Energizer 2001 Annual Report Download - page 42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
(Dollars in millions except per share data)
employees and directors upon their purchase of an equal number of shares of Energizer (ENR) stock within a
speciÑed period. The restricted stock equivalents will vest three years from their respective dates of grant and
will convert into unrestricted shares of ENR stock at that time or, at the recipient's election, will convert at the
time of the recipient's retirement or other termination of employment. During Ñscal 2001 and 2000,
respectively, 120,885 and 488,415 restricted stock equivalents had been granted. The weighted-average fair
value for restricted stock equivalents granted in 2001 and 2000 was $19.94 and $18.30, respectively.
Under the terms of the Plan, option shares and prices, and restricted stock and stock equivalent awards,
are adjusted in conjunction with stock splits and other recapitalizations so that the holder is in the same
economic position before and after these equity transactions.
Energizer also permits deferrals of bonus and salary, and, for directors, retainers and fees, under the terms
of its Deferred Compensation Plan. Under this plan, employees or directors deferring amounts into the
Energizer Common Stock Unit Fund are credited with a number of stock equivalents based on the fair value
of ENR stock at the time of deferral. In addition, during 2000, they were credited with an additional number
of stock equivalents equal to 25% for employees, and 33
1
/ 3 % for directors, of the amount deferred. This
additional company match vests immediately for directors and three years from the date of initial crediting for
employees. Amounts deferred into the Energizer Common Stock Unit Fund, and vested company matching
deferrals, may be transferred to other investment options oÅered under the plan. At the time of termination of
employment, or for directors, at the time of termination of service on the Board, or at such other time for
distribution which may be elected in advance by the participant, the number of equivalents then credited to
the participant's account is determined and then an amount in cash equal to the fair value of an equivalent
number of shares of ENR stock is paid to the participant.
Energizer applies APB 25 and related interpretations in accounting for its stock-based compensation.
Accordingly, charges to earnings for stock-based compensation were $4.1 and $4.8 in 2001 and 2000,
respectively. Had cost for stock-based compensation been determined based on the fair value method set forth
under SFAS 123, Energizer's net earnings and earnings per share would have been reduced to the pro forma
amounts indicated in the table below. Pro forma amounts are for disclosure purposes only and may not be
representative of future calculations.
2001 2000
Net earnings/(loss):
As reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(39.0) $181.4
Pro forma ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(45.7) $176.1
Basic earnings/(loss) per share:
As reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(0.42) $ 1.89
Pro forma ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(0.49) $ 1.83
Diluted earnings/(loss) per share:
As reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(0.42) $ 1.88
Pro forma ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(0.49) $ 1.83
The weighted-average fair value from options granted in Ñscal 2001 and 2000 was $7.51 and $7.13 per
option, respectively. This was estimated at the grant date using the Black-Scholes option-pricing model with
the following weighted-average assumptions:
2001 2000
Risk-free interest rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4.90% 5.85%
Expected life of option ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7.5 years 7.5 years
Expected volatility of ENR stockÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19.28% 20.30%
Expected dividend yield on ENR stockÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì% Ì%
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