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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion of the financial results, liquidity and other key items related to our performance and should be read in conjunction with our Consolidated Financial Statements and related notes included elsewhere in this Annual Report. The following is a combined report of SBH and SB/RH, and the following discussion includes SBH and certain matters related to SB/RH as signified below. Unless the context indicates otherwise, the terms the “Company,” “we,” “our” or “us” are used to refer to SBH and its subsidiaries and SB/RH and its subsidiaries, collectively

Business Overview

The following section provides a general description of our business as well as recent developments for the years ended September 30, 2020 and 2019, which we believe are important to understanding our results of operations, financial condition, and understanding anticipated future trends. Refer to Item 1 - Business and Note 1 – Description of Business in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for an overview of our business. For a discussion of our fiscal 2018 results, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the Company's Annual Report on Form 10-K for the year ended September 30, 2019 filed with the SEC on November 15, 2019.

COVID-19

The COVID-19 pandemic and the resulting regulations and other disruptions to both demand and supply may have a substantial impact on the commercial operations of the Company or impairment of the Company’s net assets. Such impacts may include, but are not limited to, volatility of demand for our products, disruptions and cost implications in manufacturing and supply arrangements, inability of third parties to meet obligations under existing arrangements, and significant changes to the political and economic environments in which we manufacture, sell, and distribute our products.

During the year ended September 30, 2020 and as of the date of this report, we have been and continue to be classified as an essential business in the jurisdictions that have mandated closures of non-essential businesses, and therefore have been allowed to remain open. The Company did experience temporary shutdowns at certain operating facilities in response to government mandated restrictions or to address and implement preventative safety measures. During the second quarter ended March 29, 2020, there were certain HHI operating facilities, primarily within China and the Philippines, that experienced a temporary limit on production in response to the COVID-19 outbreak, but such facilities were operating at or near full capacity by the end of the second quarter. Subsequently, during the third quarter ended June 28, 2020, additional governmental operating restrictions were announced in Mexico temporarily suspending or limiting production for our HHI operating facilities, with facilities operating and ramping up productions by the end of the third quarter. Moreover, our H&G facility in St. Louis was temporarily closed in April 2020 to provide for additional cleaning and implementation of preventative measures in response to confirmed cases of COVID-19. These facilities continue to operate to the extent possible under existing regulations and may be subject to future closure depending upon unforeseeable duration and severity of the COVID-19 pandemic and any governmental and public action.

Despite the supply implications, the Company continued to experience strong customer demand. While demand in general for our products remains strong, our teams continue to monitor demand disruption and there can be no assurance as to the level of demand that will prevail following the year ended September 30, 2020. A large portion of our customers continue to operate and sell our products, with some customers reducing operations during the year ended September 30, 2020 due to closures or reduced store hours. The Company has experienced both positive and negative consumer behavior which may or may not continue. There have also been changes in consumer needs and spending during the COVID-19 pandemic, which have resulted in a limited number of change orders and reduced spending. Currently, we have not identified, and will continue to monitor for, any substantive risk attributable to customer credit and have not experienced a significant impact from permanent store closures or retail bankruptcies. We believe the severity and duration of the COVID-19 pandemic to be uncertain and we expect it to continue to contribute to retail volatility and consumer purchase behavior changes. The magnitude of the financial impact on our results is highly dependent on the duration of the COVID-19 pandemic and how quickly the U.S. and global economies resume normal operations.

The COVID-19 pandemic has not, as of the date of this report, had a materially negative impact on the Company’s liquidity position. The sweeping nature of COVID-19 pandemic makes it extremely difficult to predict the long-term ramifications on our financial condition and results of operations. However, the likely overall economic impact of the COVID-19 pandemic is viewed as highly negative to the U.S. and global economies. During the year ended September 30, 2020, we have implemented mitigating efforts to manage non-critical capital spending, assess operating spend, preserve cash and liquidity. We continue to generate operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets, although there can be no assurance of our ability to do so. We have also not observed any material impairments of our assets due to the COVID-19 pandemic.

We expect the ultimate significance of the impact on our financial condition, results of operations, and cash flows will be dictated by the length of time that such circumstances continue, which will ultimately depend on the unforeseeable duration and severity of the COVID-19 pandemic, any governmental and public actions taken in response and any related economic disruption.

Acquisitions

On March 10, 2020, the Company aquired Omega Sea, LLC ("Omega"), a manufacturer and marketer of premium fish foods and consumable goods for the home and commercial aquarium markets, primarily consisting of the Omega brand, for a purchase price of approximately $16.9 million. The results of Omega's operations since March 10, 2020 are included in the Company's Consolidated Statements of Income and reported within the GPC reporting segment for the year ended September 30, 2020. See Note 4 - Acquisitions in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for more information.

Divestitures

•Coevorden Operations - On March 29, 2020, the Company completed the sale of its DCF production facility and distribution center in Coevorden, Netherlands for cash proceeds of $29.0 million subject to working capital and other typical closing adjustments, resulting in a loss on assets held for sale of $26.8 million during the year ended September 30, 2020. The loss was recognized as a component of continuing operations and operating income within the Company's GPC segment.

•Global Batteries & Lighting (“GBL”) – On January 2, 2019, the Company completed the sale of its GBL business pursuant to the GBL acquisition agreement with Energizer for cash proceeds of $1,956.2 million, resulting in the recognition of a pre-tax gain on sale of $989.8 million, including the estimated settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications under the acquisition agreement and an estimated contingent purchase price adjustment for the settlement with the planned divestiture of the Varta® consumer batteries business by Energizer of $200.0 million in accordance with the GBL acquisition agreement. The results of operations and gain on sale for disposal of the GBL business are recognized as a component of discontinued operations.

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•Global Auto Care (“GAC”) – On January 28, 2019, the Company completed the sale of its GAC business pursuant to the GAC acquisition agreement with Energizer for $1.2 billion, consisting of $938.7 million in cash proceeds and $242.1 million in stock consideration of common stock of Energizer, resulting in the write-down of net assets held for sale of $111.0 million, including the estimated settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications in accordance with the GAC acquisition agreement. Unrealized gains and losses realized for changes in the fair value of the Company’s common stock investment in Energizer are recognized as Other Non-Operating Expense (Income), net on the Company’s Consolidated Statement of Income. The results of operations and write-down of net assets held for sale for the disposal of the GAC business are recognized as a component of discontinued operations.

•Home and Personal Care (“HPC”) – During the year ended September 30, 2018, the Company initiated a plan to sell its GBA segment, consisting of its GBL business and HPC business, and classified the GBA operations as held for sale and discontinued operations. During the first quarter ended December 30, 2018, the Company changed its plans to sell its HPC business and classified the net assets of HPC as held for use and the HPC operations have been classified as continuing operations for all periods presented. During the period in which the HPC business was held for sale, the Company incurred divestiture related expenses to market and sell the business that were previously recognized as a component of discontinued operations and ceased the recognition of depreciation and amortization on long-lived assets of the HPC disposal group, impacting the comparability of financial results when classified as continuing operations, resulting in the recognition of $29.0 million in incremental depreciation and amortization charges during the year ended September 30, 2019.

See Note 3 – Divestitures in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further discussion pertaining to the divestitures.

Restructuring Activity

We continually seek to improve our operational efficiency, match our manufacturing capacity and product costs to market demand and better utilize our manufacturing resources. We have undertaken various initiatives to reduce manufacturing and operating costs, which may have a significant impact on the comparability of financial results on the consolidated financial statements. The most significant of these initiatives is the Global Productivity Improvement Program, which began during the year ended September 30, 2019. See Note 5 - Restructuring and Related Charges in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further discussion pertaining to restructuring and related activity.

Refinancing Activity

The following recent financing activity has a significant impact on the comparability of financial results on the consolidated financial statements.

•During the year ended September 30, 2020, the Company (1) entered into the Amended and Restated Credit Agreement (the "Credit Agreement"), which refinanced the Company's previously existing credit facility, extending the maturity, reducing the revolving facility under the Credit Agreement from $890 million to $600 million, and changing interest rate margins; (2) issued $300 million of its 5.50% Senior Unsecured Notes; and (3) completed the tender and call of its 6.625% Notes with an outstanding principal of $117.4 million initiated at the end of the year ended September 30, 2019.

•During the year ended September 30, 2019, the Company (1) repaid $452.6 million of its 6.625% Notes with an outstanding principal of $570.0 million, consisting of a repayment of $285.0 million on March 31, 2019 plus a repayment of $167.6 million on September 24, 2019 using proceeds from the GAC divestitures; (2) issued $300.0 million of 5.00% Senior Unsecured Notes due September 2029; (3) repaid its 7.75% Senior Unsecured Notes in full on January 30, 2019 using proceeds received from the GBL and GAC divestitures; (4) repaid its USD Term Loan in full on January 4, 2019 using proceeds received from the divestiture of GBL; and (5) repaid its CAD Term Loan in full on October 31, 2018.

See Note 12 - Debt in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for additional detail regarding debt and refinancing activity.

Salus CLO

During the year ended September 30, 2020, the non-recourse debt under Salus CLO were effectively discharged resulting in the recognition of a non-cash gain on extinguishment of debt of $76.2 million. See Note 12 - Debt in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for more information.

Adoption of New Lease Accounting Standard

On October 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842), and all the related amendments using the modified retrospective transition method, which resulted in the recognition of additional right-of-use (“ROU”) lease assets of $107.5 million and additional lease liabilities of $113.0 million, with no material cumulative effect adjustment to equity as of the date of adoption. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 2 – Significant Accounting Policies and Practices and Note 13 – Leases in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for more information.

Subsequent Event

On October 26, 2020, the Company acquired Armitage Pet Care Ltd ("Armitage") for approximately $187 million. Located in Nottingham, United Kingdom, Armitage is a premium provider of pet treats and toys including a portfolio of brands that includes dog treats brand, Good Boy®, and cat treats brand, Meowee!®, among others, that are predominantly sold within the United Kingdom. The net assets and operating results of Armitage will be included in the financial statements subsequent to the balance sheet date of September 30, 2020 and included within the GPC reporting segment for all subsequent periods.

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Non-GAAP Measurements

Our consolidated and segment results contain non-GAAP metrics such as organic net sales, and Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization). While we believe organic net sales and Adjusted EBITDA are useful supplemental information, such adjusted results are not intended to replace our financial results in accordance with Accounting Principles Generally Accepted in the United States (“GAAP”) and should be read in conjunction with those GAAP results.

Organic Net Sales. We define organic net sales as net sales excluding the effect of changes in foreign currency exchange rates and/or impact from acquisitions (where applicable). We believe this non-GAAP measure provides useful information to investors because it reflects regional and operating segment performance from our activities without the effect of changes in currency exchange rate and/or acquisitions. We use organic net sales as one measure to monitor and evaluate our regional and segment performance. Organic growth is calculated by comparing organic net sales to net sales in the prior year. The effect of changes in currency exchange rates is determined by translating the period’s net sales using the currency exchange rates that were in effect during the prior comparative period. Net sales are attributed to the geographic regions based on the country of destination. We exclude net sales from acquired businesses in the current year for which there are no comparable sales in the prior period. The following is a reconciliation of net sales to organic net sales of SBH and SB/RH for the year ended September 30, 2020 compared to net sales for the year ended September 30, 2019:

Adjusted EBITDA. Adjusted EBITDA is a non-GAAP metric used by management that we believe provides useful information to investors because it reflects the ongoing operating performance and trends of our segments, excluding certain non-cash based expenses and/or non-recurring items during each of the comparable periods. It also facilitates comparisons between peer companies since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA is also used for determining compliance with the Company’s debt covenants. See Note 12 - Debt in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for additional detail.

EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes:

•Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics; and generally consist of non-cash, stock-based compensation. See Note 19 - Share Based Compensation in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details. Additionally, the Company issued certain incentive bridge awards due to changes in the Company’s long-term compensation plans that allow for cash based payment upon employee election which have been included in the adjustment but do not qualify for shared-based compensation.;

•Restructuring and related charges, which consist of project costs associated with the restructuring initiatives across the Company's segments. See Note 5 - Restructuring and Related Charges in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

•Transaction related charges that consist of (1) transaction costs from qualifying acquisition transactions during the period, or subsequent integration related project costs directly associated with an acquired business; and (2) divestiture related transaction costs that are recognized in continuing operations and post-divestiture separation costs consisting of incremental costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred as part of the divestitures and exiting of transition service arrangements (TSAs) and reverse TSAs. See Note 2 – Significant Accounting Policies and Practices in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

•Gains and losses attributable to the Company’s investment in Energizer common stock, acquired as part of consideration received from the Company’s sale and divestiture of GAC during the year ended September 30, 2019. See Note 3 – Divestitures and Note 7 – Fair Value of Financial Instruments in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details;

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

•Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations after an acquisition (when applicable);

•Foreign currency gains and losses attributable to multicurrency loans for the years ended September 30, 2020 and 2019, that were entered into with foreign subsidiaries in exchange for the receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures. The Company has entered into various hedging arrangements to mitigate the volatility of foreign exchange risk associated with such loans;

•Incremental reserves associated with environmental remediation activity of legacy properties and former manufacturing sites assumed by the organization which had previously been exited by the Company, plus legal settlement costs associated with retained litigation from the Company's divested GAC operations realized during the year ended September 30, 2019. See Note 20 – Commitments and Contingencies in Notes to the Consolidated Financial Statements included elsewhere in this Annual Report for further discussion;

•Legal and litigation costs associated with Salus during the years ended September 30, 2020 and 2019 as it is not considered a component of the continuing commercial products company, but continues to be consolidated by the Company after completion of the Spectrum Merger until the Salus operations can be wholly dissolved and/or deconsolidated;

•Gain on extinguishment of the Salus CLO debt due to the discharge of the obligation during the year ended September 30, 2020. See Note 12 - Debt in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further details; and

•Other adjustments primarily consisting of costs attributable to (1) expenses and cost recovery for flood damage at the Company's facilities in Middleton, Wisconsin recognized during the years ended September 30, 2020 and 2019; (2) incremental costs for separation of a key executives during the years ended September 30, 2020 and 2019; (3) incremental costs associated with a safety recall in GPC during the year ended September 30, 2019; (4) operating margin on H&G sales to GAC discontinued operations during the year ended September 30, 2019; and (5) certain fines and penalties for delayed shipments following the completion of a GPC distribution center consolidation in EMEA during the year ended September 30, 2019.

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The following is a reconciliation of net income to Adjusted EBITDA for the years ended September 30, 2020 and 2019 for SBH:

Income tax expense — — — — 70.9 70.9

Share and incentive based compensation — — — — 43.6 43.6

Loss on Energizer investment — — — — 16.8 16.8

Loss on assets held for sale — — 26.8 — — 26.8

Write-off from impairment of intangible assets — — 24.2 — — 24.2

Foreign currency loss on multicurrency divestiture loans — 0.6 — — 3.2 3.8

Salus — — — — 0.6 0.6

Salus CLO debt extinguishment — — — — (76.2) (76.2)

Income tax benefit — — — — (7.1) (7.1)

Share and incentive based compensation — — — — 53.7 53.7

Loss on Energizer investment — — — — 12.1 12.1

Write-off from impairment of goodwill — 116.0 — — — 116.0

Write-off from impairment of intangible assets — 18.8 16.6 — — 35.4

Foreign currency loss on multicurrency divestiture loans — — — — 36.2 36.2

Legal and environmental remediation reserves — — — — 10.0 10.0

GPC safety recall — — 0.7 — — 0.7

Salus — — — — 1.6 1.6

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The following is a reconciliation of net income to Adjusted EBITDA for the years ended September 30, 2020 and 2019 for SB/RH

SB/RH HOLDINGS, LLC (in millions) HHI HPC GPC H&G Corporate Consolidated

Income tax expense — — — — 58.1 58.1

Share and incentive based compensation — — — — 42.3 42.3

Loss on Energizer investment — — — — 16.8 16.8

Loss on assets held for sale — — 26.8 — — 26.8

Write-off from impairment of intangible assets — — 24.2 — — 24.2

Income tax expense — — — — 10.7 10.7

Share and incentive based compensation — — — — 52.1 52.1

Loss on Energizer investment — — — — 12.1 12.1

Write-off from impairment of goodwill — 116.0 — — — 116.0

Write-off from impairment of intangible assets — 18.8 16.6 — — 35.4

Foreign currency loss on multicurrency divestiture loans — — — — 36.2 36.2

Legal and environmental remediation reserves — — — — 10.0 10.0

GPC safety recall — — 0.7 — — 0.7

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Consolidated Results of Operations

The following section provides an analysis of our operations for the years ended September 30, 2020 and 2019. For a discussion of our fiscal 2018 results, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the Company's Annual Report on Form 10-K for the year ended September 30, 2019 filed with the SEC on November 15, 2019.

SBH

The following is summarized consolidated results of operations for SBH for the years ended September 30, 2020 and 2019, respectively:

Year Ended September 30,

(in millions, except %) 2020 2019 Variance

Income from discontinued operations, net of tax 14.0 682.5 (668.5) (97.9 %)

Net Sales. Net sales for the year ended September 30, 2020 increased $162.1 million, or 4.3%, with an increase in organic sales of $175.1 million, or 4.6%. The following sets forth net sales by segment for the years ended September 30, 2020 and 2019:

Year Ended September 30,

(in millions, except %) 2020 2019 Variance

The following sets forth the principal components of the change in net sales from the year ended September 30, 2020 to the year ended September 30, 2019:

Net Sales for the year ended September 30, 2019 $ 3,802.1

Increase due to acquisition 7.5

Increase in GPC 86.0

Increase in HPC 58.4

Increase in H&G 43.9

Decrease in HHI (13.2)

Foreign currency impact, net (20.5)

Net Sales for the year ended September 30, 2020 $ 3,964.2

Gross Profit. Gross profit for the year ended September 30, 2020 increased $63.0 million with an increase in gross profit margin from 34.4% to 34.6% primarily due to increased sales volume with incremental product and input costs including tariffs, offset by productivity, favorable product mix and pricing adjustments.

Operating Expenses. Operating expenses for the year ended September 30, 2020 decreased $108.2 million, or 8.8%, due to the impairment of HPC goodwill of $116.0 million and impairment of intangible assets of $35.4 million in the prior year with offsets by the recognition of loss on assets held for sale of $26.8 million and impairment of intangible assets of $24.2 million associated with the Coevorden Operations divestiture. Additionally, the Company recognized a decrease in restructuring and related charges of $4.6 million and a decrease in selling and general and administrative expenses of $2.8 million primarily from higher depreciation and amortization in the prior year associated with HPC business being de-recognized from held for sale offest by increased marketing and advertising spend. See Note 5 - Restructuring and Related Charges in the Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further discussion pertaining to restructuring and related activity.

Interest Expense. Interest expense for the year ended September 30, 2020 decreased $77.6 million, or 34.9%, due to lower borrowings and average interest rates during the period attributable to refinancing activities. See Note 12 - Debt in Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Other Non-Operating Expense, Net. Other non-operating expense for the year ended September 30, 2020 decreased $24.2 million primarily due to foreign currency losses in the prior year related to multicurrency loans with foreign subsidiaries associated with the GBL and GAC divestitures.

Income Taxes. The effective tax rate was 45.6% for the year ended September 30, 2020 compared to 3.7% for the year ended September 30, 2019. Our effective tax rate for the year ended September 30, 2020 was significantly impacted by income earned outside the U.S. that is subject to U.S. tax including the U.S. tax on global intangible low taxed income, losses that more likely than not will not result in tax benefits, certain nondeductible expenses, an increase to state deferred tax rates, and foreign rates that differ from the U.S. federal statutory rate.

See Note 16 – Income Taxes in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for additional detail.

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Income From Discontinued Operations. Discontinued operations includes the results of operations, financial position and cash flows for the GBL and GAC divisions sold during the year ended September 30, 2019, effective January 2, 2019 and January 28, 2019, respectively. During the year ended September 30, 2020, the Company recognized a $10.5 million tax benefit to discontinued operations from the return to provision adjustments related to the divestitures of GBL, primarily from changes to US GILTI on the non-US portions of the sold business, in addition to other adjustments to tax indemnifications following the GBL and GAC divestitures. See Note 3 – Divestitures in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for more information on the divestitures and the assets and liabilities classified as held for sale.

Noncontrolling Interest. The net income attributable to noncontrolling interest reflects the share of the net income of our subsidiaries, which are not wholly-owned, attributable to the accounting interest. Such amount varies in relation to such subsidiary’s net income or loss for the period and the percentage interest not owned by SBH.

SB/RH

The following is summarized consolidated results of operations for SB/RH for the years ended September 30, 2020 and 2019:

Year Ended September 30,

(in millions, except %) 2020 2019 Variance

Income from discontinued operations, net of tax 14.0 682.5 (668.5) (97.9 %)

For the year ended September 30, 2020, the change in net sales, gross profit, operating expenses and other non-operating expenses are primarily attributable to changes in SBH previously discussed. The change interest expense are primarily attributable to the changes in SBH previously discussed except for the non-cash gain on extinguishment of Salus CLO debt.

The effective tax rate was 67.1% for the year ended September 30, 2020 compared to (8.3%) for the year ended September 30, 2019. Our effective tax rate for the year ended September 30, 2020 was significantly impacted by income earned outside the U.S. that is subject to U.S. tax including the U. S. tax on global intangible low taxed income, losses that more likely than not will not result in tax benefits, certain nondeductible expenses, an increase to state deferred tax rates, and foreign rates that differ from the U.S. federal statutory rate.

Income from discontinued operations is attributable to SBH previously discussed.

Segment Financial Data

This section provides an analysis of our results of reportable segments for the years ended September 30, 2020 and 2019. For a discussion of our fiscal 2018 results, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the Company's Annual Report on Form 10-K for the year ended September 30, 2019 filed with the SEC on November 15, 2019.

Hardware & Home Improvement (HHI)

Year Ended September 30,

(in millions, except %) 2020 2019 Variance

Operating income margin 16.7 % 15.9 % 80 bps

Adjusted EBITDA margin 19.1 % 18.7 % 40 bps

Net sales for the year ended September 30, 2020 decreased $13.6 million, or 1.0%, with a decrease in organic net sales of $13.2 million, or 1.0%.

•Security decreased $52.7 million due to supply constraints driven by temporary government mandated COVID-19 related shutdowns limiting supply levels despite strong consumer demand in response to the COVID-19 pandemic and volume reduction from customer loss, partially offset by favorable pricing.

•Plumbing increased $19.1 million due to strong consumer demand in response to the COVID-19 pandemic, promotional related volume and increased placement in retail channel, market share gains in the multifamily development channel and favorable pricing.

•Hardware increased $20.5 million due to strong consumer demand in response to the COVID-19 pandemic, new product introductions in the home center channel, increased volume through online retail channels and favorable pricing.

Operating income for the year ended September 30, 2020 increased $9.8 million with a margin increase of 80 bps due to improved productivity, pricing and mix, retrospective tariff exclusions and reduced restructuring expense despite lower sales volume plus higher input costs driven by tariffs and our COVID-19 response. Adjusted EBITDA for the year ended September 30, 2020 increased $2.6 million with an increase in margin of 40 bps due to improved productivity, pricing and mix, retrospective tariff exclusions despite lower sales volume plus higher input costs driven by tariffs and our COVID-19 response.

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Home & Personal Care (HPC)

Year Ended September 30,

(in millions, except %) 2020 2019 Variance

Operating income margin 3.9 % (11.9 %) 1,580 bps

Adjusted EBITDA margin 8.3 % 8.2 % 10 bps

Net sales from the year ended September 30, 2020 increased $39.5 million, or 3.7%, with an organic net sales increase of $58.4 million, or 5.5%.

•Home appliances sales increased $43.9 million, including an increase in NA of $26.0 million due to new product introductions and distribution in grocery, mass and online retail channels, coupled with an increase in response to the COVID-19 pandemic partially offset by supply constraints and store closures in response to the COVID-19 pandemic; an increase in EMEA of $11.7 million from promotional volumes with traditional and online retailers during holiday season with increased consumer demand partially offset by lower distribution from store closures in response to COVID-19 pandemic; an increase in LATAM of $1.7 million from new product distribution and increase in APAC of $4.5 million from consumer demand.

•Personal care sales increased $14.6 million, including an increase in EMEA of $11.1 million due to promotional volumes with traditional and online retailers during the holiday season, increased growth in e-commerce channels coupled with increased demand in response to the COVID-19 pandemic partially offset by supply constraints; an increase in NA of $4.0 million due to increased volume and demand in mass retail and e-commerce channels primarily with hair care and personal grooming products primarily in response to the COVID-19 pandemic despite supply constraints and store closures attributable to the COVID-19 pandemic; and an increase in APAC of $2.2 million from consumer demand and a decrease in LATAM of $2.7 million from store closures during COVID-19 pandemic.

Operating income for the year ended September 30, 2020 increased $170.4 million with an increase in margin of 1,580 bps due to higher sales volumes with favorable product mix and productivity with benefit from retrospective tariff exclusions, the recognition of goodwill impairment of $116.0 million and write-off of indefinite lived intangible assets of $18.8 million in the prior year, plus incremental depreciation and amortization of $29.0 million in the prior year associated with HPC business being de-recognized from held for sale, offset by incremental input costs driven by tariffs, increased marketing and advertising spend, plus incremental foreign currency transaction loss. Adjusted EBITDA for the year ended September 30, 2020 increased $5.0 million with an increase in margin of 10 bps due to higher sales volume with favorable product mix and productivity with benefit from retrospective tariff exclusions, offset by incremental input costs driven by tariffs, increased marketing and advertising spend, plus incremental foreign currency transaction loss.

Global Pet Care (GPC)

Year Ended September 30,

(in millions, except %) 2020 2019 Variance

Operating income margin 4.9 % 7.5 % (260) bps

Net sales for the year ended September 30, 2020 increased $92.4 million, or 10.6%, with an organic net sales increase of $86.0 million, or 9.9%.

•Companion animal sales increased $62.2 million, including an increase in NA of $56.7 million from increased demand in dollar, mass and online retail channels driven by consumer demand in response to the COVID-19 pandemic; an increase in EMEA of $6.1 million from dog and cat food sales and increased distribution through online retail channels in response to the COVID-19 pandemic; an increase in LATAM of $0.4 million and a decrease in APAC of $0.9 million.

•Aquatics increased $31.3 million, exclusive of acquisition sales of $7.5 million, including an increase in NA of $25.6 million from increased demand through online retail and pet specialty channels; an increase in EMEA of $5.2 million due to increased distribution through online retail channels; a decrease in APAC of $0.3 million and increase in LATAM of $0.7 million.

Operating income for the year ended September 30, 2020 decreased $18.5 million with a margin decrease of 260 bps due to the recognition of a loss on assets held for sale of $26.8 million associated with the Coevorden Operations divestiture, and a $24.2 million write-off from impairment of intangible assets; incremental transaction costs associated with the Omega acquisition and Coevorden Operations divestiture, plus restructuring costs and accelerated depreciation as part of the Global Productivity Improvement Program, tariffs and additional investment in marketing and advertising, offset by increased sales volume, product cost improvements, and positive pricing. Adjusted EBITDA in the year ended September 30, 2020 increased $29.4 million with a margin increase of 150 bps due to increased sales volume, productivity, and positive pricing, offset by tariffs and additional investment in marketing and advertising.

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Home & Garden (H&G)

Year Ended September 30,

(in millions, except %) 2020 2019 Variance

Operating income margin 16.5 % 16.7 % (20) bps

Adjusted EBITDA margin 20.3 % 20.8 % (50) bps

Net sales for the year ended September 30, 2020 increased $43.8 million, or 8.6%, with an organic net sales increase of $43.9 million, or 8.6%.

•Lawn & garden control products increased $22.7 million due to seasonal demand and favorable weather, increased online retail and home center volumes, new retail customer distribution with continued strong consumer demand.

•Repellent products increased $10.3 million due to continued replenishment orders due to strong consumer demand.

•Household insect control products increased $11.0 million due to continued replenishment orders due to strong consumer demand.

•Other net sales to GAC discontinued operations were $18.9 million and $19.1 million for the years ended September 30, 2020 and 2019, respectively.

Operating income for the year ended September 30, 2020 increased $6.2 million, or 7.3%, with a decline in margin of 20 bps due to increased sales volume offset by higher material and input costs including tariffs, plus higher marketing and advertising investment spending. Adjusted EBITDA in the year ended September 30, 2020 increased $6.6 million, or 6.3%, with a decrease in margin of 50 bps due to increased sales volume offset by higher material and input costs including tariffs, plus higher marketing and advertising investment spending.

Liquidity and Capital Resources

This section provides a discussion of our financial condition and an analysis of our cash flows for the years ended September 30, 2020 and 2019. For a discussion of our fiscal 2018 cash flows, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the Company's Annual Report on Form 10-K for the year ended September 30, 2019 filed with the SEC on November 15, 2019. This section also provides a discussion of our contractual operations and other commercial commitments as well as our ability to fund future commitments and operating activities through sources of capital as of September 30, 2020.

The following is a summary of the Company’s net cash flows from continuing operations for the years ended September 30, 2020, 2019, and 2018:

SBH SB/RH

Cash flows from operating activities

Cash flows from SBH continuing operations increased $206.6 million for the year ended September 30, 2020 due to:

•Increase in cash provided by continuing operations of $153.6 million, with an increase in cash provided by working capital of $110.0 million mainly primarily attributable to timing of accounts payable;

•Decrease in cash paid for interest of $81.0 million from debt repayment activity in the prior year; offset by

•Increase in net corporate expenditures of $13.4 million;

•Increase in cash paid for restructuring and integration related activities of $26.2 million;

•Decrease in cash paid for income taxes of $11.8 million;

Cash flows from operating activities from continuing operations of SB/RH decreased $17.2 million during the year ended September 30, 2020 primarily due to the items discussed above except for an incremental operating cash outflow to its parent company for federal net operating losses under the Company's tax sharing agreement.

Depreciation and amortization

Depreciation and amortization for the Company was $148.5 million and $180.8 million for the years ended September 30, 2020 and 2019, respectively. The decrease in depreciation and amortization is primarily attributable to the cumulative adjustment to depreciation and amortization from the change in plan to sell the HPC division in the prior year.

Cash flows from investing activities

Cash flows from investing activities from SBH continuing operations decreased $2,694.6 million for the year ended September 30, 2020 primarily due the cash receipts attributable to the divestitures of GBL and GAC in the prior year of $1,924.1 million and $935.4 million, respectively; offset by the cash proceeds received from the Coevorden Operations divestiture of $29.0 million and proceeds from the sale of Energizer common stock investment of $147.1 million, net cash used for business acquisition of Omega for $16.9 million for the year ended September 30, 2020. Cash flows from investing activities from SB/RH continuing operations increased $2,694.6 million for the year ended September 30, 2020 primarily due to the SBH items discussed above.

Capital Expenditures

Capital expenditures for SBH totaled $61.0 million and $58.4 million for the years ended September 30, 2020 and 2019, respectively. We expect to make incremental investments in capital projects slightly above historical experience related to investment in high return cost reduction projects and related restructuring initiatives. Capital expenditures of SB/RH are consistent with those of SBH.

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Energizer Investment

As part of the consideration received for the GAC divestiture, the Company received 5.3 million shares of Energizer common stock, valued at $242.1 million on the effective close date of the GAC divestiture. During the year ended September 30, 2020, the Company sold 3.6 million shares of Energizer common stock for proceeds of $147.1 million. As of September 30, 2020, the company holds 1.7 million shares of Energizer common stock, valued at $66.9 million. The Company may dispose of additional shares of Energizer common stock from time to time and use proceeds toward high return projects or investments.

Cash flows from financing activities

Cash flows used by financing activities for SBH continuing operations decreased $2,225.3 million for the year ended September 30, 2020 due to the debt repayment activity in the prior year following the GBL and GAC divestitures, offset by the payment of the Varta contingent payment to Energizer subsequent to the GBL divestiture and incremental treasury share repurchase activity. Cash flows used by financing activities for SB/RH continuing operations decreased $2,408.4 million for the year ended September 30, 2020 due to the debt repayment activity in the prior year following the GBL and GAC divestitures, offset by the payment of the Varta contingent payment to Energizer subsequent to the GBL divestiture.

Debt

During the year ended September 30, 2020, SBH recognized net proceeds of $300.0 million from the issuance of 5.50% Notes. The proceeds from the issuance of the 5.50% Notes were used for repayment of the Revolver Facility obligation. The Company made $135.5 million payment on debts for the outstanding balance of 6.625% Notes of $117.4 million with premium of early extinguishment of $1.3 million, and other debt payments of $16.8 million.

During the year ended September 30, 2019, the Company made $2,649.9 million of payment on debts, including the redemption of the USD Term Loans of $1,231.7 million, 7.75% Notes of $890.0 million with a premium on extinguishment of $26.4 million, partial paydown of 6.625% Notes of $452.6 million with payment of early extinguishment of $9.2 million, CAD Term Loan of $32.6 million, and other debt payments of $16.6 million. During the year ended September 30, 2019, the Company recognized incremental proceed from the issuance of debt due to the issuance of $300 million of 5.00% Senior Notes.

In addition to the outstanding principal on our debt obligations, we have annual interest payment obligations of approximately $124.5 million in the aggregate and includes interest under our: (i) 4.00% Notes of approximately $20.0 million; (ii) 6.125% Notes of approximately $15.3 million; (iii) 5.75% Notes of $57.5 million; (iv) 5.0% Notes of approximately $15.0 million; (v) 5.50% Notes of approximately $16.5 million. Interest on the notes is payable semi-annually in arrears and interest under the Revolver Facility is payable on various interest payment dates as provided in the Senior Credit Agreement.

During the year ended September 30, 2020, the Company entered into the Credit Agreement, which refinanced the Company’s previously existing credit facility, reduced the revolving facility under the Credit Agreement from $890 million to $600 million and extended the Credit Agreement's maturity date to June 30, 2025. The Company may borrow funds at a variable interest rate. As a result of borrowings and payments under the Revolver Facility, at September 30, 2020, the Company had borrowing availability of $579.3 million, net of outstanding letters of credit of $20.7 million. Certain fees are required to be paid in connection with our outstanding debt obligations including a quarterly commitment fee of up to 0.45% on the unused portion of the Revolver Facility and certain additional fees with respect to the letter of credit sub-facility under the Revolver Facility.

At September 30, 2020, we were in compliance with all covenants under the Senior Credit Agreement and the indentures governing the 5.50% Notes, 6.125% Notes, 5.75% Notes, 5.00% Notes, and 4.00% Notes.

The Company’s access to capital markets and financing costs may depend on the Company’s credit ratings. On March 26, 2020, S&P downgraded the Company’s corporate credit rating to ‘B’ from ‘B+’, senior secured debt ratings to ‘BB-‘ from ‘BB’ and senior unsecured debt to ‘B’ from ‘B+’ , with a negative outlook in response to the changing economic environment and risks attributable to COVID-19. The Company's credit ratings and outlook with Moody's and Fitch remain unchanged. None of the Company’s current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company’s credit ratings could increase fees and interest charges on future borrowings. The Company believes that its current credit arrangements are sound and that the strength of its balance sheet affords the company the financial flexibility, including through access to financial markets for potential new financing, to respond to both internal growth opportunities and those available through acquisitions. None of the Company’s current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company’s credit ratings could increase fees and interest charges on future financings. Refer to Note 12 - Debt of Notes in Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Equity

During the year ended September 30, 2020 and 2019, SBH did not issue additional shares of common stock other than pursuant to the Company’s share-based compensation plans. SBH made cash dividend payments of $75.2 million and $85.5 million, or $0.42 per share, during the years ended September 30, 2020 and 2019, respectively.

From time to time, SBH will repurchase outstanding shares common stock in the open market or otherwise. During the year ended September 30, 2020, the Company repurchased $355.6 million or 6.1 million shares as part of its $1 billion common stock repurchase program, including $125.0 million through an accelerated share repurchase. During the year ended September 30, 2019, the Company repurchased $250.0 million or 4.6 million shares.

The Company issues share based awards to our employees and our directors as a component of their compensation. All vesting is subject to the recipient’s continued employment, except as otherwise permitted by our Compensation Committee or Board of Directors or in certain cases if the employee is terminated without cause or as otherwise provided in an applicable employment agreement. See Note 19 - Share Based Compensation of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information. During the years ended September 30, 2020 and 2019 the Company paid $12.6 million and $4.4 million, respectively, in tax withholding payments on share based compensation plans, net of proceeds received upon vesting.

Liquidity Outlook

The Company’s ability to make principal and interest payments on its senior notes and borrowings under its U.S. and foreign credit facilities and its ability to fund planned capital expenditures will depend on its ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. Based on its current level of operations, the Company believes that its existing cash balances and expected cash flows from operations will be sufficient to meet its operating requirements for at least the next 12 months. However, the Company may request borrowings under its credit facilities and seek alternative forms of financing or additional investments to achieve its longer-term strategic plans. At September 30, 2020, we believe there is approximately $75-$100 million of foreign cash available for repatriation.

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Because the COVID-19 pandemic has not, as of the date of this report, materially impacted our operations or demand for our products, it has not had a materially negative impact on the Company's liquidity position. We have initiated mitigating efforts to manage non-critical capital spending, assess operating spend, preserve cash and improve liquidity. Additionally we temporarily suspended treasury repurchase activity. We continue to generate operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets although there can be no assurance of our ability to do so.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations & Other Commercial Commitments

The following table summarizes our contractual obligations as of September 30, 2020 and the effect such obligations are expected to have on our liquidity and cash flow in future periods:

Contractual Payments Due by Period

(in millions) Total Less than 1 year 1 to 3 years 3 to 5 years Thereafter

Letters of credit(5) 20.7 20.7 — — —

(1) See Note 12 - Debt of the Notes to the Consolidated Financial Statements included elsewhere in the Annual Report.

(2) Finance and operating lease payments due by fiscal year include executory costs and imputed interest not reflected in the Consolidated Statements of Financial Position. See Note 13 – Leases of the Notes to the Consolidated Financial Statements included elsewhere in the Annual Report.

(3) Employee benefit obligations represent the sum of our estimated future minimum required funding for our qualified defined benefit plans based on actuarially determined estimates and projected future benefit payments from our unfunded postretirement plans. See Note 15 - Employee Benefit Plans of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(4) Other obligations include the mandatory repatriation liability of $6.6 million payable over 8 years, recognized as Other Long-Term Liabilities on the Consolidated Statement of Financial Position as of September 30, 2020. The remaining balance due is net of refundable tax credits and overpayments that must be applied to the mandatory repatriation tax installments, and due to the credits and overpayments, the Company does not expect to make an additional payment for mandatory repatriation until Fiscal 2025. See Note 16 – Income Taxes of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

(5) Standby letters of credit that back the performance of our entities under various credit facilities, insurance policies and lease arrangements.

At September 30, 2020, our Consolidated Statements of Financial Position includes reserves for uncertain tax positions. However, it is not possible to predict or estimate the amount and timing of payments for uncertain tax positions and those liabilities have been excluded from the obligations above. The Company cannot reasonably predict the ultimate outcome of income tax audits currently in progress for certain of our companies; however, it is reasonably possible that during the next 12 months, some portion of our unrecognized tax benefits could be recognized. See Note 16 – Income Taxes of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Additionally, other payables associated with indemnifications following the divestitures of GBL and GAC, including tax indemnifications, are not included as we cannot reasonably predict the ultimate outcome of our obligation; however it is reasonably possible that during the next 12 months, some portion of our indemnification payable could be recognized. As of September 30, 2020, there are $33.0 million of indemnification liabilities to Energizer recognized as current and $17.2 million recognized as Other Long-Term Liabilities on the Consolidated Statement of Financial Position. See Note 3 – Divestitures of the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

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Guarantor Statements - SB/RH

SBI has issued the 5.00% Notes under the 2029 Indenture, the 5.50% Notes under the 2030 Indenture, the 6.125% Notes under the 2024 Indenture, the 5.75% Notes under the 2025 Indenture, and the 4.00% Notes under the 2026 Indenture (collectively, the “Notes”). The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by SB/RH and SBI’s domestic subsidiaries. The Notes and the related guarantees rank equally in right of payment with all of SBI and the guarantors’ existing and future senior indebtedness and rank senior in right of payment to all of SBI and the guarantors’ future indebtedness that expressively provide for its subordination to the Notes and the related guarantees. Non-guarantor subsidiaries primarily consist of SBI’s foreign subsidiaries.

The following financial information consists of summarized financial information of the Obligor, presented on a combined basis. The “Obligor” consists of the financial statements of SBI as the debt issuer, SB/RH as a parent guarantor, and the domestic subsidiaries of SBI as subsidiary guarantors. Intercompany balances and transactions between SBI and the guarantors have been eliminated. Investments in non-guarantor subsidiaries and the earnings or losses from those non-guarantor subsidiaries have been excluded.

Statement of Operations Data

Third-party net sales $ 2,868.5

Intercompany net sales to non-guarantor subsidiaries 63.5

Operating income 187.4

Net loss from continuing operations (46.8)

Net loss attributable to controlling interest (32.8)

Statement of Financial Position Data

Current Liabilities 881.7

Noncurrent Liabilities 3,020.4

The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of September 30, 2020 are as follows:

Statement of Financial Position Data

Current receivables from non-guarantor subsidiaries $ 161.1

Long-term receivable from non-guarantor subsidiaries —

Current payable to non-guarantor subsidiaries 368.4

Long-term debt with non-guarantor subsidiaries 212.0

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CriticalAccountingPolicies and Estimates

Our Consolidated Financial Statements have been prepared in accordance with GAAP and fairly present our financial position and results of operations. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its accounting estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances and evaluates its estimates on an ongoing basis. The following section identifies and summarizes those accounting policies considered by management to be the most critical to understanding the judgments that are involved in the preparation of our consolidated financial statements and the uncertainties that could impact our results of operations, financial position and cash flows. The application of these accounting policies requires judgment and use of assumptions as to future events and outcomes that are uncertain and, as a result, actual results could differ from these estimates. Refer to Note 2 - Significant Accounting Policies and Practices of Notes to the Consolidated Financial Statements for all relevant accounting policies.

Goodwill, Intangible Assets and Other Long-Lived Assets

The Company’s goodwill, intangible assets and tangible fixed assets are stated at historical cost, net of depreciation and amortization, less any provision for impairment. Intangible and tangible assets with determinable lives are amortized or depreciated on a straight line basis over estimated useful lives. Refer to Note 2 - Significant Accounting Policies and Practices of Notes to the Consolidated Financial Statements for more information about useful lives.

On an annual basis, during the fourth quarter of the fiscal year, or more frequently if triggering events occur, the Company compares the estimated fair value of its reporting units to the carrying value to determine if potential goodwill impairment exists. Our reporting units are consistent with our operating segments. See Note 21 - Segment Information of Notes to the Consolidated Financial Statements for further discussion of operating and reporting segments.

If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded for the difference between the fair value of the reporting unit goodwill and its carrying value. The estimated fair value represents the amount at which a reporting unit could be bought or sold in a current transaction between willing parties on an arms-length basis. In estimating the fair value of the reporting unit, we used a discounted cash flows methodology, which requires us to estimate future revenues, expenses, and capital expenditures and make assumptions about our weighted average cost of capital and perpetuity growth rate, among other variables. We test the aggregate estimated fair value of our reporting units by comparison to our total market capitalization, including both equity and debt capital. The fair value of HHI, GPC, and H&G reporting units exceeded their carrying value by 32%, 52%, and 134%, respectively, and did not recognize an impairment or deem the respective reporting units as ‘at risk’ of impairment.

In addition to goodwill, the Company has indefinite-lived intangible assets that consist of acquired tradenames. On an annual basis, during the Company’s fourth quarter, or more frequently if triggering events occur, the Company compares the estimated fair value of the identified trade names to the carrying value to determine if potential impairment exists. If the fair value is less than its carrying value, an impairment loss is recorded for the excess. The fair value of indefinite-lived intangible assets is determined using an income approach, the relief-from-royalty methodology, which requires us to make estimates and assumptions about future revenues, royalty rates, and the discount rate, among others. During the first quarter of the year ended September 30, 2020, the Company recognized $16.6 million impairment on indefinite life intangible assets of tradenames associated with the commercial DCF business due to the reduced value of the associated tradenames following the divestiture of the Coevorden Operations. With the recognition of the impairment, the respective intangible assets were adjusted to their determined fair value, leaving no excess fair value as of the measurement date. As of September 30, 2020, there are approximately $136.9 million of intangible assets that could be deemed at risk of future impairment due to the limited excess fair value.

The Company also reviews other definite-lived intangible assets and tangible fixed assets for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review. If such indicators are present, the Company performs undiscounted cash flow analyses to determine if impairment exists. The asset value would be deemed impaired if the undiscounted cash flows expected to be generated by the asset did not exceed the carrying value of the asset. If impairment is determined to exist, any related impairment loss is calculated based on fair value. During the year ended September 30, 2020, the Company recognized an impairment of $7.6 million on definite-lived intangible assets due to the incremental cash flow risk associated with the commercial DCF business following the divestiture of the Coevorden Operations, which consisted of the remaining carrying cost of the definite lived intangibles assets associated with the commercial DCF business.

A considerable amount of judgment and assumptions are required in performing the impairment tests, principally in determining the fair value of each reporting unit and assets subject to impairment testing. While the Company believes its judgments and assumptions are reasonable, different assumptions could change the estimated fair value and therefore, additional impairment charges could be required. The Company is subject to financial statement risk in the event that business or economic conditions unexpectedly decline and impairment is realized.

Income Taxes

The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes and recording the related deferred tax assets and liabilities.

The Company assesses its income tax positions and records tax liabilities for all years subject to examination based upon management’s evaluation of the facts and circumstances and information available for reporting. For those income tax positions where it is more-likely-than-not that a tax benefit will be sustained upon conclusion of an examination, the Company has recorded a reserve based upon the largest amount of tax benefit having a cumulatively greater than 50% likelihood of being realized upon ultimate settlement with the applicable taxing authority assuming that it has full knowledge of all relevant information. For those income tax positions where it is more-likely-than-not that a tax benefit will not be sustained, the Company did not recognize a tax benefit. As of September 30, 2020, the total amount of unrecognized tax benefits, including interest and penalties, that if not recognized would affect the effective tax rate in future periods was $17.7 million. Our effective tax rate includes the impact of income tax reserves and changes to those reserves when considered appropriate. A number of years may elapse before a particular matter for which we have established a reserve is finally resolved. Unfavorable settlement of any particular issue may require the use of cash or a reduction in our net operating loss carryforwards or tax credits. Favorable resolution would be recognized as a reduction to the effective rate in the year of resolution.

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The Company recognizes deferred tax assets and liabilities for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses, tax credit, and other carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company does not adjust its measurement for proposed future tax rate changes that have not yet been enacted into law. The Company regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance based on historical losses, projected future taxable income, expected timing of the reversals of existing temporary differences, and ongoing prudent and feasible tax planning strategies. We base these estimates on projections of future income, including tax planning strategies, in certain jurisdictions. Changes in industry conditions and other economic conditions may impact our ability to project future income. Should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period we make that determination.

As of September 30, 2020, we have U.S. federal net operating loss carryforwards (“NOLs”) of $1,247.7 million, with a federal tax benefit of $262.0 million and future tax benefits related to state NOLs of $73.3 million. Our total valuation allowance for the tax benefit of deferred tax assets that may not be realized is $306.8 million at September 30, 2020. Of this amount, $283.6 million relates to U.S. net deferred tax assets and $23.2 million relates to foreign net deferred tax assets. We estimate that $155.8 million of valuation allowance related to domestic deferred tax assets cannot be released regardless of the amount of domestic operating income generated due to prior period ownership changes that limit the amount of NOLs and credits we can use.

As of September 30, 2020, we have provided no significant residual U.S. taxes on earnings not yet taxed in the U.S. As of September 30, 2020, we project $4.6 million of additional tax from non-U.S. withholding and other taxes expected to be incurred on repatriation of foreign earnings.

See Note16 - Income Taxes of Notes to the Consolidated Financial Statements elsewhere included in this Annual Report.

New Accounting Pronouncements

See Note 2 – Significant Accounting Policies and Practices of Notes to the Consolidated Financial Statements elsewhere included in this Annual Report for information about recent accounting pronouncements not yet adopted.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Factors

We have market risk exposure from changes in interest rates, foreign currency exchange rates, tariffs, and commodity prices. When appropriate, we use derivative financial instruments to mitigate the risk from such exposures. A discussion of our accounting policies for derivative financial instruments is included in Note 14 - Derivatives of Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.

Interest Rate Risk

We have bank lines of credit at variable interest rates. If market interest rates increase, the interest rate on our variable rate debt will increase and will create higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations. The general levels of U.S., European Union interest rates, and LIBOR affect interest expense. As of September 30, 2020, there was no outstanding debt associated with our bank lines of credit and therefore no debt subject to variable interest rates.

Foreign Exchange Risk

We are subject to risk from sales and loans to and from our subsidiaries as well as sales to, purchases from and bank lines of credit with third-party customers, suppliers and creditors denominated in foreign currencies. Foreign currency sales and purchases are made primarily in Euro, Pounds Sterling, Mexican Pesos, Canadian Dollars, and Australian Dollars. We manage our foreign exchange exposure from such sales, accounts receivable, intercompany loans, firm purchase commitments, accounts payable and credit obligations through the use of naturally occurring offsetting positions (borrowing in local currency), forward foreign exchange contracts, foreign exchange rate swaps and foreign exchange options. The related amounts payable to, or receivable from, the contract counter-parties are included in accounts payable or accounts receivable.

At September 30, 2020, we had $515.1 million equivalent of debt denominated in foreign currencies, which consist primarily of the Euro-denominated 4.00% Notes to the equivalent of $499.1 million, which are recorded in a U.S. Dollar functional entity, and the remaining debt is recorded in countries with the same functional currency as the debt. The 4.00% Notes are held as a net investment hedge of the translation of the Company’s net investments in Euro-denominated subsidiaries.

At September 30, 2020, the potential change in fair value of outstanding foreign exchange derivative instruments, assuming a 10% unfavorable change in the underlying exchange rates, would be a loss of $108.3 million. The net impact on reported earnings, after also including the effect of the change in the underlying foreign currency-denominated exposures, would be a net gain of $9.7 million.

Commodity Price Risk

We are exposed to fluctuations in market prices for purchases of zinc and brass used in our manufacturing processes. We use commodity swaps and calls to manage such risk. The maturity of, and the quantities covered by, the contracts are closely correlated to our anticipated purchases of the commodity. The cost of calls is amortized over the life of the contracts and recorded in cost of goods sold, along with the effects of the swap and call contracts. The related amounts payable to, or receivable from, the counter-parties are included in accounts payable or accounts receivable.

At September 30, 2020, the potential change in fair value of outstanding commodity price derivative instruments, assuming a 10% decline in the underlying commodity prices, would be a loss of $0.9 million. The net impact on reported earnings, after also including the reduction in cost of one year’s purchases of the related commodities due to the same change in commodity prices, would be a gain of $1.1 million.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required for this Item is included in this Annual Report on Form 10-K within Item 15, Exhibits, Financial Statements and Schedules, and is incorporated herein by reference. This report is a combined report of SBH and SB/RH. The notes to the consolidated financial statements include consolidated SBH Notes and certain distinct information specific to SB/RH when required.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

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ITEM 9A. CONTROLS AND PROCEDURES

Spectrum Brands Holdings, Inc.

Evaluation of Disclosure Controls and Procedures. An evaluation was performed under the supervision and participation of SBH’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of SBH’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of September 30, 2020. Based on that evaluation, SBH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that due to the material weakness in our internal control over financial reporting described below, SBH's disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act was being recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it was accumulated for and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures.

However, giving the full consideration to the material weaknesses, management has concluded that the Consolidated Financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, SBH's financial position, results of operations and cash flows for periods disclosed in conformity with U.S. generally accepted accounting principles.

Management’s Annual Report on Internal Control over Financial Reporting. SBH’s management is responsible for establishing and maintaining adequate internal control over financial reporting for SBH, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of SBH’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only with proper authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of SBH’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis.

SBH’s management, under the oversight of the principal executive and principal financial officers, and Board of Directors, conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework). Based on this assessment, we identified a material weakness in internal control over financial reporting related to ineffective information technology general controls (ITGCs) related to user access and role change reviews over certain information technology (IT) systems in the EMEA region. As a result, our business process automated and manual controls that are dependent on the ineffective ITGCs are also considered ineffective because they could have been adversely impacted. These control deficiencies were due to an ineffective risk assessment and communication of control activities related to the transfer of ITGC operations provided under transition service agreements (TSAs) within the EMEA region.

The material weakness did not result in any identified misstatements to the financial statements and there were no changes to previously released financial results. Based on this material weakness, we concluded that as September 30, 2020, the internal control over financial reporting was not effective.

Under guidelines established by the SEC, companies are allowed to exclude acquisitions from their first assessment of internal control over financial reporting following the date of the acquisition. SBH’s management excluded the acquisition of Omega Sea, which was completed on March 10, 2020, from the assessment of the effectiveness of internal control over financial reporting. The total assets of $6.0 million and total net sales of $7.5 million associated with the acquisitions are included in the consolidated financial statements of SBH as of and for the year ended September 30, 2020.

Our independent registered public accounting firm, KPMG, LLP, who audited the consolidated financial statements included in this annual report, has expressed an adverse report on the operating effectiveness of SBH's internal control over financial reporting as of September 30, 2020. KPMG LLP's report appears on page 55 of this annual report on Form 10-K.

Management's Remediation Plan. To remediate the material weakness described above, SBH has been and will be implementing revised controls that will include (1) developing and enhancing IT compliance oversight capabilities with specific focus over identification and execution of appropriate ITGCs within the EMEA region; (2) enhancing user access reviews and role change testing control activities and policies within the EMEA IT operations, including documentation evidencing the specific control procedures to be performed; and (3) maintaining process and control documentation underlying user access reviews and role change processes within the EMEA region to promote knowledge transfer and transition upon personnel changes. In addition, we would validate the underlying data and financial reports generated by the impacted information systems supporting business process controls and operations in the EMEA region. The Audit Committee of the Board of Directors and the Board of Directors has reviewed and discussed these matters with management. The Audit Committee will oversee management's efforts to remediate the identified material weakness.

The material weakness will be considered remediated when management concludes that, through testing, the applicable remedial controls are designed and implemented effectively. We expect remediation of this material weakness will be completed during fiscal year 2021.

Changes in Internal Control Over Financial Reporting. Other than the changes related to the material weakness occurring in earlier periods and identified during the quarter ended September 30, 2020, as described above, there have been no changes in SBH's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect SBH's internal control over financial reporting.

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SB/RH Holdings, LLC

Evaluation of Disclosure Controls and Procedures. An evaluation was performed under the supervision and participation of SB/RH’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of SB/RH’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of September 30, 2020. Based on that evaluation, SB/RH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that due to the material weakness in our internal control over financial reporting described below, SB/RH's disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act was being recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it was accumulated for and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures.

However, giving the full consideration to the material weaknesses, management has concluded that the Consolidated Financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, SB/RH's financial position, results of operations and cash flows for periods disclosed in conformity with U.S. generally accepted accounting principles.

Management’s Annual Report on Internal Control over Financial Reporting. SB/RH’s management is responsible for establishing and maintaining adequate internal control over financial reporting for SB/RH, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of SB/RH’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only with proper authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of SB/RH’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis.

SB/RH’s management, under the oversight of the principal executive and principal financial officers, and Board of Directors, conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework). Based on this assessment, we identified a material weakness in internal control over financial reporting related to ineffective information technology general controls (ITGCs) related to user access and role change reviews over certain information technology (IT) systems in the EMEA region. As a result, our business process automated and manual controls that are dependent on the ineffective ITGCs are also considered ineffective because they could have been adversely impacted. These control deficiencies were due to an ineffective risk assessment and communication of control activities related to the transfer of ITGC operations provided under transition service agreements (TSAs) within the EMEA region.

The material weakness did not result in any identified misstatements to the financial statements and there were no changes to previously released financial results. Based on this material weakness, we concluded that as September 30, 2020, the internal control over financial reporting was not effective.

Under guidelines established by the SEC, companies are allowed to exclude acquisitions from their first assessment of internal control over financial reporting following the date of the acquisition. SB/RH’s management excluded the acquisition of Omega Sea, which was completed on March 10, 2020, from the assessment of the effectiveness of internal control over financial reporting. The total assets of $6.0 million and total net sales of $7.5 million associated with the acquisitions are included in the consolidated financial statements of SB/RH as of and for the year ended September 30, 2020.

This annual report does not include an attestation report of SB/RH's registered public accounting firm due to the established rules of the SEC.

Management's Remediation Plan. To remediate the material weakness described above, SB/RH has been and will be implementing revised controls that will include (1) developing and enhancing IT compliance oversight capabilities with specific focus over identification and execution of appropriate ITGCs within the EMEA region; (2) enhancing user access reviews and role change testing control activities and policies within the EMEA IT operations, including documentation evidencing the specific control procedures to be performed; and (3) maintaining process and control documentation underlying user access reviews and role change processes within the EMEA region to promote knowledge transfer and transition upon personnel changes. In addition, we would validate the underlying data and financial reports generated by the impacted information systems supporting business process controls and operations in the EMEA region. The Audit Committee of the Board of Directors and the Board of Directors has reviewed and discussed these matters with management. The Audit Committee will oversee management's efforts to remediate the identified material weakness.

The material weakness will be considered remediated when management concludes that, through testing, the applicable remedial controls are designed and implemented effectively. We expect remediation of this material weakness will be completed during fiscal year 2021.

Changes in Internal Control Over Financial Reporting. Other than the changes related to the material weakness occurring in earlier periods and identified during the quarter ended September 30, 2020, as described above, there have been no changes in SB/RH's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect SB/RH's internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 401 of Regulation S-K concerning the directors and executive officers of SBH is incorporated herein by reference to the disclosures which will be included in in a subsequent amendment to the Form 10-K, which will be filed not later than 120 days after the end of the SBH’s fiscal year ended September 30, 2020.

Audit Committee and Audit Committee Financial Expert

The information required by Items 407(d)(4) and 407(d)(5) of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K.

Section 16(a) Beneficial Ownership Reporting Compliance

The information required by Item 405 of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K.

Code of Ethics

We have adopted the Code of Ethics for the Principal Executive Officer and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer and other senior finance organization employees. The Code of Ethics for the Principal Executive Officer and Senior Financial Officers is publicly available on our website at www.spectrumbrands.com under “Investor Relations—Corporate Governance.” We intend to disclose amendments to, and, if applicable, waivers of, this code of ethics on that section of our website.

We have also adopted the Spectrum Brands Code of Business Conduct and Ethics that applies to all of our directors, officers and employees. The Spectrum Brands Code of Business Conduct and Ethics is publicly available on our website at www.spectrumbrands.com under “Investor Relations—Corporate Governance.” Any amendments to this code of ethics or any waiver of this code of ethics for executive officers or directors may be made only by our Board of Directors as a whole or our Audit Committee and will be promptly disclosed to our shareholders via that section of our website.

ITEM 11. EXECUTIVE COMPENSATION

ExecutiveCompensation

The information required by Item 402 of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K.

Compensation Committee Interlocks and Insider Participation

The information required by Item 407(e)(4) of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K.

Report of the Compensation Committee of the Board of Directors

The information required by Item 407(e)(5) of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Ownership of Common Shares of Spectrum Brands Holdings, Inc.

The information required by Item 404 of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Review, Approval or Ratification of Transactions with Related Persons

The information required by Item 404 of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K.

Director Independence

The information required by Item 407(a) of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table summarizes the fees KPMG LLP, our independent registered public accounting firm, billed to the Company.

Audit Fees $ 5.0 $ 6.2

Audit-Related Fees — 2.6

All Other Fees — —

In the above table, in accordance with the SEC’s definition and rules, “Audit Fees” are fees paid to KPMG LLP for professional services for the of audit SBH and SB/RH, and our consolidated financial statements included in our Form 10-K and the review of our financial statements included in Form 10-Q, or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, such as issuance of comfort letters and statutory audits required for certain of our foreign subsidiaries. “Audit-Related Fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including the due diligence activities relating to mergers and acquisitions and including the audit of standalone carve-out financial statements used as part of our GBL and GAC divestitures.. “Tax Fees” are fees for tax compliance, tax advice, and tax planning. Such fees were attributable to services for tax compliance assistance and tax advice. “All Other Fees” are fees, if any, for any services not included in the first three categories.

Pre-Approval of Independent Auditors Services and Fees

The Audit Committee pre-approved the audit services engagement performed by KPMG LLP for the year ended September 30, 2020. In accordance with the Audit Committee’s Pre-Approval Policy, the Audit Committee has pre-approved other specified audit, or audit related services, provided that the fees incurred by KPMG LLP in connection with any individual engagement do not exceed $200,000 in any 12-month period. The Audit Committee must approve for an engagement by engagement basis any individual non-audit or tax engagement in any 12-month period. The Audit Committee has delegated to its Chairman the authority to pre-approve any other specific audit or specific non-audit service which was not previously pre-approved by the Audit Committee, provided that any decision of the Chairman to pre-approve other audit or non-audit services shall be presented to the Audit Committee at its next scheduled meeting.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES

(a) The following documents are filed as part of or are included in this Annual Report on Form 10-K:

1.The financial statements of Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC listed in the Index to Consolidated Financial Statements, filed as part of this Annual Report on Form 10-K.

2.The financial statement schedule of Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC listed in the Index to Consolidated Financial Statements, filed as part of this Annual Report on Form 10-K.

3.The exhibits listed in the Exhibit Index filed as part of this Annual Report on Form 10-K.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

This report is a combined report of Spectrum Brands Holdings, Inc. (“SBH”) and SB/RH Holdings, LLC (“SB/RH”). The notes to the consolidated financial statements include consolidated SBH footnotes and certain footnotes related to SB/RH.

Page

Reports of Independent Registered Public Accounting Firm 53

Spectrum Brands Holdings, Inc. Consolidated Financial Statements

Consolidated Statements of Financial Position 58

Consolidated Statements of Income 59

Consolidated Statements of Comprehensive Income 60

Consolidated Statements of Shareholders’ Equity 61

Consolidated Statements of Cash Flows 62

SB/RH Holdings, LLC Consolidated Financial Statements

Consolidated Statements of Financial Position 64

Consolidated Statements of Income 65

Consolidated Statements of Comprehensive Income 66

Consolidated Statements of Shareholder’s Equity 67

Consolidated Statements of Cash Flows 68

Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC Combined

Combined Notes to Consolidated Financial Statements 69

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Spectrum Brands Holdings, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Spectrum Brands Holdings, Inc. and subsidiaries (the Company) as of September 30, 2020 and 2019, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 18, 2020 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Carrying value of certain indefinite-lived intangible assets

As discussed in Notes 2 and 11 to the consolidated financial statements, the indefinite-lived intangible assets balance as of September 30, 2020 was $1,007.5 million, which includes certain tradenames in the Global Pet Care (GPC) and Home & Hardware Improvement (HHI) segments. The Company performs impairment testing of its indefinite-lived intangible assets on an annual basis and whenever events or changes in circumstances indicate that the carrying value of such asset might exceed its fair value. At September 30, 2020 there are approximately $136.9 million of intangible assets that could be deemed at risk of future impairment due to the limited excess fair value.

We identified the assessment of the carrying value of indefinite-lived intangible assets for certain tradenames in the GPC and HHI segments as a critical audit matter. The estimated fair values of these tradenames had limited excess compared to their carrying values, which indicated a greater risk that the tradenames may be impaired, and required a higher degree of auditor judgment. In addition, minor changes to the following key assumptions used by the Company to calculate the fair value of the tradenames would have had a significant effect on the Company’s assessment of the carrying values of the tradenames:

•discount rate

•royalty rate

•forecasted revenue growth rates.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the determination of the fair value of certain tradenames in the GPC and HHI segments, and the development of the discount rate, royalty rate, and forecasted revenue growth rates. We performed sensitivity analyses over the discount rate, royalty rate, and forecasted revenue growth rates assumptions to assess the impact of changes to those assumptions on the Company’s determination of the fair value of the tradenames. We evaluated the Company’s forecasted revenue growth rates by comparing them to the forecasted revenue growth rates in the Company’s and its peer companies’ analyst reports. Additionally, we compared the Company’s historical revenue growth rates for the tradenames to actual results to assess the Company’s ability to accurately forecast. We involved valuation professionals with specialized skills and knowledge, who assisted in:

•evaluating the Company’s discount and royalty rates by comparing them against a discount rate range and royalty rate range that was independently developed using publicly available market data for comparable entities

•developing an estimate of the tradenames’ fair values using the revenue forecasts for the tradenames and the independently developed discount and royalty rates, and compared the results to the Company’s fair value estimates.

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Recoverability of deferred tax assets associated with the Company’s net operating losses

As discussed in Note 16 to the consolidated financial statements, the Company had $689.8 million of deferred tax assets as of September 30, 2020. The deferred tax assets arise primarily due to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as, net operating losses, capital losses, and other carryforwards. The Company records a valuation allowance on the deferred tax assets not expected to be recoverable. In assessing the recoverability of the deferred tax assets, the Company considers both historical and forecasted income and expected timing of when temporary differences will reverse.

We identified the evaluation of the recoverability of the deferred tax assets associated with the Company’s net operating losses as a critical audit matter due to the subjectivity involved in evaluating the recoverability of those deferred tax assets. This subjectivity is primarily driven by the Company’s ability to generate sufficient taxable income of the appropriate character in the future so as to recover those deferred tax assets. Further, there is complexity in the application of the relevant tax regulations to the Company’s forecasted taxable income.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the development of forecasted income, utilization of net operating losses, and the application of the relevant tax regulations. We assessed the likelihood of the Company’s ability to recover its net operating loss deferred tax assets in the future, which included evaluating projected financial information used to forecast taxable income. To assess the Company’s ability to forecast, we compared the Company’s previous forecasts to actual results. We involved U.S. tax professionals with specialized skills and knowledge, who assisted in assessing the Company’s application of the relevant tax regulations and evaluating the recoverability of deferred tax assets associated with the Company’s net operating losses.

/s/ KPMG LLP

We have served as the Company’s auditor since 2011.

Milwaukee, Wisconsin

November 18, 2020

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Spectrum Brands Holdings, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Spectrum Brands Holdings, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of September 30, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weakness, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of September 30, 2020, based oncriteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of September 30, 2020 and 2019, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2020, and the related notes (collectively, the consolidated financial statements), and our report dated November 18, 2020, expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A material weakness has been identified and included in management’s assessment related to ineffective information technology general controls related to user access and role change reviews over certain information technology systems in the Company’s EMEA region. As a result, business process automated and manual controls that are dependent on the affected general information technology controls were also ineffective because they could have been adversely impacted. These control deficiencies were due to an ineffective risk assessment and communication of control activities related to the transfer of ITGC operations provided under transition service agreements within the EMEA region. The material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2020 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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

/s/ KPMG LLP

Milwaukee, Wisconsin

November 18, 2020

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Report of Independent Registered Public Accounting Firm

To the Shareholder and Board of Directors

SB/RH Holdings, LLC:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of SB/RH Holdings, LLC and subsidiaries (the Company) as of September 30, 2020 and 2019, the related consolidated statements of income, comprehensive income, shareholder’s equity, and cash flows for each of the years in the three-year period ended September 30, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2020, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Carrying value of certain indefinite-lived intangible assets

As discussed in Notes 2 and 11 to the consolidated financial statements, the indefinite-lived intangible assets balance as of September 30, 2020 was $1,007.5 million, which includes certain tradenames in the Global Pet Care (GPC) and Home & Hardware Improvement (HHI) segments. The Company performs impairment testing of its indefinite-lived intangible assets on an annual basis and whenever events or changes in circumstances indicate that the carrying value of such asset might exceed its fair value. At September 30, 2020 there are approximately $136.9 million of intangible assets that could be deemed at risk of future impairment due to the limited excess fair value.

We identified the assessment of the carrying value of indefinite-lived intangible assets for certain tradenames in the GPC and HHI segments as a critical audit matter. The estimated fair values of these tradenames had limited excess compared to their carrying values, which indicated a greater risk that the tradenames may be impaired, and required a higher degree of auditor judgment. In addition, minor changes to the following key assumptions used by the Company to calculate the fair value of the tradenames would have had a significant effect on the Company’s assessment of the carrying values of the tradenames:

•discount rate

•royalty rate

•forecasted revenue growth rates.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the determination of the fair value of certain tradenames in the GPC and HHI segments, and the development of the discount rate, royalty rate, and forecasted revenue growth rates. We performed sensitivity analyses over the discount rate, royalty rate, and forecasted revenue growth rates assumptions to assess the impact of changes to those assumptions on the Company’s determination of the fair value of the tradenames. We evaluated the Company’s forecasted revenue growth rates by comparing them to the forecasted revenue growth rates in the Company’s and its peer companies’ analyst reports. Additionally, we compared the Company’s historical revenue growth rates for the tradenames to actual results to assess the Company’s ability to accurately forecast. We involved valuation professionals with specialized skills and knowledge, who assisted in:

•evaluating the Company’s discount and royalty rates by comparing them against a discount rate range and royalty rate range that was independently developed using publicly available market data for comparable entities

•developing an estimate of the tradenames’ fair values using the revenue forecasts for the tradenames and the independently developed discount and royalty rates, and compared the results to the Company’s fair value estimates.

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Recoverability of deferred tax assets associated with the Company’s net operating losses

As discussed in Note 16 to the consolidated financial statements, the Company had $361.8 million of deferred tax assets as of September 30, 2020. The deferred tax assets arise primarily due to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as, net operating losses, capital losses, and other carryforwards. The Company records a valuation allowance on the deferred tax assets not expected to be recoverable. In assessing the recoverability of the deferred tax assets, the Company considers both historical and forecasted income and expected timing of when temporary differences will reverse.

We identified the evaluation of the recoverability of the deferred tax assets associated with the Company’s net operating losses as a critical audit matter due to the subjectivity involved in evaluating the recoverability of those deferred tax assets. This subjectivity is primarily driven by the Company’s ability to generate sufficient taxable income of the appropriate character in the future so as to recover those deferred tax assets. Further, there is complexity in the application of the relevant tax regulations to the Company’s forecasted taxable income.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the development of forecasted income, utilization of net operating losses, and the application of the relevant tax regulations. We assessed the likelihood of the Company’s ability to recover its net operating loss deferred tax assets in the future, which included evaluating projected financial information used to forecast taxable income. To assess the Company’s ability to forecast, we compared the Company’s previous forecasts to actual results. We involved U.S. tax professionals with specialized skills and knowledge, who assisted in assessing the Company’s application of the relevant tax regulations and evaluating the recoverability of deferred tax assets associated with the Company’s net operating losses.

/s/ KPMG LLP

We have served as the Company’s auditor since 1997.

Milwaukee, Wisconsin

November 18, 2020

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SPECTRUM BRANDS HOLDINGS, INC.

Consolidated Statements of Financial Position

September 30, 2020 and 2019

(in millions, except per share figures)

Assets

Cash and cash equivalents $ 531.6 $ 627.1

Prepaid expenses and other current assets 63.5 53.5

Property, plant and equipment, net 396.5 452.9

Operating lease assets 103.8 —

Deferred charges and other 48.3 67.2

Liabilities and Shareholders' Equity

Current portion of long-term debt $ 15.3 $ 136.9

Accrued wages and salaries 95.0 72.1

Indemnification payable to Energizer 33.0 230.8

Long-term debt, net of current portion 2,461.0 2,214.4

Long-term operating lease liabilities 88.8 —

Deferred income taxes 65.4 50.6

Commitments and contingencies (Note 20)

Shareholders' equity

Accumulated other comprehensive loss, net of tax (284.7) (273.6)

Noncontrolling interest 8.3 8.0

See accompanying notes to the consolidated financial statements.

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SPECTRUM BRANDS HOLDINGS, INC.

Consolidated Statements ofIncome

Years ended September 30, 2020, 2019 and 2018

(in millions, except per share figures)

Restructuring and related charges 14.3 2.8 3.6

Restructuring and related charges 58.3 62.9 72.0

Loss on assets held for sale 26.8 — —

Write-off from impairment of goodwill — 116.0 —

Write-off from impairment of intangible assets 24.2 35.4 20.3

Gain from extinguishment of Salus CLO debt (76.2) — —

Other non-operating expense (income), net 19.7 43.9 (4.1)

Income tax expense (benefit) 70.9 (7.1) (462.7)

Net income (loss) from continuing operations 84.5 (186.7) 427.0

Income from discontinued operations, net of tax 14.0 682.5 445.0

Net income attributable to non-controlling interest 0.7 1.3 103.7

Net income attributable to controlling interest $ 97.8 $ 494.5 $ 768.3

Amounts attributable to controlling interest

Net income attributable to controlling interest $ 97.8 $ 494.5 $ 768.3

Earnings Per Share

Basic earnings per share from continuing operations $ 1.88 $ (3.71) $ 9.64

Basic earnings per share from discontinued operations 0.31 13.47 11.15

Diluted earnings per share from continuing operations $ 1.87 $ (3.71) $ 9.62

Diluted earnings per share from discontinued operations 0.31 13.47 11.12

Weighted Average Shares Outstanding

See accompanying notes to the consolidated financial statements.

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SPECTRUM BRANDS HOLDINGS, INC.

Consolidated Statements of Comprehensive Income

Years ended September 30, 2020, 2019 and 2018

(in millions)

Other comprehensive income

Foreign currency translation loss (18.5) (30.8) (45.8)

Deferred tax effect 0.1 (4.7) 7.9

Deferred tax valuation allowance — — (0.2)

Net unrealized loss on foreign currency translation (18.4) (35.5) (38.1)

Unrealized gain (loss) on derivative instruments

Deferred tax effect 11.7 (5.4) (7.1)

Net unrealized gain (loss) on hedging derivative instruments 0.5 (3.4) 10.0

Defined benefit pension (loss) gain

Defined benefit pension loss before reclassification (5.2) (27.6) (3.0)

Net reclassification for loss to income from continuing operations 4.3 2.0 4.6

Net reclassification for loss to income from discontinued operations — 0.2 0.7

Defined benefit pension (loss) gain after reclassification (0.9) (25.4) 2.3

Deferred tax effect (0.3) 4.1 1.5

Net defined benefit pension (loss) gain (1.2) (21.3) 3.8

Unrealized investment gain

Unrealized investment gain before reclassification — — 26.0

Net reclassification for gain to income from discontinued operations — — (6.3)

Unrealized gain on investments after reclassification — — 19.7

Adjustments to intangible assets — — (0.9)

Deferred tax effect — — (6.7)

Net unrealized gain on investments — — 12.1

Net change to derive comprehensive loss for the periods (11.0) (38.3) (458.1)

Comprehensive income attributable to controlling interest $ 87.1 $ 458.0 $ 416.7

See accompanying notes to the consolidated financial statements.

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SPECTRUM BRANDS HOLDINGS, INC.

Consolidated Statements of Shareholders’ Equity

Years ended September 30, 2020, 2019 and 2018

(in millions)

(in millions) Shares Amount

Income from discontinued operations, net of tax — — — 411.8 — — 411.8 33.2 445.0

Other comprehensive loss, net of tax — — — — (9.4) — (9.4) (2.8) (12.2)

Exercise of stock options and warrants 2.6 — 20.7 — — — 20.7 — 20.7

Share based compensation — — 3.7 — — — 3.7 (0.4) 3.3

Dividend paid to common shareholders — — — (22.5) — — (22.5) — (22.5)

Dividend paid by subsidiary to NCI — — — — — — — (28.6) (28.6)

Reverse stock split adjustment (170.4) (1.7) 1.7 — — — — — —

Income from discontinued operations, net of tax — — — 682.5 — — 682.5 — 682.5

Sale and deconsolidation of discontinued operations — — — — 21.9 — 21.9 — 21.9

Other comprehensive loss, net of tax — — — — (59.7) — (59.7) (0.5) (60.2)

Share based compensation — — 32.3 — — — 32.3 — 32.3

Dividend paid to common shareholders — — — (87.3) — — (87.3) — (87.3)

Dividend paid by subsidiary to NCI — — — — — — — (1.1) (1.1)

Net income from continuing operations — — — 83.8 — — 83.8 0.7 84.5

Income from discontinued operations, net of tax — — — 14.0 — — 14.0 — 14.0

Sale and deconsolidation of assets held for sale — — — — 8.1 — 8.1 — 8.1

Other comprehensive (loss) income, net of tax — — — — (19.5) — (19.5) 0.4 (19.1)

Share based compensation — — 37.6 — — — 37.6 — 37.6

Dividend paid to common shareholders — — — (77.4) — — (77.4) — (77.4)

Dividend paid by subsidiary to NCI — — — — — — — (0.8) (0.8)

See accompanying notes to the consolidated financial statements.

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SPECTRUM BRANDS HOLDINGS, INC.

Consolidated Statements of Cash Flows

Years ended September 30, 2020, 2019 and 2018

(in millions)

Cash flows from operating activities

Income from discontinued operations, net of tax 14.0 682.5 445.0

Net income (loss) from continuing operations 84.5 (186.7) 427.0

Unrealized loss on equity investments held 7.5 12.1 —

Realized loss on equity investments sold 9.3 — —

Loss on assets held for sale 26.8 — —

Write-off from impairment of goodwill — 116.0 —

Write-off from impairment of intangible assets 24.2 35.4 20.3

Amortization of debt issuance costs and debt discount 6.4 9.9 19.6

Write-off of unamortized discount and debt issuance costs 1.1 38.3 —

Gain from extinguishment of Salus CLO debt (76.2) — —

Purchase accounting inventory adjustment — — 0.8

GPC safety recall inventory write-off — — 4.1

Dividends from subsidiaries classified as discontinued operations — — 3.1

Deferred tax expense (benefit) 46.8 (6.5) (556.5)

Net changes in operating assets and liabilities

Prepaid expenses and other current assets 18.0 (3.1) 22.3

Accounts payable and accrued liabilities 125.0 (161.3) 65.7

Net cash provided by operating activities 290.3 1.1 343.3

Cash flows from investing activities

Purchases of property, plant and equipment (61.0) (58.4) (75.9)

Proceeds from disposal of property, plant and equipment 4.2 2.1 4.2

Proceeds from sale of assets held for sale 29.0 — —