Energizer 2006 Annual Report Download - page 20

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ENERGIZER HOLDINGS, INC.
Management’s Discussion and Analysis of Results of Operations and Financial Condition
(Dollars in millions, except per share and percentage data)
18 ENR 2006 ANNUAL REPORT
limit the Company’s ability to meet future operating expenses and
liquidity requirements, fund capital expenditures or service its debt as it
becomes due. Unknown environmental liabilities and greater than antic-
ipated remediation expenses or environmental control expenditures
could have a material impact on the Company’s financial position.
Estimates of environmental liabilities are based upon, among other things,
the Company’s payments and/or accruals with respect to each reme-
diation site; the number, ranking and financial strength of other responsible
parties (PRPs); the status of the proceedings, including various settlement
agreements, consent decrees or court orders; allocations of volumetric
waste contributions and allocations of relative responsibility among PRPs
developed by regulatory agencies and by private parties; remediation
cost estimates prepared by governmental authorities or private technical
consultants; and the Company’s historical experience in negotiating and
settling disputes with respect to similar sites – and such estimates
may prove to be inaccurate. The Company’s overall tax rate in future
years may be higher than anticipated because of unforeseen changes in
the tax laws or applicable rates, higher taxes on repatriated earnings or
increased foreign losses. Economic turmoil and currency fluctuations
could increase the Company’s risk from unfavorable impact on variable-
rate debt, currency derivatives and other financial instruments. Deferred
compensation liabilities reflecting the value of the Common Stock may
increase significantly, depending on market fluctuation and employee
elections, but such increase may not be reflected in a comparable increase
in the value of the prepaid share option. Adjustments to accruals for
promotional programs and calculations of impairment of long-lived
assets may be more significant than anticipated. The impact of decreases
in the expected returns from pension assets may have a greater than antic-
ipated impact on pension expenses. Additional risks and uncertainties
include those detailed from time to time in the Company’s publicly filed
documents, including its Registration Statement on Form 10, as amended,
and its Current Report on Form 8-K dated April 25, 2000.