##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      FORM 10-K
  þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF
    1934For the fiscal year ended
    September 30, 2006ORo

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the transition period
    from          
    to   Commission file number
    1-14557
      Jacuzzi Brands, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

22-3568449(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. employer
    identification number)777 S. Flagler
    Drive;
    Suite 1100 West
    West Palm Beach, FL

33401(Zip code)(Address of principal executive
    offices)   (561) 514-3838
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to
    Section 12(b) of the Act:
  Title of Each Class

Name of each exchange on which registeredCommon Stock, par value
    $.01 per share

New York Stock Exchange   Securities registered pursuant to
    Section 12(g) of the Act: None
      þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer  þ     Accelerated
    filer  o     Non-accelerated
    filer  o
  Rule 12b-2).  Yes o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 



TABLE OF
    CONTENTS
  Item



PagePART I1.

Business


11A.

Risk Factors


82.

Properties


133.

Legal
    Proceedings


144.

Submission of
    Matters to a Vote of Security Holders


16PART II5.

Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


166.

Selected Financial
    Data


177.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


187A.

Quantitative and
    Qualitative Disclosures About Market Risk


368.

Financial
    Statements and Supplementary Data


379.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


879A.

Controls and
    Procedures


879B.

Other
    Information


87PART III10.

Directors and
    Executive Officers of the Registrant


8711.

Executive
    Compensation


8712.

Security Ownership
    of Certain Beneficial Owners and Management


8713.

Certain
    Relationships and Related Transactions


8814.

Principal
    Accounting Fees and Services


88PART IV15.

Exhibits and
    Financial Statement Schedules


88SIGNATURES


94EX-10.45 Amended and Restated Employment AgreementEX-21.1 SubsidiariesEX-23.1 Consent of Ernst & Young LLPEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEO & CFO




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##### Table of Contents



PART I  Item 1.
    Business    ® ® ® tm ® ® ®
      5 8
  53-week Form 10-K www.sec.gov www.jacuzzibrands.com Form 10-K, Form 10-Q, Form 8-K
  Note 11
  Bath
    Products Segment
   1




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U.S. Bath Products. ® ® ® ®
  ® ®
  point-of-purchase
    International Bath Products. ® ® ® ® ® ®
  ®
  ®
  Plumbing
    Products Segment
    ® tm tm ® ®
 2




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##### Table of Contents



tm ®
    24-hour
    Rexair
    Segment
  EITF 01-02, Interpretations of APB Opinion No. 29 No. 01-02)
  Discontinued
    Operations
        Note 3
 3




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##### Table of Contents



Seasonality
    Raw
    Materials, Energy and Suppliers
    Patents,
    Trademarks and Licenses
  ® ® ® ® tm
  Competition
    Backlog
    Export
    and International Operations
  and/or ®
 4




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Employee
    Relations
    Environmental
    Regulation
         5




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Corporate
    Governance
    Executive
    Officers
    Name

Age

PositionAlex P. Marini


60


President and Chief Executive
    OfficerSteven C. Barre


46


Senior Vice President, General
    Counsel and SecretaryMarie S. Dreher


48


Senior Vice President 
    Corporate Development and StrategyJeffrey B. Park


54


Senior Vice President, Chief
    Financial Officer and TreasurerDiana E. Burton


61


Vice President 
    Investor RelationsFrancisco V. Puñal


47


Vice President and Corporate
    ControllerEdmund L. Krainski


54


Vice President, Finance   Alex P. Marini
  Steven C. Barre
  Marie S. Dreher
 6




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##### Table of Contents



Jeffrey B. Park
  Diana E. Burton
  Francisco V. Puñal
  Edmund L. Krainski
 7




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Item 1A.
    Risk
    Factors  Form 10-K
  Risks
    Related to Our Business
  The
    seasonality of our sales and economic events may adversely
    affect our financial results and our ability to service our
    debt.
    Weather
    could adversely affect the demand for our products and decrease
    our net sales.
    Demand
    for building and home improvement products may depend on
    availability of financing.
    We may
    be adversely affected by downturns in the markets we
    serve.
   8




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The
    markets in which we sell our products are highly
    competitive.
    The
    loss of any significant customer could adversely affect our
    business.
    An
    increase in the price of raw materials, components, finished
    goods and other commodities could adversely affect our
    operations.
    We are
    exposed to political, economic and other risks that arise from
    operating a multinational business.
    
    the difficulty of enforcing agreements and collecting
    receivables through foreign legal systems;
    trade protection measures and import or export licensing
    requirements;
    tax rates in certain foreign countries that exceed those in the
    U.S. and the imposition of withholding requirements on foreign
    earnings;
    the imposition of tariffs, exchange controls or other
    restrictions;
    difficulty in staffing and managing widespread operations and
    the application of foreign labor regulations;
    required compliance with a variety of foreign laws and
    regulations; and
    changes in general economic and political conditions in
    countries where we operate, particularly in emerging markets.   9




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We are
    subject to currency exchange rate and other related
    risks.
      Adverse
    investment returns and other factors may increase our pension
    liability and pension expense.
    Our
    financial statements are based upon estimates and assumptions
    that may differ from actual results.
    We are
    subject to numerous asbestos claims that could adversely affect
    us.
  Item 3. Legal
    Proceedings.
  We are
    subject to environmental regulation and incur costs relating to
    environmental matters.
   10




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We may
    not be able to protect our intellectual property
    rights.
    Our
    failure to attract and retain qualified personnel could have an
    adverse effect on us.
    Work
    stoppages and other labor problems could affect
    us.
    Our
    proposed merger with Apollo may not be consummated
      Risks
    Related to Our Indebtedness
  Liquidity and Capital Resources Item 7 Form 10-K
 11




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We
    have substantial indebtedness and servicing our indebtedness
    reduces funds available to operate our business.
    
    increase our vulnerability to general adverse economic and
    industry conditions;
    limit our ability to obtain additional financing;
    require us to dedicate a substantial portion of our cash flow
    from operations to the payment of principal and interest on our
    indebtedness, reducing the amount of our cash flow available for
    other general corporate purposes, including capital
    expenditures, research and development efforts and working
    capital;
    require us to sell other securities or to sell some of our core
    assets, possibly on unfavorable terms, to meet payment
    obligations;
    restrict us from making strategic acquisitions, investing in new
    products or capital assets or taking advantage of business
    opportunities;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate; and
    place us at a possible competitive disadvantage compared to less
    leveraged competitors.  Our
    debt instruments contain covenants which will limit our ability
    to operate our business.
    
    incur additional debt or enter into
    sale-and-lease-back
    transactions;
    pay dividends or distributions on our capital stock or
    repurchase our capital stock;
    issue preferred stock of subsidiaries;
    make certain investments;
    create liens to secure debt;
    enter into transactions with affiliates;
    merge or consolidate with another company; and
    transfer and sell assets.     12




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To
    service our indebtedness, we will require a significant amount
    of cash. Our ability to generate cash depends on many factors
    beyond our control.
      Item 2.
    Properties    ApproximateLocation

Use

Square Footage


Owned/LeasedBath Products:EuropeValvasone, Italy

Manufacturing/Warehouse


251,472



OwnedNewcastle, England

Manufacturing


99,429



OwnedBirstal, England

Manufacturing/Showroom


136,375



OwnedHilton, England

Warehouse


125,000



LeasedBradford, England

Warehouse


202,000



LeasedParis, France

Warehouse


79,653



LeasedCusset, France

Manufacturing


10,764



OwnedMarsa, Malta

Manufacturing


57,834



LeasedSouth AmericaItu, Brazil

Manufacturing/Office


234,695



OwnedSantiago, Chile

Manufacturing/Office/Showroom


52,480



OwnedUnited StatesChino, California

Spa Manufacturing/Warehouse


350,000



LeasedChino, California

Spa Office Space & Bath
    Manufacturing


92,000



OwnedChino, California

Whirlpool Bath
    Manufacturing/Warehouse


306,700



LeasedCarrollton, Texas

Manufacturing/Warehousing/Testing


11,440



LeasedPlant City, Florida

Office


1,000



LeasedValdosta, Georgia

Manufacturing/Office


363,876



LeasedAddison, Texas

Office


110,649



Leased 13




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##### Table of Contents



ApproximateLocation

Use

Square Footage


Owned/LeasedPlumbing Products:CanadaMississauga, Ontario

Manufacturing/Warehouse


27,878



LeasedUnited StatesGardena, California

Office/Warehouse/Distribution


73,987



OwnedPaso Robles, California

Manufacturing/Office


158,000



OwnedNorcross, Georgia

Warehouse/Office


96,000



LeasedElkhart, Indiana

Manufacturing/Distribution


110,000



OwnedHayward, California

Warehouse/Office


23,640



LeasedSacramento, California

Warehouse


16,000



LeasedFalconer, New York

Manufacturing/Warehouse/Distribution


151,520



LeasedSanford, North Carolina

Assembly/Office


78,000



OwnedNorthwood, Ohio

Warehouse


17,920



LeasedBen Salem, Pennsylvania

Warehouse/Office


40,000



LeasedErie, Pennsylvania

Manufacturing/Office/Distribution


310,562



LeasedHarborcreek, Pennsylvania

Warehouse/Office


50,000



LeasedCommerce, Texas

Manufacturing/Distribution


175,000



OwnedDallas, Texas

Warehouse/Office


55,020



Leased   week-to-week
  Item 3.
    Legal
    Proceedings      Note 10
      year-over-year.
 14




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and/or and/or and/or and/or
           15




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Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities      Fiscal 2006


Fiscal 2005High


Low


High


LowFirst Quarter

$
8.70


$
6.95


$
9.75


$
7.94Second Quarter

$
10.10


$
8.45


$
10.85


$
8.28Third Quarter

$
10.22


$
8.09


$
11.35


$
8.09Fourth Quarter

$
10.66


$
7.80


$
11.57


$
7.23         Liquidity and
    Capital Resources Item 7 Form 10-K).
   16




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Column(a)


Column(b)


Column(c)Number of Securities


Weighted-Averageto be Issued Upon


Exercise Price of


Number of SecuritiesExercise of


Outstanding


Remaining Available forOutstanding


Options,


Future Issuance UnderOptions,


Warrants and


Equity CompensationPlan Category

Warrants and Rights


Rights


Plans(1)Equity compensation plans:Approved by security holders


930,632


$
5.11



3,225,948Not approved by security holders










Total


930,632


$
5.11



3,225,948     (1)
    
    Excluding securities reflected in Column (a).  Item 6.
    Selected
    Financial Data             17




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##### Table of Contents



Item 8 Form 10-K. Items 7 8 Form 10-K.
  For the Fiscal Years EndedSeptember 30,


September 30,


September 30,


September 30,


September 30,2006


2005


2004


2003


2002(in millions, except per share amounts)Statements of
    Operations:Net sales

$
1,202.4


$
1,210.0


$
1,201.2


$
1,025.2


$
904.1Operating income


103.6



94.4



127.2



99.1



95.2Earnings from continuing operations


43.8



58.0



48.3



21.4



32.4(Loss) earnings from discontinued
    operations, net of tax


(3.4
)


(63.6
)


(19.9
)


(50.4
)


8.5Net earnings (loss)


40.4



(5.6
)


28.4



(29.0
)


40.9Basic earnings (loss) per share:Earnings (loss) from continuing
    operations


0.57



0.77



0.64



0.29



0.44(Loss) earnings from discontinued
    operations


(0.04
)


(0.84
)


(0.26
)


(0.68
)


0.11Net earnings (loss)


0.53



(0.07
)


0.38



(0.39
)


0.55Diluted earnings (loss) per share:Earnings from continuing operations


0.56



0.76



0.64



0.29



0.44(Loss) earnings from discontinued
    operations


(0.04
)


(0.83
)


(0.27
)


(0.68
)


0.11Net earnings (loss)


0.52



(0.07
)


0.37



(0.39
)


0.55Balance Sheet Data (at period
    end):Cash and cash equivalents

$
147.2


$
110.2


$
39.6


$
31.2


$
32.1Working capital


351.7



260.7



240.7



194.8



293.0Total assets


1,253.7



1,289.5



1,380.4



1,327.8



1,686.9Total debt


403.3



407.0



471.8



500.1



808.1Stockholders equity


345.5



285.2



288.5



245.5



254.4   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
     18




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The Equity Method of Accounting for Investments in Common
    Stock
            Results of Operations Form 10-K.
  For the Fiscal Years Ended September 30,2006


2005


2004(in millions)Net sales

$
82.0


$
133.0


$
148.1Operating loss


(6.3
)


(9.1
)


(31.6
)Loss from discontinued operations


(3.4
)


(63.6
)


(19.9
)    19




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##### Table of Contents



Note 3
  Results
    of Operations
    For the Fiscal Years EndedSeptember 30,2006


2005


2004(in millions)Net SalesBath Products

$
766.6


$
780.8


$
788.4Plumbing Products


435.8



353.1



308.0Rexair(1)






76.1



104.8Total Net Sales

$
1,202.4


$
1,210.0


$
1,201.2Operating IncomeBath Products

$
38.5


$
30.1


$
57.2Plumbing Products


90.9



75.3



60.7Rexair(1)






19.0



27.3129.4



124.4



145.2Corporate Expenses


(25.8
)


(30.0
)


(18.0
)Total Operating
    Income

$
103.6


$
94.4


$
127.2     (1)
    
    Reflects sales and operating income through June 30, 2005.  Fiscal
    2006 Compared to Fiscal 2005
  Overall
      Bath
    Products
   20




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##### Table of Contents



Note 4
  Plumbing
    Products
    last-in-first-out first-in-fist-out
  Corporate
    Expenses
      For the Fiscal Years Ended


Favorable/September 30,


September 30,


(Unfavorable)2006


2005


Variance(in millions)Pension income

$
(5.2
)

$
(7.2
)

$
(2.0
)Post-retirement expenses


4.9



1.3



(3.6
)Restructuring and severance


2.8



4.9



2.1Intangible tax


(1.6
)


2.2



3.8$
0.9


$
1.2


$
0.3  21




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##### Table of Contents



Interest
    Income and Expense
    Gain on
    sale of business
    Other
    income/(expense), net
    For the Fiscal YearsEnded September 30,2006


2005(in millions)Keller Ladder income (expense)

$
0.5


$
(1.0
)Gain (loss) on collection or sales
    of non-operating assets


9.3



(0.7
)(Loss) gain on sale of excess
    properties and equipment


(0.6
)


1.7Foreign currency transaction
    (losses) gains


(1.7
)


0.4Debt retirement costs






(3.2
)Gain on litigation of
    environmental claim


3.5



Other, net


(3.5
)


(3.8
)$
7.5


$
(6.6
)    22




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Taxes
      Fiscal
    2005 Compared to Fiscal 2004
  Overall
      Bath
    Products
      Note 4
 23




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Plumbing
    Products
      Corporate
    Expenses
  year-over-year
  Interest
    Income and Expense
    Other
    Expense, net
    For the Fiscal YearsEnded September 30,2005


2004(in millions)Keller Ladder expenses

$
1.0


$
1.6Loss (gain) on sales of other
    non-operating assets


0.7



(2.5
)(Gain) loss on sale of excess
    properties and equipment


(1.7
)


0.1Foreign currency transaction
    (gains) losses


(0.4
)


1.9Debt retirement costs


3.2



Other, net


3.8



2.1$
6.6


$
3.2     Taxes
    
    No taxes will be incurred on the Rexair gain because it resulted
    in a capital loss for tax purposes.
    A $2.9 million tax benefit was recognized in the second
    quarter of fiscal 2005 upon the completion of a Federal tax
    audit of a subsidiary. 24




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##### Table of Contents




    A $5.9 million tax benefit was recognized in fiscal 2005 as
    a result of a Federal tax audit of our consolidated tax returns
    for the fiscal years 1998 through 2002. The benefit resulted
    from agreed upon computational adjustments. The IRS provided
    their final report for this audit in August 2005. We filed an
    appeal with the IRS in September 2005 regarding various issues
    that we could not reach agreement on.    Liquidity
    and Capital Resources
      Note 4
       25




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Maximum


AmountAvailability


Outstanding


Applicable Interest Rate(in millions)Senior Notes

$
380.0


$
380.0


9.625%Asset-based credit
    facility(1)


131.2






2.0% over LIBOR or PrimeUS Brass note


3.5



3.5


Interest imputed at 9.5%Total

$
514.7


$
383.5     (1)
    
    $30.7 million of the facility is utilized for letters of
    credit at the end of fiscal 2006.     26




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##### Table of Contents



Commitments
      PaymentsPayments Due in Fiscal


DueTotal


2007


2008-2009


2010-2011


Thereafter(in millions)Long-term debt

$
383.5


$
1.7


$
1.8


$
380.0


$
Notes payable


19.8



19.8











Lease obligations


51.6



12.7



17.7



12.6



8.6Purchase
    obligations(1)


117.8



117.8











Interest
    payments(2)


137.2



36.6



73.2



27.4



Other(3)


4.6



2.6



1.6



0.3



0.1Total

$
714.5


$
191.2


$
94.3


$
420.3


$
8.7     (1)
    
    Purchase obligations are all open purchase orders at
    September 30, 2006. Of this amount, $9.9 million
    represents obligations that were relieved by October 5,
    2006.(2)
    
    Interest payments represent interest on the Senior Notes. 27




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##### Table of Contents



(3)
    
    Other includes $3.6 million of restructuring and other cash
    obligations which are accrued on our balance sheet at
    September 30, 2006. The remaining $1.0 million relates
    to a consulting agreement which will be expensed as incurred.    Guarantees
    and Indemnifications
        New
    Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109 Accounting for Income Taxes.
  Fair Value Measurements.
  Considering the Effects of Prior Year Misstatements when
    Qualifying Misstatements in Current Year Financial
    Statements.
 28




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Employers Accounting for Defined Benefit
    Pension and Other Postretirement Plans  An Amendment
    of FASB Statements No. 87, 88, 106, and 123R. a b c
  Foreign
    Currency Matters
    Effects
    of Inflation
    Critical
    Accounting Policies and Estimates
  Note 2
  Trade
    Receivables
   29




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##### Table of Contents



Inventories
    Income
    Taxes
      Assets
    Held for Sale
  Accounting for Impairment or Disposal
    of Long-lived Assets
  Goodwill
  and/or Goodwill and
    Intangible Assets
  Costs
    Associated with Exit or Disposal Activities
  Accounting for Costs
    Associated with Exit or Disposal Activities.
 30




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##### Table of Contents



Commitments
    and Contingencies
        Usheroff v. Jacuzzi Brands,
    Inc., et al. No. 2473-N Ryan v. Victor,
    et al. No. 2477-N Rubenstein v. Marini, et
    al No. 2485-N Worcester Retirement
    System v. Jacuzzi Brands, Inc., et al. No. 2531-N
  Warranty
    Reserves
   31




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Pension
    and Other Post-Employment Benefits
      Note 6
  Environmental
    Liabilities
      
    The extent and types of hazardous substances at a site;
    The range of technologies that can be used for remediation;
    Evolving standards of what constitutes acceptable
    remediation; and
    The number and financial condition of other PRPs and the extent
    of their responsibility for the remediation.   32




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Asbestos
    Claims and Insurance for Asbestos Claims
  Item 3 Legal Proceedings Form 10-K,
      Revenue
    Recognition
      Accounting
    for Stock-Based Compensation
  Share-Based Payment
 33




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##### Table of Contents



Note 8
  Discontinued
    Operations
  Accounting for the Impairment of
    Long-lived Assets and for Long-lived Assets to be Disposed
    Of.
    Variable
    Interest Entities
  Consolidation of Variable
    Interest Entities, an Interpretation of ARB No. 51
  Disclosure
    Concerning Forward-Looking Statements and Factors That May
    Affect Future Results
    Form 10-K Form 10-K
    
    The seasonality of our sales and economic events may adversely
    affect our financial results and our ability to service our debt.
    Weather could adversely affect the demand for our products and
    decrease our net sales.
    Demand for building and home improvement products may depend on
    availability of financing. 34




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##### Table of Contents




    We may be adversely affected by downturns in the markets we
    serve.
    The markets in which we sell our products are highly competitive.
    The loss of any significant customer could adversely affect our
    business.
    An increase in the price of raw materials, components, finished
    goods and other commodities could adversely affect our
    operations.
    We are exposed to political, economic and other risks that arise
    from operating a multinational business.
    We are subject to currency exchange rate and other related risks.
    Adverse investment returns and other factors may increase our
    pension liability and pension expense.
    Our financial statements are based upon estimates and
    assumptions that may differ from actual results.
    We are subject to numerous asbestos claims that could adversely
    affect us.
    We are subject to environmental regulation and incur costs
    relating to environmental matters.
    We may not be able to protect our intellectual property rights.
    Our failure to attract and retain qualified resources could have
    an adverse effect on us.
    Work stoppages and other labor problems could affect us.
    We have substantial indebtedness and servicing our indebtedness
    reduces funds available to operate our business.
    Our debt instruments contain covenants which will limit our
    ability to operate our business.
    To service our indebtedness, we will require a significant
    amount of cash. Our ability to generate cash depends on many
    factors beyond our control.  Risk Factors Item 1 Form 10-K.
 35




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##### Table of Contents



Item 7A.
    Qualitative
    and Quantitative Disclosures About Market Risk     36




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Rule 13a-15(f)
       37




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             
     38




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
              
     39




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (in
    millions, except per share amounts)
  For the Fiscal Years EndedSeptember 30,2006


2005


2004Net sales

$
1,202.4


$
1,210.0


$
1,201.2Operating costs and expenses:Cost of products sold


821.9



820.4



802.4Selling, general and
    administrative expenses


271.5



285.8



268.7Impairment, restructuring and
    other charges


5.4



9.4



2.9Operating income


103.6



94.4



127.2Interest expense


(42.2
)


(48.1
)


(50.5
)Interest income


8.2



3.0



4.7Gain on sale of business






24.7



Other income (expense), net


7.5



(6.6
)


(3.2
)Rexair equity earnings


3.8



0.6



Earnings before income taxes and
    discontinued operations


80.9



68.0



78.2Provision for income taxes


(37.1
)


(10.0
)


(29.9
)Earnings from continuing operations


43.8



58.0



48.3Discontinued operations:Loss from operations, net of tax
    benefit of $0.0 in 2006, $2.3 in 2005 and $11.5 in 2004


(3.4
)


(4.5
)


(19.9
)Loss on disposals, net of tax
    benefit of $1.9 in 2006 and tax provision of $0.6 in 2005






(59.1
)


Loss from discontinued operations


(3.4
)


(63.6
)


(19.9
)Net earnings (loss)

$
40.4


$
(5.6
)

$
28.4Basic earnings (loss) per share:Continuing operations

$
0.57


$
0.77


$
0.64Discontinued operations


(0.04
)


(0.84
)


(0.26
)Net earnings (loss)

$
0.53


$
(0.07
)

$
0.38Diluted earnings (loss) per share:Continuing operations

$
0.56


$
0.76


$
0.64Discontinued operations


(0.04
)


(0.83
)


(0.27
)Net earnings (loss)

$
0.52


$
(0.07
)

$
0.37    40




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##### Table of Contents



JACUZZI
    BRANDS, INC.
  CONSOLIDATED
    BALANCE SHEETS
 (in
    millions, except share data)
  At September 30,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
147.2


$
110.2Trade receivables, net of
    allowances of $9.3 in 2006 and $8.2 in 2005


205.0



200.5Inventories


194.6



165.0Deferred income taxes


25.6



27.9Assets held for sale


7.4



69.7Prepaid expenses and other current
    assets


21.9



22.6Total current assets


601.7



595.9Restricted cash collateral






12.4Property, plant and equipment, net


92.5



103.7Pension assets


150.0



147.8Insurance for asbestos claims


136.0



153.0Goodwill


231.4



228.2Other non-current assets


42.1



48.5TOTAL ASSETS

$
1,253.7


$
1,289.5LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Notes payable

$
19.8


$
22.0Current maturities of long-term
    debt


1.7



1.5Trade accounts payable


108.5



105.7Income taxes payable


9.9



24.7Liabilities associated with assets
    held for sale


0.8



66.9Accrued expenses and other current
    liabilities


109.3



114.4Total current liabilities


250.0



335.2Long-term debt


381.8



383.5Deferred income taxes


28.3



5.6Asbestos claims


136.0



153.0Other liabilities


112.1



127.0Total liabilities


908.2



1,004.3Commitments and contingenciesStockholders equity:Common stock (par value
    $.01 per share, authorized 300,000,000 shares; issued
    99,096,734 shares; outstanding 77,628,042 and
    77,092,157 shares in 2006 and 2005, respectively)


1.0



1.0Paid-in capital


620.5



630.7Retained earnings/Accumulated
    (deficit)


31.6



(8.8
)Unearned restricted stock






(5.2
)Cumulative foreign currency
    translation


21.4



12.8Minimum pension liability


(23.7
)


(29.4
)Unrealized loss on investment


(0.1
)


Treasury stock (21,468,692 and
    22,004,557 shares in 2006 and 2005, respectively), at cost


(305.2
)


(315.9
)Total stockholders equity


345.5



285.2TOTAL LIABILITIES AND
    STOCKHOLDERS EQUITY

$
1,253.7


$
1,289.5    41




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##### Table of Contents



JACUZZI
    BRANDS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (in
    millions)
  September 30,2006


2005


2004(Revised)


(Revised)OPERATING ACTIVITIES:Earnings from continuing operations

$
43.8


$
58.0


$
48.3Adjustments to reconcile earnings
    from continuing operations to net cash provided by operating
    activities of continuing operations:Depreciation expense


20.4



21.7



19.2Amortization of intangible assets






0.9



1.2Amortization of unearned restricted
    stock


4.0



3.7



2.0Amortization of debt issuance costs
    and other financing costs


2.9



3.3



3.7Charges for debt retirement and
    refinancing costs






3.2



Provision for deferred income taxes


19.0



4.7



2.1Provision for doubtful accounts


1.9



3.1



5.0Gain on sale of excess real estate






(1.8
)


(0.5
)Excess tax benefits from share
    based payment agreements


(0.2
)






Other stock-based compensation
    expense


1.2



0.6



1.7Loss on sale of property, plant and
    equipment


0.5



0.1



0.7(Gain)/Loss on sale/collection of
    notes


(9.3
)


0.7



Gain on sale of business






(24.7
)


Impairment, restructuring and other
    non-cash charges


0.5



1.3



Equity in earnings of investees


(3.8
)


(0.5
)


Changes in operating assets and
    liabilities, excluding the effects of acquisition and
    dispositions:Trade receivables


(1.3
)


3.5



(23.9
)Inventories


(26.9
)


(4.1
)


(27.1
)Other current assets


1.3



(1.2
)


0.8Other assets


1.3



(2.3
)


(4.2
)Trade accounts payable


(0.2
)


(5.2
)


16.8Income taxes payable


(10.2
)


(5.2
)


14.3Accrued expenses and other current
    liabilities


(1.8
)


(6.0
)


5.0Other liabilities


(8.3
)


(1.6
)


(5.7
)Net cash provided by operating
    activities of continuing operations


34.8



52.2



59.4Loss from discontinued operations


(3.4
)


(63.6
)


(19.9
)Adjustments to reconcile loss from
    discontinued operations to net cash used in discontinued
    operations:Loss on disposal of discontinued
    operations






59.1



0.3Other (increases) decreases in net
    assets held for sale


(14.7
)


(26.7
)


5.3Net cash used in discontinued
    operations


(18.1
)


(31.2
)


(14.3
)NET CASH PROVIDED BY OPERATING
    ACTIVITIES


16.7



21.0



45.1INVESTING ACTIVITIES:Proceeds from sale of businesses


3.7



140.7



4.5Proceeds from sale of non-operating
    assets


9.3



4.4



2.4Return of equity investment


3.2







Purchases of property, plant and
    equipment


(12.5
)


(22.7
)


(23.0
)Proceeds from sale of property,
    plant and equipment


0.3



0.2



0.3Proceeds from sale of real estate


1.7



2.8



3.5Net cash provided by (used in)
    investing activities of continuing operations


5.7



125.4



(12.3
)Purchases of property, plant and
    equipment, discontinued operations


(1.5
)


(0.7
)


(0.3
)Proceeds from sale of property,
    plant and equipment, discontinued operations


4.9







NET CASH PROVIDED BY (USED IN)
    INVESTING ACTIVITIES


9.1



124.7



(12.6
)FINANCING ACTIVITIES:Proceeds from long-term debt






59.1



46.4Repayment of long-term debt


(1.5
)


(124.8
)


(72.3
)Deposits into restricted cash
    collateral accounts






(12.4
)


Withdrawals from restricted cash
    collateral accounts


12.8







Excess tax benefits from share
    based payment agreements


0.2







Payment of debt issuance,
    retirement and other financing costs






(1.0
)


(1.5
)(Repayment of) proceeds from notes
    payable, net


(3.4
)


1.3



(4.4
)Payment for stock option exchange






(0.2
)


(0.4
)Proceeds from issuance of common
    stock for option exercise


1.7



1.4



0.9Net cash provided by (used in)
    financing activities of continuing operations


9.8



(76.6
)


(31.3
)(Decrease) increase in notes
    payable, discontinued operations


(0.8
)


0.7



NET CASH PROVIDED BY (USED IN)
    FINANCING ACTIVITIES


9.0



(75.9
)


(31.3
)Effect of exchange rate changes on
    cash and cash equivalents


2.2



0.8



7.2INCREASE IN CASH AND CASH
    EQUIVALENTS


37.0



70.6



8.4CASH AND CASH EQUIVALENTS AT
    BEGINNING OF YEAR


110.2



39.6



31.2CASH AND CASH EQUIVALENTS AT END OF
    YEAR

$
147.2


$
110.2


$
39.6    42




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##### Table of Contents



JACUZZI
    BRANDS, INC.
    CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
    EQUITY
    For the Fiscal Years Ended September 30, 2006, 2005 and
    2004
    (in millions, except share data)
  Accumulated





OtherRetained Earnings


Unearned


Other





ComprehensiveCommon


Paid-in


(Accumulated


Restricted


Comprehensive


Treasury


EarningsStock


Capital


Deficit)


Stock


Loss


Stock


(Loss)


TotalBalance at September 30, 2003

$
1.0


$
650.1


$
(31.6
)

$
(0.8
)

$
(21.0
)

$
(352.2
)





$
245.5Net earnings










28.4














$
28.4



28.4Amortization of unearned restricted
    stock














2.1















2.1Treasury stock issued to directors
    (6,988 shares)






















0.1







0.1Treasury stock issued in 401K match
    (135,098 shares)






(1.1
)














2.4







1.3Forfeiture of restricted stock
    (1,714 shares)






























Exercise of stock options
    (277,875 shares)






(3.7
)














4.6







0.9Issuance of restricted stock grants
    (698,230 shares)






(5.6
)






(5.9
)






11.5







Foreign currency translation
    adjustment, net of tax provision of $0.4


















16.8







16.8



16.8Minimum pension liability
    adjustment, net of tax benefit of $1.9


















(6.8
)






(6.8
)


(6.8
)Net unrealized losses on
    investments, net of tax provision of $0.1


















0.2







0.2



0.2Other comprehensive earnings


























10.2Total comprehensive earnings

























$
38.6Balance at September 30, 2004


1.0



639.7



(3.2
)


(4.6
)


(10.8
)


(333.6
)






288.5Net loss










(5.6
)













$
(5.6
)


(5.6
)Amortization of unearned restricted
    stock














4.9















4.9Treasury stock issued to directors
    (4,994 shares)






(0.1
)














0.1







Deferred directors stock units






0.9























0.9Treasury stock issued in 401K match
    (30,922 shares)






(0.2
)














0.6







0.4Forfeiture of restricted stock
    (101,901 shares)






(0.2
)






1.1







(0.9
)






Exercise of stock options
    (348,573 shares)






(4.0
)














5.9







1.9Issuance of restricted stock grants
    (706,110 shares)






(5.4
)






(6.6
)






12.0







Foreign currency translation
    adjustment, net of tax benefit of $0.8


















(1.3
)






(1.3
)


(1.3
)Minimum pension liability
    adjustment, net of tax benefit of $2.5


















(4.4
)






(4.4
)


(4.4
)Net unrealized losses on investments


















(0.1
)






(0.1
)


(0.1
)Other comprehensive loss


























(5.8
)Total comprehensive loss

























$
(11.4
)Balance at September 30, 2005


1.0



630.7



(8.8
)


(5.2
)


(16.6
)


(315.9
)






285.2Net earnings










40.4














$
40.4



40.4Reclassification of unearned
    restricted stock on FAS 123R adoption






(5.2
)






5.2















Deferred directors stock units






0.5























0.5Forfeiture of restricted stock
    (201,726 shares)






0.9















(1.9
)






(1.0
)Exercise of stock options
    (274,084 shares)






(3.0
)














4.7







1.7Issuance of restricted stock grants
    (463,527 shares)






(7.9
)














7.9







Stock-based compensation expense






4.7























4.7Tax benefit on stock options






0.3























0.3Retiree benefit revaluation (see
    Note 6)






(0.5
)






















(0.5
)S&J disposal:Translation adjustment, net of tax
    benefit of $0.9


















(1.6
)






(1.6
)


(1.6
)Minimum pension liability
    adjustment, net of tax provision of $3.2


















5.4







5.4



5.4Foreign currency translation
    adjustment, net of tax provision of $1.4


















10.2







10.2



10.2Minimum pension liability
    adjustment, net of tax provision of $0.5


















0.3







0.3



0.3Net unrealized losses on investments


















(0.1
)






(0.1
)


(0.1
)Other comprehensive earnings


























14.2Total comprehensive earnings

























$
54.6Balance at September 30, 2006

$
1.0


$
620.5


$
31.6


$



$
(2.4
)

$
(305.2
)





$
345.5    43




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Note 1 
    Basis of Presentation
  Note 3 Note 11
    5 8
  53-week
  Consolidation of Variable Interest Entities, an
    Interpretation of ARB No. 51 Consolidated Financial Statements Consolidation of All Majority-Owned Subsidiaries.
    Revision
    of Statements of Cash Flows
   44




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 1 
    Basis of Presentation (Continued)
    September 30,2005


2004


2003Net cash used in discontinued
    operations, as reported

$
(31.2
)

$
(14.6
)

$
(8.9
)Adjustments






0.3



1.5Net cash used in operating
    activities of discontinued operations, revised


(31.2
)


(14.3
)


(7.4
)Net cash used in investing
    activities of discontinued operations, as reported










Adjustments


(0.7
)


(0.3
)


(1.5
)Net cash used in investing
    activities of discontinued operations, revised


(0.7
)


(0.3
)


(1.5
)Net cash provided by financing
    activities of discontinued operations, as reported










Adjustments


0.7







Net cash provided by financing
    activities of discontinued operations, revised


0.7







   Note 2 
    Accounting Policies
  Use of Estimates:
  Foreign Currency Translation: Foreign Currency Translation
  Cash and Cash Equivalents:
  Trade Receivables and Concentration of Credit
    Risk:
  DeductionsWrite-offs,Balance at


Additions


Payments and


Balance atBeginning


Charged to


Other


End ofDescription

of Period


Expense


Adjustments


Period(in millions)Allowance for doubtful accounts:2006

$
8.2


$
1.9


$
(0.8
)

$
9.32005


8.7



3.1



(3.6
)


8.22004


8.9



5.0



(5.2
)


8.7    45




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 2 
    Basis of Presentation (Continued)
    Income Taxes:
  Inventories: first-in-first-out last-in-first-out
  At September 30,2006


2005(in millions)Finished products

$
147.4


$
112.1In-process products


15.1



12.9Raw materials


49.4



43.4Inventory at FIFO


211.9



168.4LIFO reserve


(17.3
)


(3.4
)$
194.6


$
165.0     Property, Plant and Equipment:
    At September 30,2006


2005(in millions)Land and buildings

$
59.8


$
63.6Machinery, equipment and furniture


164.8



161.9Accumulated depreciation


(132.1
)


(121.8
)$
92.5


$
103.7   Other Non-current Assets: The Equity Method of
    Accounting for Investments in Common Stock
 46




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 2 
    Basis of Presentation (Continued)
  Note 3 Note 5
  Goodwill: Goodwill and Other Intangible Assets Accounting for the Impairment or Disposal of
    Long-lived Assets
        At September 30,2006


2005(in millions)Bath Products

$
105.6


$
102.4Plumbing Products


125.8



125.8$
231.4


$
228.2   Accrued Expenses and Other Current
    Liabilities:
  At September 30,2006


2005(in millions)Compensation related

$
21.4


$
16.0Insurance


3.5



4.8Customer incentives


25.6



23.8Interest


9.5



9.6Warranty


13.2



12.2Commissions


7.1



6.2Other(1)


29.0



41.8 47




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  At September 30,2006


2005(in millions)Note 2  Basis
    of Presentation (Continued)$
109.3


$
114.4     (1)
    
    The decrease in other relates primarily to current year payments
    associated with liabilities retained from the sales of Rexair
    and Eljer in 2005.      At September 30,2006


2005(in millions)Beginning balance

$
24.3


$
25.3Warranty accrual


17.8



15.4Cash payments


(17.0
)


(15.4
)Other


0.5



Sale of Rexair (See
    Note 3)






(1.0
)Ending balance

$
25.6


$
24.3   Fair Value of Financial Instruments: Disclosure about Fair Value of
    Financial Instruments
  Short-term Assets and Liabilities:
  Long-term Debt Note 5
    At September 30, 2006

At September 30, 2005Carrying

Fair

Carrying

FairAmount

Value

Amount

Value(in millions)9.625% Senior Notes

$
380.0


$
402.8


$
380.0


$
402.8  48




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 2 
    Basis of Presentation (Continued)
  Revenue Recognition:
    No. 01-09, Accounting for Consideration Given by a Vendor to a Customer
    (Including a Reseller of the Vendors Products)
  Shipping and Handling Fees and Costs:
  Other Income/(Expense), net:
  For the Fiscal Years EndedSeptember 30,2006


2005


2004(in millions)Keller Ladder expenses

$
0.5


$
(1.0
)

$
(1.6
)Gain (Loss) on collection or sales
    of other non-operating assets


9.3



(0.7
)


2.5(Loss) gain on sale of excess
    properties and equipment


(0.6
)


1.7



(0.1
)Foreign currency translation
    (losses) gains


(1.7
)


0.4



(1.9
)Debt retirement costs






(3.2
)


Gain on litigation of
    environmental claim


3.5







Other, net


(3.5
)


(3.8
)


(2.1
)$
7.5


$
(6.6
)

$
(3.2
)    49




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 2 
    Basis of Presentation (Continued)
    Advertising Costs:
  Research and Development Costs:
  Stock-Based Compensation: Accounting for Stock Issued to Employees, and
    related Interpretations Accounting for
    Stock-Based Compensation
  Earnings (Loss) Per Share: Note 8
    For the Fiscal Years EndedSeptember 30,2006


2005


2004(in millions)Basic weighted-average number of
    common shares outstanding


76.3



75.5



75.0Potential dilution of common shares


1.3



1.2



0.7Diluted weighted-average number of
    common shares outstanding


77.6



76.7



75.7     New Accounting Pronouncements: Accounting for Uncertainty
    in Income Taxes  an interpretation of FASB Statement
    No. 109 Accounting for Income Taxes.
 50




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 2 
    Basis of Presentation (Continued)
  Considering the Effects of Prior Year Misstatements when
    Qualifying Misstatements in Current Year Financial
    Statements.
  Fair Value Measurements.
  Employers Accounting for Defined Benefit
    Pension and Other Postretirement Plans  An Amendment
    of FASB Statements No. 87, 88, 106, and
    123R. a b c
  Note 3 
    Dispositions and Discontinued Operations
  EITF 01-02, Interpretations of APB Opinion No. 29 (EITF No. 01-02). Note 2 No. 01-02,
  Discontinued
    Operations
   51




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 3 
    Dispositions and Discontinued Operations (Continued)
  Form 8-K
          September 30,2006


2005


2004(in millions)Net sales

$
82.0


$
133.0


$
148.1Operating loss


(6.3
)


(9.1
)


(31.6
)Loss from discontinued operations


(3.4
)


(63.6
)


(19.9
)       September 30, 2005(in millions)Cash

$
7.3Trade receivables, net


16.4Inventories


25.0Other current assets


1.3 52




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  September 30, 2005(in millions)Note 3 
    Dispositions and Discontinued Operations (Continued)Deferred taxes


15.3Property, plant and equipment, net


1.4Equity investment


0.2Assets held for sale

$
66.9Notes payable

$
0.8Trade accounts payable


8.1Other current liabilities


11.3Other long term liabilities


36.7Minority interest


10.0Liabilities associated with assets
    held for sale

$
66.9     No. 03-13
  Note 4 
    Impairment,
    Restructuring and Other Charges    For the Fiscal YearsEnded September 30,2006


2005


2004(in millions)Impairment of assets

$
1.9


$



$
Lease obligations and other
    commitments


0.2



0.4



(0.6
)Severance and related costs


5.1



9.0



3.5$
7.2


$
9.4


$
2.9Cash charges

$
5.3


$
8.1


$
2.9Non-cash charges


1.9



1.3



$
7.2


$
9.4


$
2.9  53




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 4 
    Dispositions and Discontinued Operations (Continued)
  Accounting for Costs Associated with Exit or
    Disposal Activities Employers Accounting for
    Settlements and Curtailments of Defined Benefit Pension Plans
    and for Termination Benefits
  For the Fiscal YearsEnded September 30,2006


2005


2004(in millions)Bath Products:U.K. initiatives

$
5.2
(1)

$
1.6


$
Closure of Asia office


0.6







Consolidation of administrative
    functions


1.2



2.9



3.5Sub-total
    Bath Products


7.0



4.5



3.5Corporate Expenses:Adjustment of estimated lease
    obligation










(0.6
)Corporate headquarters
    restructuring


0.2



4.9



Sub-total
    Corporate Expenses


0.2



4.9



(0.6
)$
7.2


$
9.4


$
2.9     (1)
    
    These amounts include $1.8 million of inventory write-downs
    and accelerated depreciation recorded in cost of goods sold.     54




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 4 
    Dispositions and Discontinued Operations (Continued)
    Contract


SeveranceRelated


and Related


TotalCosts


Costs


Costs(in millions)At September 30, 2004

$
3.1


$
2.5


$
5.62005 charges


0.4



9.0



9.4Cash payments


(1.8
)


(9.4
)


(11.2
)At September 30, 2005


1.7



2.1



3.82006 charges


0.2



5.1



5.3Cash payments


(0.8
)


(5.9
)


(6.7
)Other


0.2







0.2At September 30, 2006

$
1.3


$
1.3


$
2.6     Note 5 
    Long-term
    Debt    September 30,2006


2005Senior Notes

$
380.0


$
380.0Other long-term debt


3.5



5.0383.5



385.0Less: current maturities


(1.7
)


(1.5
)Long-term debt

$
381.8


$
383.5      55




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 5 
    Long-term Debt (Continued)        2007

$
1.72008


1.82009


2010


380.02011


$
383.5   Commitments
    Note 6 
    Pension and Retirement Plans
    Domestic
    Benefit Arrangements
  and/or
   56




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6  Pension and Retirement Plans
    (Continued)
    Pension Plans


Other Plansat September 30,


at September 30,2006


2005


2006


2005(in millions)Benefit obligation at beginning of
    year

$
372.1


$
338.4


$
17.2


$
16.7Adjustment relating to prior
    years(1)


5.5











Service cost


4.3



6.5



0.3



0.3Interest cost


19.6



18.8



0.9



0.9Plan amendments






1.2







Actuarial (gains)/losses


(15.7
)


30.5



(2.6
)


1.2Benefits paid


(23.2
)


(19.8
)


(1.9
)


(1.9
)Curtailments


(1.0
)


(3.5
)






Benefit obligation at end of year

$
361.6


$
372.1


$
13.9


$
17.2Fair value of plan assets at
    beginning of year

$
407.2


$
369.8


$



$
Actual return on plan assets


35.1



56.4







Contributions


3.7



0.8



1.9



1.9Benefits paid


(23.2
)


(19.8
)


(1.9
)


(1.9
)Fair value of plan assets at end
    of year

$
422.8


$
407.2


$



$
Plan assets in excess of (less
    than) projected benefit obligation

$
61.2


$
35.1


$
(13.9
)

$
(17.2
)Unrecognized net actuarial losses
    (gains)


59.5



85.7



(1.1
)


1.5Unrecognized prior service cost
    (income)


10.1



11.7



(3.3
)


(4.3
)Net amount recognized

$
130.8


$
132.5


$
(18.3
)

$
(20.0
)Prepaid benefits

$
148.1


$
145.4


$



$
Accrued benefits


(23.2
)


(22.2
)


(18.3
)


(20.0
)Intangible assets


1.9



2.4







Accumulated other comprehensive
    expense


4.0



6.9







Net amount recognized

$
130.8


$
132.5


$
(18.3
)

$
(20.0
)     (1)
    
    An adjustment relating to prior years was made in the third
    quarter of fiscal 2006 relating to benefits payable to several
    key executives (see also $2.9 million adjustment to expense
    on next page).     57




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6  Pension and Retirement Plans
    (Continued)
    Pension Plans


Other Plansfor the Fiscal Years Ended


for the Fiscal Years EndedSeptember 30,


September 30,2006


2005


2004


2006


2005


2004(in millions)Service cost

$
4.3


$
6.5


$
6.7


$
0.3


$
0.3


$
0.2Interest cost


19.5



18.8



18.2



0.9



0.9



1.0Expected return on plan assets


(32.2
)


(31.5
)


(31.8
)










Prior service cost


3.4



1.5



0.9



(1.0
)


(1.0
)


(1.0
)Net actuarial loss (gain)


6.2



5.1



1.9



0.1







(0.1
)Curtailments/settlements


0.6



4.8



2.5







(0.4
)


Periodic expense (income) of
    defined benefit plans


1.8



5.2



(1.6
)


0.3



(0.2
)


0.1Adjustment relating to prior
    years(1)


2.9



















Net reclassification adjustment
    for discontinued operations






(4.5
)


(3.9
)










Net periodic expense (income):Defined benefit plans


4.7



0.7



(5.5
)


0.3



(0.2
)


0.1Defined contribution plans


1.3



1.3



1.4











$
6.0


$
2.0


$
(4.1
)

$
0.3


$
(0.2
)

$
0.1     (1)
    
    We made an adjustment to pension expense in the third quarter of
    fiscal 2006 related to several employment contracts, of which
    $2.9 million should have been recorded during the period
    beginning with our 1995 spin off from Hanson plc through fiscal
    2005. No single fiscal year was materially misstated so the
    entire amount was recorded in the third quarter of fiscal 2006.
    We also adjusted paid-in capital by $0.5 million to reflect
    the additional retiree benefit liability associated with these
    contracts which should have been recorded at the time of our
    1995 spin-off.  Assumptions
    Pension Plans


Other Plansat September 30,


at September 30,2006


2005


2004


2006


2005


2004Discount rate


5.65
%


5.35
%


5.75
%


5.65
%


5.35
%


5.75
%Rate of compensation increases


3.25
%


3.25
%


3.25
%










  58




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6  Pension and Retirement Plans
    (Continued)
    Pension Plans


Other Plansfor the Fiscal Years Ended


for the Fiscal Years EndedSeptember 30,


September 30,2006


2005


2004


2006


2005


2004Discount rate


5.35
%


5.75
%


6.00
%


5.35
%


5.75
%


6.00
%Rate of compensation increases


3.25
%


3.25
%


3.25
%










Expected rate of return on assets


8.75
%


8.75
%


8.75
%










       Increase (Decrease)Costs/ObligationsEffect of a 1% increase in the
    health care cost trend rate on:Service cost plus interest cost

$
0.2Accumulated post-employment
    benefit obligation


1.4Effect of a 1% decrease in the
    health care cost trend rate on:Service cost plus interest cost

$
(0.1
)Accumulated post-employment
    benefit obligation


(1.1
)   Plan
    Assets
    At September 30,2006


2005(in millions)Equity securities

$
289.6


$
279.5Debt securities


98.3



98.8Other


34.9



28.9$
422.8


$
407.2   year-to-year
 59




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6  Pension and Retirement Plans
    (Continued)
    Equity securities

45% - 75%Debt securities

20% - 40%Real estate

0% - 5%Other

0% - 25%     Expected
    Contributions and Benefit Payments
    Pension


OtherPlans


Plans(in millions)2007

$
18.9


$
0.92008


19.7



1.02009


20.0



1.02010


20.3



1.02011


20.9



1.02012 - 2016


117.1



5.2$
216.9


$
10.1      60




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6  Pension and Retirement Plans
    (Continued)
  Foreign
    Benefit Arrangements
    At September 30,2006


2005(in millions)Benefit obligation at beginning of
    year

$
81.9


$
69.2Service cost


1.5



1.3Interest cost


4.4



4.1Employee contributions


0.8



0.9Foreign currency exchange rate
    changes


5.4



(1.8
)Actuarial losses


4.9



10.4Benefits paid


(1.5
)


(2.2
)Benefit obligation at end of year

$
97.4


$
81.9Fair value of plan assets at
    beginning of year

$
53.7


$
43.5Actual return on plan assets


5.4



10.6Foreign currency exchange rate
    changes


3.6



(1.2
)Employer contributions


3.9



2.1Employee contributions


0.8



0.9Benefits paid


(1.5
)


(2.2
)Fair value of plan assets at end
    of year

$
65.9


$
53.7Plan assets less than projected
    benefit obligation

$
(31.5
)

$
(28.2
)Unrecognized net actuarial losses


42.2



38.3$
10.7


$
10.1Accrued benefits

$
(23.3
)

$
(21.5
)Accumulated other comprehensive
    expense


34.0



31.6$
10.7


$
10.1  61




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6  Pension and Retirement Plans
    (Continued)
    For the Fiscal YearsEnded September 30,2006


2005


2004(in millions)Service cost

$
1.5


$
1.3


$
1.1Interest cost


4.3



4.1



3.2Expected return on plan assets


(4.0
)


(4.2
)


(3.8
)Net actuarial loss


2.1



1.0



0.4Net periodic expense:Defined benefit plans


3.9



2.2



0.9Defined contribution plans


0.3



0.3



0.3$
4.2


$
2.5


$
1.2   Assumptions
    At September 30,2006


2005


2004Discount rate


5.00
%


5.25
%


5.75
%Rate of compensation increases


3.25
%


3.00
%


3.25
%     For the Fiscal YearsEnded September 30,2006


2005


2004Discount rate


5.00
%


5.25
%


5.75
%Rate of compensation increases


3.25
%


3.00
%


3.25
%Expected rate of return on assets


7.75
%


7.75
%


7.50
%    62




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6  Pension and Retirement Plans
    (Continued)
  Plan
    Assets
    At September 30,2006


2005Equity securities

$
50.0


$
42.4Debt securities


15.9



10.8Other






0.5$
65.9


$
53.7     Expected Contributions and Benefit Payments
    2007

$
1.22008


1.32009


1.32010


1.42011


1.42012 - 2016


7.8$
14.4     Note 7 
    Income
    Taxes    For the Fiscal YearsEnded September 30,2006


2005


2004(in millions)United States

$
67.3


$
47.0


$
49.0Foreign


13.6



21.0



29.2$
80.9


$
68.0


$
78.2  63




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 7 
    Income Taxes (Continued)    For the Fiscal YearsEnded September 30,2006


2005


2004(in millions)Current:Federal

$
22.7


$
(7.1
)

$
10.8State


2.2



2.5



1.6Foreign


(6.8
)


9.9



15.4Deferred


19.0



4.7



2.1$
37.1


$
10.0


$
29.9       At September 30,2006


2005(in millions)Deferred tax assets:Accruals and allowances

$
33.4


$
41.5Post-employment benefits


6.1



7.7Property, plant and equipment






3.0Inventory


2.7



3.0Other


0.9



1.6Foreign tax credits


17.9



18.8Expected benefit from disposal
    plans & capital loss carryforwards


120.6



119.0Gross deferred tax assets


181.6



194.6Valuation allowance


(133.0
)


(133.5
)Total deferred tax assets


48.6



61.1Deferred tax liabilities:Net pension assets


45.6



34.2Property, plant and equipment


0.3



Deductible goodwill


5.4



4.6Total deferred tax liabilities


51.3



38.8Net deferred tax assets
    (liabilities)

$
(2.7
)

$
22.3    64




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 7 
    Income Taxes (Continued)          At September 30,2006


2005(in millions)Current assets

$
25.6


$
27.9Current liabilities






Net current assets


25.6



27.9Non-current assets


23.0



33.2Non-current liabilities


(51.3
)


(38.8
)Net non-current liabilities


(28.3
)


(5.6
)Net deferred tax assets
    (liabilities)

$
(2.7
)

$
22.3  65




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 7 
    Income Taxes (Continued)      For the Fiscal YearsEnded September 30,2006


2005


2004(in millions)Federal tax provision computed at
    the statutory rate

$
28.3


$
23.8


$
27.4Foreign income tax differential


3.2



2.3



0.5State income taxes (net of federal
    benefit)


2.0



2.1



1.7Rexair dispostion


(0.2
)


(8.6
)


Resolution of tax contingencies






(8.8
)


Other non-deductible items


0.1



0.2



0.4Changes in valuation allowances


1.0



(0.6
)


0.6U.K. deferred tax reserve


15.9







Italian tax refunds


(14.0
)






Other, net


0.8



(0.4
)


(0.7
)$
37.1


$
10.0


$
29.9     Note 8 
    Employee
    Benefit Plans  Retirement
    Savings Plans
    Accounting
    for Stock-based Compensation
   66




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8 
    Employee
    Benefit Plans (Continued)  Adoption
    of New Accounting Guidance and Transition
  Accounting for Stock Issued to Employees Accounting for
    Stock-Based Compensation Accounting for Stock Appreciation
    Rights and other Variable Stock Option or Award Plans .
  Share-Based Payment
      Pro Forma
    Information Under SFAS No. 123 for Periods Prior to
    Fiscal 2006
    67




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8 
    Employee
    Benefit Plans (Continued)  Year Ended September 30,2005


2004Net (loss) earnings, as reported

$
(5.6
)

$
28.4Stock-based employee compensation
    expense, net of tax


2.5



2.2Total stock-based employee
    compensation expense determined under the fair value method, net
    of tax


(3.1
)


(3.0
)Pro forma net (loss) earnings

$
(6.2
)

$
27.6(Loss) earnings per share:Basic  as reported

$
(0.07
)

$
0.38Basic  pro forma


(0.08
)


0.37Diluted  as reported

$
(0.07
)

$
0.37Diluted  pro forma


(0.08
)


0.36     Year Ended September 30,2005


2004Expected term (in years)


4.0



4.0Risk-free interest rate


3.41
%


2.97
%Expected volatility


63
%


66
%Expected dividend yield


0
%


0
%     Valuation
    and Expense Information under SFAS No. 123R
     68




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8 
    Employee
    Benefit Plans (Continued)    September 30,2006Expected term (in years)

5.6Risk-free interest rate

4.28%Expected volatility

72%Expected dividend yield

0%   Expected Term:
  Risk-Free Interest Rate:
  Expected Volatility:
  Expected Dividend Yield:
  Incentive
    Stock Plans
     69




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8 
    Employee
    Benefit Plans (Continued)    Weighted-AverageWeighted-


RemainingAverage


Contractual


AggregateNumber of


Exercise


Term


InstrinsicOptions

Shares


Price


(years)


ValueOutstanding at September 30,
    2005


1,266,032


$
5.37Granted


53,250



8.31Exercised


(269,650
)


5.99Forfeited


(119,000
)


7.36Outstanding at September 30,
    2006


930,632


$
5.11



5.8


$
4.6Vested or expected to vest at
    September 30, 2006


889,271


$
5.10



5.8



4.4Exercisable at September 30,
    2006


738,507


$
4.81



5.4


$
3.9       Weighted-Average FairNumber of


Value atShares


Grant DateNonvested at September 30,
    2005


1,012,204


$
9.41Granted


484,571



8.27Vested


(500,402
)


9.59Forfeited


(93,315
)


9.17Nonvested at September 30,
    2006


903,058


$
8.72    70




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 9 
    Capital
    Stock   Common
    Stock
    Stockholder
    Rights Plan
        Note 10 
    Commitments and Contingencies
   Operating
    Leases
  Note 4
  2007

$
12.72008


9.82009


7.92010


6.92011


5.7Thereafter


8.6$
51.6     Environmental
    Regulation
   71




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 10  Commitments and Contingencies
    (Continued)
            Litigation
     72




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 10  Commitments and Contingencies
    (Continued)
    Usheroff v. Jacuzzi Brands, Inc., et
    al., Ryan v. Victor, et al., Rubenstein v. Marini, et al., Worcester
    Retirement System v. Jacuzzi Brands, Inc., et al.,
      year-over-year.
 73




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 10  Commitments and Contingencies
    (Continued)
  and/or and/or and/or and/or
         74




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 10  Commitments and Contingencies
    (Continued)
      Note 11 
    Segment Information
    Note 2
 75




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 11  Segment Information (Continued)
    Bath


Plumbing








ConsolidatedProducts


Products


Rexair


Corporate


Total(in millions)Net Sales2006

$
766.6


$
435.8


$



$



$
1,202.42005


780.8



353.1



76.1







1,210.02004


788.4



308.0



104.8







1,201.2Operating Income
    (Loss)2006

$
38.5


$
90.9


$



$
(25.8
)

$
103.62005


30.1



75.3



19.0



(30.0
)


94.42004


57.2



60.7



27.3



(18.0
)


127.2Capital Expenditures2006

$
8.4


$
4.0


$



$
0.1


$
12.52005


18.0



4.0



0.4



0.3



22.72004


17.2



3.5



1.5



0.8



23.0Depreciation and
    Amortization2006

$
17.2


$
4.4


$



$
2.8


$
24.42005


15.6



5.2



2.3



3.2



26.32004


11.8



5.6



3.3



1.7



22.4Restructuring and Other Charges
    Included in Operating Income
    (Loss)(1)2006

$
7.0


$



$



$
0.2


$
7.22005


4.5











4.9



9.42004


3.5











(0.6
)


2.9AssetsAt September 30, 2006

$
466.0


$
333.8


$



$
453.9


$
1,253.7At September 30, 2005

$
480.9


$
295.6


$



$
513.0


$
1,289.5     (1)
    
    Fiscal 2006 include $1.8 million of inventory write-downs
    and accelerated depreciation in cost of goods sold associated
    with the Bradford, U.K. consolidation.     76




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 11  Segment Information (Continued)
    For the Fiscal Years EndedSeptember 30,2006


2005


2004(in millions)Net
    SalesUnited States

$
850.9


$
836.5


$
825.2United Kingdom


211.6



228.7



240.0Other foreign


139.9



144.8



136.0$
1,202.4


$
1,210.0


$
1,201.2Operating Income
    (Loss)(1)United States

$
90.8


$
70.2


$
90.5United Kingdom


(13.5
)


(2.0
)


12.6Other foreign


26.3



26.2



24.1$
103.6


$
94.4


$
127.2Long-lived Assets (at period
    end)United States

$
221.6


$
228.3United Kingdom


89.6



92.4Other foreign


12.7



11.2$
323.9


$
331.9     (1)
    
    Operating income (loss) for the years ended September 30,
    2006, 2005 and 2004 include impairment, restructuring and other
    charges of $7.2 million, $9.4 million, and
    $2.9 million, respectively. For 2006, $5.2 million of
    the restructuring and other charges relate to our U.K.
    operations, $0.2 million relate to other foreign operations
    and the remainder relates to operations in the U.S. For
    2005, $1.6 million of the restructuring and other charges
    relate to our U.K. operations, $0.1 million relate to other
    foreign operations and the remainder relates to operations in
    the U.S. All the restructuring charges included in 2004
    operating income relate to operations in the U.S. Corporate
    expenses are included in the U.S. 77




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 12 
    Quarterly Financial Data (Unaudited)
    For the Fiscal 2006 Quarters Ended


For the Fiscal 2005 Quarters EndedDec. 31


March 31


June 30


Sept. 30


Dec. 31


March 31


June 30


Sept. 30Net sales

$
267.1


$
289.2


$
332.6


$
313.5


$
281.5


$
301.0


$
334.2


$
293.3Gross profit


82.2



90.8



107.0



100.5



90.7



94.1



110.7



94.1Earnings from continuing operations


12.1



7.1



(1.0
)


25.6



6.6



8.6



37.9



4.9Net earnings (loss)


10.7



4.1



(3.9
)


29.5



5.5



7.4



(20.8
)


2.3Earnings (loss) per basic common
    share:Continuing operations

$
0.16


$
0.09


$
(0.01
)

$
0.34


$
0.09


$
0.11


$
0.50


$
0.06Net earnings (loss)


0.14



0.05



(0.05
)


0.39



0.07



0.10



(0.28
)


0.03Earnings (loss) per diluted common
    share:Continuing operations

$
0.16


$
0.09


$
(0.01
)

$
0.33


$
0.09


$
0.11


$
0.50


$
0.06Net earnings (loss)


0.14



0.05



(0.05
)


0.38



0.07



0.10



(0.27
)


0.03       Note 13 
    Supplemental Joint Issuer and Guarantor Financial
    Information
   78




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  Note 5
  For the Fiscal Year Ended September 30, 2006Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(in millions)Net sales

$



$
859.9


$
354.8


$
(12.3
)

$
1,202.4Operating costs and expenses:Cost of products sold






581.1



253.1



(12.3
)


821.9Selling, general and
    administrative expenses


24.6



162.4



84.5







271.5Impairment, restructuring and
    other charges


0.2



1.0



4.2







5.4Operating (loss) income


(24.8
)


115.4



13.0







103.6Interest expense


(40.7
)


(0.5
)


(1.0
)






(42.2
)Interest income


4.1



0.3



3.8







8.2Intercompany interest (expense)
    income, net


(31.2
)


28.8



2.4







Equity in earnings (losses) of
    investees, net


83.0



11.2







(94.2
)


Rexair equity earnings






3.8











3.8Other (expense) income, net


(2.2
)


11.5



(1.8
)






7.5Other intercompany income
    (expense), net


32.6



(29.9
)


(2.7
)






Earnings (loss) before income
    taxes and discontinued operations


20.8



140.6



13.7



(94.2
)


80.9Benefit from (provision for)
    income taxes


23.0



(57.6
)


(2.5
)






(37.1
)Earnings (loss) from continuing
    operations


43.8



83.0



11.2



(94.2
)


43.8(Loss) earnings from discontinued
    operations


(3.4
)


(3.4
)


(0.5
)


3.9



(3.4
)Net earnings (loss)

$
40.4


$
79.6


$
10.7


$
(90.3
)

$
40.4   79




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  For the Fiscal Year Ended September 30, 2005Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(in millions)Net sales

$



$
863.3


$
360.4


$
(13.7
)

$
1,210.0Operating costs and expenses:Cost of products sold






576.6



257.5



(13.7
)


820.4Selling, general and
    administrative expenses


24.8



178.7



82.3







285.8Impairment, restructuring and
    other charges


4.7



3.0



1.7







9.4Operating (loss) income


(29.5
)


105.0



18.9







94.4Interest expense


(46.4
)


(0.7
)


(1.0
)






(48.1
)Interest income


0.8



1.1



1.1







3.0Intercompany interest (expense)
    income, net


(19.0
)


18.0



1.0







Equity in earnings (losses) of
    investees, net


127.4



10.9







(138.3
)


Gain on sale of business






24.7











24.7Rexair equity earnings






0.6











0.6Other (expense) income, net


(5.8
)


(1.1
)


0.3







(6.6
)Other intercompany (expense)
    income, net


(10.2
)


10.1



0.1







Earnings (loss) before income
    taxes and discontinued operations


17.3



168.6



20.4



(138.3
)


68.0Benefit from (provision for)
    income taxes


40.7



(41.2
)


(9.5
)






(10.0
)Earnings (loss) from continuing
    operations


58.0



127.4



10.9



(138.3
)


58.0(Loss) earnings from discontinued
    operations


(63.6
)


(63.6
)






63.6



(63.6
)Net earnings (loss)

$
(5.6
)

$
63.8


$
10.9


$
(74.7
)

$
(5.6
)   80




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  For the Fiscal Year Ended September 30, 2004Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(in millions)Net sales

$



$
844.3


$
363.9


$
(7.0
)

$
1,201.2Operating costs and expenses:Cost of products sold






556.3



253.1



(7.0
)


802.4Selling, general and
    administrative expenses


18.0



174.5



76.2







268.7Impairment, restructuring and
    other charges






2.9











2.9Operating (loss) income


(18.0
)


110.6



34.6







127.2Interest expense


(48.9
)


(0.8
)


(0.8
)






(50.5
)Interest income


2.6



1.6



0.5







4.7Intercompany interest (expense)
    income, net


(13.9
)


14.0



(0.1
)






Equity in earnings (losses) of
    investees, net


97.7



15.9







(113.6
)


Other expense, net


(0.1
)


(1.2
)


(1.9
)






(3.2
)Other intercompany (expense)
    income, net


(0.1
)


2.3



(2.2
)






Earnings (loss) before income
    taxes and discontinued operations


19.3



142.4



30.1



(113.6
)


78.2Benefit from (provision for)
    income taxes


29.0



(45.3
)


(13.6
)






(29.9
)Earnings (loss) from continuing
    operations


48.3



97.1



16.5



(113.6
)


48.3(Loss) earnings from discontinued
    operations


(19.9
)


(19.9
)


(0.9
)


20.8



(19.9
)Net earnings (loss)

$
28.4


$
77.2


$
15.6


$
(92.8
)

$
28.4   81




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  At September 30, 2006Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(in millions)ASSETSCurrent assets:Cash and cash equivalents

$
112.6


$
(4.6
)

$
39.2


$



$
147.2Trade receivables, net


0.4



116.6



88.0







205.0Inventories






138.2



56.4







194.6Deferred income taxes


(0.7
)


25.4



0.9







25.6Assets held for sale






0.6



6.8







7.4Prepaid expenses and other current
    assets


4.3



6.5



11.1







21.9Total current assets


116.6



282.7



202.4







601.7Property, plant and equipment, net


1.0



44.0



47.5







92.5Pension assets


149.3



0.7











150.0Insurance for asbestos claims






136.0











136.0Goodwill






176.6



54.8







231.4Other non-current assets


28.2



13.6



0.3







42.1Investment in subsidiaries/
    Intercompany receivable (payable), net


555.2



1,017.0



174.8



(1,747.0
)


Total assets

$
850.3


$
1,670.6


$
479.8


$
(1,747.0
)

$
1,253.7LIABILITIES AND STOCKHOLDERS
    EQUITYCurrent liabilities:Notes payable

$



$



$
19.8


$



$
19.8Current maturities of long-term
    debt






1.7











1.7Trade accounts payable


0.3



56.1



52.1







108.5Income taxes payable


21.9



5.2



(17.2
)






9.9Liabilities associated with assets
    held for sale






0.8











0.8Accrued expenses and other current
    liabilities


16.2



56.8



36.3







109.3Total current liabilities


38.4



120.6



91.0







250.0Long-term debt


380.0



1.8











381.8Deferred income taxes


46.7



(13.8
)


(4.6
)






28.3Asbestos claims






136.0











136.0Other liabilities


39.7



41.4



31.0







112.1Total liabilities


504.8



286.0



117.4







908.2Stockholders equity


345.5



1,384.6



362.4



(1,747.0
)


345.5Total liabilities and
    stockholders equity

$
850.3


$
1,670.6


$
479.8


$
(1,747.0
)

$
1,253.7   82




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  At September 30, 2005Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(in millions)ASSETSCurrent assets:Cash and cash equivalents

$
84.1


$
(7.0
)

$
33.1


$



$
110.2Trade receivables, net






118.9



81.6







200.5Inventories






116.9



48.1







165.0Deferred income taxes


7.9



19.4



0.6







27.9Assets held for sale






1.8



67.9







69.7Prepaid expenses and other current
    assets


4.4



5.9



12.3







22.6Total current assets


96.4



255.9



243.6







595.9Restricted cash collateral accounts


12.4















12.4Property, plant and equipment, net


1.2



50.5



52.0







103.7Pension assets


146.8



1.0











147.8Insurance for asbestos claims






153.0











153.0Goodwill






176.7



51.5







228.2Other non-current assets


30.6



17.6



0.3







48.5Investment in subsidiaries/
    Intercompany receivable (payable), net


475.7



985.2



180.7



(1,641.6
)


Total assets

$
763.1


$
1,639.9


$
528.1


$
(1,641.6
)

$
1,289.5LIABILITIES AND STOCKHOLDERS
    EQUITYCurrent liabilities:Notes payable

$



$



$
22.0


$



$
22.0Current maturities of long-term
    debt






1.5











1.5Trade accounts payable


0.3



58.0



47.4







105.7Income taxes payable


19.3



6.0



(0.6
)






24.7Liabilities associated with assets
    held for sale










66.9







66.9Accrued expenses and other current
    liabilities


17.9



63.9



32.6







114.4Total current liabilities


37.5



129.4



168.3







335.2Long-term debt


380.0



3.5











383.5Deferred income taxes


17.4



(1.2
)


(10.6
)






5.6Asbestos claims






153.0











153.0Other liabilities


43.0



55.8



28.2







127.0Total liabilities


477.9



340.5



185.9







1,004.3Stockholders equity


285.2



1,299.4



342.2



(1,641.6
)


285.2Total liabilities and
    stockholders equity

$
763.1


$
1,639.9


$
528.1


$
(1,641.6
)

$
1,289.5   83




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  For the Fiscal Year Ended September 30, 2006Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(in millions)NET CASH (USED IN) PROVIDED BY
    OPERATING ACTIVITIES

$
(55.7
)

$
66.0


$
6.4


$



$
16.7INVESTING ACTIVITIES:Proceeds from sale of businesses










3.7







3.7Proceeds from sale of non-operating
    assets






9.3











9.3Purchases of property, plant and
    equipment


(0.1
)


(6.7
)


(5.7
)






(12.5
)Return of equity investment






3.2











3.2Proceeds from sale of fixed assets






0.3











0.3Proceeds from sale of excess real
    estate






1.7











1.7Net transfers with subsidiaries


69.6



(1.9
)






(67.7
)


Net cash provied by (used in )
    investing activities of continuing operations


69.5



5.9



(2.0
)


(67.7
)


5.7Purchases of property, plant and
    equipment, discontinued operations










(1.5
)






(1.5
)Proceeds from sale of property,
    plant and equipment, discontinued operations










4.9







4.9NET CASH PROVIDED BY (USED IN)
    INVESTING ACTIVITIES


69.5



5.9



1.4



(67.7
)


9.1FINANCING ACTIVITIES:Repayment of long-term debt






(1.5
)










(1.5
)Withdrawals from restricted cash
    collateral accounts


12.8















12.8Excess tax benefits from share
    based payment agreements


0.2















0.2Proceeds from the issuance of
    common stock for stock option exercises


1.7















1.7Repayment of notes payable, net










(3.4
)






(3.4
)Net transfers with parent






(69.6
)


1.9



67.7



Net cash provided by (used in )
    financing activities of continuing operations


14.7



(71.1
)


(1.5
)


67.7



9.8Decrease in notes payable,
    discontinued operations










(0.8
)






(0.8
)NET CASH PROVIDED BY (USED IN)
    FINANCING ACTIVITIES


14.7



(71.1
)


(2.3
)


67.7



9.0Effect of exchange rate changes on
    cash and cash equivalents






1.6



0.6







2.2INCREASE IN CASH AND CASH
    EQUIVALENTS


28.5



2.4



6.1







37.0CASH AND CASH EQUIVALENTS AT
    BEGINNING OF YEAR


84.1



(7.0
)


33.1







110.2CASH AND CASH EQUIVALENTS AT END OF
    YEAR

$
112.6


$
(4.6
)

$
39.2


$



$
147.2   84




---



##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  For the Fiscal Year Ended September 30, 2005Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Revised)(in millions)NET CASH (USED IN) PROVIDED BY
    OPERATING ACTIVITIES

$
(69.6
)

$
71.4


$
19.2


$



$
21.0INVESTING ACTIVITIES:Proceeds from sale of businesses






140.7











140.7Proceeds from sale of non-operating
    assets






4.4











4.4Purchases of property, plant and
    equipment


(0.3
)


(13.3
)


(9.1
)






(22.7
)Proceeds from sale of property,
    plant and equipment






0.2











0.2Proceeds from sale of excess real
    estate






2.8











2.8Net transfers with subsidiaries


231.0



17.6







(248.6
)


Net cash provided by (used in)
    investing activities of continuing operations


230.7



152.4



(9.1
)


(248.6
)


125.4Purchases of property, plant and
    equipment, discontinued operations










(0.7
)






(0.7
)NET CASH PROVIDED BY (USED IN)
    INVESTING ACTIVITIES


230.7



152.4



(9.8
)


(248.6
)


124.7FINANCING ACTIVITIES:Proceeds from long-term debt


59.1















59.1Repayment of long-term debt


(123.4
)


(1.4
)










(124.8
)Deposits into restricted cash
    collateral accounts


(12.4
)














(12.4
)Proceeds from the issuance of
    common stock for stock option exercises


1.4















1.4Payment of debt issuance,
    retirement and other financing costs


(1.0
)














(1.0
)Proceeds from notes payable, net










1.3







1.3Payment for stock option exchange


(0.2
)














(0.2
)Net transfers with parent






(231.0
)


(17.6
)


248.6



Net cash (used in) provided by
    financing activities of continuing operations


(76.5
)


(232.4
)


(16.3
)


248.6



(76.6
)Increase in notes payable,
    discontinued operations










0.7







0.7NET CASH (USED IN) PROVIDED BY
    FINANCING ACTIVITIES


(76.5
)


(232.4
)


(15.6
)


248.6



(75.9
)Effect of exchange rate changes on
    cash and cash equivalents


(1.4
)


0.6



1.6







0.8INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS


83.2



(8.0
)


(4.6
)






70.6CASH AND CASH EQUIVALENTS AT
    BEGINNING OF YEAR


0.9



1.0



37.7







39.6CASH AND CASH EQUIVALENTS AT END OF
    YEAR

$
84.1


$
(7.0
)

$
33.1


$



$
110.2  85




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##### Table of Contents



JACUZZI
    BRANDS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 13  Supplemental Joint Issuer and
    Guarantor Financial Information (Continued)
  For the Fiscal Year Ended September 30, 2004Combined


CombinedGuarantor


Non-GuarantorJBI


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Revised)(in millions)NET CASH PROVIDED BY (USED IN)
    OPERATING ACTIVITIES

$
24.8


$
(14.3
)

$
34.6


$



$
45.1INVESTING ACTIVITIES:Proceeds from sale of businesses






2.4



2.1







4.5Proceeds from sale of non-operating
    assets






2.4











2.4Purchases of property, plant and
    equipment


(0.8
)


(14.4
)


(7.8
)






(23.0
)Proceeds from sale of property,
    plant and equipment






0.1



0.2







0.3Proceeds from sale of excess real
    estate


3.2



0.3











3.5Net transfers with subsidiaries


(1.8
)


15.2







(13.4
)


Net cash provided by (used in)
    investing activities of continuing operations


0.6



6.0



(5.5
)


(13.4
)


(12.3
)Purchases of property, plant and
    equipment, discontinued operations






(0.3
)










(0.3
)NET CASH PROVIDED BY (USED IN)
    INVESTING ACTIVITIES


0.6



5.7



(5.5
)


(13.4
)


(12.6
)FINANCING ACTIVITIES:Proceeds from long-term debt


46.5



(0.1
)










46.4Repayment of long-term debt


(71.1
)


(1.2
)










(72.3
)Payment of debt issuance,
    retirement and other financing costs


(1.6
)


0.1











(1.5
)Repayment of notes payable, net










(4.4
)






(4.4
)Payment for stock option exchange


(0.4
)














(0.4
)Proceeds from the issuance of
    common stock for stock option exercises


0.9















0.9Net transfers with parent






1.8



(15.2
)


13.4



NET CASH (USED IN) PROVIDED BY
    FINANCING ACTIVITIES


(25.7
)


0.6



(19.6
)


13.4



(31.3
)Effect of exchange rate changes on
    cash and cash equivalents


1.0



6.1



0.1







7.2INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS


0.7



(1.9
)


9.6







8.4CASH AND CASH EQUIVALENTS AT
    BEGINNING OF YEAR


0.2



2.9



28.1







31.2CASH AND CASH EQUIVALENTS AT END OF
    YEAR

$
0.9


$
1.0


$
37.7


$



$
39.6    86




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Rules 13a-15(c) 15d-15(e)
  Item 8. Financial
    Statements and Supplementary Data Form 10-K.
  Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant  Item 1 Form 10-K
    Regulation S-K
  Regulation S-K
  Regulation S-K Form 10-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and
    Management   87




---



##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  The following documents are filed as a part of this
    report:
      Note 2
    Exhibits
 88




---



##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNumber

Exhibit2
.1

Amended and Restated Securities
    Purchase Agreement, dated as of March 24, 2000, by and
    among U.S. Industries, Inc., JUSI Holdings, Inc., Strategic
    Industries, LLC and Automotive Interior Products LLC (filed
    as Exhibit 10.1 to our Current Report on
    Form 8-K
    filed April 10, 2000)*2
.2

Agreement and Plan of Merger,
    dated February 16, 1998, among U.S. Industries, Inc.,
    USI Atlantic, Zurn Industries, Inc. and certain other parties
    named therein (included as
    Appendix A-1
    to the Merger Proxy)*2
.3

Stock and Asset Purchase Agreement
    dated as of March 19, 2002 among U.S. Industries,
    Inc., JUSI Holdings, Inc., USI Canada Inc. and Hubbell
    Incorporated (filed as Exhibit 2.1 of our Current Report on
    Form 8-K
    filed on May 10, 2002)*2
.4

Amendment No. 1 to Stock and
    Asset Purchase Agreement dated as of April 26, 2002 among
    JUSI Holdings, Inc. and Hubbell Incorporated (filed as
    Exhibit 2.2 of our Current Report on
    Form 8-K
    filed on May 10, 2002)*2
.5

Stock and Asset Purchase Agreement
    dated as of May 17, 2002 by and among U.S. Industries,
    Inc., Eljer Plumbingware, Inc., Selkirk, Inc., Selkirk Canada
    U.S.A., Inc., Selkirk Canada, Inc., Selkirk Acquisition
    Partners, L.P. and Tinicum Capital Partners, L.P. (filed as
    Exhibit 10.4 to our
    10-Q filed
    August 13, 2002)*2
.6

Share Purchase Agreement dated as
    of August 2, 2002 among JUSI Holdings, Inc.,
    U.S. Industries, Inc. and SiTeco Beteiligungs
    GmbH & Co KG (filed as Exhibit 2.1 to our Current
    Report on
    Form 8-K
    filed on October 24, 2002)*2
.7

Amendment Agreement dated as of
    August 2, 2002 among JUSI Holdings, Inc.,
    U.S. Industries, Inc. and SiTeco Beteilingungs
    GmbH & Co KG (filed as Exhibit 2.2 to our Current
    Report on
    Form 8-K
    filed on October 24, 2002)*2
.8

Stock Purchase Agreement dated as
    of August 23, 2002 among USI Mayfair Limited and MegaPro
    Tools, Inc. and S and J Acquisition Corp. (filed as
    Exhibit 10.47(a) to our Report on
    Form 10-K
    filed on December 24, 2002)*2
.9

Agreement and Plan of Merger dated
    as of May 8, 2005 among Rhône Sweep Holdings LLC,
    Rhône Sweep Acquisition LLC, Rhône Sweep Acquisition
    Inc., Rhône Sweep Acquisition Sub LLC, Jacuzzi Brands,
    Inc., JUSI Holdings, Inc. and Rexair Holdings, Inc. (the
    schedules and annexes have been omitted pursuant to
    Item 601(b) (2) of
    Regulation S-K)
    (filed as Exhibit 2.1 to our Current Report on
    Form 8-K
    filed on May 10, 2005)*2
.10

Contribution and Sale Agreement
    dated as of May 19, 2005 among Jacuzzi Brands, Inc.,
    Eljer Plumbingware, Inc., BMK/Eljer Holding Corp., Eljer
    One, LLC, Eljer Two, LLC and Eljer Three, LLC (the schedules and
    annexes have been omitted pursuant to Item 601(b) (2)
    of
    Regulation S-K)
    (filed as Exhibit 2.1 to our Current Report
    Form 8-K
    filed on May 25, 2005)*2
.11

Stock Purchase Agreement dated as
    of March 23, 2006 among registrant, USI American
    Holdings, Inc. and United Pacific Industries Limited (filed
    as Exhibit 2.1 on our Current Report filed March 27,
    2006)*2
.12

Amendment No. 1 to Stock
    Purchase Agreement dated as of May 4, 2006 among
    registrant, USI American Holdings, Inc. and United Pacific
    Industries Limited (filed as Exhibit 2.2 on our Current
    Report filed July 12, 2006)*2
.13

Amendment No. 2 to the Stock
    Purchase Agreement dated as of July 10, 2006 entered into
    by and among the registrant, USI American Holdings, Inc. and
    United Pacific Industries Limited (filed as Exhibit 2.3 to
    our Current Report on
    Form 8-K
    filed on July 12, 2006)*2
.14

Agreement and Plan of Merger dated
    as of October 11, 2006 among Jacuzzi Brands, Inc., Jupiter
    Acquisition, LLC and Jupiter Merger Sub, Inc. (filed as
    exhibit 2.1 to our Current Report on
    form 8-K
    filed on October 11, 2006)*3
.1

Form of Amended and Restated
    Certificate of Incorporation (filed as part of our Registration
    Statement
    No. 333-47101
    on
    Form S-4
    (the 1998
    S-4),
    as
    Appendix B-1
    to the Joint Proxy Statement/Prospectus (the Merger
    Proxy) included therein)* 89




---



##### Table of Contents



ExhibitNumber

Exhibit3
.2

Form of Certificate of
    Designations of Series A Junior Preferred Stock (filed as
    Exhibit (c) within the Rights Agreement filed as
    Exhibit (4) to our Current Report on
    Form 8-K
    filed October 16, 1998)*3
.3

Amended and Restated By-laws of
    our company (filed as Exhibit 3.1 to our Current Report
    filed September 19, 2006)*3
.4

Charters of subsidiary guarantors
    (filed as Exhibit 3.1 to the
    Form 10-Q
    filed February 12, 2004)*3
.5

Bylaws of subsidiary guarantors
    (filed as Exhibit 3.1 to the
    Form 10-Q
    filed February 12, 2004)*4
.1

Specimen form of certificate
    representing shares of Common Stock of U.S. Industries,
    Inc. (filed as Exhibit 4.1 to the Form 10 filed
    April 20, 1995 (the Form 10))*4
.2

Indenture dated July 15,
    2003, between the Company as Issuer and Wilmington Trust Company
    as Trustee (filed as Exhibit 4.1 to our Current Report on
    Form 8-K
    filed on August 12, 2003)*4
.3

Loan and Security Agreement dated
    July 15, 2003, among the Company and other subsidiaries of
    the Company as party thereto as Loan Parties, Fleet Capital
    Corporation, Fleet Securities, Inc., Credit Suisse First Boston,
    Bank One, NA and Silver Point Finance LLC (filed as
    Exhibit 10.2 to the
    Form 10-Q
    filed on August 12, 2003)*4
.4

Guaranty Agreement, dated
    July 15, 2003, among the Company and other subsidiaries of
    the Company as party thereto as Guarantors, Fleet Capital
    Corporation and Various Banks named therein (filed as
    Exhibit 10.3 to the
    Form 10-Q
    filed on August 12, 2003)*4
.5

Pledge Agreement, dated
    July 15, 2003, among the Company and other subsidiaries of
    the Company as party thereto as Pledgors, Fleet Capital
    Corporation and Various Banks named therein (filed as
    Exhibit 10.4 to the
    Form 10-Q
    filed on August 12, 2003)*4
.6

Intercreditor Agreement, dated
    July 15, 2003, by and among the Company and other
    subsidiaries of the Company as party thereto, Fleet Capital
    Corporation and Various Banks named therein and Wilmington Trust
    Company (filed as Exhibit 10.5 to the
    Form 10-Q
    filed on August 12, 2003)*4
.7

Class A Collateral Agreement,
    dated July 15, 2003, among the Company and other
    subsidiaries of the Company as party thereto as Grantors and
    Wilmington Trust Company as Collateral Agent (filed as
    Exhibit 10.6 to the
    Form 10-Q
    filed on August 12, 2003)*4
.8

Class B Collateral Agreement,
    dated July 15, 2003, among the Company and other
    subsidiaries of the Company as party thereto as Grantors and
    Wilmington Trust Company as Collateral Agent (filed as
    Exhibit 10.7 to the
    Form 10-Q
    filed on August 12, 2003)*4
.9

Class B Pledge Agreement,
    dated July 15, 2003, among the Company and other
    subsidiaries of the Company as party thereto as Pledgors and
    Wilmington Trust Company as Collateral Agent (filed as
    Exhibit 10.8 to the
    Form 10-Q
    filed on August 12, 2003)*4
.10

Collateral Agency Agreement, dated
    July 15, 2003, among the Company and other subsidiaries of
    the Company as party thereto, the Representatives and
    Unrepresented Holders as party thereto and Wilmington Trust
    Company, as Trustee and as Collateral Agent (filed as
    Exhibit 10.9 to the
    Form 10-Q
    filed on August 12, 2003)*4
.11

First Amendment to Loan and
    Security Agreement among Jacuzzi Brands, Inc., the other
    borrowers named on the signature page thereto, Fleet Capital
    Corporation, Silver Point Finance LLC, the Revolving Credit
    Lenders named therein, and the Term Loan B Lenders named
    therein dated October 10, 2003 (filed as Exhibit 10.53
    to the
    Form 10-K
    filed on December 19, 2004)*4
.12

Supplement and First Amendment to
    Pledge Agreement among JBI Holdings Limited, the Pledgors party
    to the Pledge Agreement and Fleet Capital Corporation dated
    October 16, 2003 (filed as Exhibit 10.54 to the
    Form 10-K
    filed on December 19, 2004)*4
.13

Supplement to Guaranty and
    Guarantor Security Agreement between JBI Holdings Limited and
    Fleet Capital Corporation dated October 16, 2003
    (filed as Exhibit 10.55 to the
    Form 10-K
    filed on December 19, 2004)*4
.14

Supplement and First Amendment to
    Class B Pledge Agreement among JBI Holdings Limited, the
    Pledgors party to the Class B Pledge Agreement and
    Wilmington Trust Company dated October 16, 2003 (filed as
    Exhibit 10.56 to the
    Form 10-K
    filed on December 19, 2004)* 90




---



##### Table of Contents



ExhibitNumber

Exhibit4
.15

Supplement to Class B
    Collateral Agreement among JBI Holdings Limited, the Grantors
    party to the Class B Collateral Agreement and Wilmington
    Trust Company dated October 16, 2003 (filed as
    Exhibit 10.57 to the
    Form 10-K
    filed on December 19, 2004)*4
.16

Supplement Indenture dated as of
    October 16, 2003 among JBI Holdings Limited, the Subsidiary
    Guarantors and Wilmington Trust Company (filed as
    Exhibit 10.58 to the
    Form 10-K
    filed on December 19, 2004)*4
.17

Second Amendment to Loan and
    Security Agreement among Jacuzzi Brands, Inc., the other
    borrowers named on the signature pages thereto, Fleet Capital
    Corporation, Silver Point Finance LLC, the Revolving Credit
    Lenders named therein, and the Term Loan B Lenders named
    therein dated June 30, 2004 (filed as Exhibit 10.1 to
    the
    Form 10-Q
    filed on August 12, 2004)*10
.1

Subscription Agreement, dated
    May 31, 1995, between Hanson PLC and USI Atlantic (filed as
    Exhibit 10.10 to the 1995
    10-K)*10
.2

Tax Sharing and Indemnification
    Agreement, dated May 30, 1995, among HM
    Anglo-American
    Ltd., HM Holdings, Inc., Endicott Johnson Corporation, Kidde
    Industries, Inc., HMB Holdings Inc., Kaiser Cement Corporation,
    Spartus Corporation, USI Atlantic and USIAH (Filed as
    Exhibit 10.14 to the 1995
    10-K)*10
.3

Tax Sharing and Indemnification
    Agreement, dated May 30, 1995, among HM
    Anglo-American
    Ltd., Quantum Chemical Corporation, Endicott Johnson
    Corporation, Spartus Corporation, USI Atlantic and USIAH (Filed
    as Exhibit 10.15 to the 1995
    10-K)*10
.4

Indemnification Agreement, dated
    as of March 24, 2000, by and among Strategic Industries,
    LLC, U.S. Industries, Inc. and JUSI Holdings, Inc. (filed
    as Exhibit 10.2 to our Report on
    Form 8-K
    filed April 10, 2000)*10
.5

Amended and Restated Subscription
    Agreement, dated as of March 24, 2000, by and among
    U.S. Industries, Inc., JUSI Holdings, Inc., Strategic
    Industries, LLC, Strategic Industries, Inc. and Automotive
    Interior Products LLC (filed as Exhibit 10.3 to our Current
    Report on
    Form 8-K
    filed April 10, 2000)*10
.6

Rexair Indemnification Agreement,
    dated as of March 24, 2000, by and among
    U.S. Industries, Inc., JUSI Holdings, Inc., Strategic
    Industries, LLC and Strategic Industries, Inc. (filed as
    Exhibit 10.4 to our Current Report on
    Form 8-K
    filed April 10, 2000)*10
.7

Employment Agreement dated
    February 22, 1995 between our company and David H. Clarke
    (filed as Exhibit 10.9 to the Form 10)*10
.8

First Amendment, dated
    June 12, 1995, to the Employment Agreement dated
    February 22, 1995 between our company and David H. Clarke
    (filed as Exhibit 10.19(b) to the 1995
    10-K)*10
.9

Employment Agreement by and
    between our company and Francisco V. Puñal, dated as of
    December 15, 2001 (filed as Exhibit 10.9 to our
    10-Q filed
    May 15, 2001)*10
.10

Amendment dated May 1, 2001
    to the Employment Agreement between our company and Francisco V.
    Puñal (filed as Exhibit 10.19 (b) to our
    Form 10-K
    filed on December 24, 2002)*10
.11

Amended U.S. Industries, Inc.
    Stock Option Plan, as restated June 11, 1998 (filed as
    Exhibit 10.9 to the 1998
    10-K)*10
.12

U.S. Industries, Inc.
    Supplemental Retirement Plan (filed as Exhibit 10.14 to the
    Form 10)*10
.13

U.S. Industries, Inc.
    Restricted Stock Plan, as restated June 11, 1998 (filed as
    Exhibit 10.11 to the 1998
    10-K)*10
.14

U.S. Industries, Inc.
    Long-Term Incentive Plan (filed as Exhibit 10.15 to the
    Form 10)*10
.15

Rights Agreement dated as of
    October 15, 1998 between our company and the Chase
    Manhattan Bank, as Rights Agent (filed as
    Exhibit (4) to our Current Report on
    Form 8-K
    filed October 16, 1998)*10
.16

Stock and Asset Purchase Agreement
    dated as of December 21, 2001, by and among JUSI
    Holdings, Inc., Spear & Jackson plc, USI Global
    Corp., USI Canada Inc., U.S. Industries, Inc. and ATT
    Acquisition Co. (filed as Exhibit 10.33 to the 2001
    10-K)* 91




---



##### Table of Contents



ExhibitNumber

Exhibit10
.17

Employment Agreement,
    March 31, 2000, of Steven C. Barre (filed as
    Exhibit 10.12(a) to the 2000
    10-K)*10
.18

Letter Agreement, dated
    November 3, 2000 between our company and Steven C. Barre
    (filed as Exhibit 10.12(b) to the 2000
    10-K)*10
.19

First Amendment, dated
    September 11, 2001, to the Employment Agreement dated
    March 31, 2001 between the Company and Steven C. Barre
    (filed as Exhibit 10.34(c) to the 2001
    10-K)*10
.20

Amendment No. 1 to the Stock
    and Asset Purchase Agreement dated as of January 14, 2002
    among JUSI Holdings, Inc., Spear & Jackson plc, USI
    Global Corp., USI Canada Inc., U.S. Industries, Inc. and
    ATT Acquisition Co. (filed as Exhibit 2.2 of our Current
    Report on
    Form 8-K
    filed on January 18, 2002)*10
.21

Escrow Agreement dated as of
    April 26, 2002 among U.S. Industries, Inc., JUSI
    Holdings, Inc. and Hubbell Incorporated (filed as
    Exhibit 2.3 of our Current Report on
    Form 8-K
    filed on May 10, 2002)*10
.22

Tax Sharing and Indemnification
    Agreement effective as of March 19, 2002 among
    U.S. Industries, Inc., JUSI Holdings, Inc., USI Canada
    Inc. and Hubbell Incorporated (filed as Exhibit 2.4 of our
    Current Report on
    Form 8-K
    filed on May 10, 2002)*10
.23

Stockholders Agreement dated as of
    September 6, 2002 among MegaPro Tools, Inc. and the
    stockholders party thereto (filed as Exhibit 10.47(b) to
    our Report on
    Form 10-K
    filed on December 24, 2002)*10
.24

Standstill Agreement dated as of
    December 5, 2002 between U.S. Industries, Inc. and
    Southeastern Asset Management, Inc. (filed as Exhibit 10.48
    to the
    Form 10-K
    filed on December 24, 2002)*10
.25

Amendment No. 1 to Standstill
    Agreement dated as of December 5, 2002 between
    U.S. Industries, Inc., and Southeastern Asset Management,
    Inc., dated August 11, 2005 (filed as Exhibit 99.1 to
    our Current Report on
    Form 8-K
    filed on August 11, 2005)*10
.26

Employment Agreement by and
    between the Company and Donald C. Devine dated April 21,
    2003 (filed as Exhibit 10.10 to the
    Form 10-Q
    filed on August 12, 2003)*10
.27

Employment Agreement by and
    between the Company and Jeffrey B. Park dated April 21,
    2003 (filed as Exhibit 10.11 to the
    Form 10-Q
    filed on August 12, 2003)*10
.28

Charge over Shares Agreement
    between Jacuzzi Brands, Inc. and Fleet Capital Corporation dated
    October 16, 2003 (filed as Exhibit 10.51 to the
    Form 10-K
    filed on December 19, 2004)*10
.29

Charge over Shares Agreement
    between Jacuzzi Brands, Inc. and Wilmington Trust Company dated
    October 16, 2003 (filed as Exhibit 10.52 to the
    Form 10-K
    filed on December 19, 2004)*10
.30

Jacuzzi Brands, Inc. 2004 Stock
    Incentive Plan (filed as Appendix B to our Definitive Proxy
    Statement on Schedule 14A on January 6, 2004)*10
.31

First Amendment to the Jacuzzi
    Brands, Inc. 2004 Stock Incentive Plan (filed as
    Exhibit 10.2 to our Current Report on
    Form 8-K
    filed on October 7, 2004)*10
.32

Amended and Restated Non-Employee
    Director Deferred Compensation Plan (filed as Exhibit 10.1
    to our Current Report on
    Form 8-K
    filed on October 7, 2004)*10
.33

Transition Agreement between the
    registrant and David H. Clarke, dated December 8, 2004
    (filed as Exhibit 10.1 to our Current Report on
    Form 8-K/A
    filed on December 9, 2004)*10
.34

First Amendment dated
    August 10, 2005 to Transition Agreement dated as of
    December 8, 2004 between the registrant and David H. Clarke
    (filed as Exhibit 10.4 to our Current Report on
    Form 8-K
    on August 16, 2005)*10
.35

Employment Agreement between the
    registrant and Donald C. Devine, dated December 8, 2004
    (filed as Exhibit 10.2 to our Current Report on
    Form 8-K/A
    filed on December 9, 2004)*10
.36

Change of Control Agreement
    between the registrant and Donald C. Devine, dated
    December 8, 2004 (filed as Exhibit 10.3 to our Current
    Report on
    Form 8-K/A
    filed on December 9, 2004)*10
.37

Separation Agreement between the
    registrant and Donald C. Devine, dated August 10, 2005
    (filed as Exhibit 10.3 to our Current Report on
    Form 8-K
    on August 16, 2005)* 92




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##### Table of Contents



ExhibitNumber

Exhibit10
.38

Employment Agreement between the
    registrant and Robert Hennemuth, dated December 27, 2004
    (filed as Exhibit 10.1 to our Current Report on
    Form 8-K
    filed on December 31, 2004)*10
.39

Change in Control Agreement
    between the registrant and Robert Hennemuth, dated
    December 27, 2004 (filed as Exhibit 10.2 to our
    Current Report on
    Form 8-K
    filed on December 31, 2004)*10
.40

Employment Agreement between the
    registrant and Alex P. Marini, dated August 11, 2005 (filed
    as Exhibit 10.1 to our Current Report on
    Form 8-K
    filed on August 16, 2005)*10
.41

Incentive Award Letter between the
    registrant and Alex P. Marini dated May 17, 2001 (filed as
    Exhibit 10.2 to our Current Report on
    Form 8-K
    on August 16, 2005)*10
.42

2005 Annual Performance Incentive
    Plan (filed as Appendix A to Schedule 14A on
    January 1, 2005)*10
.43

Letter Agreement between the
    registrant and Alex P. Marini, dated July 17, 2006 (filed
    as exhibit 10.1 to our Current Report on
    Form 8-K
    filed July 21, 2006)*10
.44

Second Amendment between the
    registrant and David H. Clarke dated July 17, 2006 (filed
    as exhibit 10.2 to our Current Report on
    Form 8-K
    filed July 21, 2006)*10
.45

Amended and Restated Employment
    Agreement between the registrant and Alex P. Marini, dated
    October 10, 200614
.1

Amendment to Code of Business
    Conduct and Ethics dated October 12, 2004 (filed as
    Exhibit 99 to our Current Report on
    Form 8-K
    filed on October 18, 2004)*21
.1

Subsidiaries of Jacuzzi Brands,
    Inc.23
.1

Consent of Ernst & Young
    LLP, Independent Registered Public Accounting Firm24
.1

Power of Attorney (see Signature
    Page)31
.1

Certification of principal
    executive officer required by Rule 13a  14a of
    the Exchange Act31
.2

Certification of principal
    financial officer required by Rule 13a  14a of
    the Exchange Act32
.1

Certification of Chief Executive
    Officer and Chief Financial Officer pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002     *
    
    Incorporated by reference  Note:
    
    Exhibit Numbers 10.7 to 10.14, 10.17 to 10.19, 10.26, 10.27
    and 10.30 to 10.45 are management contracts or compensatory
    plans or arrangements. 93




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##### Table of Contents



SIGNATURES
      By:
    /s/  Alex
    P. Marini      POWER OF
    ATTORNEY
  attorneys-in-fact Form 10-K attorneys-in-fact attorneys-in-fact
    Signature

Title/s/  Alex
    P. MariniAlex
    P. Marini

President and Chief Executive
    Officer
    (Principal Executive Officer), and Director/s/  Jeffrey
    B. ParkJeffrey
    B. Park

Senior Vice President, Chief
    Financial Officer and
    Treasurer (Principal Financial Officer)/s/  Francisco
    V.
    PuñalFrancisco
    V. Puñal

Vice President and Controller
    (Principal Accounting Officer)/s/  Thomas
    B. WaldinThomas
    B. Waldin

Director
    (Chairman of the Board)/s/  Brian
    C. BeazerBrian
    C. Beazer

Director/s/  Veronica
    M. HagenVeronica
    M. Hagen

Director 94




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##### Table of Contents



Signature

Title/s/  John
    J.
    McAtee, Jr.John
    J. McAtee, Jr.

Director/s/  Claudia
    E. MorfClaudia
    E. Morf

Director/s/  Royall
    Victor IIIRoyall
    Victor III

Director/s/  Robert
    R. WomackRobert
    R. Womack

Director  95