Energizer 2001 Annual Report Download - page 47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
(Dollars in millions except per share data)
Purpose Entity (SPE) for accounting purposes and is therefore not consolidated for Ñnancial reporting
purposes. The SPE's sole purpose is the acquisition of receivables from Energizer and the sale of its interests
in the receivables to a multi-seller receivables securitization company. Energizer's investment in the SPE is
classiÑed as Other Current Assets on the Consolidated Balance Sheet as disclosed below.
The activity related to the SPE at September 30, is presented in the table below. The net proceeds of the
transaction were used to reduce various debt instruments. The proceeds are reÖected as operating cash Öows in
Energizer's Consolidated Statement of Cash Flows.
As of September 30,
2001 2000
Total outstanding accounts receivable sold to SPE ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $184.1 $257.1
Cash received by SPE from sale of receivables to a third party ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 86.2 100.0
Subordinated retained interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 97.9 157.1
Energizer's investment in SPE ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 97.9 157.1
(14) Preferred Stock
Energizer's Articles of Incorporation authorize Energizer to issue up to 10 million shares of $.01 par value
of preferred stock. As of September 30, 2001, there were no shares of preferred stock outstanding.
(15) Shareholders Equity
On March 16, 2000, the Board of Directors declared a dividend of one share purchase right (Right) for
each outstanding share of ENR common stock. Each Right entitles a shareholder of ENR stock to purchase
an additional share of ENR stock at an exercise price of $150, which price is subject to antidilution
adjustments. Rights, however, may only be exercised if a person or group has acquired, or commenced a public
tender for 20% or more of the outstanding ENR stock, unless the acquisition is pursuant to a tender or
exchange oÅer for all outstanding shares of ENR stock and a majority of the Board of Directors determines
that the price and terms of the oÅer are adequate and in the best interests of shareholders (a Permitted OÅer).
At the time that 20% or more of the outstanding ENR stock is actually acquired (other than in connection
with a Permitted OÅer), the exercise price of each Right will be adjusted so that the holder (other than the
person or member of the group that made the acquisition) may then purchase a share of ENR stock at one-
third of its then-current market price. If Energizer merges with any other person or group after the Rights
become exercisable, a holder of a Right may purchase, at the exercise price, common stock of the surviving
entity having a value equal to twice the exercise price. If Energizer transfers 50% or more of its assets or
earnings power to any other person or group after the Rights become exercisable, a holder of a Right may
purchase, at the exercise price, common stock of the acquiring entity having a value equal to twice the exercise
price.
Energizer can redeem the Rights at a price of $.01 per Right at any time prior to the time a person or
group actually acquires 20% or more of the outstanding ENR stock (other than in connection with a
Permitted OÅer). In addition, following the acquisition by a person or group of at least 20%, but not more than
50% of the outstanding ENR stock (other than in connection with a Permitted OÅer), Energizer may
exchange each Right for one share of ENR stock. Energizer's Board of Directors may amend the terms of the
Rights at any time prior to the time a person or group acquires 20% or more of the outstanding ENR stock
(other than in connection with a Permitted OÅer) and may amend the terms to lower the threshold for
exercise of the Rights. If the threshold is reduced it cannot be lowered to a percentage which is less than 10%,
or, if any shareholder holds 10% or more of the outstanding ENR stock at that time, the reduced threshold
must be greater than the percentage held by that shareholder. The Rights will expire on April 1, 2010.
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