NOTE 20 - GUARANTOR STATEMENTS – SB/RH

Spectrum Brands, Inc. (“SBI”) with SB/RH as a parent guarantor (collectively, the “Parent”), with SBI’s domestic subsidiaries as subsidiary guarantors, has issued the 6.625% Notes under the 2020/22 Indenture, 6.125% Notes under the 2024 Indenture, the 5.75% Notes under the 2025 Indenture and the 4.00% Notes under the 2026 Indenture.

The following consolidating financial statements illustrate the components of the consolidated financial statements of SB/RH. The ‘Parent’ consists of the financial statements of SBI as the debt issuer, with SB/RH as a parent guarantor, without consolidated entities. SB/RH financial information is not presented separately as there are no independent assets or operations and is therefore determined not to be material. Investments in subsidiaries are accounted for using the equity method for purposes of illustrating the consolidating presentation. The elimination entries presented herein eliminate investments in subsidiaries and intercompany balances and transactions.



Statement of Financial Position			Guarantor		Nonguarantor
As of July 1, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	2.4	$	0.8	$	143.7	$	—	$	146.9
Trade receivables, net		132.0		176.8		75.4		—		384.2
Intercompany receivables		—		1,414.2		323.7		(1,737.9)		—
Other receivables		48.3		6.1		14.5		(11.2)		57.7
Inventories		166.9		246.4		151.7		(18.3)		546.7
Prepaid expenses and other		43.1		9.5		15.5		—		68.1
Current assets of business held for sale		1,052.2		83.9		781.1		(4.1)		1,913.1
Total current assets		1,444.9		1,937.7		1,505.6		(1,771.5)		3,116.7
Property, plant and equipment, net		174.5		177.3		142.4		—		494.2
Long-term intercompany receivables		310.4		80.0		11.7		(402.1)		—
Deferred charges and other		154.7		2.5		34.4		(147.9)		43.7
Goodwill		568.6		1,463.4		237.4		—		2,269.4
Intangible assets, net		392.7		997.6		174.5		—		1,564.8
Investments in subsidiaries		5,044.6		1,382.4		(2.8)		(6,424.2)		—
Total assets	$	8,090.4	$	6,040.9	$	2,103.2	$	(8,745.7)	$	7,488.8
Liabilities and Shareholder's Equity
Current portion of long-term debt	$	14.8	$	4.3	$	1.8	$	(0.1)	$	20.8
Accounts payable		88.0		154.1		105.9		—		348.0
Intercompany accounts payable		1,738.9		—		1.0		(1,739.9)		—
Accrued wages and salaries		21.8		3.4		16.0		—		41.2
Accrued interest		43.3		—		—		—		43.3
Other current liabilities		64.0		24.2		46.9		(11.2)		123.9
Current liabilities of business held for sale		164.6		1.4		359.3		—		525.3
Total current liabilities		2,135.4		187.4		530.9		(1,751.2)		1,102.5
Long-term debt, net of current portion		4,156.9		89.5		7.1		—		4,253.5
Long-term intercompany debt		11.7		290.9		97.3		(399.9)		—
Deferred income taxes		—		422.3		46.5		(153.7)		315.1
Other long-term liabilities		68.0		6.2		39.0		—		113.2
Total liabilities		6,372.0		996.3		720.8		(2,304.8)		5,784.3
Shareholder's equity:
Other capital		2,095.2		787.6		(1,378.5)		567.1		2,071.4
Accumulated (deficit) earnings		(153.3)		4,452.3		2,940.1		(7,392.4)		(153.3)
Accumulated other comprehensive loss		(223.5)		(195.3)		(189.1)		384.4		(223.5)
Total shareholder's equity		1,718.4		5,044.6		1,372.5		(6,440.9)		1,694.6
Non-controlling interest		—		—		9.9		—		9.9
Total equity		1,718.4		5,044.6		1,382.4		(6,440.9)		1,704.5
Total liabilities and equity	$	8,090.4	$	6,040.9	$	2,103.2	$	(8,745.7)	$	7,488.8

NOTE 20 - GUARANTOR STATEMENTS – SB/RH (continued)



Statement of Financial Position			Guarantor		Nonguarantor
As of September 30, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	6.0	$	4.8	$	157.4	$	—	$	168.2
Trade receivables, net		85.4		102.4		78.2		—		266.0
Intercompany receivables		0.7		1,288.1		335.4		(1,624.2)		—
Other receivables		4.4		4.7		10.6		(1.0)		18.7
Inventories		184.7		205.6		126.4		(20.4)		496.3
Prepaid expenses and other		30.9		8.6		14.6		0.1		54.2
Current assets of business held for sale		228.7		0.2		378.4		(4.3)		603.0
Total current assets		540.8		1,614.4		1,101.0		(1,649.8)		1,606.4
Property, plant and equipment, net		182.2		178.9		142.0		—		503.1
Long-term intercompany receivables		317.2		96.6		12.5		(426.3)		—
Deferred charges and other		244.2		3.0		35.6		(254.4)		28.4
Goodwill		568.6		1,463.4		245.1		—		2,277.1
Intangible assets, net		401.4		1,027.7		182.9		—		1,612.0
Investments in subsidiaries		4,730.1		1,290.3		—		(6,020.4)		—
Noncurrent assets of business held for sale		814.3		124.4		438.2		—		1,376.9
Total assets	$	7,798.8	$	5,798.7	$	2,157.3	$	(8,350.9)	$	7,403.9
Liabilities and Shareholder's Equity
Current portion of long-term debt	$	13.8	$	4.3	$	5.2	$	(3.9)	$	19.4
Accounts payable		122.2		108.3		141.1		—		371.6
Intercompany accounts payable		1,629.6		—		—		(1,629.6)		—
Accrued wages and salaries		27.5		2.3		20.1		—		49.9
Accrued interest		48.5		—		—		—		48.5
Other current liabilities		50.1		25.6		44.2		(1.0)		118.9
Current liabilities of business held for sale		177.3		0.9		322.4		—		500.6
Total current liabilities		2,069.0		141.4		533.0		(1,634.5)		1,108.9
Long-term debt, net of current portion		3,650.8		92.1		9.4		—		3,752.3
Long-term intercompany debt		12.6		302.1		102.4		(417.1)		—
Deferred income taxes		177.9		523.5		52.0		(260.2)		493.2
Other long-term liabilities		11.5		6.1		40.4		—		58.0
Noncurrent liabilities of business held for sale		22.8		3.4		129.9		—		156.1
Total liabilities		5,944.6		1,068.6		867.1		(2,311.8)		5,568.5
Shareholder's equity:
Other capital		2,107.1		1,089.9		(1,075.0)		(43.0)		2,079.0
Accumulated (deficit) earnings		(42.8)		3,814.1		2,521.6		(6,335.7)		(42.8)
Accumulated other comprehensive loss		(210.1)		(173.9)		(165.2)		339.6		(209.6)
Total shareholder's equity		1,854.2		4,730.1		1,281.4		(6,039.1)		1,826.6
Non-controlling interest		—		—		8.8		—		8.8
Total equity		1,854.2		4,730.1		1,290.2		(6,039.1)		1,835.4
Total liabilities and equity	$	7,798.8	$	5,798.7	$	2,157.3	$	(8,350.9)	$	7,403.9

NOTE 20 - GUARANTOR STATEMENTS – SB/RH (continued)


Statement of Income			Guarantor		Nonguarantor
Three month period ended July 1, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	378.7	$	851.4	$	290.6	$	(575.2)	$	945.5
Cost of goods sold		277.5		649.0		234.1		(574.6)		586.0
Restructuring and related charges		—		3.2		1.7		—		4.9
Gross profit		101.2		199.2		54.8		(0.6)		354.6
Selling		40.7		50.7		32.7		(0.2)		123.9
General and administrative		28.9		31.0		6.7		—		66.6
Research and development		1.8		2.9		2.2		—		6.9
Acquisition and integration related charges		0.9		0.7		0.7		—		2.3
Restructuring and related charges		13.3		4.8		2.4		—		20.5
Total operating expense		85.6		90.1		44.7		(0.2)		220.2
Operating income		15.6		109.1		10.1		(0.4)		134.4
Interest expense		37.7		5.4		0.5		—		43.6
Other non-operating (income) expense, net		(82.7)		(12.1)		0.5		95.0		0.7
Income from operations before income taxes		60.6		115.8		9.1		(95.4)		90.1
Income tax (benefit) expense		(9.2)		29.3		0.5		(0.1)		20.5
Net income from continuing operations		69.8		86.5		8.6		(95.3)		69.6
Income from discontinued operations, net of tax		(10.2)		16.3		17.1		(32.7)		(9.5)
Net income		59.6		102.8		25.7		(128.0)		60.1
Net income attributable to non-controlling interest		—		—		0.2		—		0.2
Net income attributable to controlling interest	$	59.6	$	102.8	$	25.5	$	(128.0)	$	59.9


Statement of Income			Guarantor		Nonguarantor
Nine Month Period Ended July 1, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	1,026.8	$	1,873.9	$	877.6	$	(1,420.2)	$	2,358.1
Cost of goods sold		764.2		1,453.3		688.9		(1,421.9)		1,484.5
Restructuring and related charges		—		6.5		3.4		—		9.9
Gross profit		262.6		414.1		185.3		1.7		863.7
Selling		131.8		132.0		100.4		(0.4)		363.8
General and administrative		74.0		81.3		25.2		0.1		180.6
Research and development		5.5		8.7		6.9		—		21.1
Acquisition and integration related charges		5.2		3.8		3.0		—		12.0
Restructuring and related charges		45.1		9.5		4.5		—		59.1
Total operating expense		261.6		235.3		140.0		(0.3)		636.6
Operating income		1.0		178.8		45.3		2.0		227.1
Interest expense		107.8		15.6		0.9		(0.1)		124.2
Other non-operating (income) expense, net		(308.6)		(49.3)		—		361.4		3.5
Income from operations before income taxes		201.8		212.5		44.4		(359.3)		99.4
Income tax benefit		(6.6)		(98.6)		(5.9)		0.1		(111.0)
Net income from continuing operations		208.4		311.1		50.3		(359.4)		210.4
Income from discontinued operations, net of tax		31.9		75.8		77.9		(153.6)		32.0
Net income		240.3		386.9		128.2		(513.0)		242.4
Net income attributable to non-controlling interest		—		—		1.0		—		1.0
Net income attributable to controlling interest	$	240.3	$	386.9	$	127.2	$	(513.0)	$	241.4

NOTE 20 - GUARANTOR STATEMENTS – SB/RH (continued)




Statement of Income			Guarantor		Nonguarantor
Three month period ended July 2, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	299.1	$	668.5	$	276.1	$	(380.8)	$	862.9
Cost of goods sold		205.1		489.0		216.2		(378.8)		531.5
Restructuring and related charges		—		11.2		—		—		11.2
Gross profit		94.0		168.3		59.9		(2.0)		320.2
Selling		42.5		53.9		31.9		(0.4)		127.9
General and administrative		26.3		23.7		7.8		—		57.8
Research and development		2.1		2.6		2.5		—		7.2
Acquisition and integration related charges		4.6		0.1		0.5		—		5.2
Restructuring and related charges		7.8		1.9		0.3		—		10.0
Total operating expense		83.3		82.2		43.0		(0.4)		208.1
Operating income		10.7		86.1		16.9		(1.6)		112.1
Interest expense		33.0		5.9		0.9		—		39.8
Other non-operating (income) expense, net		(68.4)		(14.8)		0.8		83.8		1.4
Income from operations before income taxes		46.1		95.0		15.2		(85.4)		70.9
Income tax (benefit) expense		(6.8)		26.4		—		0.2		19.8
Net income from continuing operations		52.9		68.6		15.2		(85.6)		51.1
Income from discontinued operations, net of tax		28.5		22.3		23.9		(46.4)		28.3
Net income		81.4		90.9		39.1		(132.0)		79.4
Net income attributable to non-controlling interest		—		—		1.7		—		1.7
Net income attributable to controlling interest	$	81.4	$	90.9	$	37.4	$	(132.0)	$	77.7


Statement of Income			Guarantor		Nonguarantor
Nine Month Period Ended July 2, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	841.0	$	1,510.4	$	784.1	$	(913.9)	$	2,221.6
Cost of goods sold		559.9		1,073.5		614.3		(908.5)		1,339.2
Restructuring and related charges		—		16.4		—		—		16.4
Gross profit		281.1		420.5		169.8		(5.4)		866.0
Selling		127.0		132.8		95.3		(1.2)		353.9
General and administrative		96.6		57.6		27.5		—		181.7
Research and development		6.1		8.4		6.4		—		20.9
Acquisition and integration related charges		9.9		0.4		1.3		—		11.6
Restructuring and related charges		9.4		4.9		0.6		—		14.9
Total operating expense		249.0		204.1		131.1		(1.2)		583.0
Operating income		32.1		216.4		38.7		(4.2)		283.0
Interest expense		104.2		14.0		3.8		—		122.0
Other non-operating (income) expense, net		(186.9)		(38.0)		(0.7)		227.9		2.3
Income from operations before income taxes		114.8		240.4		35.6		(232.1)		158.7
Income tax expense (benefit)		5.4		54.3		(6.2)		(0.2)		53.3
Net income from continuing operations		109.4		186.1		41.8		(231.9)		105.4
Income from discontinued operations, net of tax		100.0		78.6		82.6		(161.4)		99.8
Net income		209.4		264.7		124.4		(393.3)		205.2
Net income attributable to non-controlling interest		—		—		1.5		—		1.5
Net income attributable to controlling interest	$	209.4	$	264.7	$	122.9	$	(393.3)	$	203.7

NOTE 20 - GUARANTOR STATEMENTS – SB/RH (continued)


Statement of Comprehensive Income			Guarantor		Nonguarantor
Three month period ended July 1, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net income	$	59.6	$	102.8	$	25.7	$	(128.0)	$	60.1
Other comprehensive income (loss), net of tax:
Net unrealized loss on foreign currency translation		(59.2)		(59.2)		(62.4)		121.7		(59.1)
Unrealized gain on hedging derivative instruments		30.4		9.2		9.2		(18.4)		30.4
Defined benefit pension gain		2.9		2.4		2.4		(4.8)		2.9
Other comprehensive (loss) income		(25.9)		(47.6)		(50.8)		98.5		(25.8)
Comprehensive income (loss)		33.7		55.2		(25.1)		(29.5)		34.3
Comprehensive loss attributable to non-controlling interest		—		—		(0.6)		—		(0.6)
Comprehensive income (loss) attributable to controlling interest	$	33.7	$	55.2	$	(24.5)	$	(29.5)	$	34.9


Statement of Comprehensive Income			Guarantor		Nonguarantor
Nine Month Period Ended July 1, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net income	$	240.3	$	386.9	$	128.2	$	(513.0)	$	242.4
Other comprehensive income (loss), net of tax:
Foreign currency translation loss		(37.0)		(37.0)		(39.4)		76.5		(36.9)
Unrealized gain on derivative instruments		20.6		13.4		13.4		(26.8)		20.6
Defined benefit pension gain		2.5		1.7		1.7		(3.4)		2.5
Other comprehensive income		(13.9)		(21.9)		(24.3)		46.3		(13.8)
Comprehensive income		226.4		365.0		103.9		(466.7)		228.6
Comprehensive loss attributable to non-controlling interest		—		—		(0.1)		—		(0.1)
Comprehensive income attributable to controlling interest	$	226.4	$	365.0	$	104.0	$	(466.7)	$	228.7


Statement of Comprehensive Income			Guarantor		Nonguarantor
Three month period ended July 2, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net income	$	81.4	$	90.9	$	39.1	$	(132.0)	$	79.4
Other comprehensive income (loss), net of tax:
Net unrealized gain on foreign currency translation		30.3		32.3		31.1		(63.4)		30.3
Unrealized loss on hedging derivative instruments		(30.2)		(9.1)		(9.1)		18.2		(30.2)
Defined benefit pension loss		(2.3)		(2.3)		(2.3)		4.6		(2.3)
Other comprehensive (loss) income		(2.2)		20.9		19.7		(40.6)		(2.2)
Comprehensive income		79.2		111.8		58.8		(172.6)		77.2
Comprehensive loss attributable to non-controlling interest		—		—		(0.2)		—		(0.2)
Comprehensive income attributable to controlling interest	$	79.2	$	111.8	$	59.0	$	(172.6)	$	77.4


Statement of Comprehensive Income			Guarantor		Nonguarantor
Nine Month Period Ended July 2, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net income	$	209.4	$	264.7	$	124.4	$	(393.3)	$	205.2
Other comprehensive income (loss), net of tax:
Foreign currency translation gain		5.9		8.8		8.1		(16.9)		5.9
Unrealized loss on derivative instruments		(15.7)		(9.9)		(9.9)		19.8		(15.7)
Defined benefit pension gain		0.8		0.8		0.8		(1.7)		0.7
Other comprehensive loss		(9.0)		(0.3)		(1.0)		1.2		(9.1)
Comprehensive income		200.4		264.4		123.4		(392.1)		196.1
Comprehensive loss attributable to non-controlling interest		—		—		(0.4)		—		(0.4)
Comprehensive income attributable to controlling interest	$	200.4	$	264.4	$	123.8	$	(392.1)	$	196.5

NOTE 20 - GUARANTOR STATEMENTS – SB/RH (continued)



Statement of Cash Flows			Guarantor		Nonguarantor
Nine Month Period Ended July 1, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash (used) provided by operating activities from continuing operations	$	(165.3)	$	(25.8)	$	91.0	$	7.6	$	(92.5)
Net cash provided (used) by operating activities from discontinued operations		13.5		0.1		12.4		(31.0)		(5.0)
Net cash (used) provided by operating activities		(151.8)		(25.7)		103.4		(23.4)		(97.5)
Cash flows from investing activities		.
Purchases of property, plant and equipment		(17.9)		(13.0)		(18.3)		—		(49.2)
Proceeds from sales of property, plant and equipment		0.8		0.1		1.9		—		2.8
Other investing activity, net		—		(0.2)		(0.2)		—		(0.4)
Net cash used by investing activities from continuing operations		(17.1)		(13.1)		(16.6)		—		(46.8)
Net cash used by investing activities from discontinued operations		(13.5)		(0.1)		(13.4)		—		(27.0)
Net cash used by investing activities		(30.6)		(13.2)		(30.0)		—		(73.8)
Cash flows from financing activities
Proceeds from issuance of debt		545.5		—		9.8		—		555.3
Payment of debt		(35.4)		—		(15.6)		—		(51.0)
Payment of debt issuance costs		(0.4)		—		—		—		(0.4)
Payment of cash dividends to parent		(351.8)		—		—		—		(351.8)
Advances related to intercompany transactions		20.9		34.9		(79.2)		23.4		—
Net cash provided (used) by financing activities from continuing operations		178.8		34.9		(85.0)		23.4		152.1
Net cash provided by financing activities from discontinued operations		—		—		1.0		—		1.0
Net cash provided (used) by financing activities		178.8		34.9		(84.0)		23.4		153.1
Effect of exchange rate changes on cash and cash equivalents		—		—		(3.1)		—		(3.1)
Net decrease in cash and cash equivalents		(3.6)		(4.0)		(13.7)		—		(21.3)
Cash and cash equivalents, beginning of period		6.0		4.8		157.4		—		168.2
Cash and cash equivalents, end of period	$	2.4	$	0.8	$	143.7	$	—	$	146.9


Statement of Cash Flows			Guarantor		Nonguarantor
Nine Month Period Ended July 2, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash provided (used) by operating activities from continuing operations	$	130.8	$	(19.3)	$	32.5	$	(116.8)	$	27.2
Net cash provided by operating activities from discontinued operations		15.4		—		8.6		93.3		117.3
Net cash provided (used) by operating activities		146.2		(19.3)		41.1		(23.5)		144.5
Cash flows from investing activities
Purchases of property, plant and equipment		(16.7)		(16.3)		(18.1)		—		(51.1)
Proceeds from sales of property, plant and equipment		—		0.2		3.3		—		3.5
Business acquisitions, net cash acquired		(304.7)		—		—		—		(304.7)
Other investing activities		—		(1.1)		—		—		(1.1)
Net cash used by investing activities from continuing operations		(321.4)		(17.2)		(14.8)		—		(353.4)
Net cash used by investing activities from discontinued operations		(15.4)		—		(10.9)		—		(26.3)
Net cash used by investing activities		(336.8)		(17.2)		(25.7)		—		(379.7)
Cash flows from financing activities
Proceeds from issuance of debt		543.0		—		13.9		—		556.9
Payment of debt		(207.7)		—		(17.3)		—		(225.0)
Payment of debt issuance costs		(5.9)		—		—		—		(5.9)
Purchase of noncontrolling interest		(12.6)		—		—		—		(12.6)
Payment of cash dividends to parent		(240.1)		—		—		—		(240.1)
Advances related to intercompany transactions		20.9		34.9		(79.3)		23.5		—
Net cash provided (used) by financing activities from continuing operations		97.6		34.9		(82.7)		23.5		73.3
Net cash provided by financing activities from discontinued operations		—		—		2.4		—		2.4
Net cash provided (used) by financing activities		97.6		34.9		(80.3)		23.5		75.7
Effect of exchange rate changes on cash and cash equivalents		—		—		(1.5)		—		(1.5)
Net decrease in cash and cash equivalents		(93.0)		(1.6)		(66.4)		—		(161.0)
Cash and cash equivalents, beginning of period		98.6		3.1		169.1		—		270.8
Cash and cash equivalents, end of period	$	5.6	$	1.5	$	102.7	$	—	$	109.8