Guarantor Statements - SB/RH

12 Months Ended

Sep. 30, 2019

Guarantor Statements - SB/RH [Abstract]

Guarantor Statements - SB/RH

NOTE 22 – 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 6.125% 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 Holdings, LLC. The ‘Parent’ consists of the financial statements of Spectrum Brands, Inc. as the debt issuer, with SB/RH Holdings, LLC as a parent guarantor, without consolidated entities. SB/RH Holdings, LLC 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 September 30, 2019 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	441.2	$	0.4	$	180.3	$	—	$	621.9
Trade receivables, net		92.5		55.2		209.0		—		356.7
Intercompany receivables		—		2,435.5		1,067.5		(3,503.0)		—
Other receivables		68.7		7.4		64.0		—		140.1
Inventories		207.7		156.5		191.5		(7.3)		548.4
Prepaid expenses and other		26.0		4.7		22.8		—		53.5
Current assets of business held for sale		—		—		—		—		—
Total current assets		836.1		2,659.7		1,735.1		(3,510.3)		1,720.6
Property, plant and equipment, net		187.1		121.1		144.7		—		452.9
Long-term intercompany receivables		51.9		37.4		10.2		(99.5)		—
Deferred charges and other		277.8		0.7		49.7		(276.5)		51.7
Investment		230.8		—		—		—		230.8
Goodwill		567.2		543.3		217.6		—		1,328.1
Intangible assets, net		707.2		560.3		239.6		—		1,507.1
Investments in subsidiaries		4,231.2		1,111.2		(2.9)		(5,339.5)		—
Total assets	$	7,089.3	$	5,033.7	$	2,394.0	$	(9,225.8)	$	5,291.2
Liabilities and Shareholder's Equity
Current portion of long-term debt	$	119.7	$	4.7	$	12.7	$	(0.2)	$	136.9
Accounts payable		98.7		65.4		299.7		—		463.8
Intercompany accounts payable		2,873.6		211.2		386.4		(3,471.2)		—
Accrued wages and salaries		38.1		6.5		27.4		—		72.0
Accrued interest		29.3		—		—		—		29.3
Indemnification payable to Energizer		—		—		230.8		—		230.8
Income tax payable		215.7		—		24.8		—		240.5
Other current liabilities		119.6		19.8		43.3		—		182.7
Current liabilities of business held for sale		—		—		—		—		—
Total current liabilities		3,494.7		307.6		1,025.1		(3,471.4)		1,356.0
Long-term debt, net of current portion		2,076.7		52.8		9.6		—		2,139.1
Long-term intercompany debt		12.3		—		118.8		(131.1)		—
Deferred income taxes		56.5		439.0		55.9		(279.2)		272.2
Other long-term liabilities		35.1		3.1		73.6		—		111.8
Total liabilities		5,675.3		802.5		1,283.0		(3,881.7)		3,879.1
Shareholder's equity:
Other capital		2,124.8		439.2		(750.9)		300.2		2,113.3
Accumulated (deficit) earnings		(437.3)		4,049.0		2,108.4		(6,157.4)		(437.3)
Accumulated other comprehensive loss		(273.5)		(257.0)		(256.1)		513.1		(273.5)
Total shareholder's equity		1,414.0		4,231.2		1,101.4		(5,344.1)		1,402.5
Non-controlling interest		—		—		9.6		—		9.6
Total equity		1,414.0		4,231.2		1,111.0		(5,344.1)		1,412.1
Total liabilities and equity	$	7,089.3	$	5,033.7	$	2,394.0	$	(9,225.8)	$	5,291.2

NOTE 22 – GUARANTOR STATEMENTS – SB/RH (continued)

Statement of Financial Position			Guarantor		Nonguarantor
As of September 30, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	276.6	$	1.8	$	227.0	$	—	$	505.4
Trade receivables, net		108.9		42.9		165.3		—		317.1
Intercompany receivables		—		1,648.3		283.0		(1,931.3)		—
Other receivables		65.7		4.0		27.6		(2.2)		95.1
Inventories		228.5		162.6		204.6		(12.1)		583.6
Prepaid expenses and other		35.3		4.0		23.6		—		62.9
Current assets of business held for sale		551.2		1,379.0		482.5		(10.1)		2,402.6
Total current assets		1,266.2		3,242.6		1,413.6		(1,955.7)		3,966.7
Property, plant and equipment, net		222.9		122.1		155.0		—		500.0
Long-term intercompany receivables		321.3		70.3		11.6		(403.2)		—
Deferred charges and other		200.4		0.6		68.6		(195.4)		74.2
Goodwill		557.4		611.4		285.9		—		1,454.7
Intangible assets, net		770.4		609.5		261.9		—		1,641.8
Investments in subsidiaries		4,900.7		1,262.5		(2.9)		(6,160.3)		—
Total assets	$	8,239.3	$	5,919.0	$	2,193.7	$	(8,714.6)	$	7,637.4
Liabilities and Shareholder's Equity
Current portion of long-term debt	$	535.0	$	4.3	$	7.8	$	(0.2)	$	546.9
Accounts payable		222.4		124.2		238.1		—		584.7
Intercompany accounts payable		1,878.0		—		35.1		(1,913.1)		—
Accrued wages and salaries		24.6		1.5		29.3		—		55.4
Accrued interest		55.0		—		—		—		55.0
Income tax payable		1.9		—		15.9		(2.3)		15.5
Other current liabilities		57.4		17.5		61.9		—		136.8
Current liabilities of business held for sale		81.7		157.8		298.1		—		537.6
Total current liabilities		2,856.0		305.3		686.2		(1,915.6)		1,931.9
Long-term debt, net of current portion		3,615.3		57.3		13.8		—		3,686.4
Long-term intercompany debt		11.6		295.0		114.8		(421.4)		—
Deferred income taxes		59.4		357.6		70.6		(200.6)		287.0
Other long-term liabilities		71.5		3.1		45.8		—		120.4
Total liabilities		6,613.8		1,018.3		931.2		(2,537.6)		6,025.7
Shareholder's equity:
Other capital		2,096.8		803.7		(1,361.9)		534.4		2,073.0
Accumulated (deficit) earnings		(235.6)		4,303.0		2,814.5		(7,117.4)		(235.5)
Accumulated other comprehensive loss		(235.7)		(206.0)		(200.0)		406.0		(235.7)
Total shareholder's equity		1,625.5		4,900.7		1,252.6		(6,177.0)		1,601.8
Non-controlling interest		—		—		9.9		—		9.9
Total equity		1,625.5		4,900.7		1,262.5		(6,177.0)		1,611.7
Total liabilities and equity	$	8,239.3	$	5,919.0	$	2,193.7	$	(8,714.6)	$	7,637.4

‎

NOTE 22 – GUARANTOR STATEMENTS – SB/RH (continued)

Statement of Income			Guarantor		Nonguarantor
Year Ended September 30, 2019 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	1,794.5	$	1,517.9	$	1,906.9	$	(1,417.2)	$	3,802.1
Cost of goods sold		1,327.5		1,126.4		1,460.3		(1,421.8)		2,492.4
Restructuring and related charges		0.3		0.2		2.3		—		2.8
Gross profit		466.7		391.3		444.3		4.6		1,306.9
Selling		231.3		129.4		240.0		(0.2)		600.5
General and administrative		229.8		85.1		36.4		(1.5)		349.8
Research and development		23.2		10.0		10.3		—		43.5
Restructuring and related charges		46.6		2.0		14.3		—		62.9
Transaction related charges		27.4		(0.1)		(5.5)		—		21.8
Write-off from impairment of goodwill		61.0		—		55.0		—		116.0
Write-off from impairment of intangible assets		18.8		16.6		—		—		35.4
Total operating expense		638.1		243.0		350.5		(1.7)		1,229.9
Operating (loss) income		(171.4)		148.3		93.8		6.3		77.0
Interest expense (income)		179.3		6.2		(23.5)		—		162.0
Other non-operating (income) expense, net		(55.4)		(403.9)		(494.8)		998.3		44.2
(Loss) income from operations before income taxes		(295.3)		546.0		612.1		(992.0)		(129.2)
Income tax (benefit) expense		(143.2)		108.5		45.2		0.2		10.7
Net (loss) income from continuing operations		(152.1)		437.5		566.9		(992.2)		(139.9)
Income (loss) from discontinued operations, net of tax		659.6		(72.9)		(7.1)		80.3		659.9
Net income		507.5		364.6		559.8		(911.9)		520.0
Net income attributable to non-controlling interest		—		—		1.3		—		1.3
Net income attributable to controlling interest	$	507.5	$	364.6	$	558.5	$	(911.9)	$	518.7

Statement of Income			Guarantor		Nonguarantor
Year Ended September 30, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	1,839.8	$	1,363.1	$	1,960.2	$	(1,354.4)	$	3,808.7
Cost of goods sold		1,336.8		998.8		1,489.2		(1,354.0)		2,470.8
Restructuring and related charges		—		0.1		3.5		—		3.6
Gross profit		503.0		364.2		467.5		(0.4)		1,334.3
Selling		239.1		122.0		246.3		(0.2)		607.2
General and administrative		108.2		87.9		62.1		(0.5)		257.7
Research and development		23.3		8.9		12.4		—		44.6
Restructuring and related charges		59.7		1.6		10.7		—		72.0
Transaction related charges		23.5		4.2		2.5		—		30.2
Write-off from impairment of intangible assets		—		20.3		—		—		20.3
Total operating expense		453.8		244.9		334.0		(0.7)		1,032.0
Operating income		49.2		119.3		133.5		0.3		302.3
Interest expense		145.2		18.8		2.9		0.1		167.0
Other non-operating (income) expense, net		(208.3)		21.1		1.5		190.9		5.2
Income from operations before income taxes		112.3		79.4		129.1		(190.7)		130.1
Income tax (benefit) expense		(99.2)		(131.3)		149.3		4.4		(76.8)
Net income (loss) from continuing operations		211.5		210.7		(20.2)		(195.1)		206.9
(Loss) income from discontinued operations, net of tax		(30.7)		124.2		177.4		(294.9)		(24.0)
Net income		180.8		334.9		157.2		(490.0)		182.9
Net income attributable to non-controlling interest		—		—		1.4		—		1.4
Net income attributable to controlling interest	$	180.8	$	334.9	$	155.8	$	(490.0)	$	181.5

NOTE 22 – GUARANTOR STATEMENTS – SB/RH (continued)

Statement of Income			Guarantor		Nonguarantor
Year Ended September 30, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	1,662.9	$	1,002.1	$	1,830.9	$	(790.5)	$	3,705.4
Cost of goods sold		1,132.3		649.6		1,376.8		(789.1)		2,369.6
Restructuring and related charges		—		0.5		—		—		0.5
Gross profit		530.6		352.0		454.1		(1.4)		1,335.3
Selling		226.3		119.2		232.7		(0.2)		578.0
General and administrative		195.4		66.2		39.0		(0.1)		300.5
Research and development		23.5		10.0		11.1		—		44.6
Restructuring and related charges		28.1		1.2		7.7		—		37.0
Transaction related charges		14.3		0.5		2.9		—		17.7
Write-off from impairment of intangible assets		—		16.3		—		—		16.3
Total operating expense		487.6		213.4		293.4		(0.3)		994.1
Operating income		43.0		138.6		160.7		(1.1)		341.2
Interest expense		138.0		17.3		6.5		—		161.8
Other non-operating (income) expense, net		(231.2)		(133.6)		1.0		369.6		5.8
Income from operations before income taxes		136.2		254.9		153.2		(370.7)		173.6
Income tax (benefit) expense		(48.3)		22.7		15.8		1.2		(8.6)
Net income from continuing operations		184.5		232.2		137.4		(371.9)		182.2
Income from discontinued operations, net of tax		123.0		132.3		58.4		(194.7)		119.0
Net income		307.5		364.5		195.8		(566.6)		301.2
Net (loss) income attributable to non-controlling interest		(0.3)		—		1.6		—		1.3
Net income attributable to controlling interest	$	307.8	$	364.5	$	194.2	$	(566.6)	$	299.9

Statement of Comprehensive Income			Guarantor		Nonguarantor
Year Ended September 30, 2019 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net income	$	507.5	$	364.6	$	559.8	$	(911.9)	$	520.0
Other comprehensive income, net of tax:
Foreign currency translation loss		(65.3)		(66.0)		(71.2)		137.2		(65.3)
Unrealized gain on derivative instruments		26.4		2.5		2.5		(5.0)		26.4
Defined benefit pension loss		(21.3)		(9.7)		(9.7)		19.4		(21.3)
Deconsolidation of discontinued operations		21.8		21.8		21.8		(43.5)		21.9
Other comprehensive loss		(38.4)		(51.4)		(56.6)		108.1		(38.3)
Comprehensive income		469.1		313.2		503.2		(803.8)		481.7
Comprehensive loss attributable to non-controlling interest		—		—		(0.5)		—		(0.5)
Comprehensive income attributable to controlling interest	$	469.1	$	313.2	$	503.7	$	(803.8)	$	482.2

Statement of Comprehensive Income			Guarantor		Nonguarantor
Year Ended September 30, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net income	$	180.8	$	334.9	$	157.2	$	(490.0)	$	182.9
Other comprehensive income, net of tax:
Net unrealized loss on foreign currency translation		(44.3)		(43.6)		(46.2)		89.8		(44.3)
Unrealized gain on hedging derivative instruments		16.2		13.3		13.3		(26.6)		16.2
Defined benefit pension gain (loss)		1.7		(2.6)		(2.6)		5.2		1.7
Other comprehensive loss		(26.4)		(32.9)		(35.5)		68.4		(26.4)
Comprehensive income		154.4		302.0		121.7		(421.6)		156.5
Comprehensive loss attributable to non-controlling interest		—		—		(0.3)		—		(0.3)
Comprehensive income attributable to controlling interest	$	154.4	$	302.0	$	122.0	$	(421.6)	$	156.8

Statement of Comprehensive Income			Guarantor		Nonguarantor
Year Ended September 30, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net income	$	307.5	$	364.5	$	195.8	$	(566.6)	$	301.2
Other comprehensive income, net of tax:
Foreign currency translation gain		29.1		32.0		34.3		(66.3)		29.1
Unrealized loss on derivative instruments		(29.1)		(15.1)		(15.1)		30.2		(29.1)
Defined benefit pension gain		19.6		14.6		14.7		(29.3)		19.6
Other comprehensive income		19.6		31.5		33.9		(65.4)		19.6
Comprehensive income		327.1		396.0		229.7		(632.0)		320.8
Comprehensive loss attributable to non-controlling interest		—		—		(0.2)		—		(0.2)
Comprehensive income attributable to controlling interest	$	327.1	$	396.0	$	229.9	$	(632.0)	$	321.0

‎

NOTE 22 – GUARANTOR STATEMENTS – SB/RH (continued)

Statement of Cash Flows			Guarantor		Nonguarantor
Year Ended September 30, 2019 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities from continuing operations	$	797.4	$	346.2	$	2,104.9	$	(3,151.3)	$	97.2
Net cash provided (used) by operating activities from discontinued operations		1.7		2.7		3.2		(90.0)		(82.4)
Net cash provided provided by operating activities		799.1		348.9		2,108.1		(3,241.3)		14.8
Cash flows from investing activities		.
Purchases of property, plant and equipment		(29.5)		(15.0)		(13.9)		—		(58.4)
Proceeds from sales of property, plant and equipment		2.0		—		0.1		—		2.1
Proceeds from sale of discontinued operations, net of cash		2,859.5		—		—		—		2,859.5
Other investing activities		—		—		(0.3)		—		(0.3)
Net cash provided (used) by investing activities from continuing operations		2,832.0		(15.0)		(14.1)		—		2,802.9
Net cash used by investing activities from discontinued operations		(1.1)		(2.5)		(1.7)		—		(5.3)
Net cash provided (used) by investing activities		2,830.9		(17.5)		(15.8)		—		2,797.6
Cash flows from financing activities
Proceeds from issuance of debt		300.0		—		—		—		300.0
Payment of debt		(2,250.0)		(4.7)		(8.0)		—		(2,262.7)
Payment of debt issuance costs		(4.1)		—		—		—		(4.1)
Payment of cash dividends to parent		(717.4)		—		—		—		(717.4)
Dividends paid by subsidiary to non-controlling interest		—		—		(1.1)		—		(1.1)
Advances related to intercompany transactions		(793.3)		(327.9)		(2,120.1)		3,241.3		—
Other financing activities		(8.9)		—		—		—		(8.9)
Net cash used by financing activities from continuing operations		(3,473.7)		(332.6)		(2,129.2)		3,241.3		(2,694.2)
Net cash used by financing activities from discontinued operations		(0.6)		(0.2)		(1.4)		—		(2.2)
Net cash used by financing activities		(3,474.3)		(332.8)		(2,130.6)		3,241.3		(2,696.4)
Effect of exchange rate changes on cash and cash equivalents		—		—		(8.4)		—		(8.4)
Net increase (decrease) in cash, cash equivalents and restricted cash		155.7		(1.4)		(46.7)		—		107.6
Cash, cash equivalents and restricted cash, beginning of period		285.5		1.8		227.0		—		514.3
Cash, cash equivalents and restricted cash, end of period	$	441.2	$	0.4	$	180.3	$	—	$	621.9

Statement of Cash Flows			Guarantor		Nonguarantor
Year Ended September 30, 2018 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash (used) provided by operating activities from continuing operations	$	(312.9)	$	43.5	$	809.9	$	(316.8)	$	223.7
Net cash provided by operating activities from discontinued operations		3.6		5.6		22.5		97.1		128.8
Net cash (used) provided by operating activities		(309.3)		49.1		832.4		(219.7)		352.5
Cash flows from investing activities
Purchases of property, plant and equipment		(35.6)		(13.0)		(27.3)		—		(75.9)
Proceeds from sales of property, plant and equipment		0.7		0.1		3.4		—		4.2
Other investing activity		—		(0.2)		(0.3)		—		(0.5)
Net cash used by investing activities from continuing operations		(34.9)		(13.1)		(24.2)		—		(72.2)
Net cash used by investing activities from discontinued operations		(6.0)		(5.6)		(15.4)		—		(27.0)
Net cash used by investing activities		(40.9)		(18.7)		(39.6)		—		(99.2)
Cash flows from financing activities
Proceeds from issuance of debt		520.0		—		19.6		—		539.6
Payment of debt		(52.3)		—		(17.0)		—		(69.3)
Payment of debt issuance costs		(0.4)		—		—		—		(0.4)
Payment of cash dividends to parent		(374.2)		—		—		—		(374.2)
Advances related to intercompany transactions		527.7		(33.4)		(714.1)		219.8		—
Other investing activities		(6.4)		—		—		—		(6.4)
Net cash provided (used) by financing activities from continuing operations		614.4		(33.4)		(711.5)		219.8		89.3
Net cash used by financing activities from discontinued operations		—		—		(4.7)		(0.1)		(4.8)
Net cash provided (used) by financing activities		614.4		(33.4)		(716.2)		219.7		84.5
Effect of exchange rate changes on cash and cash equivalents		—		—		(7.0)		—		(7.0)
Net increase (decrease) in cash, cash equivalents and restricted cash		264.2		(3.0)		69.6		—		330.8
Cash, cash equivalents and restricted cash, beginning of period		21.3		4.8		157.4		—		183.5
Cash, cash equivalents and restricted cash, end of period	$	285.5	$	1.8	$	227.0	$	—	$	514.3

‎

NOTE 22 – GUARANTOR STATEMENTS – SB/RH (continued)

Statement of Cash Flows			Guarantor		Nonguarantor
Year Ended September 30, 2017 (in millions)	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash provided (used) by operating activities from continuing operations	$	638.2	$	149.0	$	(140.7)	$	(202.5)	$	444.0
Net cash provided by operating activities from discontinued operations		8.8		15.5		11.1		168.2		203.6
Net cash provided (used) by operating activities		647.0		164.5		(129.6)		(34.3)		647.6
Cash flows from investing activities		.
Purchases of property, plant and equipment		(38.7)		(11.7)		(31.4)		—		(81.8)
Proceeds from sales of property, plant and equipment		0.2		0.3		4.1		—		4.6
Business acquisitions, net of cash acquired		(289.4)		—		—		—		(289.4)
Other investing activity, net		—		(2.5)		(0.3)		—		(2.8)
Net cash used by investing activities from continuing operations		(327.9)		(13.9)		(27.6)		—		(369.4)
Net cash used by investing activities from discontinued operations		(8.8)		(12.4)		(10.7)		—		(31.9)
Net cash used by investing activities		(336.7)		(26.3)		(38.3)		—		(401.3)
Cash flows from financing activities
Proceeds from issuance of debt		250.0		—		15.6		—		265.6
Payment of debt		(214.9)		0.3		(14.6)		—		(229.2)
Payment of debt issuance costs		(5.9)		—		—		—		(5.9)
Payment of cash dividends to parent		(350.8)		—		—		—		(350.8)
Advances related to intercompany transactions		(54.2)		(135.9)		155.8		34.3		—
Purchase of non-controlling interest		(12.6)		—		—		—		(12.6)
Net cash (used) provided by financing activities from continuing operations		(388.4)		(135.6)		156.8		34.3		(332.9)
Net cash used by financing activities from discontinued operations		—		(0.3)		(3.1)		—		(3.4)
Net cash (used) provided by financing activities		(388.4)		(135.9)		153.7		34.3		(336.3)
Effect of exchange rate changes on cash and cash equivalents on Venezuela devaluation		—		—		(0.4)		—		(0.4)
Effect of exchange rate changes on cash and cash equivalents		—		—		3.1		—		3.1
Net (decrease) increase in cash and cash equivalents		(78.1)		2.3		(11.5)		—		(87.3)
Cash and cash equivalents, beginning of period		99.4		2.5		168.9		—		270.8
Cash and cash equivalents, end of period	$	21.3	$	4.8	$	157.4	$	—	$	183.5