Energizer 2002 Annual Report Download - page 40

The detail of long-term debt at September 30 is as follows:
2002 2001
Private placement, interest rates ranging
from 7.8% to 8.0%, due 2003 to 2010 $ 175.0 $ 175.0
Revolving credit facility –50.0
175.0 225.0
Less current portion 15.0 –
Total long-term debt $ 160.0 $ 225.0
Energizer maintains total committed debt facilities of $625.0, of which
$450.0 remained available as of September 30, 2002.
Under the terms of the facilities, the ratio of Energizer’s total indebtedness
to its EBITDA cannot be greater than 3 to 1 and the ratio of its EBIT to
total interest expense must exceed 3 to 1.
Aggregate maturities on all long-term debt are as follows: $15.0 in 2003,
$110.0 in 2005, $25.0 in 2007 and $25.0 in 2010.
15. Sale of Accounts Receivable
Energizer entered into an agreement to sell, on an ongoing basis, a pool
of domestic trade accounts receivable to a wholly owned bankruptcy-
remote subsidiary of Energizer. The subsidiary qualifies as a Special
Purpose Entity (SPE) for accounting purposes and is therefore not consol-
idated for financial 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 classified 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 reflected as operating cash flows in
Energizer’s Consolidated Statement of Cash Flows.
AS OF SEPTEMBER 30, 2002 2001
Total outstanding accounts receivable sold to SPE $ 164.6 $ 184.1
Cash received by SPE from sale of
receivables to a third party –86.2
Subordinated retained interest 164.6 97.9
Energizer’s investment in SPE 164.6 97.9
Absent the sale treatment required for the SPE, Energizer’s balance sheet
would reflect additional accounts receivable, notes payable and lower
other current assets as follows:
AS OF SEPTEMBER 30, 2002 2001
Additional accounts receivable $ 164.6 $ 184.1
Additional notes payable –86.2
Lower other current assets 164.6 97.9
16. 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,
2002, there were no shares of preferred stock outstanding.
17. 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
anti-dilution 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 offer for all outstanding shares of ENR stock and a majority of the
Board of Directors determines that the price and terms of the offer are ade-
quate and in the best interests of shareholders (a Permitted Offer). At the
time that 20% or more of the outstanding ENR stock is actually acquired
(other than in connection with a Permitted Offer), 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 Offer). 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 connec-
tion with a Permitted Offer), 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 Offer) and may amend the terms to lower the threshold for
ENR 2002 Annual Report Page 38
Energizer Holdings, Inc.
Notes to Consolidated Financial Statements Continued
(Dollars in millions, except per share data)