(14) Other Required Disclosures

Receivables and Concentrations of Credit Risk

“Receivables, net” in the accompanying Condensed Consolidated Balance Sheets consist of the following:


	December 30, 2012		September 30, 2012
Trade accounts receivable	$	505.4	$	357.2
Contingent purchase price reduction receivable (Note 13)		41.0		41.0
Other receivables		44.5		38.1

Total receivables		590.9		436.3
Less: Allowance for doubtful trade accounts receivable		24.2		21.9

Total receivables, net	$	566.7	$	414.4

Trade receivables subject Spectrum Brands to credit risk. Trade accounts receivable are carried at net realizable value. Spectrum Brands extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history, and generally does not require collateral. Spectrum Brands monitors its customers’ credit and financial condition based on changing economic conditions and makes adjustments to credit policies as required. Provision for losses on uncollectible trade receivables are determined based on ongoing evaluations of Spectrum Brands’ receivables, principally on the basis of historical collection experience and evaluations of the risks of nonpayment for a given customer.

Spectrum Brands has a broad range of customers including many large retail outlet chains, one of which accounts for a significant percentage of its sales volume. This customer represented approximately 21% and 24% of Spectrum Brands’ net sales during the three months ended December 30, 2012 and January 1, 2012, respectively. This customer also represented approximately 8% and 13% of Spectrum Brands’ trade accounts receivable, net at December 30, 2012 and September 30, 2012, respectively.

Approximately 50% and 49% of Spectrum Brands’ net sales during the three months ended December 30, 2012 and January 1, 2012, respectively, occurred outside the United States. These sales and related receivables are subject to varying degrees of credit, currency, political and economic risk. Spectrum Brands monitors these risks and makes appropriate provisions for collectability based on an assessment of the risks present.

Inventories

Inventories of Spectrum Brands, which are stated at the lower of cost (using the first-in, first-out method) or market, consist of the following:


	December 30, 2012		September 30, 2012
Raw materials	$	103.1	$	58.5
Work-in-process		44.2		23.4
Finished goods		531.9		370.7

Total inventories	$	679.2	$	452.6

Properties

Properties, net consist of the following:


	December 30, 2012		September 30, 2012
Land, buildings and improvements	$	94.9	$	93.6
Machinery, equipment and other		441.5		325.7
Construction in progress		19.8		18.4

Total properties, at cost		556.2		437.7
Less accumulated depreciation		228.2		216.1

Total properties, net	$	328.0	$	221.6

Shipping and Handling Costs

Spectrum Brands incurred shipping and handling costs of $50.0 and $50.3 for the three months ended December 30, 2012 and January 1, 2012, respectively. These costs are included in “Selling, acquisition, operating and general expenses” expenses in the accompanying Condensed Consolidated Statements of Operations. Shipping and handling costs include costs incurred with third-party carriers to transport products to customers as well as salaries and overhead costs related to activities to prepare Spectrum Brands’ products for shipment from its distribution facilities.

Other Assets

“Other assets” in the accompanying Condensed Consolidated Balance Sheets consist of the following:


	December 30, 2012		September 30, 2012
Prepaid expenses and other current assets	$	181.2	$	53.1
Debt issuance costs		95.7		50.9
Deferred charges and other assets		70.3		68.6

Total other assets	$	347.2	$	172.6

Accounts payable and other current liabilities

“Accounts payable and other current liabilities” in the accompanying Condensed Consolidated Balance Sheets consist of the following:


	December 30, 2012		September 30, 2012
Accounts payable	$	411.7	$	325.9
Wages and benefits		76.1		110.9
Income taxes payable		17.6		96.6
Accrued interest		22.1		50.4
Accrued expenses		27.6		25.1
Accrued dividends on Preferred Stock		8.4		8.3
Restructuring and related charges		8.5		6.6
Other		164.2		130.4

Total accounts payable and other current liabilities	$	736.2	$	754.2

Other liabilities

“Other liabilities” in the accompanying Condensed Consolidated Balance Sheets consist of the following:


	December 30, 2012		September 30, 2012
Amounts payable for investment purchases	$	9.3	$	206.7
Retained asset account		192.7		203.7
Funds withheld from reinsurers		54.1		54.7
Amounts payable to reinsurers		31.8		32.0
Remittances and items not allocated		35.9		29.5
Other		93.0		128.7

Total other liabilities	$	416.8	$	655.3

Restructuring and Related Charges

The Company reports restructuring and related charges associated with manufacturing and related initiatives of Spectrum Brands in “Consumer products cost of goods sold.” Restructuring and related charges reflected in “Consumer products cost of goods sold” include, but are not limited to, termination, compensation and related costs associated with manufacturing employees, asset impairments relating to manufacturing initiatives, and other costs directly related to the restructuring or integration initiatives implemented.

The Company reports restructuring and related charges relating to administrative functions of Spectrum Brands in “Selling, acquisition, operating and general expenses,” such as initiatives impacting sales, marketing, distribution, or other non-manufacturing functions. Restructuring and related charges reflected in “Selling, acquisition, operating and general expenses” include, but are not limited to, termination and related costs, any asset impairments relating to the functional areas described above, and other costs directly related to the initiatives.

In 2009, Spectrum Brands implemented a series of initiatives to reduce operating costs and to evaluate opportunities to improve its capital structure (the “Global Cost Reduction Initiatives”). The following table summarizes restructuring and related charges incurred by the Global Cost Reduction Initiatives, as well as other initiatives which were not significant, for the three months ended December 30, 2012 and January 1, 2012 and where those charges are classified in the accompanying Condensed Consolidated Statements of Operations:


	Three Months Ended
	December 30, 2012		January 1, 2012		Charges Since Inception		Expected Future Charges		Total Projected Costs		Expected Completion Date
Initiatives:
Global Cost Reduction	$	6.5	$	7.1	$	89.5	$	8.3	$	97.8		January 31, 2015
Other		0.1		0.6

	$	6.6	$	7.7

Classification:
Consumer products cost of goods sold	$	1.1	$	4.6
Selling, acquisition, operating and general expenses		5.5		3.1

	$	6.6	$	7.7

The following table summarizes the remaining accrual balance associated with the initiatives and the activity during the three months ended December 30, 2012:


	Accrual Balance at September 30, 2012		Provisions		Cash Expenditures			Accrual Balance at December 30, 2012		Expensed as Incurred^(a)
Global Cost Reduction Initiatives:
Termination benefits	$	3.3	$	3.8	$	(1.5	)	$	5.6	$	0.2
Other costs		1.1		0.1		(0.3	)		0.9		2.4

		4.4		3.9		(1.8	)		6.5		2.6

Other initiatives		2.2		—		(0.2	)		2.0		0.1

	$	6.6	$	3.9	$	(2.0	)	$	8.5	$	2.7

(a)	Consists of amounts not impacting the accrual for restructuring and related charges.