Energizer 2010 Annual Report Download - page 29

ENERGIZER HOLDINGS, INC.
(Dollars in millions, except per share and percentage data)
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other long-lived assets, which could result in an impairment charge. These charges may have
an adverse impact on our operating results and financial position.
Loss of any of our principal customers could significantly decrease our sales and
profitability.
Wal-Mart, together with its subsidiaries, is our largest customer, accounting for approximately
20.1% of net sales in fiscal 2010. Generally, sales to Wal-Mart and our other top customers are
made pursuant to purchase orders and we do not have supply agreements or guarantees of
minimum purchases from them. As a result, these customers may cancel their purchase orders
or reschedule or decrease their level of purchases from us at any time. The loss or a
substantial decrease 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 extensive regulation in the U.S. and abroad. This regulation includes,
but is not limited to, the following:
• in the U.S., a number of our products and their manufacture are subject to regulation
and review and/or approval by the Food and Drug Administration as well as by the
Consumer Product Safety Commission and the Environmental Protection Agency;
• in the U.S., claims and advertising with respect to our products are regulated by the
Federal Trade Commission;
• our operations are subject to taxation by federal, state, local and foreign taxing
authorities;
• in foreign countries where we manufacture or sell our products, we are subject to similar
regulation, and in the U.S. by state and local authorities; and
• our selling practices are regulated by competition authorities in the U.S. and abroad.
A finding that we are in violation of, or not in compliance with, applicable laws or regulations
could subject us to civil remedies, including fines, damages, injunctions or product recalls, or
criminal sanctions, which could be material. Even if a claim is unsuccessful, is not merited or is
not fully pursued, the negative publicity surrounding such assertions regarding our products or
processes could jeopardize our reputation and brand image. Damage to our reputation or loss
of consumer confidence in our products for any of these reasons could have a material adverse
effect on our businesses, as well as require resources to rebuild our reputation.
We must comply with various environmental laws and regulations in the jurisdictions in which
we operate, including those relating to the handling and disposal of solid and hazardous wastes
and the remediation of contamination associated with the use and disposal of hazardous
substances. A release of such substances due to accident or an intentional act could result in
substantial liability to governmental authorities or to third parties. We have incurred, and will
continue to incur, capital and operating expenses and other costs in complying with
environmental laws and regulations, including remediation costs relating to our current and
former properties and third party waste disposal sites. It is possible that we could become