The Company identifies its segments based upon the internal organization that is used by management for making operating decisions and assessing performance as the source of its reportable segments. As a result of the GBL and GAC divestitures, and changes to the Company’s plan to sell its HPC division, the way management views its business activities and the reportable segments changed. Spectrum had historically recognized GBL and HPC as components to Global Batteries and Appliances (GBA) reportable segment. Effective December 29, 2017, the Company approved a plan to sell its GBA segment and classified it as held for sale and excluded it from segment reporting until November 2018, when the decision was made to change its plan to sell HPC and recognize it as a component of continuing operations. See Note 3 – Divestitures for further details on GBL and GAC divestitures, and the change in plan to sell HPC. HPC has been recognized as a component of continuing operations and as a separate operating and reportable segment.

Spectrum manages its continuing operations in vertically integrated, product-focused reporting segments: (i) HHI, which consists of Spectrum’s worldwide hardware, security and plumbing business; (ii) PET, which consists of Spectrum’s worldwide pet care business; (iii) H&G, which consists of Spectrum’s home and garden and insect control business and (iv) HPC, which consists of Spectrum’s worldwide small kitchen and personal care appliances businesses. Global strategic initiatives and financial objectives for each reportable segment are determined at the corporate level. Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president or general manager responsible for the sales and marketing initiatives and financial results for product lines within the segment. Net sales relating to the segments for the three and nine month periods ended June 30, 2019 and 2018 are as follows:


	Three Month Periods ended				Nine Month Periods ended
(in millions)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
HHI	$	354.6	$	372.4	$	990.7	$	1,016.8
HPC		243.4		254.4		782.3		827.5
PET		221.7		194.7		641.3		608.3
H&G		202.5		207.9		394.9		381.7
Net sales	$	1,022.2	$	1,029.4	$	2,809.2	$	2,834.3

NOTE 19 - SEGMENT INFORMATION (continued)

The Chief Operating Decision Maker of the Company uses Adjusted EBITDA as the primary operating metric in evaluating the business and making operating decisions. EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes:

Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics; and generally consist of non-cash, stock-based compensation. During the year ending September 30, 2019, the Company issued certain incentive bridge awards due to changes in the Company’s long-term compensation plans that allow for cash based payment upon employee election which have been included in the adjustment but would not qualify for shared-based compensation. See Note 15 - Share Based Compensation for further discussion;

Transaction related charges consist of (1) transaction costs from qualifying acquisition transactions during the period, or subsequent integration related project costs directly associated with an acquired business; (2) post-divestiture separation costs consisting of incremental costs incurred by the continuing operations of the Company after completion of the GBL and GAC divestitures to facilitate separation of shared operations, development of transferred shared service operations, platforms and personnel transferred as part of the divestitures and exiting of TSAs and reverse TSAs with Energizer; (3) divestiture related transaction costs that are recognized in continuing operations due to the change in plan to cease marketing and selling of the HPC business. See Note 2 – Basis of Presentation & Significant Accounting Policies for additional details;

Restructuring and related charges, which consist of project costs associated with restructuring initiatives across the segments. See Note 5 - Restructuring and Related Charges for further details;

Unrealized gains and losses attributable to the Company’s investment in Energizer common stock, acquired as part of consideration received from the Company’s sale and divestiture of GAC to Energizer. See Note 3 – Divestitures for further discussion;

Foreign currency gains and losses attributable to multicurrency loans that were entered with foreign subsidiaries in exchange for the receipt of divestiture proceeds by the parent company through the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures. The Company has also entered into various hedging arrangements to mitigate the volatility of foreign exchange risk associated with such loans;

Incremental costs associated with a safety recall in PET;

Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations subsequent to an acquisition (when applicable);

Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations (when applicable);

Incremental costs directly associated with the Spectrum Merger during the three and nine month periods ended June 30, 2018;

Non-recurring HRG net operating costs during the three and nine month periods ended June 30, 2018, considered to be redundant or duplicative as a result of the Spectrum Merger and not considered a component of the continuing commercial products company post-merger, including compensation and benefits, directors fees, professional fees, insurance, public company costs, amongst others, and including interest and other non-recurring income that will ultimately be eliminated following the transaction; and

Other adjustments primarily consisting of costs attributable to (1) operating margin on H&G sales to GAC discontinued operations for the three and nine month periods ended June 30, 2019 and 2018 respectively; (2) expenses and cost recovery for flood damage at Company facilities in Middleton, Wisconsin during the three and nine month periods ended June 30, 2019; (3) certain fines and penalties for delayed shipments following the completion of a PET distribution center consolidation in EMEA during the nine month period ended June 30, 2019; (4) legal and litigation costs associated with Salus during the three and nine month periods ended June 30, 2019 as they are not considered a component of the continuing commercial products company, but continue to be consolidated by the Company after completion of the Spectrum Merger until the Salus operations can be wholly dissolved and/or deconsolidated; and (5) incremental costs for separation of a key executive during the three and nine month periods ended June 30, 2018.

Segment Adjusted EBITDA for the reportable segments for SBH for the three and nine month periods ended June 30, 2019 and 2018, are as follows:


	Three Month Periods ended				Nine Month Periods ended
SBH (in millions)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
HHI	$	67.7	$	73.9	$	175.9	$	179.5
HPC		18.2		21.4		57.7		83.3
PET		39.0		34.9		100.9		104.6
H&G		53.3		57.0		85.9		87.7
Total Segment Adjusted EBITDA		178.2		187.2		420.4		455.1
Corporate expenses		5.3		9.5		16.7		28.8
Interest expense		33.9		63.3		185.1		206.4
Depreciation and amortization		35.9		27.9		138.4		96.6
Share and incentive based compensation		15.6		5.7		38.7		7.0
Transaction related charges		4.8		5.5		16.4		20.4
Restructuring and related charges		20.7		17.9		42.2		55.4
Unrealized loss on Energizer investment		33.2		—		38.2		—
Foreign currency loss on multicurrency divestiture loans		7.7		—		29.5		—
Inventory acquisition step-up		—		—		—		0.8
Pet safety recall		—		5.1		0.7		16.3
Spectrum merger related transaction charges		—		3.1		—		22.0
Non-recurring HRG operating costs		—		1.1		—		13.0
Other		1.6		3.4		3.9		3.2
Income (loss) from operations before income taxes	$	19.5	$	44.7	$	(89.4)	$	(14.8)

‎

Segment Adjusted EBITDA for reportable segments for SB/RH for the three and nine month periods ended June 30, 2019 and July 1, 2018 are as follows:


	Three Month Periods ended				Nine Month Periods ended
SB/RH (in millions)	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
HHI	$	67.7	$	73.9	$	175.9	$	179.5
HPC		18.2		21.4		57.7		83.3
PET		39.0		34.9		100.9		104.6
H&G		53.3		57.0		85.9		87.7
Total Segment Adjusted EBITDA		178.2		187.2		420.4		455.1
Corporate expenses		5.6		9.4		15.4		28.1
Interest expense		33.7		43.4		125.2		124.0
Depreciation and amortization		35.9		27.9		138.4		96.5
Share and incentive based compensation		15.2		4.9		37.6		4.6
Transaction related charges		4.8		5.5		16.4		20.4
Restructuring and related charges		20.7		17.9		42.2		55.4
Unrealized loss on Energizer investment		33.2		—		38.2		—
Foreign currency loss on multicurrency divestiture loans		7.7		—		29.5		—
Inventory acquisition step-up		—		—		—		0.8
Pet safety recall		—		5.1		0.7		16.3
Other		0.4		3.4		2.8		3.2
Income (loss) from continuing operations before income taxes	$	21.0	$	69.7	$	(26.0)	$	105.8