Energizer 2012 Annual Report Download - page 25

adverse effect on our business, prospects, financial condition and results of operations. Our success also depends on our
continuing ability to attract, retain and develop highly qualified personnel. Competition for such personnel is intense, and there
can be no assurance that we can retain our key employees or attract, assimilate and retain other highly qualified personnel in
the future.
We may experience losses or be subject to increased funding and expenses related to our pension plans.
The funding obligations for Energizer's pension plans, including those assumed in the ASR acquisition, are impacted by the
performance of the financial markets, interest rates and governmental regulations. While in November 2012, we approved and
communicated changes to our U.S. pension plan so that, effective January 1, 2014, the pension benefit earned to date by active
participants under the legacy Energizer U.S. pension plan will be frozen and future retirement service benefits will no longer be
accrued under this retirement program, our pension obligations are expected to remain significant. If the investment of plan
assets does not provide the expected long-term returns, interest rates change, or if governmental regulations change the timing
or amounts of required contributions to the plans, we could be required to make significant additional pension contributions
which may have an adverse impact on our liquidity, our ability to comply with debt covenants and may require recognition of
increased expense within our financial statements.
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.
In fiscal 2012, the vast majority of our total revenues were from products bearing proprietary trademarks and brand names.
In addition, Energizer owns or licenses from third parties a considerable number of patents, patent applications and other
technology. Accordingly, Energizer relies on trademark, trade secret, patent and copyright laws to protect our intellectual
property rights. There is a risk that Energizer will not be able to obtain and perfect or maintain our own intellectual property
rights or, where appropriate, license intellectual property rights necessary to support new product introductions. In addition,
even if such rights are protected in the United States, the laws of some other countries in which Energizer's products are or may
be sold do not protect intellectual property rights to the same extent as the laws of the United States. We cannot be certain that
our intellectual property rights will not be invalidated, circumvented or challenged in the future, and Energizer could incur
significant costs in connection with legal actions relating to such rights. As patents expire, we could face increased competition
or decreased royalties either of which could negatively impact our operating results. If other parties infringe our intellectual
property rights, they may dilute the value of our brands in the marketplace, which could diminish the value that consumers
associate with our brands and harm our sales.
We may not be able to continue to identify and complete strategic acquisitions and effectively integrate acquired companies
to achieve desired financial benefits.
We have completed four significant acquisitions since becoming an independent company in 2000, including, most recently,
the acquisition of ASR in fiscal 2011. We expect to continue making acquisitions if appropriate opportunities arise. However,
we may not be able to identify and successfully negotiate suitable strategic acquisitions at attractive valuations, obtain
financing for future acquisitions on satisfactory terms or otherwise complete future acquisitions. Furthermore, our existing
operations may encounter unforeseen operating difficulties and may require significant financial and managerial resources,
which would otherwise be available for the ongoing development or expansion of our existing operations.
Even if we can complete future acquisitions, we face significant challenges in consolidating functions and effectively
integrating procedures, personnel, product lines, and operations in a timely and efficient manner. The integration process can be
complex and time consuming, may be disruptive to our existing and acquired business, and may cause an interruption of, or a
loss of momentum in, the business. Even if we can successfully complete the integration of acquired businesses into our
operations, there is no assurance that anticipated cost savings, synergies, or revenue enhancements will be realized within the
expected time frame, or at all.
Additional descriptions of risk factors impacting Energizer appearing under “ENERGIZER HOLDINGS, INC. -
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION” are included in Exhibit 13 attached hereto, which will also appear in the Energizer Holdings, Inc. 2012
Annual Report to Shareholders.
Item 1B. Unresolved Staff Comments.
None.
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