Energizer 2001 Annual Report Download - page 18

The program commenced in the fourth quarter of 2001 and is expected to be completed during the
second quarter of Ñscal year 2002. When the program is fully implemented, the annual pre-tax savings is
estimated to be $16.5, in Ñscal year 2002, the pre-tax savings is estimated to be $14.3.
The restructuring charges consist of non-cash Ñxed asset impairment charges of $11.1 for the closed
carbon zinc plant and production equipment, enhanced pension beneÑts for certain terminated U.S. employees
of $8.3, cash severance payments of $6.3, and other cash charges of $4.1.
During 1999, Energizer recorded net provisions for restructuring of $8.3 after-tax, or $9.9 pre-tax, $2.1 of
which represented inventory write-downs and is classiÑed as cost of products sold in the Consolidated
Statement of Earnings. Of the net pre-tax charge, $7.4 relates to the 1999 restructuring plans for the
elimination of certain production capacity in North America and in Asia.
The pre-tax charge of $7.4 for 1999 plans consisted of termination beneÑts of $3.2, other cash costs of $.2
and Ñxed asset impairments of $4.0. The Ñxed asset impairments primarily related to assets used for the
production of lithium coin cells in North America. These assets were idled and scrapped in 1999.
The 1999 restructuring plan provided for the termination of approximately 170 production and
administrative employees, and the closure of one plant in Asia. This plant closure was precipitated by the
Ñnancial problems in the Asian market, which resulted in contractions in battery markets in this area. All
actions associated with these charges were completed as of September 30, 2000.
The remaining $2.5 represented additional net provisions related to prior years' restructuring plans.
Additional termination beneÑts of $5.5 primarily represent enhanced severance related to a European plant
closing in the 1997 restructuring plan. Additional provisions for other cash costs of $1.8 were recorded for Ñxed
asset disposition costs for previously held-for-use assets related to the 1997 restructuring plan that were idled
and held for disposal. Other non-cash charges of $2.1 relate to inventory write-oÅs, which were more than
oÅset by a reclassiÑcation of $4.5 from other comprehensive income to net income of cumulative translation
adjustment for a subsidiary sold in connection with the 1997 plan. Also recorded in 1999 were asset proceeds
greater than anticipated of $5.4, related to 1994, 1995 and 1997 restructuring plans.
Annual pre-tax cost savings from the 1999 restructuring plans are as follows: $.3 in 2000 and $1.4
thereafter. Annual pre-tax cost savings from prior restructuring plans have been or are expected to be as
follows: $31.0 in 1999 and $36.0 thereafter.
As of September 30, 2001, except for the disposition of certain assets held for disposal, all activities
associated with the 1994 through 1999 restructuring plans are complete. The carrying value of assets held for
disposal under all restructuring plans was $2.6 at September 30, 2001.
Energizer expects to fund the remaining costs of these restructuring actions with funds generated from
operations.
See Note 5 to the Consolidated Financial Statements for a table that presents, by major cost component
and by year of provision, activity related to the restructuring charges discussed above during Ñscal years 2001,
2000 and 1999 including any adjustments to the original charges.
Intellectual Property Rights Income
In Ñscal 2001, Energizer recorded income of $20.0 pre-tax, or $12.3 after-tax, related to the licensing of
intellectual property rights.
Costs Related to Spin-oÅ
In Ñscal 2000, Energizer recorded one-time spin-related costs of $5.5 pre-tax, or $3.3 after-tax. These
costs include legal fees, charges related to the vesting of certain compensation beneÑts, and other costs
triggered by, or associated with, the spin-oÅ.
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