Energizer 2015 Annual Report Download - page 15

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• loss of sales as we reduce or eliminate staffing for non-core product lines;
• diversion of management attention from ongoing business activities; and
• failure to maintain employee morale and retain key employees while implementing benefit changes and reductions in
the workforce
We may not be able to effectively design restructuring programs in the future, and when implementing restructuring
plans we may not be able to predict whether we will realize the purpose and anticipated benefits of these measures and, if
we do not, our business and results of operations may be adversely affected.
Our business is subject to increasing 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., including by the Consumer Product Safety Commission, the Environmental Protection
Agency, and by the Federal Trade Commission with respect to advertising. Similar regulations have been adopted by
authorities in foreign countries where we sell our products, and by state and local authorities in the U.S. Legislation is
continually being introduced in the United States and other countries, and new or more restrictive regulations or more
restrictive interpretations of existing regulations, particularly in the battery industry, are likely and could have an adverse
impact on our business. Such actions also increase the risk of personal injury or property damage from inappropriately
handled post-consumer recycled battery collection and processing. Legislative and regulatory changes by taxing
authorities have an impact on our effective tax rate, and we may be subject to additional costs arising from new or changed
regulations, including those relating to health care and energy. Additionally, a finding that we are in violation of, or not in
compliance with, applicable laws or regulations in the areas above, as well laws or regulations related to competition/
antitrust, anti-corruption, trade compliance and other areas, could subject us to material civil remedies, including fines,
damages, injunctions, product recalls, or criminal sanctions. Even if a claim is unsuccessful, is not merited or is not fully
pursued, the negative publicity surrounding such assertions could jeopardize our reputation and brand image and have a
material adverse effect on our businesses, as well as require resources to rebuild our reputation.
We are subject to environmental laws and regulations that may expose us to significant liabilities.
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, recycling of batteries 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. Pursuant to
certain environmental laws, we could be subject to joint and several strict liability for contamination relating to our or our
predecessors’ current or former properties or any of their respective third-party waste disposal sites. In addition to
potentially significant investigation and remediation costs, any such contamination can give rise to claims from
governmental authorities or other third parties for natural resource damage, personal injury, property damage or other
liabilities. Contamination has been identified at certain of our current and former facilities as well as third-party waste
disposal sites, and we are conducting investigation and remediation activities in relation to such properties. The discovery of
additional contamination or the imposition of further cleanup obligations at these or other properties could have a material
adverse effect on our businesses, results of operations or financial condition. We have incurred, and will continue to incur,
capital and operating expenses and other costs in complying with environmental laws and regulations. As new laws and
regulations are introduced, we could become subject to additional environmental liabilities in the future that could cause a
material adverse effect on our results of operations or financial condition.
The resolution of our tax contingencies may result in additional tax liabilities, which could adversely impact our cash
flows and results of operations.
Significant estimation and judgment are required in determining our tax provisions for taxes in the U.S. and
jurisdictions outside the U.S. In the ordinary course of our business, there are transactions and calculations in which the
ultimate tax determination is uncertain. We are regularly audited by tax authorities and, although we believe our tax
positions are defensible and our tax provision estimates are reasonable, the final outcome of tax audits and related
litigation could be materially different than that reflected in our income tax provisions and accruals. The unfavorable
resolution of any audits or litigation could have an adverse impact on future operating results and our financial condition.
Changes in production costs, including raw material prices, could erode our profit margins and negatively impact operating
results. Pricing and availability of raw materials, energy, shipping and other services needed for our business can be
volatile due to general economic conditions, labor costs, production levels, import duties and tariffs and other factors
beyond our control. There is no certainty that we will be able to offset future cost increases. This volatility can
significantly affect our production cost and may, therefore, have a material adverse effect on our business, results of
operations and financial condition.