Energizer 2013 Annual Report Download - page 25

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.
The vast majority of our total revenues are 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.
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.
Energizer's business involves the potential for product liability and other claims against us, which could affect our results of
operations and financial condition.
We face exposure to claims arising out of alleged defects in our products, including for property damage, bodily injury or
other adverse effects. We maintain product liability insurance, but this insurance does not cover all types of claims, particularly
claims that do not involve personal injury or property damage or claims that exceed the amount of insurance coverage. Further,
we may not maintain such insurance on acceptable terms, or at all. In addition to the risk of monetary judgments not covered by
insurance, product liability claims could result in negative publicity that could harm our products' reputation and in certain
cases require a product recall. Product recalls or product liability claims, and any subsequent remedial actions, could have a
material adverse effect on our business, results of operations and financial condition.
We may not be able to attract, retain and develop key personnel.
Our future performance depends in significant part upon the continued service of our executive officers and other key
personnel. The loss of the services of one or more of our executive officers or other key employees could have a material
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 and motivate our key employees or attract and retain other highly qualified personnel in
the future. Additionally, the escalating costs of offering and administering health care benefits for employees could result in
reduced profitability.
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.
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 a number of significant acquisitions since becoming an independent company in 2000, including, most
recently, the acquisition of the Stayfree, Carefree and o.b. brands in the U.S., Canada and the Caribbean in October 2013. 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.
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