Energizer 2000 Annual Report Download - page 49

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47
(23) PRO FORMA FINANCIAL RESULTS
The pro forma consolidated statements of earnings for the years
ended September 30, 1999 and 2000 present the consolidated
results of Energizer’s operations assuming the spin-off had occurred
as of October 1, 1998. Such statement of earnings has been pre-
pared by adjusting the historical statement of earnings to indicate
the effect of estimated costs and expenses and the recapitalization
associated with the spin-off.
The pro forma statement of earnings may not necessarily reflect the
consolidated results of operations that would have existed had the
spin-off been effected on the dates specified nor are they necessarily
indicative of future results.
YEAR ENDED SEPTEMBER 30, 2000
Adjustments
Related to
Historic Distribution Pro Forma
Net Sales $1,914.3 $ 1,914.3
Costs and Expenses
Cost of products sold 974.7 974.7
Selling, general and administrative 374.4 4.0 (a) 378.4
0.8 (b)
(0.8) (c)
Advertising and promotion 187.4 187.4
Research and development 49.9 49.9
Costs related to spin-off 5.5 5.5
Loss on disposition of Spanish affiliate 15.7 15.7
Interest 27.5 17.1 (d) 44.6
1,635.1 21.1 1,656.2
Earnings from Continuing Operations before Income Taxes 279.2 (21.1) 258.1
Income Taxes (99.0) (23.4) (e) (114.0)
8.4 (f)
Earnings from Continuing Operations $ 180.2 $ (36.1) $ 144.1
Earnings Per Share from Continuing Operations (g)
Basic $1.88 $1.50
Diluted $1.87 $1.49
Weighted-average Shares of Common Stock (g)
Basic 96.1 96.1
Diluted 96.3 96.3
(a) To reflect the incremental costs associated with becoming a stand-alone company
including Board of Director costs, stock exchange registration fees, shareholder
record keeping services, external financial reporting, treasury services, tax planning
and compliance, certain legal expenses and compensation planning and administration.
(b) To adjust pension income on plan assets transferred to Energizer plans upon the spin-off.
(c) To eliminate expense of certain postretirement benefits to be retained by Ralston.
(d) To reflect the increase in interest expense associated with debt levels assigned to
Energizer upon the spin-off. The adjustment reflects an average interest rate of 6.7%
for $67.0 of incremental notes payable and 7.2% for $411.0 of incremental long-term
debt. Approximately $303.0 of the incremental debt has a variable interest rate. A 1/8%
variation in the interest rate would change interest expense by $.4.
(e) To reflect taxes as if Energizer was a single, stand-alone U.S. taxpayer.
(f) To reflect tax effect of the above pro forma adjustments.
(g) The number of shares used to compute earnings per share is based on the weighted-
average number of shares of Ralston stock outstanding during the six months ended
March 31, 2000 (adjusted for the distribution of one share of Energizer stock for each
three shares of Ralston stock) and the weighted-average number of shares of Energizer
stock outstanding from April 1, 2000 to September 30, 2000.
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in millions except per share data – unaudited)