Energizer 2005 Annual Report Download - page 38

36 ENR 2005 Annual Report
ENERGIZER HOLDINGS, INC.
Notes to Consolidated Financial Statements
(Dollars in millions, except per share and percentage data)
3.4% to 4.4%. Proceeds from these notes were used to pay down
all existing long-term debt in the revolving credit facility and to par-
tially retire short-term debt within the secured financing arrange-
ments. In addition, the Company renegotiated its existing U.S.
revolving credit facility in order to extend the maturity to five years
and to realize more favorable borrowing spreads. In August 2005,
the Company entered into a new Singapore multi-currency syndica-
tion of $325.0 in order to extend the maturity to 2010 and to realize
more favorable borrowing spreads. Proceeds from this borrowing
were used to refinance the existing revolving credit facility in
Singapore, allow for the repayment of intercompany debt and notes,
and the repatriation of funds in connection with the American Jobs
Creation Act. During September 2005, the Company refinanced
$325.0 of variable interest private placement debt with $325.0 of
fixed rate private placement debt with interest rates ranging from
4.9% to 5.2% and maturities from 2008 to 2015.
13. Preferred Stock
The Company’s Articles of Incorporation authorize the Company
to issue up to 10 million shares of $.01 par value of preferred stock.
During the three years ended September 30, 2005, there were no
shares of preferred stock outstanding.
14. Shareholders Equity
On March 16, 2000, the Boardof 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
$150.00, 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 adequate and in the best interests of shareholders (a Permitted
Offer). At the time that 20% or moreof 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 the Company 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 the Company
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.
The Company 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 moreof the outstanding ENR stock (other than in connection with
aPermitted 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 connection with a Permitted Offer), the
Company may exchange each Right for one share of ENR stock.
The Company’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
aPermitted Offer) 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 that 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.
At September 30, 2005, there were 300 million shares of ENR stock
authorized, of which approximately 5.5 million shares were reserved
for issuance under the 2000 Incentive Stock Plan.
Beginning in September 2000, Energizer’s Board of Directors has
approved a series of resolutions authorizing the repurchase of
shares of Energizer’s common stock, with no commitments by the
Company to repurchase such shares. Most recently, on November 1,
2005, the Boardof Directors approved the repurchase of up to an
additional 10 million shares. During fiscal year 2005, approximately
8.1 million shares werepurchased for $457.4. Subsequent to
September 30, 2005 and through November 18, 2005, approximately
1.4 million shares were purchased for $67.0 under the most recent
authorization. As of November 18, 2005, there are 8.7 million shares
remaining under the current authorizations.
15. Financial Instruments and Risk Management
Foreign Currency Contracts At times, the Company enters into
foreign exchange forward contracts and, to a lesser extent, purchases
options and enters into zero-cost option collars to mitigate potential
losses in earnings or cash flows on foreign currency transactions.
The Company has not designated any financial instruments as
hedges for accounting purposes. Foreign currency exposures are
primarily related to anticipated intercompany purchase transactions
and intercompany borrowings. Other foreign currency transactions
to which the Company is exposed include external purchase trans-
actions and intercompany receivables, dividends and service fees.
The table below summarizes by instrument the contractual amounts
of the Company’s forward exchange contracts and purchased currency
options in U.S. dollar equivalents at year-end. These contractual
amounts represent transaction volume outstanding and do not
represent the amount of the Company’s exposure to credit or market
loss. Foreign currency contracts aregenerally for one year or less.
2005 2004
INSTRUMENT
Forwards $30.8 $43.2
Prepaid ShareOption Transaction Aportion of the Company’s
deferred compensation liabilities is based on Company stock price