Energizer 2010 Annual Report Download - page 2

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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 110, 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 to, but not superior to or as a substitute for,
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 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.
2006 2007 2008 2009 2010
$3.08 $3.37 $4.33 $4.00 $4.25
2006 2007 2008 2009 2010
$4.14 $5.51 $5.59 $4.72 $5.72
Net Sales
in billions
Earnings Per Share
™
Year Ended September 30, 2010 2009 2008 2007 2006
(in millions, except per share data)
Net Earnings
Net Earnings, excluding inventory write-up $ 403.0 $ 300.1 $ 345.8 $ 321.4 $ 260.9
Acquisition inventory write-up, net of taxes(a) (2.3) (16.5)
Net Earnings $403.0 $ 297.8 $ 329.3 $ 321.4 $ 260.9
Diluted Earnings Per Share
Net Earnings, excluding inventory write-up $ 5.72 $ 4.76 $ 5.87 $ 5.51 $ 4.14
Acquisition inventory write-up, net of taxes(a) (0.04) (0.28)
Net Earnings $ 5.72 $ 4.72 $ 5.59 $ 5.51 $ 4.14
Diluted Weighted-Average Shares Outstanding 70.5 63.1 58.9 58.3 63.1
Free Cash Flow(b)
Operating Cash Flow $ 652.4 $ 489.2 $466.5 $ 445.3 $ 373.0
Capital Expenditures (108.7) (139.7) (160.0) (88.6) (94.9)
Free Cash Flow $ 543.7 $ 349.5 $ 306.5 $ 356.7 $ 278.1