Energizer 2006 Annual Report Download - page 40

ENERGIZER HOLDINGS, INC.
Notes to Consolidated Financial Statements
(Dollars in millions, except per share and percentage data)
38 ENR 2006 ANNUAL REPORT
14. Environmental and Legal Matters
Government Regulation and Environmental Matters The operations
of the Company, like those of other companies engaged in the battery
and shaving products businesses, are subject to various federal, state,
foreign and local laws and regulations intended to protect the public
health and the environment. These regulations primarily relate to worker
safety, air and water quality, underground fuel storage tanks and waste
handling and disposal. The Company has received notices from the U.S.
Environmental Protection Agency, state agencies and/or private parties
seeking contribution, that it has been identified as a “potentially respon-
sible party” (PRP) under the Comprehensive Environmental Response,
Compensation and Liability Act, and may be required to share in the
cost of cleanup with respect to seven federal “Superfund” sites. It may
also be required to share in the cost of cleanup with respect to two
state-designated sites or other sites outside of the U.S.
Accrued environmental costs at September 30, 2006 were $8.3, of
which $1.9 is expected to be spent in fiscal 2007. This accrual is not
measured on a discounted basis. It is difficult to quantify with certainty
the cost of environmental matters, particularly remediation and
future capital expenditures for environmental control equipment.
Nevertheless, based on information currently available, the Company
believes the possibility of material environmental costs in excess of the
accrued amount is remote.
Legal Proceedings The Company and its subsidiaries are parties to a
number of legal proceedings in various jurisdictions arising out of
the operations of its businesses. Many of these legal matters are in pre-
liminary stages and involve complex issues of law and fact, and may
proceed for protracted periods of time. The amount of liability, if any,
from these proceedings cannot be determined with certainty. However,
based upon present information, the Company believes that its ultimate
liability, if any, arising from pending legal proceedings, asserted legal
claims and known potential legal claims which are likely to be asserted,
should not be material to the Company’s financial position, taking into
account established accruals for estimated liabilities.
15. Other Commitments and Contingencies
An international affiliate of the Company has $10.1 of funds deposited
in a bank account that is acting as collateral for a certain bank loan. The
Company has reflected this bank deposit as restricted cash, which is
included in other current assets on the Consolidated Balance Sheet.
The loan was initiated in June 2004 for a three month period. At each
maturity, the Company renewed the agreement. As the loan amount
changes, the funds on deposit will be required to increase or decrease
with the loan amount. Beginning in 2006, the impact of this transaction
is reflected in the investing section of the Consolidated Statement
of Cash Flows.
Total rental expense for all operating leases was $27.1, $26.2 and
$22.9 in 2006, 2005 and 2004, respectively. Future minimum rental
commitments under noncancellable operating leases in effect as of
September 30, 2006, were $15.8 in 2007, $11.9 in 2008, $9.0 in 2009,
$7.4 in 2010, $4.7 in 2011 and $7.3 thereafter. These leases are primarily
for office facilities.