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ENERGIZER 2000 ANNUAL REPORT
48
YEAR ENDED SEPTEMBER 30, 1999
Adjustments
Related to
Historic Distribution Pro Forma
Net Sales $ 1,872.3 $ 1,872.3
Costs and Expenses
Cost of products sold 997.9 997.9
Selling, general and administrative 398.0 8.0 (a) 400.9
(3.3) (b)
(1.8) (c)
(d)
Advertising and promotion 164.3 164.3
Research and development 48.5 48.5
Provisions for restructuring 7.8 7.8
Interest 7.6 36.9 (e) 44.5
1,624.1 39.8 1,663.9
Earnings from Continuing Operations before Income Taxes 248.2 (39.8) 208.4
Income Taxes (88.4) (11.2) (f) (91.5)
8.1 (g)
Earnings from Continuing Operations $ 159.8 $ (42.9) $ 116.9
Earnings Per Share from Continuing Operations (h) $ 1.56 $ 1.14
Weighted-average Shares of Common Stock (h) 102.6 102.6
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in millions except per share data – unaudited)
(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 reflect pension income on plan assets to be transferred to Energizer plans upon
the distribution.
(c) To eliminate expense of certain postretirement benefits to be retained by Ralston.
(d) In addition to costs described above, compensation for certain executive officers will
be higher than the costs included in the historical financial statements. The amount of
the increase cannot be determined at this time.
(e) To reflect the increase in interest expense associated with debt levels to be assumed at
Distribution Date. The adjustment reflects an interest rate of 7.0% for $150.0 of incremental
notes payable and 7.7% for $343.9 of incremental long-term debt. The incremental notes
payable will have a variable interest rate. A 1/8% variation in the interest rate would change
interest expense by $.4.
(f) To reflect taxes as if Energizer was a single, stand-alone U.S. taxpayer.
(g) To reflect tax effect of the above pro forma adjustments.
(h) 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 year ended
September 30, 1999, adjusted for the anticipated distribution of one share of Energizer
stock for each three shares of Ralston stock.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (Dollars in millions except per share data)