Energizer 2000 Annual Report Download - page 40

ENERGIZER 2000 ANNUAL REPORT
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(10) DEFINED CONTRIBUTION PLAN
Energizer sponsors employee savings plans, which cover substan-
tially all U.S. employees. Energizer matches 50% of participants’
before-tax contributions up to 6% of compensation. In addition,
participants can make after-tax contributions of 1% of compensation
into the savings plan. This participant after-tax contribution is
matched within the pension plan at 325%. Subsequent to the spin-
off from Ralston, Energizer charged $1.8 to expense in fiscal 2000.
Prior to the spin-off, substantially all regular Energizer employees
in the United States were eligible to participate in the Ralston-
sponsored defined contribution plans. In fiscal 1999, Ralston
amended the contribution structure of the plans. Prior to January 1,
1999, Ralston generally matched 100% of participants’ before-tax
contributions up to 6% of compensation for employees hired prior
to July 1, 1993. For employees hired on or after July 1, 1993,
Ralston matched before-tax participant contributions in increasing
20% increments for each year of service. On January 1, 1999 and
thereafter, Ralston matched 25% of participants’ before-tax contribu-
tions up to 4% of compensation. In addition, participants could
make after-tax contributions of 1% or 1.75% of compensation into
the savings plan. This participant after-tax contribution was matched
within the pension plan at 300%. Amounts charged to expense
are shown in the table below. Prior to the spin-off, Energizer
recorded costs as allocated by Ralston. The amount of such costs
was $1.2 for the six months ended March 31, 2000, $3.0 in 1999
and $8.2 in 1998.
(11) DEBT
Immediately prior to the spin-off, Ralston borrowed $478.0 through
several interim-funding facilities and assigned all repayment
obligations of those facilities to Energizer. In April and May 2000,
Energizer entered into separate financing agreements, including an
agreement to sell domestic trade receivables as discussed in Note
12 below, and repaid the interim-funding facilities.
Notes payable at September 30, 2000 and 1999, consisted of notes
payable to financial institutions with original maturities of less than
one year of $135.0 and $118.5, respectively, and had a weighted-
average interest rate of 7.9% and 7.3%, respectively.
The detail of long-term debt at September 30 is as follows.
2000 1999
Private Placement, interest rates
ranging from 7.8% to 8.0%,
due 2003 to 2010 $ 175.0 $ –
Revolving Credit Facility, interest
rates ranging from 7.4% to
7.8%, due 2005 195.0 –
Other, interest rates ranging
from 7.6% to 18.9% at 9-30-99
due 1999 to 2002 –2.2
370.0 2.2
Less current portion –(0.3)
Total long-term debt $ 370.0 $ 1.9
Energizer maintains total committed long-term debt facilities
of $625.0, of which $255.0 remained available as of
September 30, 2000.
Under the terms of the facilities, the ratio of Energizer’s total
indebtedness to its EBITDA cannot be greater than 3 to 1 and
the ratio of its EBIT to total interest expense must exceed 3 to 1.
Aggregate maturities on all long-term debt are as follows: Year
ending September 30, 2003 – $15.0; 2005 – $ 305.0; and
thereafter – $50.0.
(12) SALE OF ACCOUNTS RECEIVABLE
Energizer entered into an agreement to sell, on an ongoing basis,
a pool of domestic trade accounts receivable to a wholly owned
bankruptcy-remote subsidiary of Energizer. The subsidiary qualifies
as a Special Purpose Entity (SPE) under SFAS 125, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities.” The SPE’s sole purpose is the acquisition of receivables
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (Dollars in millions except per share data)