Energizer 2015 Annual Report Download - page 43

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Contractual Obligations
A summary of Energizer’s contractual obligations at September 30, 2015 is shown below:
Total Less than 1 year 1-3 years 3-5 years More than 5 years
Long-term debt, including current maturities $ 999.0 $ 3.0 $ 8.0 $ 8.0 $ 980.0
Interest on long-term debt (1) 417.8 39.5 92.0 92.0 194.3
Notes payable 5.2 5.2 — — —
Operating leases 67.9 14.0 24.6 16.1 13.2
Pension plans (2) 5.2 5.2 — — —
Purchase obligations and other (3) 26.9 10.1 13.8 3.0 —
Total $ 1,522.0 $ 77.0 $ 138.4 $ 119.1 $ 1,187.5
(1) The above table is based upon the debt balance and LIBOR rate as of September 30, 2015. Energizer entered into an interest rate swap agreement
with one major financial institution that fixed the variable benchmark component (LIBOR) on $200 of Energizer's variable rate debt through June
2022 at an interest rate of 2.22%.
(2) Globally, total pension contributions for the Company in the next year are estimated to be $5.2. The projected payments beyond fiscal year 2016 are
not currently estimatible.
(3) Included in the table above are approximately $9.9 of fixed costs related to third party logistics contracts.
Energizer is also party to various service and supply contracts that generally extend approximately one to three
months. These arrangements are primarily individual, short-term purchase orders for routine goods and services at
market prices, which are part of our normal operations and are reflected in historical operating cash flow trends. These
contracts can generally be canceled at our option at any time. We do not believe such arrangements will adversely affect
our liquidity position.
Other Matters
Environmental Matters
The operations of Energizer 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. Under the Comprehensive Environmental Response,
Compensation and Liability Act, Energizer is identified as a “potentially responsible party” (PRP) 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, 2015 were $4.2, of which $1.5 is expected to be spent during fiscal
2016. 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, combined 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.
Legal and other contingencies
The Company and its affiliates are subject to a number of legal proceedings in various jurisdictions arising out of its
operations. 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. We
are a party to legal proceedings and claims that arise during the ordinary course of business. We review our legal proceedings
and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and follow appropriate
accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies where the
incurrence of a loss is probable and we can be reasonably estimated, and we disclose the amount accrued and the amount of a
reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be
misleading. We do not record liabilities when the likelihood that the liability has been incurred is probably, but the amount