UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended September 30, ~~2014~~2016

◻☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________

For the transition period from to


Commission File No.	Name of Registrant, State of Incorporation, Address of Principal Offices, and Telephone No.	IRS Employer Identification No.

001-34757	Spectrum Brands Holdings, Inc. (a Delaware corporation) 3001 Deming Way Middleton, WI 53562 (608) 275-3340 www.spectrumbrands.com	27-2166630
333-192634-03	SB/RH Holdings, LLC (a Delaware limited liability company) 3001 Deming Way Middleton, WI 53562 (608) 275-3340	27-2812840

Commission file No. 333-192634-03

SB/RH HOLDINGS, LLC

(Exact name of registrant as specified in its charter)

Delaware		27-2812840
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
3001 Deming Way, Middleton, Wisconsin		53562
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (608) 275-3340

Securities registered pursuant to Section 12(b) of the Act:

None


Registrant	Title of each class	Name of each exchange on which registered
Spectrum Brands Holdings, Inc.	Common Stock, Par Value $0.01	New York Stock Exchange
SB/RH Holdings, LLC	None	None

Securities registered pursuant to Section 12(g) of the Act:

None

~~Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻ No ☒~~1

~~Indicate~~Table ~~by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)~~ of ~~the Act. Yes ◻ No ☒~~Contents

Indicate by check mark ~~whether~~if the ~~registrant (1)~~registrants ~~has~~are ~~filed~~well-known ~~all~~seasoned ~~reports~~issuers, ~~required~~as todefined bein ~~filed by Section~~Rule 13405 ~~or 15(d)~~ of the Securities ~~Exchange~~ Act ~~of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days~~. ~~Yes ☒ No ◻~~

~~Indicate~~Spectrum byBrands ~~check mark whether the registrant has submitted electronically and posted on its corporate Web site~~Holdings, ~~if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232~~Inc.~~405~~ ofYes ~~this~~☒ ~~chapter)~~No ~~during~~☐ ~~the~~SB/RH ~~preceding~~Holdings, 12LLC ~~months~~Yes ~~(or~~☐ ~~for~~No ~~such shorter period that the registrant was required to submit and post such files). Yes~~ ☒ ~~No ◻~~

Indicate by check mark if ~~disclosure~~the ofregistrants ~~delinquent~~are ~~filers~~not ~~pursuant~~required to ~~Item 405~~file ofreports ~~Regulation~~pursuant ~~S-K is not contained herein, and will not be contained,~~ to ~~the~~Section 13 ~~best of registrant’s knowledge, in definitive proxy~~ or ~~information~~Section 15(d) ~~statements incorporated by reference in Part III~~ of ~~this~~the ~~Form 10-K or any amendment to this Form 10-K~~Act. ◻


Spectrum Brands Holdings, Inc.	Yes	☐	No	☒
SB/RH Holdings, LLC	Yes	☐	No	☒

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Spectrum Brands Holdings, Inc.	Yes	☒	No	☐
SB/RH Holdings, LLC	Yes	☒	No	☐

Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



Spectrum Brands Holdings, Inc.	Yes	☒	No	☐
SB/RH Holdings, LLC	Yes	☒	No	☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Registrant Large ~~accelerated~~Accelerated ~~filer~~Filer ◻ Accelerated filer ◻ Non-accelerated filer ☒Smaller ~~(Do~~reporting ~~not~~company ~~check~~Spectrum ifBrands aHoldings, ~~smaller~~Inc. ~~reporting~~X ~~company)~~SB/RH ~~Smaller~~Holdings, ~~reporting~~LLC ~~company ◻~~X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~Yes ◻ No ☒~~

~~Indicate~~Spectrum byBrands ~~check~~Holdings, ~~mark~~Inc. ~~whether~~Yes ~~the~~☐ ~~registrant~~No ~~has~~☒ ~~filed~~SB/RH ~~all documents and reports required to be filed by Section 12~~Holdings, 13LLC orYes ~~15(d)~~☐ ofNo ~~the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes~~ ☒ ~~No ◻~~

The aggregate market value of the voting stock held by non-affiliates of Spectrum Brands Holdings, Inc. was approximately $2,677,495,424 based upon the closing price on the last business day of the registrant's most recently completed second fiscal quarter (April 3, 2016). As of November 14, 2016, there were outstanding 59,410,438 shares of Spectrum Brands Holdings, Inc.’s Common Stock, par value $0.01 per share.

SB/RH Holdings, LLC meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and has therefore omitted the information otherwise called for by Items 10 to 13 of Form 10-K as allowed under General Instruction I(2)(c).

DOCUMENTS INCORPORATED BY REFERENCE

~~SB/RH~~Portions ~~Holdings,~~of ~~LLC~~Spectrum ~~meets~~Brands ~~the~~Holdings, ~~conditions~~Inc.’s ~~set~~definitive ~~forth~~proxy instatement ~~General~~to ~~Instruction~~be ~~I(1)(a)~~filed ~~and~~within ~~(b)~~120 days of ~~Form~~September ~~10-K~~30, ~~and~~2016 ~~has~~are ~~therefore~~incorporated ~~omitted~~by ~~the~~reference ~~information~~in ~~otherwise~~this ~~called~~Annual ~~for~~Report byon ~~Items~~Form 10-K in response to 13Part ofIII, ~~Form~~Items 10-K, as11, ~~allowed~~12, ~~under~~13 ~~General~~and ~~Instruction I (2)(c)~~14.

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SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

TABLE OF CONTENTS

			Page	~~Page~~
PART I
ITEM 1.	BUSINESS	~~BUSINESS~~	5	2
ITEM 1A.	RISK FACTORS	~~RISK FACTORS~~	17	11
ITEM 1B.	UNRESOLVED STAFF COMMENTS	~~UNRESOLVED STAFF COMMENTS~~	35	24
ITEM 2.	PROPERTIES	~~PROPERTIES~~	35	24
ITEM 3.	LEGAL PROCEEDINGS	~~LEGAL PROCEEDINGS~~	37	26
ITEM 4.	MINE SAFETY DISCLOSURES	~~MINE SAFETY DISCLOSURES~~	37	26
PART II
ITEM 5.	MARKET FOR THE REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	~~MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~	38	27
ITEM 6.	SELECTED FINANCIAL DATA	~~SELECTED FINANCIAL DATA~~	40	27
ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		28
ITEM7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		41
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~	58	51
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~	59	52
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~	59	52
ITEM 9A.	CONTROLS AND PROCEDURES	~~CONTROLS AND PROCEDURES~~	59	52
ITEM 9B.	OTHER INFORMATION	~~OTHER INFORMATION~~	60	53
PART III
ITEM 10.		DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	53
ITEM10	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		61
ITEM 11.	EXECUTIVE COMPENSATION	~~EXECUTIVE COMPENSATION~~	5361
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~	5361
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE~~	5362
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	~~PRINCIPAL ACCOUNTING FEES AND SERVICES~~	5362
PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES	~~EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES~~	5463
	INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE	~~INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE~~	5564
	SIGNATURES	~~SIGNATURES~~	~~111~~122
	EXHIBIT INDEX	~~EXHIBIT INDEX~~	~~112~~124

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PART I

ITEM 1. BUSINESS

Forward-Looking Statements

We have made or implied certain forward-looking statements in this ~~Annual Report on Form 10-K~~report. All statements, other than statements of historical facts included in this ~~Annual Report~~report, including the statements under ~~Item 7.~~ “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our business strategy, future operations, financial condition, estimated revenues, projected costs, projected synergies, prospects, plans and objectives of management, as well as information concerning expected actions of third parties, are forward-looking statements. When used in this ~~Annual Report~~report, the words “ anticipate,~~” “~~ intend,~~” “~~ plan,~~” “~~ estimate,~~” “~~ believe,~~” “~~ expect,~~” “~~ project,~~” “~~ could,~~” “~~ will,~~” “~~ should,~~” “~~ may” and similar expressions are also intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

Since these forward-looking statements are based upon our current expectations of future events and projections and are subject to a number of risks and uncertainties, many of which are beyond our control and some of which may change rapidly, actual results or outcomes may differ materially from those expressed or implied herein, and ~~you~~undue reliance should not ~~place~~be ~~undue~~placed ~~reliance~~ on these statements. Important factors that could cause our actual results to differ materially from those expressed or implied herein include, without limitation:

the impact of our indebtedness on our business, financial condition and results of operations;

the impact of restrictions in our debt instruments on our ability to operate our business, finance our capital needs or pursue or expand business strategies;

any failure to comply with financial covenants and other provisions and restrictions of our debt instruments;

the impact of actions taken by significant stockholders;

the impact of expenses resulting from the implementation of new business strategies, divestitures or current and proposed restructuring activities;

our inability to successfully integrate and operate new acquisitions at the level of financial performance anticipated;

the unanticipated loss of key members of senior management;

the impact of fluctuations in commodity prices, costs or availability of raw materials or terms and conditions available from suppliers, including suppliers’ willingness to advance credit;

interest rate and exchange rate fluctuations;

· ~~the~~our ~~loss~~ability ~~of,~~to orutilize aour ~~significant~~net ~~reduction~~operating ~~in,~~loss ~~sales~~carry-forwards to ~~any~~offset ~~significant~~tax ~~retail~~liabilities ~~customer(s)~~from future taxable income;

· ~~competitive~~the ~~promotional~~loss ~~activity~~of, significant reduction in, or ~~spending~~dependence byupon, ~~competitors~~sales orto ~~price~~any ~~reductions~~significant byretail ~~competitors~~customer(s);

competitive promotional activity or spending by competitors, or price reductions by competitors;

the introduction of new product features or technological developments by competitors and/or the development of new competitors or competitive brands;

the effects of general economic conditions, including inflation, recession or fears of a recession, depression or fears of a depression, labor costs and stock market volatility or changes in trade, monetary or fiscal policies in the countries where we do business;

changes in consumer spending preferences and demand for our products;

our ability to develop and successfully introduce new products, protect our intellectual property and avoid infringing the intellectual property of third parties;

our ability to successfully implement, achieve and sustain manufacturing and distribution cost efficiencies and improvements, and fully realize anticipated cost savings;

the cost and effect of unanticipated legal, tax or regulatory proceedings or new laws or regulations (including environmental, public health and consumer protection regulations);

· public perception regarding the safety of ~~our~~ products that we manufacture and sell, including the potential for environmental liabilities, product liability claims, litigation and other claims related to products manufactured by us and third parties;

the impact of pending or threatened litigation;

the impact of cybersecurity breaches or our actual or perceived failure to protect company and personal data;

changes in accounting policies applicable to our business;

government regulations;

the seasonal nature of sales of certain of our products;

the effects of climate change and unusual weather activity; and

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the effects of political or economic conditions, terrorist attacks, acts of war or other unrest in international markets.

Some of the above-mentioned factors are described in further detail in the ~~section~~sections entitled “Risk Factors” ~~set~~in ~~forth~~our ~~below~~annual and quarterly reports (including this report), as applicable. You should assume the information appearing in this ~~Annual~~report ~~Report on Form 10-K~~ is accurate only as of ~~September 30,~~the ~~2014~~end of the period covered by this report, or as otherwise specified, as our business, financial condition, results of operations and prospects may have changed since that date. Except as required by applicable law, including the securities laws of the United States (“U.S.”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”), we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

General

SB/RH Holdings, LLC, a Delaware corporation (“Spectrum Brands” or the “Company”), is a diversified global branded consumer products company. SB/RH Holdings, LLC is a wholly owned subsidiary of Spectrum Brands Holdings, Inc. ("SB Holdings"). SB Holdings' common stock trades on the New York Stock Exchange (the “NYSE”) under the symbol “SPB.”

Unless the context indicates otherwise, the terms the “Company,” “Spectrum,” “we,” “our” or “us” are used to refer to Spectrum Brands and its subsidiaries.

We manufacture and market alkaline, zinc carbon and hearing aid batteries, herbicides, insecticides and repellants and specialty pet supplies. We design and market rechargeable batteries, battery-powered lighting products, electric shavers and accessories, grooming products and hair care appliances. We also design, market and distribute a broad range of branded small household appliances and personal care products. We also design, manufacture, market, distribute and sell certain hardware, home improvement and plumbing products, and are a leading U.S. provider of residential locksets and builders' hardware and a leading provider of faucets. Our manufacturing and product development facilities are located in the U.S., Europe, Latin America and Asia. Substantially all of our rechargeable batteries, chargers and portable lighting products, shaving and grooming products, small household appliances and personal care products are manufactured by third-party suppliers, primarily located in Asia.

We sell our products in approximately 160 countries through a variety of trade channels, including retailers, wholesalers and distributors, hearing aid professionals, industrial distributors and original equipment manufacturers (“OEMs”) and enjoy strong name recognition in our markets under the Rayovac, VARTA and Remington brands, each of which has been in existence for more than 80 years, and under the Tetra, 8-in-1, Dingo, Nature's Miracle, Spectracide, Cutter, Hot Shot, Black & Decker, George Foreman, Russell Hobbs, Farberware, Black Flag, FURminator, Kwikset, Weiser, Baldwin, National Hardware, Stanley and Pfister brands. We also have patented technologies such as Smartkey, a rekeyable lockset technology, and Smart Code Home Connect.

Our diversified global branded consumer products have positions in seven major product categories: consumer batteries, small appliances, pet supplies, electric shaving and grooming, electric personal care, home and garden controls, and hardware and home improvement. Our chief operating decision-maker manages the businesses in four vertically integrated, product-focused reporting segments: (i) Global Batteries & Appliances, which consists of our worldwide battery, electric shaving and grooming, electric personal care, and small appliances primarily in the kitchen and home product categories (“Global Batteries & Appliances”); (ii) Global Pet Supplies, which consists of our worldwide pet supplies business (“Global Pet Supplies”); (iii) Home and Garden Business, which consists of our home and garden and insect control business (the “Home and Garden Business”); and (iv) Hardware & Home Improvement, which consists of residential locksets and builders hardware and plumbing products (“Hardware & Home Improvement”). Management reviews our performance based on these segments. For information pertaining to our business segments, see Note 11, “Segment Information” of Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for further information on our operating segments.

Global and geographic strategic initiatives and financial objectives are determined at the corporate level. Each business segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a general manager responsible for sales and marketing initiatives and the financial results for all product lines within that business segment.

Our operating performance is influenced by a number of factors including: general economic conditions; foreign exchange fluctuations; trends in consumer markets; consumer confidence and preferences; our overall product line mix, including pricing and gross margin, which vary by product line and geographic market; pricing of certain raw materials and commodities; energy and fuel prices; and our general competitive position, especially as impacted by our competitors’ advertising and promotional activities and pricing strategies.

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Our Products

We compete in seven major product categories: consumer batteries, small appliances, pet supplies, electric shaving and grooming, electric personal care, home and garden controls, and hardware and home improvement. Our broad line of products includes:

· consumer batteries, including alkaline and zinc carbon batteries, rechargeable batteries and chargers, hearing aid batteries, other specialty batteries and portable lighting products;

· small appliances, including small kitchen appliances and home product appliances;

· pet supplies, including aquatic equipment and supplies, dog and cat treats, small animal foods, clean up and training aids, health and grooming products and bedding;

· electric shaving and grooming devices;

· electric personal care and styling devices;

· home and garden control products, including household insect controls, insect repellents and herbicides; and

· hardware and home improvement products, including residential locksets, builders hardware and plumbing products.

Net sales of each product category sold, as a percentage of net sales of our consolidated operations, is set forth below.

	Percentage of Total Company
	Net Sales for the Fiscal Year Ended
	September 30,
	2014		2013		2012
Hardware and home improvement products		26%		21%		—%
Consumer batteries		22%		23%		29%
Small appliances		16%		18%		24%
Pet supplies		14%		15%		19%
Home and garden control products		10%		10%		12%
Electric shaving and grooming products		6%		7%		8%
Electric personal care products		6%		6%		8%
		100%		100%		100%

Hardware and Home Improvement Products

In the hardware and home improvement product category we market and sell a broad range of residential locksets and door hardware, including knobs, levers, deadbolts, handlesets and electronics. We offer our security hardware under three main brands, Kwikset, Weiser and Baldwin. On a global basis we are one of the largest producers of tubular residential locksets. Kwikset includes opening to mid-price point residential door hardware sold primarily in the U.S. retail and wholesale channels. Products are offered under the three brands Safe Lock, Kwikset and Kwikset Signature Series. Weiser offers opening to mid-price point residential door hardware sold primarily in the Canadian retail and wholesale channels. Baldwin offers high price point luxury hardware sold globally through the showroom and lumber yard channels.

As a demonstration of our design and engineering team’s ability to innovate, our patented SmartKey technology enables consumers to easily rekey their locks without hiring a locksmith. SmartKey continues to win market share across all channels of distribution and provides opportunities for further growth. Market share gains stemming from our SmartKey products further augment our overall market share in the residential lockset space. Also in security, we are capitalizing on the emerging trend in home automation and have developed further innovation in electronics where we utilize open-platform electronics to build scalable partnerships with technology and access control industry leaders.

We also offer other hardware products that include hinges, security hardware, screen and storm door products, garage door hardware, window hardware and floor protection under the Stanley and National Hardware brand names throughout the U.S. and Canada. Although the product line is largely harmonized between the brands, the dual branding approach has been utilized to protect legacy business with key customers and avoid channel conflict.

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~~Furthermore,~~PART we provide kitchen, bath and shower faucets as well as other plumbing products through our Pfister brand. Pfister is recognized for bringing showroom styles to the mass market at affordable prices and offers a lifetime warranty on all of its products. We have combined robust customer collaboration with consumer driven research to drive innovative products that are well-received by the market. With its affordable, quick-to-market and custom designed solutions, Pfister has an established capability to effectively service hospitality and international markets. Pfister seeks to differentiate itself from competition through its breadth of styles and finishes designed to meet consumer, plumber and builder needs.I

~~Consumer~~ITEM ~~Batteries~~1. BUSINESS

WeThis ~~market~~combined Form 10-K is being filed separately by Spectrum Brands Holdings, Inc. (“SBH”) and ~~sell~~SB/RH Holdings, LLC (“SB/RH”) (collectively, the “Company”). SB/RH is a ~~full~~wholly-owned ~~line~~subsidiary of ~~alkaline~~SBH ~~batteries~~and ~~(AA~~represents a majority of its assets, ~~AAA~~liabilities, Crevenues, Dexpenses and ~~9-volt~~operations. ~~sizes)~~Thus, toall ~~both~~information ~~retail~~contained in this report relates to, and ~~industrial~~is ~~customers~~filed by, SBH. ~~Our~~Information ~~alkaline~~that ~~batteries~~is ~~are~~specifically ~~marketed~~identified in this report as relating solely to SBH, such as its financial statements and ~~sold~~its ~~primarily~~common ~~under~~stock, ~~the~~does ~~Rayovac~~not relate to and ~~VARTA~~is ~~brands~~not filed by SB/RH. WeSB/RH ~~also~~makes ~~manufacture~~no ~~alkaline~~representation ~~batteries~~as ~~for~~to ~~third~~that ~~parties~~information. ~~who~~The ~~sell~~terms “the ~~batteries~~Company,” ~~under~~“we,” ~~their~~and ~~own~~“our” ~~private~~as ~~labels.~~used ~~Our~~in ~~zinc~~this ~~carbon~~report, ~~batteries~~refer ~~are~~to ~~also~~both ~~marketed~~SBH and ~~sold~~its ~~primarily~~consolidated ~~under~~subsidiaries ~~the~~and ~~Rayovac~~SB/RH and ~~VARTA~~its ~~brands~~consolidated ~~and~~subsidiaries, ~~are~~unless ~~designed~~otherwise ~~for~~indicated. ~~low~~The terms “SBH” and ~~medium~~“SB/RH” ~~drain~~refer ~~battery~~to ~~powered~~Spectrum ~~devices~~Brands Holdings, Inc. and SB/RH Holdings, LLC, respectively.

WeOur ~~believe~~Annual ~~that~~Reports weon Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are ~~currently~~made available free of charge on or through our website at www.spectrumbrands.com as soon as reasonably practicable after such reports are filed with, or furnished to the ~~largest~~SEC. ~~worldwide~~You ~~marketer~~may read and ~~distributor~~copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of ~~hearing~~the ~~aid~~Public ~~batteries~~Reference Room by calling the SEC at 1-800-SEC-0330. WeThe ~~sell~~SEC also maintains an Internet site that contains our ~~hearing~~reports, ~~aid~~proxy ~~batteries~~statements ~~through~~and ~~retail~~other ~~trade~~information ~~channels~~at www.sec.gov. In addition, copies of our (i) Corporate Governance Guidelines, (ii) charters for the Audit Committee, Compensation Committee and ~~directly~~Nominating toand ~~professional~~Corporate ~~audiologists~~Governance ~~under~~Committee, ~~several~~(iii) Code ~~brand~~of ~~names~~Business Conduct and ~~private~~Ethics ~~labels~~and (iv) Code of Ethics for the Principal Executive Officer and Senior Financial Officers are available at our Internet site at www.spectrumbrands.com under “Investor Relations—Corporate Governance.” Copies will also be provided to any stockholder upon written request to the Vice President, ~~including~~Investor ~~Beltone~~Relations & Corporate Communications, ~~Miracle~~Spectrum ~~Ear~~Brands, ~~and~~Inc. ~~Starkey~~at 3001 Deming Way, Middleton, Wisconsin 53562 or via electronic mail at investorrelations@spectrumbrands.com, or by contacting the Vice President, Investor Relations & Corporate Communications by telephone at (608) 275-3340.

~~We also sell Nickel Metal Hydride (NiMH) rechargeable batteries and a variety of battery chargers under the Rayovac and VARTA brands.~~General

~~Our~~We ~~other~~are ~~specialty~~a ~~battery~~diversified global branded consumer products ~~include~~company. ~~camera~~The ~~batteries~~Company manufactures, ~~lithium~~markets ~~batteries~~and/or distributes its products in approximately 160 countries in the North America (“NA”); Europe, ~~silver~~Middle ~~oxide~~East ~~batteries~~& Africa (“EMEA”); Latin America (“LATAM”) and Asia-Pacific (“APAC”) regions through a variety of trade channels, ~~keyless~~including ~~entry~~retailers, ~~batteries~~wholesalers and ~~coin~~distributors, ~~cells~~original ~~for~~equipment ~~use~~manufacturers (“OEMs”), construction companies and hearing aid professionals. We enjoy strong name recognition in ~~watches~~our regions under our various brands and patented technologies across multiple product categories. We manage the business in five vertically integrated, ~~cameras~~product-focused segments: (i) Global Batteries & Appliances (“GBA”), ~~calculators~~(ii) Hardware & Home Improvement (“HHI”), ~~communications~~(iii) Global ~~equipment~~Pet Supplies (“PET”), ~~medical~~(iv) ~~instruments~~Home and onGarden (“H&G”) and (v) Global Auto Care (“GAC”). Geographic strategic initiatives and financial objectives are determined at the gocorporate ~~charges~~level. Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a general manager responsible for sales and marketing initiatives and the financial results for all product lines within that segment. The following is an overview of the consolidated business showing the net sales by segment and geographic region sold (based upon destination) as a percentage of consolidated net sales for the year ended September 30, 2016:

WeOur ~~also~~operating ~~offer~~performance ais ~~broad~~influenced ~~line~~by a number of ~~battery-powered,~~factors ~~portable~~including: ~~lighting~~general ~~products~~economic conditions; foreign exchange fluctuations; trends in consumer markets; consumer confidence and preferences; our overall product line mix, including ~~flashlights~~pricing and ~~lanterns~~gross ~~for~~margin, ~~both~~which ~~retail~~vary by product line and ~~industrial~~geographic ~~markets. We~~market; ~~sell~~pricing ~~our~~of ~~portable~~certain ~~lighting~~raw ~~products~~materials ~~under~~and ~~the~~commodities; ~~Rayovac~~energy and ~~VARTA~~fuel ~~brand~~prices; ~~names~~and our general competitive position, ~~under~~especially ~~other~~as ~~proprietary~~impacted ~~brand~~by ~~names~~our competitors’ advertising and ~~pursuant~~promotional toactivities ~~licensing~~and ~~arrangements~~pricing ~~with~~strategies. ~~third~~See ~~parties~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this Annual Report on Form 10-K, for further discussion of the consolidated operating results.

Small Appliances

We market and sell a broad range of products in the branded small household appliances category under the George Foreman, Black & Decker, Russell Hobbs, Farberware, Juiceman, Breadman and Toastmaster brands, including grills, bread makers, sandwich makers, kettles, toaster ovens, toasters, blenders, juicers, can openers, coffee grinders, coffeemakers, electric knives, deep fryers, food choppers, food processors, hand mixers, rice cookers and steamers. We also market small home product appliances, including hand-held irons, vacuum cleaners, air purifiers, clothes shavers and heaters, primarily under the Black & Decker and Russell Hobbs brands.

Pet Supplies

In the pet supplies product category we market and sell a variety of leading branded pet supplies for fish, dogs, cats, birds and other small domestic animals. We have a broad line of consumer and commercial aquatics products, including integrated aquarium kits, stand-alone tanks and stands, filtration systems, heaters, pumps, and other equipment, fish food and water treatment products. Our largest aquatics brands are Tetra, Marineland, Whisper, Jungle and Instant Ocean. We also sell a variety of specialty pet products, including dog and cat treats, small animal food and treats, clean up and training aid products, health and grooming aids, bedding products, and consumable accessories including privacy tents, litter carpets, crystal litter cartridges, charcoal filters, corn-based litter and replaceable waste receptacles. Our largest specialty pet brands include FURminator, 8-in-1, Dingo, Nature’s Miracle, Wild Harvest and Littermaid.

Home and Garden Control Products

In the home, lawn and garden products category, we currently sell and market a variety of leading insect and weed control products, including household insecticides, insect repellents, and lawn insect and weed control solutions. We offer a broad array of household pest control solutions such as spider and scorpion killers; roach and ant killers; flying insect killers; insect foggers; wasp and hornet killers; bedbug, flea and tick control products; and roach and ant baits. We also offer powerful rodent traps and rodenticides with discreet designs that are easy to refill and reuse. Our largest brands in the household insect control and rodenticide category are Hot Shot and Black Flag.

This business segment also manufactures and markets a complete line of insect repellent products that provide protection from various outdoor nuisance pests, especially mosquitoes. These products include both personal repellents available in a variety of formulas (such as aerosols, lotions, pump sprays and wipes) to match consumers’ dynamic needs, as well as area repellents (such as yard sprays, citronella candles and patio lanterns) that let consumers enjoy the outdoors without bothersome pests. Our brands in the insect repellents category are Cutter and Repel.

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In addition to providing pest solutions, our line of outdoor insect and weed control solutions allows consumers to conquer bugs and weeds, and tackle their biggest lawn and landscaping projects themselves. From selective and non-selective herbicides to pest-specific solutions, our outdoor products are available in easy-to-use formulations (such as aerosols, granules, ready-to-use or hose-end ready-to-sprays) designed to fulfill a variety of consumer needs. Our ~~outdoor insecticide and herbicide brands include Spectracide, Garden Safe and Liquid Fence.~~ Strategy

WeOur ~~have~~mission ~~positioned~~is ~~ourselves~~to asachieve superior shareholder returns through above-market organic growth, with a focus on building sustainable free cash flow and further acquisitions. Our vision is to be the ~~value~~preferred ~~alternative~~strategic ~~for~~partner ~~consumers~~to ~~who~~our ~~want~~customers with an expanding portfolio of innovative and superior-value consumer products and brands. We believe that ~~deliver~~building ~~powerful~~loyalty and success over the long-term is fundamental to executing on this strategy. To transition to the next performance atlevel anand ~~exceptional~~deliver long-term value to our key stakeholders, we will seek to realize our vision by pursuing the “Spectrum First” growth strategy across all of our divisions and regions.

~~Electric~~The ~~Shaving~~Spectrum First growth accelerators; Customer, Process, and ~~Grooming~~People; ~~Products~~provide the roadmap for how we intend to execute this strategy. Each growth accelerator has three drivers. These accelerators and their respective drivers are collectively known as the “Spectrum First 3x3.”

We· ~~market~~Customer ~~and~~– ~~sell~~Our afirst ~~broad~~growth ~~line~~accelerator offocuses ~~electric~~on ~~shaving~~strengthening ~~and~~strategic ~~grooming~~partnerships ~~products~~with ~~under~~customers. ~~the~~Our ~~Remington~~objective ~~brand~~is ~~name,~~for ~~including~~our ~~men~~retail partners to think of Spectrum Brands first when identifying how best to compete for consumers’s ~~rotary~~attention ~~and~~to ~~foil~~bring ~~shavers,~~them ~~beard~~into their stores and ~~mustache~~online ~~trimmers,~~platforms ~~body~~with exciting product innovation, ~~nose~~converting ~~and~~interest ~~ear~~to ~~trimmers,~~sales ~~women’s~~through ~~shavers~~value products, ~~haircut~~and ~~kits~~being ~~and~~a ~~intense~~strategic ~~pulsed~~supplier ~~light~~through ~~hair~~total-cost ~~removal~~reduction ~~systems~~initiatives.

~~Electric~~· ~~Personal~~Process ~~Care~~– ~~Products~~ Our process growth accelerator is intended to drive continuous improvements in our products, costs and processes to generate healthy margins through sales growth with our “more-more-more” strategy to achieve above-market sales growth, which means entering into more countries, serving more channels and launching more categories. We also seek to drive continuous improvement over performance, quality and costs, and provide superior and efficient services through our shared services and “Centers of Excellence” model.

~~Our~~· ~~electric~~People ~~personal~~– ~~care~~Employees ~~products,~~represent ~~marketed~~the ~~and~~third ~~sold~~Spectrum ~~under~~First ~~the~~growth ~~Remington,~~accelerator. ~~Russell~~We ~~Hobbs,~~are ~~Carmen~~working to be a preferred employer by empowering our teams and ~~Andrew~~providing ~~Collinge~~long-term ~~brand~~career ~~names,~~opportunities ~~include~~and ~~hand~~pay-~~held~~for-performance ~~dryers,~~through ~~curling~~focusing ~~irons,~~on ~~straightening~~retention ~~irons,~~and ~~brush~~collaboration; ~~irons,~~driving ~~hair~~empowered ~~setters,~~teams ~~facial~~with ~~brushes~~trust, ~~skin~~competence ~~appliances,~~and ~~electric~~speed; ~~toothbrushes~~supporting alignment and ~~hair~~providing ~~accessories~~more paths for employees to embrace new challenges and advance their careers across the global organization.

Sales and Distribution

We sell our products through a variety of trade channels, including retailers, wholesalers and distributors, hearing aid professionals, industrial distributors and OEMs. Our sales generally are made through the use of individual purchase orders, consistent with industry practice. Retail sales of the consumer products we market have been increasingly consolidated into a small number of regional and national mass merchandisers. This trend towards consolidation is occurring on a worldwide basis. As a result of this consolidation, a significant percentage of our sales are attributable to a very limited group of retailer customers, including Wal-Mart, The Home Depot, Lowe’s, Carrefour, Target, PetSmart, Canadian Tire, PetCo and Gigante. Our sales to Wal-Mart represented approximately 16% of our consolidated net sales for the fiscal year ended September 30, 2014. No other customer accounted for more than 10% of our consolidated net sales in the fiscal year ended September 30, 2014.

Segment information as to revenues, profit and total assets as well as information concerning our revenues and long-lived assets by geographic location for the last three fiscal years is set forth in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 11, “Segment Information,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Sales and distribution practices in each of our reportable segments are as set forth below.

Global Batteries & Appliances

We manage our Global Batteries & Appliances sales force by geographic region and product group. Our sales team is divided into four major geographic territories: North America, Latin America, Europe and Asia/Pacific. Within each major geographic territory, we have additional subdivisions designed to meet our customers’ needs.

We manage our sales force in North America by distribution channel. We maintain separate sales groups to service (i) our retail sales and distribution channel, (ii) our hearing aid professionals channel and (iii) our industrial distributors and OEM sales and distribution channel. In addition, we utilize a network of independent brokers to service participants in selected distribution channels.

We manage our sales force in Latin America by distribution channel and geographic territory. We sell primarily to large retailers, wholesalers, distributors, food and drug chains and retail outlets. In countries where we do not maintain a sales force, we sell to distributors who market our products through all channels in the market.

The sales force serving our customers in Europe and Asia/Pacific is supplemented by an international network of distributors to promote the sale of our products. Our sales operations throughout Europe and Asia/Pacific are organized by geographic territory and the following sales channels: (i) food/retail, which includes mass merchandisers, discounters and drug and food stores; (ii) specialty trade, which includes clubs, consumer electronics stores, department stores, photography stores and wholesalers/distributors; and (iii) industrial, government, hearing aid professionals and OEMs.

Global Pet Supplies

Our Global Pet Supplies sales force is aligned by customer, geographic region and product group. We sell pet supply products to mass merchandisers, grocery and drug chains, pet superstores, independent pet stores and other retailers.

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~~Home~~ Global Batteries and ~~Garden~~Appliances ~~Business~~(GBA)

The ~~Home~~following ~~and~~is ~~Garden~~an ~~Business~~overview ~~sales~~of ~~force~~the isGBA ~~geographically~~segment ~~aligned~~net ~~with~~sales ~~our~~by ~~key~~product ~~customers.~~category Weand ~~sell~~geographic ~~primarily~~region tosold ~~home~~(based ~~improvement~~upon ~~centers,~~destination) ~~mass~~as ~~merchandisers,~~a ~~dollar~~percentage ~~stores,~~of ~~hardware~~net ~~stores,~~sales ~~home~~for ~~and~~the ~~garden~~segment ~~distributors,~~for ~~and~~the ~~food~~year ~~and~~ended ~~drug~~September ~~retailers~~30, ~~in the U.S.~~2016:

~~Hardware~~The &consumer ~~Home~~batteries ~~Improvement~~product category consists of alkaline batteries, zinc carbon batteries, nickel metal hydride (NiMH) rechargeable batteries and battery chargers primarily under the Rayovac® and VARTA® brands. Additionally, we manufacture alkaline batteries for third parties who sell under their own private labels. We also offer a broad line of battery-powered portable lighting products including flashlights and lanterns under the Rayovac® and VARTA® brands, and other proprietary brand names pursuant to licensing arrangements with third parties. We manufacture and sell hearing aid batteries under several brand names and private labels for many major hearing aid device manufacturers. Other specialty battery products include camera batteries, lithium batteries, silver oxide batteries, keyless entry batteries, portable chargers and coin cells for use in watches, cameras, calculators, communications equipment, and medical instruments.

The ~~sales~~small ~~force~~appliances product category consists of small kitchen appliances under the ~~Hardware~~Black & ~~Home~~Decker®, ~~Improvement~~Russell isHobbs®, ~~aligned~~George byForeman®, ~~customer~~Juiceman® and ~~geographic~~Breadman® ~~region~~brands, including toaster ovens, toasters, sandwich makers, coffeemakers, coffee grinders, can openers, electric knives, grills, deep fryers, food choppers, food processors, slow cookers, hand mixers, blenders, juicers, bread makers, kettles, rice cookers and steamers. We also sell ~~primarily~~small tohome ~~large~~product ~~retailers~~appliances, ~~non~~including hand-~~retail~~held ~~distributors~~irons, ~~home~~vacuum ~~improvement~~cleaners, ~~centers~~air purifiers, ~~hardware~~clothes ~~stores~~shavers and heaters, ~~home~~primarily ~~builders~~under the Black & Decker® and ~~other~~Russell ~~retailers~~Hobbs® brands.

~~Manufacturing~~The personal care product category includes a broad line of electric shaving and grooming products under the Remington® brand name, ~~Raw~~including ~~Materials~~men’s rotary and ~~Suppliers~~foil shavers, beard and mustache trimmers, body, nose and ear trimmers, women’s shavers, haircut kits and intense pulsed light hair removal systems. Other personal care products include hand-held dryers, curling irons, straightening irons, brush irons, hair setters, facial brushes, skin appliances, electric toothbrushes and hair accessories.

~~The~~We ~~principal~~manage ~~raw~~our ~~materials~~GBA ~~used~~sales inteams ~~manufacturing~~by ~~our~~geographic ~~products—zinc,~~region ~~electrolytic~~and ~~manganese~~product ~~dioxide,~~category. ~~brass~~We ~~and~~sell ~~steel—are~~primarily ~~sourced~~to ~~either~~large onretailers, aonline ~~global~~retailers, orwholesalers, ~~regional~~distributors, ~~basis.~~warehouse ~~The~~clubs, ~~prices~~food ofand ~~these~~drug ~~raw~~chains ~~materials~~and ~~are~~specialty ~~susceptible~~trade toor ~~price~~retail ~~fluctuations~~outlets ~~due~~such toas ~~supply~~consumer ~~and~~electronics ~~demand trends~~stores, ~~energy~~department ~~costs~~stores, ~~transportation~~discounters ~~costs,~~and ~~government~~other ~~regulations~~specialty ~~and~~stores. ~~tariffs,~~We ~~changes~~maintain inseparate ~~currency~~sales ~~exchange~~teams ~~rates,~~to ~~price~~service ~~controls,~~(i) our ~~general~~retail ~~economic~~sales ~~conditions~~ and ~~other~~distribution ~~unforeseen~~channels; ~~circumstances.~~(ii) our Wehearing ~~have~~aid ~~regularly~~professionals ~~engaged~~channel; inand ~~forward~~(iii) our ~~purchase~~industrial distributors and ~~hedging~~OEM ~~derivative~~sales ~~transactions~~and indistribution anchannel. ~~attempt~~International todistribution ~~effectively~~varies ~~manage~~by ~~the~~region ~~raw~~and ~~material~~is ~~costs~~often weexecuted ~~expect~~on toa ~~incur~~country-by-country ~~over~~basis. ~~the~~We ~~next~~utilize 12a network of independent brokers to 24service ~~months~~participants in selected distribution channels.

~~Substantially~~See ~~all~~Management’s ofDiscussion ~~our rechargeable batteries~~ and ~~chargers,~~Analysis ~~portable~~of ~~lighting~~Financial ~~products,~~Condition ~~hair care~~ and ~~other~~Results ~~personal~~of ~~care~~Operations, ~~products~~included ~~and~~elsewhere ~~our~~in ~~electric~~this ~~shaving~~Annual ~~and~~Report ~~grooming~~on ~~products~~Form ~~and~~10-K, ~~small~~for ~~appliances~~further ~~are~~discussion ~~manufactured by third party suppliers that are primarily located in the Asia/Pacific region. We maintain ownership~~ of ~~most of~~ the ~~tooling~~segment’s ~~and~~operating ~~molds used by our suppliers~~results.

We continually evaluate our manufacturing facilities’ capacity and related utilization. As a result of such analyses, we have closed a number of manufacturing facilities during the past five years. In general, we believe our existing facilities are adequate for our present and foreseeable needs.

Research and Development

In our fiscal years ended September 30, 2014, 2013 and 2012, we invested $47.9 million, $43.3 million and $33.1 million, respectively, in product research and development.

Patents and Trademarks

We also use and maintain a number of trademarks in our business, including RAYOVAC, REMINGTON, VARTA, TETRA, 8IN1, DINGO, NATURE’S MIRACLE, WILD HARVEST, MARINELAND, FURMINATOR, SPECTRACIDE, CUTTER, HOT SHOT, GARDEN SAFE, REPEL, GEORGE FOREMAN, RUSSELL HOBBS, FARBERWARE, TOASTMASTER, BLACK & DECKER, KWIKSET, WEISER, BALDWIN, NATIONAL HARDWARE AND PFISTER. We seek trademark protection in the U.S. and in foreign countries.

As a result of the October 2002 sale by VARTA AG of substantially all of its consumer battery business to us and VARTA AG’s subsequent sale of its automotive battery business to Johnson Controls, Inc. (“Johnson Controls”), we acquired rights to the VARTA trademark in the consumer battery category and Johnson Controls acquired rights to the trademark in the automotive battery category. VARTA AG continues to have rights to use the trademark with travel guides and industrial batteries and VARTA Microbattery GmbH has the right to use the trade mark with micro batteries. We are party to a Trademark and Domain Names Protection and Delimitation Agreement that governs ownership and usage rights and obligations of the parties relative to the VARTA trademark.

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As Hardware ~~a result of the common origins of the Remington Products, L.L.C. (“Remington Products”) business we acquired in September 2003~~ and ~~the~~Home ~~Remington~~Improvement ~~Arms Company, Inc.~~ (~~“Remington Arms”~~HHI), the REMINGTON trademark is owned by us and by Remington Arms each with respect to its principal products as well as associated products. Accordingly, we own the rights to use the REMINGTON trademark for electric shavers, shaver accessories, grooming products and personal care products, while Remington Arms owns the rights to use the trademark for firearms, sporting goods and products for industrial use, including industrial hand tools. In addition, the terms of a 1986 agreement between Remington Products and Remington Arms provides for the shared rights to use the REMINGTON trademark on products which are not considered “principal products of interest” for either company. We retain the REMINGTON trademark for nearly all products which we believe can benefit from the use of the brand name in our distribution channels.

WeThe ~~license~~following ~~the~~is ~~Black &~~an ~~Decker~~overview ~~brand in North America, Latin America (excluding Brazil) and the Caribbean for four core categories~~ of ~~household appliances: beverage products, food preparation products, garment care products and cooking products. Russell Hobbs has licensed~~ the ~~Black &~~HHI ~~Decker~~segment ~~brand~~net ~~since~~sales ~~1998~~by ~~for~~product ~~use~~category ~~in marketing various household small appliances. In July 2014, Spectrum Brands~~ and ~~The~~geographic ~~Black &~~region ~~Decker~~sold ~~Corporation~~ (~~“BDC”)~~based ~~extended~~upon ~~the~~destination) ~~trademark license agreement through December 2018. Under the agreement~~ as ~~extended, Spectrum Brands agreed to pay BDC royalties based on~~ a percentage of net sales, ~~with~~for ~~minimum~~the ~~annual~~segment ~~royalty~~for ~~payments~~the ~~of $15.0 million through calendar~~ year ~~2018.~~ended ~~The~~September ~~agreement~~30, ~~also requires us to comply with maximum annual return rates for products.~~2016:

IfThe ~~BDC~~lockset ~~does~~product ~~not~~category ~~agree~~includes toa ~~renew~~broad ~~the~~range ~~license~~of ~~agreement,~~residential welocksets ~~have~~and 18door ~~months~~hardware toincluding ~~transition~~knobs, ~~out~~levers, ofdeadbolts, ~~the~~handle ~~brand~~sets ~~name.~~and Noelectronics ~~minimum~~under ~~royalty~~three ~~payments~~main ~~will~~brands: be(i) ~~due~~Kwikset®, ~~during~~residential ~~such~~door ~~transition~~hardware ~~period~~sold primarily in the U.S.; ~~BDC~~(ii) ~~has~~Weiser®, ~~agreed~~residential ~~not~~door tohardware ~~compete~~sold primarily in ~~the~~Canada; ~~four~~and ~~core~~(iii) ~~product~~Baldwin®, ~~categories~~luxury ~~for~~residential adoor ~~period~~hardware. ofOur ~~five~~residential ~~years~~lockset ~~after~~products ~~the~~also ~~end~~incorporate ofa ~~the~~patented ~~transition~~SmartKey® ~~period~~technology ~~following~~that ~~termination~~enables ofconsumers ~~the~~to ~~license~~easily ~~agreement~~rekey their locks without hiring a locksmith. ~~Upon~~The ~~request,~~segment ~~BDC~~also ~~may~~includes ~~elect~~electronic toand ~~extend~~connected ~~the~~locks ~~license~~such toas ~~use~~Kevo® ~~the~~Bluetooth ~~Black &~~enabled ~~Decker~~deadbolt ~~brand~~which toturns ~~certain~~a ~~additional~~smart ~~product~~phone ~~categories.~~into ~~BDC~~a ~~has~~key ~~approved~~and ~~several~~allows ~~extensions~~authorized ofusers to open their deadbolt by simply touching the ~~license~~lock toor ~~additional~~remotely ~~categories~~with ~~and~~connected ~~geographies~~devices.

~~Through~~The ~~the~~plumbing ~~acquisition~~product ofcategory ~~the~~includes ~~residential~~kitchen, ~~hardware~~bath and ~~home~~shower ~~improvement~~faucets, ~~business~~as ~~(the~~well ~~“HHI~~as ~~Business”),~~other weplumbing ~~own~~products ~~the~~and ~~patented~~fixtures ~~SmartKey~~through ~~technology~~our Pfister® brand, which ~~enables~~brings ~~customers~~showroom styles to ~~easily~~the ~~rekey~~mass ~~their~~market ~~locks~~at ~~without~~affordable ~~hiring~~prices and offers a ~~locksmith~~lifetime warranty on all of its products. Pfister® seeks to differentiate itself from the competition through its breadth of styles and finishes, along with innovations designed to meet a variety of consumer, plumber and builder needs.

OnThe ~~November~~hardware 8product category includes hinges, ~~2012~~security hardware, wescreen ~~acquired~~and astorm ~~56%~~door ~~interest~~products, ingarage ~~Shaser~~door ~~Biosciences~~hardware, ~~Inc.~~window ~~Through~~hardware ~~this~~and ~~acquisition~~floor weprotection ~~acquired~~under ~~patented~~the ~~technology~~National ~~that~~Hardware® isand ~~used~~Stanley® inbrand ~~our~~names ~~i-Light~~throughout the U.S. and Canada. The product line is largely harmonized between these brands and the dual-branding approach has been utilized to protect legacy business with key customers and avoid channel conflict.

~~Competition~~On October 1, 2014, the Company acquired privately owned Tell Manufacturing, Inc. (“Tell”), a U.S. manufacturer and distributor of commercial doors, locks and hardware. Tell provides the HHI segment with an established commercial security sales position through a well-recognized brand, along with a platform to expand our patented SmartKey® and Kevo® residential lock technologies into commercial channels. The Tell acquisition also added doors and hollow metal door manufacturing capabilities, a strategically important adjacent category.

InThe ~~our~~sales ~~retail~~force ~~markets,~~of wethe ~~compete~~HHI ~~for~~business ~~limited~~is ~~shelf~~aligned ~~space~~by customer and ~~consumer~~geographic ~~acceptance~~region. ~~Factors~~We ~~influencing~~sell ~~product~~primarily ~~sales~~to ~~include~~large ~~brand name recognition~~retailers, ~~perceived~~home ~~quality,~~improvement ~~price~~centers, ~~performance~~hardware stores, ~~product~~non-retail ~~packaging~~distributors, ~~design~~home ~~innovation~~builders, ~~and~~commercial ~~consumer confidence and preferences as well as creative marketing~~contractors, ~~promotion~~ and ~~distribution~~other ~~strategies~~retailers.

~~The~~See ~~battery~~Management’s ~~product~~Discussion ~~category is highly competitive. Most consumer batteries manufactured throughout the world are sold by one of four global companies: Spectrum Brands (manufacturer/seller of Rayovac~~ and ~~VARTA~~Analysis ~~brands); Energizer Holdings, Inc. (“Energizer”) (manufacturer/seller~~ of ~~the~~Financial ~~Energizer~~Condition ~~brand); The Procter & Gamble Company (“Procter & Gamble”) (manufacturer/seller of the Duracell brand);~~ and ~~Matsushita~~Results ~~(manufacturer/seller~~ of ~~the Panasonic brand). We also face competition from the private label brands of major retailers~~Operations, ~~particularly~~included inelsewhere ~~Europe. The offering of private-label batteries by retailers may create pricing pressure~~ in ~~the~~this ~~consumer~~Annual ~~battery~~Report ~~market.~~on ~~Typically,~~Form ~~private~~10-~~label brands are not supported by advertising or promotion~~K, ~~and retailers sell these private label offerings at prices below competing name-brands. The main barriers to entry~~ for ~~new~~further ~~competitors~~discussion ~~are investment in technology research, cost~~ of ~~building manufacturing capacity and~~ the ~~expense~~segment’s ofoperating ~~building retail distribution channels and consumer brands~~results.

In the U.S. alkaline battery category, the Rayovac brand is positioned as a value brand, which is typically defined as a product that offers comparable performance at a lower price. In Europe, the VARTA brand is competitively priced with other premium brands. In Latin America, where zinc carbon batteries outsell alkaline batteries, the Rayovac brand is competitively priced. Our primary competitors in the portable lighting product category are Energizer and Mag Instrument, Inc.

Competition within the hardware and home improvement industry varies based on location and product segment. The main source of competition for residential locksets includes other third party manufacturers such as Schlage, a division of Ingersoll-Rand, and private label import brands such as Defiant and Gatehouse. Major competitors for hardware include The Hillman Group, Hampton Hardware, Crown Bolt and private label competitors. In plumbing, Pfister’s major U.S. competitors are Masco, Fortune Brands, Kohler, and American Standard, as well as Glacier Bay and AquaSource, and the private label brands of The Home Depot and Lowe’s.

The pet supplies product category is highly fragmented with over 500 manufacturers in the U.S. alone, consisting primarily of small companies with limited product lines. Our largest competitors in this product category are Mars Corporation (“Mars”), The Hartz Mountain Corporation (“Hartz”) and Central Garden & Pet Company (“Central Garden & Pet”). Both Hartz and Central Garden & Pet sell a comprehensive line of pet supplies and compete with a majority of the products we offer. Mars sells primarily aquatics products.

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~~Products~~ Global wePet ~~sell~~Supplies ~~in the home and garden product category face competition from The Scotts Miracle-Gro Company~~ (~~“Scotts Company”~~PET), which markets lawn and garden products under the Scotts, Ortho, Roundup, Miracle-Gro, and Tomcat brand names; Central Garden & Pet, which markets garden products under the AMDRO and Sevin brand names; and Bayer A.G., which markets home and garden products under the Bayer Advanced brand name.

~~Products~~The wefollowing ~~sell~~is inan ~~the~~overview ~~household~~of ~~insect~~the ~~control~~PET ~~product~~segment ~~category~~net ~~face~~sales ~~competition~~by ~~from~~product ~~S.C.~~category ~~Johnson &~~and ~~Son,~~geographic ~~Inc.~~region sold (~~“S.C.~~based ~~Johnson”~~upon destination), ~~which~~as ~~markets~~a ~~insecticide~~percentage ~~and~~of ~~repellent~~net ~~products~~sales ~~under~~for the ~~Raid~~segment ~~and~~for ~~OFF! brands; Scotts Company, which markets household insect control products under~~ the ~~Ortho~~year ~~brand;~~ended ~~and~~September ~~Henkel KGaA~~30, ~~which markets insect control products under the Combat brand.~~2016:

~~Our~~The ~~primary~~aquatics ~~competitors~~product incategory ~~the~~includes ~~electric~~a ~~shaving~~broad ~~and~~line ~~grooming~~of ~~product~~consumer ~~category~~and ~~are~~commercial ~~Norelco~~aquatics products, aincluding ~~division~~integrated ofaquarium ~~Koninklijke~~kits, ~~Philips~~stand-alone ~~Electronics~~tanks NVand ~~(“Philips”)~~stands, ~~which~~aquatics ~~sells~~equipment ~~and~~such ~~markets~~as ~~rotary~~filtration ~~shavers~~systems, heaters, and ~~Braun~~pumps, aand ~~division~~aquatics ofconsumables ~~Procter &~~such ~~Gamble~~as fish food, ~~which~~water ~~sells~~treatments and ~~markets~~conditioners. ~~foil~~Our ~~shavers.~~largest ~~Through~~aquatics ~~our~~brands ~~Remington~~are ~~brand~~Tetra®, weMarineland®, ~~sell~~Whisper®, ~~both~~Jungle® ~~foil~~ and ~~rotary~~Instant ~~shavers~~Ocean®.

~~Primary~~The ~~competitive~~companion ~~brands~~animal inproduct ~~the~~category ~~small~~includes ~~appliance~~a ~~category~~variety ~~include~~of ~~Hamilton~~specialty ~~Beach,~~pet ~~Proctor~~products ~~Silex,~~including ~~Sunbeam,~~rawhide ~~Mr. Coffee~~chews, ~~Oster,~~dog ~~General~~and ~~Electric,~~cat ~~Rowenta~~treats, ~~DeLonghi,~~small ~~Kitchen~~animal ~~Aid,~~food ~~Cuisinart,~~and ~~Krups~~treats, ~~Braun,~~clean-up ~~Rival,~~and ~~Europro,~~training ~~Kenwood,~~aid ~~Philips~~products, ~~Morphy~~health ~~Richards, Breville~~ and ~~Tefal.~~grooming ~~The~~aids, ~~key~~bedding ~~competitors~~products, ~~of Russell Hobbs in this market in the U.S.~~ and ~~Canada~~consumable ~~include~~accessories ~~Jarden~~including ~~Corporation~~privacy tents, ~~DeLonghi~~litter ~~America~~carpets, ~~Euro-Pro~~crystal ~~Operating~~litter ~~LLC~~cartridges, ~~Metro~~charcoal ~~Thebe~~filters, ~~Inc.,~~corn-based ~~d/b/a~~litter ~~HWI~~and ~~Breville,~~replaceable ~~NACCO~~waste ~~Industries, Inc~~receptacles. ~~(Hamilton~~Our ~~Beach)~~largest ~~and~~specialty ~~SEB~~pet ~~S.A.~~brands Ininclude ~~addition~~FURminator®, ~~Russell~~8-in-1®, ~~Hobbs~~Dingo®, ~~competes~~Nature’s ~~with~~Miracle®, ~~retailers~~Wild ~~who~~Harvest® ~~use~~and ~~their own private label brands for household appliances (for example, Wal-Mart)~~Littermaid®.

~~Our~~The ~~major~~pet ~~competitors~~food inproduct category includes wet and dry pet food for dogs and cats under the ~~electric~~IAMS®, ~~personal~~Eukanuba® ~~care~~and ~~product~~8-in-1® ~~category~~brand ~~are~~names ~~Conair~~in ~~Corporation~~European markets. On December 31, ~~Wahl~~2014, ~~Clipper~~we ~~Corporation~~completed ~~and~~the ~~Helen~~acquisition of ~~Troy~~Procter ~~Limited~~& ~~(“Helen~~Gamble’s European pet food business, consisting of ~~Troy”)~~the IAMS® and Eukanuba® brands for dogs and cats. Eukanuba® is a popular brand with breeders and veterinarians in Europe; and IAMS® is a premium brand with broad customer appeal primarily in the United Kingdom with opportunities to grow further across Europe and is positioned for consumers who treat their pets as family members and view the food they feed their pets as a way to make them happy.

~~Some~~Additionally, ofon ~~our~~January ~~major~~16, ~~competitors~~2015, ~~have~~we ~~greater~~acquired ~~resources~~Salix ~~and~~Animal ~~greater~~Health, ~~overall~~a ~~market~~vertically ~~share~~integrated ~~than~~producer weand ~~do.~~distributor ~~They~~of ~~have~~natural ~~committed~~rawhide ~~significant~~dog ~~resources~~chews, totreats ~~protect~~and ~~their~~snacks, ~~market~~offering ~~shares~~a orcomprehensive toline ~~capture~~of ~~market~~chews ~~share~~made from usbeef ~~and~~hides, ~~may~~pork, ~~continue~~chicken, tobeef doand soother invarious ~~the future~~proteins. InIts ~~some~~two ~~key~~flagship ~~product~~brands ~~lines,~~are ~~our~~Healthy-Hide® ~~competitors~~that ~~may~~is ~~have~~marketed ~~lower~~across ~~production~~the ~~costs~~Good’n’Fun®, Good’n’Fit®, and ~~higher~~Good’n’Tasty® ~~profit~~family ~~margins~~of ~~than~~brands; weand ~~do,~~Digest-eeze®. ~~which~~Salix ~~may~~will ~~enable~~provide ~~them~~the tosegment ~~compete~~with ~~more~~increased ~~aggressively~~optionality infor ~~advertising~~low-cost ~~and~~global inrawhide ~~offering~~production ~~retail~~and ~~discounts~~supply, and ~~other~~expand ~~promotional~~our ~~incentives~~Dingo® todog ~~retailers,~~treats ~~distributors,~~business ~~wholesalers~~with ~~and,~~complementary ~~ultimately,~~product ~~consumers~~offerings.

Our PET sales force is aligned by customer type, geographic region and product category. We sell primarily to mass merchandisers, grocery stores and drug chains, pet superstores, independent pet stores, warehouse clubs and other specialty retailers. International distribution varies by region and is often executed on a country-by-country basis.

See Management’s Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this Annual Report on Form 10-K, for further discussion of the segment’s operating results.

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Home and Garden (H&G)

The following is an overview of the H&G segment net sales by product category and geographic region sold (based upon destination) as a percentage of net sales for the segment for the year ended September 30, 2016:

The controls product category includes a variety of outdoor insect and weed control solutions, and animal repellents under the brand names Spectracide®, Black Flag®, Garden Safe®, EcoLogic® and Liquid Fence®. Our line of outdoor control solutions are designed to assist consumers in controlling insects, weeds and animals when tackling lawn and landscaping projects themselves. From selective and non-selective herbicides to pest-specific solutions, our outdoor products are available as aerosols, granules, ready-to-use or hose-end ready-to-sprays designed to fulfill a variety of consumer needs.

The household product category includes a broad array of household pest control solutions, such as spider and scorpion killers; roach and ant killers; flying insect killers; insect foggers; wasp and hornet killers; bedbug, flea and tick control products; and roach and ant baits. We also offer powerful rodent traps and rodenticides with discreet designs that are easy to refill and reuse. Our largest brands in the household insect control and rodenticide category are Hot Shot® and Black Flag®.

The repellents product category includes personal use pesticides for protection from various outdoor nuisance pests, especially mosquitoes. These products include both personal repellents in a variety of formulas such as aerosols, lotions, pump sprays and wipes to match consumers’ needs; as well as area repellents such as yard sprays, citronella candles and patio lanterns to allow consumers to enjoy the outdoors without bothersome pests. Our brands in the insect repellents category are Cutter® and Repel®.

The Home and Garden business sales force is geographically aligned with our key customers. We sell primarily to home improvement centers, mass merchandisers, dollar stores, hardware stores, home and garden distributors, and food and drug retailers, primarily in the U.S.

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Global Auto Care (GAC)

The following is an overview of the GAC segment net sales by product category and geographic region sold (based upon destination) as a percentage of net sales for the segment for the year ended September 30, 2016:

We entered the GAC segment through our acquisition of Armored Auto Group (“AAG”) on May 21, 2015, which consists of products within the automotive aftermarket appearance, performance chemicals, and do-it-yourself automotive air conditioner recharge product categories.

The appearance product category includes protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners and washes designed to clean, shine, refresh and protect interior and exterior automobile surfaces under the brand name Armor All®. Armor All® is a leader in the automotive aftermarket appearance products category based upon its recognized brand name, convenient application methods and product innovation.

The performance product category includes STP® branded fuel and oil additives, functional fluids and automotive appearance products that benefit from a rich heritage in the car enthusiast and racing scenes, characterized by a commitment to technology, performance and motor sports partnerships for over 60 years. The strong brand equity of STP also provides for attractive licensing opportunities that augment our presence in our core performance categories.

The A/C recharge product category includes do-it-yourself automotive air conditioner recharge products under the A/C PRO® brand name, along with other refrigerant and oil recharge kits, sealants and accessories.

The GAC business sales force is geographically aligned with key customers and supply chains. We sell primarily to big-box auto, auto specialty retail, mass retailers, food and drug retailers, and small regional and convenience store retailers. Our small regional and convenience store customers are serviced by brokers and distributors. International distribution varies by region and is often executed on a country-by-country basis.

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Other Information

Sales, Distribution and Competition

We sell our products through a variety of trade channels, including retailers, wholesalers and distributors, hearing aid professionals, construction companies and OEMs. Our sales generally are made through the use of individual purchase orders, consistent with industry practice. Retail sales of the consumer products we market have been increasingly consolidated on a worldwide basis into a small number of regional and national mass merchandisers and e-commerce companies that generally have strong negotiating power with their suppliers. A significant percentage of our sales are attributable to a limited group of retailer customers, including (in alphabetical order), Amazon, Argos, Autozone, Dollar General, Lowe’s, PetCo, PetSmart, Target, The Home Depot, and Wal-Mart. Our sales to our largest customer, Wal-Mart, represented approximately 15% of our consolidated net sales for the fiscal year ended September 30, 2016. No other customer accounted for more than 10% of our consolidated net sales in the fiscal year ended September 30, 2016.

Factors influencing product sales include brand name recognition, perceived quality, price, performance, product packaging, design innovation, and consumer confidence and preferences as well as creative marketing, promotion and distribution strategies. We compete for limited shelf space and consumer acceptance based on location and product segment. We also compete with our retail customers, who use their own private label brands, and with distributors and foreign manufacturers of unbranded products, typically at lower prices. The Company addresses competitive challenges with the following factors:

Strong Diversified Global Brand Portfolio. We have a global portfolio of well-recognized consumer product brands. We believe that the strength of our brands positions us to extend our product lines and provide our retail customers with strong sell-through to consumers.

Strong Global Retail Relationships. We have well-established business relationships with many of the top global retailers, distributors and wholesalers, which have assisted us in our efforts to expand our overall market penetration and promote sales.

Expansive Distribution Network. We distribute our products in approximately 160 countries through a variety of trade channels, including retailers, wholesalers and distributors, hearing aid professionals, construction companies and OEMs.

Innovative New Products, Packaging and Technologies. We have a long history of product and packaging innovations in each of our product categories and continually seek to introduce new products both as extensions of existing product lines and as new product categories.

Experienced Management Team. Our management team has substantial consumer products experience. On average, each senior management team member has more than 20 years of experience at Spectrum Brands, VARTA, Remington, Russell Hobbs or other branded consumer product companies such as Newell Brands and Honeywell.

Within our GBA segment, primary competitors for consumer batteries include Energizer Holdings, Inc. (Energizer); Berkshire Hathaway (Duracell); Matsushita (Panasonic) and private label brands of major retailers. Primary competitors for small appliances include Newell Brands (Oster, Sunbeam, Mr. Coffee, Crockpot, Rival, Breville), General Electric (GE), De’Longhi America (DeLonghi, Kenwood, Braun), SharkNinja f/k/a Euro-Pro (Shark, Ninja), NACCO Industries (Hamilton Beach, Proctor Silex), SEB S.A.(T-fal, Krups, Rowenta), Whirlpool Corporation (Kitchen Aid, Waring), Conair Corporate (Cuisinart), Koninklijke Philips N.V. (Philips), Glen Dimplex (Morphy Richards) and private label brands for major retailers. Primary competitors in personal care include are Koninklijke Philips Electronics N.V. (Norelco), The Procter & Gamble Company (Braun), Conair Corporation, Wahl Clipper Corporation and Helen of Troy Limited.

Within our HHI segment, primary competitors in residential locksets include Allegion (Schlage) and private label import brands such as Defiant. Primary competitors for hardware include The Hillman Group, Hampton Hardware, Crown Bolt and private label competitors. Primary competitors for plumbing include Kohler, Masco, Fortune Brands (Moen), American Standard, Glacier Bay, AquaSource, and the private label brands of major retailers.

Primary competitors in our PET segment are Mars Corporation, The Hartz Mountain Corporation and Central Garden & Pet Company which all sell a comprehensive line of pet supplies that compete across our product categories. The pet supplies product category is highly fragmented with no competitor holding a substantial market share and consists of small companies with limited product lines.

Primary competitors in our H&G segment are The Scotts Miracle-Gro Company (Scotts, Ortho, Roundup, Miracle-Gro, Tomcat); Central Garden & Pet (AMDRO, Sevin) and Bayer A.G. (Bayer Advanced), S.C. Johnson & Son, Inc. (Raid, OFF!); and Henkel AG & Co. KGaA (Combat).

Primary competitors in our GAC segment include Valvoline, Prestone, Turtle Wax, Black Magic, Energizer, Newell Brands and private label brands. We also encounter competition from similar and alternative products, many of which are produced and marketed by major multinational or national companies, including Mothers, Meguiars, Lucas, and Sea Foam.

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Seasonality

On a consolidated basis our financial results are approximately equally weighted ~~between~~across our quarters, however, sales of certain product categories tend to be seasonal. Sales infrom ~~the~~our ~~consumer~~GBA ~~battery~~segment, ~~electric~~primarily ~~shaving~~from ~~and~~consumer ~~grooming~~battery and electric personal care product categories, ~~particularly~~tend into ~~North~~increase ~~America~~during the December holiday season (the Company’s first fiscal quarter), ~~tend~~while small appliances sales increase from July through December primarily due to bethe ~~concentrated~~increased demand by customers in the ~~December~~late ~~holiday~~summer ~~season~~for “back-to-school” sales (~~Spectrum~~the Company’s ~~first~~fourth fiscal quarter). ~~Demand~~and in December for ~~hardware~~the ~~and~~holiday ~~home~~season. ~~improvement~~Sales ~~products~~from ~~increases~~our HHI segment primarily increase during the spring and summer construction period (~~Spectrum'~~the Company’s third and fourth fiscal quarters). ~~Demand~~Sales ~~for~~from ~~pet~~our ~~supplies~~PET ~~products~~segment ~~remains~~remain fairly ~~constant~~consistent throughout the year with little variation. ~~Demand~~Sales ~~for~~from ~~home~~our ~~and~~H&G ~~garden~~segment ~~control~~and ~~products~~GAC segment typically ~~peaks~~peak during the first six months of the calendar year (~~Spectrum~~the Company’s second and third fiscal quarters). ~~Small Appliances peaks from July through December primarily~~ due to ~~the~~customer ~~increased~~seasonal ~~demand~~purchasing bypatterns ~~customers~~and intiming ~~the~~of ~~late~~promotional ~~summer~~activities. ~~for~~Our ~~“back-to-school”~~ sales ~~and~~by inquarter ~~the~~as ~~fall for the holiday season. For~~ a ~~more~~percentage ~~detailed discussion~~ of ~~the~~annual ~~seasonality~~net ~~of our product~~ sales, ~~see~~during ~~Item 7.~~the ~~Management’s~~years ~~Discussion~~ended ~~and~~September ~~Analysis~~30, of2016, ~~Financial~~2015 ~~Condition~~ and ~~Results~~2014 ofis ~~Operations—“Seasonal~~as ~~Product Sales.”~~follows:


	2016		2015		2014
First Quarter		24%		23%		25%
Second Quarter		24%		23%		23%
Third Quarter		27%		26%		25%
Fourth Quarter		25%		28%		27%

Manufacturing, Raw Materials and Suppliers

The principal raw materials used in manufacturing include zinc, electrolytic manganese dioxide used in our consumer batteries products; brass and steel used in our HHI products; and refrigerant R-134a used in our GAC A/C recharge products; that are sourced either on a global or regional basis. The prices of these raw materials are susceptible to fluctuations due to supply and demand trends, energy costs, transportation costs, government regulations and tariffs, changes in currency exchange rates, price controls, general economic conditions and other unforeseen circumstances. We have regularly engaged in forward purchase and hedging derivative transactions in an attempt to effectively manage certain raw material costs we expect to incur over the next 12 to 24 months.

Substantially all of our rechargeable batteries and chargers, portable lighting products, personal care products and small appliances are manufactured by third party suppliers that are primarily located in the Asia-Pacific region. We maintain ownership of most of the tooling and molds used by our suppliers.

Patents and Trademarks

We use and maintain a number of patents, trademarks, brand names and trade names that are, in the aggregate, important to our businesses. We seek trademark protection in the U.S. and in foreign countries. The Company’s most significant registered trademarks are:


Segment		Trademarks
GBA		Rayovac®, VARTA®, Remington®, Black & Decker®, George Foreman®, Russell Hobbs®, Farberware®, Toastmaster®, Breadman®, Juiceman®
HHI		Kwikset®, Weiser®, Baldwin®, National Hardware®, Stanley®, Fanal®, Pfister®, Tell®
PET		Tetra®, 8-in-1®, Dingo®, Nature’s Miracle®, Wild Harvest®, Marineland®, Furminator®, Littermaid®, Birdola®, Healthy Hide®, Digest-eeze®, Iams®, Eukanuba®
H&G		Spectracide®, Cutter®, Hot Shot®, Real Kill®, Ultra Kill®, Black Flag®, Liquid Fence®, Rid-a-bug®, TAT®, Garden Safe®, Repel®
GAC		Armor All®, STP®, A/C PRO®

We own or license from third parties a significant number of patents and patent applications throughout the world relating to products we sell and manufacturing equipment we use. We hold a license that expires in March 2022 for certain alkaline battery designs, technology and manufacturing equipment from Matsushita Electrical Industrial Co., Ltd. (“Matsushita”), to whom we pay a royalty. Through our 56% ownership interest in Shaser, Inc., we have patented technology that is used in our i-Light and i-Light Reveal product line. Through ownership of our HHI segment, we own the patented SmartKey® technology, which enables customers to easily rekey their locks without hiring a locksmith.

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We acquired the rights to the VARTA® trademark in the consumer battery category and Johnson Controls Inc. acquired rights to the trademark in the automotive battery category from VARTA AG. VARTA AG continues to have rights to use the trademark with travel guides and industrial batteries and VARTA Microbattery GmbH has the right to use the trademark with micro batteries. We are party to a Trademark and Domain Names Protection and Delimitation Agreement that governs ownership and usage rights and obligations of the parties relative to the VARTA ® trademark.

We license the Black & Decker® brand in North America, Latin America (excluding Brazil) and the Caribbean for four core categories of household appliances: beverage products, food preparation products, garment care products and cooking products through a trademark license agreement with The Black and Decker Corporation (“BDC”) through December 2018. Under the agreement, Spectrum agreed to pay BDC royalties based on a percentage of sales, with minimum annual royalty payments of $15.0 million through calendar year 2018. The agreement also requires us to comply with maximum annual return rates for products. If BDC does not agree to renew the license agreement, we have 18 months to transition out of the brand name with no minimum royalty payments during such transition period and BDC has agreed to not compete in the four categories for five years after the end of the transition period. Upon request, BDC may elect to extend the license to use the Black & Decker brand to certain additional product categories. BDC has approved several extensions of the license to additional categories and geographies.

We own the rights to use the Remington® trademark for electric shavers, shaver accessories, grooming products and personal care products; and Remington Arms Company, Inc. (“Remington Arms”) owns the rights to use the trademark for firearms, sporting goods and products for industrial use, including industrial hand tools. The terms of a 1986 agreement between Remington Products, LLC and Remington Arms provides for the shared rights to use the trademark on products which are not considered “principal products of interest” for either company. We retain the trademark for nearly all products which we believe can benefit from the use of the brand name in our distribution channels.

We license the Stanley® and Black & Decker® marks and logos in the HHI segment for such products as residential locksets, builder’s hardware, padlocks, and door hardware through a transitional trademark license agreement with Stanley Black & Decker Corporation. Under the agreement and as part of the acquisition of the HHI Business in December 2012, Spectrum has a royalty-free, fully paid license to use certain trademarks, brand names and logos in marketing our products and services for five years after the completion of the HHI Business acquisition. Upon termination of the agreement, HHI will be obligated to discontinue any and all use of the trademarks as designated by the arrangement within 180 days following the termination.

Research and Development

Our research and development strategy is focused on new product development and performance enhancements of our existing products. We plan to continue to use our strong brand names, established customer relationships and significant research and development efforts to introduce innovative products that offer enhanced value to consumers through new designs and improved functionality. During the years ended September 30, 2016, 2015 and 2014, we invested $58.7 million, $51.3 million and $47.9 million, respectively, in product research and development.

Governmental Regulations and Environmental Matters

Due to the nature of our operations, our facilities are subject to a broad range of federal, state, local and foreign legal and regulatory provisions relating to the environment, including those regulating the discharge of materials into the environment, the handling and disposal of solid and hazardous substances and wastes and the remediation of contamination associated with the releases of hazardous substances at our facilities. We believe that compliance with the federal, state, local and foreign laws and regulations to which we are subject will not have a material effect upon our capital expenditures, financial condition, earnings or competitive position.

From time to time, we have been required to address the effect of historic activities on the environmental condition of our properties. We have not conducted invasive testing at all facilities to identify all potential environmental liability risks. Given the age of our facilities and the nature of our operations, it is possible that material liabilities may arise in the future in connection with our current or former facilities. If previously unknown contamination of property underlying or in the vicinity of our manufacturing facilities is discovered, we could incur material unforeseen expenses, which could have a material adverse effect on our financial condition, capital expenditures, earnings and competitive position. Although we are currently engaged in investigative or remedial projects at some of our facilities, we do not expect that such projects, taking into account established accruals, will cause us to incur expenditures that are material to our business, financial condition or results of operations; however, it is possible that our future liability could be material.

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We have been, and in the future may be, subject to proceedings related to our disposal of industrial and hazardous material at off-site disposal locations or similar disposals made by other parties for which we are held responsible as a result of our relationships with such other parties. In the U.S., these proceedings are under the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) or similar state laws that hold persons who “arranged for” the disposal or treatment of such substances strictly liable for costs incurred in responding to the release or threatened release of hazardous substances from such sites, regardless of fault or the lawfulness of the original disposal. Liability under CERCLA is typically joint and several, meaning that a liable party may be responsible for all costs incurred in investigating and remediating contamination at a site. As a practical matter, liability at CERCLA sites is shared by all of the viable responsible parties. We occasionally are identified by federal or state governmental agencies as being a potentially responsible party for response actions contemplated at an off-site facility. At the existing sites where we have been notified of our status as a potentially responsible party, it is either premature to determine whether our potential liability, if any, will be material or we do not believe that our liability, if any, will be material. We may be named as a potentially responsible party under CERCLA or similar state laws for other sites not currently known to us, and the costs and liabilities associated with these sites may be material.

It is difficult to quantify with certainty the potential financial impact of actions regarding expenditures for environmental matters, particularly remediation, and future capital expenditures for environmental control equipment. Nevertheless, based upon the information currently available, we believe that our ultimate liability arising from such environmental matters, ~~taking~~considering ~~into account~~ established accruals of $4.64 million for estimated liabilities at September 30, ~~2014~~2016 should not be material to our business or financial condition.

Electronic and electrical products that we sell in Europe, particularly products sold under the Remington® brand name, VARTA® battery chargers, certain portable lighting and all of our batteries, are subject to regulation in European Union (“EU”) markets under three key EU directives. The first directive is the Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) which took effect in EU member states beginning July 1, 2006. RoHS prohibits companies from selling products which contain certain specified hazardous materials in EU member states. We believe that compliance with RoHS ~~will~~does not have a material effect on our capital expenditures, financial condition, earnings or competitive position. The second directive is entitled the Waste of Electrical and Electronic Equipment (“WEEE”). WEEE makes producers or importers of particular classes of electrical goods financially responsible for specified collection, recycling, treatment and disposal of past and future covered products. WEEE assigns levels of responsibility to companies doing business in EU markets based on their relative market share. WEEE calls on each EU member state to enact enabling legislation to implement the directive. To comply with WEEE requirements, we have partnered with other companies to create a comprehensive collection, treatment, disposal and recycling program. As EU member states pass enabling legislation we currently expect our compliance system to be sufficient to meet such requirements. Our current estimated costs associated with compliance with WEEE are not significant based on our current market share. However, we continue to evaluate the impact of the WEEE legislation as EU member states implement guidance and as our market share changes and, as a result, actual costs to our company could differ from our current estimates and may be material to our business, financial condition or results of operations. The third directive is the Directive on Batteries and Accumulators and Waste Batteries, which was adopted in September 2006 and went into effect in September 2008 (the “Battery Directive”). The Battery Directive bans heavy metals in batteries by establishing maximum quantities of those heavy metals in batteries and mandates waste management of batteries, including collection, recycling and disposal systems. The Battery Directive places the costs of such waste management systems on producers and importers of batteries. The Battery Directive calls on each EU member state to enact enabling legislation to implement the directive. We currently believe that compliance with the Battery Directive ~~will~~does not have a material effect on our capital expenditures, financial condition, earnings or competitive position. ~~However, until such time as the~~ EU member states ~~adopt~~have adopted enabling legislation, arequired ~~full~~by ~~evaluation~~the ofdirective ~~these~~and ~~costs~~issued ~~cannot~~additional ~~be completed~~guidance. We will continue to evaluate the impact of the Battery Directive and its enabling legislation ~~as EU member states implement guidance~~.

Certain of our products and facilities in each of our business segments are regulated by the United States Environmental Protection Agency (the “EPA”) and the United States Food and Drug Administration (the “FDA”) or other federal consumer protection and product safety agencies and are subject to the regulations such agencies enforce, as well as by similar state, foreign and multinational agencies and regulations. For example, in the U.S., all products containing pesticides must be registered with the EPA and, in many cases, similar state and foreign agencies before they can be manufactured or sold. Our inability to obtain or the cancellation of any registration could have an adverse effect on our business, financial condition and results of operations. The severity of the effect would depend on which products were involved, whether another product could be substituted and whether our competitors were similarly affected. We attempt to anticipate regulatory developments and maintain registrations of, and access to, substitute chemicals and other ingredients. We may not always be able to avoid or minimize these risks.

The Food Quality Protection Act (“FQPA”) established a standard for food-use pesticides, which is that a reasonable certainty of no harm will result from the cumulative effect of pesticide exposures. Under the FQPA, the EPA is evaluating the cumulative effects from dietary and non-dietary exposures to pesticides. The pesticides in certain of our products continue to be evaluated by the EPA as part of this program. It is possible that the EPA or a third party active ingredient registrant may decide that a pesticide we use in our products will be limited or made unavailable to us. We cannot predict the outcome or the severity of the effect of the EPA’s continuing evaluations of active ingredients used in our products.

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Certain of our products and packaging materials are subject to regulations administered by the FDA. Among other things, the FDA enforces statutory prohibitions against misbranded and adulterated products, establishes ingredients and manufacturing procedures for certain products, establishes standards of identity for certain products, determines the safety of products and establishes labeling standards and requirements. In addition, various states regulate these products by enforcing federal and state standards of identity for selected products, grading products, inspecting production facilities and imposing their own labeling requirements.

Certain A/C products containing R-134a are subject to regulation in the U.S. markets under the EPA’s Significant New Alternative Policy ("SNAP Program"), which implements international agreements restricting the use of certain refrigerants. The EPA has identified use of R-134a in new automotive air conditioning systems as an approved use up to the 2020 automotive model year. The EPA has not yet approved a replacement refrigerant under the SNAP program for sale in small cans for automotive use for automobiles produced beginning with the 2021 model year, and future rulemakings from the agency are anticipated. We currently believe that compliance with current and future SNAP regulations will not have a material effect on our capital expenditures, financial condition, earnings or competitive position. However, until such time as future regulations are issued and future alternate refrigerants are approved for sale in small cans, a full evaluation of these costs cannot be completed. We will continue to evaluate the impact of the SNAP Program as the EPA issues additional guidance.

Employees

We ~~had~~have approximately 1315,~~400~~700 full-time employees worldwide as of September 30, ~~2014~~2016. Approximately 1514% of our total labor force is covered by collective bargaining agreements. There are 45 collective bargaining agreements that will expire during our fiscal year ending September 30, ~~2015~~2017, which cover approximately 4538% of the labor force under collective bargaining agreements, or approximately 75% of our total labor force. We believe that our overall relationship with our employees is good.

~~Available Information~~16

~~Our~~Table ~~Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d)~~ of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are made available free of charge on or through our website at www.spectrumbrands.com as soon as reasonably practicable after such reports are filed with, or furnished to the SEC. You may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains our reports, proxy statements and other information at www.sec.gov. In addition, copies of our (i) Corporate Governance Guidelines, (ii) charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, (iii) Code of Business Conduct and Ethics and (iv) Code of Ethics for the Principal Executive Officer and Senior Financial Officers are available at our Internet site at www.spectrumbrands.com under “Investor Relations—Corporate Governance.” Copies will also be provided to any stockholder upon written request to the Vice President, Investor Relations & Corporate Communications, Spectrum Brands, Inc. at 3001 Deming Way, Middleton, Wisconsin 53562 or via electronic mail at [email protected], or by contacting the Vice President, Investor Relations & Corporate Communications by telephone at (608) 275-3340.Contents

ITEM 1A. RISK FACTORS

RISK FACTORS

Any of the following factors could materially and adversely affect our business, financial condition and results of operations. The risks described below are not the only risks that we may face. Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also materially and adversely affect our business, financial condition or results of operations.

Risks Related To Our Business

Our substantial indebtedness may limit our financial and operating flexibility, and we may incur additional debt, which could increase the risks associated with our substantial indebtedness.

We have, and we expect to continue to have, a significant amount of indebtedness. As of September 30, ~~2014~~2016, we had total indebtedness under ~~the~~senior ~~Senior~~secured ~~Secured Facilities~~facilities, ~~the~~notes ~~Notes~~ and other debt instruments of approximately $3.7 billion. Our substantial indebtedness has had, and could continue to have, material adverse consequences for our business, and may:

require us to dedicate a large portion of our cash flow to pay principal and interest on our indebtedness, which will reduce the availability of our cash flow to fund working capital, capital expenditures, research and development expenditures and other business activities;

increase our vulnerability to general adverse economic and industry conditions;

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

restrict our ability to make strategic acquisitions, dispositions or to exploit business opportunities;

place us at a competitive disadvantage compared to our competitors that have less debt; and

limit our ability to borrow additional funds (even when necessary to maintain adequate liquidity) or dispose of assets.

Under the ~~Senior~~senior ~~Secured~~secured ~~Facilities~~facilities and the indentures governing the ~~Notes~~notes (together, the “Indentures”), we may incur additional indebtedness. If new debt is added to our existing debt levels, the related risks that we now face would increase.

11Furthermore, a portion of our debt bears interest at variable 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. While we may enter into agreements limiting our exposure to higher debt service requirements, any such agreements may not offer complete protection from this risk.

Restrictive covenants in the senior secured facilities and the Indentures may restrict our ability to pursue our business strategies.

The senior secured facilities and the Indentures each restrict, among other things, asset dispositions, mergers and acquisitions, dividends, stock repurchases and redemptions, other restricted payments, indebtedness and preferred stock, loans and investments, liens and affiliate transactions. The senior secured facilities and the Indentures also contain customary events of default. These covenants could, among other things, limit our ability to fund future working capital and capital expenditures, engage in future acquisitions or development activities, or otherwise realize the value of our assets and opportunities fully. In addition, the senior secured facilities and the Indentures require us to dedicate a portion of cash flow from operations to payments on debt and also contain borrowing restrictions based on, among other things, our fixed charge coverage ratio. Furthermore, the credit agreement governing our senior secured facilities contains a financial covenant relating to maximum leverage. Such requirements and covenants could limit the flexibility of our restricted entities in planning for, or reacting to, changes in the industries in which they operate. Our ability to comply with these covenants is subject to certain events outside of our control. If we are unable to comply with these covenants, the lenders under our senior secured facilities could terminate their commitments and the lenders under our senior secured facilities or the holders of the notes could accelerate repayment of our outstanding borrowings and, in either case, we may be unable to obtain adequate refinancing of outstanding borrowings on favorable terms or at all. If we are unable to repay outstanding borrowings when due, the lenders under the senior secured facilities will also have the right to proceed against the collateral granted to them to secure the indebtedness owed to them. If our obligations under the senior secured facilities are accelerated, we cannot assure you that our assets would be sufficient to repay in full such indebtedness.

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~~Furthermore,~~ The asale ~~substantial~~or ~~portion~~other ofdisposition ~~our~~by ~~debt~~HRG ~~bears~~Group, ~~interest at variable rates~~Inc. ~~If market interest rates increase~~(“HRG”), the ~~interest~~holder ~~rate~~of ona ~~our~~majority ~~variable~~of ~~rate~~the ~~debt~~outstanding ~~will~~shares ~~increase~~of ~~and~~our ~~will~~common ~~create higher debt service requirements~~stock, ~~which~~to ~~would~~non-affiliates ~~adversely~~of ~~affect~~a ~~our~~sufficient ~~cash~~amount ~~flow~~of ~~and~~the ~~could~~common ~~adversely~~stock ~~impact our results~~ of ~~operations.~~the ~~While~~Company wewould ~~may~~constitute ~~enter~~a ~~into~~change ~~agreements~~of ~~limiting~~control ~~our~~under ~~exposure~~the ~~to higher debt service requirements, any such~~ agreements ~~may~~governing ~~not~~the ~~offer~~Company’s ~~complete protection from this risk~~debt.

~~Restrictive~~HRG ~~covenants~~owns ina majority of the outstanding shares of the common stock of the Company. The sale or other disposition by HRG to non-affiliates of a sufficient amount of the common stock of the Company could constitute a change of control under certain of the agreements governing the Company's debt, including any foreclosure on or sale of the Company's common stock pledged as collateral by HRG pursuant to the indenture governing HRG's 7.875% Senior Secured ~~Facilities~~Notes due 2019. Under the senior secured facilities, a change of control is an event of default and, if a change of control were to occur, the Company would be required to amend these facilities to avoid a default. If the Company was unable to amend these facilities, the lenders could accelerate the maturity of any outstanding debt under these facilities. In addition, under the Indentures, ~~may~~upon ~~restrict~~a ~~our~~change ~~ability~~of control of the Company, the Company is required to ~~pursue~~offer to repurchase such notes from the holders at a price equal to 101% of the principal amount of the notes plus accrued interest or obtain a waiver of default from the holders of such notes. If the Company were unable to make the change of control offer, or to obtain a waiver of default, it would be an event of default under the indentures that could allow holders of such notes to accelerate the maturity of the notes. See the risk factor entitled “HRG and its significant stockholders exercise significant influence over us and their interests in our business ~~strategies~~may be different from the interests of our stockholders” in this Form 10-K.

The Senior Secured Facilities and the Indentures each restrict, among other things, asset dispositions, mergers and acquisitions, dividends, stock repurchases and redemptions, other restricted payments, indebtedness and preferred stock, loans and investments, liens and affiliate transactions. The Senior Secured Facilities and the Indentures also contain customary events of default. These covenants could among other things, limit our ability to fund future working capital and capital expenditures, engage in future acquisitions or development activities, or otherwise realize the value of our assets and opportunities fully. In addition, the Senior Secured Facilities and the Indentures require us to dedicate a portion of cash flow from operations to payments on debt and the Senior Secured Facilities contain financial covenants relating to maximum leverage and minimum interest coverage. Such requirements and covenants could limit the flexibility of our restricted entities in planning for, or reacting to, changes in the industries in which they operate. Our ability to comply with these covenants is subject to certain events outside of our control. If we are unable to comply with these covenants, the lenders under our Senior Secured Facilities could terminate their commitments and the lenders under our Senior Secured Facilities or the holders of the Notes could accelerate repayment of our outstanding borrowings and, in either case, we may be unable to obtain adequate refinancing of outstanding borrowings on favorable terms or at all. If we are unable to repay outstanding borrowings when due, the lenders under the Senior Secured Facilities will also have the right to proceed against the collateral granted to them to secure the indebtedness owed to them. If our obligations under the Senior Secured Facilities are accelerated, we cannot assure you that our assets would be sufficient to repay in full such indebtedness.

The sale or other disposition by Harbinger Group Inc., the holder of a majority of the outstanding shares of our common stock, to non-affiliates of a sufficient amount of the common stock of SB Holdings would constitute a change of control under the agreements governing Spectrum Brands’ debt.

Harbinger Group Inc. (“HRG”) owns a majority of the outstanding shares of the common stock of SB Holdings. The sale or other disposition by HRG to non-affiliates of a sufficient amount of the common stock of SB Holdings could constitute a change of control under certain of the agreements governing Spectrum Brands' debt, including any foreclosure on or sale of SB Holdings' common stock pledged as collateral by HRG pursuant to the indenture governing HRG's 7.875% Senior Secured Notes due 2019. Under the Senior Secured Facilities, a change of control is an event of default and, if a change of control were to occur, Spectrum Brands would be required to get an amendment to these agreements to avoid a default. If Spectrum Brands was unable to get such an amendment, the lenders could accelerate the maturity of each of our Term Loan and ABL Facility. In addition, under the Indentures, upon a change of control of SB Holdings, Spectrum Brands is required to offer to repurchase such notes from the holders at a price equal to 101% of the principal amount of the notes plus accrued interest or obtain a waiver of default from the holders of such notes. If Spectrum Brands was unable to make the change of control offer, or to obtain a waiver of default, it would be an event of default under the indentures that could allow holders of such notes to accelerate the maturity of the notes.

We face risks related to the current economic environment.

The economic environment and related turmoil in the global financial system ~~between~~in ~~2008~~recent ~~and~~years ~~2012~~ had an impact on our business and financial condition, and we may face additional challenges if economic and financial market conditions deteriorate in the future.

Global economic conditions have significantly impacted economic markets within certain sectors, with financial services and retail businesses being particularly impacted. Our ability to generate revenue depends significantly on discretionary consumer spending. It is difficult to predict new general economic conditions that could impact consumer and customer demand for our products or our ability to manage normal commercial relationships with our customers, suppliers and creditors. A number of negative economic factors, including constraints on the supply of credit to households, uncertainty and weakness in the labor market and general consumer fears of a new economic downturn could have a negative impact on discretionary consumer spending. If the economy deteriorates or fails to further improve, our business could be negatively impacted, including as a result of reduced demand for our products or supplier or customer disruptions. Any weakness in discretionary consumer spending could have a material adverse effect on our revenues, results of operations and financial condition. In addition, our ability to access the capital markets may be restricted at a time when it could be necessary or beneficial to do so, which could have an impact on our flexibility to react to changing economic and business conditions.

12In the last few years, concern over continuing high unemployment, stagnant economic performance and government debt levels in many European Union countries caused significant fluctuations of the Euro relative to other currencies, such as the U.S. Dollar. Continued weakness of the European economy could lead to a decrease in consumer confidence, which could cause reductions in discretionary spending and demand for our products. Furthermore, sovereign debt issues could also lead to further significant, and potentially longer-term, economic issues such as reduced economic growth and devaluation of the Euro against the U.S. Dollar, any of which could adversely affect our business, financial conditions and operating results. Moreover, risks related to the United Kingdom’s 2016 referendum to exit the European Union could exacerbate the foregoing risks and create additional uncertainty for our business. See the risk factor entitled “We face risks relating the United Kingdom’s 2016 referendum, which called for its exit from the European Union” in this form 10-K.

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In the last few years, concern over continuing high unemployment, stagnant economic performance and government debt levels in many European Union countries caused significant fluctuations of the Euro relative to other currencies, such as the U.S. Dollar. Continued weakness of the European economy could lead to a decrease in consumer confidence, which could cause reductions in discretionary spending and demand for our products. Furthermore, sovereign debt issues could also lead to further significant, and potentially longer-term, economic issues such as reduced economic growth and devaluation of the Euro against the U.S. Dollar, any of which could adversely affect our business, financial conditions and operating results.

We depend on key personnel and may not be able to retain those employees or recruit additional qualified personnel.

We are highly dependent on the continuing efforts of our senior management team and other key personnel. Our business, financial condition and results of operations could be materially adversely affected if we lose any of these persons and are unable to attract and retain qualified replacements.

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We participate in very competitive markets and we may not be able to compete successfully, causing us to lose market share and sales.

~~The~~We ~~markets~~compete infor ~~which we participate are very competitive. In the~~ consumer ~~battery~~acceptance ~~market,~~and ~~our~~limited ~~primary~~shelf ~~competitors~~space ~~are~~based ~~Duracell~~upon (a brand ofname ~~Procter & Gamble)~~recognition, ~~Energizer~~perceived ~~and Panasonic (a brand of Matsushita). In the electric shaving and grooming and electric personal care~~ product ~~markets~~quality, ~~our~~price, ~~primary competitors are Braun (a brand of Procter & Gamble)~~performance, ~~Norelco~~product (afeatures ~~brand~~and ~~of Philips)~~enhancements, ~~and~~product ~~Vidal~~packaging ~~Sassoon~~ and ~~Revlon~~design ~~(brands of Helen of Troy). In the pet supplies market~~innovation, ~~our~~as ~~primary~~well ~~competitors~~as ~~are~~creative ~~Mars~~marketing, ~~Hartz~~promotion and ~~Central~~distribution ~~Garden &~~strategies, ~~Pet. In the Home~~ and ~~Garden~~new ~~Business,~~product ~~our principal national competitors are Scotts, Central Garden & Pet and S~~introductions.C. ~~Johnson.~~ Our ~~principal~~ability ~~national~~to ~~competitors~~compete ~~within~~in ~~our~~these ~~small~~consumer ~~appliances~~ product category include Jarden Corporation, DeLonghi America, Euro-Pro Operating LLC, Metro Thebe, Inc., (d/b/a HWI Breville) NACCO Industries, Inc. (Hamilton Beach ) and SEB S.A. In the hardware and home improvement industry, our principal competitors are Schlage, a division of Ingersoll-Rand, Masco, Fortune Brands, Kohler and American Standard. In each of these markets, wemay ~~also~~be ~~face~~adversely ~~competition~~affected ~~from~~by ~~numerous other companies. In addition, in~~ a number of ~~our product lines~~factors, ~~we compete with our retail customers~~including, ~~who~~but ~~use~~not ~~their~~limited ~~own private label brands~~to, ~~and~~the with distributors and foreign manufacturers of unbranded products. Significant new competitors or increased competition from existing competitors may adversely affect our business, financial condition and results of our operations.following:

We compete with our competitors for consumer acceptance and limited shelf space based upon brand name recognition, perceived product quality, price, performance, product features and enhancements, product packaging and design innovation, as well as creative marketing, promotion and distribution strategies, and new product introductions. Our ability to compete in these consumer product markets may be adversely affected by a number of factors, including, but not limited to, the following:

We compete against many well-established companies that may have substantially greater financial and other resources, including personnel and research and development, and greater overall market share than us.

In some key product lines, our competitors may have lower production costs and higher profit margins than us, which may enable them to compete more aggressively in offering retail discounts, rebates and other promotional incentives.

Technological advancements, product improvements or effective advertising campaigns by competitors may weaken consumer demand for our products.

Consumer purchasing behavior may shift to distribution channels, including to online retailers, where we and our customers do not have a strong presence.

Consumer preferences may change to lower margin products or products other than those we market.

We may not be successful in the introduction, marketing and manufacture of any new products or product innovations or be able to develop and introduce, in a timely manner, innovations to our existing products that satisfy customer needs or achieve market acceptance.

In the consumer battery product category, our primary competitors are Duracell (a brand of Berkshire Hathaway), Energizer and Panasonic (a brand of Matsushita). In the personal care product category, our primary competitors are Braun (a licensed brand of Procter & Gamble), Norelco (a brand of Philips), and Conair, Wahl, and Helen of Troy. In our PET business, our primary competitors are Central Garden & Pet, Mars and Hartz. In the H&G business, our principal national competitors are Scotts, Central Garden & Pet and S.C. Johnson. Our principal national competitors within our small appliances product category include Newell Brands, DeLonghi America, SharkNinja (f/k/a Euro-Pro Operating LLC), NACCO Industries, Inc. and SEB S.A. In the HHI business, our principal competitors are Fortune Brands, Allegion, Masco, Kohler and American Standard. In the GAC business, our primary competitors are Valvoline, Prestone, Turtle Wax, Black Magic, Energizer and store brands.

In addition, in a number of our product lines, we compete with our retail customers, who use their own private label brands, and with distributors and foreign manufacturers of unbranded products. Significant new competitors or increased competition from existing competitors may adversely affect our business, financial condition and results of our operations.

Some competitors may be willing to reduce prices and accept lower profit margins to compete with us. As a result of this competition, we could lose market share and sales, or be forced to reduce our prices to meet competition. If our product offerings are unable to compete successfully, our sales, results of operations and financial condition could be materially and adversely affected. In addition, we may be unable to implement changes to our products or otherwise adapt to changing consumer trends. If we are unable to respond to changing consumer trends, our operating results and financial condition could be adversely affected.

13We face risks relating to the United Kingdom’s 2016 referendum, which called for its exit from the European Union.

The announcement of the referendum regarding the United Kingdom’s (“UK”) membership in the European Union (“EU”) on June 23, 2016 (referred to as “Brexit”), advising for the exit of the UK from the EU, has adversely impacted global markets and foreign currencies. In particular, the value of the Pound Sterling has sharply declined as compared to the US Dollar and other currencies. This volatility in foreign currencies is expected to continue as the UK negotiates and executes its exit from the EU, but there is uncertainty over what time period this will occur. A significantly weaker Pound Sterling compared to the US Dollar could have a significant negative effect on the Company’s business, financial condition and results of operations. The decrease in value to the Pound Sterling and impacts across global markets and foreign currencies may influence trends in consumer confidence and discretionary spending habits, but given the lack of precedent and uncertainty, it is unclear how the implications will affect us.

The UK is expected to remain a member of the EU for some period of time and there is generally not expected to be any immediate change in either EU or UK law as a consequence of the “leave” vote. However, we can provide no assurances that such consequences will not occur. Negotiations will commence to determine the future terms of the UK relationship with the EU, including, among other things, the terms of trade between the UK and the EU. The effects of Brexit will depend on many factors, including any agreements that the UK makes to retain access to EU markets either during a transitional period or more permanently. Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate. Any of these effects of Brexit and others we cannot anticipate, could materially and adversely affect our business, business opportunities, results of operations, financial condition, liquidity and cash flows.

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Sales of certain of our products are seasonal and may cause our operating results and working capital requirements to fluctuate.

On a consolidated basis our financial results are approximately equally weighted ~~between~~across our quarters, however, sales of certain product categories tend to be seasonal. Sales infrom ~~the~~our ~~consumer~~GBA ~~battery~~segment, ~~electric~~primarily ~~shaving~~from ~~and~~consumer ~~grooming~~battery and electric personal care product categories, ~~particularly~~tend into ~~North~~increase ~~America~~during the December holiday season (the Company’s first fiscal quarter), ~~tend~~while small appliances sales increase from July through December primarily due to bethe ~~concentrated~~increased demand by customers in the ~~December~~late ~~holiday~~summer ~~season~~for “back-to-school” sales (~~Spectrum~~the Company’s ~~first~~fourth fiscal quarter). ~~Demand~~and in December for ~~hardware~~the ~~and~~holiday ~~home~~season. ~~improvement~~Sales ~~products~~from ~~increases~~our HHI segment primarily increase during the spring and summer construction period (~~Spectrum'~~the Company’s third and fourth fiscal quarters). ~~and~~Sales ~~demand~~from ~~for~~our ~~pet~~PET ~~supplies~~segment ~~products~~remain ~~remains~~ fairly ~~constant~~consistent throughout the year with little variation. ~~Demand~~Sales ~~for~~from ~~home~~our ~~and~~H&G ~~garden~~segment ~~control~~and ~~products~~GAC segment typically ~~peaks~~peak during the first six months of the calendar year (~~Spectrum~~the Company’s second and third fiscal quarters). ~~Small Appliances peaks from July through December primarily~~ due to ~~the~~customer ~~increased~~seasonal ~~demand~~purchasing bypatterns ~~customers in the late summer for “back-to-school” sales~~ and intiming ~~the~~of ~~fall~~promotional ~~for the holiday season~~activities. As a result of this seasonality, our inventory and working capital needs fluctuate significantly throughout the year. In addition, orders from retailers are often made late in the period preceding the applicable peak season, making forecasting of production schedules and inventory purchases difficult. If we are unable to accurately forecast and prepare for customer orders or our working capital needs, or there is a general downturn in business or economic conditions during these periods, our business, financial condition and results of operations could be materially and adversely affected.

Adverse weather conditions during our peak selling ~~season~~seasons for our home and garden control and auto care products could have a material adverse effect on our ~~Home~~home and ~~Garden~~garden ~~Business~~business and auto care business.

Weather conditions have a significant impact on the timing and volume of sales of certain of our lawn and garden and household insecticide and repellent products. For example, periods of dry, hot weather can decrease insecticide sales, while periods of cold and wet weather can slow sales of herbicides. Adverse weather conditions during the first six months of the calendar year (~~Spectrum~~the Company’s second and third fiscal quarters), when demand for home and garden control products typically peaks, could have a material adverse effect on our home and garden business and our financial results during such period. Weather can also influence customer behavior for our auto care products, especially with appearance and A/C recharge products, which sell best during warm, dry weather. There could be a material adverse effect on the auto care segment if the weather is cold or wet, during the spring and summer seasons when demand typically peaks.

We are subject to significant international business risks that could hurt our business and cause our results of operations to fluctuate.

Approximately 4036% of our net sales for the fiscal year ended September 30, ~~2014~~2016 were to customers outside of the U.S. Our pursuit of international growth opportunities may require significant investments for an extended period before returns on these investments, if any, are realized. Our international operations are subject to risks including, among others:

currency fluctuations, including, without limitation, fluctuations in the foreign exchange rate of the Euro, British Pound, Brazilian Real, Canadian Dollar, Australian Dollar, Japanese Yen and the Mexican Peso;

changes in the economic conditions or consumer preferences or demand for our products in these markets;

the risk that because our brand names may not be locally recognized, we must spend significant amounts of time and money to build brand recognition without certainty that we will be successful;

labor unrest;

political and economic instability, as a result of war, terrorist attacks, pandemics, natural disasters or otherwise;

lack of developed infrastructure;

longer payment cycles and greater difficulty in collecting accounts;

restrictions on transfers of funds;

import and export duties and quotas, as well as general transportation costs;

changes in domestic and international customs and tariffs;

changes in foreign labor laws and regulations affecting our ability to hire and retain employees;

inadequate protection of intellectual property in foreign countries;

unexpected changes in regulatory environments;

difficulty in complying with foreign law; and

adverse tax consequences.

The foregoing factors may have a material adverse effect on our ability to increase or maintain our supply of products, financial condition or results of operations.

Our products utilize certain key raw materials; any significant increase in the price of, or change in supply and demand for, these raw materials could have a material and adverse effect on our business, financial condition and profits.20

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~~experienced~~ Our ~~extraordinary~~products ~~price~~utilize ~~increases~~certain ~~for~~key raw materials,; ~~particularly~~any assignificant ~~a result of strong demand from China. Although we may~~ increase in the ~~prices~~price of ~~certain of our goods to our customers~~, weor ~~may~~change not be able to pass all of these cost increases on to our customers. As a result, our margins may be adversely impacted by such cost increases. We cannot provide any assurance that our sources of supply will not be interrupted due to changes in ~~worldwide~~ supply ofand or demand for, these raw materials orcould ~~other~~have ~~events~~a ~~that interrupt~~ material ~~flow,~~and ~~which may have an~~ adverse effect on our ~~profitability~~business, ~~and~~financial ~~results~~condition ofand ~~operations~~profits.

The principal raw materials used to produce our products—including zinc powder, brass, electrolytic manganese dioxide powder, petroleum-based plastic materials, steel, aluminum, copper and corrugated materials (for packaging)—are sourced either on a global or regional basis by us or our suppliers, and the prices of those raw materials are susceptible to price fluctuations due to supply and demand trends, energy costs, transportation costs, government regulations, duties and tariffs, changes in currency exchange rates, price controls, general economic conditions and other unforeseen circumstances. In particular, during the years 2012 and 2013, we experienced extraordinary price increases for raw materials, particularly as a result of strong demand from China. Although we may increase the prices of certain of our goods to our customers, we may not be able to pass all of these cost increases on to our customers. As a result, our margins may be adversely impacted by such cost increases. We cannot provide any assurance that our sources of supply will not be interrupted due to changes in worldwide supply of or demand for raw materials or other events that interrupt material flow, which may have an adverse effect on our profitability and results of operations.

We regularly engage in forward purchase and hedging derivative transactions in an attempt to effectively manage and stabilize some of the raw material costs we expect to incur over the next 12 to 24 months. However, our hedging positions may not be effective, or may not anticipate beneficial trends, in a particular raw material market or may, as a result of changes in our business, no longer be useful for us. In addition, for certain of the principal raw materials we use to produce our products, such as electrolytic manganese dioxide powder, there are no available effective hedging markets. If these efforts are not effective or expose us to above average costs for an extended period of time, and we are unable to pass our raw materials costs on to our customers, our future profitability may be materially and adversely affected. Furthermore, with respect to transportation costs, certain modes of delivery are subject to fuel surcharges which are determined based upon the current cost of diesel fuel in relation to pre-established agreed upon costs. We may be unable to pass these fuel surcharges on to our customers, which may have an adverse effect on our profitability and results of operations.

In addition, we have exclusivity arrangements and minimum purchase requirements with certain of our suppliers for the ~~Home~~home and ~~Garden~~garden ~~Business~~business, which increase our dependence upon and exposure to those suppliers. Some of those agreements include caps on the price we pay for our supplies and in certain instances, these caps have allowed us to purchase materials at below market prices. When we attempt to renew those contracts, the other parties to the contracts may not be willing to include or may limit the effect of those caps and could even attempt to impose above market prices in an effort to make up for any below market prices paid by us prior to the renewal of the agreement. Any failure to timely obtain suitable supplies at competitive prices could materially adversely affect our business, financial condition and results of operations.

We may not be able to fully utilize our U.S. net operating loss carryforwards.

As of September 30, ~~2014~~2016, we had U.S. federal net operating loss carryforwards (“NOLs”) of ~~approximately~~ $~~1,084~~759 million and state NOL tax benefits ~~related~~of to$61 million ~~state~~with ~~NOLs~~capital loss carryforwards of $7020 million. These ~~net~~NOLs ~~operating loss carryforwards~~ expire through years ending in ~~2034~~2036. During AsFiscal ~~of September 30~~2016, ~~2014,~~ we ~~determined~~concluded that it ~~continues~~was tonow be more likely than not that the ~~U.S.~~majority ~~federal and most~~ of the ~~U.S.~~federal and state ~~net~~ deferred tax ~~asset,~~assets will ~~not~~create betax ~~realized~~benefits in the future and as such ~~recorded~~released athe ~~full~~ valuation allowance toon ~~offset~~ the ~~net U.S. federal and most of the U.S. state deferred~~ tax ~~asset,~~benefits ~~including~~during ~~Spectrum~~Fiscal ~~Brands, Inc~~2016.’s NOLs. In addition, Spectrum Brands, Inc. has had changes of ownership, as defined under Section 382 of the Internal Revenue Code (the “IRC”) of 1986, as amended, that continue to subject a significant amount of Spectrum Brands, Inc.’s U.S. NOLs and other tax attributes to certain limitations.

As a consequence of ~~the~~earlier ~~merger~~business combinations and issuances of ~~Salton~~common stock, ~~Inc.~~the Company and ~~Applica~~its ~~Incorporated~~subsidiaries inhave ~~December~~had ~~2007~~various ~~(which~~changes ~~created~~of ~~Russell Hobbs~~ownership, ~~Inc.),~~ as ~~well~~defined asunder ~~earlier~~Section 382 ~~business~~of ~~combinations~~the ~~and~~Internal ~~issuances~~Revenue ofCode ~~common~~(the ~~stock~~“IRC”) ~~consummated~~of by1986, ~~both~~as ~~companies~~amended, ~~use~~that ofcontinue ~~the~~to ~~tax~~subject ~~benefits~~a ofsignificant ~~Russell~~amount ~~Hobbs,~~of ~~Inc.~~the Company’s U.S. NOLs isand ~~also~~other ~~subject~~tax attributes to certain limitations. ~~imposed~~As ~~by Section 382~~ of ~~the~~September ~~IRC.~~30, We2016, ~~expect~~a ~~that~~$204 amillion ~~significant~~valuation ~~portion~~allowance ofis ~~these~~still ~~carryforwards,~~recorded ifon ~~any,~~certain ~~will~~federal ~~not~~and bestate ~~available~~tax tocarryforwards ~~offset~~that ~~future~~are ~~taxable~~expected ~~income.~~to Inexpire ~~addition,~~due ~~use~~to ofthe ~~Russell~~ownership ~~Hobbs~~change limitations, ~~Inc.’s~~capital ~~NOLs~~losses, ~~and~~foreign tax ~~credit carryforwards is dependent upon both Russell Hobbs~~credits, ~~Inc.~~ and usstate ~~achieving~~NOLs ~~profitable~~that ~~results~~we indo ~~the~~not ~~future.~~believe ~~Russell~~we ~~Hobbs~~will ~~Inc.’s~~earn ~~U.S.~~enough ~~NOLs~~taxable ~~were~~income ~~subject~~ to ~~a full valuation allowance at September 30, 2014~~utilize.

As of September 30, ~~2014~~2016, we estimate that approximately $~~302~~460 million of the ~~Spectrum~~total ~~Brands, Inc. and Russell Hobbs, Inc.~~ U.S. federal NOLs ~~and~~with a federal tax ~~benefits~~benefit of $17 161 million ~~from~~and ~~Spectrum~~tax ~~Brands,~~benefits ~~Inc.~~of ~~and~~$17 million ~~Russell~~related ~~Hobbs,~~to ~~Inc.~~ state NOLs would expire unused even if the Company generates sufficient income to otherwise use all its NOLs, due to the ~~limitation~~ownership inchange ~~Section 382~~limitations ofin the IRC. An additional $19 million of tax benefits related to capital losses and credits are expected to expire unused.

If we are unable to fully utilize our NOLs, ~~other than those restricted under Section 382 of the IRC, as discussed above,~~ to offset taxable income generated in the future, our ~~results~~future ofcash ~~operations~~taxes could be materially and negatively impacted.

Consolidation of retailers and our dependence on a small number of key customers for a significant percentage of our sales may negatively affect our business, financial condition and results of operations.21

As a result of consolidation of retailers and consumer trends toward national mass merchandisers, a significant percentage of our sales are attributable to a very limited group of customers. Our largest customer accounted for approximately 16% of our consolidated net sales for the fiscal year ended September 30, 2014. As these mass merchandisers and retailers grow larger and become more sophisticated, they may demand lower pricing, special packaging or impose other requirements on product suppliers. These business demands may relate to inventory practices, logistics or other aspects of the customer-supplier relationship. Because of the importance of these key customers, demands for price reductions or promotions, reductions in their purchases, changes in their financial condition or loss of their accounts could have a material adverse effect on our business, financial condition and results of operations.

Although we have long-established relationships with many of our customers, we do not have long-term agreements with them and purchases are generally made through the use of individual purchase orders. Any significant reduction in purchases, failure to obtain anticipated orders or delays or cancellations of orders by any of these major customers, or significant pressure to reduce prices from any of these major customers, could have a material adverse effect on our business, financial condition and results of operations. Additionally, a significant deterioration in the financial condition of the retail industry in general, the bankruptcy of any of our

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~~customers~~ Consolidation orof ifretailers ~~any~~and of our ~~customers~~dependence ~~were~~on toa ~~leave~~small ~~the~~number ~~business,~~of ~~could~~key ~~have~~customers for a ~~material~~significant ~~adverse~~percentage ~~effect~~of on our sales may negatively affect our business, financial condition and ~~profitability~~results of operations.

InAs ~~addition, as~~ a result of ~~the~~consolidation ~~desire~~ of retailers toand ~~more~~consumer ~~closely~~trends ~~manage~~toward ~~inventory~~national ~~levels~~mass merchandisers, ~~there is~~ a ~~growing~~significant ~~trend~~percentage ~~among~~of ~~them~~our tosales ~~purchase~~are ~~products~~attributable onto a ~~“just-in-time”~~limited ~~basis.~~group ~~Due~~of tocustomers. aOur ~~number~~largest ~~of factors~~customer, ~~including~~Wal ~~(i) manufacturing lead-times~~Mart, ~~(ii) seasonal~~accounted ~~purchasing~~for ~~patterns~~15% ~~and~~of ~~(iii) the~~our ~~potential~~consolidated ~~for~~net ~~material~~sales ~~price~~for ~~increases,~~the wefiscal ~~may~~year beended ~~required~~September 30, to2016. ~~shorten~~As ~~our~~these ~~lead-time~~mass ~~for~~merchandisers ~~production~~ and ~~more~~retailers ~~closely~~grow ~~anticipate~~larger ~~our retailers’~~ and ~~customers’~~become ~~demands~~more sophisticated, ~~which~~they ~~could~~may indemand ~~the~~lower ~~future~~pricing, ~~require~~special uspackaging toor ~~carry~~impose ~~additional~~other ~~inventories~~requirements ~~and~~on ~~increase~~product ~~our~~suppliers. ~~working~~These ~~capital~~business ~~and~~demands ~~related financing requirements. This~~ may ~~increase~~relate ~~the~~to ~~cost~~inventory ofpractices, ~~warehousing~~logistics ~~inventory~~ or ~~result~~other inaspects ~~excess~~of ~~inventory~~the ~~becoming~~customer-supplier ~~difficult to manage, unusable or obsolete~~relationship. InBecause ~~addition,~~of ifthe ~~our~~importance ~~retailers~~of ~~significantly~~these ~~change~~key ~~their inventory management strategies~~customers, wedemands ~~may~~for ~~encounter~~price ~~difficulties~~reductions inor ~~filling~~promotions, ~~customer~~reductions ~~orders or~~ in ~~liquidating~~their ~~excess inventories~~purchases, orchanges ~~may~~in ~~find~~their ~~that~~financial ~~customers~~condition ~~are cancelling orders~~ or ~~returning~~loss ~~products,~~of ~~which~~their ~~may~~accounts could have a material adverse effect on our business, financial condition and results of operations.

As a result of retailers maintaining tighter inventory control, we face risks related to meeting demand and storing inventory.

As a result of the desire of retailers to more closely manage inventory levels, there is a growing trend among them to purchase products on a “just-in-time” basis. Due to a number of factors, including (i) manufacturing lead-times, (ii) seasonal purchasing patterns and (iii) the potential for material price increases, we may be required to shorten our lead-time for production and more closely anticipate our retailers’ and customers’ demands, which could in the future require us to carry additional inventories and increase our working capital and related financing requirements. This may increase the cost of warehousing inventory or result in excess inventory becoming difficult to manage, unusable or obsolete. In addition, if our retailers significantly change their inventory management strategies, we may encounter difficulties in filling customer orders or in liquidating excess inventories, or may find that customers are cancelling orders or returning products, which may have a material adverse effect on our business.

Furthermore, we primarily sell branded products and a move by one or more of our large customers to sell significant quantities of private label products, which we do not produce on their behalf and which directly compete with our products, could have a material adverse effect on our business, financial condition and results of operations.

As a result of our international operations, we face a number of risks related to exchange rates and foreign currencies.

Our international sales and certain of our expenses are transacted in foreign currencies. During the fiscal year ended September 30, ~~2014~~2016, approximately 4036% of our net sales and operating expenses were denominated in foreign currencies. We expect that the amount of our revenues and expenses transacted in foreign currencies will increase as our Latin American, European and Asian operations grow and as a result of acquisitions in these markets and, as a result, our exposure to risks associated with foreign currencies could increase accordingly. Significant changes in the value of the U.S. dollar in relation to foreign currencies will affect our cost of goods sold and our operating margins and could result in exchange losses or otherwise have a material effect on our business, financial condition and results of operations. Changes in currency exchange rates may also affect our sales to, purchases from, and loans to, our subsidiaries, as well as sales to, purchases from, and bank lines of credit with, our customers, suppliers and creditors that are denominated in foreign currencies.

We source many products from China and other Asian countries. To the extent the Chinese Renminbi (“RMB”) or other currencies appreciate with respect to the U.S. dollar, we may experience fluctuations in our results of operations. Since 2005, the RMB has no longer been pegged to the U.S. dollar at a constant exchange rate and instead fluctuates versus a basket of currencies. Although the People’s Bank of China ~~regularly~~has ~~intervenes~~historically intervened in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate within a flexible peg range against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future Chinese authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure to currency fluctuations. Further, we may not be successful in implementing customer pricing or other actions in an effort to mitigate the impact of currency fluctuations and, thus, our results of operations may be adversely impacted.

~~Our international operations may expose us to risks related to compliance with the laws and regulations of foreign countries.~~22

We are subject to three EU Directives that may have a material impact on our business: Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment, Waste of Electrical and Electronic Equipment and the Directive on Batteries and Accumulators and Waste Batteries, discussed below. Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment requires us to eliminate specified hazardous materials from products we sell in EU member states. Waste of Electrical and Electronic Equipment requires us to collect and treat, dispose of or recycle certain products we manufacture or import into the EU at our own expense. The EU Directive on Batteries and Accumulators and Waste Batteries bans heavy metals in batteries by establishing maximum quantities of heavy metals in batteries and mandates waste management of these batteries, including collection, recycling and disposal systems, with the costs imposed upon producers and importers such as us. The costs associated with maintaining compliance or failing to comply with the EU Directives may harm our business. For example:

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· Our ~~Although~~international ~~contracts~~operations ~~with our suppliers address related compliance issues, we~~ may beexpose ~~unable~~us to ~~procure~~risks ~~appropriate~~related ~~Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment compliant material in sufficient quantity and quality and/or be able~~ to ~~incorporate~~compliance itwith ~~into~~the ~~our~~laws ~~product procurement processes without compromising quality~~ and~~/or~~ ~~harming~~regulations ~~our~~of ~~cost~~foreign ~~structure~~countries.

We are subject to three EU Directives that may have a material impact on our business: Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment (“RUHSEEE”), Waste of Electrical and Electronic Equipment (“WEEE”) and the Directive on Batteries and Accumulators and Waste Batteries (“DBAWB”), discussed below. RUHSEEE requires us to eliminate specified hazardous materials from products we sell in EU member states. WEEE requires us to collect and treat, dispose of or recycle certain products we manufacture or import into the EU at our own expense. The EU DBAWB bans heavy metals in batteries by establishing maximum quantities of heavy metals in batteries and mandates waste management of these batteries, including collection, recycling and disposal systems, with the costs imposed upon producers and importers such as us. The costs associated with maintaining compliance or failing to comply with the EU Directives may harm our business. For example:

Although contracts with our suppliers address related compliance issues, we may be unable to procure appropriate RUHSEEE-compliant material in sufficient quantity and quality and/or be able to incorporate it into our product procurement processes without compromising quality and/or harming our cost structure.

We may face excess and obsolete inventory risk related to non-compliant inventory that we may hold for which there is reduced demand, and we may need to write down the carrying value of such inventories.

We may be unable to sell certain existing inventories of our batteries in Europe and other countries that have adopted similar regulations.

Many of the developing countries in which we operate do not have significant governmental regulation relating to environmental safety, occupational safety, employment practices or other business matters routinely regulated in the U.S. and EU or may not rigorously enforce such regulation. As these countries and their economies develop, it is possible that new regulations or increased enforcement of existing regulations may increase the expense of doing business in these countries. In addition, social legislation in many countries in which we operate may result in significantly higher expenses associated with labor costs, terminating employees or distributors and closing manufacturing facilities. Increases in our costs as a result of increased regulation, legislation or enforcement could materially and adversely affect our business, results of operations and financial condition.

We may not be able to adequately establish and protect our intellectual property rights, and the infringement or loss of our intellectual property rights could harm our business.

To establish and protect our intellectual property rights, we rely upon a combination of national, foreign and multi-national patent, trademark and trade secret laws, together with licenses, confidentiality agreements and other contractual arrangements. The measures that we take to protect our intellectual property rights may prove inadequate to prevent third parties from infringing or misappropriating our intellectual property. We may need to resort to litigation to enforce or defend our intellectual property rights. If a competitor or collaborator files a patent application claiming technology also claimed by us, or a trademark application claiming a trademark, service mark or trade dress also used by us, in order to protect our rights, we may have to participate in expensive and time consuming opposition or interference proceedings before the U.S. Patent and Trademark Office or a similar foreign agency. Similarly, our intellectual property rights may be challenged by third parties or invalidated through administrative process or litigation. The costs associated with protecting intellectual property rights, including litigation costs, may be material. Furthermore, even if our intellectual property rights are not directly challenged, disputes among third parties could lead to the weakening or invalidation of our intellectual property rights, or our competitors may independently develop technologies that are substantially equivalent or superior to our technology. Obtaining, protecting and defending intellectual property rights can be time consuming and expensive, and may require us to incur substantial costs, including the diversion of the time and resources of management and technical personnel.

Moreover, the laws of certain foreign countries in which we operate or may operate in the future do not protect, and the governments of certain foreign countries do not enforce, intellectual property rights to the same extent as do the laws and government of the U.S., which may negate our competitive or technological advantages in such markets. Also, some of the technology underlying our products is the subject of nonexclusive licenses from third parties. As a result, this technology could be made available to our competitors at any time. If we are unable to establish and then adequately protect our intellectual property rights, our business, financial condition and results of operations could be materially and adversely affected.

We license various trademarks, trade names and patents from third parties for certain of our products. These licenses generally place marketing obligations on us and require us to pay fees and royalties based on net sales or profits. Typically, these licenses may be terminated if we fail to satisfy certain minimum sales obligations or if we breach the terms of the license. The termination of these licensing arrangements could adversely affect our business, financial condition and results of operations.

In our Global Batteries & Appliances segment, we license the use of the Black & Decker brand for marketing in certain small household appliances in North America, South America (excluding Brazil) and the Caribbean. In July 2014, The Black & Decker Corporation (“BDC”) extended the license agreement through December 2018. The failure to renew the license agreement with BDC or to enter into a new agreement on acceptable terms could have a material adverse effect on our financial condition, liquidity and results of operations. Additionally, in connection with our acquisition of the HHI Business, we received a limited right to use certain Stanley Black & Decker trademarks, brand names and logos in marketing our products and services for only five years. Pursuant to a transitional trademark license agreement, Stanley Black & Decker granted us the right to use the “Stanley” and “Black & Decker” marks and logos, and certain other marks and logos, for up to five years after the completion of the HHI Business acquisition in connection with certain products and services. When our right to use these Stanley Black & Decker trademarks, brand names and logos expires, we may not be able to maintain or enjoy comparable name recognition or status under our new brand. If we are unable to successfully manage the transition of our business to our new brand, our reputation among our customers could be adversely affected, and our revenue and profitability could decline.23

Claims by third parties that we are infringing their intellectual property and other litigation could adversely affect our business.

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In our GBA segment, we license the use of the Black and Decker® brand for marketing in certain small household appliances in North America, South America (excluding Brazil) and the Caribbean. In July 2014, The Black and Decker Corporation (“BDC”) extended the license agreement through December 2018. The failure to renew the license agreement with BDC or to enter into a new agreement on acceptable terms for the period following December 2018 could have a material adverse effect on our financial condition, liquidity and results of operations. Additionally, in connection with our acquisition of the HHI Business, pursuant to a transitional trademark license agreement, Stanley Black and Decker granted us the right to use the Stanley® and Black and Decker® marks and logos, and certain other marks and logos, for up to five years after the completion of the acquisition in connection with certain products and services. When our right to use these trademarks, brand names and logos expires, we may not be able to maintain or enjoy comparable name recognition or status under our new brand. If we are unable to successfully manage the transition of our business to our new brand, our reputation among our customers could be adversely affected, and our revenue and profitability could decline.

Claims by third parties that we are infringing their intellectual property and other litigation could adversely affect our business.

From time to time in the past we have been subject to claims that we are infringing the intellectual property of others. We currently are the subject of such claims and it is possible that third parties will assert infringement claims against us in the future. An adverse finding against us in these or similar trademark or other intellectual property litigations may have a material adverse effect on our business, financial condition and results of operations. Any such claims, with or without merit, could be time consuming and expensive, and may require us to incur substantial costs, including the diversion of the resources of management and technical personnel, cause product delays or require us to enter into licensing or other agreements in order to secure continued access to necessary or desirable intellectual property. If we are deemed to be infringing a third party’s intellectual property and are unable to continue using that intellectual property as we had been, our business and results of operations could be harmed if we are unable to successfully develop non-infringing alternative intellectual property on a timely basis or license non-infringing alternatives or substitutes, if any exist, on commercially reasonable terms. In addition, an unfavorable ruling in intellectual property litigation could subject us to significant liability, as well as require us to cease developing, manufacturing or selling the affected products or using the affected processes or trademarks. Any significant restriction on our proprietary or licensed intellectual property that impedes our ability to develop and commercialize our products could have a material adverse effect on our business, financial condition and results of operations.

Our dependence on a few suppliers and one of our U.S. facilities for certain of our products makes us vulnerable to a disruption in the supply of our products.

Although we have long-standing relationships with many of our suppliers, we generally do not have long-term contracts with them. An adverse change in any of the following could have a material adverse effect on our business, financial condition and results of operations:

our ability to identify and develop relationships with qualified suppliers;

the terms and conditions upon which we purchase products from our suppliers, including applicable exchange rates, transport and other costs, our suppliers’ willingness to extend credit to us to finance our inventory purchases and other factors beyond our control;

the financial condition of our suppliers;

political and economic instability in the countries in which our suppliers are located, as a result of war, terrorist attacks, pandemics, natural disasters or otherwise;

our ability to import outsourced products;

our suppliers’ noncompliance with applicable laws, trade restrictions and tariffs; or

our suppliers’ ability to manufacture and deliver outsourced products according to our standards of quality on a timely and efficient basis.

If our relationship with one of our key suppliers is adversely affected, we may not be able to quickly or effectively replace such supplier and may not be able to retrieve tooling, molds or other specialized production equipment or processes used by such supplier in the manufacture of our products. The loss of one or more of our suppliers, a material reduction in their supply of products or provision of services to us or extended disruptions or interruptions in their operations could have a material adverse effect on our business, financial condition and results of operations.

We manufacture the majority of our foil cutting systems for our shaving product lines, using specially designed machines and proprietary cutting technology, at our Portage, Wisconsin facility. In addition, we also manufacture the majority of our residential door locks at our Subic Bay, Philippines facility. Our home and garden products are mainly manufactured from our St. Louis, Missouri, facility. Damage to these facilities, or prolonged interruption in the operations of these facilities whether for repairs, as a result of labor difficulties or for other reasons, could have a material adverse effect on our ability to manufacture and sell our foil shaving, residential door locks and home and garden products which could in turn harm our business, financial condition and results of operations.

~~We face risks related to our sales of products obtained from third-party suppliers.~~24

We sell a significant number of products that are manufactured by third party suppliers over which we have no direct control. While we have implemented processes and procedures to try to ensure that the suppliers we use are complying with all applicable regulations, there can be no assurances that such suppliers in all instances will comply with such processes and procedures or otherwise with applicable regulations. Noncompliance could result in our marketing and distribution of contaminated, defective or dangerous products which could subject us to liabilities and could result in the imposition by governmental authorities of procedures or penalties that could restrict or eliminate our ability to purchase products from non-compliant suppliers. Any or all of these effects could adversely affect our business, financial condition and results of operations.

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We face risks related to our sales of products obtained from third-party suppliers.

We sell a significant number of products that are manufactured by third party suppliers over which we have no direct control. While we have implemented processes and procedures to try to ensure that the suppliers we use are complying with all applicable regulations, there can be no assurances that such suppliers in all instances will comply with such processes and procedures or otherwise with applicable regulations. Noncompliance could result in our marketing and distribution of contaminated, defective or dangerous products which could subject us to liabilities and could result in the imposition by governmental authorities of procedures or penalties that could restrict or eliminate our ability to purchase products. Any or all of these effects could adversely affect our business, financial condition and results of operations.

In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act includes provisions regarding certain minerals and metals, known as conflict minerals, mined from the Democratic Republic of Congo and adjoining countries. These provisions require companies to undertake due diligence procedures and report on the use of conflict minerals in its products, including products manufactured by third parties. Compliance with these provisions will cause us to incur costs to certify that our supply chain is conflict free and we may face difficulties if our suppliers are unwilling or unable to verify the source of their materials. Our ability to source these minerals and metals may also be adversely impacted. In addition, our customers may require that we provide them with a certification and our inability to do so may disqualify us as a supplier.

Class action and derivative action lawsuits and other investigations, regardless of their merits, could have an adverse effect on our business, financial condition and results of operations.

We and certain of our officers and directors have been named in the past, and, may be named in the future, as defendants of class action and derivative action lawsuits. In the past, we have also received requests for information from government authorities. Regardless of their subject matter or merits, class action lawsuits and other government investigations may result in significant cost to us, which may not be covered by insurance, may divert the attention of management or may otherwise have an adverse effect on our business, financial condition and results of operations.

We may be exposed to significant product liability claims which our insurance may not cover and which could harm our reputation.

In the ordinary course of our business, we may be named as a defendant in lawsuits involving product liability claims. In any such proceeding, plaintiffs may seek to recover large and sometimes unspecified amounts of damages, and the matters may remain unresolved for several years. Any such matters could have a material adverse effect on our business, results of operations and financial condition if we are unable to successfully defend against or settle these matters or if our insurance coverage is insufficient to satisfy any judgments against us or settlements relating to these matters. Although we have product liability insurance coverage and an excess umbrella policy, our insurance policies may not provide coverage for certain, or any, claims against us or may not be sufficient to cover all possible liabilities. Additionally, we do not maintain product recall insurance. We may not be able to maintain such insurance on acceptable terms, if at all, in the future. Moreover, any adverse publicity arising from claims made against us, even if the claims were not successful, could adversely affect the reputation and sales of our products. In particular, product recalls or product liability claims challenging the safety of our products may result in a decline in sales for a particular product and could damage the reputation or the value of the related brand. This could be true even if the claims themselves are ultimately settled for immaterial amounts. This type of adverse publicity could occur and product liability claims could be made in the future.

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We may incur material capital and other costs due to environmental liabilities.

We are subject to a broad range of federal, state, local, foreign and multi-national laws and regulations relating to the environment. These include laws and regulations that govern:

discharges to the air, water and land;

the handling and disposal of solid and hazardous substances and wastes; and

remediation of contamination associated with release of hazardous substances at our facilities and at off-site disposal locations.

Risk of environmental liability is inherent in our business. As a result, material environmental costs may arise in the future. In particular, we may incur capital and other costs to comply with increasingly stringent environmental laws and enforcement policies, such as the EU Directives: Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment, Waste of Electrical and Electronic Equipment and the Directive on Batteries and Accumulators and Waste Batteries, discussed above. Our international operations may expose us to risks related to compliance with the laws and regulations of foreign countries. See “Our international operations may expose us to risks related to compliance with the laws and regulations of foreign countries” in this Form 10-K.

Moreover, there are adopted and proposed international accords and treaties, as well as federal, state and local laws and regulations, that would attempt to control or limit the causes of climate change, including the effect of greenhouse gas emissions on the environment. In the event that the U.S. government or foreign governments enact new climate change laws or regulations or make changes to existing laws or regulations, compliance with applicable laws or regulations may result in increased manufacturing costs for our products, such as by requiring investment in new pollution control equipment or changing the ways in which certain of our products are made. We may incur some of these costs directly and others may be passed on to us from our third-party suppliers. Although we believe that we are substantially in compliance with applicable environmental laws and regulations at our facilities, we may not always be in compliance with such laws and regulations or any new laws and regulations in the future, which could have a material adverse effect on our business, financial condition and results of operations.

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From time to time, we have been required to address the effect of historic activities on the environmental condition of our properties or former properties. We have not conducted invasive testing at all of our facilities to identify all potential environmental liability risks. Given the age of our facilities and the nature of our operations, material liabilities may arise in the future in connection with our current or former facilities. If previously unknown contamination of property underlying or in the vicinity of our manufacturing facilities is discovered, we could be required to incur material unforeseen expenses. If this occurs, it may have a material adverse effect on our business, financial condition and results of operations. We are currently engaged in investigative or remedial projects at a few of our facilities and any liabilities arising from such investigative or remedial projects at such facilities may have a material effect on our business, financial condition and results of operations.

In addition, in connection with certain business acquisitions, we have assumed, and in connection with future acquisitions may assume in the future, certain potential environmental liabilities. To the extent we have not identified such environmental liabilities or to the extent the indemnifications obtained from our counterparties are insufficient to cover such environmental liabilities, these environmental liabilities could have a material adverse effect on our business.

We are also subject to proceedings related to our disposal of industrial and hazardous material at off-site disposal locations or similar disposals made by other parties for which we are responsible as a result of our relationship with such other parties. These proceedings are under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) or similar state or foreign jurisdiction laws that hold persons who “arranged for” the disposal or treatment of such substances strictly liable for costs incurred in responding to the release or threatened release of hazardous substances from such sites, regardless of fault or the lawfulness of the original disposal. Liability under CERCLA is typically joint and several, meaning that a liable party may be responsible for all of the costs incurred in investigating and remediating contamination at a site. We occasionally are identified by federal or state governmental agencies as being a potentially responsible party for response actions contemplated at an off-site facility. At the existing sites where we have been notified of our status as a potentially responsible party, it is either premature to determine if our potential liability, if any, will be material or we do not believe that our liability, if any, will be material. We may be named as a potentially responsible party under CERCLA or similar state or foreign jurisdiction laws in the future for other sites not currently known to us, and the costs and liabilities associated with these sites may have a material adverse effect on our business, financial condition and results of operations.

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Compliance with various public health, consumer protection and other regulations applicable to our products and facilities could increase our cost of doing business and expose us to additional requirements with which we may be unable to comply.

Certain of our products sold through, and facilities operated under, each of our business segments are regulated by the Environmental Protection Agency (“EPA”), the Food and Drug Administration (“FDA”) or other federal consumer protection and product safety agencies and are subject to the regulations such agencies enforce, as well as by similar state, foreign and multinational agencies and regulations. For example, in the U.S., all products containing pesticides must be registered with the EPA and, in many cases, similar state and foreign agencies before they can be manufactured or sold. Our inability to obtain, or the cancellation of, any registration could have an adverse effect on our business, financial condition and results of operations. The severity of the effect would depend on which products were involved, whether another product could be substituted and whether our competitors were similarly affected. We attempt to anticipate regulatory developments and maintain registrations of, and access to, substitute chemicals and other ingredients, but we may not always be able to avoid or minimize these risks.

As a distributor of consumer products in the U.S., certain of our products are also subject to the Consumer Product Safety Act, which empowers the U.S. Consumer Product Safety Commission (the “Consumer Commission”) to exclude from the market products that are found to be unsafe or hazardous. Under certain circumstances, the Consumer Commission could require us to repair, replace or refund the purchase price of one or more of our products, or we may voluntarily do so. Any additional repurchases or recalls of our products could be costly to us and could damage the reputation or the value of our brands. If we are required to remove, or we voluntarily remove our products from the market, our reputation or brands could be tarnished and we may have large quantities of finished products that could not be sold. Furthermore, failure to timely notify the Consumer Commission of a potential safety hazard can result in significant fines being assessed against us. Additionally, laws regulating certain consumer products exist in some states, as well as in other countries in which we sell our products, and more restrictive laws and regulations may be adopted in the future.

The Food Quality Protection Act (“FQPA”) established a standard for food-use pesticides, which is that a reasonable certainty of no harm will result from the cumulative effect of pesticide exposures. Under the FQPA, the EPA is evaluating the cumulative effects from dietary and non-dietary exposures to pesticides. The pesticides in certain of our products that are sold through the Home and Garden Business continue to be evaluated by the EPA as part of this program. It is possible that the EPA or a third party active ingredient registrant may decide that a pesticide we use in our products will be limited or made unavailable to us. We cannot predict the outcome or the severity of the effect of the EPA’s continuing evaluations of active ingredients used in our products.

In addition, the use of certain pesticide products that are sold through our Home and Garden Business may, among other things, be regulated by various local, state, federal and foreign environmental and public health agencies. These regulations may require that only certified or professional users apply the product, that users post notices on properties where products have been or will be applied or that certain ingredients may not be used. Compliance with such public health regulations could increase our cost of doing business and expose us to additional requirements with which we may be unable to comply.

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Any failure to comply with these laws or regulations, or the terms of applicable environmental permits, could result in us incurring substantial costs, including fines, penalties and other civil and criminal sanctions or the prohibition of sales of our pest control products. Environmental law requirements, and the enforcement thereof, change frequently, have tended to become more stringent over time and could require us to incur significant expenses.

Most federal, state and local authorities require certification by Underwriters Laboratory, Inc. (“UL”), an independent, not-for-profit corporation engaged in the testing of products for compliance with certain public safety standards, or other safety regulation certification prior to marketing electrical appliances. Foreign jurisdictions also have regulatory authorities overseeing the safety of consumer products. Our products may not meet the specifications required by these authorities. A determination that any of our products are not in compliance with these rules and regulations could result in the imposition of fines or an award of damages to private litigants.

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A cybersecurity breach or failure of one or more key information technology systems could have a material adverse impact on our business or reputation.

We rely extensively on information technology (IT) systems, networks and services, including internet sites, data hosting and processing facilities and tools and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used by third-parties or their vendors, to assist in conducting our business.

Our IT systems have been, and will likely continue to be, subject to computer viruses or other malicious codes, unauthorized access attempts, phishing and other cyber-attacks. We continue to assess potential threats and make investments seeking to address these threats, including monitoring of networks and systems and upgrading skills, employee training and security policies for the Company and its third-party providers. However, because the techniques used in these attacks change frequently and may be difficult to detect for periods of time, we may face difficulties in anticipating and implementing adequate preventative measures. To date, we have seen no material impact on our business or operations from these attacks; however, we cannot guarantee that our security efforts will prevent breaches or breakdowns to our or our third-party providers’ databases or systems. If the IT systems, networks or service providers we rely upon fail to function properly, or if we or one of our third-party providers suffer a loss, significant unavailability of or disclosure of our business or stakeholder information, and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action. The costs and operational consequences of responding to breaches and implementing remediation measures could be significant.

Our actual or perceived failure to adequately protect personal data could adversely affect our business, financial condition and results of operations.

A variety of state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. These privacy and data protection-related laws and regulations are evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. Compliance with these laws and regulations can be costly and can delay or impede the development of new products.

We historically have relied upon adherence to the U.S. Department of Commerce’s Safe Harbor Privacy Principles and compliance with the U.S.-EU Safe Harbor Framework under Directive 95/46/EC (commonly referred to as the “Data Protection Directive”) agreed to by the U.S. Department of Commerce and the EU. The U.S.-EU Safe Harbor Framework, which established means for legitimizing the transfer of personal data by U.S. companies from the European Economic Area, or EEA, to the U.S., recently was invalidated by a decision of the European Court of Justice (or the “ECJ”).

On July 12, 2016, the European Commission adopted the EU-U.S. Privacy Shield, which provides a framework for the transfer of personal data of EU data subjects, and on May 4, 2016, the EU General Data Protection Regulation (“GDPR”), which will replace Directive 95/46/EC, was formally published. The GDPR will go into effect on May 25, 2018 and as a regulation as opposed to a directive will be directly applicable in EU member states. Among other things, the GDPR applies to data controllers and processors outside of the EU whose processing activities relate to the offering of goods or services to, or monitoring the behavior within the EU of, EU data subjects.

In light of these developments, we are reviewing our business practices and may find it necessary or desirable to make changes to our personal data handling to cause our transfer and receipt of EEA residents’ personal data to be legitimized under applicable European law. The regulation of data privacy in the EU continues to evolve, and it is not possible to predict the ultimate content, and therefore the effect, of data protection regulation over time.

Our actual or alleged failure to comply with applicable laws and regulations, or to protect personal data, could result in enforcement actions and significant penalties against us, which could result in negative publicity, increase our operating costs, subject us to claims or other remedies and have a material adverse effect on our business, financial condition, and results of operations.

Public perceptions that some of the products we produce and market are not safe could adversely affect us.

On occasion, customers ~~and some current or former employees~~ have alleged that some products failed to perform up to expectations or have caused damage or injury to individuals or property. Public perception that any of our products are not safe, whether justified or not, could impair our reputation, damage our brand names and have a material adverse effect on our business, financial condition and results of operations. In addition, we rely on certain third party trademarks, brand names and logos of which we do not have exclusive use of. Public perception that any such third party trademarks, ~~band~~brand names and logos used by us are not safe, whether justified or not, could have a material adverse effect on our business, financial condition and results of operations.

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If we are unable to negotiate satisfactory terms to continue existing or enter into additional collective bargaining agreements, we may experience an increased risk of labor disruptions and our results of operations and financial condition may suffer.

Approximately 1514% of our total labor force is covered by collective bargaining agreements. There are 45 collective bargaining agreements that will expire during our fiscal year ending September 30, ~~2015~~2016, which cover approximately 4538% of the labor force under collective bargaining agreements, or approximately 75% of our total labor force. While we currently expect to negotiate continuations to the terms of these agreements, there can be no assurances that we will be able to obtain terms that are satisfactory to us or otherwise to reach agreement at all with the applicable parties. In addition, in the course of our business, we may also become subject to additional collective bargaining agreements. These agreements may be on terms that are less favorable than those under our current collective bargaining agreements. Increased exposure to collective bargaining agreements, whether on terms more or less favorable than our existing collective bargaining agreements, could adversely affect the operation of our business, including through increased labor expenses. While we intend to comply with all collective bargaining agreements to which we are subject, there can be no assurances that we will be able to do so and any noncompliance could subject us to disruptions in our operations and materially and adversely affect our results of operations and financial condition.

Significant changes in actual investment return on pension assets, discount rates and other factors could affect our results of operations, equity and pension contributions in future periods.

Our results of operations may be positively or negatively affected by the amount of income or expense we record for our defined benefit pension plans. U.S. Generally Accepted Accounting Principles (“GAAP”) requires that we calculate income or expense for the plans using actuarial valuations. These valuations reflect assumptions about financial markets and other economic conditions, which may change based on changes in key economic indicators. The most significant assumptions we use to estimate pension income or expense are the discount rate and the expected long-term rate of return on plan assets. In addition, we are required to make an annual measurement of plan assets and liabilities, which may result in a significant change to equity. Although pension expense and pension funding contributions are not directly related, key economic factors that affect pension expense would also likely affect the amount of cash we would contribute to pension plans as required under the Employee Retirement Income Security Act of 1974, as amended.

If our goodwill, indefinite-lived intangible assets or other long-term assets become impaired, we will be required to record additional impairment charges, which may be significant.

A significant portion of our long-term assets consist of goodwill, other indefinite-lived intangible assets and finite-lived intangible assets recorded as a result of past acquisitions as well as through fresh start reporting. We do not amortize goodwill and indefinite-lived intangible assets, but rather review them for impairment on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. We consider whether circumstances or conditions exist which suggest that the carrying value of our goodwill and other long-lived intangible assets might be impaired. If such circumstances or conditions exist, further steps are required in order to determine whether the carrying value of each of the individual assets exceeds its fair value. If analysis indicates that an individual asset’s carrying value does exceed its fair value, the next step is to record a loss equal to the excess of the individual asset’s carrying value over its fair value.

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The steps required by GAAP entail significant amounts of judgment and subjectivity. Events and changes in circumstances that may indicate that there may be an impairment and which may indicate that interim impairment testing is necessary include, but are not limited to: strategic decisions to exit a business or dispose of an asset made in response to changes in economic, political and competitive conditions; the impact of the economic environment on the customer base and on broad market conditions that drive valuation considerations by market participants; our internal expectations with regard to future revenue growth and the assumptions we make when performing impairment reviews; a significant decrease in the market price of our assets; a significant adverse change in the extent or manner in which our assets are used; a significant adverse change in legal factors or the business climate that could affect our assets; an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset; and significant changes in the cash flows associated with an asset. As a result of such circumstances, we may be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill, indefinite-lived intangible assets or other long-term assets is determined. Any such impairment charges could have a material adverse effect on our business, financial condition and operating results.

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If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology, products and services could be harmed significantly.

We rely on trade secrets, know-how and other proprietary information in operating our business. If this information is not adequately protected, then it may be disclosed or used in an unauthorized manner. To the extent that consultants, key employees or other third parties apply technological information independently developed by them or by others to our proposed products, disputes may arise as to the proprietary rights to such information, which may not be resolved in our favor. The risk that other parties may breach confidentiality agreements or that our trade secrets become known or independently discovered by competitors, could harm us by enabling our competitors, who may have greater experience and financial resources, to copy or use our trade secrets and other proprietary information in the advancement of their products, methods or technologies. The disclosure of our trade secrets would impair our competitive position, thereby weakening demand for our products or services and harming our ability to maintain or increase our customer base.

Disruption or failures of our information technology systems could have a material adverse effect on our business.

Our information technology systems are susceptible to security breaches, operational data loss, general disruptions in functionality, and may not be compatible with new technology. We depend on our information technology systems for the effectiveness of our operations and to interface with our customers, as well as to maintain financial records and accuracy. Disruption or failures of our information technology systems could impair our ability to effectively and timely provide our services and products and maintain our financial records, which could damage our reputation and have a material adverse effect on our business.

Our acquisition and expansion strategy may not be successful.

Our growth strategy is based in part on growth through acquisitions, which poses a number of risks. We may not be successful in identifying appropriate acquisition candidates, consummating acquisitions on satisfactory terms or integrating any newly acquired or expanded business with our current operations. We may issue additional equity, incur long-term or short-term indebtedness, spend cash or use a combination of these for all or part of the consideration paid in future acquisitions or expansion of our operations. The execution of our acquisition and expansion strategy could entail repositioning or similar actions that in turn require us to record impairments, restructuring and other charges. Any such charges would reduce our earnings. We cannot guarantee that any future business acquisitions will be pursued or that any acquisitions that are pursued will be consummated.

Significant costs have been incurred and are expected to be incurred in connection with the consummation of recent and future business acquisitions and the integration of such acquired businesses with Spectrum into a combined company, including legal, accounting, financial advisory and other costs.

We expect to incur one-time costs in connection with integrating ~~the~~our operations, products and personnel ~~of Spectrum~~ and ~~acquired~~those of businesses we acquire into a combined company, in addition to costs related directly to completing such acquisitions ~~described below~~. We would expect similar costs to be incurred with any future acquisition. These costs may include expenditures for:

employee redeployment, relocation or severance;

integration of operations and information systems;

combination of research and development teams and processes; and

reorganization or closures of facilities.

In addition, we expect to incur a number of non-recurring costs associated with combining our operations with those of acquired businesses. Additional unanticipated costs may yet be incurred as we integrate our business with acquired businesses. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of our operations with those of acquired businesses, may offset incremental transaction and transaction-related costs over time, this net benefit may not be achieved in the near term. Additionally, while we expect to benefit from leveraging distribution channels and brand names among ~~Spectrum~~the Company and ~~its~~the ~~acquired~~ businesses we acquire, we cannot assure you that we will achieve such benefits.

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We may not realize the anticipated benefits of, and synergies from, our business acquisitions and may become responsible for certain liabilities and integration costs as a result.

Business acquisitions involve the integration of new businesses that have previously operated independently from us. The integration of our operations with those of acquired businesses is frequently expected to result in financial and operational benefits, including increased top line growth, margins, revenues and cost savings and be accretive to earnings per share, earnings before interest, taxes, depreciation and amortization and free cash flow before synergies. There can be no assurance, however, regarding when or the extent to which we will be able to realize these increased top line growth, margins, revenues, cost savings or accretions to earnings per share, earnings before interest, taxes, depreciation and amortization or free cash flow or other benefits. Integration may also be difficult, unpredictable, and subject to delay because of possible company culture conflicts and different opinions on technical decisions and product roadmaps. We will often be required to integrate or, in some cases, replace, numerous systems, including those involving management information, purchasing, accounting and finance, sales, billing, employee benefits, payroll and regulatory compliance, many of which may be dissimilar. In some instances, we and certain acquired businesses have served the same customers, and some customers may decide that it is desirable to have additional or different suppliers. Difficulties associated with the integration of acquired businesses could have a material adverse effect on our business.

We may also acquire partial or full ownership in businesses or may acquire rights to market and distribute particular products or lines of products. The acquisition of a business or the rights to market specific products or use specific product names may involve a financial commitment by us, either in the form of cash or equity consideration. In the case of a new license, such commitments are usually in the form of prepaid royalties and future minimum royalty payments. There is no guarantee that we will acquire businesses or product distribution rights that will contribute positively to our earnings. Anticipated synergies may not materialize, cost savings may be less than expected, sales of products may not meet expectations and acquired businesses may carry unexpected liabilities.

In addition, in connection with business acquisitions, we have assumed, and may assume in connection with future acquisitions, certain potential liabilities. To the extent such liabilities are not identified by us or to the extent the indemnifications obtained from third parties are insufficient to cover such liabilities, these liabilities could have a material adverse effect on our business.

Integrating our business with acquired businesses may divert our management’s attention away from operations.

Successful integration of acquired businesses’ operations, products and personnel with us may place a significant burden on our management and other internal resources. The diversion of management’s attention, and any difficulties encountered in the transition and integration process, could harm our business, financial condition and operating results.

As a result of business acquisitions, we may not be able to retain key personnel or recruit additional qualified personnel, which could materially affect our business and require us to incur substantial additional costs to recruit replacement personnel.

We are highly dependent on the continuing efforts of our senior management team and other key personnel. As a result of business acquisitions, our current and prospective employees could experience uncertainty about their future roles. This uncertainty may adversely affect our ability to attract and retain key management, sales, marketing and technical personnel. Any failure to attract and retain key personnel could have a material adverse effect on our business. In addition, we currently do not maintain “key person” insurance covering any member of our management team.

If any of our key personnel or those of our acquired businesses were to join a competitor or form a competing company, existing and potential customers or suppliers could choose to form business relationships with that competitor instead of us. There can be no assurance that confidentiality, non-solicitation, non-competition or similar agreements signed by former directors, officers, employees or stockholders of us, our acquired businesses or our transactional counterparties will be effective in preventing a loss of business.

General customer uncertainty related to our business acquisitions could harm us.

Our customers may, in response to the announcement or consummation of a business acquisition, delay or defer purchasing decisions. If our customers delay or defer purchasing decisions, our revenues could materially decline or any anticipated increases in revenue could be lower than expected.

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We are required to supply certain products and services to Stanley Black & Decker and its subsidiaries pursuant to the terms of certain supply agreements for a period of time after the completion of the HHI Business acquisition. Our provision of products and services under these agreements require us to dedicate resources of the HHI Business and may result in unfavorable results to us.

Certain products and services currently used by Stanley Black & Decker are produced and provided using equipment of the HHI Business which includes the acquired Tong Lung Metal Industry Co. Ltd. (the “TLM Business”) that we acquired or certain equipment belonging to Stanley Black & Decker and its subsidiaries that will continue to be located for a period of time after the completion of the HHI Business acquisition at facilities operated by the HHI Business and the TLM Business and maintained by us pursuant to certain specifications. We and Stanley Black & Decker entered into supply agreements (each, a “Supply Agreement”) whereby we provide Stanley Black & Decker and its subsidiaries with certain of these products and services for a period of time. This requires us to dedicate resources of the HHI Business and the TLM Business towards the provision of these products and services and may result in unfavorable results to us. These Supply Agreements are an accommodation to Stanley Black & Decker and its subsidiaries as part of the HHI Business acquisition, and the pricing of the products and services is on terms more favorable to Stanley Black & Decker and its subsidiaries than it would be in the ordinary course of business.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

The following table lists our principal owned or leased manufacturing, packaging and distribution facilities at September 30, 2014:

Facility		Function
Global Batteries & Appliances
Fennimore, Wisconsin(1)		Battery Manufacturing
Portage, Wisconsin(1)		Battery Manufacturing
Dischingen, Germany(2)		Battery Manufacturing
Washington, UK(2)		Battery Manufacturing & Distribution
Guatemala City, Guatemala(1)		Battery Manufacturing
Jaboatao, Brazil(1)		Battery Manufacturing
Dixon, Illinois(2)		Distribution
Ellwangen-Neunheim, Germany(2)		Distribution
Redlands, California(2)		Distribution
Manchester, England(1)		Distribution
Wolverhampton, England(1) (2)		Distribution
Hardware & Home Improvement
Brockville, Canada(2)		Distribution
Charlotte, North Carolina(2)		Distribution
Cobourg, Canada(1)		Distribution
Denison, Texas(1) (2)		Manufacturing & Distribution
Fort Mill, South Carolina(2)		Manufacturing
Mexicali, Mexico(2)		Manufacturing
Mira Loma, California(2)		Distribution
Monterrey, Mexico(1)		Manufacturing & Distribution
Nogales, Mexico(1)		Manufacturing
Shenzhen, China		Distribution
Chia-Yi, Taiwan(2)		Manufacturing
Subic Bay, Philippines(1)		Manufacturing
Xiamen, China(2)		Manufacturing
Xiaolan, China(2)		Manufacturing
Global Pet Supplies
Noblesville, Indiana(1)		Manufacturing
Bridgeton, Missouri(2)		Manufacturing
Blacksburg, Virginia(1)		Manufacturing
Melle, Germany(1)		Manufacturing
Melle, Germany(2)		Distribution
Edwardsville, Illinois(2)		Distribution
Phnom Penh, Cambodia(2)		Manufacturing
Daleville, Virginia(2)		Distribution
Home and Garden Business
St. Louis, Missouri(2)		Manufacturing
Edwardsville, Illinois(3)		Distribution

(1) Facility is owned.

(2) Facility is leased.

(3) Facility is leased and managed by a third party logistics firm.

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We also own, operate or contract with third parties to operate distribution centers, sales offices and administrative offices throughout the world in support of our business. We lease our administrative headquarters and primary research and development facility located in Middleton, Wisconsin.

We believe that our existing facilities are suitable and adequate for our present purposes and that the productive capacity in such facilities is substantially being utilized or we have plans to utilize it.

ITEM 3. LEGAL PROCEEDINGS

Litigation

We are a defendant in various matters of litigation generally arising out of the ordinary course of business.

We do not believe that any matters or proceedings presently pending will have a material adverse effect on our results of operations, financial condition, liquidity or cash flows.

Environmental

We have provided for the estimated costs associated with environmental remediation activities at some of our current and former manufacturing sites. We believe that any additional liability that may result from the resolution of these matters in excess of the amounts provided of approximately $4.6 million will not have a material adverse effect on our financial condition, results of operations or cash flows.

We are subject to various federal, state and local environmental laws and regulations. We believe we are in substantial compliance with all such environmental laws that are applicable to our operations. See also the discussion captioned “Governmental Regulations and Environmental Matters” under Item 1 above.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

We are a wholly-owned subsidiary of SB Holdings. Accordingly, there is no established public trading market for our common stock.

During the fiscal year ended September 30, 2014, Spectrum Brands paid cash dividends of $77 million to SB Holdings. During the fiscal year ended September 30, 2013, Spectrum Brands paid a cash dividend of $89 million to SB Holdings. Certain restrictive covenants within the Company’s debt facilities impose limitations on the payment of dividends to SB Holdings.

There was one record holder of our common stock at November 19, 2014.

ITEM 6. SELECTED FINANCIAL DATA

The following selected historical financial data is derived from our audited consolidated financial statements. Only our Consolidated Statements of Financial Position as of September 30, 2014 and 2013 and our Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income (Loss), Consolidated Statements of Shareholders’ Equity and Consolidated Statements of Cash Flows for the years ended September 30, 2014, 2013 and 2012 are included elsewhere in this Annual Report on Form 10-K. The information presented below as of and for the fiscal year ended September 30, 2013 also includes the results of the HHI Business operations since December 17, 2012, and the results of TLM Taiwan since April 8, 2013.

The following selected financial data, which may not be indicative of future performance, should be read in conjunction with our consolidated financial statements and notes thereto and the information contained in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein.

	2014		2013		2012		2011		2010
Statement of Operations Data:
Net sales	$	4,429.1	$	4,085.6	$	3,252.4	$	3,186.9	$	2,567.0
Gross profit		1,568.9		1,390.3		1,115.7		1,128.9		921.4
Operating income (1)		484.5		352.9		306.1		228.7		169.1
Interest expense (2)		202.1		369.5		192.0		208.5		277.0
Other expense, net		6.3		3.5		0.9		2.5		12.3
Reorganization items expense		—		—		—		—		3.6
Income (loss) from continuing operations before income taxes		276.1		(20.2)		113.2		17.7		(123.8)
Income tax expense (3)		59.0		27.4		60.4		92.3		63.2
Loss from discontinued operations, net of tax (4)				—		—		—		(2.7)
Net income (loss)		217.1		(47.5)		52.8		(74.6)		(189.8)
Less: Net income (loss) attributable to noncontrolling interest		0.3		(0.1)		—		—		—
Net income (loss) attributable to controlling interest		216.8		(47.4)		52.8		(74.6)		(189.8)
Restructuring and related charges - cost of goods sold (5)		3.7		10.0		9.8		7.8		7.2
Restructuring and related charges - operating expenses (5)		19.2		24.0		9.7		20.8		17.0
Cash Flow and Related Data:
Net cash provided by operating activities	$	434.7	$	258.2	$	252.7	$	232.2	$	57.3
Capital expenditures (6)		73.3		82.0		46.8		36.2		40.3
Depreciation and amortization (excluding amortization of debt issuance costs) (6)		202.5		183.0		129.8		134.7		117.3
Statement of Financial Position Data (at period end):
Cash and cash equivalents	$	192.9	$	198.2	$	157.9	$	142.4	$	170.6
Working capital (7)		502.3		524.4		454.4		412.0		537.3
Total assets		5,511.3		5,619.0		3,753.5		3,662.3		3,873.7
Total long-term debt, net of current maturities		2,894.1		3,115.9		1,652.9		1,535.5		1,723.1
Total debt		3,006.7		3,218.9		1,669.3		1,576.6		1,743.8
Total shareholders' equity		1,070.2		933.9		992.7		989.1		1,046.7

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(1) Pursuant to the guidance in Financial Accounting Standards Board Accounting Standards Codification Topic 350: “Intangibles-Goodwill and Other,” we conduct annual impairment testing of goodwill and indefinite-lived intangible assets. As a result of these analyses we recorded a non-cash pretax impairment charge of approximately $32 million in Fiscal 2011. See the “Critical Accounting Policies—Valuation of Assets and Asset Impairment” section of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as Note 2(i), “Significant Accounting Policies—Intangible Assets,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further details on impairment charges.

(2) Fiscal 2014 includes a non-cash charge of $9 million related to the write-off of unamortized debt issuance costs and unamortized discounts in connection with the amendment of the Company’s Term Loan. Fiscal 2013 includes fees and expenses of $106 million coupled with a non-cash charge of $16 million related to the write-off of unamortized debt issuance costs and unamortized premiums in connection with the extinguishment and replacement of the Company’s 9.5% Notes and Term Loan in conjunction with the acquisition of the HHI Business. Fiscal 2012 includes a non-cash charge of $2 million related to the write-off of unamortized debt issuance costs and unamortized premiums in connection with the extinguishment and refinancing of the Company’s 12% Notes. Fiscal 2011 includes a non-cash charge of $24 million related to the write-off of unamortized debt issuance costs and unamortized discounts in conjunction with the refinancing of the Company’s Term Debt facility. Fiscal 2010 includes a non-cash charge of $83 million related to the write-off of unamortized debt issuance costs and unamortized discounts and premiums in connection with the extinguishment and refinancing of debt that was completed in conjunction with the merger with Russell Hobbs.

(3) Fiscal 2014 income tax expense of $59 million includes a non-cash benefit of approximately $116 million resulting from a decrease in the valuation allowance against certain net deferred taxes. Fiscal 2013 income tax expense of $27 million includes a non-cash charge of approximately $62 million resulting from an increase in the valuation allowance against certain net deferred tax assets, net of a $50 million benefit due to the reversal of $50 million of the valuation allowance in conjunction with the acquisition of the HHI Business. Fiscal 2012 income tax expense of $60 million includes a non-cash charge of approximately $12 million resulting from an increase in the valuation allowance against certain net deferred tax assets, net of a $15 million benefit due to the reversal of $15 million of the valuation allowance in conjunction with the acquisition of FURminator. Fiscal 2011 income tax expense of $92 million includes a non-cash charge of approximately $65 million resulting from an increase in the valuation allowance against certain net deferred tax assets. Fiscal 2010 income tax expense of $63 million includes a non-cash charge of approximately $92 million resulting from an increase in the valuation allowance against certain net deferred tax assets.

(4) On November 5, 2008, Spectrum Brands’ board of directors committed to the shutdown of the growing products portion of the Home and Garden Business, which included the manufacturing and marketing of fertilizers, enriched soils, mulch and grass seed, following an evaluation of the historical lack of profitability and the projected input costs and significant working capital demands for the growing product portion of the Home and Garden Business during Fiscal 2009. During the second quarter of Fiscal 2009, we completed the shutdown of the growing products portion of the Home and Garden Business and, accordingly, began reporting the results of operations of this business as discontinued operations. Therefore, the presentation of all historical continuing operations excludes the growing products portion of the Home and Garden Business.

(5) See Note 14, “Restructuring and Related Charges,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion.

(6) Amounts reflect the results of continuing operations only.

(7) Working capital is defined as current assets less current liabilities.

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

Introduction

The following is management’s discussion of the financial results, liquidity and other key items related to our performance and should be read in conjunction with Item 6. Selected Financial Data and our Consolidated Financial Statements and related notes included in this Annual Report on Form 10-K. All references to Fiscal 2014, Fiscal 2013 and Fiscal 2012 refer to fiscal year periods ended September 30, 2014, 2013 and 2012, respectively.

Unless the context indicates otherwise, the terms the “Company,” “Spectrum,” “we,” “our” or “us” are used to refer to Spectrum Brands and its subsidiaries.

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On October 2, 2014, we completed the acquisition of Tell Manufacturing, Inc., a leading U.S. manufacturer and distributor of commercial doors, locks and hardware. On September 23, 2014, we entered into an agreement with Procter & Gamble (“P&G”) to acquire P&G’s European pet food business, consisting of the complementary IAMS and Eukanuba premium brands for dogs and cats. This acquisition is expected to close in the second quarter of the fiscal year ending September 30, 2015 (“Fiscal 2015”).

Business Overview

We manufacture and market alkaline, zinc carbon and hearing aid batteries, herbicides, insecticides and repellants and specialty pet supplies. We design and market rechargeable batteries, battery-powered lighting products, electric shavers and accessories, grooming products and hair care appliances. We also design, market and distribute a broad range of branded small household appliances and personal care products. We also design, manufacture, market, distribute and sell certain hardware, home improvement and plumbing products, and are a leading U.S. provider of residential locksets and builders' hardware and a leading provider of faucets. Our manufacturing and product development facilities are located in the United States (“U.S.”), Europe, Latin America and Asia. Substantially all of our rechargeable batteries, chargers and portable lighting products, shaving and grooming products, small household appliances and personal care products are manufactured by third-party suppliers, primarily located in Asia.

Our diversified global branded consumer products have positions in seven major product categories: consumer batteries; small appliances; pet supplies; electric shaving and grooming; electric personal care; home and garden controls; and hardware and home improvement. Our chief operating decision-maker manages the businesses in four vertically integrated, product-focused reporting segments: (i) Global Batteries & Appliances, which consists of our worldwide battery, electric shaving and grooming, electric personal care, and small appliances primarily in the kitchen and home product categories (“Global Batteries & Appliances”); (ii) Global Pet Supplies, which consists of our worldwide pet supplies business (“Global Pet Supplies”); (iii) Home and Garden Business, which consists of our home and garden and insect control business (“Home and Garden Business”); and (iv) Hardware & Home Improvement, which consists of residential locksets and builders hardware and plumbing products (“Hardware & Home Improvement”). Management reviews our performance based on these segments. For information pertaining to our business segments, see Note 11, “Segment Information” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further information on our operating segments.

Cost Reduction Initiatives

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.

Fiscal 2014. To reduce operating costs we implemented a series of initiatives to rationalize the international operations within our residential hardware and home improvement business, which was acquired in Fiscal 2013 (the “HHI Business”). These initiatives will include headcount reductions and the exit of certain unprofitable international business within the Hardware and Home Improvement segment (the “HHI Business Rationalization Initiatives”).

Fiscal 2013. To reduce operating costs we implemented a series of initiatives throughout the Company comprised principally of headcount reductions in the Global Batteries & Appliances and Global Pet Supplies segments and within Corporate (the “Global Expense Rationalization Initiatives”). On November 3, 2014, we announced an expansion of our Global Expense Rationalization Initiatives, which consist of headcount reductions. Costs associated with the expanded initiatives, which are expected to be incurred through September 30, 2015, are currently projected to total approximately $46,500, which include costs associated with the Global Expense Rationalization Initiatives announced in Fiscal 2013.

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Fiscal 2009. In connection with our announcement of a plan to reduce headcount within each of our segments and to exit certain facilities in the U.S. related to the Global Pet Supplies segment, we implemented a number of cost reduction initiatives (the “Global Cost Reduction Initiatives”). These initiatives also included consultation, legal and accounting fees related to the evaluation of our capital structure.

Meeting Consumer Needs through Technology and Development

We continue to focus our efforts on meeting consumer needs for our products through new product development and technology innovations. Research and development efforts associated with our electric shaving and grooming products allow us to deliver to the market unique cutting systems. Research and development efforts associated with our electric personal care products allow us to deliver to our customers products that save them time, provide salon alternatives and enhance their in-home personal care options. We are continuously pursuing new innovations for our shaving, grooming and hair care products including foil and rotary shaver improvements, trimmer enhancements and technologies that deliver skin and hair care benefits.

During Fiscal 2014, at our Home and Garden Business segment, we entered the animal repellents category with the acquisition of The Liquid Fence Company. In addition, we increased our pest repellent offerings with the Cutter Backwoods Dry Insect Repellent aerosol and the Repel Tick Defense aerosol. Continuing our pursuit of innovation, we started offering the Mulch-Lock Ready-to-Use and Mulch-Lock Concentrate, which are versatile landscaping tools that can be used to eliminate frequent groundcover maintenance and help customers save time, effort and money. We also introduced our novel, award-winning Black Flag Refillable Rat Bait Station, a reusable rodenticide product that is easy to refill. At our Global Batteries & Appliances segment, Rayovac released the Phone Boost 800 portable charging device and the car and wall USB power chargers. In addition, Rayovac introduced the Virtually Indestructible Spotlight and the Virtually Indestructible Lantern. Our Russell Hobbs brand entered the health fryer market with the new versatile Purifry and Purifry Multi. Our Black and Dekker brand introduced the Mill & Brew Coffee Maker, an integrated bean grinder that allows coffee drinkers to have the freshest cup of hot coffee. Our Remington brand introduced new personal care products such as the HyperFlex rotary shaver, Vacuum Beard and Grooming kit, SmartEdge Shaver and Virtually Indestructible Hair Clipper. At our Hardware and Home Improvement segment, we launched our SmartKey re-key technology in padlocks, enhancing security and allowing homeowners to use the same key to unlock their home and their padlocks. Within our Hardware and Home Improvement segment, our Kwikset Brand launched the revolutionary Kevo Bluetooth enabled deadbolt. This is a first of a kind deadbolt that turns a smart phone into a key and allows authorized users to open their Kwikset deadbolt by simply touching the lock. Owners of Kevo can also send digital EKeys and monitor the use of their lock by downloading the Kevo app. At our Global Pet Supplies segment, we recently launched the Tetra Betta Ring, which is a designer aquarium indoor system for Betta fish with LED lighting that provides for a relaxing atmosphere. In addition, our Tetra brand introduced a breakthrough innovation for ideal water parameters with biodegradable balls. The biodegradable balls fulfill the living requirements of bacteria by consuming harmful substances with the effect of improving aquarium water quality and less algae growth.

Competitive Landscape

We compete in seven major product categories: consumer batteries, hardware and home improvement, pet supplies, home and garden control products, electric shaving and grooming products, small appliances and electric personal care products.

The consumer battery product category consists of non-rechargeable alkaline or zinc carbon batteries in cell sizes of AA, AAA, C, D and 9-volt, specialty batteries, which include rechargeable batteries, hearing aid batteries, photo batteries and watch/calculator batteries, and portable lighting products. Most consumer batteries are marketed under one of the following brands: Rayovac/VARTA, Duracell, Energizer or Panasonic. In addition, some retailers market private label batteries, particularly in Europe. The majority of consumers in North America and Europe purchase alkaline batteries. The Latin America market consists primarily of zinc carbon batteries but is gradually converting to higher-priced alkaline batteries as household disposable income grows. Our major competitors in the consumer batteries product category are Energizer Holdings, Inc., The Procter & Gamble Company and Matsushita.

We believe that we are the largest worldwide marketer of hearing aid batteries and that we continue to maintain a leading global market position. We believe that our close relationship with hearing aid manufacturers and other customers, as well as our product performance improvements and packaging innovations, position us for continued success in this category.

Our global pet supplies business comprises aquatics equipment (aquariums, filters, pumps, etc.), aquatics consumables (fish food, water treatments and conditioners, etc.) and specialty pet products for dogs, cats, birds and other small domestic animals. The pet supply market is extremely fragmented, with no competitor holding a market share greater than twenty percent. We believe that our brand positioning, including the leading global aquatics brand in Tetra, our diverse array of innovative and attractive products and our strong retail relationships and global infrastructure will allow us to remain competitive in this fast growing industry. Our largest competitors in the pet supplies product category are Mars Corporation, The Hartz Mountain Corporation and Central Garden & Pet Company.

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Products in our home and garden category are sold through the Home and Garden Business, which operates in the U.S. market under the major brand names Spectracide, Hot Shot, Cutter, Repel, Black Flag and Garden Safe. The Home and Garden Business manufactures and markets outdoor and indoor insect control products, rodenticides, herbicides, insect repellents and lawn maintenance products. In addition, we produce and market several private-label brands for many major retailers.

The Home and Garden Business’ marketing position is primarily that of a branded value, enhanced and supported by innovative products of outstanding quality and appealing packaging that is designed to drive sales at the point of purchase. Our commitment to quality and value has earned the trust of consumers and the confidence of retailers, who count on us to deliver the fast-selling products, merchandising solutions and quality service they require. The Home and Garden Business’ primary competitors include The Scotts Miracle-Gro Company, Central Garden & Pet Company and S.C. Johnson & Son, Inc.

We also operate in the shaving and grooming and personal care product category, consisting of electric shavers and accessories, electric grooming products and hair care appliances. Electric shavers include men’s and women’s shavers (both rotary and foil design) and electric shaver accessories consisting of shaver replacement parts (primarily foils and cutters), pre-shave products and cleaning agents. Electric shavers are marketed primarily under our Remington brand. Our primary competitors in the electric shaving and grooming category are Procter & Gamble, makers of Braun, and Koninklijke Phillips Electronics N.V., makers of Norelco. Electric grooming products include beard and mustache trimmers, nose and ear trimmers, body groomers and haircut kits and related accessories. Hair care appliances include hair dryers, straightening irons, styling irons and hair-setters. Europe and North America account for the majority of our worldwide electric personal care product category sales. Our major competitors in the electric personal care product category are Conair Corporation, Wahl Clipper Corporation and Helen of Troy Limited.

The Hardware & Home Improvement segment has developed a market-leading franchise with leading brands, making it the most desired manufacturer among top home builders and major retailers. Hardware & Home Improvement is acclaimed as a market leader in the U.S. and Canadian lockset business. Competition within the industry varies based on location as well as product segment. The main source of competition for locks includes other third party manufacturers such as Schlage, a division of Ingersoll-Rand and private label import brands such as Defiant and Gatehouse. The major U.S. competitors of Pfister, the plumbing brand sold by our Hardware & Home Improvement segment, are Masco, Fortune Brands, Kohler and American Standard. Hardware & Home Improvement also competes with The Home Depot and Lowe’s private label brands.

Products in our small appliances category consist of small electrical appliances primarily in the kitchen and home product categories. Primary competitor brands in the small appliance category include Hamilton Beach, Procter Silex, Sunbeam, Mr. Coffee, Oster, General Electric, Rowenta, DeLonghi, Kitchen Aid, Cuisinart, Krups, Braun, Rival, Europro, Kenwood, Philips, Morphy Richards, Breville and Tefal.

The following factors contribute to our ability to succeed in these highly competitive product categories:

· Strong Diversified Global Brand Portfolio. We have a global portfolio of well-recognized consumer product brands. We believe that the strength of our brands positions us to extend our product lines and provide our retail customers with strong sell-through to consumers.

· Strong Global Retail Relationships. We have well-established business relationships with many of the top global retailers, distributors and wholesalers, which have assisted us in our efforts to expand our overall market penetration and promote sales.

· Expansive Distribution Network. We distribute our products in approximately 160 countries through a variety of trade channels, including retailers, wholesalers and distributors, hearing aid professionals, industrial distributors and Original Equipment Manufacturers.

· Innovative New Products, Packaging and Technologies. We have a long history of product and packaging innovations in each of our seven product categories and continually seek to introduce new products both as extensions of existing product lines and as new product categories.

· Experienced Management Team. Our management team has substantial consumer products experience. On average, each senior management team member has more than 20 years of experience at Spectrum, VARTA, Remington, Russell Hobbs or other branded consumer product companies such as Newell Rubbermaid and Schering-Plough.

Seasonal Product Sales

On a consolidated basis our financial results are approximately equally weighted between quarters, however, sales of certain product categories tend to be seasonal. Sales in the consumer battery, electric shaving and grooming and electric personal care product categories, particularly in North America, tend to be concentrated in the December holiday season (Spectrum’s first fiscal quarter). Demand for hardware and home improvement products increases during the spring and summer construction period (Spectrum's third and fourth fiscal quarters). Demand for pet supplies products remains fairly constant throughout the year. Demand for home and garden control products sold though the Home and Garden Business typically peaks during the first six months of the calendar year (Spectrum’s second and third fiscal quarters). Small Appliances peaks from July through December primarily due to the increased demand by customers in the late summer for “back-to-school” sales and in the fall for the holiday season.

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~~The~~ A ~~seasonality~~change ofin ~~our~~governmental ~~sales~~regulations ~~during~~regarding the ~~last~~use ~~three~~of ~~fiscal~~refrigerant ~~years~~gas isR-134a asor ~~follows:~~its potential future substitutes could have a material adverse effect on GAC’s ability to sell its aftermarket A/C products.

~~Percentage~~The refrigerant R-134a is critical component of ~~Annual~~the ~~Sales~~Company’s aftermarket A/C products and is used in products which comprised approximately 34% of GAC’s net sales, or approximately 3% of the Company’s net sales, in the year ended September 30, 2016. Older generation refrigerants such as R-12 (Freon) have been regulated for some time in the United States and elsewhere, due to concerns about their potential to contribute to ozone depletion. In recent years, refrigerants such as R-134a, which is an approved substitute for R-12, have also become the subject of regulatory focus due to their potential to contribute to global warming.

	Fiscal Year Ended
	September 30,
Fiscal Quarter Ended	2014		2013		2012
December		25%		21%		26%
March		23%		24%		23%
June		25%		27%		25%
September		27%		28%		26%

The European Union has passed regulations that require the phase out of R-134a in automotive cooling systems in new vehicles by 2017. In the United States, the Company has reported that it cannot predict what future action, if any, the EPA will take on the regulation of R-134a. But based on currently available information, it believes that it would take some time for suitable alternatives to R-134a to come into full scale commercial production and therefore such alternatives would not be readily available for wide spread use in new car models. If the future use of R-134a is phased out or is limited or prohibited in jurisdictions in which we do business, the future market for GAC’s products containing R-134a may be limited, which could have a material adverse impact on its results of operations, financial condition, and cash flows.

~~Fiscal~~In ~~Year~~addition, ~~Ended~~regulations ~~September~~may 30be enacted governing the packaging, ~~2014~~use ~~Compared~~and disposal of the Company’s products containing refrigerants. For example, regulations are currently in effect in California that govern the sale and distribution of products containing R-134a. While the Company has reported that it is not aware of any noncompliance with such regulations, its failure to ~~Fiscal~~comply ~~Year~~with ~~Ended~~these ~~September~~or 30possible future regulations in California, ~~2013~~or elsewhere, could result in material fines or costs or the inability to sell its products in those markets, which could have a material adverse impact on the results of operations, financial condition and cash flows. If substitutes for R-134a become widely used in A/C systems and their use for DIY and retrofit purposes are not approved by the EPA, it could have a material adverse effect on GAC’s results of operations, financial condition, and cash flows. In addition, the cost of HFO-1234yf, the leading long-term alternative to R-134a being proposed in the United States and the European Union for use in the A/C systems of new vehicles, will likely be higher than that of R-134a. If HFO-1234yf becomes widely used and the Company is able to develop products using HFO-1234yf, but is unable to price its products to reflect the increased cost of HFO-1234yf, it could have a material adverse effect on its results of operations, financial condition and cash flow.

~~Highlights~~All of ~~Consolidated~~GAC’s ~~Operating~~refrigerant ~~Results~~products are produced at one facility, and a significant disruption or disaster at such a facility could have a material adverse effect on its results of operations.

~~Net~~GAC’s ~~Sales~~manufacturing facility consists of one site which is located in Garland, Texas and thus GAC is dependent upon the continued safe operation of this facility. ~~Net~~ ~~sales~~Its ~~for~~facility ~~Fiscal~~is ~~2014~~subject ~~increased~~to ~~$343~~various ~~million~~hazards associated with the manufacturing, handling, storage, and transportation of chemical materials and products, including human error, leaks and ruptures, explosions, floods, fires, inclement weather and natural disasters, power loss or other infrastructure failures, mechanical failure, unscheduled downtime, regulatory requirements, the loss of certifications, technical difficulties, labor disputes, inability to $4obtain material,~~429~~ ~~million~~equipment ~~from~~or $4transportation,~~086~~ ~~million~~environmental inhazards ~~Fiscal~~such ~~2013~~as remediation, anchemical 8%spills, ~~increase~~discharges or releases of toxic or hazardous substances or gases, and other risks. ~~The~~Many ~~following~~of ~~table~~these ~~details~~hazards could cause personal injury and loss of life, severe damage to, or destruction of, property and equipment and environmental contamination. In addition, the ~~principal~~occurrence ~~components~~of material operation problems at GAC’s facility due to any of these hazards could cause a disruption in the ~~change~~production of its products. GAC may also encounter difficulties or interruption as a result of the application of enhanced manufacturing technologies or changes to production lines to improve GAC’s throughput or to upgrade or repair its production lines. The Company’s insurance policies have coverage in ~~net~~case ~~sales~~of significant damage to its manufacturing facility but may not fully compensate GAC for the cost of replacement for any such damage and any loss from ~~Fiscal~~business ~~2013~~interruption. As a result, GAC may not be adequately insured to ~~Fiscal~~cover ~~2014~~losses (resulting from significant damage to its manufacturing facility. Any damage to its facility or interruption in ~~millions):~~manufacturing could result in production delays and delays in meeting contractual obligations which could have a material adverse effect on GAC’s relationship with its customers and on its results of operations, financial condition or cash flows in any given period.

	Net Sales
Fiscal 2013 Net Sales	$	4,086
Increase in hardware and home improvement products		296
Increase in home and garden products		42
Increase in consumer batteries		28
Increase in electric personal care products		10
Increase in electric shaving and grooming products		2
Decrease in small appliances		(4)
Decrease in pet supplies		(23)
Foreign currency impact, net		(8)
Fiscal 2014 Net Sales	$	4,429

Consolidated product line net sales by segment for Fiscal 2014 and Fiscal 2013 were as follows (in millions):

	Fiscal Year
	2014		2013
Product line net sales by segment
Global batteries and appliances
Consumer batteries	$	958	$	932
Small appliances		731		740
Electric shaving and grooming products		278		277
Electric personal care products		264		255
Total Global batteries and appliances	$	2,231	$	2,204
Hardware and home improvement		1,166		870
Global pet supplies		600		622
Home and garden		432		390
Total net sales to external customers	$	4,429	$	4,086

Global consumer battery sales increased $26 million, or 3%, during Fiscal 2014 compared to Fiscal 2013. Excluding the impact of negative foreign exchange of $2 million, global consumer battery sales increased $28 million. The constant currency increase in global consumer battery sales was attributable to increases in European and Latin American consumer battery sales of $24 million and $10 million, respectively, partially offset by a decrease in North American consumer battery sales of $6 million. The increase in European and Latin American sales were a result of retailer distribution gains, new customers and products, successful promotion activities and geographic expansion. The decrease in North America was primarily driven by the non-recurrence of approximately $10 million of flashlight sales in North America related to storm activity in the first quarter of Fiscal 2013.

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~~Small~~ HRG ~~appliance~~and ~~sales~~its ~~decreased~~significant $9stockholders ~~million,~~exercise orsignificant ~~1%,~~influence ~~during~~over ~~Fiscal~~us ~~2014~~and ~~versus~~their ~~Fiscal~~interests ~~2013.~~in ~~Excluding~~our ~~the~~business ~~negative~~may ~~foreign~~be ~~exchange~~different ~~impact~~from ofthe $5interests ~~million, small appliances decreased $4 million. Excluding foreign exchange impacts, North American sales declined $20 million, which was tempered by gains in Europe and Latin America~~ of ~~$13 million and $2 million, respectively. The North American sales declines were due to~~ our ~~exit of low-margin promotions in Fiscal 2014~~stockholders. ~~The European and Latin American sales gains were attributable to promotions with existing retailers during Fiscal 2014, coupled with innovative new product launches.~~

~~Electric~~HRG, ~~shaving~~as ~~and~~our ~~grooming~~majority ~~product~~stockholder, ~~sales~~and ~~increased~~its $1significant ~~million~~stockholders, orhave ~~1%,~~the ~~during~~ability ~~Fiscal 2014 compared~~ to ~~Fiscal~~influence ~~2013. Excluding~~ the ~~impact~~outcome of ~~negative~~any ~~foreign~~corporate ~~exchange~~action ofby $1us ~~million,~~that ~~electric~~requires ~~shaving~~stockholder ~~and~~approval, ~~grooming~~including, ~~product~~but ~~sales~~not ~~increased~~limited ~~$2 million. The constant currency increase was attributable~~ to, ~~European~~the ~~and~~election ~~Latin~~of ~~American~~directors, ~~sales~~approval ~~gains~~ of $5merger ~~million~~transactions and $1the ~~million,~~sale ~~respectively,~~of ~~offset~~all byor asubstantially $4all ~~million~~of ~~decline~~our ~~in North American sales~~assets. ~~The~~In ~~gains~~addition, inwe ~~Europe~~are ~~and~~a ~~Latin~~party ~~America were due~~ to ~~innovative~~a ~~new~~stockholder ~~product~~agreement ~~launches,~~with ~~promotional~~HRG ~~activities~~ and ~~expansion~~certain ~~into new channels. The decrease in North America was due to the non-recurrence~~ of ~~promotions~~its ~~during the first quarter of Fiscal 2013 and customer inventory management~~stockholders.

~~Electric~~This ~~personal~~influence ~~care~~and ~~sales~~actual ~~increased~~control $9may ~~million,~~have ~~or 4%, in Fiscal 2014 versus Fiscal 2013. Geographically, excluding~~ the ~~impact~~effect of ~~negative~~discouraging ~~foreign~~offers ~~exchange~~to ofacquire $1the ~~million,~~Company ~~sales~~because ~~increased~~any $5such ~~million~~consummation inwould ~~Latin~~likely ~~America,~~require $3the ~~million~~consent inof ~~Europe~~HRG and $2perhaps ~~million~~certain inof ~~North~~its ~~America~~stockholders. ~~Latin~~HRG ~~American~~may ~~sales~~also ~~gains~~delay ~~were~~or ~~attributable~~prevent toa ~~volume~~change ~~expansion~~ in ~~Colombia,~~control ~~successful~~of ~~hair~~the ~~care accessories product launches throughout Central America, distribution gains in Brazil and increased promotional activities~~Company. ~~The increase in both European and North American sales was driven by innovative new products and successful promotions.~~

~~Hardware~~In ~~and~~addition, ~~home~~because ~~improvement~~HRG ~~sales~~owns ~~increased~~more ~~$296~~than ~~million, or 34~~50%, ~~during Fiscal 2014 compared to Fiscal 2013. On a proforma basis, as if the acquisition~~ of the ~~HHI~~voting ~~Business~~power ~~had occurred at the beginning~~ of the ~~Fiscal 2013~~Company, ~~hardware~~the ~~and~~Company ~~home~~is ~~improvement~~considered ~~sales~~a ~~increased~~controlled ~~$104~~company ~~million,~~under orthe ~~10%,~~NYSE tolisting ~~$1,166~~standards. ~~million~~As ~~in Fiscal 2014 versus $1~~such,~~062~~ ~~million in Fiscal 2013. This increase was attributable to~~ the ~~residential~~NYSE ~~security~~corporate ~~category~~governance ~~which~~rules ~~accounted~~requiring ~~for~~that ~~$91~~a ~~million~~majority of the ~~increase~~Company’s ~~due~~board ~~to strong retail positioning in North America coupled with the continued recovery~~ of ~~the~~directors ~~U.S.~~and ~~housing market. The plumbing category increased $17 million while~~ the ~~hardware~~Company’s ~~product~~entire ~~category~~compensation ~~decreased~~committee $2or ~~million. The plumbing product category increased due to growth in~~ the ~~U.S.~~nominating ~~from both retail~~ and ~~non-retail~~corporate ~~channels.~~governance ~~Also~~committee ~~contributing~~be toindependent ~~the~~do ~~Fiscal~~not ~~2014 sales increase were sales related to the Tong Lung Metal Industry Co~~apply. ~~Ltd.,~~As a ~~Taiwan~~result, ~~Corporation (~~the ~~“TLM~~ability ~~Business”),~~of asthe ~~prior~~Company’s ~~year~~independent ~~results~~directors ~~did~~to ~~not~~influence ~~include~~its ~~the~~business ~~TLM~~policies ~~Business~~and ~~until~~affairs ~~April~~may 8,be ~~2013~~reduced.

~~Global~~If ~~pet~~HRG ~~supplies~~were ~~sales~~to ~~decreased~~sell ~~$22~~substantial ~~million~~amounts of the Company’s common stock in the public market, or ~~4%,~~investors ~~during~~perceive ~~Fiscal~~that ~~2014~~these ~~versus~~sales ~~Fiscal~~could ~~2013~~occur, ~~which~~the ~~included~~market aprice ~~positive~~of ~~foreign~~the ~~currency~~Company's ~~exchange~~common ~~impact~~stock ofcould $1be ~~million~~adversely affected. ~~Excluding~~The ~~foreign~~Company ~~exchange~~has ~~impacts,~~entered ~~aquatic~~into ~~sales~~a ~~and~~registration ~~companion~~rights ~~animal~~agreement ~~sales~~(the ~~decreased~~“Registration ~~$19~~Rights ~~million~~Agreement”) with HRG, certain of HRG’s stockholders and $4certain ~~million,~~other ~~respectively~~of our stockholders. ~~The~~If ~~decline~~requested inproperly ~~aquatic~~under ~~sales~~the ~~was~~terms ~~driven~~of bythe ~~lower~~Registration ~~kit~~Rights ~~and~~Agreement, ~~equipment~~these ~~sales~~stockholders inhave ~~North~~the ~~America~~right ~~and~~to ~~lower~~require ~~aquatic~~the ~~food~~Company ~~sales~~to ~~internationally~~register ~~coupled~~all ~~with~~or asome ~~one-time~~of ~~negative~~such ~~impact~~shares ~~from~~for ~~product~~sale ~~registration~~under ~~issues~~the Securities Act in ~~Russia~~certain ~~during~~circumstances, and also have the ~~third~~right ~~and~~to ~~fourth~~include ~~quarter~~those ofshares ~~Fiscal~~in ~~2014~~a registration initiated by the Company. ~~The~~If ~~decline~~the inCompany ~~companion~~is ~~animal~~required ~~sales~~to ~~was~~include ~~driven~~the shares of its common stock held by ~~adverse~~these ~~weather~~stockholders pursuant to these registration rights in ~~North~~a ~~America~~registration initiated by the Company, ~~which~~sales ~~negatively~~made ~~affected~~by ~~retail~~such ~~store~~stockholders ~~traffic~~may ~~during~~adversely affect the ~~second~~price ~~quarter~~ of ~~Fiscal~~the ~~2014~~Company's common stock and ability to raise needed capital. In addition, if these stockholders exercise their demand registration rights and ~~the~~cause ~~non-recurrence~~a large number of ~~companion~~shares ~~animal~~to ~~promotions~~be registered and sold in the public market or demand that ~~took~~the ~~place~~Company ~~during~~register its shares on a shelf registration statement, such sales or shelf registration may have an adverse effect on the ~~first~~market ~~quarter~~price of ~~Fiscal~~the ~~2013.~~Company’s common stock.

~~Home~~We ~~and~~are ~~garden~~one ~~product~~of ~~sales~~several ~~increased~~companies ~~$42 million, or 11%,~~ in ~~Fiscal~~which ~~2014~~HRG ~~versus~~owns ~~Fiscal~~a ~~2013~~controlling interest. The ~~sales~~interests ~~gains~~of ~~were~~HRG ~~attributable to increases in repellent product sales~~ and ~~lawn~~these ~~and~~other ~~garden~~companies ~~control~~may, ~~sales~~from oftime ~~$23~~to ~~million and $20 million~~time, ~~respectively. The~~diverge ~~repellent~~from ~~product~~the ~~sales~~interests ~~increase~~of ~~was~~other ~~driven~~of ~~by market share gains,~~ the ~~extended~~Company’s ~~selling~~stockholders ~~season due to favorable weather~~ and afrom ~~$13~~each ~~million~~other, ~~increase~~particularly ~~due~~with regard to ~~the~~new ~~acquisition~~investment ~~of The Liquid Fence Company, Inc~~opportunities. ~~(“Liquid~~HRG ~~Fence”)~~is onnot ~~January~~restricted 2,from ~~2014.~~investing ~~The increase~~ in ~~lawn~~other ~~and~~businesses ~~garden~~involving ~~control~~or ~~sales~~related ~~was~~to ~~primarily~~the ~~driven~~marketing byor distribution ~~gains~~of athousehold ~~key~~products, ~~retailers~~pet and ~~the~~pest ~~extended~~products ~~selling~~and ~~season~~personal ~~discussed~~care ~~above~~products. ~~These~~HRG ~~gains~~may ~~were~~also ~~partially~~engage ~~offset~~in byother abusinesses ~~slight~~that ~~decline~~compete inor ~~household~~may ~~insect~~in ~~control~~the ~~sales~~future ofcompete $1with ~~million~~the Company.

~~Gross~~Our ~~Profit. Gross~~Restated ~~profit~~Bylaws ~~and~~provide ~~gross~~that ~~profit~~the ~~margin~~Court ~~for~~of ~~Fiscal~~Chancery ~~2014~~of ~~was~~the ~~$1,569~~State ~~million~~of ~~and~~Delaware ~~35.4%~~will ~~versus~~be ~~$1,390~~the ~~million~~exclusive ~~and~~forum ~~34.0%, respectively,~~ for ~~Fiscal~~substantially ~~2013. The~~all ~~increase~~disputes inbetween ~~gross~~us ~~profit~~ and ~~improvement~~our instockholders, ~~gross~~which ~~profit~~could ~~margin~~limit ~~was~~our ~~primarily~~stockholders’ ~~attributable~~ability to anobtain ~~increase in sales, particularly the shift towards higher margin sales, and continuing cost improvements. In addition, the increase in gross profit margin was driven by the non-recurrence of~~ a ~~$31~~favorable ~~million~~judicial ~~increase~~forum tofor ~~cost~~disputes ~~of goods sold due to the sale of inventory during Fiscal 2013 that was revalued in connection~~ with ~~the~~us ~~acquisition~~or ofour ~~the~~directors, ~~HHI~~officers ~~Business~~or employees.

~~Operating~~Our ~~Expenses. Operating~~restated ~~expenses~~bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for ~~Fiscal~~any ~~2014~~derivative ~~totaled~~action ~~$1,084~~or ~~million~~proceeding ~~compared~~brought toon $1our behalf,~~037~~ ~~million~~any ~~for~~action ~~Fiscal~~asserting ~~2013.~~a ~~The~~breach ~~$47~~of ~~million~~fiduciary ~~increase~~duty, inany ~~operating~~action ~~expenses~~asserting ~~during~~a ~~Fiscal~~claim ~~2014~~against isus ~~primarily~~arising ~~attributable~~pursuant to anthe ~~increase~~Delaware ofGeneral ~~$76~~Corporation ~~million~~Law, inour ~~Selling~~amended and ~~General~~restated certificate of incorporation or our restated bylaws, any action to interpret, apply, enforce, or determine the validity of our amended and ~~administrative~~restated ~~expenses~~certificate asof incorporation or bylaws, or any action asserting a ~~result~~claim ofagainst ~~increased~~us ~~sales~~that ~~partially~~is ~~offset~~governed by the internal affairs doctrine. The choice of forum provision may limit a ~~$28~~stockholder’s ~~million~~ability ~~decrease~~to bring a claim in ~~Acquisition~~a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and ~~integration~~our ~~related~~directors, ~~charges~~officers asand other employees. Alternatively, if a ~~result~~court ofwere to find the ~~HHI~~choice ~~Business~~of ~~acquisition~~forum provision contained in ~~Fiscal~~our ~~2013~~restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

See Note 2, “Significant Accounting Policies—Acquisition and Integration Related Charges,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information regarding our Acquisition and integration charges.

Segment Results. As discussed above, we manage our business in four reportable segments: (i) Global Batteries & Appliances; (ii) Global Pet Supplies; (iii) Home and Garden Business; and (iv) Hardware & Home Improvement.

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~~The~~ Even ~~operating~~though ~~segment~~the ~~profits~~Company’s docommon ~~not~~stock ~~include~~is ~~restructuring~~currently ~~and~~traded ~~related~~on ~~charges,~~the ~~acquisition and integration related charges~~NYSE, ~~interest~~it ~~expense,~~has ~~interest~~less ~~income~~liquidity ~~and~~than ~~income~~many ~~tax~~other ~~expense. Corporate~~stocks ~~expenses~~quoted ~~primarily include general and administrative expenses and global long-term incentive compensation plans which are evaluated~~ on a ~~consolidated~~national ~~basis~~securities ~~and not allocated to our operating segments~~exchange. All depreciation and amortization included in income from operations is related to operating segments or corporate expense. Costs are allocated to operating segments or corporate expense according to the function of each cost center.

~~Financial~~The ~~information~~trading ~~pertaining~~volume in the Company’s common stock on the NYSE has been relatively low when compared with larger companies listed on the NYSE or other stock exchanges. Because of this, it may be more difficult for stockholders to ~~our~~sell ~~reportable~~a ~~segments~~substantial isnumber ~~contained~~of shares for the same price at which stockholders could sell a smaller number of shares. We cannot predict the effect, if any, that future sales of the Company’s common stock in ~~Note~~the 11market, ~~“Segment~~or ~~Information~~the availability of shares of its common stock for sale in the market,” will have on the market price of ~~Notes~~the Company’s common stock. We can give no assurance that sales of substantial amounts of the Company’s common stock in the market, or the potential for large amounts of sales in the market, would not cause the price of the Company’s common stock to ~~Consolidated~~decline ~~Financial~~or ~~Statements~~impair ~~included~~the Company’s future ability to raise capital through sales of its common stock. Furthermore, because of the limited market and generally low volume of trading in ~~this~~the ~~Annual~~Company’s ~~Report~~common onstock ~~Form~~that ~~10-K~~could occur, the share price of its common stock could be more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the market's perception of our business, and announcements made by the Company, its competitors or parties with whom the Company has business relationships. The lack of liquidity in the Company’s common stock may also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange for any financing we may need in the future. In addition, we may experience other adverse effects, including, without limitation, the loss of confidence in us by current and prospective suppliers, customers, employees and others with whom we have or may seek to initiate business relationships.

~~Adjusted~~The ~~Earnings~~market ~~Before~~price ~~Interest,~~of ~~Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is a metric used by management and frequently used by~~ the ~~financial community which provides insight into an organization~~Company’s ~~operating~~common ~~trends~~stock ~~and~~is ~~facilitates~~likely ~~comparisons~~to 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 can also be ahighly ~~useful~~volatile ~~measure of a company’s ability to service debt~~ and iscould ~~one~~fluctuate ofwidely ~~the~~in ~~measures~~price ~~used for determining our debt covenant compliance. Adjusted EBITDA excludes certain items that are unusual~~ in ~~nature~~response ~~or not comparable from period~~ to ~~period.~~various ~~While we believe that Adjusted EBITDA is useful supplemental information~~factors, ~~such~~many ~~adjusted~~of ~~results~~which are ~~not~~beyond ~~intended to replace~~ our Ucontrol.~~S. Generally Accepted Accounting Principles’ (“GAAP”) financial results and should be read in conjunction with those GAAP results.~~

~~Below~~Factors ~~are~~that ~~reconciliations~~may ofinfluence ~~GAAP~~the ~~Net~~price ~~income,~~of asthe ~~adjusted,~~common tostock ~~Adjusted~~include, ~~Earnings~~without ~~Before~~limitation, ~~Interest~~the ~~and Taxes (“Adjusted EBIT”) and to Adjusted EBITDA for each segment and for Consolidated Spectrum Brands for Fiscal 2014 and Fiscal 2013~~following:

	Global						Hardware &		Corporate /		Consolidated
	Batteries &		Global Pet		Home and		Home		Unallocated		Spectrum
Fiscal 2014	Appliances		Supplies		Garden		Improvement		Items(a)		Brands
	(in millions)
Net income (loss), as adjusted (a)	$	235	$	79	$	88	$	157	$	(342)	$	217
Income tax expense		—		—		—		—		59		59
Interest expense		—		—		—		—		202		202
Acquisition and integration related charges		8		—		1		4		7		20
Restructuring and related charges		11		3		—		8		1		23
Other (b)		—		—		—		—		1		1
Adjusted EBIT	$	254	$	82	$	89	$	169	$	(72)	$	522
Depreciation and amortization (c)		73		31		13		40		46		203
Adjusted EBITDA	$	327	$	113	$	102	$	209	$	(26)	$	725

loss of any of our key customers or suppliers;

	Global						Hardware &		Corporate /		Consolidated
	Batteries &		Global Pet		Home and		Home		Unallocated		Spectrum
Fiscal 2013	Appliances		Supplies		Garden		Improvement		Items(a)		Brands
	(in millions)
Net income (loss), as adjusted (a)	$	214	$	77	$	78	$	75	$	(491)	$	(47)
Pre-acquisition earnings of HHI(d)		—		—		—		30		—		30
Income tax expense		—		—		—		—		27		27
Interest expense		—		—		—		—		370		370
Acquisition and integration related charges		6		2		—		7		33		48
Restructuring and related charges		15		11		1		6		1		34
HHI Business inventory fair value adjustment		—		—		—		31		—		31
Venezuela devaluation		2		—		—		—		—		2
Adjusted EBIT	$	237	$	90	$	79	$	149	$	(60)	$	495
Depreciation and amortization (c)		67		30		11		32		43		183
Adjusted EBITDA	$	304	$	120	$	90	$	181	$	(17)	$	678

additions or departures of key personnel;

~~______________________________~~ · sales of common stock;

our ability to execute our business plan;

announcements and consummations of business acquisitions;

operating results that fall below expectations;

additional issuances of common stock;

low volume of sales due to concentrated ownership of common stock;

intellectual property disputes;

industry developments;

economic and other external factors;

period-to-period fluctuations in our financial results; and

market concerns with respect to the potential indirect impact of matters not directly involving the Company but impacting HRG or its affiliates.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company’s common stock. You should also be aware that price volatility might be worse if the trading volume of shares of the common stock is low.

Additional issuances of the Company’s common stock may result in dilution to its existing stockholders.

Under our equity incentive plan approved by the shareholders on March 1, 2011, called the Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Award Plan (the “2011 Equity Plan”), 4,625,676 shares of common stock of the Company, net of cancellations, were authorized to be issued. At the 2014 annual shareholders meeting, the 2011 Equity Plan was amended to increase the shares issuable by 1,000,000; therefore, a total of 5,625,676 shares, net of cancellations, are authorized to be issued under such plan. Increases to the number of shares issuable under the 2011 Equity Plan are subject to approval by the Board of Directors and shareholders. As of September 30, 2016, we have issued 4,525,494 restricted stock units (or the equivalent number of shares of common stock upon the lapsing of the applicable restrictions) under the 2011 Plan and have a remaining authorization to issue up to a total of 1,100,182 shares of our common stock, or options or restricted stock units exercisable for shares of common stock.

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~~(a)~~ In Itaddition, is the Company'’s ~~policy~~board of directors has the authority to ~~record~~issue ~~Income~~additional ~~tax~~shares ~~expense~~of ~~and~~capital ~~Interest~~stock ~~expense~~to onprovide additional financing or for other purposes in the future. The issuance of any such shares or exercise of any such options may result in a ~~consolidated~~reduction ~~basis~~of the book value or market price of the outstanding shares of common stock. ~~Accordingly,~~If we do issue any such ~~amounts~~additional shares or any such options are ~~not~~exercised, ~~reflected~~such issuance or exercise also will cause a reduction in the ~~operating~~proportionate ~~results~~ownership and voting power of all other stockholders. As a result of such dilution, the ~~operating~~proportionate ~~segments~~ownership interest and ~~are~~voting ~~presented~~power ~~within~~of ~~Corporate~~a /holder ~~Unallocated~~of ~~Items~~shares of common stock could be decreased. Further, any such issuance or exercise could result in a change of control. Under our certificate of incorporation, holders of 5% or more of the outstanding common stock or capital stock into which any shares of common stock may be converted have certain rights to purchase their pro rata share of certain future issuances of securities.

~~(b)~~ ITEM ~~Included~~1B.UNRESOLVED inSTAFF ~~other are costs associated with onboarding for a key executive.~~COMMENTS

~~(c) Included within depreciation and amortization is amortization of stock based compensation~~ None.

~~(d)~~ ITEM ~~The Pre-acquisition earnings of HHI do not include the TLM Taiwan business as stand alone financial data is not available for the periods presented~~2. ~~The TLM Taiwan business is not deemed material to the Company's operating results.~~PROPERTIES

~~Global~~The ~~Batteries~~following lists our principal owned or leased administrative, manufacturing, packaging and distribution facilities at September &30, ~~Appliances~~2016:

		Fiscal Year
	2014			2013
Net sales to external customers	$	2,231		$	2,204
Segment profit	$	257		$	238
Segment profit as a % of net sales		11.5	%		10.8	%
Segment Adjusted EBITDA	$	327		$	304
Assets as of September 30	$	2,152		$	2,361

Corporate & Administrative

~~Global~~Location ~~Batteries~~Function ~~and~~/ ~~Appliances~~Use ~~net~~Owned ~~sales~~/ toLeased ~~external~~U.S. ~~customers~~Locations ~~are~~Middleton, ~~discussed~~Wisconsin inWorld ~~the~~Headquarters ~~“Product~~& ~~line~~GBA ~~net~~Headquarters ~~sales~~Leased byDanbury, ~~segment”~~Connecticut ~~discussion~~GAC ~~above~~Headquarters Leased Earth City, Missouri Pet, Home & Garden Headquarters Leased Lake Forest, California HHI Headquarters Leased Miami Lakes, Florida Latin America Headquarters Leased Non-U. S. Locations Manchester, England UK Headquarters Owned Mentone, Australia APAC Headquarters Leased Sulzbach, Germany Europe Headquarters Leased Mississauga, Canada Canada Headquarters Leased

~~Segment~~Global ~~profit~~Batteries in Fiscal 2014 increased to $257 million from $238 million in Fiscal 2013. Segment profitability as a percentage of net sales increased slightly to 11.5% in Fiscal 2014 versus 10.8% in Fiscal 2013. The increase in segment profit and ~~segment~~Appliances profitably as a percentage of net sales were primarily attributable to increased sales and cost improvements, which were partially offset by unfavorable product mix and pricing pressures in the U.S. and Europe.(GBA)

~~Segment~~Location ~~Adjusted~~Function ~~EBITDA~~/ inUse ~~Fiscal~~Owned ~~2014~~/ ~~increased~~Leased toU.S. ~~$327~~Locations ~~million~~Fennimore, ~~from~~Wisconsin ~~$304~~Battery ~~million~~Manufacturing inOwned ~~Fiscal~~Portage, ~~2013.~~Wisconsin ~~The~~Battery ~~increase~~Manufacturing inOwned ~~segment~~DeForest, ~~Adjusted~~Wisconsin ~~EBITDA~~Distribution ~~was~~Leased ~~driven~~Dixon, byIllinois ~~the~~Distribution ~~factors~~Leased ~~discussed~~Redlands, ~~above~~California Distribution Leased Non-U. S. Locations Dischingen, Germany Battery Manufacturing Leased Guatemala City, Guatemala Battery Manufacturing Owned Jaboatao, Brazil Battery Manufacturing Owned Washington, UK Battery Manufacturing Leased Ellwangen-Neunheim, Germany Distribution Leased Guatemala City, Guatemala Distribution Owned Mentone, Australia Distribution Leased Santo Domingo, Dominican Republic Distribution Owned Wolverhampton, England Distribution Owned

Segment assets at September 30, 2014 decreased to $2,152 million from $2,361 million at September 30, 2013. The decrease in segment assets of $209 million is primarily due to the transfer of $147 million in cash and cash equivalents from our Global Batteries and Appliances segment to Corporate, coupled with a decrease of $49 million in intangible assets. Goodwill and intangible assets, which are substantially the result of the revaluation impacts of fresh-start reporting during Fiscal 2009 and acquisitions, decreased to $1,272 million at September 30, 2014 from $1,322 million at September 30, 2013 due to amortization of intangible assets, coupled with negative foreign exchange impacts.

Hardware & Home Improvement

		Fiscal Year
	2014			2013
Net sales to external customers	$	1,166		$	870
Segment profit	$	172		$	89
Segment profit as a % of net sales		14.8	%		10.2	%
Segment Adjusted EBITDA	$	209		$	181
Assets as of September 30	$	1,629		$	1,736

Results of the HHI Business, reported in the Hardware & Home Improvement segment, relate to operations subsequent to the acquisition date of December 17, 2012. A portion of the HHI Business, consisting of the TLM Business, is included in the results of the Hardware and Home Improvement segment subsequent to its acquisition on April 8, 2013.

Hardware and home improvement net sales to external customers are discussed in the “Product line net sales by segment” discussion above.

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~~Segment~~ Home ~~profit~~& ~~increased~~Hardware ~~$83~~Improvement million to $172 million in Fiscal 2014 compared to $89 million Fiscal 2013. Segment profitability as a percentage of net sales was 14.8% in Fiscal 2014 and 10.2% in Fiscal 2013. The increase in segment profit was primarily driven by the inclusion of the (HHI Business for the entire Fiscal 2014. Furthermore, the increase in segment profit and segment profit as a percentage of net sales was driven by the increase in sales and cost improvements, coupled with the non-recurrence of a $31 million increase to cost of goods sold in Fiscal 2013 which related to the sale of inventory revalued in connection with the acquisition.)

~~Segment~~Location ~~Adjusted~~Function ~~EBITDA~~/ ~~was~~Use ~~$209~~Owned ~~million~~/ inLeased ~~Fiscal~~U.S. ~~2014~~Locations ~~compared~~Charlotte, toNorth ~~$181~~Carolina ~~million~~Manufacturing in& ~~Fiscal~~Distribution ~~2013. The~~Leased ~~increase~~Houston, inTexas ~~Segment~~Manufacturing ~~Adjusted~~& ~~EBITDA~~Distribution ~~were~~Leased ~~driven~~Lititz, byPennsylvania ~~the~~Manufacturing ~~increased~~& ~~sales~~Distribution Leased Denison, ~~cost~~Texas ~~improvements~~Manufacturing ~~and~~Leased ~~other~~Birmingham, ~~factors~~Alabama ~~discussed~~Distribution ~~above~~Leased Dallas, Texas Distribution Leased Denison, Texas Distribution Owned Elkhart, Indiana Distribution Leased Mira Loma, California Distribution Leased Non-U. S. Locations Mexicali, Mexico Manufacturing & Distribution Leased Chia-Yi, Taiwan Manufacturing Leased Nogales, Mexico Manufacturing Owned Subic Bay, Philippines Manufacturing Owned Xiamen, China Manufacturing Leased Xiaolan, China Manufacturing Leased Brockville, Canada Distribution Leased Shenzhen, China Distribution Leased

~~Segment~~Global ~~assets~~Pet atSupplies September 30, 2014 decreased to $1,629 million from $1,736 million at September 30, 2013. The decrease of $107 million is primarily due to the transfer of $35 million in cash and cash equivalents from our Hardware and Home Improvement segment to Corporate, coupled with a decrease in intangible assets and property, plant and equipment of $21 million and $14 million, respectively, principally due to depreciation and amortization recognized in Fiscal 2014. (PET)

~~Global~~Location ~~Pet~~Function ~~Supplies~~ / Use Owned / Leased U.S. Locations Blacksburg, Virginia Manufacturing Owned Bridgeton, Missouri Manufacturing Leased Noblesville, Indiana Manufacturing Owned St. Louis, Missouri Manufacturing Leased Edwardsville, Illinois Distribution Leased Non-U.S. Locations Bogota, Colombia Manufacturing & Distribution Leased Ambato, Ecuador Manufacturing Leased Coevorden, Netherlands Manufacturing Owned Leon, Mexico Manufacturing Leased Melle, Germany Manufacturing Owned Phnom Penh, Cambodia Manufacturing Leased Melle, Germany Distribution Leased

		Fiscal Year
	2014			2013
Net sales to external customers	$	600		$	622
Segment profit	$	82		$	91
Segment profit as a % of net sales		13.7	%		14.6	%
Segment Adjusted EBITDA	$	113		$	120
Assets as of September 30	$	890		$	949

Home & Garden (H&G)

~~Global~~Location ~~Pet~~Function ~~Supply~~/ ~~net~~Use ~~sales~~Owned to/ ~~external~~Leased ~~customers~~U.S. ~~are~~Locations ~~discussed~~St. inLouis, ~~the~~Missouri ~~“Product~~Manufacturing ~~line~~Leased ~~net~~Edwardsville, ~~sales~~Illinois byDistribution ~~segment” discussion above.~~ Leased

~~Segment~~Global ~~profit~~Auto ~~decreased~~Care $9 million to $82 million in Fiscal 2014 compared to $91 million in Fiscal 2013 and segment profitability as a percentage of net sales in Fiscal 2014 decreased to 13.7%, compared to 14.6% in Fiscal 2013. The decrease in segment profit and profitability as a percentage of net sales were primarily driven by decreased sales and unfavorable product mix in Fiscal 2014 as compared to Fiscal 2013, which was partially offset by cost improvements in manufacturing and sourcing.(GAC)

~~Segment~~Location ~~Adjusted~~Function ~~EBITDA~~/ inUse ~~Fiscal~~Owned ~~2014~~/ ~~decreased~~Leased $7U.S. ~~million~~Locations toGarland, ~~$113~~Texas ~~million~~Manufacturing ~~from~~& ~~$120~~Distribution ~~million~~Leased inMentor, ~~Fiscal~~Ohio ~~2013.~~Manufacturing ~~The~~& ~~decrease~~Distribution inLeased ~~Adjusted~~Painesville, ~~EBITDA~~Ohio ~~was~~Manufacturing ~~driven~~& byDistribution ~~the~~Owned ~~factors~~Non-U.S. ~~discussed~~Locations ~~above~~Ebbw ~~for~~Vale, ~~segment~~Gwent, ~~profit.~~ Wales Manufacturing & Distribution Leased

Segment assets at September 30, 2014 decreased to $890 million from $949 million at September 30, 2013. The decrease in segment assets was primarily driven by a $13 million transfer of cash and cash equivalents from our Global Pet Supplies segment to Corporate, coupled with a $32 million decrease in goodwill and intangible assets. Goodwill and intangible assets, which are substantially the result of the revaluation impacts of fresh-start reporting during Fiscal 2009 and acquisitions, decreased to $669 million at September 30, 2014 from $701 million at September 30, 2013 due to amortization of intangible assets coupled with negative foreign exchange impacts.

Home and Garden Business

		Fiscal Year
	2014			2013
Net sales to external customers	$	432		$	390
Segment profit	$	89		$	78
Segment profit as a % of net sales		20.6	%		20.1	%
Segment Adjusted EBITDA	$	102		$	90
Assets as of September 30	$	527		$	501

Home and Garden net sales to external customers are discussed in the “Product line net sales by segment” discussion above.

Segment profitability in Fiscal 2014 increased $11 million to $89 million from $78 million in Fiscal 2013, driven by increased sales in Fiscal 2014 and the acquisition of Liquid Fence. Segment profitability as a percentage of net sales in Fiscal 2014 increased to 20.6% from 20.1% in Fiscal 2013.

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~~Segment~~We ~~Adjusted~~also ~~EBITDA~~own, ~~increased~~operate ~~$12~~or ~~million~~contract with third parties to ~~$102~~operate ~~million~~distribution incenters, ~~Fiscal~~sales ~~2014~~and ~~compared~~other toadministrative ~~segment~~offices ~~Adjusted~~throughout ~~EBITDA~~the world in support of ~~$90~~our ~~million~~business. inWe ~~Fiscal~~believe ~~2013~~that ~~driven~~our byexisting facilities are suitable and adequate for our present purposes and that the ~~increase~~productive capacity in ~~net~~such ~~sales~~facilities ~~coupled~~is ~~with~~substantially ~~cost~~being ~~and~~utilized ~~operating~~or ~~expense~~we ~~improvements~~have plans to utilize it.

~~Segment~~ITEM ~~assets at September 30, 2014 increased to $527 million from $501 million at September 30, 2013~~3.LEGAL The increased in segment assets was primarily driven by a $23 million increase in goodwill and intangible assets due to the acquisition of Liquid Fence. Goodwill and intangible assets, which are substantially a result of the revaluation impacts of fresh-start reporting during Fiscal 2009 and acquisitions, increased to $449 million at September 30, 2014, from $426 million at September 30, 2013.PROCEEDINGS

~~See Note 15, “Acquisitions” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information regarding the Liquid Fence acquisition.~~Litigation

~~Corporate~~We ~~Expense. Our~~are ~~corporate~~a ~~expense~~defendant ~~was $73 million~~ in ~~Fiscal~~various ~~2014~~matters ~~compared to $60 million in Fiscal 2013. The increase in corporate expense is primarily attributable to an increase~~ of $5litigation ~~million~~generally ~~related~~arising toout ~~corporate support~~ of the ~~HHI~~ordinary ~~business~~course ~~and other initiatives coupled with an increase in stock based compensation~~ of ~~$2 million and onboarding costs for a key executive~~business. ~~Corporate expense as a percentage of consolidated net sales for Fiscal 2014 increased slightly to 1.6% versus 1.5% for Fiscal 2013 due to the factors discussed above.~~

~~Acquisition~~We ~~and~~do ~~Integration Related Charges. Acquisition and integration related charges include, but are~~ not ~~limited~~believe ~~to,~~that ~~transaction~~any ~~costs~~matters ~~such~~or asproceedings ~~banking,~~presently ~~legal~~pending ~~and~~will ~~accounting~~have ~~professional~~a ~~fees~~material ~~directly~~adverse ~~related~~effect toon ~~acquisitions, termination and related costs for transitional and certain other employees, integration related professional fees and other post business combination related expenses associated with~~ our ~~acquisitions.~~results ~~See~~of ~~Note 2~~operations, ~~“Significant~~financial ~~Accounting Policies—Acquisition and Integration Related Charges~~condition,” ofliquidity ~~Notes~~or tocash ~~Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information regarding our Acquisition and integration related charges~~flows.

Restructuring and Related Charges. See Note 14, “Restructuring and Related Charges,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding our Restructuring and related charges.Environmental

~~Interest~~We ~~Expense. Interest~~have ~~expense~~provided infor ~~Fiscal~~the ~~2014~~estimated ~~was $202 million compared to $370 million in Fiscal 2013. The decrease in interest expense in Fiscal 2014 of $174 million is primarily due to a non-recurrence of $122 million of~~ costs ~~related~~associated ~~to extinguishment of our 9.5% Notes in Fiscal 2013 coupled~~ with ~~ongoing~~environmental ~~interest~~remediation ~~cost~~activities ~~savings~~at ofsome ~~$56 million from the refinancing~~ of ~~those~~our ~~notes. The~~current ~~decrease in interest expense is also due to a non-recurrence of $29 million in costs~~ and ~~expenses~~former ~~related~~manufacturing ~~to the acquisition financing for the HHI Business in Fiscal 2013~~sites. ~~These~~ ~~savings~~We ~~were~~believe ~~partially~~that ~~offset~~any byadditional ~~$11~~liability ~~million~~that inmay ~~costs~~result ~~related~~from to the ~~refinancing~~resolution of ~~our~~these ~~Term~~matters ~~Loan~~ in ~~Fiscal~~excess ~~2014, consisting~~ of the ~~write~~amounts ~~off~~provided of ~~unamortized~~approximately ~~deferred~~$4.4 ~~financing~~million ~~fees~~will ~~and~~not ~~original~~have ~~issue discount, and the inclusion of~~ a ~~full~~material ~~year~~adverse ofeffect ~~interest~~on ~~related~~our tofinancial ~~the HHI Business financing in Fiscal 2014 versus a partial period in Fiscal 2013. See Note 6~~condition, ~~“Debt,”~~results of ~~Notes~~operations toor ~~Consolidated~~cash ~~Financial Statements included in this Annual Report on Form 10-K~~flows.

~~Income~~We ~~Taxes.~~are In Fiscal 2014, we recorded income tax expense of $59 million on pretax income from continuing operations of $276 million, and in Fiscal 2013, we recorded income tax expense of $27 million on a pretax loss from continuing operations of $20 million. Our effective tax rate on income from continuing operations was approximately 21% for Fiscal 2014. Our effective tax rate on our loss from continuing operations was approximately (136)% for Fiscal 2013. During Fiscal 2014, our effective tax rate differs from the U.S. federal statutory rate of 35% principally due to income earned outside the U.S. that is subject to ~~statutory~~various ~~rates lower than 35%. During Fiscal 2013~~federal, ~~our~~state ~~effective~~and ~~tax~~local ~~rate~~environmental ~~differed~~laws ~~from~~and ~~the U~~regulations.S. ~~federal~~We ~~statutory~~believe ~~rate~~we ofare ~~35% principally due to: (i) losses~~ in ~~the~~substantial ~~U.S.~~compliance ~~and~~with ~~certain~~all ~~foreign~~such ~~jurisdictions~~environmental ~~for~~laws ~~which~~that noare ~~tax~~applicable ~~benefit can be recognized due~~ to ~~full valuation allowances that have been provided on~~ our ~~net~~operations. ~~operating~~See ~~loss~~also ~~carryforward tax benefits and other deferred tax assets; (ii) deferred income tax expense related to~~ the ~~change~~discussion incaptioned ~~book~~“Governmental ~~versus~~Regulations ~~tax basis of indefinite lived intangibles, which are amortized for tax purposes but not for book purposes~~ and ~~(iii)~~Environmental ~~the~~Matters” ~~reversal~~under ofItem 1 Uabove.S. valuation allowances of $50 million on deferred tax assets as a result of the acquisition of the HHI Business. Additionally, in Fiscal 2013, the consolidated pretax income was close to break even, resulting in a higher effective tax rate as this rate is calculated by dividing tax expense into pretax income (loss) from continuing operations.

AsITEM ~~of September 30, 2014, we have provided residual taxes on approximately $3 million of earnings not yet taxed in the U~~4.S.MINE ~~Due~~SAFETY to the valuation allowance recorded against U.S. net deferred tax assets, including net operating loss carryforwards (“NOLs”), we do not recognize any incremental U.S. tax expense on the expected future repatriation of foreign earnings. Should the U.S. valuation allowance be released at some future date, the U.S. tax on future foreign earnings not considered to be permanently reinvested might have a material effect on our effective tax rate. As of September 30, 2014, we project approximately $2 million of additional tax expense from non-U.S. withholding and other taxes expected to be incurred on repatriation of foreign earnings. DISCLOSURES

AsNot of September 30, 2014, we have U.S. federal NOLs of approximately $1,084 million, with a federal tax benefit of $380 million and future tax benefits related to state NOLs of $70 million. We also have foreign NOLs of approximately $106 million. During Fiscal 2014, we used approximately $302 million of U.S. NOLs, including $179 million from one-time internal restructuring and external debt refinancing activities.applicable

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~~The~~PART realization of our deferred tax assets depends on our ability to generate sufficient taxable income of the appropriate character in future periods and in the appropriate taxing jurisdictions. We establish valuation allowances for deferred tax assets when we estimate it is more likely than not that the tax assets will not be realized. 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. Accounting Standards Codification (“ASC”) Topic 740: “Income Taxes” (“ASC 740”) requires the establishment of a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In accordance with ASC 740, we periodically assess the likelihood that our deferred tax assets will be realized and determine if adjustments to the valuation allowance are required.II

~~Our~~ITEM ~~total~~5. ~~valuation~~MARKET ~~allowance~~FOR ~~for~~THE ~~the~~REGISTRANTS’ ~~tax~~COMMON ~~benefit of deferred tax assets that may not be realized is approximately $327 million at September 30~~EQUITY, ~~2014.~~RELATED OfSTOCKHOLDER ~~this~~MATTERS ~~amount,~~AND ~~approximately~~ISSUER ~~$293~~PURCHASES ~~million~~OF ~~relates~~EQUITY ~~to U.S. net deferred tax assets and approximately $34 million relates to foreign net deferred tax assets.~~ SECURITIES

~~For~~SBH’s ~~Fiscal~~common ~~2014,~~stock wetrades ~~generated~~on ~~domestic~~the ~~pretax~~New ~~profits~~York ofStock ~~$83~~Exchange ~~million.~~(the ~~Should~~“NYSE”) weunder ~~continue~~the tosymbol ~~generate~~“SPB”. ~~domestic~~As ~~pretax~~of ~~profits~~November 17, ~~in subsequent periods~~2016, there iswere aapproximately ~~reasonable~~5 ~~possibility~~holders ~~that~~of ~~some~~record orbased ~~most~~upon ofdata ~~the~~provided ~~domestic~~by ~~valuation~~the ~~allowance~~transfer ofagent ~~$293~~for ~~million~~the ~~could~~SBH’s becommon ~~released~~stock. atWe ~~some~~believe ~~future~~the ~~date,~~number ~~which~~of ~~could~~beneficial ~~result~~holders inof aSBH’s ~~material~~common ~~tax~~stock ~~benefit.~~is Wesignificantly ~~estimate~~in ~~that~~excess ~~$122 million~~ of ~~valuation~~this ~~allowance~~amount. The ~~related~~following totable ~~domestic~~sets ~~deferred~~forth ~~tax~~the ~~assets~~reported ~~cannot~~high beand ~~released~~low ~~regardless~~bid ofprices ~~the~~per ~~amount~~share of ~~domestic~~SBH ~~income~~common ~~generated~~stock ~~due~~as toreported ~~prior~~on ~~period~~the ~~ownership~~NYSE ~~changes~~Composite ~~that~~Transaction ~~limit~~Tape, for the ~~amount~~fiscal ofperiod ~~NOLs we can use.~~ indicated:

ASC 740, which clarifies the accounting for uncertainty in tax positions, requires that we recognize the impact of a tax position if that position is more likely than not to be sustained on audit based on the technical merits of the position. As of September 30, 2014 and September 30, 2013, the total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate in future periods was $12 million and $14 million, respectively.



	High		Low
Year Ended September 30, 2016
Quarter ended September 30, 2016	$	138.95	$	114.63
Quarter ended July 3, 2016	$	122.52	$	106.91
Quarter ended April 3, 2016	$	110.39	$	87.65
Quarter ended January 3, 2016	$	103.57	$	89.88
Year Ended September 30, 2015
Quarter ended September 30, 2015	$	106.55	$	88.28
Quarter ended June 28, 2015	$	105.07	$	86.02
Quarter ended March 29, 2015	$	98.83	$	89.14
Quarter ended December 28, 2014	$	98.36	$	81.03

~~See~~SB/RH ~~Note~~is 9a wholly-owned subsidiary of SBH and accordingly, ~~“Income~~there ~~Taxes~~is no established public trading market for its equity securities. As of November 17,” 2016, there is only one record holder of ~~Notes~~its equity securities. During the years ended September 30, 2016 and 2015, SB/RH paid cash dividends of $97.2 million and $72.1 million, respectively, to ~~Consolidated~~SBH. ~~Financial~~Certain ~~Statements~~restrictive ~~included~~covenants inwithin ~~this~~the ~~Annual~~Company’s ~~Report~~debt facilities impose limitations on ~~Form~~payment ~~10-K~~of ~~for~~dividends ~~additional~~by ~~information~~SB/RH’s ~~regarding~~subsidiaries ~~income~~to ~~taxes~~SB/RH and to SBH.

~~Fiscal~~Purchases ~~Year~~of ~~Ended~~Equity ~~September 30,~~Securities ~~2013~~by ~~Compared~~the toIssuer ~~Fiscal~~and ~~Year~~Affiliated ~~Ended September 30, 2012~~ Purchasers

~~Highlights~~On July 28, 2015, the Board of ~~Consolidated~~Directors ~~Operating~~of ~~Results~~SBH approved a $300 million common stock repurchase program. The authorization is effective for 36 months. The following table reflects all shares repurchased, inclusive of shares purchased under the program:

Net Sales. Net sales for Fiscal 2013 increased $834 million to $4,086 million from $3,252 million in Fiscal 2012, a 26% increase. The following table details the principal components of the change in net sales from Fiscal 2012 to Fiscal 2013 (in millions):


	Total Number	Average		Total Number	Approximate Dollar Value
	of Shares	Price Paid		of Shares Purchased	of Shares that may
	Purchased	Per Share		as Part of Plan	Yet Be Purchased
As of September 30, 2015	130,000	$	98.18	130,000	$	287,236,600
Quarter ended January 3, 2016	428,700		93.88	428,700		246,989,425
Quarter ended April 3, 2016	—		—	—		246,989,425
Quarter ended July 3, 2016	—		—	—		246,989,425
Quarter ended September 30, 2016	21,387		132.33	21,387		244,159,304
As of September 30, 2016	580,087	$	96.26	580,087	$	244,159,304

	Net Sales
Fiscal 2012 Net Sales	$	3,252
Addition of hardware and home improvement products		870
Increase in pet supplies		12
Increase in electric personal care products		5
Increase in home and garden products		3
Decrease in electric shaving and grooming products		(1)
Decrease in consumer batteries		(9)
Decrease in small appliances		(27)
Foreign currency impact, net		(19)
Fiscal 2013 Net Sales	$	4,086

Table of Contents

~~Consolidated~~ Stock ~~net~~Performance ~~sales by product line for Fiscal 2013 and Fiscal 2012 are as follows (in millions):~~Graph

	Fiscal Year
	2013		2012
Product line net sales by segment
Global batteries and appliances
Consumer batteries	$	932	$	949
Small appliances		740		772
Electric shaving and grooming products		277		279
Electric personal care products		255		250
Total Global batteries and appliances	$	2,204	$	2,250
Hardware and home improvement products		870		—
Global pet supplies		622		615
Home and garden		390		387
Total net sales to external customers	$	4,086	$	3,252

The following graph compares the cumulative total stockholder return on our Common Stock to the cumulative total return of (i) the Russell 1000 Financial Index, (ii) Russell 2000 Financial Index and (iii) our peer group selected in good faith, which is composed of the following companies (alphabetical order): Central Garden and Pet Company, Church & Dwight Co., Inc., The Clorox Company, Edgewell Personal Care Company, Energizer Holdings, Inc., Fortune Brands Home & Security, Inc., Hanesbrands, Inc., Hasbro, Inc., Helen of Troy Limited, Mattel, Inc., Newell Brands, Inc., Nu Skin Enterprises, Inc., The Scotts Miracle-Gro Company, Stanley Black & Decker, Inc., and Tupperware Brands Corporation. For 2016, the peer group has been revised to delete Jarden Corporation because it was acquired by Newell Brands Inc. during 2016 and is no longer a public company. In connection with this transaction, Newell Brands Inc. succeeded to the business of Newell Rubbermaid Inc., and therefore Newell Brands Inc. has replaced Newell Rubbermaid Inc. in the peer group. Additionally, for 2016, the peer group has been revised to add Helen of Troy Limited because of its personal care products industry focus, comparable annual revenues and market capitalization to the Company. In addition for 2016, in accordance with Regulation S-K Item 201(e)(4), the graph now displays a comparison to the Russell 1000 index in addition to the Russell 2000, because during the index’s annual 2016 reconstitution process the Company was moved into the Russell 1000 from the Russell 2000.

~~Global~~The ~~consumer~~comparison ~~battery~~below ~~sales~~assumes ~~decreased~~that $17100 ~~million,~~was orinvested ~~2%,~~in ~~during~~(i) ~~Fiscal~~the ~~2013~~common ~~compared~~stock toof ~~Fiscal~~SBH ~~2012~~from September 30, 2011 until September 30, 2016. ~~Excluding~~The ~~the~~comparison ~~impact~~is ofbased ~~negative~~upon ~~foreign~~the ~~exchange~~closing price of $8the ~~million~~common stock, ~~global~~as ~~consumer~~applicable, ~~battery~~and ~~sales~~assumes ~~decreased~~the $9reinvestment ~~million.~~of ~~The~~all ~~constant~~dividends, ~~currency~~if ~~decrease~~any. inThe ~~global~~returns ~~consumer~~of ~~battery~~each ~~sales~~of ~~was~~the ~~primarily~~companies ~~attributable~~in toour ~~the~~peer ~~non-recurrence~~group ofare ~~promotions,~~weighted ~~timing~~according ofto ~~holiday~~the ~~shipments~~respective ~~and~~company’s ~~inventory~~stock ~~management~~market capitalization at ~~key~~the ~~customers,~~beginning ~~tempered~~of byeach ~~new~~period ~~customer~~for ~~listings~~which ~~and~~a ~~expansion~~return ~~into~~is ~~new channels~~indicated.

Small appliance sales decreased $32 million, or 4%, during Fiscal 2013 versus Fiscal 2012, primarily attributable to declines in North American sales of $45 million and negative foreign exchange impacts of $4 million, partially offset by a $17 million increase in European small appliance sales. The North American sales declines resulted from the planned exit of certain low margin products. Strong small appliances sales in Europe were driven by market share gains in the United Kingdom, regional expansion in both Eastern and Western Europe and successful new product introductions.

Electric shaving and grooming product sales decreased $2 million, or 1%, during Fiscal 2013 compared to Fiscal 2012, attributable to an $11 million decline in North American sales and $1 million of negative foreign currency impacts, partially offset by an increase of $10 million in European sales and a slight increase in Latin American sales. North American sales declined as a result of labor disruptions at U.S. ports of entry during the peak holiday period in Fiscal 2013, coupled with decreased retail space available for the product category at a major retailer and customer inventory management. European sales gains were driven by successful new product launches and promotions, market growth, increased distribution and customer gains. The gain in Latin American sales was driven by expansion in Brazil due to successful new product launches and distribution gains, tempered by lower sales to customers who export to Venezuela and import restrictions in Argentina.

Electric personal care sales increased $5 million, or 2%, in Fiscal 2013 versus Fiscal 2012, resulting from a sales increase of $8 million in Europe, driven by new innovative products, coupled with additional distribution channels and customer gains. The gains were tempered by a $3 million decline in Latin American sales, resulting from decreased promotions and lower sales to customers who export to Venezuela, partially offset by distribution gains in Brazil and Central America.

Hardware and home improvement sales were $870 million for Fiscal 2013, reflecting the results of the HHI Business subsequent to the acquisition on December 17, 2012. Proforma net sales for Fiscal 2013 and Fiscal 2012 as if the acquisition had occurred at the beginning of both periods were $1,062 million and $974 million, respectively. The Fiscal 2013 sales growth was driven by double-digit improvements in the HHI Business' U.S. residential security and plumbing categories due to the housing market recovery. The results of TLM Taiwan are included in the results of hardware and home improvement sales subsequent to its acquisition on April 8, 2013.

Global pet supplies sales increased $7 million, or 1%, during Fiscal 2013 versus Fiscal 2012, driven by increased companion animal sales of $16 million, tempered by a $4 million decline in aquatics sales and $5 million of negative foreign currency impacts. Gains in companion animal sales resulted from strong growth in the Dingo and FURminator brands, expansion in Europe, new product launches and the inclusion of FURminator sales during all of Fiscal 2013 as the acquisition was completed on December 22, 2011. The decline in aquatic sales was primarily due to a decline in tropical food and outdoor pond product sales in Europe as a result of a later arrival of the spring season due to cooler temperatures.

Table of Contents

~~Home~~ ITEM and garden product sales increased $3 million, or 1%, in Fiscal 2013 versus Fiscal 2012, driven by a $4 million increase in lawn and garden control sales resulting from an extension to the season due to favorable fall weather, combined with reduced returns and more efficient trade spending6.SELECTED ~~The~~FINANCIAL negative impact on household insect control sales due to a late spring season was offset by increased year over year fourth quarter sales driven by the extension of the season due to favorable fall weather and gains in the first quarter of Fiscal 2013 from new retail distribution. Also contributing to the sales gains was the inclusion of Black Flag sales during all of Fiscal 2013, as the acquisition was completed on October 31, 2011, and retail replenishment following strong retail sales in the fourth quarter of Fiscal 2012.DATA

~~Gross~~Spectrum ~~Profit.~~Brands ~~Gross profit for Fiscal 2013 was $1~~Holdings,~~390~~ ~~million versus $1,116 million for Fiscal 2012~~Inc. The increase in gross profit was driven by the acquisition of the HHI Business which contributed $273 million in Gross profit in Fiscal 2013. Our gross profit margin for Fiscal 2013 decreased slightly to 34.0% from 34.3% in Fiscal 2012. The slight decline in gross profit margin was driven by a $31 million increase to cost of goods sold due to the sale of inventory which was revalued in connection with the acquisition of the HHI Business, which offset improvements to gross profit resulting from the exit of low margin products in our small appliances category.

~~Operating Expenses. Operating expenses for Fiscal 2013 totaled $1,037 million compared to $810 million for Fiscal 2012.~~ The ~~$227~~following ~~million~~selected ~~increase~~historical infinancial ~~operating~~data ~~expenses~~is ~~during~~derived ~~Fiscal~~from ~~2013~~SBH’s isaudited ~~primarily~~consolidated ~~attributable~~financial tostatements ~~the~~as ~~acquisition~~ of ~~the~~and ~~HHI Business which accounted~~ for ~~$190~~the ~~million~~years inended ~~operating~~September ~~expenses~~30. ~~and~~The ~~led~~summary tohas abeen ~~$17~~derived ~~million increase~~ in ~~Acquisition~~part ~~and integration related charges. Furthermore~~from, weand ~~incurred~~should abe ~~$14~~read ~~million increase~~ in ~~Restructuring~~conjunction ~~and~~with, ~~related~~the ~~charges~~Consolidated ~~primarily~~Financial ~~related~~Statements toof the ~~Global~~Company ~~Expense~~included ~~Rationalization~~elsewhere ~~initiatives announced~~ in ~~Fiscal~~this ~~2013~~Annual ~~and an $18 million increase in stock compensation expense~~Report. ~~These increases were tempered by $8 million in savings across all segments from our cost reduction initiatives and positive foreign exchange impacts of $4 million.~~



(in millions, except per share data)	2016(1)		2015(2)		2014(3)		2013(4)		2012(5)
Statement of Operations Data
Net sales	$	5,039.7	$	4,690.4	$	4,429.1	$	4,085.6	$	3,252.4
Gross profit		1,919.9		1,670.3		1,568.9		1,390.3		1,115.7
Operating income		656.2		474.1		481.9		351.2		301.7
Interest expense		250.0		271.9		202.1		375.6		191.9
Income (loss) from operations before income taxes		397.6		193.3		273.5		(27.9)		109.0
Income tax expense		40.0		43.9		59.0		27.4		60.4
Net income (loss)		357.6		149.4		214.5		(55.3)		48.6
Net income (loss) attributable to controlling interest		357.1		148.9		214.1		(55.2)		48.6
Restructuring and Related Charges
Cost of goods sold	$	0.5	$	2.1	$	3.7	$	10.0	$	9.8
Operating expenses		14.7		26.6		19.2		24.0		9.7
Earnings (Loss) Per Share of Common Stock
Basic	$	6.02	$	2.68	$	4.07	$	(1.06)	$	0.94
Diluted		5.99		2.66		4.02		(1.06)		0.91
Dividends per share		1.47		1.27		1.15		0.75		1.00
Weighted Average Shares Outstanding
Basic		59.3		55.6		52.6		52.0		51.6
Diluted		59.6		55.9		53.3		52.0		53.3
Cash Flow and Related Data
Net cash provided by operating activities	$	615.0	$	444.3	$	432.7	$	256.5	$	258.8
Purchase of property, plant and equipment		95.2		89.1		73.3		82.0		46.8
Depreciation and amortization		183.0		170.0		157.6		139.9		104.6
Statement of Financial Position Data (at September 30)
Cash and cash equivalents	$	275.3	$	247.9	$	194.6	$	207.3	$	158.0
Working capital (6)(7)		537.3		660.6		485.0		497.5		422.7
Total assets (7)(8)		7,069.1		7,193.8		5,429.6		5,543.2		3,695.9
Total debt (8)		3,620.2		3,905.9		2,939.7		3,153.6		1,630.0
Total equity		1,844.0		1,606.8		1,086.8		940.1		989.1

~~See~~(1) ~~Note~~For 14the year ended September 30, ~~“Restructuring~~2016, interest expense includes $15.6 million of tender premium and ~~Related~~a ~~Charges,”~~non-cash expense of ~~Notes~~$5.8 tomillion ~~Consolidated~~as ~~Financial~~a ~~Statements~~result ~~included~~of the write-off of unamortized debt issuance costs in ~~this~~connection ~~Annual~~with ~~Report~~the onredemption ~~Form~~of 10the 6.375% Notes. Income tax expense includes a non-Kcash ~~for~~benefit ~~additional~~of ~~information~~$111.1 ~~regarding~~million ~~our~~from ~~Restructuring~~a ~~and~~decrease ~~related~~in ~~charges~~the valuation allowance against net deferred tax asset.

~~Segment~~(2) ~~Results.~~For Asthe ~~discussed~~year ~~above~~ended September 30, we2015, ~~manage~~the ~~our~~operating ~~business~~results ininclude ~~four~~the ~~reportable~~Armored ~~segments:~~AutoGroup ~~(i) Global~~operations ~~Batteries &~~since ~~Appliances~~the acquisition date of May 21, 2015; ~~(ii) Global~~Salix ~~Pet~~operations ~~Supplies~~since the acquisition date of January 16, 2015; ~~(iii) Home~~ European IAMS and ~~Garden~~Eukanuba ~~Business~~operations since the acquisition date of December 31, 2014; and ~~(iv)~~Tell ~~Hardware~~operations &since ~~Home~~the ~~Improvement~~acquisition date of October 1, 2014. Interest expense of $58.8 million was incurred related to the financing of the acquisition of AAG and the refinancing of the then-existing senior credit facility and asset based revolving loan facility. Income tax expense includes a non-cash benefit of $20.2 million from a decrease in the valuation allowance against net deferred tax assets, and a $22.8 million benefit due to the reversal of valuation allowance in conjunction with the acquisition of the AAG business.

~~The~~(3) ~~operating~~For ~~segment~~the ~~profits~~year doended ~~not~~September ~~include~~30, ~~restructuring~~2014, ~~and~~the ~~related~~operating ~~charges,~~results ~~acquisition~~include ~~and~~the ~~integration~~Liquid ~~related~~Fence ~~charges,~~operations ~~interest~~since ~~expense,~~the ~~interest~~acquisition ~~income~~date ~~and~~of ~~income~~January ~~tax~~2, ~~expense~~2014. ~~Corporate~~ ~~expenses~~Interest ~~primarily~~expense ~~include~~includes ~~general~~a ~~and~~non-cash ~~administrative~~charge ~~expenses~~of ~~and~~$9.2 ~~global~~million ~~long-term~~as ~~incentive~~a ~~compensation~~result ~~plans~~of ~~which~~the ~~are~~write-off ~~evaluated~~of onunamortized adebt ~~consolidated~~issuance ~~basis~~costs and ~~not~~unamortized ~~allocated~~discounts toin ~~our~~connection ~~operating~~with ~~segments.~~the ~~All~~amendment ~~depreciation~~of ~~and~~the ~~amortization~~Company's ~~included~~then inexisting ~~income~~term ~~from~~loans. ~~operations~~Income istax ~~related~~expense toincludes ~~operating~~a ~~segments~~non-cash orbenefit ~~corporate~~of ~~expense~~approximately $115.6 ~~Costs~~million ~~are~~from ~~allocated~~a todecrease ~~operating~~in ~~segments~~the orvaluation ~~corporate~~allowance ~~expense~~against ~~according~~net todeferred ~~the~~tax ~~function of each cost center~~assets.

~~Financial~~(4) ~~information~~For ~~pertaining~~the toyear ~~our~~ended ~~reportable~~September ~~segments~~30, is2013, ~~contained~~the inoperating ~~Note~~results 11include the HHI Business operations since the acquisition date of December 17, ~~“Segment~~2012, ~~Information~~and the TLM Taiwan operations since the acquisition date of April 8,” 2013. Interest expense includes $105.6 million fees and expenses along with a $10.9 million non-cash charge for the write-off of unamortized debt issuance cost and unamortized premiums in connection with the extinguishment and replacement of the Company's 9.5% Notes and then-existing term loan in conjunction with the acquisition of the HHI Business. Income taxes includes a non-cash charge of approximately $64.4 million from an increase in the valuation allowance against net deferred tax assets, net of a $49.8 million benefit due to ~~Consolidated~~the ~~Financial~~reversal ~~Statements~~of ~~included~~a portion of the valuation allowance in ~~this~~conjunction ~~Annual~~with ~~Report~~the onacquisition ~~Form~~of ~~10-K~~the HHI Business.

~~Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization~~ (~~“Adjusted EBITDA”~~5) isFor athe ~~metric~~year ~~used~~ended bySeptember ~~management~~30, ~~and~~2012, ~~frequently used by~~ the ~~financial~~operating ~~community~~results ~~which~~include ~~provides~~the ~~insight~~FURminator ~~into~~operations ansince ~~organization’s~~the ~~operating~~acquisition ~~trends~~date ~~and~~of ~~facilitates~~December ~~comparisons between peer companies~~22, ~~since interest~~2011, ~~taxes, depreciation~~ and ~~amortization~~the ~~can~~Black ~~differ~~Flag ~~greatly~~operations ~~between~~since ~~organizations~~the asacquisition adate ~~result~~ of ~~differing~~October ~~capital~~31, ~~structures and tax strategies~~2011. ~~Adjusted~~Interest ~~EBITDA~~expense ~~can~~includes ~~also be~~ a ~~useful~~non-cash ~~measure~~charge of ~~a company’s ability to service debt and is one of the measures used for determining our debt covenant compliance~~$2.1 ~~Adjusted~~million ~~EBITDA~~related ~~excludes certain items that are unusual in nature or not comparable from period~~ to period. While we believe that Adjusted EBITDA is useful supplemental information, such adjusted results are not intended to replace our Generally Accepted Accounting Principles’ (“GAAP”) financial results and should be read in conjunction with those GAAP results. 40

Table of Contents

~~Below~~the ~~are~~write-off ~~reconciliations~~ of ~~GAAP~~unamortized ~~Net~~debt ~~income~~issuance ~~(loss),~~costs asand ~~adjusted,~~unamortized topremiums ~~Adjusted~~in ~~Earnings~~connection ~~Before~~with ~~Interest~~the extinguishment and ~~Taxes~~refinancing ~~(“Adjusted~~of ~~EBIT”)~~the ~~and~~Company’s 12% Notes. Income tax expense includes a non-cash charge of approximately $13.9 million from an increase in the valuation allowance against net deferred tax assets, net of a $14.5 million benefit due to ~~Adjusted~~the ~~EBITDA~~reversal ~~for~~of ~~each~~a ~~segment~~portion ~~and~~of ~~for~~the ~~Consolidated~~valuation ~~Spectrum~~allowance ~~Brands~~in ~~for~~conjunction ~~Fiscal~~with ~~2013~~the ~~and~~acquisition ~~Fiscal~~of ~~2012:~~ FURminator.

	Global						Hardware &		Corporate /		Consolidated
	Batteries &		Global Pet		Home and		Home		Unallocated		Spectrum
Fiscal 2013	Appliances		Supplies		Garden		Improvement		Items(a)		Brands
	(in millions)
Net income (loss), as adjusted (a)	$	214	$	77	$	78	$	75	$	(491)	$	(47)
Pre-acquisition earnings of HHI(b)		—		—		—		30		—		30
Income tax expense		—		—		—		—		27		27
Interest expense		—		—		—		—		370		370
Acquisition and integration related charges		6		2		—		7		33		48
Restructuring and related charges		15		11		1		6		1		34
HHI Business inventory fair value adjustment		—		—		—		31		—		31
Venezuela devaluation		2		—		—		—		—		2
Adjusted EBIT	$	237	$	90	$	79	$	149	$	(60)	$	495
Depreciation and amortization (c)		67		30		11		32		43		183
Adjusted EBITDA	$	304	$	120	$	90	$	181	$	(17)	$	678

⁽⁶⁾

Working capital is defined as current assets less current liabilities per the consolidated statements of financial position.

	Global						Hardware &		Corporate /		Consolidated
	Batteries &		Global Pet		Home and		Home		Unallocated		Spectrum
Fiscal 2012	Appliances		Supplies		Garden		Improvement		Items(a)		Brands
	(in millions)
Net income (loss), as adjusted (a)	$	221	$	70	$	71	$	—	$	(313)	$	49
Pre-acquisition earnings of HHI(b)		—		—		—		183		—		183
Income tax expense		—		—		—		—		60		60
Interest expense		—		—		—		—		192		192
Acquisition and integration related charges		15		5		2		—		9		31
Restructuring and related charges		7		10		1		—		1		19
Adjusted EBIT	$	243	$	85	$	74	$	183	$	(51)	$	534
Depreciation and amortization (c)		64		28		13		—		29		134
Adjusted EBITDA	$	307	$	113	$	87	$	183	$	(22)	$	668

⁽⁷⁾

During the year ended September 30, 2016, the Company retrospectively adopted ASU No. 2015-17, Income Taxes (Topic 740) – Balance Sheet Classification of Deferred Taxes, resulting in a reclassification of current deferred tax assets of $44.7 million, $36.7 million, $33.0 million and $28.1 million for the years ended September 30, 2015, 2014, 2013 and 2012, respectively; and current deferred tax liabilities of $4.6 million and $2.8 million for the years ended September 30, 2015 and 2014, respectively. The adoption of the ASU resulted in the reclassification of total current and non-current deferred tax assets of $39.1 million, $32.3 million, $18.2 million and $16.4 million for the years ended September 30, 2015, 2014, 2013, and 2012 respectively.

~~______________________________~~ (8) During the year ended September 30, 2016, the Company retrospectively adopted ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, resulting in a reclassification of debt issuance costs of $65.1 million, $51.1 million, $65.3 million and $39.3 million for the years ended September 30, 2015, 2014, 2013 and 2012, respectively.

~~(a)~~ SB/RH ~~It is the Company's policy to record Income tax expense and interest expense on a consolidated basis. Accordingly~~Holdings, ~~such amounts are not reflected in the operating results of the operating segments and are presented within Corporate / Unallocated Items.~~LLC

~~(b)~~ Omitted ~~The~~pursuant ~~Pre-acquisition~~to ~~earnings~~General ofinstruction ~~HHI~~I doof ~~not~~Form ~~include the TLM Taiwan business as stand alone financial data is not available for the periods presented~~10-K. ~~The TLM Taiwan business is not deemed material to the Company's operating results.~~

~~(c)~~ ITEM ~~Included~~7.MANAGEMENT’S ~~within~~DISCUSSION ~~depreciation~~AND ~~and~~ANALYSIS ~~amortization~~OF isFINANCIAL ~~amortization~~CONDITION ofAND ~~stock~~RESULTS ~~based~~OF ~~compensation.~~OPERATIONS

~~Global~~The ~~Batteries &~~following ~~Appliances~~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,” “Spectrum,” “we,” “our” or “us” are used to refer to SBH and its subsidiaries and SB/RH and its subsidiaries, collectively.

	Fiscal Year
	2013			2012
Net sales to external customers	$	2,204		$	2,250
Segment profit	$	238		$	244
Segment profit as a % of net sales		10.8	%		10.9	%
Segment Adjusted EBITDA	$	304		$	307
Assets as of September 30	$	2,361		$	2,243

Business Overview

Refer to Item 1 “Business” included elsewhere within this Annual Report for an overview of our business.

Acquisitions

The application of acquisition accounting as a result of business combinations can significantly affect certain assets, liabilities and expenses. During the years ended September 30, 2015 and 2014, the Company has completed a number of acquisitions as outlined below. There were no acquisitions during the year ended September 30, 2016. See Note 3, “Acquisitions” in the Notes to the Consolidated Financial Statements, included elsewhere within this Annual Report, for further additional detail regarding acquisition activity.

Armored AutoGroup - On May 21, 2015, the Company completed the acquisition of AAG, a consumer products company consisting primarily of Armor All® branded appearance products, STP® branded performance chemicals, and A/C PRO® branded do-it-yourself automotive air conditioner recharge products. The results of AAG’s operations are included in the Company’s Consolidated Statements of Income, since May 21, 2015 and reported as a separate segment, GAC.

Salix - On January 16, 2015, the Company completed the acquisition of Salix, a vertically integrated producer and distributor of natural rawhide dog chews, treats and snacks. The results of Salix’s operations are included in the Company’s Consolidated Statements of Income, and as part of the PET segment, since January 16, 2015.

European IAMS and Eukanuba - On December 31, 2014, the Company completed the acquisition of Procter & Gamble’s European IAMS and Eukanuba pet food business (“European IAMS and Eukanuba”), including its brands for dogs and cats. The results of the European IAMS and Eukanuba’s operations are included in the Company’s Consolidated Statements of Income, and as part of the PET segment, since December 31, 2014.

Tell Manufacturing - On October 1, 2014, the Company completed the acquisition of Tell Manufacturing, Inc. (“Tell”), a manufacturer and distributor of commercial doors, locks and hardware. The results of Tell’s operations are included in the Company’s Consolidated Statements of Income, and as part of the HHI segment, since October 1, 2014.

Liquid Fence - On January 2, 2014, the Company completed the acquisition of the Liquid Fence Company (“Liquid Fence”), a producer of animal repellents. The results of Liquid Fence’s operations are included in the Company’s Consolidated Statements of Income, and as part of the H&G segment, since January 2, 2014.

Table of Contents

~~Global~~Restructuring ~~Batteries and Appliances net sales to external customers are discussed in the “Product line net sales by segment” discussion above.~~Activity

~~Segment~~We ~~profit~~continually inseek ~~Fiscal 2013 decreased~~ to ~~$238~~improve ~~million~~our ~~from~~operational ~~$244~~efficiency, ~~million~~match inour ~~Fiscal~~manufacturing ~~2012,~~capacity ~~primarily~~and ~~attributable~~product costs to ~~unfavorable~~market ~~product~~demand ~~mix~~ and ~~pricing~~better ~~pressures~~utilize inour ~~the~~manufacturing Uresources.S, ~~coupled~~We ~~with~~have ~~the~~undertaken ~~decrease~~various ininitiatives ~~sales~~to ~~discussed~~reduce ~~above.~~manufacturing ~~Segment~~and ~~profitability~~operating ascosts. aThe ~~percentage~~most significant of ~~net~~these ~~sales~~initiatives ~~decreased~~are ~~slightly~~outlined ~~to 10~~below.8% inSee ~~Fiscal~~Note ~~2013 versus 10.9% in Fiscal 2012~~4, ~~driven~~“Restructuring byand ~~unfavorable~~Related ~~mix~~Charges” ~~and~~in ~~pricing~~the ~~pressures~~Notes into the ~~U.S.,~~Consolidated ~~which~~Financial ~~offset~~Statements, ~~gains~~included ~~from~~elsewhere ~~the~~within ~~exit~~this ofAnnual ~~low~~Report, ~~margin~~for ~~products~~additional indetail ~~the~~regarding ~~small~~restructuring ~~appliances~~and ~~category~~related activity.

~~Segment~~GAC ~~Adjusted~~Business ~~EBITDA~~Rationalization inInitiatives ~~Fiscal~~– ~~2013~~During ~~decreased~~the tothird ~~$304~~quarter ~~million~~of ~~from~~the ~~$307~~fiscal ~~million~~year inended ~~Fiscal~~September ~~2012.~~30, ~~The~~2016, ~~decrease~~the inCompany ~~segment~~implemented ~~Adjusted~~a ~~EBITDA~~series ~~was~~of ~~driven~~initiatives bythrough the ~~factors~~GAC ~~discussed~~segment ~~above~~to ~~for~~consolidate certain operations and reduce operating costs. These initiatives included headcount reductions and the ~~decline~~exit inof ~~segment~~certain ~~profit~~facilities. Total costs associated with these initiatives are expected to be approximately $20 million and are anticipated to be incurred through September 30, 2017, of which $5.3 million has been incurred to date.

~~Segment~~HHI ~~assets~~Business atRationalization ~~September 30,~~Initiatives ~~2013~~- ~~increased~~During tothe ~~$2,361~~fourth ~~million~~quarter ~~from~~of ~~$2,243~~the ~~million~~fiscal atyear ended September 30, ~~2012.~~2014, ~~The~~the ~~increase~~Company isimplemented ~~primarily~~a ~~due~~series toof initiatives throughout the ~~acquisition~~HHI ofbusiness ~~Shaser.~~segment ~~Goodwill~~to ~~and~~reduce ~~intangible~~operating ~~assets,~~costs ~~which~~and ~~are~~exit alow ~~direct~~margin ~~result~~business outside of the ~~revaluation~~U.S. ~~impacts~~These ofinitiatives ~~fresh-start~~included ~~reporting~~headcount ~~which~~reductions, ~~occurred~~the ~~during~~exit ~~the~~of ~~year~~certain ~~ended~~facilities ~~September~~and ~~30,~~the ~~2009~~sale ~~(“Fiscal~~of ~~2009”)~~a ~~and~~portion ~~acquisitions,~~of ~~increased~~the toglobal ~~$1,322~~HHI ~~million~~operations. atCosts ~~September 30,~~associated ~~2013~~with ~~from~~these ~~$1,261~~initiatives ~~million~~of at$16.6 ~~September~~million ~~30,~~were ~~2012,~~incurred ~~primarily~~to ~~due~~date toand ~~the~~completed ~~acquisition~~as of ~~Shaser~~September 30, 2016.

~~Hardware~~Global &Expense ~~Home~~Rationalization ~~Improvement~~Initiatives - During the third quarter of the year ended September 30, 2013, the Company implemented a series of initiatives to reduce operating costs. These initiatives consisted of headcount reductions in the GBA and PET segments and in Corporate. Costs associated with these initiatives of $47.0 million were incurred to date and completed as of September 30, 2016.

	Fiscal Year
	2013			2012
Net sales to external customers	$	870		$	-
Segment profit	$	89		$	-
Segment profit as a % of net sales		10.2	%		-	%
Segment Adjusted EBITDA	$	181		$	-
Assets as of September 30	$	1,736		$	-

Other Restructuring Activities – The Company is entering or may enter into small, less significant initiatives and restructuring activities to reduce costs and improve margins throughout the organization. Individually these activities are not substantial, and occur over a shorter time period (less than 12 months). Total costs associated with these initiatives are expected to be approximately $6 million, of which $2.9 million has been incurred to date.

~~Results~~Refinancing of the HHI Business, reported as a separate business segment, Hardware & Home Improvement relate to operations subsequent to the acquisition date, December 17, 2012. The results of TLM Taiwan are reflected in the Hardware & Home Improvement segment subsequent to its acquisition on April 8, 2013. Activity

~~Hardware~~The ~~and~~following ~~Home~~recent ~~Improvement~~financing ~~net~~activity ~~sales~~has toa ~~external~~significant ~~customers~~impact ~~are~~on ~~discussed~~the incomparability of financial results on the ~~“Product~~condensed ~~line~~consolidated ~~net~~financial ~~sales~~statements. bySee ~~segment~~Note 10, “Debt” ~~discussion~~in ~~above~~the Notes to the Consolidated Financial Statements, included elsewhere within this Annual Report, for additional detail regarding debt.

~~Segment~~During ~~profit~~the inyear ~~Fiscal~~ended ~~2013~~September ~~was~~30, ~~$89~~2016, ~~million~~we refinanced a portion of our debt to extend maturities and reduce borrowing costs. On ~~Segment~~September ~~profitability~~20, as2016, awe ~~percentage~~issued €425 million aggregate principal amount of ~~net~~4.00% ~~sales~~unsecured innotes ~~Fiscal~~due ~~2013~~2026 ~~was~~(the 10“4.200% Notes”). The ~~Segment~~proceeds ~~profitability~~from ~~was~~the ~~negatively~~4.00% ~~impacted~~Notes byand adraws ~~$31~~on ~~million~~the ~~increase~~Revolver were used to ~~cost~~repay ofour ~~goods~~outstanding ~~sold~~6.375% unsecured notes due to2020 (the ~~sale~~“6.375% ofNotes”) ~~inventory~~and ~~which~~pay ~~was~~fees ~~revalued~~and expenses in connection with the ~~acquisition~~refinancing. The Company repurchased $390.3 million aggregate principal amount of the 6.375% Notes through a cash tender offer on September 20, 2016, with the remaining outstanding aggregate principal amount of $129.7 million subsequently redeemed by the Company on October 20, 2016.

~~Including~~During ~~pre-~~the year ended September 30, 2015, we refinanced a portion of our debt to improve liquidity, extend maturities and reduce borrowing costs. On May 20, 2015, in connection with the acquisition ~~earnings~~of AAG, we issued $1,000 million aggregate principal amount of 5.75% unsecured notes due 2025 (the ~~HHI~~“5.75% ~~Business~~Notes”). On June 23, ~~segment~~2015, ~~Adjusted~~we ~~EBITDA~~entered ~~was~~into term loan facilities pursuant to a Senior Credit Agreement consisting of (i) a $~~181~~1,450 million USD Term Loan due June 23, 2022, (ii) a $75 million CAD Term Loan due June 23, 2022 and (iii) a €300 million Euro Term Loan due June 23, 2022, (collectively, “Term Loans”) and (iv) entered into a $500 million Revolver Facility due June 23, 2020 (the “Revolver”). The proceeds from the Term Loans and draws on the Revolver were used to repay our then-existing senior term credit facility, repay our outstanding 6.75% senior unsecured notes due 2020, repay and replace our then-existing asset based revolving loan (“ABL”) facility and to pay fees and expenses in ~~Fiscal~~connection ~~2013~~with the refinancing and for general corporate purposes. Additionally, on December 3, 2014, we issued $250 million aggregate principal amount of 6.12% unsecured notes due 2024 (the “6.125% Notes”). The proceeds from the 6.125% Notes were used to fund acquisition activity, pay fees and expenses in connection with the financing and general corporate purposes.

~~Segment~~During ~~assets~~the atyear ended September 30, ~~2013~~2014, ~~were~~the $1Company amended its then-existing senior term credit facility,~~736~~ ~~million~~issuing two tranches maturing September 4, 2019 which provide for borrowings in the principal amounts of $215.0 ~~Goodwill~~million and ~~intangible~~€225.0 ~~assets~~million. The proceeds from the amendment were $1used to refinance a portion of the then-existing senior term credit facility which was scheduled to mature December 17,~~192~~ 2019, in an amount outstanding of $513.3 million atprior to refinancing. The $215.0 million U.S. dollar denominated portion was combined with the then-existing Tranche C maturing September 30 4, ~~2013~~2019. These loans were refinanced during the year ended September 30, 2015 as described above.

See Note 15, “Acquisitions” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information regarding the HHI Business acquisition.

Global Pet Supplies

	Fiscal Year
	2013			2012
Net sales to external customers	$	622		$	615
Segment profit	$	91		$	86
Segment profit as a % of net sales		14.6	%		14.0	%
Segment Adjusted EBITDA	$	120		$	113
Assets as of September 30	$	949		$	956

Table of Contents

~~Global~~ Consolidated ~~Pet~~Results ~~Supply~~of ~~net sales to external customers are discussed in the “Product line net sales by segment” discussion above.~~ Operations

~~Segment~~The ~~profit~~following ~~increased~~is $5summarized ~~million~~consolidated toresults ~~$91 million in Fiscal 2013 compared to $86 million in Fiscal 2012. Segment profitability as a percentage~~ of ~~net~~operations ~~sales~~for inSBH ~~Fiscal~~for ~~2013 increased to 14.6%, compared to 14.0% in~~ the ~~same~~years ~~period~~ended ~~last~~September ~~year.~~30, ~~The increase in segment profit and profitability as a percentage of net sales was driven by cost improvements and operating expense reductions~~2016, ~~which~~2015 ~~offset increased cost of goods sold~~ and ~~unfavorable~~2014 ~~product mix in Fiscal 2013 versus Fiscal 2012.~~respectively:

Segment Adjusted EBITDA in Fiscal 2013 increased $7 million to $120 million from $113 million in Fiscal 2012. The increase in Adjusted EBITDA was driven by the factors discussed above for segment profit.


(in millions, except %)	2016		2015		Variance			2015		2014		Variance
Net sales	$	5,039.7	$	4,690.4	$	349.3	7.4%	$	4,690.4	$	4,429.1	$	261.3	5.9%
Gross Profit		1,919.9		1,670.3		249.6	14.9%		1,670.3		1,568.9		101.4	6.5%
Operating expenses		1,263.7		1,196.2		67.5	5.6%		1,196.2		1,087.0		109.2	10.0%
Interest expense		250.0		271.9		(21.9)	(8.1%)		271.9		202.1		69.8	34.5%
Income tax expense		40.0		43.9		(3.9)	(8.9%)		43.9		59.0		(15.1)	(25.6%)
Net income		357.6		149.4		208.2	139.4%		149.4		214.5		(65.1)	(30.3%)

~~Segment~~Net ~~assets~~Sales. atNet sales for the year ended September 30, ~~2013~~2016 ~~decreased~~increased ~~slightly to~~ $~~949~~349.3 million, ~~from~~or ~~$956~~7.4%, ~~million~~compared atto the year ended September 30, ~~2012~~2015. ~~Goodwill~~Organic ~~and~~net ~~intangible~~sales ~~assets~~for the year ended September 30, ~~which~~2016 ~~are~~increased ~~substantially~~$123.7 ~~the~~million, ~~result~~or of2.6%, compared to the ~~revaluation~~year ~~impacts~~ended ofSeptember ~~fresh-start~~30, ~~reporting~~2015. ~~during~~Net ~~Fiscal~~sales ~~2009~~for ~~and~~the ~~acquisitions~~year ended September 30, ~~decreased~~2015 toincreased $~~701~~261.3 million, ator 5.9%, compared to the year ended September 30, ~~2013~~2014. ~~from~~Organic net sales for the year ended September 30, 2015 increased $~~715~~91.1 million, ator 2.1%, compared to the year ended September 30, ~~2012~~2014. ~~due~~Organic tonet ~~amortization~~sales excludes the impact of ~~intangible~~foreign ~~assets~~currency translation and acquisitions, ~~tempered~~and byis ~~positive~~considered ~~foreign~~a ~~exchange~~non-GAAP ~~impacts~~measurement. See “Non-GAAP Measurements” section included elsewhere in this Annual Report for a reconciliation of Net Sales to organic net sales. The following sets forth net sales by segment for the years ended September 30, 2016, 2015 and 2014:

Home and Garden Business


(in millions, except %)	2016		2015		Variance			2015		2014		Variance
Consumer batteries	$	840.7	$	829.5	$	11.2	1.4%	$	829.5	$	957.8	$	(128.3)	(13.4%)
Small appliances		656.0		734.6		(78.6)	(10.7%)		734.6		730.8		3.8	0.5%
Personal care		513.6		528.1		(14.5)	(2.7%)		528.1		542.1		(14.0)	(2.6%)
Global Batteries & Appliances		2,010.3		2,092.2		(81.9)	(3.9%)		2,092.2		2,230.7		(138.5)	(6.2%)
Hardware & Home Improvement		1,241.0		1,205.5		35.5	2.9%		1,205.5		1,166.0		39.5	3.4%
Global Pet Supplies		825.7		758.2		67.5	8.9%		758.2		600.5		157.7	26.3%
Home & Garden		509.0		474.0		35.0	7.4%		474.0		431.9		42.1	9.7%
Global Auto Care		453.7		160.5		293.2	182.7%		160.5		—		160.5	—
Net Sales	$	5,039.7	$	4,690.4		349.3	7.4%	$	4,690.4	$	4,429.1		261.3	5.9%

	Fiscal Year
	2013			2012
Net sales to external customers	$	390		$	387
Segment profit	$	78		$	74
Segment profit as a % of net sales		20.1	%		19.0	%
Segment Adjusted EBITDA	$	90		$	87
Assets as of September 30	$	501		$	508

The following sets forth the principal components of change in net sales from the year ended September 30, 2016 to the year ended September 30, 2015, and from the year ended September 30, 2015 to the year ended September 30, 2014:

Home and Garden net sales to external customers are discussed in the “Product line net sales by segment” discussion above.


(in millions)	2016		2015
Net Sales for the years ended September 30, 2015 and 2014, respectively	$	4,690.4	$	4,429.1
Acquisition of AAG		277.3		160.5
Acquisition of European IAMS and Eukanuba		44.2		128.7
Acquisition of Salix		30.3		71.4
Acquisition of Tell		—		39.4
Increase (decrease) in consumer batteries		51.2		(42.8)
Increase in personal care		12.9		35.5
(Decrease) increase in small appliances		(43.5)		51.3
Increase in hardware & home improvement		50.2		20.7
Increase (decrease) in global pet supplies		1.2		(15.8)
Increase in home & garden		35.1		42.2
Increase in global auto care		16.6		—
Foreign currency impact, net		(126.2)		(229.8)
Net Sales for the years ended September 30, 2016 and 2015, respectively	$	5,039.7	$	4,690.4

~~Segment~~Gross ~~profitability~~Profit. inGross ~~Fiscal~~profit ~~2013~~for ~~increased~~the $4year ~~million~~ended toSeptember ~~$78~~30, ~~million~~2016 ~~from~~increased $74249.6 million incompared ~~Fiscal~~to ~~2012~~the year ended September 30, ~~driven~~2015 byprimarily attributable to the increase in ~~lawn~~net sales and ~~garden~~increase ~~control~~in ~~sales~~gross ~~and~~profit ~~strong~~margin. ~~expense~~Gross ~~management~~profit margin increased from 35.6% ~~Segment~~to ~~profitability~~38.1% ascontributed to by the AAG acquisition, and a ~~percentage~~shift oftowards ~~net~~higher margin product sales inand ~~Fiscal~~continuing ~~2013~~cost ~~improved~~improvements across segments. Gross profit for the year ended September 30, 2015 increased $101.4 million compared to 20the year ended September 30, 2014 attributable to our increase in net sales.1% Gross profit margin increased from 1935.04% into ~~Fiscal~~35.6% ~~2012,~~primarily asattributable to a ~~result~~shift oftowards ~~strong~~higher ~~expense~~margin ~~management~~product sales and cost improvement initiatives.

Segment Adjusted EBITDA improved $3 million to $90 million in Fiscal 2013 compared to segment Adjusted EBITDA of $87 million in Fiscal 2012, driven by the increase in net sales coupled with cost and operating expense improvements.

Segment assets at September 30, 2013 decreased to $501 million from $508 million at September 30, 2012. Goodwill and intangible assets, which are substantially a result of the revaluation impacts of fresh-start reporting during Fiscal 2009 and acquisitions, decreased to $426 million at September 30, 2013, from $433 million at September 30, 2012, driven by amortization of intangible assets.

Corporate Expense. Our corporate expense was $60 million in Fiscal 2013 compared to $52 million in Fiscal 2012. This increase is primarily attributable to an $18 million increase in stock based compensation expense, tempered by operating expense improvements. Corporate expense as a percentage of consolidated net sales for Fiscal 2013 remained constant with Fiscal 2012 at 1.5%.

Acquisition and Integration Related Charges. Acquisition and integration related charges include, but are not limited to, transaction costs such as banking, legal and accounting professional fees directly related to acquisitions, termination and related costs for transitional and certain other employees, integration related professional fees and other post business combination related expenses associated with our acquisitions. See Note 2, "Significant Accounting Policies—Acquisition and Integration Related Charges," of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information regarding our Acquisition and integration charges.

Table of Contents

~~Interest~~ Operating ~~Expense~~Expenses. Operating ~~Interest~~expenses ~~expense~~for inthe ~~Fiscal~~year ~~2013~~ended ~~was~~September ~~$370~~30, ~~million~~2016 ~~compared~~increased to $~~192 million in Fiscal 2012~~67. ~~The increase in interest expense in Fiscal 2013 of $178~~ 5 million isor ~~primarily due to costs and expenses related to the extinguishment of our 9.~~5.6% ~~Notes~~compared ~~and~~to the ~~financing~~year ofended ~~the~~September ~~acquisition~~30, of2015 ~~the~~primarily ~~HHI~~attributable ~~Business coupled with higher ongoing interest expense related~~ to ~~the~~an ~~debt~~increase ~~issued~~ in ~~connection~~selling ~~with~~and ~~that~~general ~~acquisition, partially offset by the non-recurrence of costs~~ and administrative expenses ~~related to the extinguishment~~ of ~~our 12% Notes in Fiscal 2012~~$89. We4 ~~incurred $122~~ million ofdue ~~costs related~~ to ~~the~~increased ~~extinguishment~~net ~~of our 9.5% Notes including cash tender~~sales, ~~consent~~prior ~~and~~year ~~redemption~~acquisitions ~~premium costs totaling $111 million~~ and ~~non-cash~~increased ~~costs~~share ~~for~~based ~~the~~compensation ~~write off~~ of ~~unamortized deferred financing fees less unamortized original issue premium totaling~~ $~~11 million~~16.8 ~~We incurred $23~~ million; inoffset ~~costs~~by ~~and~~decreased ~~expenses related to the~~ acquisition ~~financing~~& ~~for~~integration ~~the~~related ~~HHI~~charges ~~Business including cash costs~~ of $2422.1 million ~~for~~and ~~bridge~~decreased ~~financing~~restructuring ~~fees~~ and ~~transaction~~related ~~costs,~~charges ~~along with non-cash costs~~ of $511.9 million. ~~related~~Operating toexpenses ~~the~~for ~~write-off of debt issuance costs and original issue discount on~~ the ~~former~~year ~~term~~ended ~~loan~~September ~~facility. In addition~~30, we2015 ~~incurred~~increased $69109.2 million ofor ~~ongoing~~10.0% ~~cash~~primarily ~~interest~~attributable ~~expense related~~ to ~~the~~an ~~debt~~increase ~~incurred for the acquisition~~ of ~~the HHI Business~~$59.7 ~~The~~million ~~higher expense incurred~~ in ~~Fiscal~~selling ~~2013~~and ~~was~~general ~~partially~~and ~~offset~~administrative byexpenses ~~the~~as ~~non-recurrence~~a ofresult ~~$25 million~~ of ~~cash~~acquisition activity and $2increased ~~million~~net ~~of non-cash costs incurred in connection with the extinguishment of our 12% Notes~~sales, ~~savings~~increased ~~related~~acquisition toand ~~the~~integration ~~extinguishments~~costs of ~~the~~$38.7 ~~12%~~million ~~Notes~~ and ~~the~~increased ~~9.5%~~restructuring ~~Notes~~and ~~coupled~~related ~~with~~charges ~~other items netting to reduced interest~~ of $97.4 million. ~~See~~for ~~Note~~new 6,and ~~“Debt,”~~continuing ofrestructuring ~~Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K~~initiatives.

~~Income~~See ~~Taxes.~~Note In3 ~~Fiscal~~to ~~2013,~~the weConsolidated ~~recorded~~Financial ~~income tax expense of $27 million on a pretax loss from continuing operations of $20 million~~Statements, ~~and in Fiscal 2012~~“Acquisitions”, weincluded ~~recorded~~elsewhere ~~income~~within ~~tax~~this ~~expense~~Annual ofReport, ~~$60 million on pretax income from continuing operations of $113 million. Our effective tax rate on our loss from continuing operations was approximately (136)%~~ for ~~Fiscal~~additional ~~2013.~~detail ~~Our effective tax rate~~ on ~~income~~acquisition ~~from~~and ~~continuing~~integration ~~operations was approximately 53% for Fiscal 2012~~costs. ~~Our~~ ~~effective~~See ~~tax~~Note ~~rates~~4 ~~differ from the U.S. federal statutory rate of 35% principally due~~ to: ~~(i) losses in~~ the ~~U.S.~~Consolidated ~~and~~Financial ~~certain~~Statements, ~~foreign~~“Restructuring ~~jurisdictions for which no tax benefit can be recognized due to full valuation allowances that have been provided on our net operating loss carryforward tax benefits~~ and ~~other~~Related ~~deferred~~Charges”, ~~tax~~included ~~assets;~~elsewhere ~~(ii)~~within ~~deferred~~this ~~income~~Annual ~~tax expense related to the change in book versus tax basis of indefinite lived intangibles~~Report, ~~which are amortized~~ for ~~tax~~additional ~~purposes~~detail ~~but not for book purposes, and (iii) the reversal in Fiscal 2013 of U.S. valuation allowances of $50 million~~ on ~~deferred~~restructuring ~~tax~~activity ~~assets as a result of the acquisition of the HHI Business~~ and ~~the~~related ~~reversal in Fiscal 2012 of U~~costs.S. valuation allowances of $15 million on deferred tax assets as a result of the FURminator acquisition. Additionally, in Fiscal 2013, the consolidated pretax income was close to break even, resulting in a higher effective tax rate as this rate is calculated by dividing tax expense into pretax income (loss).

InInterest ~~light~~Expense. Interest ofexpense ~~our~~for ~~plans~~the toyear ~~voluntarily~~ended ~~pay~~September ~~down~~30, ~~our~~2016 Udecreased $21.S9 million or 8.1% ~~debt~~from the year ended September 30, ~~fund~~2015, ~~distributions~~attributable to ~~shareholders,~~the ~~fund~~refinancing ~~U.S.~~activity ~~acquisitions,~~during ~~and~~the ~~our~~year ~~ongoing~~ended ~~U.S.~~September ~~operational~~30, ~~cash~~2015 ~~flow~~previously ~~requirements~~discussed, incoupled ~~Fiscal~~with ~~2012~~payments weon ~~began~~Term ~~recording~~Loans; ~~residual~~partially ~~U.S.~~offset ~~and~~by ~~foreign~~$21.4 ~~taxes~~million onof ~~current~~non-recurring ~~foreign~~costs ~~earnings,~~due ~~which~~to werefinancing doactivity ~~not~~during ~~consider~~the toyear beended ~~permanently~~September ~~reinvested~~30, ~~except~~2016, ~~for~~including ~~locations~~(i) ~~precluded~~$15.6 bymillion ~~local~~tendedr ~~legal~~premium ~~restrictions~~upon ~~from~~the ~~repatriating~~repayment ~~earnings~~of 6.375% Wesenior ~~evaluate~~unsecured ~~annually~~notes; ~~the~~and ~~available~~(iii) ~~earnings,~~$5.8 ~~permanent~~million ~~reinvestment~~non-cash ~~classification~~expense ~~and~~for ~~availability~~the write-off of ~~and~~debt ~~management’s~~issuance ~~intent~~costs toassociated ~~use~~with ~~alternative~~the ~~mechanisms~~repayment ~~for~~of ~~repatriation~~6.375% senior unsecured notes. Interest expense for ~~each~~the ~~jurisdiction~~year inended ~~which~~September we30, do2015 ~~business~~increased $69.8 Asmillion ofor 34.5% from the year ended September 30, ~~2013~~2014, weattributable ~~have~~to ~~provided~~refinancing ~~residual~~activity ~~taxes~~previously ondiscussed, ~~approximately~~resulting in $4658.8 million of ~~earnings~~non-recurring ~~not~~costs, ~~yet~~including ~~taxed~~(i) in$14.1 ~~the~~million ~~U.S.~~for ~~Due~~bridge tofinancing ~~the~~commitments ~~valuation~~associated ~~allowance~~with ~~recorded~~the ~~against~~AAG Uacquisition, (ii) $4.S.5 ~~net~~million ~~deferred~~interest ~~tax~~on ~~assets,~~assumed ~~including~~AAG ~~net~~senior ~~operating~~notes ~~loss~~from ~~carryforwards,~~the wedate doof ~~not~~the ~~recognize~~acquisition ~~any~~through ~~incremental~~payoff Uin June 2015, (iii) $16.S.9 ~~tax~~million ~~expense~~call onpremium upon the ~~expected~~repayment ~~future~~of ~~repatriation~~6.75% ofsenior ~~these~~unsecured ~~foreign~~notes; ~~earnings~~(iv) $4.1 ~~Should~~million ~~the~~non-cash ~~U.S.~~expense ~~valuation~~for ~~allowance~~the bewrite-off ~~released~~of atdebt ~~some~~issuance ~~future~~costs ~~date,~~associated with the Urepayment of 6.S.75% ~~tax~~senior onunsecured ~~foreign~~notes; ~~earnings~~(v) ~~not~~$10.4 ~~considered~~million toin befees ~~permanently~~associated ~~reinvested~~with ~~might~~refinancing ~~have~~the athen-existing ~~material~~senior ~~effect~~term oncredit ~~our~~facility; ~~effective~~and ~~tax~~(vi) ~~rate~~$8.8 ~~For~~million ~~Fiscal~~non-cash ~~2013,~~expense wefor ~~expect~~the ~~approximately~~write-off $3of ~~million~~unamortized ofdeferred ~~additional~~financing ~~tax~~fees ~~expense~~and ~~from~~discounts ~~non~~on the then-~~U.S.~~existing ~~withholding~~senior credit facility and ~~other~~ABL ~~taxes~~revolving loan facility. See Note 10 to bethe ~~incurred~~Condensed onConsolidated ~~repatriation~~Financial ofStatements, ~~current~~“Debt”, ~~earnings~~included elsewhere within this Annual Report, for additional information regarding our outstanding debt.

AsIncome ~~of September~~Taxes. ~~30,~~Our ~~2013,~~effective wetax ~~have~~rate Uwas 10.S.1% ~~federal~~for ~~and~~the ~~state~~year ~~net~~ended ~~operating~~September ~~loss~~30, ~~carryforwards~~2016 ofcompared ~~approximately~~to ~~$1,502~~22.7% ~~million~~for ~~and~~the ~~$1,538~~year ~~million~~ended September 30, ~~respectively~~2015. ~~These~~Our ~~net~~estimated ~~operating~~annual ~~loss~~effective ~~carryforwards~~tax ~~expire~~rate ~~through~~applied ~~years~~to ~~ending~~these inperiods ~~2033.~~differs Wefrom ~~also~~the ~~have~~U.S. ~~foreign~~federal ~~loss~~statutory ~~carryforwards~~rate of ~~approximately~~35% ~~$111~~primarily ~~million,~~due ~~which~~to ~~will~~the ~~expire~~release ~~beginning~~of invaluation ~~2014.~~allowances ~~Certain~~on ofU.S. ~~the foreign~~ net operating losses ~~have~~deferred ~~indefinite~~tax ~~carryforward~~assets ~~periods.~~and Weincome ~~have~~earned ~~had~~outside ~~multiple~~the ~~changes~~U.S. ofthat ~~ownership,~~is assubject ~~defined~~to ~~under~~statutory ~~Internal~~rates ~~Revenue~~lower ~~Code~~than ~~(“IRC”)~~35% ~~Section 382,~~offsetting ~~that~~tax ~~subject~~expense ~~our~~on U.S. ~~federal~~pretax ~~and~~income. ~~state~~Our ~~net~~effective ~~operating~~tax ~~losses~~rate ~~and~~for ~~other~~the ~~tax~~year ~~attributes~~ended toSeptember ~~certain~~30, ~~limitations.~~2016 ~~The~~includes ~~annual~~a ~~limitation~~$25.5 onmillion ~~our~~expense ~~use~~to ofrecord ~~these~~a ~~carryforwards~~tax iscontingency ~~based~~reserve onfor a ~~number~~tax ofexposure ~~factors~~in ~~including~~Germany. During the ~~value~~year, ofa local court ruled against our ~~stock~~characterization (of certain assets as ~~defined~~amortizable ~~for~~under Germany tax ~~purposes)~~law. onWe ~~the~~have ~~date~~appealed ofthis ~~the~~ruling ~~ownership~~to ~~change,~~the ~~our~~German ~~net~~Federal ~~unrealized~~Court. ~~built~~While inwe ~~gain~~continue ~~position~~to onbelieve that ~~date,~~our tax treatment was correct under the ~~occurrence~~applicable ofGerman ~~realized~~law, ~~built~~we inhave ~~gains~~concluded inthat ~~years~~sufficient ~~subsequent~~uncertainty toon the ~~ownership~~ruling ~~change,~~from ~~and~~ the ~~effects~~German ofFederal ~~subsequent~~Court ~~ownership~~exists ~~changes~~to ~~(as~~record ~~defined~~a ~~for~~full tax ~~purposes),~~contingency iffor ~~any~~this exposure. InAlso included ~~addition,~~are ~~separate~~$25.1 ~~return~~million ~~year~~of ~~limitations~~tax ~~apply~~benefits, toresulting ~~limit~~from ~~our~~the ~~utilization~~adoption of ~~the~~ASU ~~acquired Russell Hobbs U~~2016-09.S. ~~federal~~See ~~and~~Note ~~state~~2 ~~net operating losses~~ to ~~future~~the ~~income~~Condensed ofConsolidated ~~the~~Financial ~~Russell~~Statements, ~~Hobbs~~“Significant ~~subgroup.~~Accounting ~~Based~~Policies onand ~~these factors~~Practices”, weincluded ~~estimate~~elsewhere ~~that~~in ~~$301~~this ~~million~~Annual ofReport, ~~the~~for ~~total~~additional ~~U.S.~~discussion ~~federal~~ and ~~$358~~detail ~~million~~over of the ~~state~~adoption ~~net~~of ~~operating~~ASU ~~loss~~2016-09. ~~would~~In ~~expire~~December ~~unused~~2015, ~~even if~~ the Company ~~generates~~received ~~sufficient~~a ~~income~~ruling tofrom ~~otherwise~~the ~~use~~Internal ~~all~~Revenue ~~its~~Service ~~NOLs.~~which Inresulted ~~addition,~~in ~~we project that~~ $~~103~~87.8 million of ~~the~~U.S. ~~total foreign~~ net operating ~~loss~~losses ~~carryforwards~~being ~~will expire unused~~restored. WeThe ~~have~~ruling ~~provided~~created aadditional ~~full~~U.S. ~~valuation allowance against these~~ deferred tax assets asand ~~well~~valuation allowance.

The ~~ultimate~~Company ~~realization~~released of$111.1 ~~our~~million ~~deferred~~of domestic ~~tax~~valuation ~~assets~~allowance ~~depends~~during onthe ~~our~~year ~~ability~~ended toSeptember ~~generate~~30, ~~sufficient~~2016. ~~taxable~~Approximately ~~income~~$25.1 million of the ~~appropriate~~domestic ~~character~~valuation inallowance ~~the~~release ~~future~~results ~~and~~from inadditional ~~the appropriate taxing jurisdictions. We establish valuation allowances for~~ deferred tax assets ~~when~~created weby ~~estimate it is more likely than not that~~ the ~~tax~~adoption ~~assets~~of ~~will~~ASU ~~not be realized~~No. We2016-09, ~~base~~effective ~~these~~as ~~estimates on projections~~ of ~~future~~October ~~income~~1, ~~including~~2015. ~~tax~~In ~~planning~~December ~~strategies~~2015, inthe ~~certain~~Company ~~jurisdictions.~~received ~~Changes~~a inruling ~~industry~~from ~~conditions~~the ~~and~~Internal ~~other~~Revenue ~~economic~~Service ~~conditions may impact our ability to project future income. Accounting Standards Codification~~ (“~~ASC~~IRS”) ~~Topic~~which ~~740:~~resulted ~~“Income~~in ~~Taxes”~~$87.8 ~~(“ASC~~million ~~740”) requires the establishment~~ of aU.S. ~~valuation~~net ~~allowance~~operating ~~when~~losses itbeing isrestored ~~more~~and a ~~likely~~release ~~than~~of ~~not~~$16.2 ~~that~~million ~~some~~of ~~portion~~domestic orvaluation ~~all~~allowance offrom ~~the~~additional deferred tax assets ~~will~~created ~~not~~by bethe ~~realized~~IRS ruling. InThe ~~accordance~~Company ~~with~~recorded ~~ASC~~tax ~~740,~~expense weof ~~periodically~~$3.1 ~~assess~~million ~~the~~rlated ~~likelihood~~to ~~that~~additional ~~our~~foreign ~~deferred~~valuation ~~tax~~allowance ~~assets~~during ~~will be realized and determine if adjustments to~~ the ~~valuation~~year ~~allowance~~ended ~~are~~September ~~required~~30, 2016.

Our effective tax rate was 22.7% for the year ended September 30, 2015 compared to 21.6% for the year ended September 30, 2014. Our estimated annual effective tax rate applied to these periods differs from the U.S. federal statutory rate of 35% primarily due to income earned outside the U.S. that is subject to statutory rates lower than 35% and the release of valuation allowances on U.S. net operating losses deferred tax assets offsetting tax expense on U.S. pretax income. During the year ended September 30, 2015, we also recorded U.S. deferred income tax expense related to the change in book versus tax basis of indefinite-lived intangibles, which are amortized for tax purposes but not for book purposes. Additionally for the year ended September 30, 2015, we recorded a tax benefit of $22.8 million for the reversal of a portion of the U.S. valuation allowance on deferred tax assets as a result of the AAG acquisition. For the year ended September 30, 2015, the Company also recognized $23.3 million of deferred tax assets related to its investment in one of its foreign subsidiaries, because that timing difference was expected to reverse in the foreseeable future, but due to the U.S. valuation allowance against deferred tax assets there was no net tax benefit for this item.

See Note 14, “Income Taxes,” of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information regarding income taxes.

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~~Our~~Segment ~~total~~Financial ~~valuation allowance for the tax benefit of deferred tax assets that may not be realized is approximately $449 million at September~~Data 30, 2013. Of this amount, approximately $416 million relates to U.S. net deferred tax assets and approximately $33 million relates to foreign net deferred tax assets. Our total valuation allowance was approximately $382 million at September 30, 2012. Of this amount, approximately $347 million related to U.S. net deferred tax assets and approximately $35 million related to foreign net deferred tax assets. As a result of the purchase of the HHI Business, we reversed $50 million of U.S. valuation allowance during Fiscal 2013. As a result of the purchase of FURminator, we released $15 million of U.S. valuation allowance during Fiscal 2012. These releases were attributable to the net deferred tax liabilities recorded on the opening balance sheets of the acquired companies in purchase accounting, which offset other U.S. net deferred tax assets.

~~ASC~~Global ~~740,~~Batteries ~~which~~& ~~clarifies~~Appliances the accounting for uncertainty in tax positions, requires that we recognize in our financial statements the impact of a tax position if that position is more likely than not to be sustained on audit based on the technical merits of the position. As of September 30, 2013 and September 30, 2012, the total amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate in future periods was $14 million and $6 million, respectively. See Note 9, “Income Taxes,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.(GBA)

Liquidity and Capital Resources


(in millions, except %)	2016		2015		Variance				2015		2014		Variance
Net Sales	$	2,010.3	$	2,092.2	$	(81.9)		(3.9%)	$	2,092.2	$	2,230.7	$	(138.5)		(6.2%)
Adjusted EBITDA		311.4		306.9		4.5		1.5%		306.9		326.6		(19.7)		(6.0%)
Adjusted EBITDA Margin		15.5%		14.7%		80	bps			14.7%		14.6%		10	bps

~~Operating~~Net ~~Activities.~~sales ~~Cash~~decreased ~~provided~~$81.9 bymillion, ~~operating~~or ~~activities~~3.9%, ~~totaled~~during ~~$435~~the ~~million~~year ~~during~~ended ~~Fiscal~~September ~~2014~~30, 2016 compared to the year ended September 30, 2015. Organic net sales increased $~~258~~20.6 million, ~~during~~or ~~Fiscal 2013~~1.0%. ~~The~~Net sales decreased $~~177~~138.5 million, ~~increase~~or in6.2%, ~~cash~~during ~~provided~~the byyear ~~operating~~ended ~~activities~~September ~~was~~30, ~~primarily~~2015 ~~due~~compared to: the year ended September 30, 2014. Organic net sales increased $44.0 million, or 2.0%.

· Consumer ~~Cash~~battery ~~generated~~organic net sales increased $51.2 million, or 6.2%, for the year ended September 30, 2016 compared to the year ended September 30, 2015; primarily attributable to increases in North America of $6.9 million due to an increase in alkaline battery volumes from ~~higher~~branded ~~adjusted~~and ~~EBITDA~~private label product, increases in Europe of $7933.8 million primarily from an increase in alkaline battery sales of $17.5 million driven by promotional sales volumes, ~~excluding~~increased ~~pre~~e-~~acquisition~~commerce ~~earnings~~and new private label customers; an increase in hearing aid and specialty batteries of $14.9 million from increased hearing aid battery volumes with new and existing customers coupled with increases in portable power sales; and increases in Latin America of $9.7 million primarily from hearing aid and specialty batteries. Consumer battery organic net sales decreased $42.8 million, or 4.5%, for the ~~HHI~~year ~~Business~~ended September 30, 2015 compared to the year ended September 30, 2014; primarily attributable to decreases in North America sales of $75.8 million due to lower alkaline batteries sales of $54.6 million from continued competitor discounting coupled with a retail customer bankruptcy, and a decrease in specialty batteries and lights from distribution loss to a competitor at a major retailer and timing of holiday sales; partially offset by an increase in Europe sales of $29.4 million from increased alkaline batteries sales of $24.4 million from increased volumes with new and existing retailers and private label customers, increased volumes in specialty and hearing aid batteries, plus increased lights from new products and promotional activity.

· Small Aappliances organic net sales decreased $6843.5 million, ~~generation~~or 5.9%, for the year ended September 30, 2016 compared to the year ended September 30, 2015; primarily attributable to decreases of ~~cash~~organic ~~from~~net ~~working~~sales ~~capital~~in North America of $43.8 million due to softer point of sale within the category, reduction in retail inventory, shifting of holiday sales, and ~~other~~competitive ~~items~~pricing. Small appliances organic net sales increased $51.3 million, or 7.0% for the year ended September 30, 2015 compared to the year ended September 30, 2014; driven by ~~lower~~increased ~~accounts~~sales ~~receivable~~in North America of $25.1 million attributable to the success of new product launches; increase in Europe sales of $24.9 million from promotional activity; and ~~inventory,~~Latin ~~partially~~America ~~offset~~sales byof ~~lower~~$2.0 ~~accounts~~million ~~payable~~from new product introductions and ~~other~~volume ~~working~~increases ~~capital~~in ~~items;~~certain product lines.

· Personal ~~Lower~~care ~~cash~~organic ~~payments~~net sales increased $12.9 million, or 2.4%, for ~~interest~~the year ended September 30, 2016 compared to the year ended September 30, 2015; primarily attributable to an increase in Europe of $4613.0 million and Latin America of $9.5 million from higher volume due to promotional sales and market expansion; offset by decrease in North America of $13.9 million for softer point of sales in the category, reduction in retail inventory, shifting of holiday sales and competitive pricing. Personal care organic net sales increased $35.5 million, or 6.5%, for the year ended September 30, 2015 compared to the year ended September 30, 2014; driven by increased sales in North America of $11.6 million as a result of display location changes at a major customer, promotional activity and continued growth in e-commerce; increased Europe sales of $16.6 million due to new product sales and expansion in Eastern European markets; and increased Latin America sales of $5.3 million from growth in Mexico, new customers and effective promotional sales within the region.

· Adjusted ~~Lower~~EBITDA ~~cash~~in ~~acquisition~~the year ended September 30, ~~integration~~2016 increased $4.5 million and ~~restructuring~~the ~~related~~Adjusted ~~costs~~EBITDA margin improved 80 bps compared to the year ended September 30, 2015. Adjusted EBITDA increased primarily due to the increase in net sales discussed above, cost improvement and better product mix, offset by negative foreign currency impact of $1476.5 million. The increase in Adjusted EBITDA margin is due to improved product mix and cost improvements. Adjusted EBITDA in the year ended September 30, 2015 decreased $19.7 million and the Adjusted EBITDA margin improved by 10 bps compared to the year ended September 30, 2014. Adjusted EBITDA decreased primarily due to decreased sales discussed above, which was partially offset by cost improvements and favorable product mix. Adjusted EBITDA margin increased due to cost improvements and product mix. See Non-GAAP Measurements for reconciliation of Net Income to Adjusted EBITDA by segment.

Offset by,

· Higher cash payments for income taxes of $31 million.

We expect to fund our cash requirements, including capital expenditures, interest and principal payments due in Fiscal 2015, through a combination of cash on hand, cash flow from operations and funds available for borrowings under our ABL Revolving Credit Facility. Going forward, our ability to satisfy financial and other covenants in our senior credit agreements and senior unsecured indentures and to make scheduled payments or prepayments on our debt and other financial obligations will depend on our financial and operating performance. There can be no assurances that our business will generate sufficient cash flows from operations or that future borrowings under our ABL Revolving Credit Facility will be available in an amount sufficient to satisfy our debt maturities or to fund our other liquidity needs.

At September 30, 2014, there are no significant foreign cash balances available for repatriation. For Fiscal 2015, we expect to generate between $75 million and $125 million of foreign cash that may be repatriated for general corporate purposes.

See Item 1A. Risk Factors, for further discussion of the risks associated with our ability to service all of our existing indebtedness, our ability to maintain compliance with financial and other covenants related to our indebtedness and the impact of the current economic crisis.

Investing Activities. Net cash used by investing activities was $94 million for Fiscal 2014 compared to $1,477 million for Fiscal 2013. The $1,383 million decrease in cash used by investing activities in Fiscal 2014 was primarily driven by a decrease in cash used for acquisitions of $1,366 million, which related to the $1,351 million purchase, net of cash acquired, of the HHI Business, and the $43 million purchase, net of cash acquired, of Shaser in Fiscal 2013, compared to a $28 million purchase, net of cash acquired, of Liquid Fence in Fiscal 2014.

We expect to make investments in capital projects similar to historical levels, as well as incremental investments in high return cost reduction projects slightly above historical levels.

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~~Financing~~ Hardware ~~Activities~~& Home Improvement (HHI)

Debt Financing


(in millions, except %)	2016		2015		Variance				2015		2014		Variance
Net Sales	$	1,241.0	$	1,205.5	$	35.5		2.9%	$	1,205.5	$	1,166.0	$	39.5	3.4%
Adjusted EBITDA		241.6		225.5		16.1		7.1%		225.5		210.3		15.2	7.2%
Adjusted EBITDA Margin		19.5%		18.7%		80	bps			18.7%

Spectrum Brands Holdings, Inc.

SB/RH Holdings, LLC

Filing Compare · SB/RH Holdings, LLC