Energizer 2007 Annual Report Download - page 20

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Energizer Holdings, Inc. 2007 Annual Report
Forward-Looking Information
Statements in the Management’s Discussion and Analysis of Results of
Operations and Financial Condition and other sections of this
Annual Report to Shareholders that are not historical, particularly
statements regarding the Company’s positioning to meet consumer
demand and the benefits of its portfolio of products; the Company’s
estimates of its share of total U.S. retail battery market and share of
the wet shave category in major markets; the impact of changes in
the value of local currencies on segment profitability; estimates of the
Company’s normalized tax rate for fiscal 2008; the negative impact
on results in future quarters from Playtex inventory write-ups
required under purchase accounting rules; the Company’s annual-
ized cost savings from European restructuring projects; estimated
capital expenditures for fiscal year 2008 and their source of financ-
ing; the likelihood of acceleration of the Company’s debt covenants,
the anticipated adequacy of cash flows and the Company’s ability to
meet liquidity requirements; the impact of adverse changes in inter-
est rates, currency exchange losses in Venezuela and the market risk
of foreign currency derivatives; the mitigating impact of changes in
value of the prepaid share option on deferred compensation liabili-
ties; the materiality of future expenditures for environmental matters
and environmental control equipment; anticipated material cost
increases in the first quarter of fiscal 2008, and the impact of the
Company’s implemented price increases and product cost savings in
offsetting those higher costs; potential adjustments to accruals for
promotional program costs; the impact of variations from assump-
tions on pension asset returns on the Company’s pre-tax pension
expense; and the valuation of long-lived assets, may be considered
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The Company cautions
readers not to place undue reliance on any forward-looking state-
ments, which speak only as of the date made.
The Company advises readers that various risks and uncertainties
could affect its financial performance and could cause the
Company’s actual results for future periods to differ materially from
those anticipated or projected. Shifts in consumer demands or needs,
competitive activity or product improvements, or further retailer con-
solidations may dilute or defeat the benefits of the Company’s con-
sumer positioning and strategy. The Company’s estimates of its U.S.
alkaline market share and estimates of share of the wet shave cate-
gory are based solely on limited data available to the Company and
management’s reasonable assumptions about market conditions, and
consequently may be inaccurate, or may not reflect segments of the
retail market. Global economic conditions and fluctuations in cur-
rency exchange rates could significantly impact current exchange
rates, resulting in a more significant impact on segment profitability
than is currently anticipated. The Company’s effective tax rate for fis-
cal 2008 could be impacted by legislative or regulatory changes by
federal, state and local, and foreign, taxing authorities, as well as by
the profitability or losses of the Company’s various subsidiary
operations in both high-tax and low-tax countries. The impact of
Playtex inventory write-ups could be impacted by changes in those
requirements, inventory levels, and inventory valuations. With respect
to the European restructurings, estimates of annual savings may be
impacted by a number of factors, including limits on available effi-
ciencies, unforeseen integration complexities, and greater than antic-
ipated ongoing operations expenses associated with the combined
operations. Liquidity issues or alternative cash flow uses, competitive
activity or general economic changes could impact the amount and
timing of capital expenditures. Unforeseen fluctuations in levels of
the Company’s operating cash flows, or inability to maintain compli-
ance with its debt covenants, could limit the Company’s ability to
meet future operating expenses and liquidity requirements, fund
capital expenditures or service its debt as it becomes due. 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. Unknown environmental liabilities and
greater than anticipated remediation expenses or environmental con-
trol 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 remediation site; the number, ranking and finan-
cial 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 consult-
ants; 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 impact of material cost increases could
be more significant than anticipated, as it is difficult to predict with
any accuracy whether raw material, energy and other input costs
will stabilize or continue to increase, since such costs are impacted
by multiple economic, political and other factors outside of the
Company’s control. Higher than anticipated material cost increases,
competitive promotional activity or pricing or promotional demands
from retailer customers, could limit the effectiveness of implemented
price increases and product cost savings in future periods.
Adjustments to accruals for promotional programs and calculations
of impairment of long-lived assets may be more significant than antic-
ipated. The impact of decreases in the expected returns from pen-
sion assets may have a greater than anticipated impact on pension
expenses. Additional risks and uncertainties include those detailed
from time to time in the Company’s publicly filed documents.
Management’s Discussion and Analysis of Results of Operations and Financial Condition
(Dollars in millions, except per share and percentage data)