Energizer 2005 Annual Report Download - page 37

ENR 2005 Annual Report 35
11. Defined Contribution Plan
The Company sponsors a defined contribution plan, which extends
participation eligibility to substantially all U.S. employees. The
Company matches 50% of participants’ before-tax contributions
up to 6% of eligible compensation. In addition, participants can
make after-tax contributions into the plan. The participant’s first
1% of eligible compensation after-tax contribution is matched with
a325% Company contribution to the participant’s pension plan.
Amounts charged to expense during fiscal 2005, 2004 and 2003
were $5.2, $5.4 and $4.4, respectively, and are reflected in SG&A and
cost of products sold in the Consolidated Statement of Earnings.
As of March 29, 2003, U.S. employees of the newly acquired
SWS business were eligible to participate in the Company’s defined
contribution plan, but, as mandated by the terms of the Stock
and Asset Purchase Agreement with Pfizer, Inc. relating to the
acquisition of SWS (the Acquisition Agreement), until January 1,
2004, the Company was required to match 100% of the first 3%
of compensation contributed and 50% of the next 3% of com-
pensation contributed, consistent with the terms of the Pfizer-
sponsored defined contribution plan in which they had previously
participated. Contributions could be on either a before-tax or
after-tax basis. As of January1, 2004, U. S. participants received
matching contributions in accordance with the terms of the
Company’s defined contribution plan, but, as dictated by the
terms of the Acquisition Agreement, also received, until March 28,
2005, an additional contribution of 3.5% of compensation to the
participant’spension plan.
12. Debt
Notes payable at September 30, 2005 and 2004 consisted of notes
payable to financial institutions with original maturities of less than
one year of $101.2 and $162.3, respectively, and had a weighted-
average interest rate of 4.7% and 3.0%, respectively.
In September 2003, the Company prepaid $160.0 in long-term
debt with interest rates ranging from 7.8% to 8.0% and maturity
dates in 2005, 2007 and 2010. In September 2003, the Company
recorded a $20.0 pre-tax charge, or $12.4 after-tax, related to this
prepayment, which is recorded in other financing (income)/expense,
net in the Consolidated Statement of Earnings.
The detail of long-term debt at September 30 is as follows:
2005 2004
Private Placement, fixed interest rates ranging
from 2.3% to 5.2%, due 2006 to 2015 $1,000.0 $375.0
Private Placement, variable interest at LIBOR +
65 to 75 basis points –325.0
Singapore Bank Syndication, multi-currency
facility, variable interest at LIBOR + 55 basis
points, or 4.4%, due 2010 310.0 –
Singapore Bank Syndication, U.S. Dollar,
variable interest at SIBOR + 1% –105.0
Singapore Dollar Revolving Credit Facility,
variable interest rate –39.6
U.S. Revolving Credit Facility,variable interest
rate, 3.0% due 2006 –235.0
1,310.0 1,079.6
Less current portion 15.0 20.0
Total long-term debt $1,295.0 $ 1,059.6
The Company maintains total committed debt facilities of $1,625.0,
of which $315.0 remained available as of September 30, 2005.
Under the terms of the facilities, the ratio of the Company’s total
indebtedness to its EBITDA cannot be greater than 3.5 to 1 and
the ratio of its EBIT to total interest expense must exceed 3 to 1.
Additional restrictive covenants exist under current debt facilities.
Failure to comply with the above ratios or other covenants could
result in acceleration of maturity, which could trigger cross defaults
on other borrowings. The Company believes that covenant violations
resulting in acceleration of maturity is unlikely. The Company’s fixed
rate debt is callable by the Company, subject to a “make whole”
premium, which would be required to the extent the underlying
benchmark U.S. treasury yield has declined since issuance.
Aggregate maturities on all long-term debt at September 30, 2005
are as follows: $15.0 in 2006, $10.0 in 2007, $135.0 in 2008, $20.0
in 2009, $605.0 in 2010, and $525.0 thereafter.
In November 2004, the Company entered into two new financing
agreements. A $300.0 long-term debt financing was completed, with
three, five and seven year maturities with fixed rates ranging from