Energizer 2010 Annual Report Download - page 104

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Exhibit 13
ENERGIZER HOLDINGS, INC.
(Dollars in millions, except per share and percentage data)
94
The detail of long-term debt at September 30 for the year indicated is as follows:
2010 2009
Private Placement, fixed interest rates ranging from 3.9% to 6.6%, due
2011 to 2017
1,835.0$ 1,930.0$
Term Loan, variable interest at LIBOR + 63 basis points, or 0.9%, due
2012
453.5 459.5
Total long-term debt, including current maturities 2,288.5 2,389.5
Less current portion 266.0 101.0
Total long-term debt 2,022.5$ 2,288.5$
The Company’s total borrowings were $2,313.4 at September 30, 2010, including $478.4 tied to
variable interest rates, of which $300 is hedged via the interest rate swap noted below. The
Company maintains total debt facilities of $2,588.4, exclusive of available borrowings under the
receivables securitization program, of which $259.7 remained available as of September 30,
2010.
During the second quarter of fiscal 2009, the Company entered into interest rate swap
agreements with two major financial institutions that fixed the variable benchmark component
(LIBOR) of the Company’s interest rate on $300 of the Company’s variable rate debt through
December 2012 at an interest rate of 1.9%.
In May 2011, the Company’s $275 U.S. revolving credit facility will mature. At September 30,
2010, there were no outstanding borrowings under this facility. It is our intent to renew this
facility in advance of the May maturity date. However, we can provide no assurances that this
facility will be renewed, or if renewed, that the terms will be as favorable as those contained in
the existing facility.
Under the terms of the Company’s credit agreements, the ratio of the Company’s indebtedness
to its EBITDA, as defined in the agreements and detailed below, cannot be greater than 4.00 to
1, and may not remain above 3.50 to 1 for more than four consecutive quarters. If and so long as
the ratio is above 3.50 to 1 for any period, the Company is required to pay additional interest
expense for the period in which the ratio exceeds 3.50 to 1. The interest rate margin and certain
fees vary depending on the indebtedness to EBITDA ratio. Under the Company’s private
placement note agreements, the ratio of indebtedness to EBITDA may not exceed 4.0 to 1.
However, if the ratio is above 3.50 to 1, the Company is required to pay an additional 75 basis
points in interest for the period in which the ratio exceeds 3.50 to 1. In addition, under the credit
agreements, the ratio of its current year EBIT, as defined in the agreements, to total interest
expense must exceed 3.00 to 1. The Company’s ratio of indebtedness to its EBITDA was 2.70 to
1, and the ratio of its EBIT to total interest expense was 5.72 to 1, as of September 30, 2010.
The Company anticipates that it will remain in compliance with its debt covenants for the
foreseeable future. The negative impact on EBITDA resulting primarily from the Venezuela
devaluation of $18.3, pre-tax, is included in the trailing twelve month EBITDA calculation at
September 30, 2010, and negatively impacted the ratio of indebtedness to EBITDA at
September 30, 2010. If the Company fails to comply with the financial covenants referred to
above or with other requirements of the credit agreements or private placement note
agreements, the lenders would have the right to accelerate the maturity of the debt. Acceleration
under one of these facilities would trigger cross defaults on other borrowings.