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BEHIND THE
BRAND
THE
ENERGIZER HOLDINGS, INC.
2010 ANNUAL REPORT

Table of contents

  • Page 1
    THE BRAND ENERGIZER HOLDINGS, INC. BEHIND THE 2010 ANNUAL REPORT

  • Page 2
    ... 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...

  • Page 3
    ... 2010 ANNUAL R E POR T 2000 WE BEGAN AS AN INDEPENDENT BATTERY AND FLASHLIGHT COMPANY WITH ANNUAL REVENUES OF NEARLY $2.0 BILLION IN 2000. ™ Energizer® and Eveready® brand names, allows us qo provide reqailers wiqh proven caqegory managemenq soluqions while offering consumers superior brands...

  • Page 4
    ... sales organizations fuels our current performance and provides important growth opportunities. Energizer Holdings' transformation began in 2003 with our purchase of Schick Wilkinson Sword, which became our Personal Care segment. Schick Wilkinson diversified us beyond batteries, solidly positioning...

  • Page 5
    ... over $520 million in sales in 2010. And in 2010, we launched a revoluqion in shaving wiqh qhe Schick Hydro,® which incorporaqes new qechnology qhaq combines a close shave wiqh skin comforq. of Schick Wilkinson Sword, qhe secondlargesq manufacqurer of weq shave producqs in qhe world. We've grown...

  • Page 6
    ... able to expand the presence of Banana Boat® and Hawaiian Tropic® sun care products internationally and grow sales by 62% since acquiring these brands as part of the Playtex acquisition in October 2007. In addition to the top- and bottom-line growth we saw this year, we were also able to improve...

  • Page 7
    ... ACQUISITIONS allowed us qo grow and Weq Ones® - in qhe Skin Care, Feminine Care, and Infanq Care caqegories. Through innovaqion and acquisiqions, our personal care business has grown from $868 million in sales in fiscal 2004 qo over $2 billion in fiscal 2010. our Personal Care business...

  • Page 8
    ... as we supported the Schick Hydro® launch. Since the 2003 acquisition of Schick Wilkinson Sword, our Personal Care segment has grown through acquisition and innovation to become a $2.0 billion business with number one or two market share positions in wet shave, sun and skin care, infant care and...

  • Page 9
    ... shave producq line. Since 2000, Energizer has grown from a nearly $2 billion baqqery and flashlighq company qo a global consumer producqs company wiqh revenues of over $4.2 billion. meanq qhaq we conqinued qo invesq in qhe fuqure despiqe qhe uncerqain economy. Our 2009 acquisiqion of Edge shaving...

  • Page 10
    ...and we did, making a substantial investment in our future despite the economic environment. While we will face increased spending on advertising and promotion related to our growth initiatives, including the launch of Schick Hydro® in additional markets in fiscal 2011, our brands and businesses are...

  • Page 11
    ... REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2010 Commission File No. 001-15401 ENERGIZER HOLDINGS, INC. _____ Incorporated in Missouri IRS Employer Identification No. 43-1863181 533 Maryville University Drive, St. Louis...

  • Page 12
    ...have a class of non-voting equity securities.) Number of shares of Energizer Holdings, Inc. Common Stock ("ENR Stock"), $.01 par value, outstanding as of close of business on November 19, 2010: 70,583,751. DOCUMENTS INCORPORATED BY REFERENCE 1. Portions of Energizer Holdings, Inc. 2010 Annual Report...

  • Page 13
    ... cost savings; the impact of further decline in the battery category; our competitive position and market share presence in both Household Products and Personal Care categories; capital expenditures and other investments during fiscal 2011; advertising and promotional spending; the impact of foreign...

  • Page 14
    ...'s profitability for the year with any degree of certainty; and, the impact of prolonged recessionary conditions in key global markets where Energizer competes on local currency movements, which could impact current spot rates. • • The risk factors set forth in our Annual Report on Form 10...

  • Page 15
    ... systems, Wet Ones pre-moistened wipes, Banana Boat and Hawaiian Tropic sun care products, and Playtex household gloves. Our subsidiaries operate a number of manufacturing and packaging facilities in 14 countries on five continents, as listed in Item 2 below, and as of September 30, 2010, employ...

  • Page 16
    ... the Energizer, Schick, Wilkinson Sword and Playtex logos as our trademarks or those of our subsidiaries. Product names and company programs appearing throughout in italics are trademarks of Energizer Holdings, Inc. or its subsidiaries. This Annual Report on Form 10-K also may refer to brand names...

  • Page 17
    ...for the portable power and portable lighting products market. Energizer's long history of innovation includes the first to market the Alkaline battery, the first mercury-free Alkaline battery, the first mercury-free Hearing Aid battery and the "World's Longest Lasting AA and AAA Battery in High-Tech...

  • Page 18
    ..., the Company launched a new line of Schick Hydro shave gels, which coupled with the Schick Hydro razor, delivers a complete skin comfort system that goes beyond hair removal to care for men's skin. With the acquisition of Playtex, we added a diversified portfolio of well-recognized branded consumer...

  • Page 19
    ... specialty stores and department stores, hardware and automotive centers and military stores. Although a large percentage of Energizer's sales are attributable to a relatively small number of retail customers, in fiscal 2010, only Wal-Mart Stores, Inc. and its subsidiaries, as a group, accounted...

  • Page 20
    ... conditions that drive increased needs for portable power and spike battery and flashlight sales. The wet shave business does not exhibit significant seasonal variability. Customer orders for sun care products are highly seasonal, which has historically resulted in higher sun care sales to retailers...

  • Page 21
    ...Gamble Company, and Spectrum Brands, Inc. We believe private-label sales by large retailers had some impact on the market in some parts of the world. Duracell and Panasonic are significant competitors in South and Central America, Asia and Europe, and local and regional battery manufacturers in Asia...

  • Page 22
    ... the Company, relating to the acquisition of the SWS business, environmental liabilities related to pre-closing operations of that business, or associated with properties acquired, are generally retained by Pfizer, subject to time limitations varying from 2 years to 10 years following closing with...

  • Page 23
    ... testing requirements and revised labeling for the Banana Boat and Hawaiian Tropic product lines, as well as competitors' products, within a certain limited period of time after issuance. Energizer is not able to estimate the costs of complying with these changes at this time. Available Information...

  • Page 24
    ... as private label. Similar retailer customer activity could negatively impact Energizer's operating results. In addition, declining financial performance by certain of our retailer customers could impact their ability to pay us on a timely basis, or at all. Increasing retailer customer concentration...

  • Page 25
    ... with those covenants. If Energizer cannot continue to develop new products in a timely manner, and at favorable margins, it may not be able to compete effectively. The battery, portable lighting products, wet shave, skin care, feminine care and infant care industries have been notable for the...

  • Page 26
    ... with existing customers. The industries in which Energizer operates, including battery, portable lighting products, wet shave, skin care, feminine care and infant care, are highly competitive, both in the United States and on a global basis, as a limited number of large manufacturers compete for...

  • Page 27
    ... Energizer, Schick, Wilkinson Sword, Edge, Skintimate, Playtex, Diaper Genie, Wet Ones, Banana Boat and Hawaiian Tropic brands. The success of these brands can suffer if our marketing plans or new product offerings do not have the desired impact on our brand's image or ability to attract consumers...

  • Page 28
    ... that exchange rates can be highly volatile. Changes in currency exchange rates may also affect the relative prices at which Energizer and our foreign competitors sell products in the same market and the relative prices at which Energizer purchases materials and services in foreign markets. There...

  • Page 29
    ... in the volume of purchases by Wal-Mart or any of our other top customers would harm our sales and profitability. Energizer's businesses are subject to regulation in the U.S. and abroad. The manufacture, packaging, labeling, storage, distribution, advertising and sale of our products are subject to...

  • Page 30
    ... be significant to Energizer. Energizer's manufacturing facilities or supply channels may be subject to disruption from events beyond our control. We currently operate a number of manufacturing and packaging facilities worldwide for our Household Products and Personal Care businesses. Operations at...

  • Page 31
    ...funded status of the plans could significantly increase our required contributions in the future and adversely impact our liquidity. Assumptions used in determining benefit liabilities and the fair value of plan assets for our pension and other postretirement benefit plans are evaluated by Energizer...

  • Page 32
    ... operations in both high-tax and low-tax countries. If Energizer fails to adequately protect its intellectual property rights, competitors may manufacture and market similar products, which could adversely affect our market share and results of operations. Energizer relies on trademark, trade secret...

  • Page 33
    ... within the time frame that is currently expected. The benefits of the acquisition may also be offset by operating losses relating to changes in commodity pricing, or in increased competition, or by risks and uncertainties relating to the combined company's private label and branded products. If we...

  • Page 34
    ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) If we incur unexpected charges related to the restructuring, or in connection with any potential future restructuring program, our financial condition and results of operations may suffer. Restructuring presents ...

  • Page 35
    ..., Egypt Nakuru, Kenya (4) Mississauga, Ontario, Canada (1) In addition to the properties identified above, Energizer and its subsidiaries own and/or operate sales offices, regional offices, storage facilities, distribution centers and terminals and related properties. (1) Leased (2) Two plants and...

  • Page 36
    ...and Chief Executive Officer, Energizer Personal Care since November, 2007. Prior to his current position and title, he served as President and Chief Executive Officer, Schick-Wilkinson Sword from April to November, 2007, as Executive Vice President and Chief Marketing Officer, Energizer Battery from...

  • Page 37
    .... No dividends were declared or paid on ENR Stock during that period, and the Company does not currently intend to pay dividends during fiscal year 2011. Market Price Range FY2010 First Quarter Second Quarter Third Quarter Fourth Quarter $ $ $ $ 52.58 - $ 53.88 - $ 50.24 - $ 49.25 - $ 66.90 65.74...

  • Page 38
    ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) ISSUER PURCHASES OF EQUITY SECURITIES Total Number of Shares purchased 351 1,616 1,581 Average price paid per shares $50.14 $63.90 $67.56 Period July 1, 2010-July 31, 2010 August 1, 2010-August 31, 2010 September ...

  • Page 39
    ... *$100 invested on 9/30/05 in stock or index, including reinvestment of dividends. Fiscal year ending September 30. Copyright© 2010 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. 9/05 Energizer Holdings, Inc. S&P Midcap 400 S&P Household Products 100.00 100.00 100.00 9/06...

  • Page 40
    ... the Exchange Act is recorded, processed, summarized and reported accurately and within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to Energizer's management, including its Chief Executive Officer and Chief Financial Officer, as...

  • Page 41
    ... Reporting and the Report of the Independent Registered Public Accounting Firm of the Energizer Holdings, Inc. is included as part of Exhibit 13 attached hereto and incorporated by reference herein. Item 9B. Other Information Not applicable. PART III Item 10. Directors and Executive Officers...

  • Page 42
    ... filed with this report: 1. Financial statements included as Exhibit 13 attached hereto and incorporated by reference herein: - Report of Independent Registered Public Accounting Firm. - Consolidated Statements of Earnings and Comprehensive Income -- for years ended September 30, 2010, 2009 and 2008...

  • Page 43
    ... 11, 2009). Asset Purchase Agreement dated as of October 8, 2010, by and between American Safety Razor, LLC, a Delaware limited liability company, and Energizer (incorporated by reference to Exhibit 2.1 of Energizer's Current Report on Form 8-K filed October 13, 2010). *** Articles of Incorporation...

  • Page 44
    ... Transaction Agreement between Energizer Holdings, Inc. and Citigroup Global Markets Limited dated as of August 28, 2003 (incorporated by reference to Exhibit 10(i) of Energizer's Annual Report on Form 10-K for the Year ended September 30, 2003). Form of Non-Qualified Stock Option dated January...

  • Page 45
    ... 18, 2007). Energizer Holdings, Inc. Deferred Compensation Plan, as amended and restated October 28, 2008 (incorporated by reference to Exhibit 10 of Energizer's Annual Report on Form 10-K for the year ended September 30, 2008).* Form of Performance Restricted Stock Equivalent Award Agreement...

  • Page 46
    ... of Energizer's Current Report on Form 8-K filed February 10, 2009).* Third Amended and Restated Receivables Purchase Agreement dated as of May 4, 2009 among Energizer Receivables Funding Corporation, as seller, Energizer Battery, Inc., as servicer, Energizer Personal Care, LLC, as sub-servicer, The...

  • Page 47
    ... personal use of corporate aircraft by the chief executive officer, is hereby incorporated by reference to Energizer's Current Report on Form 8-K filed November 4, 2009.* Amendment No. 2 to Third Amended and Restated Receivables Purchase Agreement dated as of May 3, 2010 by and among Energizer...

  • Page 48
    ... Shareholders' Equity for the years ended September 30, 2010, 2009 and 2008, and (v) Notes to Consolidated Financial Statements for the year ended September 30, 2010. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall...

  • Page 49
    ... by the undersigned, thereunto duly authorized. ENERGIZER HOLDINGS, INC. By Ward M. Klein Chief Executive Officer Date: November 23, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in...

  • Page 50
    ... in reviewing Energizer Holdings, Inc.'s (the Company) historical basis results of operations, operating segment results, and liquidity and capital resources. The Company reports results in two segments: Household Products, which includes batteries and portable lighting products, and Personal Care...

  • Page 51
    ... 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) Hydro Launch In April 2010, the Company launched a new men's razor system in North America, Schick Hydro. Subsequently, the Company extended the launch to Japan and certain key European markets. Schick Hydro...

  • Page 52
    ... outstanding shares of common stock of Energizer were distributed in a tax-free spin-off to shareholders of Ralston Purina Company. Energizer is the successor to over 100 years of expertise in the battery and portable lighting products industry. Its brand names Energizer and Eveready have worldwide...

  • Page 53
    ...new products for the portable power and portable lighting products market. Energizer's long history of innovation includes the first to market the Alkaline battery, the first mercury-free Alkaline battery, the first mercury-free Hearing Aid battery and the "World's Longest Lasting AA and AAA Battery...

  • Page 54
    ... hold or gain share in many of our key markets in recent years due to our diversified portfolio of products, which meet a broad spectrum of consumer needs. Personal Care The Personal Care division includes Wet Shave products sold under the Schick, Wilkinson Sword, Edge and Skintimate brand names...

  • Page 55
    ..., the Company launched a new line of Schick Hydro shave gels, which coupled with the Schick Hydro razor, delivers a complete skin comfort system that goes beyond hair removal to care for men's skin. On October 1, 2007, Energizer acquired Playtex, a leading North American manufacturer and marketer in...

  • Page 56
    ... preparation brands. The total year growth was also positively impacted by the Schick Hydro launch in the third quarter. The recent devaluation and difficult economic conditions in Venezuela resulted in a reduction in net sales of approximately $23 in fiscal 2010. Net sales in the Household Products...

  • Page 57
    ...may vary from year to year with new product launches, the impact of acquisitions, strategic brand support initiatives, the overall competitive environment, and the state of the global economy. We expect A&P expense to increase in fiscal 2011 due to the launch of Schick Hydro in key markets in Europe...

  • Page 58
    ...13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) 2010, this spending occurred in the second half of the fiscal year. In 2011, higher comparative A&P expense is likely in the first two quarters as compared to the prior year due to the timing of the Schick Hydro...

  • Page 59
    ... the Company are managed via two segments - Household Products (battery and portable lighting products) and Personal Care (wet shave, skin, feminine and infant care). Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation...

  • Page 60
    ... to fiscal 2008, and favorable pricing and product mix. As noted previously, we believe an increasing number of devices are using built-in rechargeable battery systems, particularly in developed markets. We believe this continues to create a negative impact on the demand for primary batteries. This...

  • Page 61
    ... Wet Shave net sales for fiscal 2010 increased approximately $126, or 11% as compared to fiscal 2009, due to the full year impact of the Edge and Skintimate brands acquisition, which added approximately $90 to net sales, and the launch of Schick Hydro. Infant Care sales increased 2% driven by Diaper...

  • Page 62
    ... to increase in fiscal 2011 due to the launch of Schick Hydro in key markets in Europe and Japan, and the continued support of this new product launch in North America. While we incurred launch related A&P spending in fiscal 2010, this spending occurred primarily in the back half of the fiscal year...

  • Page 63
    ...of PTO, net of days used, was accrued at any given balance sheet date. As part of a review of certain benefit programs, this policy was revised in fiscal 2009 to a more "market" policy for PTO. The revised policy has an "earn as you go" approach, under which colleagues earn current-year PTO on a pro...

  • Page 64
    ... brands at year-end fiscal 2010. The most significant driver of the higher cash flow from operations in fiscal 2009 as compared to fiscal 2008 was accounts receivable, which was lower by $106.7 at year-end fiscal 2009, excluding the impact of acquired brands. This decrease was due to lower net sales...

  • Page 65
    ... 10.925 million shares of common stock for $49.00 per share. Net proceeds from the sale of the additional shares were $510.2. The Company used $275 of the net proceeds to complete the purchase of the shave preparation brands on June 5, 2009 and used $100 to repay private placement notes, which...

  • Page 66
    ... has staggered long-term borrowing maturities through 2017 to reduce refinancing risk in any single year and to optimize the use of cash flow for repayment. No shares of Energizer common stock were repurchased by the Company in fiscal 2008 through 2010 other than a small number of shares related to...

  • Page 67
    ... fiscal year presented. The U.S. pension plans constitute more than 70% of the total benefit obligations and plan assets for the Company's pension plans. At this time, we do not believe that a minimum pension contribution for the U.S. plan will be required before fiscal 2012. Based on current market...

  • Page 68
    ... structuring techniques are used to manage the net investment in foreign currencies, as necessary. Additionally, the Company attempts to limit its U.S. dollar net monetary liabilities in countries with unstable currencies. From time to time the Company may employ foreign currency hedging techniques...

  • Page 69
    ... and 2009, respectively. Stock Price Exposure At September 30, 2010, the Company held a share option with a major financial institution to mitigate the impact of changes in certain of the Company's deferred compensation liabilities, which are tied to the Company's common stock price. The fair market...

  • Page 70
    ... sun care products. Other factors may also have an impact on the timing and amounts of sales, operating income, working capital and cash flows. They include: the timing of new product launches by competitors or by the Company, the timing of advertising, promotional, merchandising or other marketing...

  • Page 71
    ...cases where the right of return does exist for a particular sale. Under certain circumstances, we allow customers to return sun care products that have not been sold by the end of the sun care season, which is normal practice in the sun care industry. We record sales at the time the title, ownership...

  • Page 72
    ... the assumptions listed above, changes in the expected long-term rate of return on plan assets and changes in the discount rate used in developing plan obligations will likely have the most significant impact on the Company's annual earnings prospectively. Based on plan assets at September 30, 2010...

  • Page 73
    ... ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) As allowed under GAAP, the Company's U.S. qualified pension plan uses Market Related Value, which recognizes market appreciation or depreciation in the portfolio over five years so it reduces the short-term impact...

  • Page 74
    ... cost savings; the impact of further decline in the battery category; our competitive position and market share presence in both Household Products and Personal Care categories; capital expenditures and other investments during fiscal 2011; advertising and promotional spending; the impact of foreign...

  • Page 75
    ... strategic initiatives on Energizer's relationships with its employees, its major customers and vendors; our ability to develop new products, improve operations and realize cost savings; our ability to continue planned advertising and other promotional spending and the impact thereon of lower than...

  • Page 76
    ... ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data events that may disrupt our manufacturing facilities or supply channels; the effect of regulation on our business in the U.S. and abroad; the impact of changes in foreign, cultural, political and financial market...

  • Page 77
    ... in force costs Acquisition inventory valuation PTO adjustment Foreign pension charge Total (c) Net earnings w ere (reduced)/increased by the follow ing items: FOR THE YEARS ENDED SEPTEMBER 30, 2010 Venezuela devaluation/other impacts Provisions for realignment and related costs Integration costs...

  • Page 78
    ... management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. Internal control over financial reporting...

  • Page 79
    ... respects, the financial position of Energizer Holdings, Inc. and its subsidiaries at September 30, 2010 and 2009 and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2010 in conformity with accounting principles generally accepted...

  • Page 80
    ... 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) Because of its inherent limitations, internal control over financial reporting may ... that the degree of compliance with the policies or procedures may deteriorate. St. Louis, Missouri November 23, 2010 70

  • Page 81
    ...data) ENERGIZER HOLDINGS, INC. CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (Dollars in millions, except per share data) YEARS ENDED SEPTEMBER 30, Statement of Earnings Net sales Cost of products sold Gross profit Selling, general and administrative expense Advertising and promotion...

  • Page 82
    ... per share and percentage data) ENERGIZER HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in millions, except par values) SEPTEMBER 30, 2009 2010 Assets Current assets Cash and cash equivalents Trade receivables, net Inventories Other current assets Total current assets Property, plant and...

  • Page 83
    ... than 90 days Net (decrease)/increase in debt with original maturities of 90 days or less Proceeds from issuance of common stock Excess tax benefits from share-based payments Net cash (used by)/from financing activities Effect of exchange rate changes on cash Net increase/(decrease) in cash and cash...

  • Page 84
    ...(Dollars in millions, except per share and percentage data) ENERGIZER HOLDINGS, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Dollars in millions, shares in thousands) 2010 Common stock: Balance at beginning of year Net proceeds from equity offering Ending balance Additional paid-in capital...

  • Page 85
    ... under the rules governing the translation of financial information in a highly inflationary economy based on the use of the blended National Consumer Price Index in Venezuela. Under GAAP, an economy is considered highly inflationary if the cumulative inflation rate for a three year period meets or...

  • Page 86
    ... second quarters of fiscal 2008, as it relates to the Playtex acquisition, the adjustments were charged to cost of products sold in the respective periods. Capitalized Software Costs - Capitalized software costs are included in Other Assets. These costs are amortized using the straight-line method...

  • Page 87
    ...cases where the right of return does exist for a particular sale. Under certain circumstances, we allow customers to return sun care products that have not been sold by the end of the sun care season, which is normal practice in the sun care industry. We record sales at the time the title, ownership...

  • Page 88
    ... activity to our customers, especially in the latter stages of the sun care season, to reduce the potential for returned product. The Company offers a variety of programs, such as consumer coupons and similar consumer rebate programs, primarily to its retail customers, designed to promote sales...

  • Page 89
    ... under the rules governing the translation of financial information in a highly inflationary economy based on the use of the blended National Consumer Price Index in Venezuela. Under GAAP, an economy is considered highly inflationary if the cumulative inflation rate for a three year period meets or...

  • Page 90
    ... Company's reporting units: Household Products, Wet Shave and Playtex. No impairments were identified and no adjustments were deemed necessary in fiscal 2010, 2009 and 2008. However, future changes in the judgments, assumptions and estimates that are used in our impairment testing including discount...

  • Page 91
    ... at September 30, 2010: Household Products $ 37.1 0.1 $ 37.2 Personal Care $ 1,289.1 (9.9) $ 1,279.2 Balance at October 1, 2009 Cumulative translation adjustment Balance at September 30, 2010 $ $ Total 1,326.2 (9.8) 1,316.4 The Company had indefinite-lived trademarks and tradenames of $1,704...

  • Page 92
    Exhibit 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) (5) Income Taxes The provisions for income taxes consisted of the following for the years ended September 30: 2010 Currently payable: United States - Federal State Foreign Total current Deferred: United ...

  • Page 93
    .... Unrecognized tax benefits activity for the years ended September 30, 2010 and 2009 are summarized below: 2009 2010 Unrecognized tax benefits, beginning of year $ 47.0 $ 46.9 Additions based on current year tax positions 3.3 5.0 Reductions for prior year tax positions (1.6) (1.4) Settlements with...

  • Page 94
    ...shares used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options and restricted stock equivalents. The following table sets forth the computation of basic and diluted earnings per share (shares in millions): FOR THE YEARS ENDED SEPTEMBER 30, 2009 2008 2010...

  • Page 95
    ... Balance Sheets. The Company uses the straight-line method of recognizing compensation cost. Total compensation cost charged against income for the Company's share-based compensation arrangements was $28.2, $15.3 and $26.4 for the years ended September 30, 2010, 2009 and 2008, respectively...

  • Page 96
    ..., 2010, unrecognized compensation costs related to stock options granted was $4.5. For outstanding nonqualified stock options, the weighted-average remaining contractual life is 4.7 years. The following table summarizes nonqualified ENR stock option activity during the current fiscal year (shares in...

  • Page 97
    ...; 2) the remainder vests on the date that the Company publicly releases its earnings for its 2011 fiscal year contingent upon the Company's compound annual growth rate for reported earnings per share (EPS CAGR) for the three year period ending on September 30, 2011. If an EPS CAGR of 15% is achieved...

  • Page 98
    Exhibit 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) The following table summarizes RSE activity during the current year (shares in millions): Weighted-Average Grant Date Fair Value $75.95 65.60 69.24 67.27 $75.04 Nonvested RSE at October 1, 2009 Granted ...

  • Page 99
    Exhibit 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) The Company also sponsors or participates in a number of other non-U.S. pension arrangements, including various retirement and termination benefit plans, some of which are required by local law or ...

  • Page 100
    ... comprehensive income for the year ended September 30, 2010 are as follows: Pension Changes in plan assets and benefit obligations recognized in other comprehensive loss New prior service credit Net loss arising during the year Effect of exchange rates $ 62.4 3.4 $ (1.2) 0.4 (0.1) Postretirement...

  • Page 101
    ...assets in all of the Company's defined benefit pension plans. Investment policy for the U.S. plan includes a mandate to diversify assets and invest in a variety of asset classes to achieve that goal. The U.S. plan's assets are currently invested in several funds representing most standard equity and...

  • Page 102
    ... for the component plans, used in determining the above information: September 30, Pension 2010 Plan obligations: Discount rate Compensation increase rate Net periodic benefit cost: Discount rate Expected long-term rate of return on plan Compensation increase rate 4.8% 3.4% 5.6% 8.0% 3.8% 2009...

  • Page 103
    ...reflect the policy and target allocation of the retirement plan assets. Effective January 1, 2010, the pension benefit earned to date by active participants under the U.S. pension plan was frozen and future retirement benefits accrue to active participants using a new retirement accumulation formula...

  • Page 104
    Exhibit 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) The detail of long-term debt at September 30 for the year indicated is as follows: 2010 $ 1,835.0 453.5 2,288.5 266.0 $ 2,022.5 2009 $ 1,930.0 459.5 2,389.5 101.0 $ 2,288.5 Private Placement, fixed ...

  • Page 105
    ... the use of cash flow for repayment. Aggregate maturities of long-term debt, including current maturities, at September 30, 2010 are as follows for the fiscal years' noted: $266.0 in 2011, $231.0 in 2012, $701.5 in 2013, $190.0 in 2014, $230.0 in 2015 and $670.0 thereafter. At this time, the Company...

  • Page 106
    ... repurchased during fiscal year 2010 other than a small number of shares related to the net settlement of certain stock awards for tax withholding purposes. (13) Financial Instruments and Risk Management The market risk inherent in the Company's financial instruments and positions represents the...

  • Page 107
    ... in Hedging Relationships The Company holds a share option with a major financial institution to mitigate the impact of changes in certain of the Company's deferred compensation liabilities, which are tied to the Company's common stock price. Period activity related to the share option is classified...

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    ... 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) The following table provides fair values as of September 30, 2010 and 2009, and the amounts of gains and losses on derivative instruments classified as cash flow hedges as of and for the twelve months ended...

  • Page 109
    ... the reporting entity's own assumptions or external inputs from inactive markets. Under the fair value accounting guidance hierarchy, an entity is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The following table sets forth the Company's financial...

  • Page 110
    ... 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) At September 30, 2010 and 2009 the Company had no level 1 or level 3 financial assets or liabilities. See Note 7 of the Notes to Consolidated Financial Statements for further discussion of deferred compensation...

  • Page 111
    ... for office facilities. (16) Supplemental Financial Statement Information The components of certain balance sheet accounts at September 30 for the years indicated are as follows: 2010 Inventories Raw materials and supplies Work in process Finished products Total inventories Other Current Assets...

  • Page 112
    ...the Company are managed via two segments - Household Products (Battery and Lighting Products) and Personal Care (Wet Shave, Skin Care, Feminine Care and Infant Care). Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation...

  • Page 113
    ...of PTO, net of days used, was accrued at any given balance sheet date. As part of a review of certain benefit programs, this policy was revised in fiscal 2009 to a more "market" policy for PTO. The revised policy has an "earn as you go" approach, under which colleagues earn current-year PTO on a pro...

  • Page 114
    Exhibit 13 ENERGIZER HOLDINGS, INC. (Dollars in millions, except per share and percentage data) Wal-Mart Stores, Inc. and its subsidiaries accounted for 20.1%, 21.4% and 20.8% of total net sales in fiscal 2010, 2009 and 2008, respectively, primarily in North America. Corporate assets shown in the ...

  • Page 115
    ... less than 5% of the Company's total net sales for each of the three years presented. Supplemental product information is presented below for net sales: 2010 Net Sales Alkaline batteries Other batteries and lighting products Wet Shave Skin Care Feminine Care Infant Care Total net sales $ 1,327.9 871...

  • Page 116
    ... per share and percentage data) (18) Quarterly Financial Information - (Unaudited) The results of any single quarter are not necessarily indicative of the Company's results for the full year. Net earnings of the Company are impacted in the first quarter by the additional battery product sales volume...

  • Page 117
    ... the Personal Care business as it competes in the value segment of the wet shave category. The Company's legacy Wet Shave product line focuses on branded wet shave products. ASR, founded in 1875, is a leading global manufacturer of private label / value wet shaving razors and blades, and industrial...

  • Page 118
    ...) of Energizer Holdings, Inc. of our report dated November 23, 2010 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the 2010 Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K. St. Louis...

  • Page 119
    .... (Dollars in millions, except per share and percentage data) Certification of Chief Executive Officer I, Ward M. Klein, certify that: 1. I have reviewed this annual report on Form 10-K of Energizer Holdings, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement...

  • Page 120
    ... millions, except per share and percentage data) Certification of Executive Vice President and Chief Financial Officer I, Daniel J. Sescleifer, certify that: 1. I have reviewed this annual report on Form 10-K of Energizer Holdings, Inc.; 2. Based on my knowledge, this annual report does not contain...

  • Page 121
    ...In connection with the Annual Report of Energizer Holdings, Inc. (the "Company") on Form 10-K for the year ended September 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ward M. Klein, Chief Executive Officer of the Company, certify pursuant to 18...

  • Page 122
    ... with the Annual Report of Energizer Holdings, Inc. (the "Company") on Form 10-K for the year ended September 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel J. Sescleifer, Executive Vice President and Chief Financial Officer of the...

  • Page 123
    ...at Energizer's World Headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141. Common Stock Information The table below sets forth, for the fiscal quarter indicated, the reported high and low sale prices of the Company's common stock, as reported on the New York Stock Exchange. Fiscal...

  • Page 124
    ... HOLDINGS, INC. 533 Maryville University Drive St. Louis, Missouri 63141 314.985.2000 www.energizer.com © 2010 Energizer. Energizer, Energizer Bunny design, Eveready, Schick and other marks included in this Annual Report are trademarks of Energizer, its affiliates and its subsidiaries. Playtex...