Energizer 2013 Annual Report Download - page 93

ENERGIZER HOLDINGS, INC.
(Dollars in millions, except per share data)
See Note 8 of the Notes to Consolidated Financial Statements for further discussion of deferred compensation liabilities.
At September 30, 2013 and 2012, the fair market value of fixed rate long-term debt was $2,262.3 and $2,438.0, respectively,
compared to its carrying value of $2,138.8 and $2,263.6, respectively. The book value of the Company’s variable rate debt
approximates estimated fair value. The estimated fair value of the long-term debt is estimated using yields obtained from
independent pricing sources for similar types of borrowing arrangements. The estimated fair value of fixed rate long-term debt
has been determined based on level 2 inputs.
Due to the nature of cash and cash equivalents and short-term borrowings, including notes payable, carrying amounts on the
balance sheets approximate estimated fair value. The estimated fair value of cash and cash equivalents and short-term
borrowings have been determined based on level 2 inputs.
At September 30, 2013, the estimated fair value of foreign currency contracts and the Company's share option as described
above is the amount that the Company would receive or pay to terminate the contracts, considering first, quoted market prices
of comparable agreements, or in the absence of quoted market prices, such factors as interest rates, currency exchange rates and
remaining maturities. The estimated fair value of the Company's unfunded deferred compensation liability is determined based
upon the quoted market prices of the Energizer Common Stock Unit Fund as well as other investment options that are offered
under the plan.
Venezuela Currency Risk See Note 4 of the Notes to Consolidated Financial Statements for further information on Venezuela
currency risk.
(15) Environmental and Legal Matters
Government Regulation and Environmental Matters – The operations of the Company, like those of other companies engaged
in the Household Products and Personal Care businesses, are subject to various federal, state, foreign and local laws and
regulations intended to protect the public health and the environment. These regulations relate primarily to worker safety, air
and water quality, underground fuel storage tanks and waste handling and disposal. The Company has received notices from the
U.S. Environmental Protection Agency, state agencies and/or private parties seeking contribution, that it has been identified as a
“potentially responsible party” (PRP) under the Comprehensive Environmental Response, Compensation and Liability Act, and
may be required to share in the cost of cleanup with respect to eight federal “Superfund” sites. It may also be required to share
in the cost of cleanup with respect to state-designated sites or other sites outside of the U.S.
Accrued environmental costs at September 30, 2013 were $19.3, of which $4.7 is expected to be spent in fiscal 2014. It is
difficult to quantify with certainty the cost of environmental matters, particularly remediation and future capital expenditures
for environmental control equipment. Total environmental capital expenditures and operating expenses are not expected to
have a material effect on our total capital and operating expenditures, consolidated earnings or competitive position. However,
current environmental spending estimates could be modified as a result of changes in our plans or our understanding of
underlying facts, changes in legal requirements, including any requirements related to global climate change, or other factors.
Certain of the Company’s products are subject to regulation by the United States Food and Drug Administration (FDA),
including feminine care and sun care products.
Legal Proceedings – The Company and its subsidiaries are parties to a number of legal proceedings in various jurisdictions
arising out of the operations of the Company's businesses. Many of these legal matters are in preliminary stages and involve
complex issues of law and fact, and may proceed for protracted periods of time. The amount of liability, if any, from these
proceedings cannot be determined with certainty. However, based upon present information, the Company believes that its
liability, if any, arising from such pending legal proceedings, asserted legal claims and known potential legal claims which are
likely to be asserted, are not reasonably likely to be material to the Company's financial position, results of operations, or cash
flows, taking into account established accruals for estimated liabilities.
(16) Other Commitments and Contingencies
Total rental expense less sublease rental income for all operating leases was $29.4, $30.8 and $32.6 in fiscal 2013, 2012 and
2011, respectively. Future minimum rental commitments under non-cancellable operating leases in effect as of September 30,
2013, were $28.9 in fiscal 2014, $21.9 in fiscal 2015, $17.4 in fiscal 2016, $16.1 in fiscal 2017, $15.1 in fiscal 2018 and $30.6
thereafter. These leases are primarily for office facilities.
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