Energizer 2014 Annual Report Download - page 84

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(12) Defined Contribution Plan
The Company sponsors a defined contribution plan, which extends participation eligibility to the vast majority of U.S.
employees. Effective January 1, 2014, the Company matches 100% of participant’s before-tax or Roth contributions up to 6%
of eligible compensation. Amounts charged to expense during fiscal 2014, 2013, and 2012 were $13.7, $9.3, and $9.3,
respectively, and are reflected in SG&A and Cost of products sold in the Consolidated Statements of Earnings and
Comprehensive Income.
(13) Debt
Notes payable at September 30, 2014 and 2013 consisted of notes payable to financial institutions with original maturities of
less than one year of $289.5 and $99.0, respectively, and had a weighted-average interest rate of 2.1% and 3.6%, respectively.
The detail of long-term debt at September 30 for the year indicated is as follows:
2014 2013
Private Placement, fixed interest rates ranging from 5.2% to 6.6%, due 2014 to 2017 $ 900.0 $ 1,040.0
Senior Notes, fixed interest rate of 4.7%, due 2021 600.0 600.0
Senior Notes, fixed interest rate of 4.7%, due 2022, net of discount 498.9 498.8
Total long-term debt, including current maturities 1,998.9 2,138.8
Less current portion 230.0 140.0
Total long-term debt $ 1,768.9 $ 1,998.8
The Company’s total borrowings were $2,288.4 at September 30, 2014, including $289.5 tied to variable interest rates. The
Company maintains total debt facilities of $2,603.4. The Company's Amended and Restated Revolving Credit Agreement,
which matures in 2016, currently provides for revolving credit loans and the issuance of letters of credit in an aggregate amount
of up to $450 at September 30, 2014. The Company had outstanding borrowings of $135.0 under our revolving credit facility,
recorded within notes payable, and $302.8 remains available as of September 30, 2014, taking into account outstanding
borrowings and $12.2 of outstanding letters of credit.
Advances under the Company's $150 receivables securitization program, as amended, are not considered debt for purposes of
the Company’s debt compliance covenants, but are included in total debt on the balance sheet. At September 30, 2014 and
2013, $133.5 and $78.0, respectively, was outstanding under this facility.
In addition, the Company had outstanding international borrowings, recorded within Notes payable, of $21.0 as of
September 30, 2014 and 2013, respectively.
Under the terms of the Company’s credit agreement, the ratio of the Company’s indebtedness to its earnings before interest,
taxes, depreciation and amortization (EBITDA), as defined in the agreement and detailed below, cannot be greater than 4.0 to 1,
and may not remain above 3.5 to 1 for more than four consecutive quarters. If and so long as the ratio is above 3.5 to 1 for any
period, the Company is required to pay additional interest expense for the period in which the ratio exceeds 3.5 to 1. The
interest rate margin and certain fees vary depending on the indebtedness to EBITDA ratio. Under the Company’s private
placement note agreements, indebtedness to EBITDA may not be greater than 4.0 to 1; if the ratio is above 3.5 to 1 for any
quarter, the Company is required to pay additional interest on the private placement notes of 0.75% per annum for each quarter
until the ratio is reduced to not more than 3.5 to 1. In addition, under the credit agreement, the ratio of its current year earnings
before interest and taxes (EBIT), as defined in the agreement, to total interest expense must exceed 3.0 to 1. Under the credit
agreement, EBITDA is defined as net earnings, as adjusted to add-back interest expense, income taxes, depreciation and
amortization, all of which are determined in accordance with GAAP. In addition, the credit agreement allows certain non-cash
charges such as stock award amortization and asset write-offs including, but not limited to, impairment and accelerated
depreciation, to be “added-back” in determining EBITDA for purposes of the indebtedness ratio. Severance and other cash
charges incurred as a result of restructuring and realignment activities as well as expenses incurred in acquisition integration
activities are included as reductions in EBITDA for calculation of the indebtedness ratio. In the event of an acquisition,
EBITDA is calculated on a pro forma basis to include the trailing twelve-month EBITDA of the acquired company or brands.
Total debt is calculated in accordance with GAAP, but excludes outstanding borrowings under the receivable securitization
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