Energizer 2009 Annual Report Download - page 2

FINANCIAL HIGHLIGHTS
Energizer Holdings, Inc. is a consumer goods company operating globally in the broad categories of household and personal
care products. The Household Products Division offers consumers a broad range of portable power solutions and lighting products,
anchored by the universally recognized Energizer and Eveready brands. The Personal Care Division offers a diversified range of
consumer products in the wet shave, skin care, feminine care and infant care categories with well-established brand names such as
Schick and Wilkinson Sword men’s and women’s shaving systems and disposable razors; Edge and Skintimate shave preparations;
Playtex tampons, infant feeding, Diaper Genie and gloves; Banana Boat and Hawaiian Tropic sun care products; and Wet Ones
moist wipes. With commercial and production operations in 50 countries and distribution in more than another 130 countries,
the company markets its products throughout most of the world. Energizer is traded on the NYSE under the ticker symbol ENR.
In addition to its earnings presented in accordance with generally accepted accounting principles (GAAP), Energizer has presented certain non-GAAP measures in
the table above, which it believes are useful to readers in addition to traditional GAAP measures. These measures should be considered as an alternative, but not
superior, to the comparable GAAP measures.
(a) Earnings are presented with and without the impact of a write-up on inventory acquired through the purchase of the Edge and Skintimate shave preparation
brands in 2009 and the purchase of Playtex Products, Inc. in 2008. GAAP requires inventory to be valued at fair market value less the cost of disposal and a profit
allowance for the selling effort, as opposed to its historical manufacturing cost. As a result, there was an allocation of purchase price to the acquired inventory in
both 2009 and 2008. 2009 includes a charge of $3.7 million, pre-tax, or $2.3 million, after-tax, higher than historical manufacturing cost. 2008 includes a charge
of $27.5 million, pre-tax, or $16.5 million, after-tax, higher than historical manufacturing cost. Inventory value and cost of product sold for all product manufactured
after the acquisition date are based upon actual production costs, as dictated by GAAP, Energizer believes presenting earnings excluding the inventory write-up is
useful to investors as an additional basis for comparison to the prior and subsequent periods.
(b) Free cash flow is defined as net cash provided by operating activities net of additions to and disposals of property, plant and equipment. The Company views free
cash flow as an important indicator of its ability to repay debt, fund growth and return cash to shareholders. Free cash flow is not a measure of the residual cash
flow that is available for discretionary expenditures, since the Company has certain non-discretionary obligations, such as debt service, that are not deducted from
the measure. For April 1, 2000 to September 30, 2009, cumulative cash flow and capital expenditures were $3.6 billion and $0.9 billion, respectively. Cumulative
free cash flow for the period April 1, 2000 to September 30, 2009, was $2.7 billion.
Year Ended September 30, 2009 2008 2007 2006 2005
(in millions, except per share data)
NET EARNINGS
Net Earnings, excluding inventory write-up $ 300.1 $ 345.8 $ 321.4 $ 260.9 $ 280.7
Acquisition inventory write-up, net of taxes(a) (2.3) (16.5)
Net Earnings $ 297.8 $ 329.3 $ 321.4 $ 260.9 $ 280.7
DILUTED EARNINGS PER SHARE
Net Earnings, excluding inventory write-up $ 4.76 $ 5.87 $ 5.51 $ 4.14 $ 3.82
Acquisition inventory write-up, net of taxes(a) (0.04) (0.28)
Net Earnings $ 4.72 $ 5.59 $ 5.51 $ 4.14 $ 3.82
Diluted Weighted-Average Shares Outstanding 63.1 58.9 58.3 63.1 73.5
FREE CASH FLOW(b)
Operating Cash Flow $489.2 $466.5 $ 445.3 $ 373.0 $ 295.9
Capital Expenditures (139.7) (160.0) (88.6) (94.9) (103.0)
Free Cash Flow $349.5 $ 306.5 $ 356.7 $ 278.1 $ 192.9
EARNINGS PER SHARE
excluding inventory write-ups as noted above
NET SALES
in billions
$3.82
$2.99
20052005 20062006 20072007 20082008 20092009
$4.14
$3.08
$5.51
$3.37
$5.87
$4.33
$4.76
$4.00