Energizer 2002 Annual Report Download - page 30

available technologies and techniques. During fiscal 2001, Energizer
adopted restructuring plans to eliminate carbon zinc capacity, and
to reduce and realign certain selling, production, research and admin-
istrative functions. The total cost associated with this plan was $33.4
before taxes, of which $29.8, or $19.4 after-tax, was recorded in the
fourth quarter of fiscal 2001. In the first quarter of fiscal 2002,
Energizer ceased production and terminated substantially all of its
employees at its Mexican carbon zinc production facility. Energizer
also continued execution of other previously announced restructuring
actions. Energizer recorded provisions for restructuring of $1.4, or
$0.9 after-tax, as well as related costs for accelerated depreciation and
inventory obsolescence of $2.6, or $2.0 after-tax, which was recorded
in cost of products sold in the first quarter of fiscal 2002. In addition,
Energizer recorded net reversals of previously recorded excess
restructuring charges of $.4, or $.2 after-tax, during the fourth
quarter of fiscal 2002.
The 2001 restructuring plans improved Energizer’s operating efficiency,
downsized and centralized corporate functions, and decreased costs.
One carbon zinc production facility in Mexico was closed. A total of 539
employees were terminated, consisting of 340 production and 199 sales,
research and administrative employees, primarily in the United States and
South and Central America.
The restructuring charges for the 2001 plan consist of non-cash fixed
asset impairment charges of $10.6 for the closed carbon zinc plant and
production equipment, enhanced pension benefits for certain terminated
U.S. employees of $8.3, cash severance payments of $7.6, other cash
charges of $4.2, and $2.6 of other related costs for accelerated depreci-
ation and inventory obsolescence recorded in cost of products sold.
Prior to fiscal 2000, Energizer adopted restructuring plans. All activities
associated with such plans, except disposition of certain assets held for
disposal, had been completed as of September 30, 2000.
The carrying value of assets held for disposal under restructuring plans
was $1.3 at September 30, 2002.
The following table presents, by major cost component and by year of
provision, activity related to the restructuring charges discussed above
during fiscal years 2002, 2001 and 2000, including any adjustments to
the original charges:
Energizer Holdings, Inc.
Notes to Consolidated Financial Statements Continued
(Dollars in millions, except per share data)
ENR 2002 Annual Report Page 28
2000 ROLLFORWARD 2001 ROLLFORWARD 2002 ROLLFORWARD
Beginning Provision/ Ending Beginning Provision/ Ending Beginning Provision/ Ending
Balance (Reversals) Activity Balance Balance (Reversals) Activity Balance Balance (Reversals) Activity Balance
Prior Plans
Termination benefits $ 6.4 $ – $ (6.4) $ – $ – $ – $ – $ – $– $– $ – $ –
Other cash costs 4.9 – (1.0) 3.9 3.9 – (3.9) – – – – –
Total 11.3 – (7.4) 3.9 3.9 – (3.9) – – – – –
2001 Plan
Termination benefits – – – – – 14.6 (9.3) 5.3 5.3 1.3 (5.7) 0.9
Other cash costs – – – – – 4.1 (0.2) 3.9 3.9 0.1 (3.8) 0.2
Fixed asset impairments – – – – – 11.1 (11.1) – – (0.4) 0.4 –
Total – – – – – 29.8 (20.6) 9.2 9.2 1.0 (9.1) 1.1
2002 Plan
Termination benefits – – – – – – – – – 5.7 (0.3) 5.4
Other cash costs – – – – – – – – – 1.0 (0.2) 0.8
Total – – – – – – – – – 6.7 (0.5) 6.2
Grand Total $ 11.3 $ – $ (7.4) $ 3.9 $ 3.9 $ 29.8 $ (24.5) $ 9.2 $ 9.2 $ 7.7 $ (9.6) $ 7.3