CONSOLIDATING FINANCIAL STATEMENTS

In connection with the combination with Russell Hobbs, Spectrum Brands, with its domestic subsidiaries and SB/RH Holdings, LLC as guarantors, issued the 9.5% Notes under the 2018 Indenture. (See Note 6, “Debt,” for further information on the the 9.5% Notes under the 2018 Indenture.)

The following consolidating financial statements illustrate the components of the consolidated financial statements of the Company. Investments in subsidiaries are accounted for using the equity method for purposes of illustrating the consolidating presentation. Earnings of subsidiaries are therefore reflected in the Company’s and Guarantor Subsidiaries’ investment accounts and earnings. The elimination entries presented herein eliminate investments in subsidiaries and intercompany balances and transactions. Separate consolidated financial statements of the Guarantor Subsidiaries are not presented because management has determined that such financial statements would not be material to investors.

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Financial Position

June 30, 2013

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
ASSETS
Current assets:
Cash and cash equivalents	$	682		$	2,732		$	95,490		$	—		$	98,904
Receivables:
Trade accounts receivables, net of allowances	41,796			106,106			331,405			—			479,307
Intercompany receivables	220,219			904,187			(190,895		)	(930,162		)	3,349
Other	2,210			12,909			56,475			—			71,594
Inventories	103,035			183,363			429,895			(8,953		)	707,340
Deferred income taxes	(5,697		)	23,257			1,414			2,278			21,252
Prepaid expenses and other	19,138			8,705			113,353			(71,396		)	69,800
Total current assets	381,383			1,241,259			837,137			(1,008,233		)	1,451,546
Property, plant and equipment, net	68,111			46,562			240,577			—			355,250
Long-term intercompany receivables	108,626			132,430			40,220			(281,276		)	—
Deferred charges and other	6,353			2,011			14,025			—			22,389
Goodwill	67,722			440,043			962,415			—			1,470,180
Intangible assets, net	507,135			746,714			915,555			—			2,169,404
Debt issuance costs	70,064			—			1,839			—			71,903
Investments in subsidiaries	3,979,462			2,412,934			445			(6,392,841		)	—
Total assets	$	5,188,856		$	5,021,953		$	3,012,213		$	(7,682,350	)	$	5,540,672

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	6,786		$	1,346		$	32,651		$	—		$	40,783
Accounts payable	66,577			80,464			280,498			—			427,539
Intercompany accounts payable	920,146			309,386			124,341			(1,353,873		)	—
Accrued liabilities:
Wages and benefits	3,941			8,065			51,617			—			63,623
Income taxes payable	44			97			29,445			—			29,586
Accrued interest	25,983			—			923			—			26,906
Other	21,772			33,447			100,191			—			155,410
Total current liabilities	1,045,249			432,805			619,666			(1,353,873		)	743,847
Long-term debt, net of current maturities	3,073,415			2,554			109,302			—			3,185,271
Intercompany long-term debt	—			349,173			(421,709		)	72,536			—
Employee benefit obligations, net of current portion	33,016			—			76,324			—			109,340
Deferred income taxes	42,598			256,898			203,958			—			503,454
Other	12,045			1,062			11,738			—			24,845
Total liabilities	4,206,323			1,042,492			599,279			(1,281,337		)	4,566,757
Shareholders’ equity:
Other capital	1,394,424			3,181,285			2,218,803			(5,408,706		)	1,385,806
Accumulated (deficit) retained earnings	(406,513		)	780,417			172,322			(952,739		)	(406,513		)
Accumulated other comprehensive loss	(56,310		)	(39,365		)	(35,315		)	74,680			(56,310		)
Total shareholders’ equity	931,601			3,922,337			2,355,810			(6,286,765		)	922,983
Non-controlling interest	50,932			57,124			57,124			(114,248		)	50,932
Total equity	982,533			3,979,461			2,412,934			(6,401,013		)	973,915
Total liabilities and shareholders’ equity	$	5,188,856		$	5,021,953		$	3,012,213		$	(7,682,350	)	$	5,540,672

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Financial Position

September 30, 2012

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
ASSETS
Current assets:
Cash and cash equivalents	$	6,729		$	13,302		$	137,841		$	—		$	157,872
Receivables:
Trade accounts receivables, net of allowances	51,991			87,382			195,928			—			335,301
Intercompany receivables	242,449			961,195			332,975			(1,534,668		)	1,951
Other	1,705			6,639			29,772			—			38,116
Inventories	87,482			174,254			197,467			(6,570		)	452,633
Deferred income taxes	(5,545		)	23,766			8,276			1,646			28,143
Prepaid expenses and other	16,534			4,721			28,022			(4		)	49,273
Total current assets	401,345			1,271,259			930,281			(1,539,596		)	1,063,289
Property, plant and equipment, net	61,246			47,633			105,138			—			214,017
Long term intercompany receivables	103,358			110,076			73,731			(287,165		)	—
Deferred charges and other	9,094			1,920			16,697			—			27,711
Goodwill	67,722			438,864			187,659			—			694,245
Intangible assets, net	514,968			777,220			422,741			—			1,714,929
Debt issuance costs	39,320			—			—			—			39,320
Investments in subsidiaries	2,678,029			1,120,830			445			(3,799,304		)	—
Total assets	$	3,875,082		$	3,767,802		$	1,736,692		$	(5,626,065	)	$	3,753,511

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	3,939		$	1,667		$	10,808		$	—		$	16,414
Accounts payable	79,522			107,065			138,436			—			325,023
Intercompany accounts payable	993,646			321,210			20,261			(1,335,117		)	—
Accrued liabilities:
Wages and benefits	21,682			18,158			42,279			—			82,119
Income taxes payable	(96		)	64			30,304			—			30,272
Accrued interest	30,427			—			46			—			30,473
Other	20,331			38,366			65,900			—			124,597
Total current liabilities	1,149,451			486,530			308,034			(1,335,117		)	608,898
Long-term debt, net of current maturities	1,622,060			3,259			27,567			—			1,652,886
Long-term intercompany debt	—			376,754			109,966			(486,720		)	—
Employee benefit obligations, net of current portion	24,560			—			65,434			—			89,994
Deferred income taxes	64,727			222,994			89,744			—			377,465
Other	16,225			236			15,117			—			31,578
Total liabilities	2,877,023			1,089,773			615,862			(1,821,837		)	2,760,821
Shareholders’ equity:
Other equity	1,365,315			2,089,602			1,078,928			(3,173,899		)	1,359,946
Accumulated (deficit) retained earnings	(333,821		)	606,196			55,262			(661,458		)	(333,821		)
Accumulated other comprehensive (deficit) income	(33,435		)	(17,769		)	(13,360		)	31,129			(33,435		)
Total shareholders’ equity (deficit)	998,059			2,678,029			1,120,830			(3,804,228		)	992,690
Total liabilities and shareholders’ equity	$	3,875,082		$	3,767,802		$	1,736,692		$	(5,626,065	)	$	3,753,511

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

Three Month Period Ended June 30, 2013

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries		Eliminations			Consolidated Total
Net sales	$	138,746		$	344,883		$	870,895	$	(264,699	)	$	1,089,825
Cost of goods sold	103,974			226,763			638,178		(262,862		)	706,053
Restructuring and related charges	—			275			738		—			1,013
Gross profit	34,772			117,845			231,979		(1,837		)	382,759
Operating expenses:
Selling	17,018			37,834			110,585		(259		)	165,178
General and administrative	16,446			20,108			33,503		—			70,057
Research and development	4,806			2,490			4,190		—			11,486
Acquisition and integration related charges	5,294			967			1,486		—			7,747
Restructuring and related charges	3,415			2,856			5,961		—			12,232
Total operating expense	46,979			64,255			155,725		(259		)	266,700
Operating income	(12,207		)	53,590			76,254		(1,578		)	116,059
Interest expense	55,686			980			4,847		3			61,516
Other (income) expense, net	(87,536		)	(54,320		)	2,714		141,755			2,613
(Loss) income from continuing operations before income taxes	19,643			106,930			68,693		(143,336		)	51,930
Income tax expense	(17,118		)	16,666			15,637		(16		)	15,169
Net (loss) income	36,761			90,264			53,056		(143,320		)	36,761
Less: Net income attributable to non-controlling interest	263			263			263		(526		)	263
Net (loss) income attributable to controlling interest	$	36,498		$	90,001		$	52,793	$	(142,794	)	$	36,498

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Comprehensive Income

Three Month Period Ended June 30, 2013

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
Net (loss) income	$	36,761		$	90,264		$	53,056		$	(143,320	)	$	36,761
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(7,830		)	(7,834		)	(8,113		)	15,947			(7,830		)
Unrealized gain on derivative instruments	1,780			1,926			1,926			(3,852		)	1,780
Defined benefit pension loss	(52		)	(52		)	(52		)	104			(52		)
Other comprehensive (loss) income	(6,102		)	(5,960		)	(6,239		)	12,199			(6,102		)
Comprehensive (loss) income	30,659			84,304			46,817			(131,121		)	30,659
Less: Comprehensive income attributable to non-controlling interest	263			263			263			(526		)	263
Comprehensive (loss) income attributable to controlling interest	30,396			84,041			46,554			(130,595		)	30,396

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

Three Month Period Ended July 1, 2012

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries		Eliminations			Consolidated Total
Net sales	$	149,130		$	357,363		$	433,024	$	(114,714	)	$	824,803
Cost of goods sold	109,719			239,647			296,558		(114,855		)	531,069
Restructuring and related charges	—			804			1,234		—			2,038
Gross profit	39,411			116,912			135,232		141			291,696
Operating expenses:
Selling	18,348			40,096			71,552		(145		)	129,851
General and administrative	5,131			21,435			23,532		628			50,726
Research and development	5,000			2,713			884		—			8,597
Acquisition and integration related charges	1,055			3,003			1,216		—			5,274
Restructuring and related charges	140			659			1,059		—			1,858
	29,674			67,906			98,243		483			196,306
Operating (loss) income	9,737			49,006			36,989		(342		)	95,390
Interest expense	35,204			1,401			3,078		3			39,686
Other (income) expense, net	(66,677		)	(16,711		)	2,035		83,577			2,224
(Loss) income from continuing operations before income taxes	41,210			64,316			31,876		(83,922		)	53,480
Income tax (benefit) expense	(17,641		)	5,814			6,333		123			(5,371		)
Net (loss) income	$	58,851		$	58,502		$	25,543	$	(84,045	)	$	58,851

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Comprehensive Income

Three Month Period Ended July 1, 2012

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
Net (loss) income	$	58,851		$	58,502		$	25,543		$	(84,045	)	$	58,851
Other comprehensive income, net of tax:
Foreign currency translation	(34,147		)	(34,357		)	(35,088		)	69,444			(34,148		)
Unrealized loss on derivative instruments	1,474			2,714			2,715			(5,428		)	1,475
Defined benefit pension gain (loss)	422			422			422			(844		)	422
Other comprehensive income	(32,251		)	(31,221		)	(31,951		)	63,172			(32,251		)
Comprehensive (loss) income	26,600			27,281			(6,408		)	(20,873		)	26,600

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

Nine Month Period Ended June 30, 2013

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries		Eliminations			Consolidated Total
Net sales	$	466,600		$	868,542		$	2,256,031	$	(643,324	)	$	2,947,849
Cost of goods sold	340,769			590,325			1,656,965		(638,727		)	1,949,332
Restructuring and related charges	—			1,854			2,844		—			4,698
Gross profit	125,831			276,363			596,222		(4,597		)	993,819
Operating expenses:
Selling	56,222			107,418			302,037		(716		)	464,961
General and administrative	51,182			56,660			88,216		19			196,077
Research and development	13,330			7,424			10,763		—			31,517
Acquisition and integration related charges	32,099			3,631			4,828		—			40,558
Restructuring and related charges	3,877			9,195			9,966		—			23,038
	156,710			184,328			415,810		(697		)	756,151
Operating (loss) income	(30,879		)	92,035			180,412		(3,900		)	237,668
Interest expense	168,808			3,132			13,705		7			185,652
Other (income) expense, net	(170,869		)	(121,518		)	7,531		292,797			7,941
(Loss) income from continuing operations before income taxes	(28,818		)	210,421			159,176		(296,704		)	44,075
Income tax (benefit) expense	(17,965		)	35,106			38,419		(632		)	54,928
Net (loss) income	(10,853		)	175,315			120,757		(296,072		)	(10,853		)
Less: Net loss attributable to non-controlling interest	8			8			8		(16		)	8
Net (loss) income attributable to controlling interest	$	(10,861	)	$	175,307		$	120,749	$	(296,056	)	$	(10,861	)

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Comprehensive Income

Nine Month Period Ended June 30, 2013

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
Net (loss) income	$	(10,853	)	$	175,315		$	120,757		$	(296,072	)	$	(10,853	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(25,385		)	(25,457		)	(25,817		)	51,274			(25,385		)
Unrealized gain on derivative instruments	2,858			4,209			4,209			(8,418		)	2,858
Defined benefit pension loss	(348		)	(347		)	(347		)	694			(348		)
Other comprehensive (loss) income	(22,875		)	(21,595		)	(21,955		)	43,550			(22,875		)
Comprehensive (loss) income	(33,728		)	153,720			98,802			(252,522		)	(33,728		)
Less: Comprehensive loss attributable to non-controlling interest	8			8			8			(16		)	8
Comprehensive (loss) income attributable to controlling interest	(33,736		)	153,712			98,794			(252,506		)	(33,736		)

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Operations

Nine Month Period Ended July 1, 2012

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries		Eliminations			Consolidated Total
Net sales	$	489,068		$	915,117		$	1,411,931	$	(396,257	)	$	2,419,859
Cost of goods sold	354,725			638,757			977,269		(394,948		)	1,575,803
Restructuring and related charges	—			3,595			4,708		—			8,303
Gross profit	134,343			272,765			429,954		(1,309		)	835,753
Operating expenses:
Selling	56,103			115,730			220,385		(696		)	391,522
General and administrative	36,322			58,881			60,550		1,740			157,493
Research and development	13,600			7,412			2,778		—			23,790
Acquisition and integration related charges	7,364			8,931			4,330		—			20,625
Restructuring and related charges	1,596			3,819			2,172		—			7,587
	114,985			194,773			290,215		1,044			601,017
Operating income	19,358			77,992			139,739		(2,353		)	234,736
Interest expense	136,257			3,760			10,150		2			150,169
Other (income) expense, net	(150,859		)	(86,912		)	3,153		236,843			2,225
(Loss) income from continuing operations before income taxes	33,960			161,144			126,436		(239,198		)	82,342
Income tax expense	(9,610		)	21,735			26,690		(43		)	38,772
Net (loss) income	$	43,570		$	139,409		$	99,746	$	(239,155	)	$	43,570

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Comprehensive Income

Nine Month Period Ended July 1, 2012

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
Net (loss) income	$	43,570		$	139,409		$	99,746		$	(239,155	)	$	43,570
Other comprehensive income, net of tax:
Foreign currency translation	(30,538		)	(30,462		)	(30,415		)	60,877			(30,538		)
Unrealized gain (loss) on derivative instruments	2,370			2,211			2,211			(4,422		)	2,370
Defined benefit pension gain	924			5,261			645			(5,906		)	924
Other comprehensive income	(27,244		)	(22,990		)	(27,559		)	50,549			(27,244		)
Comprehensive (loss) income	16,326			116,419			72,187			(188,606		)	16,326

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Cash Flows

Nine Month Period Ended June 30, 2013

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
Net cash (used) provided by operating activities	$	(230,744	)	$	41,163		$	672,999		$	(559,256	)	$	(75,838	)
Cash flows from investing activities:
Purchases of property, plant and equipment	(14,857		)	(5,958		)	(24,421		)	—			(45,236		)
Acquisition of Shaser, net of cash acquired	—			—			(42,510		)	—			(42,510		)
Acquisition of the HHI Business, net of cash acquired	—			(1,351,008		)	—			—			(1,351,008		)
Other investing activities	73			(1,289		)	75			—			(1,141		)
Net cash used by investing activities	(14,784		)	(1,358,255		)	(66,856		)	—			(1,439,895		)
Cash flows from financing activities:
Proceeds from issuance of Term Loan	700,000			—			92,000			—			792,000
Proceeds from issuance of 6.375% Notes	520,000			—			—			—			520,000
Proceeds from issuance of 6.625% Notes	570,000			—			—			—			570,000
Payment of senior credit facilities, excluding ABL revolving credit facility	(406,904		)	—			—			—			(406,904		)
Debt issuance costs	(42,333		)	—			(2,136		)	—			(44,469		)
Other debt financing, net	—			—			17,080			—			17,080
Reduction of other debt	—			—			(1,970		)	—			(1,970		)
ABL revolving credit facility, net	69,500			—			—			—			69,500
Capital contribution from parent	28,562			—			—			—			28,562
Cash dividends paid to parent	(61,842		)	—			—			—			(61,842		)
Share based award tax withholding payments	(20,141		)	—			—			—			(20,141		)
Advances related to intercompany transactions	(1,117,361		)	1,306,522			(748,417		)	559,256			—
Net cash provided (used) by financing activities	239,481			1,306,522			(643,443		)	559,256			1,461,816
Effect of exchange rate changes on cash and cash equivalents due to Venezuela devaluation	—			—			(1,870		)	—			(1,870		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(3,181		)	—			(3,181		)
Net (decrease) increase in cash and cash equivalents	(6,047		)	(10,570		)	(42,351		)	—			(58,968		)
Cash and cash equivalents, beginning of period	6,729			13,302			137,841			—			157,872
Cash and cash equivalents, end of period	$	682		$	2,732		$	95,490		$	—		$	98,904

SPECTRUM BRANDS, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Cash Flows

Nine Month Period Ended July 1, 2012

(Unaudited)

(Amounts in thousands)



	Parent			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminations			Consolidated Total
Net cash (used) provided by operating activities	(46,049		)	188,635			125,730			(336,244		)	(67,928		)
Cash flows from investing activities:
Purchases of property, plant and equipment	(14,321		)	(9,719		)	(9,077		)	—			(33,117		)
Acquisition of Black Flag	—			(43,750		)	—			—			(43,750		)
Acquisition of FURminator, net of cash	—			(139,390		)	—			—			(139,390		)
Other investing activities	135			(92		)	(1,670		)	—			(1,627		)
Net cash used by investing activities	(14,186		)	(192,951		)	(10,747		)	—			(217,884		)
Cash flows from financing activities:
Proceeds from 6.75% Notes	300,000			—			—			—			300,000
Payment of 12% Notes, including tender and call premium	(270,431		)	—			—			—			(270,431		)
Proceeds from new 9.5% Notes, including premium	217,000			—			—			—			217,000
Payment of senior credit facilities, excluding ABL revolving credit facility	(4,091		)	—			—			—			(4,091		)
Debt issuance costs	(11,163		)	—			—			—			(11,163		)
Other debt financing, net	—			—			6,192			—			6,192
Reduction of other debt	(25,000		)	—			(2,992		)	—			(27,992		)
ABL revolving credit facility, net	2,500			—			—			—			2,500
Share based award tax withholding payments	(3,936		)	—			—			—			(3,936		)
Other financing activities	—			(953		)	—			—			(953		)
Proceeds from (advances related to) intercompany transactions	(144,229		)	(1,360		)	(190,655		)	336,244			—
Net cash provided (used) by financing activities	60,650			(2,313		)	(187,455		)	336,244			207,126
Effect of exchange rate changes on cash and cash equivalents	—			—			(1,429		)	—			(1,429		)
Net (decrease) increase in cash and cash equivalents	415			(6,629		)	(73,901		)	—			(80,115		)
Cash and cash equivalents, beginning of period	49			8,789			133,576			—			142,414
Cash and cash equivalents, end of period	$	464		$	2,160		$	59,675		$	—		$	62,299