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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 1934    
|For the fiscal year ended October 1, 2005     
|OR                                            
|                                              
|o                                              |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|For 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(Address of principal executive offices) |  | 33401(Zip code)                            

(561) 514-3838






|                                       |  |                                          
|-------------------------------------- |  | -----------------------------------------
|Title of Each Class                    |  | Name of each exchange on which registered
|                                       |  |                                          
|Common Stock, par value $.01 per share |  | New York Stock Exchange                  

None





o þ


o þ


þ o


þ


þ o


o þ


















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TABLE OF CONTENTS


|                                                  |     |  |  |                                                                                                                      |      |  |    | 
|------------------------------------------------- | --- |  |  | -------------------------------------------------------------------------------------------------------------------- | ---- |  | -- | 
|Item                                              |     |  |  |                                                                                                                      | Page | 
|                                                  |     |  |  |                                                                                                                      |      | 
|PART I                                           
|                                                  | 1.  |  |  | Business                                                                                                             |      |  | 1  | 
|                                                  | 1A. |  |  | Risk Factors                                                                                                         |      |  | 8  | 
|                                                  | 2.  |  |  | Properties                                                                                                           |      |  | 13 | 
|                                                  | 3.  |  |  | Legal Proceedings                                                                                                    |      |  | 14 | 
|                                                  | 4.  |  |  | Submission of Matters to a Vote of Security
    Holders                                                              |      |  | 16 | 
|                                                 
|PART II                                          
|                                                  | 5.  |  |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |      |  | 16 | 
|                                                  | 6.  |  |  | Selected Financial Data                                                                                              |      |  | 17 | 
|                                                  | 7.  |  |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |      |  | 19 | 
|                                                  | 7A. |  |  | Qualitative and Quantitative Disclosures
    About Market Risk                                                       |      |  | 37 | 
|                                                  | 8.  |  |  | Financial Statements and Supplementary
    Data                                                                      |      |  | 38 | 
|                                                  | 9.  |  |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |      |  | 92 | 
|                                                  | 9A. |  |  | Controls and Procedures                                                                                              |      |  | 92 | 
|                                                  | 9B. |  |  | Other Information                                                                                                    |      |  | 92 | 
|                                                 
|PART III                                         
|                                                  | 10. |  |  | Directors and Executive Officers of the
    Registrant                                                               |      |  | 92 | 
|                                                  | 11. |  |  | Executive Compensation                                                                                               |      |  | 92 | 
|                                                  | 12. |  |  | Security Ownership of Certain Beneficial
    Owners and Management                                                   |      |  | 92 | 
|                                                  | 13. |  |  | Certain Relationships and Related
    Transactions                                                                   |      |  | 93 | 
|                                                  | 14. |  |  | Principal Accounting Fees and Services                                                                               |      |  | 93 | 
|                                                 
|PART IV                                          
|                                                  | 15. |  |  | Exhibits and Financial Statement
    Schedules                                                                       |      |  | 93 | 
|                                                  |     |  |  | SIGNATURES                                                                                                           |      |  | 99 | 
|Subsidiaries                                     
|Consent of Ernst & Young                         
|Section 302 Chief Executive Officer Certification
|Section 302 Chief Financial Officer Certification
|Section 906 CEO & CFO Certification              







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##### Table of Contents






PART I







|        |         
|------- | --------
|Item 1. | Business



tm tm






www.sec.gov www.jacuzzibrands.com


Note 11


Bath Products Segment




U.S. Bath Products.


1



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International Bath Products.






Plumbing Products Segment




2



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tm tm








Rexair Segment


Note 3


Discontinued Operations








Note 3


3



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Seasonality




Raw Materials, Energy and Suppliers




Patents, Trademarks and Licenses


tm


Competition




Backlog




Export and International Operations




4



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Employee Relations




Environmental Regulation








5



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Corporate Governance




Executive Officers




|                   |  |     |    |  |          |                                                               
|------------------ |  | --- | -- |  | -------- | --------------------------------------------------------------
|Name               |  | Age |    |  | Position
|                   |  |     |    |  |         
|David H. Clarke    |  |     | 64 |  |          | Chairman of the Board and Chief Executive Officer             
|Alex P. Marini     |  |     | 59 |  |          | President and Chief Operating Officer                         
|Steven C. Barre    |  |     | 46 |  |          | Senior Vice President, General Counsel and Secretary          
|Marie S. Dreher    |  |     | 47 |  |          | Senior Vice President  Corporate Development and
    Strategy
|Jeffrey B. Park    |  |     | 53 |  |          | Senior Vice President, Chief Financial Officer and Treasurer  
|Diana E. Burton    |  |     | 60 |  |          | Vice President  Investor Relations                           
|Francisco V. Puñal |  |     | 46 |  |          | Vice President and Corporate Controller                       

David H. Clarke


6



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Alex P. Marini


Steven C. Barre


Marie S. Dreher


Jeffrey B. Park


Diana E. Burton


Francisco V. Puñal


7



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|         |             
|-------- | ------------
|Item 1A. | Risk Factors



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.                       

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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.


10



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| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | 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.



Risks Related to Our Indebtedness


Liquidity and Capital Resources Item 7


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.                                                               





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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



|                     |  |                                        |  |                |         |  |              |  |        | 
|-------------------- |  | -------------------------------------- |  | -------------- | ------- |  | ------------ |  | ------ | 
|                     |  |                                        |  | Approximate    |         |  |             
|Location             |  | Use                                    |  | Square Footage |         |  | Owned/Leased | 
|                     |  |                                        |  |                |         |  |              | 
|Bath Products:       |  |                                        |  |                |         |  |              |  |        | 
|Europe/ Asia         |  |                                        |  |                |         |  |              |  |        | 
|Valvasone, Italy     |  | Manufacturing/Warehouse                |  |                | 251,472 |  |              |  | Owned  | 
|Newcastle, England   |  | Manufacturing                          |  |                | 99,429  |  |              |  | Owned  | 
|Bradford, England    |  | Manufacturing/Office Warehouse         |  |                | 528,256 |  |              |  | Owned  | 
|Birstal, England     |  | Manufacturing/Showroom                 |  |                | 136,375 |  |              |  | Owned  | 
|Hilton, England      |  | Warehouse                              |  |                | 125,000 |  |              |  | Leased | 
|Paris, France        |  | Warehouse                              |  |                | 79,653  |  |              |  | Leased | 
|Cedex, France        |  | Manufacturing                          |  |                | 10,764  |  |              |  | Owned  | 
|Marsa, Malta         |  | Manufacturing                          |  |                | 57,834  |  |              |  | Leased | 
|South America        |  |                                        |  |                |         |  |              |  |        | 
|Itu, Brazil          |  | Manufacturing/Office                   |  |                | 234,695 |  |              |  | Owned  | 
|Santiago, Chile      |  | Manufacturing/Office/Showroom          |  |                | 52,480  |  |              |  | Owned  | 
|United States        |  |                                        |  |                |         |  |              |  |        | 
|Chino, California    |  | Spa Manufacturing/Warehouse            |  |                | 350,000 |  |              |  | Leased | 
|Chino, California    |  | Spa Office Space & Bath Manufacturing  |  |                | 90,000  |  |              |  | Owned  | 
|Chino, California    |  | Whirlpool Bath Manufacturing/Warehouse |  |                | 306,700 |  |              |  | Leased | 
|Carrollton, Texas    |  | Manufacturing/Warehousing/Testing      |  |                | 11,440  |  |              |  | Leased | 
|Plant City, Florida  |  | Office                                 |  |                | 1,000   |  |              |  | Leased | 
|Valdosta, Georgia    |  | Manufacturing/Office                   |  |                | 363,876 |  |              |  | Leased | 
|Statesville, Georgia |  | Warehouse                              |  |                | 12,000  |  |              |  | Leased | 
|Salem, Ohio          |  | Warehouse                              |  |                | 479,644 |  |              |  | Owned  | 
|Addison, Texas       |  | Office                                 |  |                | 110,649 |  |              |  | Leased | 

13



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|                          |  |                                      |  |                |         |  |              |  |        | 
|------------------------- |  | ------------------------------------ |  | -------------- | ------- |  | ------------ |  | ------ | 
|                          |  |                                      |  | Approximate    |         |  |             
|Location                  |  | Use                                  |  | Square Footage |         |  | Owned/Leased | 
|                          |  |                                      |  |                |         |  |              | 
|Plumbing Products:        |  |                                      |  |                |         |  |              |  |        | 
|Canada                    |  |                                      |  |                |         |  |              |  |        | 
|Mississauga, Ontario      |  | Manufacturing/Warehouse              |  |                | 27,878  |  |              |  | Leased | 
|United States             |  |                                      |  |                |         |  |              |  |        | 
|Gardena, California       |  | Office/Warehouse/Distribution        |  |                | 73,987  |  |              |  | Owned  | 
|Paso Robles, California   |  | Manufacturing/Office                 |  |                | 158,000 |  |              |  | Owned  | 
|Norcross, Georgia         |  | Warehouse/Office                     |  |                | 57,600  |  |              |  | Leased | 
|Elkhart, Indiana          |  | Manufacturing/Distribution           |  |                | 110,000 |  |              |  | Owned  | 
|Hayward, California       |  | Warehouse/Office                     |  |                | 23,640  |  |              |  | Leased | 
|Sacramento, California    |  | Warehouse                            |  |                | 16,000  |  |              |  | Leased | 
|Falconer, New York        |  | Manufacturing/Warehouse/Distribution |  |                | 151,520 |  |              |  | Leased | 
|Sanford, North Carolina   |  | Assembly/Office                      |  |                | 78,000  |  |              |  | Owned  | 
|Northwood, Ohio           |  | Warehouse                            |  |                | 17,920  |  |              |  | Leased | 
|Ben Salem, Pennsylvania   |  | Warehouse/Office                     |  |                | 40,000  |  |              |  | Leased | 
|Erie, Pennsylvania        |  | Manufacturing/Office/Distribution    |  |                | 310,562 |  |              |  | Leased | 
|Harborcreek, Pennsylvania |  | Warehouse/Office                     |  |                | 100,000 |  |              |  | Leased | 
|Commerce, Texas           |  | Manufacturing/Distribution           |  |                | 175,000 |  |              |  | Owned  | 
|Dallas, Texas             |  | Warehouse/Office                     |  |                | 33,000  |  |              |  | Leased | 








|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings











14



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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 2005 |       |  | Fiscal 2004 |  
|               |  |             |       |  |             |  
|               |  | High        |       |  | Low         |   |      | High |  |   | Low  | 
|               |  |             |       |  |             |   |      |      |  |   |      | 
|First Quarter  |  | $           | 9.75  |  |             | $ | 7.94 |      |  | $ | 7.50 |  |  | $ | 6.00 | 
|Second Quarter |  | $           | 10.85 |  |             | $ | 8.28 |      |  | $ | 9.51 |  |  | $ | 7.72 | 
|Third Quarter  |  | $           | 11.35 |  |             | $ | 8.09 |      |  | $ | 9.93 |  |  | $ | 7.40 | 
|Fourth Quarter |  | $           | 11.57 |  |             | $ | 7.23 |      |  | $ | 9.61 |  |  | $ | 7.50 | 







Liquidity and Capital Resources Item 7


16



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|                           |                                  |                      |  |           |                   |  |   |                         |      |  |  |           |           | 
|-------------------------- | -------------------------------- | -------------------- |  | --------- | ----------------- |  | - | ----------------------- | ---- |  |  | --------- | --------- | 
|                           |                                  | Column(a)            |  |           | Column(b)         |  |   | Column(c)               |     
|                           |                                  |                      |  |           |                   |  |   |                         |     
|                           |                                  | Number of Securities |  |           | Weighted-Average  |  |   |                        
|                           |                                  | to be Issued Upon    |  |           | Exercise Price of |  |   | Number of Securities    |     
|                           |                                  | Exercise of          |  |           | Outstanding       |  |   | Remaining Available for |     
|                           |                                  | Outstanding          |  |           | Options,          |  |   | Future Issuance Under   |     
|                           |                                  | Options,             |  |           | Warrants and      |  |   | Equity Compensation     |     
|Plan Category              |                                  | Warrants and Rights  |  |           | Rights            |  |   | Plans(1)                |     
|                           |                                  |                      |  |           |                   |  |   |                         |     
|Equity compensation plans: |                                  |                      |  |           |                   |  |   |                         |      |  |  |          
|                           | Approved by security holders     |                      |  | 1,266,032 |                   |  | $ | 5.37                    |      |  |  | 3,240,255 |          
|                           | Not approved by security holders |                      |  |          |                   |  |   |                        |      |  |  |          |          
|                           |                                  |                      |  |           |                   |  |   |                         |     
|                           |                                  | Total                |  |           | 1,266,032         |  |   | $                       | 5.37 |  |  |           | 3,240,255 | 
|                           |                                  |                      |  |           |                   |  |   |                         |     






|    |                                              
|--- | ---------------------------------------------
|(1) | Excluding securities reflected in Column (a).






|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data













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Goodwill
and other Intangible Assets


Liquidity and Capital Resources Item 7


Item 8 Items 7 8


|                                    |                                                          |                                              |   |            |            |   |            |               |       |            |               |         |            |               |   |         |      |  |   |         |       |  
|----------------------------------- | -------------------------------------------------------- | -------------------------------------------- | - | ---------- | ---------- | - | ---------- | ------------- | ----- | ---------- | ------------- | ------- | ---------- | ------------- | - | ------- | ---- |  | - | ------- | ----- | -
|                                    |                                                          | For the Fiscal Years Ended                   |  
|                                    |                                                          |                                              |  
|                                    |                                                          | October 1,                                   |   |            | October 2, |   |            | September 27, |       |            | September 28, |         |            | September 29, |  
|                                    |                                                          | 2005                                         |   |            | 2004*      |   |            | 2003*         |       |            | 2002*         |         |            | 2001*         |  
|                                    |                                                          |                                              |   |            |            |   |            |               |       |            |               |         |            |               |  
|                                    |                                                          |                                              |   | (Restated) |            |   | (Restated) |               |       | (Restated) |               |         | (Restated) |              
|                                    |                                                          | (in millions, except per share amounts)      |  
|Statements of Operations:           |                                                          |                                              |   |            |            |   |            |               |       |            |               |         |            |               |   |         |      |  |   |        
|                                    | Net sales                                                |                                              | $ | 1,210.0    |            |   | $          | 1,201.2       |       |            | $             | 1,025.2 |            |               | $ | 904.1   |      |  | $ | 854.6   |      
|                                    | Operating income                                         |                                              |   | 94.4       |            |   |            | 127.2         |       |            |               | 99.1    |            |               |   | 95.2    |      |  |   | 17.2    |      
|                                    | Earnings (loss) from continuing operations               |                                              |   | 58.0       |            |   |            | 48.3          |       |            |               | 21.4    |            |               |   | 32.4    |      |  |   | (121.3  | )    
|                                    | (Loss) earnings from discontinued operations, net of tax |                                              |   | (63.6      | )          |   |            | (19.9         | )     |            |               | (50.4   | )          |               |   | 8.5     |      |  |   | (385.2  | )    
|                                    | Cumulative effect of accounting change, net of tax       |                                              |   |           |            |   |            |              |       |            |               |        |            |               |   |        |      |  |   | (0.7    | )    
|                                    | Net (loss) earnings                                      |                                              |   | (5.6       | )          |   |            | 28.4          |       |            |               | (29.0   | )          |               |   | 40.9    |      |  |   | (507.2  | )    
|                                    | Basic (loss) earnings per share:                         |                                              |   |            |            |   |            |               |       |            |               |         |            |               |   |         |      |  |   |         |      
|                                    |                                                          | Earnings (loss) from continuing operations   |   |            | 0.77       |   |            |               | 0.64  |            |               |         | 0.29       |               |   |         | 0.44 |  |   |         | (1.64 | )
|                                    |                                                          | (Loss) earnings from discontinued operations |   |            | (0.84      | ) |            |               | (0.26 | )          |               |         | (0.68      | )             |   |         | 0.11 |  |   |         | (5.20 | )
|                                    |                                                          | Cumulative effect of accounting change       |   |            |           |   |            |               |      |            |               |         |           |               |   |         |     |  |   |         | (0.01 | )
|                                    |                                                          | Net (loss) earnings                          |   |            | (0.07      | ) |            |               | 0.38  |            |               |         | (0.39      | )             |   |         | 0.55 |  |   |         | (6.85 | )
|                                    | Diluted (loss) earnings per share:                       |                                              |   |            |            |   |            |               |       |            |               |         |            |               |   |         |      |  |   |         |      
|                                    |                                                          | Earnings (loss) from continuing operations   |   |            | 0.76       |   |            |               | 0.64  |            |               |         | 0.29       |               |   |         | 0.44 |  |   |         | (1.64 | )
|                                    |                                                          | (Loss) earnings from discontinued operations |   |            | (0.83      | ) |            |               | (0.27 | )          |               |         | (0.68      | )             |   |         | 0.11 |  |   |         | (5.20 | )
|                                    |                                                          | Cumulative effect of accounting change       |   |            |           |   |            |               |      |            |               |         |           |               |   |         |     |  |   |         | (0.01 | )
|                                    |                                                          | Net (loss) earnings                          |   |            | (0.07      | ) |            |               | 0.37  |            |               |         | (0.39      | )             |   |         | 0.55 |  |   |         | (6.85 | )
|                                    | Cash dividend declared per share                         |                                              |   |           |            |   |            |              |       |            |               |        |            |               |   |        |      |  |   | 0.05    |      
|Balance Sheet Data (at period end): |                                                          |                                              |   |            |            |   |            |               |       |            |               |         |            |               |   |         |      |  |   |        
|                                    | Cash and cash equivalents                                |                                              | $ | 110.2      |            |   | $          | 39.6          |       |            | $             | 31.2    |            |               | $ | 32.1    |      |  | $ | 65.2    |      
|                                    | Working capital                                          |                                              |   | 260.7      |            |   |            | 240.7         |       |            |               | 194.8   |            |               |   | 293.0   |      |  |   | 449.0   |      
|                                    | Total assets                                             |                                              |   | 1,289.5    |            |   |            | 1,380.4       |       |            |               | 1,327.8 |            |               |   | 1,686.9 |      |  |   | 2,180.0 |      
|                                    | Total debt                                               |                                              |   | 407.0      |            |   |            | 471.8         |       |            |               | 500.1   |            |               |   | 808.1   |      |  |   | 1,226.8 |      
|                                    | Stockholders equity                                     |                                              |   | 285.2      |            |   |            | 288.5         |       |            |               | 245.5   |            |               |   | 254.4   |      |  |   | 217.0   |      






|  |                                                                                                                                                                                                                                                                                                                                                                     
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Amounts have been restated to reflect our increased ownership in
    Spear & Jackson, which has been classified as a
    discontinued operation (see Note 1to our
    Consolidated Financial Statements). In addition, amounts have
    been reclassified to reflect Eljer as a discontinued operation
    (see Note 3to our Consolidated Financial
    Statements).

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Overview




The Equity Method of Accounting for
Investments in Common Stock Note 3 Liquidity and Capital
Resources


Note 3 Liquidity and Capital Resources








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Note 1


Results of Operations


|                                  |  |                            |       |   |            |   |       |               |  |   |       |  
|--------------------------------- |  | -------------------------- | ----- | - | ---------- | - | ----- | ------------- |  | - | ----- | -
|                                  |  | For the Fiscal Years Ended |      
|                                  |  |                            |      
|                                  |  | October 1,                 |       |   | October 2, |   |       | September 27, | 
|                                  |  | 2005                       |       |   | 2004       |   |       | 2003          | 
|                                  |  |                            |       |   |            |   |       |               | 
|                                  |  | (in millions)              |      
|Net sales                         |  | $                          | 133.0 |   |            | $ | 148.1 |               |  | $ | 233.3 |  
|Operating loss                    |  |                            | (9.1  | ) |            |   | (31.6 | )             |  |   | (18.6 | )
|Loss from discontinued operations |  |                            | (63.6 | ) |            |   | (19.9 | )             |  |   | (50.4 | )

Note 3


Results of Operations




|                   |                   |                            |       |            |            |   |            |               |         |  |       |       |         | 
|------------------ | ----------------- | -------------------------- | ----- | ---------- | ---------- | - | ---------- | ------------- | ------- |  | ----- | ----- | ------- | 
|                   |                   | For the Fiscal Years Ended |      
|                   |                   |                            |      
|                   |                   | October 1,                 |       |            | October 2, |   |            | September 27, |        
|                   |                   | 2005                       |       |            | 2004       |   |            | 2003          |        
|                   |                   |                            |       |            |            |   |            |               |        
|                   |                   |                            |       | (Restated) |            |   | (Restated) |              
|                   |                   | (in millions)              |      
|Net Sales          |                   |                            |       |            |            |   |            |               |         |  |       |      
|                   | Bath Products     |                            | $     | 780.8      |            |   | $          | 788.4         |         |  | $     | 646.5 |        
|                   | Plumbing Products |                            |       | 353.1      |            |   |            | 308.0         |         |  |       | 276.6 |        
|                   | Rexair(1)         |                            |       | 76.1       |            |   |            | 104.8         |         |  |       | 102.1 |        
|                   |                   |                            |       |            |            |   |            |               |        
|                   |                   | Total Net Sales            |       | $          | 1,210.0    |   |            | $             | 1,201.2 |  |       | $     | 1,025.2 | 
|                   |                   |                            |       |            |            |   |            |               |        
|Operating Income   |                   |                            |       |            |            |   |            |               |         |  |       |      
|                   | Bath Products     |                            | $     | 30.1       |            |   | $          | 57.2          |         |  | $     | 25.3  |        
|                   | Plumbing Products |                            |       | 75.3       |            |   |            | 60.7          |         |  |       | 62.1  |        
|                   | Rexair(1)         |                            |       | 19.0       |            |   |            | 27.3          |         |  |       | 26.6  |        
|                   |                   |                            |       |            |            |   |            |               |        
|                   |                   |                            | 124.4 |            |            |   | 145.2      |               |         |  | 114.0 |      
|Corporate Expenses |                   |                            | (30.0 | )          |            |   | (18.0      | )             |         |  | (14.9 | )    
|                   |                   |                            |       |            |            |   |            |               |        
|                   |                   | Total Operating Income     |       | $          | (94.4      | ) |            | $             | 127.2   |  |       | $     | 99.1    | 
|                   |                   |                            |       |            |            |   |            |               |        






|    |                                                           
|--- | ----------------------------------------------------------
|(1) | Reflects sales and operating income through June 30, 2005.

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| |                                    
| | -----------------------------------
| | Fiscal 2005 Compared to Fiscal 2004



| |        
| | -------
| | Overall

Overview






| |              
| | -------------
| | Bath Products





Note 4




| |                  
| | -----------------
| | Plumbing Products



21



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| |       
| | ------
| | Rexair

Overview




| |                   
| | ------------------
| | Corporate Expenses





| |                            
| | ---------------------------
| | Interest Income and Expense





| |                   
| | ------------------
| | Other Expense, net



|                                                       |  |                      |      |   |            |   |      |  
|------------------------------------------------------ |  | -------------------- | ---- | - | ---------- | - | ---- | -
|                                                       |  | For the Fiscal Years |     
|                                                       |  | Ended                |     
|                                                       |  |                      |     
|                                                       |  | October 1,           |      |   | October 2, |  
|                                                       |  | 2005                 |      |   | 2004       |  
|                                                       |  |                      |      |   |            |  
|                                                       |  | (in millions)        |     
|Keller Ladder expenses                                 |  | $                    | 1.0  |   |            | $ | 1.6  |  
|Loss (gain) on sales of other non-operating assets     |  |                      | 0.7  |   |            |   | (2.5 | )
|(Gain) loss on sale of excess properties and equipment |  |                      | (1.7 | ) |            |   | 0.1  |  
|Foreign currency transaction (gains) losses            |  |                      | (0.4 | ) |            |   | 1.9  |  
|Debt retirement costs                                  |  |                      | 3.2  |   |            |   |     |  
|Earnings on equity investment in Rexair                |  |                      | (0.6 | ) |            |   |     |  
|Other, net                                             |  |                      | 3.8  |   |            |   | 2.1  |  
|                                                       |  |                      |      |   |            |  
|                                                       |  | $                    | 6.0  |   |            | $ | 3.2  |  
|                                                       |  |                      |      |   |            |  



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| |      
| | -----
| | 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.                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | 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. We have adequate reserves
    to cover the current proposed adjustments.







| |                                    
| | -----------------------------------
| | Fiscal 2004 Compared to Fiscal 2003



| |        
| | -------
| | Overall





| |              
| | -------------
| | Bath Products



Note 4


23



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| |                  
| | -----------------
| | Plumbing Products







| |       
| | ------
| | Rexair

e tm e


e




| |                   
| | ------------------
| | Corporate Expenses





| |                            
| | ---------------------------
| | Interest Income and Expense





| |                   
| | ------------------
| | Other Expense, Net



24



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Note 2




| |      
| | -----
| | Taxes



Liquidity and Capital Resources








Note 4






25



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|                                    |  |               |       |  |             |   |       |                          |  |  |                                      | 
|----------------------------------- |  | ------------- | ----- |  | ----------- | - | ----- | ------------------------ |  |  | ------------------------------------ | 
|                                    |  | Maximum       |       |  | Amount      |   |       |                         
|                                    |  | Availability  |       |  | Outstanding |   |       | Applicable Interest Rate | 
|                                    |  |               |       |  |             |   |       |                          | 
|                                    |  | (in millions) |       |  |            
|Senior Notes                        |  | $             | 380.0 |  |             | $ | 380.0 |                          |  |  | 9.625%                               | 
|Asset-based credit facility
    (1) |  |               | 121.9 |  |             |   |      |                          |  |  | 2.25% over LIBOR or 0.25% over Prime | 
|US Brass note                       |  |               | 5.0   |  |             |   | 5.0   |                          |  |  | Interest imputed at 9.5%             | 
|                                    |  |               |       |  |             |   |       |                          | 
|Total                               |  | $             | 506.9 |  |             | $ | 385.0 |                          |  |  |                                      | 
|                                    |  |               |       |  |             |   |       |                          | 






|    |                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------
|(1) | In addition, $41.5 million of the facility is utilized for
    letters of credit at the end of fiscal 2005.











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| |            
| | -----------
| | Commitments





|                            |       |                        |       |        |          |   |      |           |  |   |           |       |  |            |       |       |  |   |      |      | 
|--------------------------- | ----- | ---------------------- | ----- | ------ | -------- | - | ---- | --------- |  | - | --------- | ----- |  | ---------- | ----- | ----- |  | - | ---- | ---- | 
|                            |       | Payments Due in Fiscal |       |        | Payments |  
|                            |       |                        |       |        | Due      |  
|                            |       | Total                  |       |        | 2006     |   |      | 2007-2008 |  |   | 2009-2010 |       |  | Thereafter |      
|                            |       |                        |       |        |          |   |      |           |  |   |           |       |  |            |      
|                            |       | (in millions)          |      
|Long-term debt              |       | $                      | 385.0 |        |          | $ | 1.5  |           |  | $ | 3.5       |       |  | $          | 380.0 |       |  | $ |     |     
|Notes payable               |       |                        | 22.0  |        |          |   | 22.0 |           |  |   |          |       |  |            |      |       |  |   |     |     
|Lease obligations           |       |                        | 41.3  |        |          |   | 8.8  |           |  |   | 13.9      |       |  |            | 7.0   |       |  |   | 11.6 |     
|Purchase
    obligations(1) |       |                        | 82.6  |        |          |   | 82.6 |           |  |   |          |       |  |            |      |       |  |   |     |     
|Interest
    payments(2)    |       |                        | 173.8 |        |          |   | 36.6 |           |  |   | 73.2      |       |  |            | 64.0  |       |  |   |     |     
|Other(3)                    |       |                        | 37.3  |        |          |   | 18.9 |           |  |   | 9.8       |       |  |            | 4.6   |       |  |   | 4.0  |     
|                            |       |                        |       |        |          |   |      |           |  |   |           |       |  |            |      
|                            | Total |                        | $     | 742.00 |          |   | $    | 170.4     |  |   | $         | 100.4 |  |            | $     | 455.6 |  |   | $    | 15.6 | 
|                            |       |                        |       |        |          |   |      |           |  |   |           |       |  |            |      






|    |                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Purchase obligations are all open purchase orders at
    October 1, 2005. Of this amount, $6.6 million
    represents obligations that were relieved by October 6,
    2005.
|   
|(2) | Interest payments represent interest on the Senior Notes.                                                                                                                   
|   
|(3) | Other includes obligations relating to restructuring initiatives
    and indemnifications for assets and previously sold businesses.                                        

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| |                                
| | -------------------------------
| | Guarantees and Indemnifications









New Accounting Pronouncements


Determining Whether a General
Partner, or the General Partners as a Group, Controls a Limited
Partnership or Similar Entity When the Limited Partners Have
Certain Rights


Accounting Changes and Error Corrections  A
Replacement of APB Opinion No. 20 and FASB Statement
No. 3


Accounting for Conditional Asset Retirement Obligations


28



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Share-Based Payment Accounting for Stock-Based
Compensation Accounting for
Stock Issued to Employees Statement of Cash
Flows.




Note 2


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Application of FASB Statement
No. 109, Accounting for Income Taxes, to the Tax Deduction
on Qualified Production Activities Provided by the American Jobs
Creation Act of 2004 Accounting and Disclosure Guidance
for the Foreign Earnings Repatriation Provision within the
American Jobs Creation Act of 2004


Inventory
Costs, an Amendment of ARB No. 43, Chapter 4


Foreign Currency Matters




Effects of Inflation




Critical Accounting Policies and Estimates




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Note 2




| |                  
| | -----------------
| | Trade Receivables





| |            
| | -----------
| | Inventories





| |             
| | ------------
| | Income Taxes







| |                                                                              
| | -----------------------------------------------------------------------------
| | Assets Held for Sale and Liabilities Associated with
    Assets Held for Sale

Accounting for Impairment or Disposal
of Long-lived Assets




| |         
| | --------
| | Goodwill

Goodwill and
Intangible Assets


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| |                                                  
| | -------------------------------------------------
| | Costs Associated with Exit or Disposal Activities

Accounting for Costs
Associated with Exit or Disposal Activities.




| |                              
| | -----------------------------
| | Commitments and Contingencies









| |                  
| | -----------------
| | Warranty Reserves





| |                                           
| | ------------------------------------------
| | Pension and Other Post-Employment Benefits



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| |                          
| | -------------------------
| | 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.



Capitalization of Costs to Treat Environmental
Contamination,


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| |   |                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The costs extend the life, increase the capacity or improve the
    safety or efficiency of property owned. The condition of that
    property after the costs are incurred must be improved as
    compared with the condition of that property when originally
    constructed or acquired.
|
| |  | The costs mitigate or prevent environmental contamination that
    has yet to occur and that otherwise may result from future
    operations or activities. In addition, the costs improve the
    property compared with its condition when constructed or
    acquired.                    
|
| |  | The costs are incurred in preparing for sale that property which
    is currently held for sale.                                                                                                                                                                                             



| |                                                  
| | -------------------------------------------------
| | Asbestos Claims and Insurance for Asbestos Claims

Item 3 Legal Proceedings








| |                    
| | -------------------
| | Revenue Recognition





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| |                                        
| | ---------------------------------------
| | Accounting for Stock-Based Compensation

Accounting for Stock-Based
Compensation Accounting for Stock Issued to
Employees 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






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| |   |                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                                                                                     
|
| |  | 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 multi-national 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


36



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|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Qualitative and Quantitative Disclosures About Market
    Risk





37



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|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING










38



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM















| |                             
| | ----------------------------
| | /s/ Ernst & Young LLP       
| | Certified Public Accountants





39



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM






















| |                             
| | ----------------------------
| | /s/ Ernst & Young LLP       
| | Certified Public Accountants





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JACUZZI BRANDS, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


(in millions, except per share amounts)


|                                                         |                                                                                              |                            |         |            |       |   |            |       |       |   |         |       |       |  
|-------------------------------------------------------- | -------------------------------------------------------------------------------------------- | -------------------------- | ------- | ---------- | ----- | - | ---------- | ----- | ----- | - | ------- | ----- | ----- | -
|                                                         |                                                                                              | For the Fiscal Years Ended |        
|                                                         |                                                                                              | September 30,              |        
|                                                         |                                                                                              |                            |        
|                                                         |                                                                                              | 2005                       |         |            | 2004  |   |            | 2003  |      
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|                                                         |                                                                                              |                            |         | (Restated) |       |   | (Restated) |      
|Net sales                                                |                                                                                              | $                          | 1,210.0 |            |       | $ | 1,201.2    |       |       | $ | 1,025.2 |      
|Operating costs and expenses:                            |                                                                                              |                            |         |            |       |   |            |       |       |   |         |      
|                                                         | Cost of products sold                                                                        |                            |         | 820.4      |       |   |            | 802.4 |       |   |         | 682.7 |      
|                                                         | Selling, general and administrative expenses                                                 |                            |         | 285.8      |       |   |            | 268.7 |       |   |         | 233.8 |      
|                                                         | Impairment, restructuring and other charges                                                  |                            |         | 9.4        |       |   |            | 2.9   |       |   |         | 9.6   |      
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|                                                         |                                                                                              | Operating income           |         |            | 94.4  |   |            |       | 127.2 |   |         |       | 99.1  |  
|Interest expense                                         |                                                                                              |                            | (48.1   | )          |       |   | (50.5      | )     |       |   | (60.6   | )    
|Interest income                                          |                                                                                              |                            | 3.0     |            |       |   | 4.7        |       |       |   | 2.1     |      
|Gain on sale of business                                 |                                                                                              |                            | 24.7    |            |       |   |           |       |       |   |        |      
|Other expense, net                                       |                                                                                              |                            | (6.0    | )          |       |   | (3.2       | )     |       |   | (26.6   | )    
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|Earnings before income taxes and discontinued operations |                                                                                              |                            | 68.0    |            |       |   | 78.2       |       |       |   | 14.0    |      
|(Provision for) benefit from income taxes                |                                                                                              |                            | (10.0   | )          |       |   | (29.9      | )     |       |   | 7.4     |      
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|                                                         | Earnings from continuing operations                                                          |                            |         | 58.0       |       |   |            | 48.3  |       |   |         | 21.4  |      
|Discontinued operations:                                 |                                                                                              |                            |         |            |       |   |            |       |       |   |         |      
|                                                         | Loss from operations, net of tax benefit of $2.3 in 2005, $11.5
    in 2004 and $7.2 in 2003 |                            |         | (4.5       | )     |   |            | (19.9 | )     |   |         | (11.8 | )    
|                                                         | Loss on disposals, net of tax provision of $0.6 in 2005 and tax
    benefit of $5.7 in 2003  |                            |         | (59.1      | )     |   |            |      |       |   |         | (38.6 | )    
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|                                                         | Loss from discontinued operations                                                            |                            |         | (63.6      | )     |   |            | (19.9 | )     |   |         | (50.4 | )    
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|                                                         |                                                                                              | Net (loss) earnings        |         | $          | (5.6  | ) |            | $     | 28.4  |   |         | $     | (29.0 | )
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|Basic (loss) earnings per share:                         |                                                                                              |                            |         |            |       |   |            |       |       |   |         |      
|                                                         | Continuing operations                                                                        |                            | $       | 0.77       |       |   | $          | 0.64  |       |   | $       | 0.29  |      
|                                                         | Discontinued operations                                                                      |                            |         | (0.84      | )     |   |            | (0.26 | )     |   |         | (0.68 | )    
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|                                                         |                                                                                              | Net (loss) earnings        |         | $          | (0.07 | ) |            | $     | 0.38  |   |         | $     | (0.39 | )
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|Diluted (loss) earnings per share:                       |                                                                                              |                            |         |            |       |   |            |       |       |   |         |      
|                                                         | Continuing operations                                                                        |                            | $       | 0.76       |       |   | $          | 0.64  |       |   | $       | 0.29  |      
|                                                         | Discontinued operations                                                                      |                            |         | (0.83      | )     |   |            | (0.27 | )     |   |         | (0.68 | )    
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      
|                                                         |                                                                                              | Net (loss) earnings        |         | $          | (0.07 | ) |            | $     | 0.37  |   |         | $     | (0.39 | )
|                                                         |                                                                                              |                            |         |            |       |   |            |       |      



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##### Table of Contents



JACUZZI BRANDS, INC.


CONSOLIDATED BALANCE SHEETS


(in millions, except share data)


|                                           |                                                                                                                                                                                           |                            |         |            |         |   |         |        |         | 
|------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ---------- | ------- | - | ------- | ------ | ------- | 
|                                           |                                                                                                                                                                                           | At September 30,           |        
|                                           |                                                                                                                                                                                           |                            |        
|                                           |                                                                                                                                                                                           | 2005                       |         |            | 2004    |  
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|                                           |                                                                                                                                                                                           |                            |         | (Restated) |        
|ASSETS                                    
|Current assets:                            |                                                                                                                                                                                           |                            |         |            |         |   |         |       
|                                           | Cash and cash equivalents                                                                                                                                                                 |                            | $       | 110.2      |         |   | $       | 39.6   |        
|                                           | Trade receivables, net of allowances of $8.2 in 2005 and $8.7 in
    2004                                                                                                                 |                            |         | 200.5      |         |   |         | 220.1  |        
|                                           | Inventories                                                                                                                                                                               |                            |         | 165.0      |         |   |         | 180.7  |        
|                                           | Deferred income taxes                                                                                                                                                                     |                            |         | 27.9       |         |   |         | 27.8   |        
|                                           | Assets held for sale                                                                                                                                                                      |                            |         | 69.7       |         |   |         | 70.2   |        
|                                           | Prepaid expenses and other current assets                                                                                                                                                 |                            |         | 22.6       |         |   |         | 22.1   |        
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|                                           |                                                                                                                                                                                           | Total current assets       |         |            | 595.9   |   |         |        | 560.5   | 
|Restricted cash collateral                 |                                                                                                                                                                                           |                            | 12.4    |            |         |   |        |       
|Property, plant and equipment, net         |                                                                                                                                                                                           |                            | 103.7   |            |         |   | 118.6   |       
|Pension assets                             |                                                                                                                                                                                           |                            | 147.8   |            |         |   | 150.3   |       
|Insurance for asbestos claims              |                                                                                                                                                                                           |                            | 153.0   |            |         |   | 171.0   |       
|Goodwill                                   |                                                                                                                                                                                           |                            | 228.2   |            |         |   | 281.7   |       
|Other intangibles, net                     |                                                                                                                                                                                           |                            |        |            |         |   | 59.7    |       
|Other non-current assets                   |                                                                                                                                                                                           |                            | 48.5    |            |         |   | 38.6    |       
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|TOTAL ASSETS                               |                                                                                                                                                                                           | $                          | 1,289.5 |            |         | $ | 1,380.4 |       
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|                                          
|LIABILITIES AND STOCKHOLDERS EQUITY      
|Current liabilities:                       |                                                                                                                                                                                           |                            |         |            |         |   |         |       
|                                           | Notes payable                                                                                                                                                                             |                            | $       | 22.0       |         |   | $       | 21.1   |        
|                                           | Current maturities of long-term debt                                                                                                                                                      |                            |         | 1.5        |         |   |         | 3.9    |        
|                                           | Trade accounts payable                                                                                                                                                                    |                            |         | 105.7      |         |   |         | 113.3  |        
|                                           | Income taxes payable                                                                                                                                                                      |                            |         | 24.7       |         |   |         | 18.2   |        
|                                           | Liabilities associated with assets held for sale                                                                                                                                          |                            |         | 66.9       |         |   |         | 43.1   |        
|                                           | Accrued expenses and other current liabilities                                                                                                                                            |                            |         | 114.4      |         |   |         | 120.2  |        
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|                                           |                                                                                                                                                                                           | Total current liabilities  |         |            | 335.2   |   |         |        | 319.8   | 
|Long-term debt                             |                                                                                                                                                                                           |                            | 383.5   |            |         |   | 446.8   |       
|Deferred income taxes                      |                                                                                                                                                                                           |                            | 5.6     |            |         |   | 34.3    |       
|Asbestos claims                            |                                                                                                                                                                                           |                            | 153.0   |            |         |   | 171.0   |       
|Other liabilities                          |                                                                                                                                                                                           |                            | 127.0   |            |         |   | 120.0   |       
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|                                           |                                                                                                                                                                                           | Total liabilities          |         |            | 1,004.3 |   |         |        | 1,091.9 | 
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|Commitments and contingencies              |                                                                                                                                                                                           |                            |         |            |         |   |         |       
|Stockholders equity:                      |                                                                                                                                                                                           |                            |         |            |         |   |         |       
|                                           | Common stock (par value $.01 per share, authorized
    300,000,000 shares; issued 99,096,734 shares;
    outstanding 77,092,157 and 76,103,459 shares in 2005 and
    2004, respectively) |                            |         | 1.0        |         |   |         | 1.0    |        
|                                           | Paid-in capital                                                                                                                                                                           |                            |         | 630.7      |         |   |         | 639.7  |        
|                                           | Accumulated deficit                                                                                                                                                                       |                            |         | (8.8       | )       |   |         | (3.2   | )      
|                                           | Unearned restricted stock                                                                                                                                                                 |                            |         | (5.2       | )       |   |         | (4.6   | )      
|                                           | Cumulative foreign currency translation                                                                                                                                                   |                            |         | 12.8       |         |   |         | 14.0   |        
|                                           | Minimum pension liability                                                                                                                                                                 |                            |         | (29.4      | )       |   |         | (25.0  | )      
|                                           | Unrealized gain on investments                                                                                                                                                            |                            |         |           |         |   |         | 0.2    |        
|                                           | Treasury stock (22,004,577 and 22,993,275 shares in 2005
    and 2004, respectively), at cost                                                                                             |                            |         | (315.9     | )       |   |         | (333.6 | )      
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|                                           |                                                                                                                                                                                           | Total stockholders equity |         |            | 285.2   |   |         |        | 288.5   | 
|                                           |                                                                                                                                                                                           |                            |         |            |         |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                                                                           | $                          | 1,289.5 |            |         | $ | 1,380.4 |       
|                                           |                                                                                                                                                                                           |                            |         |            |         |  



42



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##### Table of Contents



JACUZZI BRANDS, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(in millions)


|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |       |       |        |        |       |      |  
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | ---------------------------------------------------------------------- | ---------- | ----- | ----- | ---------- | ----- | ----- | ----- | ------ | ------ | ----- | ---- | -
|                                                             |                                                                                                                                             | For the Fiscal Years Ended                                    |                                                                       
|                                                             |                                                                                                                                             | September 30,                                                 |                                                                       
|                                                             |                                                                                                                                             |                                                               |                                                                       
|                                                             |                                                                                                                                             | 2005                                                          |                                                                        |            | 2004  |       |            | 2003  |      
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|                                                             |                                                                                                                                             |                                                               |                                                                        | (Restated) |       |       | (Restated) |      
|OPERATING ACTIVITIES:                                        |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |       |       |        |       
|                                                             | Earnings from continuing operations                                                                                                         |                                                               | $                                                                      | 58.0       |       |       | $          | 48.3  |       |       | $      | 21.4   |      
|                                                             | Adjustments to reconcile earnings from continuing operations to
    net cash provided by operating activities of continuing
    operations: |                                                               |                                                                        |            |       |       |            |       |       |       |        |        |      
|                                                             |                                                                                                                                             | Depreciation expense                                          |                                                                        |            | 21.7  |       |            |       | 19.2  |       |        |        | 18.1  |     
|                                                             |                                                                                                                                             | Amortization of intangible assets                             |                                                                        |            | 0.9   |       |            |       | 1.2   |       |        |        | 1.2   |     
|                                                             |                                                                                                                                             | Amortization of unearned restricted stock                     |                                                                        |            | 3.7   |       |            |       | 2.0   |       |        |        | 0.6   |     
|                                                             |                                                                                                                                             | Amortization of debt issuance costs and other financing costs |                                                                        |            | 3.3   |       |            |       | 3.7   |       |        |        | 8.9   |     
|                                                             |                                                                                                                                             | Charges for debt restructuring and refinancing costs          |                                                                        |            | 3.2   |       |            |       |      |       |        |        | 21.5  |     
|                                                             |                                                                                                                                             | (Benefit from) provision for deferred income taxes            |                                                                        |            | 4.7   |       |            |       | 2.1   |       |        |        | (8.7  | )   
|                                                             |                                                                                                                                             | Provision for doubtful accounts                               |                                                                        |            | 3.1   |       |            |       | 5.0   |       |        |        | 5.7   |     
|                                                             |                                                                                                                                             | Gain on sale of real estate                                   |                                                                        |            | (1.8  | )     |            |       | (0.5  | )     |        |        | (3.5  | )   
|                                                             |                                                                                                                                             | Other stock-based compensation expense, net                   |                                                                        |            | 0.6   |       |            |       | 1.7   |       |        |        | 1.4   |     
|                                                             |                                                                                                                                             | Loss on sale of property, plant and equipment                 |                                                                        |            | 0.1   |       |            |       | 0.7   |       |        |        | 0.2   |     
|                                                             |                                                                                                                                             | Loss on sale of notes                                         |                                                                        |            | 0.7   |       |            |       |      |       |        |        |      |     
|                                                             |                                                                                                                                             | Gain on sale of business                                      |                                                                        |            | (24.7 | )     |            |       |      |       |        |        |      |     
|                                                             |                                                                                                                                             | Impairment, restructuring and other non-cash charges          |                                                                        |            | 1.3   |       |            |       |      |       |        |        | 3.4   |     
|                                                             |                                                                                                                                             | Equity in earnings of investees                               |                                                                        |            | (0.5  | )     |            |       |      |       |        |        |      |     
|                                                             | Changes in operating assets and liabilities, excluding the
    effects of acquisition and dispositions:                                     |                                                               |                                                                        |            |       |       |            |       |       |       |        |        |      
|                                                             |                                                                                                                                             | Trade receivables                                             |                                                                        |            | 3.5   |       |            |       | (23.9 | )     |        |        | (18.1 | )   
|                                                             |                                                                                                                                             | Inventories                                                   |                                                                        |            | (4.1  | )     |            |       | (27.1 | )     |        |        | 2.6   |     
|                                                             |                                                                                                                                             | Other current assets                                          |                                                                        |            | (1.2  | )     |            |       | 0.8   |       |        |        | (1.9  | )   
|                                                             |                                                                                                                                             | Other assets                                                  |                                                                        |            | (2.3  | )     |            |       | (4.2  | )     |        |        | (6.3  | )   
|                                                             |                                                                                                                                             | Trade accounts payable                                        |                                                                        |            | (5.2  | )     |            |       | 16.8  |       |        |        | 3.6   |     
|                                                             |                                                                                                                                             | Income taxes payable                                          |                                                                        |            | (5.2  | )     |            |       | 14.3  |       |        |        | 53.0  |     
|                                                             |                                                                                                                                             | Accrued expenses and other current liabilities                |                                                                        |            | (6.0  | )     |            |       | 5.0   |       |        |        | (10.6 | )   
|                                                             |                                                                                                                                             | Other liabilities                                             |                                                                        |            | (1.6  | )     |            |       | (5.7  | )     |        |        | (8.9  | )   
|                                                             |                                                                                                                                             | Other, net                                                    |                                                                        |            |      |       |            |       |      |       |        |        | (1.1  | )   
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|                                                             |                                                                                                                                             |                                                               | Net cash provided by operating activities of continuing
    operations |            |       | 52.2  |            |       |       | 59.4  |        |        |       | 82.5 |  
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|                                                             | Loss from discontinued operations                                                                                                           |                                                               |                                                                        | (63.6      | )     |       |            | (19.9 | )     |       |        | (50.4  | )    
|                                                             | Adjustments to reconcile loss from discontinued operations to
    net cash used in discontinued operations:                                 |                                                               |                                                                        |            |       |       |            |       |       |       |        |        |      
|                                                             |                                                                                                                                             | Loss on disposal of discontinued operations                   |                                                                        |            | 59.1  |       |            |       |      |       |        |        | 38.6  |     
|                                                             |                                                                                                                                             | Other (increases) decreases in net assets held for sale       |                                                                        |            | (26.7 | )     |            |       | 5.3   |       |        |        | 2.9   |     
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|                                                             |                                                                                                                                             |                                                               | Net cash used in discontinued operations                               |            |       | (31.2 | )          |       |       | (14.6 | )      |        |       | (8.9 | )
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|NET CASH PROVIDED BY OPERATING ACTIVITIES                    |                                                                                                                                             |                                                               | 21.0                                                                   |            |       |       | 44.8       |       |       |       | 73.6   |       
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|INVESTING ACTIVITIES:                                        |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |       |       |        |       
|                                                             | Proceeds from sale of businesses                                                                                                            |                                                               |                                                                        | 140.7      |       |       |            | 4.5   |       |       |        | 120.5  |      
|                                                             | Proceeds from sale of notes                                                                                                                 |                                                               |                                                                        | 4.4        |       |       |            | 2.4   |       |       |        |       |      
|                                                             | Purchases of property, plant and equipment                                                                                                  |                                                               |                                                                        | (22.7      | )     |       |            | (23.0 | )     |       |        | (17.9  | )    
|                                                             | Proceeds from sale of property, plant and equipment                                                                                         |                                                               |                                                                        | 0.2        |       |       |            | 0.3   |       |       |        | 0.2    |      
|                                                             | Proceeds from sale of real estate                                                                                                           |                                                               |                                                                        | 2.8        |       |       |            | 3.5   |       |       |        | 11.1   |      
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES          |                                                                                                                                             |                                                               | 125.4                                                                  |            |       |       | (12.3      | )     |       |       | 113.9  |       
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|FINANCING ACTIVITIES:                                        |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |       |       |        |       
|                                                             | Proceeds from long-term debt                                                                                                                |                                                               |                                                                        | 59.1       |       |       |            | 46.4  |       |       |        | 127.0  |      
|                                                             | Repayment of long-term debt                                                                                                                 |                                                               |                                                                        | (124.8     | )     |       |            | (72.3 | )     |       |        | (449.3 | )    
|                                                             | Deposits into restricted cash collateral accounts                                                                                           |                                                               |                                                                        | (12.4      | )     |       |            |      |       |       |        | (66.5  | )    
|                                                             | Withdrawals from restricted cash collateral accounts                                                                                        |                                                               |                                                                        |           |       |       |            |      |       |       |        | 224.3  |      
|                                                             | Proceeds from issuance of Senior Notes                                                                                                      |                                                               |                                                                        |           |       |       |            |      |       |       |        | 380.0  |      
|                                                             | Redemption of Senior Notes                                                                                                                  |                                                               |                                                                        |           |       |       |            |      |       |       |        | (375.0 | )    
|                                                             | Payment of debt issuance, retirement and other financing costs                                                                              |                                                               |                                                                        | (1.0       | )     |       |            | (1.5  | )     |       |        | (45.6  | )    
|                                                             | Proceeds from (repayment of) notes payable, net                                                                                             |                                                               |                                                                        | 1.3        |       |       |            | (4.4  | )     |       |        | 7.2    |      
|                                                             | Payment for stock option exchange                                                                                                           |                                                               |                                                                        | (0.2       | )     |       |            | (0.4  | )     |       |        |       |      
|                                                             | Proceeds from issuance of common stock for option exercise                                                                                  |                                                               |                                                                        | 1.4        |       |       |            | 0.9   |       |       |        |       |      
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|NET CASH USED IN FINANCING ACTIVITIES                        |                                                                                                                                             |                                                               | (76.6                                                                  | )          |       |       | (31.3      | )     |       |       | (197.9 | )     
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                                                             |                                                               | 0.8                                                                    |            |       |       | 7.2        |       |       |       | 9.5    |       
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS             |                                                                                                                                             |                                                               | 70.6                                                                   |            |       |       | 8.4        |       |       |       | (0.9   | )     
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR               |                                                                                                                                             |                                                               | 39.6                                                                   |            |       |       | 31.2       |       |       |       | 32.1   |       
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      
|CASH AND CASH EQUIVALENTS AT END OF YEAR                     |                                                                                                                                             | $                                                             | 110.2                                                                  |            |       | $     | 39.6       |       |       | $     | 31.2   |       
|                                                             |                                                                                                                                             |                                                               |                                                                        |            |       |       |            |       |      



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##### Table of Contents



JACUZZI BRANDS, INC.


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY


For the Fiscal Years Ended September 30, 2005, 2004 and
2003


(in millions, except share data)


|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |   |  |   |       |      |       |   |       |   |  | 
|------------------------------------------------------------------------- | ---------------------------- | ---------------------------- | --- |  | ------- | - | ----- | ----------- |  | ----------- | ---------- | - |  | ------------- | ---- | ------------- | -------- | - | ----- | -------- |  | - | ------ | - |  | - | ----- | ---- | ----- | - | ----- | - |  | 
|                                                                          |                              |                              |     |  |         |   |       |             |  | Accumulated |            |   |  |               |      |               |         
|                                                                          |                              |                              |     |  |         |   |       | Unearned    |  |             | Other      |   |  |               |      | Comprehensive |          |   |      
|                                                                          |                              | Common                       |     |  | Paid-in |   |       | Accumulated |  |             | Restricted |   |  | Comprehensive |      |               | Treasury |   |       | Earnings |  |   |       
|                                                                          |                              | Stock                        |     |  | Capital |   |       | Deficit     |  |             | Stock      |   |  | Loss          |      |               | Stock    |   |       | (Loss)   |  |   | Total  |  
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|Balance at September 30, 2002                                             |                              | $                            | 1.0 |  |         | $ | 655.5 |             |  | $           | (2.6       | ) |  | $             | (1.7 | )             |          | $ | (39.1 | )        |  | $ | (358.7 | ) |  |   |       |      |       | $ | 254.4 |  
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|Net loss                                                                  |                              |                              |     |  |         |   |       |             |  |             | (29.0      | ) |  |               |      |               |          |   |       |          |  |   |        |   |  | $ | (29.0 | )    |       |   | (29.0 | )
|Amortization of unearned restricted stock                                 |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               | 0.6  |               |          |   |       |          |  |   |        |   |  |   |       |      |       |   | 0.6   |  
|Treasury stock issued to directors (79,793 shares)                        |                              |                              |     |  |         |   | (1.0  | )           |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 1.3    |   |  |   |       |      |       |   | 0.3   |  
|Treasury stock issued in 401K match (309,815 shares)                      |                              |                              |     |  |         |   | (4.1  | )           |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 5.2    |   |  |   |       |      |       |   | 1.1   |  
|Forfeiture of restricted stock (12,500 shares)                            |                              |                              |     |  |         |   | (0.3  | )           |  |             |            |   |  |               | 0.3  |               |          |   |       |          |  |   |        |   |  |   |       |      |       |   |      |  
|Exercise of stock options (2,375 shares)                                  |                              |                              |     |  |         |   |      |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |       |   |  |   |       |      |       |   |      |  
|Foreign currency translation adjustment, net of tax provision of
    $0.5 |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   | 22.2  |          |  |   |        |   |  |   | 22.2  |      |       |   | 22.2  |  
|Minimum pension liability adjustment, net of tax benefit of $2.3          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   | (4.1  | )        |  |   |        |   |  |   | (4.1  | )    |       |   | (4.1  | )
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|                                                                          | Other comprehensive earnings |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |   |  |   |       | 18.1 |       |   |       |   | 
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|                                                                          |                              | Total comprehensive loss     |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |   |  |   |       | $    | (10.9 | ) |       |   |  | 
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|Balance at September 30, 2003                                             |                              |                              | 1.0 |  |         |   | 650.1 |             |  |             | (31.6      | ) |  |               | (0.8 | )             |          |   | (21.0 | )        |  |   | (352.2 | ) |  |   |       |      |       |   | 245.5 |  
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|Net earnings                                                              |                              |                              |     |  |         |   |       |             |  |             | 28.4       |   |  |               |      |               |          |   |       |          |  |   |        |   |  | $ | 28.4  |      |       |   | 28.4  |  
|Amortization of unearned restricted stock                                 |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               | 2.1  |               |          |   |       |          |  |   |        |   |  |   |       |      |       |   | 2.1   |  
|Treasury stock issued to directors (6,988 shares)                         |                              |                              |     |  |         |   |      |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 0.1    |   |  |   |       |      |       |   | 0.1   |  
|Treasury stock issued in 401K match (135,098 shares)                      |                              |                              |     |  |         |   | (1.1  | )           |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 2.4    |   |  |   |       |      |       |   | 1.3   |  
|Forfeiture of restricted stock (1,714 shares)                             |                              |                              |     |  |         |   |      |             |  |             |            |   |  |               |     |               |          |   |       |          |  |   |       |   |  |   |       |      |       |   |      |  
|Exercise of stock options (277,875 shares)                                |                              |                              |     |  |         |   | (3.7  | )           |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 4.6    |   |  |   |       |      |       |   | 0.9   |  
|Issuance 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  |      |       |   | 16.8  |  
|Minimum 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   |      |       |   | 0.2   |  
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|                                                                          | Other comprehensive earnings |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |   |  |   |       | 10.2 |       |   |       |   | 
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|                                                                          |                              | Total comprehensive earnings |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |   |  |   |       | $    | 38.6  |   |       |   |  | 
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|Balance at September 30, 2004                                             |                              |                              | 1.0 |  |         |   | 639.7 |             |  |             | (3.2       | ) |  |               | (4.6 | )             |          |   | (10.8 | )        |  |   | (333.6 | ) |  |   |       |      |       |   | 288.5 |  
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  
|Net loss                                                                  |                              |                              |     |  |         |   |       |             |  |             | (5.6       | ) |  |               |      |               |          |   |       |          |  |   |        |   |  | $ | (5.6  | )    |       |   | (5.6  | )
|Amortization of unearned restricted stock                                 |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               | 4.9  |               |          |   |       |          |  |   |        |   |  |   |       |      |       |   | 4.9   |  
|Treasury stock issued to directors (4,994 shares)                         |                              |                              |     |  |         |   | (0.1  | )           |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 0.1    |   |  |   |       |      |       |   |      |  
|Deferred directors stock units                                            |                              |                              |     |  |         |   | 0.9   |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |   |  |   |       |      |       |   | 0.9   |  
|Treasury stock issued in 401K match (30,922 shares)                       |                              |                              |     |  |         |   | (0.2  | )           |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 0.6    |   |  |   |       |      |       |   | 0.4   |  
|Forfeiture of restricted stock (101,901 shares)                           |                              |                              |     |  |         |   | (0.2  | )           |  |             |            |   |  |               | 1.1  |               |          |   |       |          |  |   | (0.9   | ) |  |   |       |      |       |   |      |  
|Exercise of stock options (348,573 shares)                                |                              |                              |     |  |         |   | (4.0  | )           |  |             |            |   |  |               |      |               |          |   |       |          |  |   | 5.9    |   |  |   |       |      |       |   | 1.9   |  
|Issuance 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, net of tax benefit of $0.0          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   | (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 | ) |  |   |       |      |       | $ | 285.2 |  
|                                                                          |                              |                              |     |  |         |   |       |             |  |             |            |   |  |               |      |               |          |   |       |          |  |   |        |  



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|         |                      
|-------- | ---------------------
|Note 1  | Basis of Presentation

Note 11


Interpretations of APB Opinion No. 29 The Equity Method of Accounting for
Investments in Common Stock


Note 3




Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51 Consolidated Financial Statements Consolidation of All Majority-Owned Subsidiaries.






| |            
| | -----------
| | Restatement



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                  
|-------- | ---------------------------------
|Note 1  | Basis of Presentation (Continued)





|                                  |      |               |   |       |             |  |   |          |   |  |   |       |  
|--------------------------------- | ---- | ------------- | - | ----- | ----------- |  | - | -------- | - |  | - | ----- | -
|                                  |      | As            |   |       | SJ          |  |   | As       |  
|                                  |      | Reported      |   |       | Adjustments |  |   | Restated |  
|                                  |      |               |   |       |             |  |   |          |  
|                                  |      | (in millions) |  
|Net earnings (loss)               |      |               |   |       |             |  |   |          |   |  |   |      
|                                  | 2004 |               | $ | 28.5  |             |  | $ | (0.1     | ) |  | $ | 28.4  |  
|                                  | 2003 |               |   | (31.1 | )           |  |   | 2.1      |   |  |   | (29.0 | )
|Basic earnings (loss) per share   |      |               |   |       |             |  |   |          |   |  |   |      
|                                  | 2004 |               | $ | 0.38  |             |  | $ |         |   |  | $ | 0.38  |  
|                                  | 2003 |               |   | (0.42 | )           |  |   | 0.03     |   |  |   | (0.39 | )
|Diluted earnings (loss) per share |      |               |   |       |             |  |   |          |   |  |   |      
|                                  | 2004 |               | $ | 0.37  |             |  | $ |         |   |  | $ | 0.37  |  
|                                  | 2003 |               |   | (0.42 | )           |  |   | 0.03     |   |  |   | (0.39 | )



|         |                    
|-------- | -------------------
|Note 2  | Accounting Policies

Use of Estimates:


Foreign Currency Translation: Foreign Currency Translation


Cash and Cash Equivalents:


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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                
|-------- | -------------------------------
|Note 2  | Accounting Policies (Continued)

Trade Receivables and Concentration of Credit Risk:


|                                 |      |               |   |     |            |             |   |             |  |  |            |      |   |  |   |     | 
|-------------------------------- | ---- | ------------- | - | --- | ---------- | ----------- | - | ----------- |  |  | ---------- | ---- | - |  | - | --- | 
|                                 |      |               |   |     |            | Deductions- |   |             | 
|                                 |      |               |   |     |            | Write-offs, |   |             | 
|                                 |      | Balance at    |   |     | Additions- |             |   | Payments    |  |  | Balance at |     
|                                 |      | Beginning     |   |     | Charged to |             |   | and Other   |  |  | End of     |     
|Description                      |      | of Period     |   |     | Expense    |             |   | Adjustments |  |  | Period     |     
|                                 |      |               |   |     |            |             |   |             |  |  |            |     
|                                 |      | (in millions) |  
|Allowance for doubtful accounts: |      |               |   |     |            |             |   |             |  |  |            |      |   |  |   |    
|                                 | 2005 |               | $ | 8.7 |            |             | $ | 3.1         |  |  | $          | (3.6 | ) |  | $ | 8.2 | 
|                                 | 2004 |               |   | 8.9 |            |             |   | 5.0         |  |  |            | (5.2 | ) |  |   | 8.7 | 
|                                 | 2003 |               |   | 6.9 |            |             |   | 5.7         |  |  |            | (3.7 | ) |  |   | 8.9 | 



Income Taxes:


Inventories:


|                    |  |                  |       |  |      |   |       | 
|------------------- |  | ---------------- | ----- |  | ---- | - | ----- | 
|                    |  | At September 30, |      
|                    |  |                  |      
|                    |  | 2005             |       |  | 2004 |  
|                    |  |                  |       |  |      |  
|                    |  | (in millions)    |      
|Finished products   |  | $                | 108.7 |  |      | $ | 121.5 | 
|In-process products |  |                  | 12.9  |  |      |   | 11.9  | 
|Raw materials       |  |                  | 43.4  |  |      |   | 47.3  | 
|                    |  |                  |       |  |      |  
|                    |  | $                | 165.0 |  |      | $ | 180.7 | 
|                    |  |                  |       |  |      |  

Property, Plant and Equipment:


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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                
|-------- | -------------------------------
|Note 2  | Accounting Policies (Continued)



|                                   |  |                  |        |   |      |   |        |  
|---------------------------------- |  | ---------------- | ------ | - | ---- | - | ------ | -
|                                   |  | At September 30, |       
|                                   |  |                  |       
|                                   |  | 2005             |        |   | 2004 |  
|                                   |  |                  |        |   |      |  
|                                   |  | (in millions)    |       
|Land and buildings                 |  | $                | 63.6   |   |      | $ | 70.0   |  
|Machinery, equipment and furniture |  |                  | 161.9  |   |      |   | 176.4  |  
|Accumulated depreciation           |  |                  | (121.8 | ) |      |   | (127.8 | )
|                                   |  |                  |        |   |      |  
|                                   |  | $                | 103.7  |   |      | $ | 118.6  |  
|                                   |  |                  |        |   |      |  

Other Non-current Assets:




Goodwill and Other Intangible Assets: Goodwill and
Other Intangible Assets Accounting for the Impairment or Disposal of
Long-lived Assets






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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                
|-------- | -------------------------------
|Note 2  | Accounting Policies (Continued)



|                  |  |                  |       |  |      |   |       | 
|----------------- |  | ---------------- | ----- |  | ---- | - | ----- | 
|                  |  | At September 30, |      
|                  |  |                  |      
|                  |  | 2005             |       |  | 2004 |  
|                  |  |                  |       |  |      |  
|                  |  | (in millions)    |      
|Bath Products     |  | $                | 102.4 |  |      | $ | 103.4 | 
|Plumbing Products |  |                  | 125.8 |  |      |   | 125.8 | 
|Rexair            |  |                  |      |  |      |   | 52.5  | 
|                  |  |                  |       |  |      |  
|                  |  | $                | 228.2 |  |      | $ | 281.7 | 
|                  |  |                  |       |  |      |  



|                    |  |           |            |                       |                |   |      |              |  |   |     | 
|------------------- |  | --------- | ---------- | --------------------- | -------------- | - | ---- | ------------ |  | - | --- | 
|                    |  |           |            | At September 30, 2004 |               
|                    |  |           |            |                       |               
|                    |  | Estimated |            |                       | Gross Carrying |   |      | Accumulated  | 
|                    |  | Life      |            |                       | Amount         |   |      | Amortization | 
|                    |  |           |            |                       |                |   |      |              | 
|                    |  |           |            | (in millions)         |               
|Patented technology |  |           | 10 years   |                       |                | $ | 2.6  |              |  | $ | 0.8 | 
|Distributor network |  |           | 40 years   |                       |                |   | 36.0 |              |  |   | 2.8 | 
|Trade name          |  |           | Indefinite |                       |                |   | 24.7 |              |  |   |    | 
|                    |  |           |            |                       |                |   |      |              | 
|                    |  |           |            |                       |                | $ | 63.3 |              |  | $ | 3.6 | 
|                    |  |           |            |                       |                |   |      |              | 

Accrued Expenses and Other Current Liabilities:


|                     |  |                  |       |  |      |   |       | 
|-------------------- |  | ---------------- | ----- |  | ---- | - | ----- | 
|                     |  | At September 30, |      
|                     |  |                  |      
|                     |  | 2005             |       |  | 2004 |  
|                     |  |                  |       |  |      |  
|                     |  | (in millions)    |      
|Compensation related |  | $                | 16.0  |  |      | $ | 23.4  | 
|Insurance            |  |                  | 4.8   |  |      |   | 8.0   | 
|Customer incentives  |  |                  | 23.8  |  |      |   | 28.5  | 
|Interest             |  |                  | 9.6   |  |      |   | 10.5  | 
|Warranty             |  |                  | 12.2  |  |      |   | 11.6  | 
|Commissions          |  |                  | 6.2   |  |      |   | 6.3   | 
|Other                |  |                  | 41.8  |  |      |   | 31.9  | 
|                     |  |                  |       |  |      |  
|                     |  | $                | 114.4 |  |      | $ | 120.2 | 
|                     |  |                  |       |  |      |  



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                
|-------- | -------------------------------
|Note 2  | Accounting Policies (Continued)



|                  |                             |                  |      |       |      |   |      |       |  
|----------------- | --------------------------- | ---------------- | ---- | ----- | ---- | - | ---- | ----- | -
|                  |                             | At September 30, |     
|                  |                             |                  |     
|                  |                             | 2005             |      |       | 2004 |  
|                  |                             |                  |      |       |      |  
|                  |                             | (in millions)    |     
|Beginning balance |                             | $                | 25.3 |       |      | $ | 20.9 |      
|                  | Warranty accrual            |                  |      | 15.4  |      |   |      | 21.1  |  
|                  | Cash payments               |                  |      | (15.4 | )    |   |      | (16.7 | )
|                  | Sale of Rexair (See Note 3) |                  |      | (1.0  | )    |   |      |      |  
|                  |                             |                  |      |       |      |  
|Ending balance    |                             | $                | 24.3 |       |      | $ | 25.3 |      
|                  |                             |                  |      |       |      |  

Fair Value of Financial Instruments: Disclosure about Fair Value of Financial
Instruments




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Short-term Assets and Liabilities: The fair values of
    our cash and cash equivalents, trade receivables and accounts
    payable approximate their carrying values because of their
    short-term nature.                                                                                                                                                                                                                                        
|
| | Long-term Debt: The fair values of our Senior Notes (as
    defined in Note 5) were determined by reference to
    quoted market prices. The fair value of our remaining debt is
    determined by discounting the cash flows using current interest
    rates for financial instruments with similar characteristics and
    maturities. The fair value of our remaining debt approximates
    its carrying value as of September 30, 2005 and 2004.
|
| | There were no other significant differences as of
    September 30, 2005 and 2004 between the carrying value and
    fair value of our financial instruments except as disclosed
    below:                                                                                                                                                                                                                                                          

|                    |  |                       |       |  |                       |   |       |          |  |   |       |  |  |   |       | 
|------------------- |  | --------------------- | ----- |  | --------------------- | - | ----- | -------- |  | - | ----- |  |  | - | ----- | 
|                    |  | At September 30, 2005 |       |  | At September 30, 2004 |  
|                    |  |                       |       |  |                       |  
|                    |  | Carrying              |       |  | Fair                  |   |       | Carrying |  |   | Fair  | 
|                    |  | Amount                |       |  | Value                 |   |       | Amount   |  |   | Value | 
|                    |  |                       |       |  |                       |   |       |          |  |   |       | 
|                    |  | (in millions)         |      
|9.625% Senior Notes |  | $                     | 380.0 |  |                       | $ | 402.8 |          |  | $ | 380.0 |  |  | $ | 418.6 | 
|                    |  |                       |       |  |                       |   |       |          |  |   |       | 

Revenue Recognition:




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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 2  Accounting Policies (Continued)




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 Expense, net:


|                                                       |  |                      |      |   |      |   |      |      |  |   |      |  
|------------------------------------------------------ |  | -------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                                       |  | For the Fiscal Years |     
|                                                       |  | Ended September 30,  |     
|                                                       |  |                      |     
|                                                       |  | 2005                 |      |   | 2004 |   |      | 2003 | 
|                                                       |  |                      |      |   |      |   |      |      | 
|                                                       |  | (in millions)        |     
|Keller Ladder expenses                                 |  | $                    | 1.0  |   |      | $ | 1.6  |      |  | $ | 3.7  |  
|Loss (gain) on sales of other non-operating assets     |  |                      | 0.7  |   |      |   | (2.5 | )    |  |   |     |  
|(Gain) loss on sale of excess properties and equipment |  |                      | (1.7 | ) |      |   | 0.1  |      |  |   | (3.7 | )
|Foreign currency translation (gains) losses            |  |                      | (0.4 | ) |      |   | 1.9  |      |  |   |     |  
|Debt retirement costs                                  |  |                      | 3.2  |   |      |   |     |      |  |   |     |  
|Debt restructuring costs                               |  |                      |     |   |      |   |     |      |  |   | 2.3  |  
|Debt refinancing costs                                 |  |                      |     |   |      |   |     |      |  |   | 19.2 |  
|Earnings on equity investment in Rexair                |  |                      | (0.6 | ) |      |   |     |      |  |   |     |  
|Other, net                                             |  |                      | 3.8  |   |      |   | 2.1  |      |  |   | 5.1  |  
|                                                       |  |                      |      |   |      |   |      |      | 
|                                                       |  | $                    | 6.0  |   |      | $ | 3.2  |      |  | $ | 26.6 |  
|                                                       |  |                      |      |   |      |   |      |      | 



Advertising Costs:


Research and Development Costs:


Stock-Based Compensation: Accounting for
Stock Issued to Employees Note 8 Accounting for Stock-Based
Compensation Accounting for
Stock


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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 2  Accounting Policies (Continued)






|                                 |                                                                                                    |                            |      |       |      |   |      |      |   |   |       |       |  
|-------------------------------- | -------------------------------------------------------------------------------------------------- | -------------------------- | ---- | ----- | ---- | - | ---- | ---- | - | - | ----- | ----- | -
|                                 |                                                                                                    | For the Fiscal Years Ended |     
|                                 |                                                                                                    | September 30,              |     
|                                 |                                                                                                    |                            |     
|                                 |                                                                                                    | 2005                       |      |       | 2004 |   |      | 2003 |  
|                                 |                                                                                                    |                            |      |       |      |   |      |      |  
|                                 |                                                                                                    | (in millions, except per   |     
|                                 |                                                                                                    | share amounts)             |     
|Net (loss) earnings, as reported |                                                                                                    | $                          | (5.6 | )     |      | $ | 28.4 |      |   | $ | (29.0 | )    
|                                 | Stock-based employee compensation expense, net of tax                                              |                            |      | 2.5   |      |   |      | 2.2  |   |   |       | 1.0   |  
|                                 | Total stock-based employee compensation expense determined under
    fair value method, net of tax |                            |      | (3.1  | )    |   |      | (3.0 | ) |   |       | (2.5  | )
|                                 |                                                                                                    |                            |      |       |      |   |      |      |  
|Pro forma net (loss) earnings    |                                                                                                    | $                          | (6.2 | )     |      | $ | 27.6 |      |   | $ | (30.5 | )    
|                                 |                                                                                                    |                            |      |       |      |   |      |      |  
|(Loss) earnings per share:       |                                                                                                    |                            |      |       |      |   |      |      |   |   |       |      
|                                 | Basic  as reported                                                                                |                            | $    | (0.07 | )    |   | $    | 0.38 |   |   | $     | (0.39 | )
|                                 | Basic  pro forma                                                                                  |                            |      | (0.08 | )    |   |      | 0.37 |   |   |       | (0.41 | )
|                                 | Diluted  as reported                                                                              |                            | $    | (0.07 | )    |   | $    | 0.37 |   |   | $     | (0.39 | )
|                                 | Diluted  pro forma                                                                                |                            |      | (0.08 | )    |   |      | 0.36 |   |   |       | (0.41 | )



(Loss) Earnings Per Share: Note 8




|                                                             |  |                      |      |  |      |  |      |      |  |  |      | 
|------------------------------------------------------------ |  | -------------------- | ---- |  | ---- |  | ---- | ---- |  |  | ---- | 
|                                                             |  | For the Fiscal Years |     
|                                                             |  | Ended September 30,  |     
|                                                             |  |                      |     
|                                                             |  | 2005                 |      |  | 2004 |  |      | 2003 | 
|                                                             |  |                      |      |  |      |  |      |      | 
|                                                             |  | (in millions)        |     
|Basic weighted-average number of common shares outstanding   |  |                      | 75.5 |  |      |  | 75.0 |      |  |  | 74.6 | 
|                                                             |  |                      |      |  |      |  |      |      | 
|Potential dilution of common shares                          |  |                      | 1.2  |  |      |  | 0.7  |      |  |  | 0.1  | 
|                                                             |  |                      |      |  |      |  |      |      | 
|Diluted weighted-average number of common shares outstanding |  |                      | 76.7 |  |      |  | 75.7 |      |  |  | 74.7 | 
|                                                             |  |                      |      |  |      |  |      |      | 



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                
|-------- | -------------------------------
|Note 2  | Accounting Policies (Continued)

New Accounting Pronouncements: Determining Whether a General Partner, or the General
Partners as a Group, Controls a Limited Partnership or Similar
Entity When the Limited Partners Have Certain Rights


Accounting for Conditional Asset Retirement Obligations


Accounting Changes and Error Corrections  A
Replacement of APB Opinion No. 20 and FASB Statement
No. 3


Share-Based Payment Accounting for Stock-Based
Compensation Accounting for
Stock Issued to Employees Statement of Cash
Flows.


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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                
|-------- | -------------------------------
|Note 2  | Accounting Policies (Continued)



Note 2


Application of FASB Statement
No. 109, Accounting for Income Taxes, to the Tax Deduction
on Qualified Production Activities Provided by the American Jobs
Creation Act of 2004 Accounting and Disclosure Guidance for the
Foreign Earnings Repatriation Provision within the American Jobs
Creation Act of 2004


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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 2  Accounting Policies (Continued)




Inventory
Costs, an Amendment of ARB No. 43, Chapter 4




|         |                                         
|-------- | ----------------------------------------
|Note 3  | Dispositions and Discontinued Operations





Note 1






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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                     
|-------- | ----------------------------------------------------
|Note 3  | Dispositions and Discontinued Operations (Continued)



|                                  |  |                            |       |   |      |   |       |      |  |   |       |  
|--------------------------------- |  | -------------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                  |  | For the Fiscal Years Ended |      
|                                  |  | September 30,              |      
|                                  |  |                            |      
|                                  |  | 2005                       |       |   | 2004 |   |       | 2003 | 
|                                  |  |                            |       |   |      |   |       |      | 
|                                  |  | (in millions)              |      
|Net sales                         |  | $                          | 133.0 |   |      | $ | 148.1 |      |  | $ | 233.2 |  
|Operating loss                    |  |                            | (9.1  | ) |      |   | (31.6 | )    |  |   | (18.6 | )
|Loss from discontinued operations |  |                            | (63.6 | ) |      |   | (19.9 | )    |  |   | (50.4 | )

Allocation of
Interest to Discontinued Operations,






|                                   |                                                  |                  |      |      |      |   |      |      | 
|---------------------------------- | ------------------------------------------------ | ---------------- | ---- | ---- | ---- | - | ---- | ---- | 
|                                   |                                                  | At September 30, |     
|                                   |                                                  |                  |     
|                                   |                                                  | 2005             |      |      | 2004 |  
|                                   |                                                  |                  |      |      |      |  
|                                   |                                                  | (in millions)    |     
|Cash                               |                                                  | $                | 7.3  |      |      | $ |     |     
|Trade receivables, net             |                                                  |                  | 16.4 |      |      |   | 27.6 |     
|Inventories                        |                                                  |                  | 25.0 |      |      |   | 14.6 |     
|Other current assets               |                                                  |                  | 1.3  |      |      |   | 1.5  |     
|Deferred taxes                     |                                                  |                  | 15.3 |      |      |   | 12.0 |     
|Property, plant and equipment, net |                                                  |                  | 4.2  |      |      |   | 10.0 |     
|Equity investment                  |                                                  |                  | 0.2  |      |      |   | 3.8  |     
|Other long-term assets             |                                                  |                  |     |      |      |   | 0.7  |     
|                                   |                                                  |                  |      |      |      |  
|                                   | Assets held for sale                             |                  | $    | 69.7 |      |   | $    | 70.2 | 
|                                   |                                                  |                  |      |      |      |  
|Notes payable                      |                                                  | $                | 0.8  |      |      | $ |     |     
|Trade accounts payable             |                                                  |                  | 8.1  |      |      |   | 10.5 |     
|Other current liabilities          |                                                  |                  | 11.3 |      |      |   | 14.2 |     
|Other long-term liabilities        |                                                  |                  | 36.7 |      |      |   | 18.4 |     
|Minority interest                  |                                                  |                  | 10.0 |      |      |   |     |     
|                                   |                                                  |                  |      |      |      |  
|                                   | Liabilities associated with assets held for sale |                  | $    | 66.9 |      |   | $    | 43.1 | 
|                                   |                                                  |                  |      |      |      |  



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                     
|-------- | ----------------------------------------------------
|Note 3  | Dispositions and Discontinued Operations (Continued)



| |              
| | -------------
| | Restructuring





| |             
| | ------------
| | Pension Plan









|            |  |                  |      | 
|----------- |  | ---------------- | ---- | 
|            |  | Expected Benefit |     
|Year        |  | Payments         |     
|            |  |                  |     
|            |  | (in millions)    |     
|2006        |  | $                | 8.0  | 
|2007        |  |                  | 8.3  | 
|2008        |  |                  | 8.7  | 
|2009        |  |                  | 9.1  | 
|2010        |  |                  | 9.5  | 
|2011 - 2015 |  |                  | 54.3 | 
|            |  |                  |     
|Total       |  | $                | 97.9 | 
|            |  |                  |     

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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                     
|-------- | ----------------------------------------------------
|Note 3  | Dispositions and Discontinued Operations (Continued)

Employers Accounting for
Pensions


|                                                          |                                        |                  |       |      |      |   |       |      |  
|--------------------------------------------------------- | -------------------------------------- | ---------------- | ----- | ---- | ---- | - | ----- | ---- | -
|                                                          |                                        | At September 30, |      
|                                                          |                                        |                  |      
|                                                          |                                        | 2005             |       |      | 2004 |  
|                                                          |                                        |                  |       |      |      |  
|                                                          |                                        | (in millions)    |      
|Change in projected benefit obligation:                   |                                        |                  |       |      |      |   |       |     
|Projected benefit obligation at the beginning of the year |                                        | $                | 180.4 |      |      | $ | 154.1 |     
|                                                          | Foreign currency exchange rate changes |                  |       | (4.5 | )    |   |       | 12.8 |  
|                                                          | Service cost                           |                  |       | 1.8  |      |   |       | 1.5  |  
|                                                          | Interest cost                          |                  |       | 10.1 |      |   |       | 9.0  |  
|                                                          | Employee contributions                 |                  |       | 0.9  |      |   |       | 0.9  |  
|                                                          | Actuarial loss                         |                  |       | 32.2 |      |   |       | 9.5  |  
|                                                          | Benefits paid                          |                  |       | (7.4 | )    |   |       | (7.4 | )
|                                                          |                                        |                  |       |      |      |  
|Projected benefit obligation at the end of the year       |                                        | $                | 213.5 |      |      | $ | 180.4 |     
|                                                          |                                        |                  |       |      |      |  
|Change in fair value of plan assets:                      |                                        |                  |       |      |      |   |       |     
|Fair value of plan assets at the beginning of the year    |                                        | $                | 141.3 |      |      | $ | 124.4 |     
|                                                          | Foreign currency exchange rate changes |                  |       | (3.5 | )    |   |       | 10.3 |  
|                                                          | Actual return on plan assets           |                  |       | 28.6 |      |   |       | 10.4 |  
|                                                          | Employer contributions                 |                  |       | 10.2 |      |   |       | 2.7  |  
|                                                          | Employee contributions                 |                  |       | 0.9  |      |   |       | 0.9  |  
|                                                          | Benefits paid                          |                  |       | (7.4 | )    |   |       | (7.4 | )
|                                                          |                                        |                  |       |      |      |  
|Fair value of plan assets at the end of the year          |                                        | $                | 170.1 |      |      | $ | 141.3 |     
|                                                          |                                        |                  |       |      |      |  
|Funded status of plan:                                    |                                        |                  |       |      |      |   |       |     
|Projected benefit obligation in excess of plan assets     |                                        | $                | (43.4 | )    |      | $ | (39.1 | )   
|Unrecognized net actuarial losses                         |                                        |                  | 69.9  |      |      |   | 59.9  |     
|                                                          |                                        |                  |       |      |      |  
|                                                          | Net amount recognized                  |                  | $     | 26.5 |      |   | $     | 20.8 |  
|                                                          |                                        |                  |       |      |      |  
|Amounts recognized in the balance sheet consist of:       |                                        |                  |       |      |      |   |       |     
|Accrued benefit cost                                      |                                        | $                | (36.0 | )    |      | $ | (33.5 | )   
|Accumulated other comprehensive expense                   |                                        |                  | 62.5  |      |      |   | 54.3  |     
|                                                          |                                        |                  |       |      |      |  
|                                                          | Net amount recognized                  |                  | $     | 26.5 |      |   | $     | 20.8 |  
|                                                          |                                        |                  |       |      |      |  





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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                     
|-------- | ----------------------------------------------------
|Note 3  | Dispositions and Discontinued Operations (Continued)





|                                        |                        |                                |   |     |       |   |   |      |       |   |   |     |      |  
|--------------------------------------- | ---------------------- | ------------------------------ | - | --- | ----- | - | - | ---- | ----- | - | - | --- | ---- | -
|                                        |                        | For the Fiscal Years Ended     |  
|                                        |                        | September 30,                  |  
|                                        |                        |                                |  
|                                        |                        | 2005                           |   |     | 2004  |   |   | 2003 |      
|                                        |                        |                                |   |     |       |   |   |      |      
|                                        |                        | (in millions)                  |  
|Components of net periodic benefit cost |                        |                                |   |     |       |   |   |      |       |   |   |    
|                                        | Defined benefit plans: |                                |   |     |       |   |   |      |       |   |   |     |     
|                                        |                        | Service cost                   |   | $   | 1.8   |   |   | $    | 1.5   |   |   | $   | 1.4  |  
|                                        |                        | Interest cost                  |   |     | 10.1  |   |   |      | 9.0   |   |   |     | 8.0  |  
|                                        |                        | Expected return on plan assets |   |     | (10.6 | ) |   |      | (10.9 | ) |   |     | (9.9 | )
|                                        |                        | Recognition of actuarial loss  |   |     | 2.7   |   |   |      | 1.7   |   |   |     | 0.8  |  
|                                        |                        |                                |   |     |       |   |   |      |      
|                                        | Net periodic cost      |                                | $ | 4.0 |       |   | $ | 1.3  |       |   | $ | 0.3 |     
|                                        |                        |                                |   |     |       |   |   |      |      





|                             |                               |                            |  |      |      |  |  |      |   |  |  |      |  
|---------------------------- | ----------------------------- | -------------------------- |  | ---- | ---- |  |  | ---- | - |  |  | ---- | -
|                             |                               | For the Fiscal Years Ended | 
|                             |                               | September 30,              | 
|                             |                               |                            | 
|                             |                               | 2005                       |  |      | 2004 |  |  | 2003 |  
|                             |                               |                            |  |      |      |  |  |      |  
|Weighted average assumptions |                               |                            |  |      |      |  |  |      |   |  |  |     
|                             | Discount rate                 |                            |  | 5.00 | %    |  |  | 5.50 | % |  |  | 5.50 | %
|                             | Rate of compensation increase |                            |  | 2.90 | %    |  |  | 2.80 | % |  |  | 2.50 | %
|                             | Expected return on assets     |                            |  | 6.50 | %    |  |  | 7.00 | % |  |  | 7.50 | %





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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                     
|-------- | ----------------------------------------------------
|Note 3  | Dispositions and Discontinued Operations (Continued)



|                |          |            |     |                |      |  |     |      |   |  |     |    |  
|--------------- | -------- | ---------- | --- | -------------- | ---- |  | --- | ---- | - |  | --- | -- | -
|                |          |            |     | % of Assets at |     
|                |          |            |     | September 30,  |     
|                |          | Target %   |     |                |      | 
|                |          | Allocation |     |                | 2005 |  |     | 2004 |  
|                |          |            |     |                |      |  |     |      |  
|Asset category: |          |            |     |                |      |  |     |      |   |  |     |   
|                | Equities |            |     | 50             | %    |  |     | 51   | % |  |     | 48 | %
|                | Bonds    |            |     | 50             | %    |  |     | 43   | % |  |     | 49 | %
|                | Cash     |            |     | 0              | %    |  |     | 6    | % |  |     | 3  | %
|                |          |            |     |                |      |  |     |      |  
|Total           |          |            | 100 | %              |      |  | 100 | %    |   |  | 100 | % 
|                |          |            |     |                |      |  |     |      |  





| |               
| | --------------
| | Sale of Rexair





|         |                                            
|-------- | -------------------------------------------
|Note 4  | Impairment, Restructuring and Other Charges



|                                        |  |                      |     |  |      |   |      |      |  |   |      |  
|--------------------------------------- |  | -------------------- | --- |  | ---- | - | ---- | ---- |  | - | ---- | -
|                                        |  | For the Fiscal Years |    
|                                        |  | Ended September 30,  |    
|                                        |  |                      |    
|                                        |  | 2005                 |     |  | 2004 |   |      | 2003 | 
|                                        |  |                      |     |  |      |   |      |      | 
|                                        |  | (in millions)        |    
|Impairment of other assets              |  | $                    |    |  |      | $ |     |      |  | $ | 3.1  |  
|Lease obligations and other commitments |  |                      | 0.4 |  |      |   | (0.6 | )    |  |   | (1.9 | )
|Severance and related costs             |  |                      | 9.0 |  |      |   | 3.5  |      |  |   | 8.4  |  
|                                        |  |                      |     |  |      |   |      |      | 
|                                        |  | $                    | 9.4 |  |      | $ | 2.9  |      |  | $ | 9.6  |  
|                                        |  |                      |     |  |      |   |      |      | 
|Cash charges                            |  | $                    | 8.1 |  |      | $ | 2.9  |      |  | $ | 6.2  |  
|Non-cash charges                        |  |                      | 1.3 |  |      |   |     |      |  |   | 3.4  |  
|                                        |  |                      |     |  |      |   |      |      | 
|                                        |  | $                    | 9.4 |  |      | $ | 2.9  |      |  | $ | 9.6  |  
|                                        |  |                      |     |  |      |   |      |      | 

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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                        
|-------- | -------------------------------------------------------
|Note 4  | Impairment, Restructuring and Other Charges (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 Years Ended |    
|                                          |                              | September 30,              |    
|                                          |                              |                            |    
|                                          |                              | 2005                       |     |     | 2004 |   |      | 2003 |  
|                                          |                              |                            |     |     |      |   |      |      |  
|                                          |                              | (in millions)              |    
|Bath Products:                            |                              |                            |     |     |      |   |      |      |   |   |      |    
|Closure of Plant City, FL facility        |                              | $                          |    |     |      | $ |     |      |   | $ | 3.9  |    
|Consolidation of administrative functions |                              |                            | 4.5 |     |      |   | 3.5  |      |   |   | 0.4  |    
|                                          |                              |                            |     |     |      |   |      |      |  
|                                          | Sub-total Bath Products      |                            |     | 4.5 |      |   |      | 3.5  |   |   |      | 4.3 | 
|                                          |                              |                            |     |     |      |   |      |      |  
|Corporate Expenses:                       |                              |                            |     |     |      |   |      |      |   |   |      |    
|Adjustment of estimated lease obligation  |                              |                            |    |     |      |   | (0.6 | )    |   |   | (3.2 | )  
|Corporate headquarters restructuring      |                              |                            | 4.9 |     |      |   |     |      |   |   | 8.5  |    
|                                          |                              |                            |     |     |      |   |      |      |  
|                                          | Sub-total Corporate Expenses |                            |     | 4.9 |      |   |      | (0.6 | ) |   |      | 5.3 | 
|                                          |                              |                            |     |     |      |   |      |      |  
|                                          |                              | $                          | 9.4 |     |      | $ | 2.9  |      |   | $ | 9.6  |    
|                                          |                              |                            |     |     |      |   |      |      |  









61



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                        
|-------- | -------------------------------------------------------
|Note 4  | Impairment, Restructuring and Other Charges (Continued)



|                      |                        |               |     |      |             |   |     |       |   |   |      |       |  
|--------------------- | ---------------------- | ------------- | --- | ---- | ----------- | - | --- | ----- | - | - | ---- | ----- | -
|                      |                        | Lease and     |     |      |             |   |    
|                      |                        | Contract      |     |      | Severance   |   |     |      
|                      |                        | Related       |     |      | and Related |   |     | Total |  
|                      |                        | Costs         |     |      | Costs       |   |     | Costs |  
|                      |                        |               |     |      |             |   |     |       |  
|                      |                        | (in millions) |    
|At September 30, 2003 |                        | $             | 5.2 |      |             | $ | 5.1 |       |   | $ | 10.3 |      
|                      | 2004 (credits) charges |               |     | (0.6 | )           |   |     | 3.5   |   |   |      | 2.9   |  
|                      | Cash payments          |               |     | (1.5 | )           |   |     | (6.1  | ) |   |      | (7.6  | )
|                      |                        |               |     |      |             |   |     |       |  
|At September 30, 2004 |                        |               | 3.1 |      |             |   | 2.5 |       |   |   | 5.6  |      
|                      | 2005 charges           |               |     | 0.4  |             |   |     | 9.0   |   |   |      | 9.4   |  
|                      | Cash payments          |               |     | (1.8 | )           |   |     | (9.4  | ) |   |      | (11.2 | )
|                      |                        |               |     |      |             |   |     |       |  
|At September 30, 2005 |                        | $             | 1.7 |      |             | $ | 2.1 |       |   | $ | 3.8  |      
|                      |                        |               |     |      |             |   |     |       |  





|         |               
|-------- | --------------
|Note 5  | Long-term Debt



|                         |                             |                  |       |   |      |   |       |      | 
|------------------------ | --------------------------- | ---------------- | ----- | - | ---- | - | ----- | ---- | 
|                         |                             | At September 30, |      
|                         |                             |                  |      
|                         |                             | 2005             |       |   | 2004 |  
|                         |                             |                  |       |   |      |  
|                         |                             | (in millions)    |      
|Senior Notes             |                             | $                | 380.0 |   |      | $ | 380.0 |     
|Bank Facilities:         |                             |                  |       |   |      |   |       |     
|                         | Asset-based credit facility |                  |       |  |      |   |       | 2.5  | 
|                         | Term loan                   |                  |       |  |      |   |       | 61.8 | 
|Other long-term debt     |                             |                  | 5.0   |   |      |   | 6.4   |     
|                         |                             |                  |       |   |      |  
|                         |                             |                  | 385.0 |   |      |   | 450.7 |     
|Less: current maturities |                             |                  | (1.5  | ) |      |   | (3.9  | )   
|                         |                             |                  |       |   |      |  
|                         |                             | $                | 383.5 |   |      | $ | 446.8 |     
|                         |                             |                  |       |   |      |  







62



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                           
|-------- | --------------------------
|Note 5  | Long-term Debt (Continued)

Note 1






Balance Sheet
Classification of Borrowings Outstanding under Revolving Credit
Agreements that Include both a Subjective Acceleration Clause
and a Lockbox Arrangement








|     |  |   |       | 
|---- |  | - | ----- | 
|2006 |  | $ | 1.5   | 
|2007 |  |   | 1.7   | 
|2008 |  |   | 1.8   | 
|2009 |  |   |      | 
|2010 |  |   | 380.0 | 
|     |  |   |      
|     |  | $ | 385.0 | 
|     |  |   |      



| |            
| | -----------
| | Commitments



63



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                           
|-------- | --------------------------
|Note 5  | Long-term Debt (Continued)







Note 6  Pension and Retirement Plans






| |                              
| | -----------------------------
| | Domestic Benefit Arrangements







|                                        |                                   |                  |       |       |                  |   |       |       |   |   |      |      |   |   |      |      |  
|--------------------------------------- | --------------------------------- | ---------------- | ----- | ----- | ---------------- | - | ----- | ----- | - | - | ---- | ---- | - | - | ---- | ---- | -
|                                        |                                   | Pension Plans    |       |       | Other Plans      |  
|                                        |                                   | at September 30, |       |       | at September 30, |  
|                                        |                                   |                  |       |       |                  |  
|                                        |                                   | 2005             |       |       | 2004             |   |       | 2005  |   |   | 2004 |     
|                                        |                                   |                  |       |       |                  |   |       |       |   |   |      |     
|                                        |                                   | (in millions)    |      
|Benefit obligation at beginning of year |                                   | $                | 338.4 |       |                  | $ | 306.9 |       |   | $ | 16.7 |      |   | $ | 16.8 |     
|                                        | Service cost                      |                  |       | 6.5   |                  |   |       | 6.7   |   |   |      | 0.3  |   |   |      | 0.2  |  
|                                        | Interest cost                     |                  |       | 18.8  |                  |   |       | 18.1  |   |   |      | 0.9  |   |   |      | 1.0  |  
|                                        | Plan amendments                   |                  |       | 1.2   |                  |   |       | 14.8  |   |   |      |     |   |   |      |     |  
|                                        | Actuarial losses                  |                  |       | 30.5  |                  |   |       | 11.4  |   |   |      | 1.2  |   |   |      | 1.2  |  
|                                        | Benefits paid                     |                  |       | (19.8 | )                |   |       | (19.2 | ) |   |      | (1.9 | ) |   |      | (2.5 | )
|                                        | Curtailments                      |                  |       | (3.5  | )                |   |       | (0.3  | ) |   |      |     |   |   |      |     |  
|                                        |                                   |                  |       |       |                  |   |       |       |   |   |      |     
|                                        | Benefit obligation at end of year |                  | $     | 372.1 |                  |   | $     | 338.4 |   |   | $    | 17.2 |   |   | $    | 16.7 |  
|                                        |                                   |                  |       |       |                  |   |       |       |   |   |      |     

64



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Note 6  Pension and Retirement Plans
(Continued)


|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |       |   |   |       |       |  
|----------------------------------------------------------------- | ---------------------------------------- | ---------------- | ----- | ----- | ---------------- | - | ----- | ----- | - | - | ----- | ----- | - | - | ----- | ----- | -
|                                                                  |                                          | Pension Plans    |       |       | Other Plans      |  
|                                                                  |                                          | at September 30, |       |       | at September 30, |  
|                                                                  |                                          |                  |       |       |                  |  
|                                                                  |                                          | 2005             |       |       | 2004             |   |       | 2005  |   |   | 2004  |      
|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |      
|                                                                  |                                          | (in millions)    |      
|Fair value of plan assets at beginning of year                    |                                          | $                | 369.8 |       |                  | $ | 342.5 |       |   | $ |      |       |   | $ |      |      
|                                                                  | Actual return on plan assets             |                  |       | 56.4  |                  |   |       | 42.9  |   |   |       |      |   |   |       |      |  
|                                                                  | Contributions                            |                  |       | 0.8   |                  |   |       | 3.6   |   |   |       | 1.9   |   |   |       | 2.5   |  
|                                                                  | Benefits paid                            |                  |       | (19.8 | )                |   |       | (19.2 | ) |   |       | (1.9  | ) |   |       | (2.5  | )
|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |      
|                                                                  | Fair value of plan assets at end of year |                  | $     | 407.2 |                  |   | $     | 369.8 |   |   | $     |      |   |   | $     |      |  
|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |      
|Plan assets in excess of (less than) projected benefit obligation |                                          | $                | 35.1  |       |                  | $ | 31.4  |       |   | $ | (17.2 | )     |   | $ | (16.7 | )    
|Unrecognized net actuarial losses (gains)                         |                                          |                  | 85.7  |       |                  |   | 89.2  |       |   |   | 1.5   |       |   |   | (5.4  | )    
|Unrecognized prior service cost (income)                          |                                          |                  | 11.7  |       |                  |   | 16.3  |       |   |   | (4.3  | )     |   |   |      |      
|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |      
|                                                                  | Net amount recognized                    |                  | $     | 132.5 |                  |   | $     | 136.9 |   |   | $     | (20.0 | ) |   | $     | (22.1 | )
|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |      
|Prepaid benefits                                                  |                                          | $                | 145.4 |       |                  | $ | 148.7 |       |   | $ |      |       |   | $ |      |      
|Accrued benefits                                                  |                                          |                  | (22.2 | )     |                  |   | (18.4 | )     |   |   | (20.0 | )     |   |   | (22.1 | )    
|Intangible assets                                                 |                                          |                  | 2.4   |       |                  |   | 1.6   |       |   |   |      |       |   |   |      |      
|Accumulated other comprehensive expense                           |                                          |                  | 6.9   |       |                  |   | 5.0   |       |   |   |      |       |   |   |      |      
|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |      
|                                                                  | Net amount recognized                    |                  | $     | 132.5 |                  |   | $     | 136.9 |   |   | $     | (20.0 | ) |   | $     | (22.1 | )
|                                                                  |                                          |                  |       |       |                  |   |       |       |   |   |       |      



65



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Note 6  Pension and Retirement Plans
(Continued)




|                               |                                                             |                            |       |      |                            |   |       |      |   |   |       |      |   |      |      |      |      |   |      |     |  |   |      |     | 
|------------------------------ | ----------------------------------------------------------- | -------------------------- | ----- | ---- | -------------------------- | - | ----- | ---- | - | - | ----- | ---- | - | ---- | ---- | ---- | ---- | - | ---- | --- |  | - | ---- | --- | 
|                               |                                                             | Pension Plans              |       |      | Other Plans                |  
|                               |                                                             | for the Fiscal Years Ended |       |      | for the Fiscal Years Ended |  
|                               |                                                             | September 30,              |       |      | September 30,              |  
|                               |                                                             |                            |       |      |                            |  
|                               |                                                             | 2005                       |       |      | 2004                       |   |       | 2003 |   |   | 2005  |      |   | 2004 |      |      | 2003 |  
|                               |                                                             |                            |       |      |                            |   |       |      |   |   |       |      |   |      |      |      |      |  
|                               |                                                             | (in millions)              |      
|Service cost                   |                                                             | $                          | 6.5   |      |                            | $ | 6.7   |      |   | $ | 6.7   |      |   | $    | 0.3  |      |      | $ | 0.2  |     |  | $ | 0.3  |    
|Interest cost                  |                                                             |                            | 18.8  |      |                            |   | 18.2  |      |   |   | 17.6  |      |   |      | 0.9  |      |      |   | 1.0  |     |  |   | 1.3  |    
|Expected return on plan assets |                                                             |                            | (31.5 | )    |                            |   | (31.8 | )    |   |   | (32.3 | )    |   |      |     |      |      |   |     |     |  |   |     |    
|Prior service cost             |                                                             |                            | 1.5   |      |                            |   | 0.9   |      |   |   | 0.6   |      |   |      | (1.0 | )    |      |   | (1.0 | )   |  |   | (0.1 | )  
|Net actuarial loss (gain)      |                                                             |                            | 5.1   |      |                            |   | 1.9   |      |   |   | 0.1   |      |   |      |     |      |      |   | (0.1 | )   |  |   | (0.3 | )  
|Curtailments/settlements       |                                                             |                            | 4.8   |      |                            |   | 2.5   |      |   |   | 2.9   |      |   |      | (0.4 | )    |      |   |     |     |  |   |     |    
|                               |                                                             |                            |       |      |                            |   |       |      |   |   |       |      |   |      |      |      |      |  
|                               | Periodic (income) expense of defined benefit plans          |                            |       | 5.2  |                            |   |       | (1.6 | ) |   |       | (4.4 | ) |      |      | (0.2 | )    |   |      | 0.1 |  |   |      | 1.2 | 
|                               | Net reclassification adjustment for discontinued operations |                            |       | (4.5 | )                          |   |       | (3.9 | ) |   |       | (4.1 | ) |      |      |     |      |   |      |    |  |   |      |    | 
|                               |                                                             |                            |       |      |                            |   |       |      |   |   |       |      |   |      |      |      |      |  
|Net periodic (income) expense: |                                                             |                            |       |      |                            |   |       |      |   |   |       |      |   |      |      |      |      |   |      |     |  |   |      |    
|                               | Defined benefit plans                                       |                            |       | 0.7  |                            |   |       | (5.5 | ) |   |       | (8.5 | ) |      |      | (0.2 | )    |   |      | 0.1 |  |   |      | 1.2 | 
|                               | Defined contribution plans                                  |                            |       | 1.3  |                            |   |       | 1.4  |   |   |       | 1.1  |   |      |      |     |      |   |      |    |  |   |      |    | 
|                               |                                                             |                            |       |      |                            |   |       |      |   |   |       |      |   |      |      |      |      |  
|                               |                                                             | $                          | 2.0   |      |                            | $ | (4.1  | )    |   | $ | (7.4  | )    |   | $    | (0.2 | )    |      | $ | 0.1  |     |  | $ | 1.2  |    
|                               |                                                             |                            |       |      |                            |   |       |      |   |   |       |      |   |      |      |      |      |  



| |            
| | -----------
| | Assumptions



|                               |  |                  |      |   |                  |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|------------------------------ |  | ---------------- | ---- | - | ---------------- |  | ---- | ---- |  |  | ---- | - |  | ---- | ---- | - | ---- |  | ---- | - |  |  | ---- | -
|                               |  | Pension Plans    |      |   | Other Plans      | 
|                               |  | at September 30, |      |   | at September 30, | 
|                               |  |                  |      |   |                  | 
|                               |  | 2005             |      |   | 2004             |  |      | 2003 |  |  | 2005 |   |  | 2004 |      |   | 2003 | 
|                               |  |                  |      |   |                  |  |      |      |  |  |      |   |  |      |      |   |      | 
|Discount rate                  |  |                  | 5.35 | % |                  |  | 5.75 | %    |  |  | 6.00 | % |  |      | 5.35 | % |      |  | 5.75 | % |  |  | 6.00 | %
|Rate of compensation increases |  |                  | 3.25 | % |                  |  | 3.25 | %    |  |  | 3.25 | % |  |      |     |   |      |  |     |   |  |  |     |  



|                                  |  |                      |      |   |                      |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|--------------------------------- |  | -------------------- | ---- | - | -------------------- |  | ---- | ---- |  |  | ---- | - |  | ---- | ---- | - | ---- |  | ---- | - |  |  | ---- | -
|                                  |  | Pension Plans        |      |   | Other Plans          | 
|                                  |  | for the Fiscal Years |      |   | for the Fiscal Years | 
|                                  |  | Ended September 30,  |      |   | Ended September 30,  | 
|                                  |  |                      |      |   |                      | 
|                                  |  | 2005                 |      |   | 2004                 |  |      | 2003 |  |  | 2005 |   |  | 2004 |      |   | 2003 | 
|                                  |  |                      |      |   |                      |  |      |      |  |  |      |   |  |      |      |   |      | 
|Discount rate                     |  |                      | 5.75 | % |                      |  | 6.00 | %    |  |  | 6.75 | % |  |      | 5.75 | % |      |  | 6.00 | % |  |  | 6.00 | %
|Rate of compensation increases    |  |                      | 3.25 | % |                      |  | 3.25 | %    |  |  | 3.25 | % |  |      |     |   |      |  |     |   |  |  |     |  
|Expected rate of return on assets |  |                      | 8.75 | % |                      |  | 8.75 | %    |  |  | 8.75 | % |  |      |     |   |      |  |     |   |  |  |     |  



66



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Note 6  Pension and Retirement Plans
(Continued)






|                                                               |                                                |                     |   |      |  
|-------------------------------------------------------------- | ---------------------------------------------- | ------------------- | - | ---- | -
|                                                               |                                                | Increase (Decrease) |  
|                                                               |                                                | Costs/Obligations   |  
|                                                               |                                                |                     |  
|Effect of a 1% increase in the health care cost trend rate on: |                                                |                     |   |     
|                                                               | Service cost plus interest cost                |                     | $ | 0.2  |  
|                                                               | Accumulated post-employment benefit obligation |                     |   | 1.9  |  
|Effect of a 1% decrease in the health care cost trend rate on: |                                                |                     |   |     
|                                                               | Service cost plus interest cost                |                     | $ | (0.1 | )
|                                                               | Accumulated post-employment benefit obligation |                     |   | (1.6 | )



| |            
| | -----------
| | Plan Assets



|                  |  |                  |       |  |      |   |       | 
|----------------- |  | ---------------- | ----- |  | ---- | - | ----- | 
|                  |  | At September 30, |      
|                  |  |                  |      
|                  |  | 2005             |       |  | 2004 |  
|                  |  |                  |       |  |      |  
|                  |  | (in millions)    |      
|Equity securities |  | $                | 279.5 |  |      | $ | 246.6 | 
|Debt securities   |  |                  | 98.8  |  |      |   | 99.6  | 
|Other             |  |                  | 28.9  |  |      |   | 23.6  | 
|                  |  |                  |       |  |      |  
|                  |  | $                | 407.2 |  |      | $ | 369.8 | 
|                  |  |                  |       |  |      |  



|                  |  |  |           | 
|----------------- |  |  | --------- | 
|Equity securities |  |  | 45%  75% | 
|Debt securities   |  |  | 20%  40% | 
|Real estate       |  |  | 0%   5%  | 
|Other             |  |  | 0%  25%  | 



67



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Note 6  Pension and Retirement Plans
(Continued)




| |                                            
| | -------------------------------------------
| | Expected Contributions and Benefit Payments



|            |  |               |       |  |       |   |      | 
|----------- |  | ------------- | ----- |  | ----- | - | ---- | 
|            |  | Pension       |       |  | Other |  
|            |  | Plans         |       |  | Plans |  
|            |  |               |       |  |       |  
|            |  | (in millions) |      
|2006        |  | $             | 17.9  |  |       | $ | 1.0  | 
|2007        |  |               | 18.6  |  |       |   | 1.1  | 
|2008        |  |               | 19.2  |  |       |   | 1.1  | 
|2009        |  |               | 19.9  |  |       |   | 1.1  | 
|2010        |  |               | 20.5  |  |       |   | 1.2  | 
|2011  2015 |  |               | 138.1 |  |       |   | 6.2  | 
|            |  |               |       |  |       |  
|            |  | $             | 234.2 |  |       | $ | 11.7 | 
|            |  |               |       |  |       |  







| |                             
| | ----------------------------
| | Foreign Benefit Arrangements



|                                        |                                        |                  |      |      |      |   |      |      |  
|--------------------------------------- | -------------------------------------- | ---------------- | ---- | ---- | ---- | - | ---- | ---- | -
|                                        |                                        | At September 30, |     
|                                        |                                        |                  |     
|                                        |                                        | 2005             |      |      | 2004 |  
|                                        |                                        |                  |      |      |      |  
|                                        |                                        | (in millions)    |     
|Benefit obligation at beginning of year |                                        | $                | 69.2 |      |      | $ | 51.4 |     
|                                        | Service cost                           |                  |      | 1.3  |      |   |      | 1.1  |  
|                                        | Interest cost                          |                  |      | 4.1  |      |   |      | 3.1  |  
|                                        | Employee contributions                 |                  |      | 0.9  |      |   |      | 0.8  |  
|                                        | Foreign currency exchange rate changes |                  |      | (1.8 | )    |   |      | 4.4  |  
|                                        | Actuarial losses                       |                  |      | 10.4 |      |   |      | 9.6  |  
|                                        | Benefits paid                          |                  |      | (2.2 | )    |   |      | (1.2 | )
|                                        |                                        |                  |      |      |      |  
|                                        | Benefit obligation at end of year      |                  | $    | 81.9 |      |   | $    | 69.2 |  
|                                        |                                        |                  |      |      |      |  

68



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 6  Pension and Retirement Plans
(Continued)


|                                                   |                                          |                  |       |      |      |   |       |      |  
|-------------------------------------------------- | ---------------------------------------- | ---------------- | ----- | ---- | ---- | - | ----- | ---- | -
|                                                   |                                          | At September 30, |      
|                                                   |                                          |                  |      
|                                                   |                                          | 2005             |       |      | 2004 |  
|                                                   |                                          |                  |       |      |      |  
|                                                   |                                          | (in millions)    |      
|Fair value of plan assets at beginning of year     |                                          | $                | 43.5  |      |      | $ | 35.5  |     
|                                                   | Actual return on plan assets             |                  |       | 10.6 |      |   |       | 3.4  |  
|                                                   | Foreign currency exchange rate changes   |                  |       | (1.2 | )    |   |       | 3.0  |  
|                                                   | Employer contributions                   |                  |       | 2.1  |      |   |       | 2.1  |  
|                                                   | Employee contributions                   |                  |       | 0.9  |      |   |       | 0.8  |  
|                                                   | Benefits paid                            |                  |       | (2.2 | )    |   |       | (1.3 | )
|                                                   |                                          |                  |       |      |      |  
|                                                   | Fair value of plan assets at end of year |                  | $     | 53.7 |      |   | $     | 43.5 |  
|                                                   |                                          |                  |       |      |      |  
|Plan assets less than projected benefit obligation |                                          | $                | (28.2 | )    |      | $ | (25.7 | )   
|Unrecognized net actuarial losses                  |                                          |                  | 38.3  |      |      |   | 36.2  |     
|                                                   |                                          |                  |       |      |      |  
|                                                   |                                          | $                | 10.1  |      |      | $ | 10.5  |     
|                                                   |                                          |                  |       |      |      |  
|Accrued benefits                                   |                                          | $                | (21.5 | )    |      | $ | (21.2 | )   
|Accumulated other comprehensive expense            |                                          |                  | 31.6  |      |      |   | 31.7  |     
|                                                   |                                          |                  |       |      |      |  
|                                                   |                                          | $                | 10.1  |      |      | $ | 10.5  |     
|                                                   |                                          |                  |       |      |      |  



|                               |                            |                            |      |     |      |   |      |      |  |   |      |     | 
|------------------------------ | -------------------------- | -------------------------- | ---- | --- | ---- | - | ---- | ---- |  | - | ---- | --- | 
|                               |                            | For the Fiscal Years Ended |     
|                               |                            | September 30,              |     
|                               |                            |                            |     
|                               |                            | 2005                       |      |     | 2004 |   |      | 2003 | 
|                               |                            |                            |      |     |      |   |      |      | 
|                               |                            | (in millions)              |     
|Service cost                   |                            | $                          | 1.3  |     |      | $ | 1.1  |      |  | $ | 1.1  |    
|Interest cost                  |                            |                            | 4.1  |     |      |   | 3.2  |      |  |   | 2.5  |    
|Expected return on plan assets |                            |                            | (4.2 | )   |      |   | (3.8 | )    |  |   | (3.4 | )  
|Net actuarial loss             |                            |                            | 1.0  |     |      |   | 0.4  |      |  |   |     |    
|                               |                            |                            |      |     |      |   |      |      | 
|                               | Defined benefit plans      |                            |      | 2.2 |      |   |      | 0.9  |  |   |      | 0.2 | 
|                               | Defined contribution plans |                            |      | 0.3 |      |   |      | 0.3  |  |   |      | 0.3 | 
|                               |                            |                            |      |     |      |   |      |      | 
|                               |                            | $                          | 2.5  |     |      | $ | 1.2  |      |  | $ | 0.5  |    
|                               |                            |                            |      |     |      |   |      |      | 



| |            
| | -----------
| | Assumptions



|                               |  |                  |      |   |      |  |      |      |  |  |      |  
|------------------------------ |  | ---------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                               |  | At September 30, |     
|                               |  |                  |     
|                               |  | 2005             |      |   | 2004 |  |      | 2003 | 
|                               |  |                  |      |   |      |  |      |      | 
|Discount rate                  |  |                  | 5.25 | % |      |  | 5.75 | %    |  |  | 5.75 | %
|Rate of compensation increases |  |                  | 3.00 | % |      |  | 3.25 | %    |  |  | 3.25 | %

69



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Note 6  Pension and Retirement Plans
(Continued)




|                                  |  |                      |      |   |      |  |      |      |  |  |      |  
|--------------------------------- |  | -------------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                  |  | For the Fiscal Years |     
|                                  |  | Ended September 30,  |     
|                                  |  |                      |     
|                                  |  | 2005                 |      |   | 2004 |  |      | 2003 | 
|                                  |  |                      |      |   |      |  |      |      | 
|Discount rate                     |  |                      | 5.25 | % |      |  | 5.75 | %    |  |  | 5.75 | %
|Rate of compensation increases    |  |                      | 3.00 | % |      |  | 3.00 | %    |  |  | 3.25 | %
|Expected rate of return on assets |  |                      | 7.75 | % |      |  | 8.00 | %    |  |  | 7.50 | %





| |            
| | -----------
| | Plan Assets



|                  |  |                  |      |  |      |   |      | 
|----------------- |  | ---------------- | ---- |  | ---- | - | ---- | 
|                  |  | At September 30, |     
|                  |  |                  |     
|                  |  | 2005             |      |  | 2004 |  
|                  |  |                  |      |  |      |  
|Equity securities |  | $                | 42.4 |  |      | $ | 34.4 | 
|Debt securities   |  |                  | 10.8 |  |      |   | 8.7  | 
|Other             |  |                  | 0.5  |  |      |   | 0.4  | 
|                  |  |                  |      |  |      |  
|                  |  | $                | 53.7 |  |      | $ | 43.5 | 
|                  |  |                  |      |  |      |  





| |                                            
| | -------------------------------------------
| | Expected Contributions and Benefit Payments



|            |  |   |      | 
|----------- |  | - | ---- | 
|2006        |  | $ | 0.9  | 
|2007        |  |   | 0.9  | 
|2008        |  |   | 0.9  | 
|2009        |  |   | 1.0  | 
|2010        |  |   | 1.0  | 
|2010  2015 |  |   | 5.6  | 
|            |  |   |     
|            |  | $ | 10.3 | 
|            |  |   |     



70



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Note 6  Pension and Retirement Plans
(Continued)






|         |             
|-------- | ------------
|Note 7  | Income Taxes



|              |  |                            |      |  |      |   |      |      |  |   |      | 
|------------- |  | -------------------------- | ---- |  | ---- | - | ---- | ---- |  | - | ---- | 
|              |  | For the Fiscal Years Ended |     
|              |  | September 30,              |     
|              |  |                            |     
|              |  | 2005                       |      |  | 2004 |   |      | 2003 | 
|              |  |                            |      |  |      |   |      |      | 
|              |  | (in millions)              |     
|United States |  | $                          | 47.0 |  |      | $ | 49.0 |      |  | $ | 0.3  | 
|Foreign       |  |                            | 21.0 |  |      |   | 29.2 |      |  |   | 13.7 | 
|              |  |                            |      |  |      |   |      |      | 
|              |  | $                          | 68.0 |  |      | $ | 78.2 |      |  | $ | 14.0 | 
|              |  |                            |      |  |      |   |      |      | 



|         |         |                            |      |      |      |   |      |      |  |   |      |      |  
|-------- | ------- | -------------------------- | ---- | ---- | ---- | - | ---- | ---- |  | - | ---- | ---- | -
|         |         | For the Fiscal Years Ended |     
|         |         | September 30,              |     
|         |         |                            |     
|         |         | 2005                       |      |      | 2004 |   |      | 2003 | 
|         |         |                            |      |      |      |   |      |      | 
|         |         | (in millions)              |     
|Current: |         |                            |      |      |      |   |      |      |  |   |      |     
|         | Federal |                            | $    | (7.1 | )    |   | $    | 10.8 |  |   | $    | (7.7 | )
|         | State   |                            |      | 2.5  |      |   |      | 1.6  |  |   |      | 1.7  |  
|         | Foreign |                            |      | 9.9  |      |   |      | 15.4 |  |   |      | 7.3  |  
|Deferred |         |                            | 4.7  |      |      |   | 2.1  |      |  |   | (8.7 | )   
|         |         |                            |      |      |      |   |      |      | 
|         |         | $                          | 10.0 |      |      | $ | 29.9 |      |  | $ | (7.4 | )   
|         |         |                            |      |      |      |   |      |      | 

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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                         
|-------- | ------------------------
|Note 7  | Income Taxes (Continued)



|                          |                                                                       |                                       |   |        |       |  |   |        |       |  
|------------------------- | --------------------------------------------------------------------- | ------------------------------------- | - | ------ | ----- |  | - | ------ | ----- | -
|                          |                                                                       | At September 30,                      |  
|                          |                                                                       |                                       |  
|                          |                                                                       | 2005                                  |   |        | 2004  | 
|                          |                                                                       |                                       |   |        |       | 
|                          |                                                                       | (In millions)                         |  
|Deferred tax assets:      |                                                                       |                                       |   |        |       |  |   |       
|                          | Accruals and allowances                                               |                                       | $ | 41.5   |       |  | $ | 46.7   |      
|                          | Post-employment benefits                                              |                                       |   | 7.7    |       |  |   | 8.7    |      
|                          | Property, plant and equipment                                         |                                       |   | 3.0    |       |  |   |       |      
|                          | Inventory                                                             |                                       |   | 3.0    |       |  |   | 2.1    |      
|                          | Other                                                                 |                                       |   | 1.6    |       |  |   | 2.8    |      
|                          | Foreign tax credits                                                   |                                       |   | 18.8   |       |  |   | 18.2   |      
|                          | Expected benefit from Disposal Plans & capital loss
    carryforwards |                                       |   | 119.0  |       |  |   | 86.4   |      
|                          |                                                                       |                                       |   |        |       | 
|                          |                                                                       | Gross deferred tax assets             |   |        | 194.6 |  |   |        | 164.9 |  
|                          | Valuation allowance                                                   |                                       |   | (133.5 | )     |  |   | (103.8 | )    
|                          |                                                                       |                                       |   |        |       | 
|                          |                                                                       | Total deferred tax assets             |   |        | 61.1  |  |   |        | 61.1  |  
|                          |                                                                       |                                       |   |        |       | 
|Deferred tax liabilities: |                                                                       |                                       |   |        |       |  |   |       
|                          | Net pension assets                                                    |                                       |   | 34.2   |       |  |   | 39.1   |      
|                          | Property, plant and equipment                                         |                                       |   |       |       |  |   | 1.2    |      
|                          | Deductible goodwill                                                   |                                       |   | 4.6    |       |  |   | 3.7    |      
|                          | Purchased intangibles                                                 |                                       |   |       |       |  |   | 22.2   |      
|                          | Mark-to-market investments                                            |                                       |   |       |       |  |   | 1.4    |      
|                          |                                                                       |                                       |   |        |       | 
|                          |                                                                       | Total deferred tax liabilities        |   |        | 38.8  |  |   |        | 67.6  |  
|                          |                                                                       |                                       |   |        |       | 
|                          |                                                                       | Net deferred tax assets (liabilities) |   | $      | 22.3  |  |   | $      | (6.5  | )
|                          |                                                                       |                                       |   |        |       | 



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                         
|-------- | ------------------------
|Note 7  | Income Taxes (Continued)





Accounting for Income Taxes




|                        |                             |                                       |       |      |      |   |       |       |      |  
|----------------------- | --------------------------- | ------------------------------------- | ----- | ---- | ---- | - | ----- | ----- | ---- | -
|                        |                             | At September 30,                      |      
|                        |                             |                                       |      
|                        |                             | 2005                                  |       |      | 2004 |  
|                        |                             |                                       |       |      |      |  
|                        |                             | (In millions)                         |      
|Current assets          |                             | $                                     | 27.9  |      |      | $ | 27.8  |      
|Current liabilities     |                             |                                       |      |      |      |   |      |      
|                        |                             |                                       |       |      |      |  
|                        | Net current assets          |                                       |       | 27.9 |      |   |       | 27.8  |     
|                        |                             |                                       |       |      |      |  
|Non-current assets      |                             |                                       | 33.2  |      |      |   | 32.1  |      
|Non-current liabilities |                             |                                       | (38.8 | )    |      |   | (66.4 | )    
|                        |                             |                                       |       |      |      |  
|                        | Net non-current liabilities |                                       |       | (5.6 | )    |   |       | (34.3 | )   
|                        |                             |                                       |       |      |      |  
|                        |                             | Net deferred tax assets (liabilities) |       | $    | 22.3 |   |       | $     | (6.5 | )
|                        |                             |                                       |       |      |      |  



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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                         
|-------- | ------------------------
|Note 7  | Income Taxes (Continued)



|                                                     |  |                            |      |   |      |   |      |      |  |   |       |  
|---------------------------------------------------- |  | -------------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ----- | -
|                                                     |  | For the Fiscal Years Ended |     
|                                                     |  | September 30,              |     
|                                                     |  |                            |     
|                                                     |  | 2005                       |      |   | 2004 |   |      | 2003 | 
|                                                     |  |                            |      |   |      |   |      |      | 
|                                                     |  | (in millions)              |     
|Federal tax provision computed at the statutory rate |  | $                          | 23.8 |   |      | $ | 27.4 |      |  | $ | 4.9   |  
|Foreign income tax differential                      |  |                            | 2.3  |   |      |   | 0.5  |      |  |   | 1.4   |  
|State income taxes (net of Federal benefit)          |  |                            | 2.1  |   |      |   | 1.7  |      |  |   | 1.4   |  
|Rexair Disposition                                   |  |                            | (8.6 | ) |      |   |     |      |  |   |      |  
|Resolution of tax contingencies                      |  |                            | (8.8 | ) |      |   |     |      |  |   | (13.6 | )
|Other non-deductible items                           |  |                            | 0.2  |   |      |   | 0.4  |      |  |   |      |  
|Valuation allowance                                  |  |                            | (0.6 | ) |      |   | 0.6  |      |  |   | (1.7  | )
|Other, net                                           |  |                            | (0.4 | ) |      |   | (0.7 | )    |  |   | 0.2   |  
|                                                     |  |                            |      |   |      |   |      |      | 
|                                                     |  | $                          | 10.0 |   |      | $ | 29.9 |      |  | $ | (7.4  | )
|                                                     |  |                            |      |   |      |   |      |      | 





|         |                       
|-------- | ----------------------
|Note 8  | Employee Benefit Plans



| |                      
| | ---------------------
| | Incentive Stock Plans





Accounting for
Stock Appreciation Rights and Other Variable Stock Option or
Award Plans.


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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                   
|-------- | ----------------------------------
|Note 8  | Employee Benefit Plans (Continued)



Issues Related to the
Accounting for Stock Compensation under APB Opinion No. 25,
Accounting for Stock Issued to Employees, , Accounting for Certain
Transactions Involving Stock Compensation,




| |                         
| | ------------------------
| | Retirement Savings Plans





| |                                        
| | ---------------------------------------
| | Accounting for Stock-based Compensation



|                                 |  |           |            |          |          |   |      |           |          |  |            |   |  |           |       |  |          |  |           |   |  |   |       | 
|-------------------------------- |  | --------- | ---------- | -------- | -------- | - | ---- | --------- | -------- |  | ---------- | - |  | --------- | ----- |  | -------- |  | --------- | - |  | - | ----- | 
|                                 |  | 2005      |            |          | 2004     |   |      | 2003      |         
|                                 |  |           |            |          |          |   |      |           |         
|                                 |  |           |            | Weighted |          |   |      |           | Weighted |  |            |   |  | Weighted  |      
|                                 |  |           |            | Average  |          |   |      |           | Average  |  |            |   |  | Average   |      
|                                 |  | Number of |            |          | Exercise |   |      | Number of |          |  | Exercise   |   |  | Number of |       |  | Exercise | 
|                                 |  | Options   |            |          | Price    |   |      | Options   |          |  | Price      |   |  | Options   |       |  | Price    | 
|                                 |  |           |            |          |          |   |      |           |          |  |            |   |  |           |       |  |          | 
|Outstanding at beginning of year |  |           | 2,640,559  |          |          | $ | 6.35 |           |          |  | 5,190,202  |   |  | $         | 9.97  |  |          |  | 5,202,796 |   |  | $ | 11.88 | 
|Granted                          |  |           | 134,524    |          |          |   | 9.45 |           |          |  | 298,750    |   |  |           | 9.42  |  |          |  | 849,250   |   |  |   | 3.39  | 
|Exercised                        |  |           | (347,225   | )        |          |   | 4.21 |           |          |  | (277,875   | ) |  |           | 3.20  |  |          |  | (875      | ) |  |   | 3.82  | 
|Canceled/ expired                |  |           | (1,161,826 | )        |          |   | 8.42 |           |          |  | (2,570,518 | ) |  |           | 13.93 |  |          |  | (860,969  | ) |  |   | 13.96 | 
|                                 |  |           |            |          |          |   |      |           |          |  |            |   |  |           |       |  |          | 
|Outstanding at end of year       |  |           | 1,266,032  |          |          |   | 5.37 |           |          |  | 2,640,559  |   |  |           | 6.35  |  |          |  | 5,190,202 |   |  |   | 9.97  | 
|                                 |  |           |            |          |          |   |      |           |          |  |            |   |  |           |       |  |          | 
|Exercisable at end of year       |  |           | 753,657    |          |          |   | 5.25 |           |          |  | 1,632,434  |   |  |           | 7.42  |  |          |  | 3,743,793 |   |  |   | 11.87 | 

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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                   
|-------- | ----------------------------------
|Note 8  | Employee Benefit Plans (Continued)



|                         |  |                     |           |           |                     |  |          |          |  |   |           |          |  |          |         |  |  |   |       | 
|------------------------ |  | ------------------- | --------- | --------- | ------------------- |  | -------- | -------- |  | - | --------- | -------- |  | -------- | ------- |  |  | - | ----- | 
|                         |  | Options Outstanding |           |           | Options Exercisable | 
|                         |  |                     |           |           |                     | 
|                         |  |                     |           | Weighted  |                     |  |          |          | 
|                         |  |                     |           | Average   |                     |  | Weighted |          |  |   |           | Weighted | 
|                         |  |                     |           | Remaining |                     |  | Average  |          |  |   |           | Average  | 
|                         |  | Number of           |           |           | Contractual         |  |          | Exercise |  |   | Number of |          |  | Exercise |        
|Range of Exercise Prices |  | Options             |           |           | Life (in years)     |  |          | Price    |  |   | Options   |          |  | Price    |        
|                         |  |                     |           |           |                     |  |          |          |  |   |           |          |  |          |        
|$2.20 to $5.49           |  |                     | 707,250   |           |                     |  | 6.2      |          |  | $ | 3.37      |          |  |          | 446,500 |  |  | $ | 3.39  | 
|$5.50 to $7.99           |  |                     | 211,500   |           |                     |  | 8.1      |          |  |   | 6.53      |          |  |          | 73,375  |  |  |   | 6.44  | 
|$8.00 to $9.99           |  |                     | 344,750   |           |                     |  | 5.8      |          |  |   | 8.66      |          |  |          | 231,250 |  |  |   | 8.30  | 
|$10.00 to $20.50         |  |                     | 2,532     |           |                     |  | 1.2      |          |  |   | 20.50     |          |  |          | 2,532   |  |  |   | 20.50 | 
|                         |  |                     |           |           |                     |  |          |          |  |   |           |          |  |          |        
|                         |  |                     | 1,266,032 |           |                     |  | 6.4      |          |  |   | 5.37      |          |  |          | 753,657 |  |  |   | 5.25  | 
|                         |  |                     |           |           |                     |  |          |          |  |   |           |          |  |          |        

Note 2.




| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| |  | expected volatility rates of 63% for 2005 and 66% for both 2004
    and 2003;      
|
| |  | risk-free interest rates of 3.41% for 2005, 2.97% for 2004 and
    2.66 % for 2003;
|
| |  | expected option lives of 4 years for all three
    years; and                      
|
| |  | expected dividend yield of 0% for all three years.                                 





|         |              
|-------- | -------------
|Note 9  | Capital Stock



| |             
| | ------------
| | Common Stock





| |                        
| | -----------------------
| | Stockholder Rights Plan







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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 9  Capital Stock (Continued)






|          |                              
|--------- | -----------------------------
|Note 10  | Commitments and Contingencies



| |                 
| | ----------------
| | Operating Leases

Note 4


|           |  |   |      | 
|---------- |  | - | ---- | 
|2006       |  | $ | 8.8  | 
|2007       |  |   | 8.1  | 
|2008       |  |   | 5.8  | 
|2009       |  |   | 3.8  | 
|2010       |  |   | 3.2  | 
|Thereafter |  |   | 11.6 | 
|           |  |   |     
|           |  | $ | 41.3 | 
|           |  |   |     





| |                         
| | ------------------------
| | Environmental Regulation







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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |                                          
|--------- | -----------------------------------------
|Note 10  | Commitments and Contingencies (Continued)







| |           
| | ----------
| | Litigation













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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |                                          
|--------- | -----------------------------------------
|Note 10  | Commitments and Contingencies (Continued)













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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |                                          
|--------- | -----------------------------------------
|Note 10  | Commitments and Contingencies (Continued)











|          |                    
|--------- | -------------------
|Note 11  | Segment Information

Note 1


Note 2


80



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##### Table of Contents



JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |                                
|--------- | -------------------------------
|Note 11  | Segment Information (Continued)



|                                                          |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |   |       |   |  |   |         | 
|--------------------------------------------------------- | --------------------- | ------------- | - | ----- | -------- |  | - | ------ |  |  | --------- | ------------ |  | ----- | - | ----- | - |  | - | ------- | 
|                                                          |                       | Bath          |   |       | Plumbing |  |   |        |  |  |           | Consolidated | 
|                                                          |                       | Products      |   |       | Products |  |   | Rexair |  |  | Corporate |              |  | Total |  
|                                                          |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |  
|                                                          |                       | (in millions) |  
|Net Sales                                                 |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |   |       |   |  |   |        
|                                                          | 2005                  |               | $ | 780.8 |          |  | $ | 353.1  |  |  | $         | 76.1         |  |       | $ |      |   |  | $ | 1,210.0 | 
|                                                          | 2004                  |               |   | 788.4 |          |  |   | 308.0  |  |  |           | 104.8        |  |       |   |      |   |  |   | 1,201.2 | 
|                                                          | 2003                  |               |   | 646.5 |          |  |   | 276.6  |  |  |           | 102.1        |  |       |   |      |   |  |   | 1,025.2 | 
|Operating Income (Loss)                                   |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |   |       |   |  |   |        
|                                                          | 2005                  |               | $ | 30.1  |          |  | $ | 75.3   |  |  | $         | 19.0         |  |       | $ | (30.0 | ) |  | $ | 94.4    | 
|                                                          | 2004                  |               |   | 57.2  |          |  |   | 60.7   |  |  |           | 27.3         |  |       |   | (18.0 | ) |  |   | 127.2   | 
|                                                          | 2003                  |               |   | 25.3  |          |  |   | 62.1   |  |  |           | 26.6         |  |       |   | (14.9 | ) |  |   | 99.1    | 
|Capital Expenditures                                      |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |   |       |   |  |   |        
|                                                          | 2005                  |               | $ | 18.0  |          |  | $ | 4.0    |  |  | $         | 0.4          |  |       | $ | 0.3   |   |  | $ | 22.7    | 
|                                                          | 2004                  |               |   | 17.2  |          |  |   | 3.5    |  |  |           | 1.5          |  |       |   | 0.8   |   |  |   | 23.0    | 
|                                                          | 2003                  |               |   | 13.2  |          |  |   | 1.7    |  |  |           | 2.9          |  |       |   | 0.1   |   |  |   | 17.9    | 
|Depreciation and Amortization                             |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |   |       |   |  |   |        
|                                                          | 2005                  |               | $ | 15.6  |          |  | $ | 5.2    |  |  | $         | 2.3          |  |       | $ | 3.2   |   |  | $ | 26.3    | 
|                                                          | 2004                  |               |   | 11.8  |          |  |   | 5.6    |  |  |           | 3.3          |  |       |   | 1.7   |   |  |   | 22.4    | 
|                                                          | 2003                  |               |   | 9.8   |          |  |   | 5.8    |  |  |           | 3.5          |  |       |   | 0.8   |   |  |   | 19.9    | 
|Restructuring Charges Included in Operating Income (Loss) |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |   |       |   |  |   |        
|                                                          | 2005                  |               | $ | 4.5   |          |  | $ |       |  |  | $         |             |  |       | $ | 4.9   |   |  | $ | 9.4     | 
|                                                          | 2004                  |               |   | 3.5   |          |  |   |       |  |  |           |             |  |       |   | (0.6  | ) |  |   | 2.9     | 
|                                                          | 2003                  |               |   | 4.3   |          |  |   |       |  |  |           |             |  |       |   | 5.3   |   |  |   | 9.6     | 
|Assets                                                    |                       |               |   |       |          |  |   |        |  |  |           |              |  |       |   |       |   |  |   |        
|                                                          | At September 30, 2005 |               | $ | 480.9 |          |  | $ | 295.6  |  |  | $         |             |  |       | $ | 513.0 |   |  | $ | 1,289.5 | 
|                                                          | At September 30, 2004 |               |   | 527.2 |          |  |   | 288.3  |  |  |           | 157.9        |  |       |   | 407.0 |   |  |   | 1,380.4 | 





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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |                                
|--------- | -------------------------------
|Note 11  | Segment Information (Continued)



|                                  |                |                            |         |       |      |   |         |       |  |   |         |       | 
|--------------------------------- | -------------- | -------------------------- | ------- | ----- | ---- | - | ------- | ----- |  | - | ------- | ----- | 
|                                  |                | For the Fiscal Years Ended |        
|                                  |                | September 30,              |        
|                                  |                |                            |        
|                                  |                | 2005                       |         |       | 2004 |   |         | 2003  | 
|                                  |                |                            |         |       |      |   |         |       | 
|                                  |                | (in millions)              |        
|Net Sales                         |                |                            |         |       |      |   |         |       |  |   |         |      
|                                  | United States  |                            | $       | 836.5 |      |   | $       | 825.2 |  |   | $       | 716.6 | 
|                                  | United Kingdom |                            |         | 228.7 |      |   |         | 240.0 |  |   |         | 191.0 | 
|                                  | Other foreign  |                            |         | 144.8 |      |   |         | 136.0 |  |   |         | 117.6 | 
|                                  |                |                            |         |       |      |   |         |       | 
|                                  |                | $                          | 1,210.0 |       |      | $ | 1,201.2 |       |  | $ | 1,025.2 |      
|                                  |                |                            |         |       |      |   |         |       | 
|Operating Income
    (loss)(1)    |                |                            |         |       |      |   |         |       |  |   |         |      
|                                  | United States  |                            | $       | 70.2  |      |   | $       | 90.5  |  |   | $       | 66.1  | 
|                                  | United Kingdom |                            |         | (2.0  | )    |   |         | 12.6  |  |   |         | 11.2  | 
|                                  | Other foreign  |                            |         | 26.2  |      |   |         | 24.1  |  |   |         | 21.8  | 
|                                  |                |                            |         |       |      |   |         |       | 
|                                  |                | $                          | 94.4    |       |      | $ | 127.2   |       |  | $ | 99.1    |      
|                                  |                |                            |         |       |      |   |         |       | 
|Long-lived Assets (at period end) |                |                            |         |       |      |   |         |       |  |   |         |      
|                                  | United States  |                            | $       | 228.3 |      |   | $       | 357.6 |  |   |         |       | 
|                                  | United Kingdom |                            |         | 92.4  |      |   |         | 91.9  |  |   |         |       | 
|                                  | Other foreign  |                            |         | 11.2  |      |   |         | 10.5  |  |   |         |       | 
|                                  |                |                            |         |       |      |   |         |       | 
|                                  |                | $                          | 331.9   |       |      | $ | 460.0   |       |  |   |         |      
|                                  |                |                            |         |       |      |   |         |       | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Operating income (loss) for the years ended September 30,
    2005, 2004 and 2003 include impairment, restructuring and other
    charges of $9.4 million, $2.9 million, and
    $9.6 million, respectively. For 2005, $1.6 million of
    the restructuring charges relate to our United Kingdom
    operations, $0.1 million relate to other foreign operations
    and the remainder relates to operations in the United States.
    All the restructuring charges included in 2004 and 2003
    operating income relate to operations in the United States. Also
    included in 2003 is an $8.6 million sale of a license for
    certain technology that had been the subject of patent
    litigation. Corporate expenses are included in the United States.

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JACUZZI BRANDS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |                                     
|--------- | ------------------------------------
|Note 12  | Quarterly Financial Data (Unaudited)



|                                          |  |                                    |       |  |                                    |   |       |         |  |   |            |   |  |         |       |  |          |            |       |         |  |   |          |  |  |   |       |  |  |   |       | 
|----------------------------------------- |  | ---------------------------------- | ----- |  | ---------------------------------- | - | ----- | ------- |  | - | ---------- | - |  | ------- | ----- |  | -------- | ---------- | ----- | ------- |  | - | -------- |  |  | - | ----- |  |  | - | ----- | 
|                                          |  | For the Fiscal 2005 Quarters Ended |       |  | For the Fiscal 2004 Quarters Ended |  
|                                          |  |                                    |       |  |                                    |  
|                                          |  | Dec. 31                            |       |  | March 31                           |   |       | June 30 |  |   | Sept. 30   |   |  | Dec. 31 |       |  | March 31 |            |       | June 30 |  |   | Sept. 30 | 
|                                          |  |                                    |       |  |                                    |   |       |         |  |   |            |   |  |         |       |  |          |            |       |         |  |   |          | 
|                                          |  | (Restated)                         |       |  |                                    |   |       |         |  |   | (Restated) |   |  |         |       |  |          | (Restated) |      
|Net sales                                 |  | $                                  | 281.5 |  |                                    | $ | 301.0 |         |  | $ | 334.2      |   |  | $       | 293.3 |  |          | $          | 266.1 |         |  | $ | 295.3    |  |  | $ | 331.3 |  |  | $ | 308.5 | 
|Gross profit                              |  |                                    | 90.7  |  |                                    |   | 94.1  |         |  |   | 110.7      |   |  |         | 94.1  |  |          |            | 88.1  |         |  |   | 95.1     |  |  |   | 113.7 |  |  |   | 101.9 | 
|Earnings from continuing operations       |  |                                    | 6.6   |  |                                    |   | 8.6   |         |  |   | 37.9       |   |  |         | 4.9   |  |          |            | 6.3   |         |  |   | 10.1     |  |  |   | 16.9  |  |  |   | 15.0  | 
|Net earnings (loss)                       |  |                                    | 5.5   |  |                                    |   | 7.4   |         |  |   | (20.8      | ) |  |         | 2.3   |  |          |            | 3.2   |         |  |   | 6.0      |  |  |   | 13.8  |  |  |   | 5.4   | 
|Earnings (loss) per basic common share:   |  |                                    |       |  |                                    |   |       |         |  |   |            |   |  |         |       |  |          |            |       |         |  |   |          |  |  |   |       |  |  |   |       | 
|Continuing operations                     |  | $                                  | 0.09  |  |                                    | $ | 0.11  |         |  | $ | 0.50       |   |  | $       | 0.06  |  |          | $          | 0.08  |         |  | $ | 0.13     |  |  | $ | 0.22  |  |  | $ | 0.20  | 
|Net earnings (loss)                       |  |                                    | 0.07  |  |                                    |   | 0.10  |         |  |   | (0.28      | ) |  |         | 0.03  |  |          |            | 0.04  |         |  |   | 0.08     |  |  |   | 0.18  |  |  |   | 0.07  | 
|Earnings (loss) per diluted common share: |  |                                    |       |  |                                    |   |       |         |  |   |            |   |  |         |       |  |          |            |       |         |  |   |          |  |  |   |       |  |  |   |       | 
|Continuing operations                     |  | $                                  | 0.09  |  |                                    | $ | 0.11  |         |  | $ | 0.50       |   |  | $       | 0.06  |  |          | $          | 0.08  |         |  | $ | 0.13     |  |  | $ | 0.22  |  |  | $ | 0.20  | 
|Net earnings (loss)                       |  |                                    | 0.07  |  |                                    |   | 0.10  |         |  |   | (0.27      | ) |  |         | 0.03  |  |          |            | 0.04  |         |  |   | 0.08     |  |  |   | 0.18  |  |  |   | 0.07  | 







|          |                                                                  
|--------- | -----------------------------------------------------------------
|Note 13  | Supplemental Joint Issuer and Guarantor Financial
    Information

Note 5


83



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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, 2005 |      
|                                                                |                                              |                                              |      
|                                                                |                                              |                                              |       | Combined  |              |   | Combined      |              |       |  
|                                                                |                                              |                                              |       | Guarantor |              |   | Non-Guarantor |              |       |  
|                                                                |                                              | JBI                                          |       |           | Subsidiaries |   |               | Subsidiaries |       |   | Eliminations |       |      | Consolidated |       
|                                                                |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       
|                                                                |                                              | (in millions)                                |      
|Net sales                                                       |                                              | $                                            |      |           |              | $ | 863.3         |              |       | $ | 360.4        |       |      | $            | (13.7  | )     |   | $ | 1,210.0 |      
|Operating costs and expenses:                                   |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |        |       |   |   |         |      
|                                                                | Cost of products sold                        |                                              |       |          |              |   |               | 576.6        |       |   |              | 257.5 |      |              |        | (13.7 | ) |   |         | 820.4 |     
|                                                                | Selling, general and administrative expenses |                                              |       | 24.8      |              |   |               | 178.7        |       |   |              | 82.3  |      |              |        |      |   |   |         | 285.8 |     
|                                                                | Impairment, restructuring and other charges  |                                              |       | 4.7       |              |   |               | 3.0          |       |   |              | 1.7   |      |              |        |      |   |   |         | 9.4   |     
|                                                                |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       
|                                                                |                                              | Operating (loss) income                      |       |           | (29.5        | ) |               |              | 105.0 |   |              |       | 18.9 |              |        |       |  |   |         |       | 94.4 | 
|Interest expense                                                |                                              |                                              | (46.4 | )         |              |   | (0.7          | )            |       |   | (1.0         | )     |      |              |       |       |   |   | (48.1   | )    
|Interest income                                                 |                                              |                                              | 0.8   |           |              |   | 1.1           |              |       |   | 1.1          |       |      |              |       |       |   |   | 3.0     |      
|Intercompany 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          |              |       |   |             |       |      |              |       |       |   |   | 24.7    |      
|Other expense, net                                              |                                              |                                              | (5.8  | )         |              |   | (0.5          | )            |       |   | 0.3          |       |      |              |       |       |   |   | (6.0    | )    
|Other intercompany income (expense), net                        |                                              |                                              | (10.2 | )         |              |   | 10.1          |              |       |   | 0.1          |       |      |              |       |       |   |   |        |      
|                                                                |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       
|Earnings (loss) before income taxes and discontinued operations |                                              |                                              | 17.3  |           |              |   | 168.6         |              |       |   | 20.4         |       |      |              | (138.3 | )     |   |   | 68.0    |      
|Benefit 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    | )    
|                                                                |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       

84



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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, 2004 |      
|                                                                    |                                              |                                              |      
|                                                                    |                                              |                                              |       | Combined  |              |   | Combined      |              |       |  
|                                                                    |                                              |                                              |       | Guarantor |              |   | Non-Guarantor |              |       |  
|                                                                    |                                              | JBI                                          |       |           | Subsidiaries |   |               | Subsidiaries |       |   | Eliminations |       |      | Consolidated |       
|                                                                    |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       
|                                                                    |                                              | (in millions)                                |      
|Net sales                                                           |                                              | $                                            |      |           |              | $ | 844.3         |              |       | $ | 363.9        |       |      | $            | (7.0   | )    |   | $ | 1,201.2 |      
|Operating costs and expenses:                                       |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |        |      |   |   |         |      
|                                                                    | Cost of products sold                        |                                              |       |          |              |   |               | 556.3        |       |   |              | 253.1 |      |              |        | (7.0 | ) |   |         | 802.4 |      
|                                                                    | Selling, general and administrative expenses |                                              |       | 18.0      |              |   |               | 174.5        |       |   |              | 76.2  |      |              |        |     |   |   |         | 268.7 |      
|                                                                    | Impairment, restructuring and other charges  |                                              |       |          |              |   |               | 2.9          |       |   |              |      |      |              |        |     |   |   |         | 2.9   |      
|                                                                    |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       
|                                                                    |                                              | Operating (loss) income                      |       |           | (18.0        | ) |               |              | 110.6 |   |              |       | 34.6 |              |        |      |  |   |         |       | 127.2 | 
|Interest expense                                                    |                                              |                                              | (48.9 | )         |              |   | (0.8          | )            |       |   | (0.8         | )     |      |              |       |      |   |   | (50.5   | )    
|Interest income                                                     |                                              |                                              | 2.6   |           |              |   | 1.6           |              |       |   | 0.5          |       |      |              |       |      |   |   | 4.7     |      
|Intercompany 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 income (expense), net                            |                                              |                                              | (0.1  | )         |              |   | 2.3           |              |       |   | (2.2         | )     |      |              |       |      |   |   |        |      
|                                                                    |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       
|Earnings (loss) before income taxes and discontinued
    operations |                                              |                                              | 19.3  |           |              |   | 142.4         |              |       |   | 30.1         |       |      |              | (113.6 | )    |   |   | 78.2    |      
|Benefit 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    |      
|                                                                    |                                              |                                              |       |           |              |   |               |              |       |   |              |       |      |              |       

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, 2003 |      
|                                                                |                                              |                                              |      
|                                                                |                                              |                                              |       | Combined  |              |   | Combined      |              |      |  
|                                                                |                                              |                                              |       | Guarantor |              |   | Non-Guarantor |              |      |  
|                                                                |                                              | JBI                                          |       |           | Subsidiaries |   |               | Subsidiaries |      |   | Eliminations |       |      | Consolidated |       
|                                                                |                                              |                                              |       |           |              |   |               |              |      |   |              |       |      |              |       
|                                                                |                                              | (in millions)                                |      
|Net sales                                                       |                                              | $                                            |      |           |              | $ | 733.5         |              |      | $ | 296.5        |       |      | $            | (4.8   | )    |   | $ | 1,025.2 |      
|Operating costs and expenses:                                   |                                              |                                              |       |           |              |   |               |              |      |   |              |       |      |              |        |      |   |   |         |      
|                                                                | Cost of products sold                        |                                              |       |          |              |   |               | 481.6        |      |   |              | 205.9 |      |              |        | (4.8 | ) |   |         | 682.7 |     
|                                                                | Selling, general and administrative expenses |                                              |       | 9.0       |              |   |               | 165.9        |      |   |              | 58.9  |      |              |        |     |   |   |         | 233.8 |     
|                                                                | Impairment, restructuring and other charges  |                                              |       | 8.5       |              |   |               | 1.1          |      |   |              |      |      |              |        |     |   |   |         | 9.6   |     
|                                                                |                                              |                                              |       |           |              |   |               |              |      |   |              |       |      |              |       
|                                                                |                                              | Operating (loss) income                      |       |           | (17.5        | ) |               |              | 84.9 |   |              |       | 31.7 |              |        |      |  |   |         |       | 99.1 | 
|Interest expense                                                |                                              |                                              | (44.3 | )         |              |   | (15.3         | )            |      |   | (1.0         | )     |      |              |       |      |   |   | (60.6   | )    
|Interest income                                                 |                                              |                                              | 0.6   |           |              |   | 1.0           |              |      |   | 0.5          |       |      |              |       |      |   |   | 2.1     |      
|Intercompany interest (expense) income, net                     |                                              |                                              | (17.2 | )         |              |   | 22.9          |              |      |   | (5.7         | )     |      |              |       |      |   |   |        |      
|Equity in earnings (losses) of investees, net                   |                                              |                                              | 140.3 |           |              |   | 8.4           |              |      |   |             |       |      |              | (148.7 | )    |   |   |        |      
|Minority interest (expense) income                              |                                              |                                              | (61.6 | )         |              |   | 61.6          |              |      |   |             |       |      |              |       |      |   |   |        |      
|Other expense, net                                              |                                              |                                              | (10.0 | )         |              |   | (16.7         | )            |      |   | 0.1          |       |      |              |       |      |   |   | (26.6   | )    
|Other intercompany income (expense), net                        |                                              |                                              | 0.3   |           |              |   | 10.8          |              |      |   | (11.1        | )     |      |              |       |      |   |   |        |      
|                                                                |                                              |                                              |       |           |              |   |               |              |      |   |              |       |      |              |       
|(Loss) earnings before income taxes and discontinued operations |                                              |                                              | (9.4  | )         |              |   | 157.6         |              |      |   | 14.5         |       |      |              | (148.7 | )    |   |   | 14.0    |      
|Benefit from (provision for) income taxes                       |                                              |                                              | 30.8  |           |              |   | (17.3         | )            |      |   | (6.1         | )     |      |              |       |      |   |   | 7.4     |      
|                                                                |                                              |                                              |       |           |              |   |               |              |      |   |              |       |      |              |       
|Earnings (loss) from continuing operations                      |                                              |                                              | 21.4  |           |              |   | 140.3         |              |      |   | 8.4          |       |      |              | (148.7 | )    |   |   | 21.4    |      
|Loss (earnings) from discontinued operations                    |                                              |                                              | (50.4 | )         |              |   | (50.4         | )            |      |   | (26.0        | )     |      |              | 76.4   |      |   |   | (50.4   | )    
|                                                                |                                              |                                              |       |           |              |   |               |              |      |   |              |       |      |              |       
|Net earnings (loss)                                             |                                              | $                                            | (29.0 | )         |              | $ | 89.9          |              |      | $ | (17.6        | )     |      | $            | (72.3  | )    |   | $ | (29.0   | )    
|                                                                |                                              |                                              |       |           |              |   |               |              |      |   |              |       |      |              |       

86



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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)

|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |          |   |          |   |       |       |         | 
|----------------------------------------------------------------- | ------------------------------------------------ | ------------------------------------------ | ----- | --------- | ------------ |  | ------------- | ------------ | ------- |  | ------------ | ---- | ----- | ------------ | -------- | - | -------- | - | ----- | ----- | ------- | 
|                                                                  |                                                  | At September 30, 2005                      |      
|                                                                  |                                                  |                                            |      
|                                                                  |                                                  |                                            |       | Combined  |              |  | Combined      |              |         | 
|                                                                  |                                                  |                                            |       | Guarantor |              |  | Non-Guarantor |              |         | 
|                                                                  |                                                  | JBI                                        |       |           | Subsidiaries |  |               | Subsidiaries |         |  | Eliminations |      |       | Consolidated |         
|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                                                  |                                                  | (in millions)                              |      
|ASSETS                                                           
|Current assets:                                                   |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |          |   |          |   |       |      
|                                                                  | Cash and cash equivalents                        |                                            | $     | 84.1      |              |  | $             | (7.0         | )       |  | $            | 33.1 |       |              | $        |  |          |   | $     | 110.2 |        
|                                                                  | Trade receivables, net                           |                                            |       |          |              |  |               | 118.9        |         |  |              | 81.6 |       |              |          |  |          |   |       | 200.5 |        
|                                                                  | Inventories                                      |                                            |       |          |              |  |               | 116.9        |         |  |              | 48.1 |       |              |          |  |          |   |       | 165.0 |        
|                                                                  | Deferred income taxes                            |                                            |       | 7.9       |              |  |               | 19.4         |         |  |              | 0.6  |       |              |          |  |          |   |       | 27.9  |        
|                                                                  | Assets held for sale                             |                                            |       |          |              |  |               | 1.8          |         |  |              | 67.9 |       |              |          |  |          |   |       | 69.7  |        
|                                                                  | Prepaid expenses and other current assets        |                                            |       | 4.4       |              |  |               | 5.9          |         |  |              | 12.3 |       |              |          |  |          |   |       | 22.6  |        
|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                                                  |                                                  | Total current assets                       |       |           | 96.4         |  |               |              | 255.9   |  |              |      | 243.6 |              |          |   |         |   |       |       | 595.9   | 
|Restricted cash collateral accounts                               |                                                  |                                            | 12.4  |           |              |  |              |              |         |  |             |      |       |              |         |   |          |   | 12.4  |      
|Property, plant and equipment, net                                |                                                  |                                            | 1.2   |           |              |  | 50.5          |              |         |  | 52.0         |      |       |              |         |   |          |   | 103.7 |      
|Pension assets                                                    |                                                  |                                            | 146.8 |           |              |  | 1.0           |              |         |  |             |      |       |              |         |   |          |   | 147.8 |      
|Insurance for asbestos claims                                     |                                                  |                                            |      |           |              |  | 153.0         |              |         |  |             |      |       |              |         |   |          |   | 153.0 |      
|Goodwill                                                          |                                                  |                                            |      |           |              |  | 176.7         |              |         |  | 51.5         |      |       |              |         |   |          |   | 228.2 |      
|Other intangibles, net                                            |                                                  |                                            |      |           |              |  |              |              |         |  |             |      |       |              |         |   |          |   |      |      
|Other non-current assets                                          |                                                  |                                            | 30.6  |           |              |  | 17.6          |              |         |  | 0.3          |      |       |              |         |   |          |   | 48.5  |      
|Investment 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 | ) |       | $     | 1,289.5 | 
|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|LIABILITIES AND STOCKHOLDERS EQUITY                             
|Current liabilities:                                              |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |          |   |          |   |       |      
|                                                                  | Notes payable                                    |                                            | $     |          |              |  | $             |             |         |  | $            | 22.0 |       |              | $        |  |          |   | $     | 22.0  |        
|                                                                  | Current maturities of long-term debt             |                                            |       |          |              |  |               | 1.5          |         |  |              |     |       |              |          |  |          |   |       | 1.5   |        
|                                                                  | Trade accounts payable                           |                                            |       | 0.3       |              |  |               | 58.0         |         |  |              | 47.4 |       |              |          |  |          |   |       | 105.7 |        
|                                                                  | Income taxes payable                             |                                            |       | 19.3      |              |  |               | 6.0          |         |  |              | (0.6 | )     |              |          |  |          |   |       | 24.7  |        
|                                                                  | Liabilities associated with assets held for sale |                                            |       |          |              |  |               |             |         |  |              | 66.9 |       |              |          |  |          |   |       | 66.9  |        
|                                                                  | Accrued expenses and other current liabilities   |                                            |       | 17.9      |              |  |               | 63.9         |         |  |              | 32.6 |       |              |          |  |          |   |       | 114.4 |        
|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                                                  |                                                  | Total current liabilities                  |       |           | 37.5         |  |               |              | 129.4   |  |              |      | 168.3 |              |          |   |         |   |       |       | 335.2   | 
|Long-term debt                                                    |                                                  |                                            | 380.0 |           |              |  | 3.5           |              |         |  |             |      |       |              |         |   |          |   | 383.5 |      
|Deferred income taxes                                             |                                                  |                                            | 17.4  |           |              |  | (1.2          | )            |         |  | (10.6        | )    |       |              |         |   |          |   | 5.6   |      
|Asbestos claims                                                   |                                                  |                                            |      |           |              |  | 153.0         |              |         |  |             |      |       |              |         |   |          |   | 153.0 |      
|Other liabilities                                                 |                                                  |                                            | 43.0  |           |              |  | 55.8          |              |         |  | 28.2         |      |       |              |         |   |          |   | 127.0 |      
|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                                                  |                                                  | Total liabilities                          |       |           | 477.9        |  |               |              | 340.5   |  |              |      | 185.9 |              |          |   |         |   |       |       | 1,004.3 | 
|Stockholders equity                                              |                                                  |                                            | 285.2 |           |              |  | 1,299.4       |              |         |  | 342.2        |      |       |              | (1,641.6 | ) |          |   | 285.2 |      
|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                                                  |                                                  | Total liabilities and stockholders equity |       | $         | 763.1        |  |               | $            | 1,639.9 |  |              | $    | 528.1 |              |          | $ | (1,641.6 | ) |       | $     | 1,289.5 | 
|                                                                  |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         

87



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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)

|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |          |   |          |   |       |       |         | 
|--------------------------------------- | ------------------------------------------------ | ------------------------------------------ | ----- | --------- | ------------ |  | ------------- | ------------ | ------- |  | ------------ | ---- | ----- | ------------ | -------- | - | -------- | - | ----- | ----- | ------- | 
|                                        |                                                  | At September 30, 2004                      |      
|                                        |                                                  |                                            |      
|                                        |                                                  |                                            |       | Combined  |              |  | Combined      |              |         | 
|                                        |                                                  |                                            |       | Guarantor |              |  | Non-Guarantor |              |         | 
|                                        |                                                  | JBI                                        |       |           | Subsidiaries |  |               | Subsidiaries |         |  | Eliminations |      |       | Consolidated |         
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                        |                                                  | (in millions)                              |      
|ASSETS                                 
|Current assets:                         |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |          |   |          |   |       |      
|                                        | Cash and cash equivalents                        |                                            | $     | 0.9       |              |  | $             | 1.0          |         |  | $            | 37.7 |       |              | $        |  |          |   | $     | 39.6  |        
|                                        | Trade receivables, net                           |                                            |       |          |              |  |               | 128.0        |         |  |              | 92.1 |       |              |          |  |          |   |       | 220.1 |        
|                                        | Inventories                                      |                                            |       |          |              |  |               | 138.1        |         |  |              | 42.6 |       |              |          |  |          |   |       | 180.7 |        
|                                        | Deferred income taxes                            |                                            |       | 29.3      |              |  |               | (2.5         | )       |  |              | 1.0  |       |              |          |  |          |   |       | 27.8  |        
|                                        | Assets held for sale                             |                                            |       |          |              |  |               | 70.2         |         |  |              |     |       |              |          |  |          |   |       | 70.2  |        
|                                        | Prepaid expenses and other current assets        |                                            |       | 3.3       |              |  |               | 7.1          |         |  |              | 11.7 |       |              |          |  |          |   |       | 22.1  |        
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                        |                                                  | Total current assets                       |       |           | 33.5         |  |               |              | 341.9   |  |              |      | 185.1 |              |          |   |         |   |       |       | 560.5   | 
|Property, plant and equipment, net      |                                                  |                                            | 1.1   |           |              |  | 67.6          |              |         |  | 49.9         |      |       |              |         |   |          |   | 118.6 |      
|Pension assets                          |                                                  |                                            | 150.3 |           |              |  |              |              |         |  |             |      |       |              |         |   |          |   | 150.3 |      
|Insurance for asbestos claims           |                                                  |                                            |      |           |              |  | 171.0         |              |         |  |             |      |       |              |         |   |          |   | 171.0 |      
|Goodwill                                |                                                  |                                            |      |           |              |  | 229.2         |              |         |  | 52.5         |      |       |              |         |   |          |   | 281.7 |      
|Other intangibles, net                  |                                                  |                                            |      |           |              |  | 59.7          |              |         |  |             |      |       |              |         |   |          |   | 59.7  |      
|Other non-current assets                |                                                  |                                            | 26.8  |           |              |  | 11.6          |              |         |  | 0.2          |      |       |              |         |   |          |   | 38.6  |      
|Investment in subsidiaries/Intercompany |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |          |   |          |   |       |      
|receivable (payable), net               |                                                  |                                            | 570.4 |           |              |  | 823.9         |              |         |  | 178.1        |      |       |              | (1,572.4 | ) |          |   |      |      
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                        |                                                  | Total assets                               |       | $         | 782.1        |  |               | $            | 1,704.9 |  |              | $    | 465.8 |              |          | $ | (1,572.4 | ) |       | $     | 1,380.4 | 
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|LIABILITIES AND STOCKHOLDERS EQUITY   
|Current liabilities:                    |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |          |   |          |   |       |      
|                                        | Notes payable                                    |                                            | $     |          |              |  | $             |             |         |  | $            | 21.1 |       |              | $        |  |          |   | $     | 21.1  |        
|                                        | Current maturities of long-term debt             |                                            |       | 2.5       |              |  |               | 1.4          |         |  |              |     |       |              |          |  |          |   |       | 3.9   |        
|                                        | Trade accounts payable                           |                                            |       | 0.4       |              |  |               | 58.4         |         |  |              | 54.5 |       |              |          |  |          |   |       | 113.3 |        
|                                        | Income taxes payable                             |                                            |       | 0.3       |              |  |               | 19.1         |         |  |              | (1.2 | )     |              |          |  |          |   |       | 18.2  |        
|                                        | Liabilities associated with assets held for sale |                                            |       |          |              |  |               | 43.1         |         |  |              |     |       |              |          |  |          |   |       | 43.1  |        
|                                        | Accrued expenses and other current liabilities   |                                            |       | 22.9      |              |  |               | 65.0         |         |  |              | 32.3 |       |              |          |  |          |   |       | 120.2 |        
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                        |                                                  | Total current liabilities                  |       |           | 26.1         |  |               |              | 187.0   |  |              |      | 106.7 |              |          |   |         |   |       |       | 319.8   | 
|Long-term debt                          |                                                  |                                            | 441.8 |           |              |  | 5.0           |              |         |  |             |      |       |              |         |   |          |   | 446.8 |      
|Deferred income taxes                   |                                                  |                                            | (11.5 | )         |              |  | 46.3          |              |         |  | (0.5         | )    |       |              |         |   |          |   | 34.3  |      
|Asbestos claims                         |                                                  |                                            |      |           |              |  | 171.0         |              |         |  |             |      |       |              |         |   |          |   | 171.0 |      
|Other liabilities                       |                                                  |                                            | 37.2  |           |              |  | 54.8          |              |         |  | 28.0         |      |       |              |         |   |          |   | 120.0 |      
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                        |                                                  | Total liabilities                          |       |           | 493.6        |  |               |              | 464.1   |  |              |      | 134.2 |              |          |   |         |   |       |       | 1,091.9 | 
|Stockholders equity                    |                                                  |                                            | 288.5 |           |              |  | 1,240.8       |              |         |  | 331.6        |      |       |              | (1,572.4 | ) |          |   | 288.5 |      
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         
|                                        |                                                  | Total liabilities and stockholders equity |       | $         | 782.1        |  |               | $            | 1,704.9 |  |              | $    | 465.8 |              |          | $ | (1,572.4 | ) |       | $     | 1,380.4 | 
|                                        |                                                  |                                            |       |           |              |  |               |              |         |  |              |      |       |              |         

88



---



##### 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, 2005 |       
|                                                                         |  |                                              |       
|                                                                         |  |                                              |        | Combined  |              |   | Combined      |              |  |  
|                                                                         |  |                                              |        | Guarantor |              |   | Non-Guarantor |              |  |  
|                                                                         |  | JBI                                          |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |       
|                                                                         |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|                                                                         |  | (in millions)                                |       
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                |  | $                                            | (69.6  | )         |              | $ | 71.4          |              |  | $ | 19.2         |   |  | $            |       |   |  | $ | 21.0   |  
|INVESTING ACTIVITIES:                                                    |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |        |   |  |   |        |  
|Proceeds from sale of businesses                                         |  |                                              |       |           |              |   | 140.7         |              |  |   |             |   |  |              |       |   |  |   | 140.7  |  
|Proceeds from sale of notes                                              |  |                                              |       |           |              |   | 4.4           |              |  |   |             |   |  |              |       |   |  |   | 4.4    |  
|Purchases of property, plant and equipment                               |  |                                              | (0.3   | )         |              |   | (13.3         | )            |  |   | (9.1         | ) |  |              |       |   |  |   | (22.7  | )
|Proceeds from sale of property, plant and equipment                      |  |                                              |       |           |              |   | 0.2           |              |  |   |             |   |  |              |       |   |  |   | 0.2    |  
|Proceeds from sale of excess real estate                                 |  |                                              |       |           |              |   | 2.8           |              |  |   |             |   |  |              |       |   |  |   | 2.8    |  
|Net transfers with subsidiaries                                          |  |                                              | 231.0  |           |              |   | 17.6          |              |  |   |             |   |  |              | (248.6 | ) |  |   |       |  
|                                                                         |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                      |  |                                              | 230.7  |           |              |   | 152.4         |              |  |   | (9.1         | ) |  |              | (248.6 | ) |  |   | 125.4  |  
|FINANCING ACTIVITIES:                                                    |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |        |   |  |   |        |  
|Proceeds from long-term debt                                             |  |                                              | 59.1   |           |              |   |              |              |  |   |             |   |  |              |       |   |  |   | 59.1   |  
|Repayment of long-term debt                                              |  |                                              | (123.4 | )         |              |   | (1.4          | )            |  |   |             |   |  |              |       |   |  |   | (124.8 | )
|Deposits into restricted cash collateral accounts                        |  |                                              | (12.4  | )         |              |   |              |              |  |   |             |   |  |              |       |   |  |   | (12.4  | )
|Withdrawals from restricted cash collateral accounts                     |  |                                              |       |           |              |   |              |              |  |   |             |   |  |              |       |   |  |   |       |  
|Proceeds for the issuance of common stock for stock option
    exercises |  |                                              | 1.4    |           |              |   |              |              |  |   |             |   |  |              |       |   |  |   | 1.4    |  
|Payment of debt issuance, retirement and other financing costs           |  |                                              | (1.0   | )         |              |   |              |              |  |   |             |   |  |              |       |   |  |   | (1.0   | )
|Proceeds from notes payable, net                                         |  |                                              |       |           |              |   |              |              |  |   | 1.3          |   |  |              |       |   |  |   | 1.3    |  
|Payment for stock option exchange                                        |  |                                              | (0.2   | )         |              |   |              |              |  |   |             |   |  |              |       |   |  |   | (0.2   | )
|Net transfers with parent                                                |  |                                              |       |           |              |   | (231.0        | )            |  |   | (17.6        | ) |  |              | 248.6  |   |  |   |       |  
|                                                                         |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                      |  |                                              | (76.5  | )         |              |   | (232.4        | )            |  |   | (16.3        | ) |  |              | 248.6  |   |  |   | (76.6  | )
|Effect of exchange rate changes on cash and cash equivalents             |  |                                              | (1.4   | )         |              |   | 0.6           |              |  |   | 1.6          |   |  |              |       |   |  |   | 0.8    |  
|                                                                         |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                         |  |                                              | 83.2   |           |              |   | (8.0          | )            |  |   | (4.6         | ) |  |              |       |   |  |   | 70.6   |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                           |  |                                              | 0.9    |           |              |   | 1.0           |              |  |   | 37.7         |   |  |              |       |   |  |   | 39.6   |  
|                                                                         |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                 |  | $                                            | 84.1   |           |              | $ | (7.0          | )            |  | $ | 33.1         |   |  | $            |       |   |  | $ | 110.2  |  
|                                                                         |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       

89



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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, 2004 |      
|                                                                         |  |                                              |      
|                                                                         |  |                                              |       | Combined  |              |   | Combined      |              |  |  
|                                                                         |  |                                              |       | Guarantor |              |   | Non-Guarantor |              |  |  
|                                                                         |  | JBI                                          |       |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |      
|                                                                         |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |      
|                                                                         |  | (in millions)                                |      
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                |  | $                                            | 24.8  |           |              | $ | (14.6         | )            |  | $ | 34.6         |   |  | $            |      |   |  | $ | 44.8  |  
|INVESTING ACTIVITIES:                                                    |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |       |   |  |   |       |  
|Proceeds from sale of businesses                                         |  |                                              |      |           |              |   | 2.4           |              |  |   | 2.1          |   |  |              |      |   |  |   | 4.5   |  
|Proceeds from sale of notes                                              |  |                                              |      |           |              |   | 2.4           |              |  |   |             |   |  |              |      |   |  |   | 2.4   |  
|Purchases 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          |   |  |              |      |   |  |   | 0.3   |  
|Proceeds from sale of excess real estate                                 |  |                                              | 3.2   |           |              |   | 0.3           |              |  |   |             |   |  |              |      |   |  |   | 3.5   |  
|Net transfers with subsidiaries                                          |  |                                              | (1.8  | )         |              |   | 15.2          |              |  |   |             |   |  |              | (13.4 | ) |  |   |      |  
|                                                                         |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |      
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                      |  |                                              | 0.6   |           |              |   | 6.0           |              |  |   | (5.5         | ) |  |              | (13.4 | ) |  |   | (12.3 | )
|FINANCING ACTIVITIES:                                                    |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |       |   |  |   |       |  
|Proceeds from long-term debt                                             |  |                                              | 46.5  |           |              |   | (0.1          | )            |  |   |             |   |  |              |      |   |  |   | 46.4  |  
|Repayment 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  | )
|Proceeds from notes payable, net                                         |  |                                              |      |           |              |   |              |              |  |   | (4.4         | ) |  |              |      |   |  |   | (4.4  | )
|Payment for stock option exchange                                        |  |                                              | (0.4  | )         |              |   |              |              |  |   |             |   |  |              |      |   |  |   | (0.4  | )
|Proceeds for the issuance of common stock for stock option
    exercises |  |                                              | 0.9   |           |              |   |              |              |  |   |             |   |  |              |      |   |  |   | 0.9   |  
|Net transfers with parent                                                |  |                                              |      |           |              |   | 1.8           |              |  |   | (15.2        | ) |  |              | 13.4  |   |  |   |      |  
|                                                                         |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |      
|NET CASH PROVIDED BY (USED IN) 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          |   |  |              |      |   |  |   | 7.2   |  
|                                                                         |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |      
|(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                         |  |                                              | 0.7   |           |              |   | (1.9          | )            |  |   | 9.6          |   |  |              |      |   |  |   | 8.4   |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                           |  |                                              | 0.2   |           |              |   | 2.9           |              |  |   | 28.1         |   |  |              |      |   |  |   | 31.2  |  
|                                                                         |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |      
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                 |  | $                                            | 0.9   |           |              | $ | 1.0           |              |  | $ | 37.7         |   |  | $            |      |   |  | $ | 39.6  |  
|                                                                         |  |                                              |       |           |              |   |               |              |  |   |              |   |  |              |      

90



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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, 2003 |       
|                                                               |  |                                              |       
|                                                               |  |                                              |        | Combined  |              |   | Combined      |              |  |  
|                                                               |  |                                              |        | Guarantor |              |   | Non-Guarantor |              |  |  
|                                                               |  | JBI                                          |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |       
|                                                               |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|                                                               |  | (in millions)                                |       
|NET CASH PROVIDED BY OPERATING ACTIVITIES                      |  | $                                            | 6.6    |           |              | $ | 24.5          |              |  | $ | 42.5         |   |  | $            |       |   |  | $ | 73.6   |  
|INVESTING ACTIVITIES:                                          |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |        |   |  |   |        |  
|Proceeds from sale of businesses                               |  |                                              |       |           |              |   | 107.1         |              |  |   | 13.4         |   |  |              |       |   |  |   | 120.5  |  
|Purchases of property, plant and equipment                     |  |                                              | (0.1   | )         |              |   | (13.8         | )            |  |   | (4.0         | ) |  |              |       |   |  |   | (17.9  | )
|Proceeds from sale of property, plant and equipment            |  |                                              |       |           |              |   | 0.2           |              |  |   |             |   |  |              |       |   |  |   | 0.2    |  
|Proceeds from sale of excess real estate                       |  |                                              |       |           |              |   | 11.1          |              |  |   |             |   |  |              |       |   |  |   | 11.1   |  
|Net transfers with subsidiaries                                |  |                                              | (161.0 | )         |              |   | 49.0          |              |  |   |             |   |  |              | 112.0  |   |  |   |       |  
|                                                               |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES            |  |                                              | (161.1 | )         |              |   | 153.6         |              |  |   | 9.4          |   |  |              | 112.0  |   |  |   | 113.9  |  
|FINANCING ACTIVITIES:                                          |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |        |   |  |   |        |  
|Proceeds from long-term debt                                   |  |                                              | 127.0  |           |              |   |              |              |  |   |             |   |  |              |       |   |  |   | 127.0  |  
|Repayment of long-term debt                                    |  |                                              | (227.2 | )         |              |   | (222.1        | )            |  |   |             |   |  |              |       |   |  |   | (449.3 | )
|Deposits into restricted cash collateral accounts              |  |                                              | (66.5  | )         |              |   |              |              |  |   |             |   |  |              |       |   |  |   | (66.5  | )
|Withdrawals from restricted cash collateral accounts           |  |                                              | 224.3  |           |              |   |              |              |  |   |             |   |  |              |       |   |  |   | 224.3  |  
|Proceeds from issuance of Senior Notes                         |  |                                              | 380.0  |           |              |   |              |              |  |   |             |   |  |              |       |   |  |   | 380.0  |  
|Redemption of senior notes                                     |  |                                              | (250.0 | )         |              |   | (125.0        | )            |  |   |             |   |  |              |       |   |  |   | (375.0 | )
|Payment of debt issuance, retirement and other financing costs |  |                                              | (33.2  | )         |              |   | (12.4         | )            |  |   |             |   |  |              |       |   |  |   | (45.6  | )
|Proceeds from notes payable, net                               |  |                                              |       |           |              |   |              |              |  |   | 7.2          |   |  |              |       |   |  |   | 7.2    |  
|Net transfers with parent                                      |  |                                              |       |           |              |   | 161.0         |              |  |   | (49.0        | ) |  |              | (112.0 | ) |  |   |       |  
|                                                               |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES            |  |                                              | 154.4  |           |              |   | (198.5        | )            |  |   | (41.8        | ) |  |              | (112.0 | ) |  |   | (197.9 | )
|Effect of exchange rate changes on cash and cash equivalents   |  |                                              |       |           |              |   | 12.3          |              |  |   | (2.8         | ) |  |              |       |   |  |   | 9.5    |  
|                                                               |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS               |  |                                              | (0.1   | )         |              |   | (8.1          | )            |  |   | 7.3          |   |  |              |       |   |  |   | (0.9   | )
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                 |  |                                              | 0.3    |           |              |   | 11.0          |              |  |   | 20.8         |   |  |              |       |   |  |   | 32.1   |  
|                                                               |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       
|CASH AND CASH EQUIVALENTS AT END OF YEAR                       |  | $                                            | 0.2    |           |              | $ | 2.9           |              |  | $ | 28.1         |   |  | $            |       |   |  | $ | 31.2   |  
|                                                               |  |                                              |        |           |              |   |               |              |  |   |              |   |  |              |       

91



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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures



Item 8. Financial
Statements and Supplementary Data







|         |                  
|-------- | -----------------
|Item 9B. | Other Information






PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

Item 1















|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management



92



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|         |                                               
|-------- | ----------------------------------------------
|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




| |                                                                   
| | ------------------------------------------------------------------
| | 1. The financial statements listed in Item 8.                     
|
| | 2. The financial statement schedule consists of the
    following:



| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | II. Valuation and Qualifying Accounts  This
    information is included in Note 2 to our
    Consolidated Financial Statements.



| |                                                   
| | --------------------------------------------------
| | 3. The exhibits listed in the Index to Exhibits.

Exhibits




| |     |                              
| | --- | -----------------------------
| | (c) | Financial Statement Schedules



93



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INDEX TO EXHIBITS


|        |   |         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | - | ------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |        
|Number  |   | Exhibit
|        |   |        
|        | 2 | .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
    Beteiligungs 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)                                                                 
|       
|        | 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)*                                                                                                                                                                                        
|       
|        | 3 | .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(ii) to the Form 10-Q filed Feb 16,
    1999)*                                                                                                                                                                                                                                                                                                                                          
|       
|        | 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))*                                                                                                                                                                                                                                                                              

94



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|        |   |         |  |                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | - | ------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |        
|Number  |   | Exhibit
|        |   |        
|       
|        | 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)*                                                                                                                
|       
|        | 4 | .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)*                                                                                                                                                                             

95



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|        |    |         |  |                                                                                                                                                                                                                                                                                                                                                                                                 
|------- | -- | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        
|Number  |    | Exhibit
|        |    |        
|       
|        | 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)*                                                                                                                           
|       
|        | 10 | .17     |  | Employment Agreement, dated as of 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)*                                                                                                                                                                                                  

96



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|        |    |         |  |                                                                                                                                                                                                                                                                                                                                   
|------- | -- | ------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        
|Number  |    | Exhibit
|        |    |        
|       
|        | 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)*                                                                                                                                                    
|       
|        | 10 | .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)*                                                                                                                               

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##### Table of Contents



|        |    |         |  |                                                                                                                                                                                      
|------- | -- | ------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |        
|Number  |    | Exhibit
|        |    |        
|       
|        | 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)*                                                                                 
|       
|        | 14 | .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 Firm                                                                                                      
|       
|        | 24 | .1      |  | Power of Attorney (see Signature Page)                                                                                                                                               
|       
|        | 31 | .1      |  | Certification of principal executive officer required by
    Rule 13a14a of the Exchange Act                                                                                        
|       
|        | 31 | .2      |  | Certification of principal financial officer required by
    Rule 13a14a of the Exchange Act                                                                                        
|       
|        | 32 | .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 10.42 are management contracts or compensatory
    plans or arrangements.

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##### Table of Contents






SIGNATURES






| |                     
| | --------------------
| | JACUZZI BRANDS, INC.



| |     |                    
| | --- | -------------------
| | By: | /s/ David H. Clarke

| |                          
| | -------------------------
| |                          
| | David H. Clarke          
| | Chairman of the Board and
| | Chief Executive Officer  

POWER OF ATTORNEY






|                                                 |  |                                                                                                |  | 
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------------- |  | 
|Signature                                        |  | Title                                                                                         
|                                                 |  |                                                                                               
|                                                
|/s/ David H. ClarkeDavid
    H. Clarke           |  | Chairman of the Board and Chief Executive Officer
    (Principal Executive Officer)           
|                                                
|/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/ Brian C. BeazerBrian
    C. Beazer           |  | Director                                                                                      
|                                                
|/s/ Veronica M. HagenVeronica
    M. Hagen       |  | Director                                                                                      
|                                                
|/s/ John J. McAtee, Jr.John
    J. McAtee, Jr.   |  | Director                                                                                      

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|                                           |  |          |  | 
|------------------------------------------ |  | -------- |  | 
|Signature                                  |  | Title   
|                                           |  |         
|                                          
|/s/ Claudia E. MorfClaudia
    E. Morf     |  | Director
|                                          
|/s/ Royall Victor IIIRoyall
    Victor III |  | Director
|                                          
|/s/ Thomas B. WaldinThomas
    B. Waldin   |  | Director
|                                          
|/s/ Robert R. WomackRobert
    R. Womack   |  | Director

100