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DIVESTITURES | 12 Months Ended
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Sep. 30, 2021
Discontinued Operations and Disposal Groups [Abstract] |
DIVESTITURES | DIVESTITURES The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the accompanying Consolidated Statement of Income for the years ended September 30, 2021, 2020, and 2019:
(in millions) |  | 2021 |  | 2020 |  | 2019
Income from discontinued operations before income taxes - HHI |  | $ | 288.2 |  |  | $ | 227.8 |  |  | $ | 220.6 |
(Loss) income from discontinued operations before income taxes - GBL |  | (7.2) |  |  | 4.2 |  |  | 997.6 |
Loss from discontinued operations before income taxes - GAC |  | (0.1) |  |  | (0.1) |  |  | (115.7) |
Interest on corporate debt allocated to discontinued operations |  | 44.5 |  |  | 47.3 |  |  | 83.0 |
Income from discontinued operations before income taxes |  | 236.4 |  |  | 184.6 |  |  | 1,019.5 |
Income tax expense from discontinued operations |  | 62.1 |  |  | 33.7 |  |  | 221.5 |
Income from discontinued operations, net of tax |  | 174.3 |  |  | 150.9 |  |  | 798.0 |
(Loss) income from discontinued operations, net of tax attributable to noncontrolling interest |  | (0.2) |  |  | 0.4 |  |  | 0.5 |
Income from discontinued operations, net of tax attributable to controlling interest |  | $ | 174.5 |  |  | $ | 150.5 |  |  | $ | 797.5 |
Interest from corporate debt allocated to discontinued operations includes interest on Term Loans required to be paid down using proceeds received on disposal on sale of a business, and interest expense from corporate debt not directly attributable to or related to other operations based on the ratio of net assets of the disposal group held for sale to the consolidated net assets plus consolidated debt, excluding debt assumed in transaction, required to be repaid, or directly attributable to other operations of the Company. Corporate debt, including Term Loans required to be paid down, are not classified as held for sale as they are not directly attributable to the identified disposal groups. For the year ended September 30, 2019, SBH recognized interest expense associated with corporate debt directly held by the SBH parent company and not included as part of the consolidated financial statements of SB/RH. As a result, there was only $75.2 million of interest on corporate debt from SB/RH allocated to discontinued operations, excluding allocated interest attributable to debt held directly by the SBH parent company, and further impacting the intraperiod income tax expense from discontinued operations to $223.4 million as part of the SB/RH Consolidated Statement of Income for the year ended September 30, 2019 . The Company paid down the outstanding debt held by SBH parent company following the divestitures of GBL and GAC during the year ended September 30, 2019 and for the years ended September 30, 2021 and September 30, 2020, all corporate debt and applicable interest allocated to discontinued operations was attributable to debt held by SBI, a wholly owned subsidiary of both SBH and SB/RH. HHI On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement (the "ASPA") with ASSA ABLOY AB ("ASSA") to sell its HHI segment for cash proceeds of $4.3 billion, subject to customary purchase price adjustments. The Company's assets and liabilities associated with the HHI disposal group has been classified as held for sale and the respective operations have been classified as discontinued operations and reported separately for all periods presented. The ASPA provides that ASSA will purchase the equity of certain subsidiaries of the Company, and acquire certain assets and assume certain liabilities of other subsidiaries used or held for the purpose of the HHI business. The Company and ASSA have made customary representations and warranties and have agreed to customary covenants relating to the acquisition. Among other things, prior to the consummation of the acquisition, the Company will be subject to certain business conduct restrictions with respect to its operation of the HHI business. The Company and ASSA have agreed to indemnify each other for losses arising from certain breaches of the ASPA and for certain other matters. In particular, the Company has agreed to indemnify ASSA for certain liabilities relating to the assets retained by the Company, and ASSA has agreed to indemnify the Company for certain liabilities assumed by ASSA, in each case as described in the ASPA. The Company and ASSA have agreed to enter into related agreements ancillary to the acquisition that will become effective upon the consummation of the acquisition, including a customary transition services agreement and reverse transition services agreement. The consummation of the acquisition is subject to certain customary conditions, including, among other things, (i) the absence of a material adverse effect on HHI, (ii) the expiration or termination of required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the receipt of certain other antitrust approvals in certain specified foreign jurisdictions (the conditions contained in (ii) and (iii) together, the “Antitrust Conditions”), (iv) the accuracy of the representations and warranties of the parties generally subject to a customary material adverse effect standard (as described in the ASPA) or other customary materiality qualifications), (v) the absence of governmental restrictions on the consummation of the acquisition in certain jurisdictions, and (vi) material compliance by the parties with their respective covenants and agreements under the ASPA. The consummation of the transaction is not subject to any financing condition. The transaction is expected to be consummated prior to September 30, 2022. The ASPA also contains certain termination rights, including the right of either party to terminate the ASPA if the consummation of the acquisition has not occurred on or before December 8, 2022 (the “Termination Date”). Further, if the acquisition has not been consummated by the Termination Date and all conditions precedent to ASSA's obligation to consummate the acquisition have otherwise been satisfied except for one or more of the Antitrust Conditions, then ASSA would be required to pay the Company a termination fee of $350 million. The following table summarizes the assets and liabilities of the HHI disposal group classified as held for sale as of September 30, 2021 and 2020:
(in millions) |  | 2021 |  | 2020
Assets |  |  |  |
Trade receivables, net |  | $ | 130.2 |  |  | $ | 201.4 |
Other receivables |  | 12.1 |  |  | 27.8 |
Inventories |  | 332.2 |  |  | 239.0 |
Prepaid expenses and other current assets |  | 39.1 |  |  | 32.6 |
Property, plant and equipment, net |  | 143.5 |  |  | 140.9 |
Operating lease assets |  | 55.5 |  |  | 45.8 |
Deferred charges and other |  | 11.7 |  |  | 16.5 |
Goodwill |  | 710.9 |  |  | 704.8 |
Intangible assets, net |  | 374.8 |  |  | 385.0 |
Total assets of business held for sale |  | $ | 1,810.0 |  |  | $ | 1,793.8 |
Liabilities |  |  |  |
Current portion of long-term debt |  | $ | 1.5 |  |  | $ | 1.4 |
Accounts payable |  | 206.6 |  |  | 195.0 |
Accrued wages and salaries |  | 41.7 |  |  | 33.3 |
Other current liabilities |  | 75.9 |  |  | 73.9 |
Long-term debt, net of current portion |  | 54.4 |  |  | 55.3 |
Long-term operating lease liabilities |  | 48.6 |  |  | 39.2 |
Deferred income taxes |  | 7.8 |  |  | 10.2 |
Other long-term liabilities |  | 17.8 |  |  | 20.4 |
Total liabilities of business held for sale |  | $ | 454.3 |  |  | $ | 428.7 |
The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture in the accompanying Consolidated Statements of Operations for the years ended September 30, 2021, 2020 and 2019:
(in millions) |  | 2021 |  | 2020 |  | 2019
Net sales |  | $ | 1,615.8 |  |  | $ | 1,342.1 |  |  | $ | 1,355.7 |
Cost of goods sold |  | 1,025.3 |  |  | 850.3 |  |  | 868.4 |
Gross profit |  | 590.5 |  |  | 491.8 |  |  | 487.3 |
Operating expenses |  | 293.1 |  |  | 257.1 |  |  | 262.8 |
Operating income |  | 297.4 |  |  | 234.7 |  |  | 224.5 |
Interest expense |  | 3.4 |  |  | 3.5 |  |  | 3.4 |
Other non-operating expense, net |  | 5.8 |  |  | 3.4 |  |  | 0.5 |
Income from discontinued operations before income taxes |  | $ | 288.2 |  |  | $ | 227.8 |  |  | $ | 220.6 |
Beginning in September 2021, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with the HHI disposal group classified as held for sale. Interest expense consists of interest from debt directly attributable to HHI operations that primarily consist of interest from finance leases. No impairment loss was recognized on the asset held for sale as the purchase price of the business less estimated cost to sell is more than its carrying value. The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture:
(in millions) |  | 2021 |  | 2020 |  | 2019
Depreciation and amortization |  | $ | 31.1 |  |  | $ | 33.9 |  |  | $ | 33.5 |
Share and incentive based compensation |  | $ | 0.8 |  |  | $ | 6.0 |  |  | $ | 5.0 |
Purchases of property, plant and equipment |  | $ | 22.8 |  |  | $ | 16.9 |  |  | $ | 18.0 |
GBL On January 2, 2019, the Company completed the sale of its GBL business pursuant to the GBL acquisition agreement with Energizer for cash proceeds of $1,956.2 million, resulting in a pre-tax gain on sale of $989.8 million, during the year ended September 30, 2019, including the settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications under the acquisition agreement and an estimated contingent purchase price adjustment of $200 million for the settlement of the planned divestiture of the Varta® consumer batteries business by Energizer. The results of operations and gain on sale for disposal of the GBL business were recognized as a component of discontinued operations. The GBL acquisition agreement provided for a purchase price adjustment that was contingent upon the completion of the divestiture of the Varta® consumer battery, chargers, portable power and portable lighting business in the EMEA region by Energizer. The Company settled the outstanding balance with Energizer for $197 million and recognized an incremental adjustment to gain on sale of $3.0 million as a component of income from discontinued operations, net of tax, during the year ended September 30, 2020. The Company and Energizer agreed to indemnify each other for losses arising from certain breaches of the GBL acquisition agreement and for certain other matters. The Company agreed to indemnify Energizer for certain liabilities relating to the assets retained by the Company, and Energizer agreed to indemnify the Company for certain liabilities assumed by Energizer, in each case as described in the acquisition agreement. As of September 30, 2021 and 2020, the Company recognized $35.0 million and $50.2 million, respectively, related to indemnifications in accordance with the acquisition agreement, including $17.3 million and $33.0 million, respectively, within Other Current Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to current income tax indemnifications and $17.7 million and $17.2 million, respectively, within Other Long-Term Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits. During the years ended September 30, 2021 and 2020, the Company recognized incremental pre-tax loss on sale for changes to tax and legal indemnifications and other agreed-upon funding under the GBL acquisition agreement with Energizer. During the year ended September 30, 2020, the Company recognized a $10.5 million tax benefit to discontinued operations from the return to provision adjustments related to the divestitures of GBL, primarily from changes to US GILTI on the non-US portions of the sold business. The Company and Energizer entered into related agreements that became effective upon the consummation of the acquisition including a customary transition services agreement (“TSA”) and reverse TSA. The TSA and reverse TSA are recognized as a component of continuing operations for periods following the completion of the GBL sale. See Note 17 – Related Party Transactions for additional discussion. The following table summarizes the components of income from discontinued operations before income taxes associated with the GBL operations in the accompanying Consolidated Statements of Operations for the years ended September 30, 2019 with the close of the GBL divestiture on January 2, 2019.
(in millions) |  | 2019
Net sales |  | $ | 249.0 |
Cost of goods sold |  | 164.6 |
Gross profit |  | 84.4 |
Operating expenses |  | 57.0 |
Operating income |  | 27.4 |
Interest expense |  | 0.6 |
Other non-operating expense, net |  | 0.5 |
Gain on sale |  | (989.8) |
Reclassification of accumulated other comprehensive income |  | 18.5 |
Income from discontinued operations before income taxes |  | $ | 997.6 |
The Company ceased the recognition of depreciation and amortization of long-lived assets associated with the GBL disposal group when classified as held for sale prior to the year ended September 30, 2019 and therefore no depreciation and amortization was recognized from the GBL disposal group during the year ended September 30, 2019 prior to close of the transaction. Interest expense consists of interest from debt directly attributable to GBL operations that primarily consist of interest from finance leases. Additionally, the Company incurred transaction costs of $12.9 million associated with the divestiture, which were recognized as a component of income from discontinued operations for the year ended September 30, 2019. Transaction costs were expensed as incurred and include fees for investment banking services, legal, accounting, due diligence, tax, valuation and various other services necessary to complete the transaction. GAC On January 28, 2019, the Company completed the sale of its GAC business pursuant to the GAC acquisition agreement with Energizer for $938.7 million in cash proceeds and $242.1 million in stock consideration of common stock of Energizer, resulting in a loss on sale of business of $111.0 million during the year ended September 30, 2019, including the estimated settlement of customary purchase price adjustments for working capital and assumed indebtedness, and recognition of tax and legal indemnifications in accordance with the GAC acquisition agreement. The results of operations and loss on the disposal of the GAC business were recognized as a component of discontinued operations. The Company and Energizer agreed to indemnify each other for losses arising from certain breaches of the GAC acquisition agreement and for certain other matters. The Company agreed to indemnify Energizer for certain liabilities relating to the assets retained by the Company, and Energizer agreed to indemnify the Company for certain liabilities assumed by Energizer, in each case as described in the acquisition agreement. As of September 30, 2021 and 2020, the Company recognized $1.5 million and $1.4 million, respectively, related to indemnifications in accordance with the acquisition agreement within Other Long-Term Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits. The Company and Energizer entered into related agreements ancillary to the GAC acquisition that became effective upon the consummation of the acquisition, including a TSA and reverse TSA, a supply agreement with the Company’s H&G business, as well as a shareholder agreement. The TSA and reverse TSA are recognized as a component of continuing operations for periods following the completion of the GAC sale. The supply agreement with the Company’s H&G business was recognized as a component of net sales and continuing operations. The supply agreement had a contracted term of 24 months, and expired in January 2021. Sales from the Company’s H&G segment to GAC discontinued operations prior to the divestiture have been recognized as a component of net sales and continuing operations for all comparable periods. See Note 17 – Related Party Transactions for additional discussion. The following table summarizes the components of income from discontinued operations before income taxes associated with the GAC business in the accompanying Consolidated Statements of Operations for the year ended 2019, with the close of the GAC divestiture on January 28, 2019:
(in millions) |  | 2019 |  |
Net sales |  | $ | 87.7 |  |  |
Cost of goods sold |  | 52.5 |  |  |
Gross profit |  | 35.2 |  |  |
Operating expenses |  | 35.7 |  |  |
Operating loss |  | (0.5) |  |  |
Interest expense |  | 0.7 |  |  |
Other non-operating expense, net |  | 0.2 |  |  |
Loss on sale of business |  | 111.0 |  |  |
Reclassification of accumulated other comprehensive income |  | 3.3 |  |  |
Loss from discontinued operations before income taxes |  | $ | (115.7) |  |  |
Beginning in November 2018, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with the GAC disposal group classified as held for sale. During the year ended September 30, 2019, there is depreciation and amortization expense included in income from discontinued operations of $1.4 million. Interest expense consists of interest from debt directly attributable to GAC operations that primarily consists of interest from finance leases. During the year ended September 30, 2019, the Company recognized a $111.0 million loss on sale associated with the GAC divestiture attributable to the expected fair value to be realized from the sale, net of transaction costs. Additionally, the Company incurred transaction costs of $8.8 million associated with the divestiture, which were recognized as a component of income from discontinued operations for the year ended September 30, 2019. Transaction costs were expensed as incurred and include fees for investment banking services, legal, accounting, due diligence, tax, valuation and various other services necessary to complete the transaction. Coevorden Operations On March 29, 2020, the Company completed its sale of the dog and cat food (“DCF”) production facility and distribution center in Coevorden, Netherlands (“Coevorden Operations”) pursuant to an agreement with United Petfood Producers NV (“UPP”) for total cash proceeds of $29.0 million. The divestiture does not constitute a strategic shift for the Company and therefore is not considered discontinued operations. The divestiture of the Coevorden Operations was defined as a disposal of a business and a component of the GPC segment and reporting unit, resulting in the allocation of $10.6 million of GPC goodwill to the disposal group based upon a relative fair-value allocation. The Company realized a loss on assets held for sale of $26.8 million during the year ended September 30, 2020. The Company and UPP entered into related agreements ancillary to the acquisition that became effective upon the consummation of the acquisition, including a TSA. The Company will continue to operate its commercial DCF business following the divestiture of the Coevorden Operations and entered into a manufacturing agreement with UPP to supply the continuing DCF business, subject to an incremental tolling charge. Additionally, the Company leases and operates the distribution center on behalf of UPP for up to 18 months following the divestiture under a lease agreement.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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