Energizer 2015 Annual Report Download - page 76

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ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
72
of $4.5 and $5.4, respectively, included in Accumulated other comprehensive loss on the Consolidated Balance Sheets.
Assuming foreign exchange rates versus the U.S. dollar remain at September 30, 2015 levels, over the next twelve months, $4.5
of the pre-tax gain included in Accumulated other comprehensive loss is expected to be recognized in earnings. Contract
maturities for these hedges extend into fiscal year 2017.
Derivatives not Designated in Hedging Relationships - Edgewell held a share option with a major financial institution to
mitigate the impact of changes in certain of Edgewell’s unfunded deferred compensation liabilities, which are tied to
Edgewell’s common stock price. The share option matured in November 2014 and was not subsequently renewed. Prior to the
spin, Energizer received an allocation of an appropriate share of the impact of this financial instrument.
In addition, Energizer enters into foreign currency derivative contracts which are not designated as cash flow hedges for
accounting purposes, to hedge existing balance sheet exposures. Any gains or losses on these contracts would be offset by
corresponding exchange losses or gains on the underlying exposures; and as such are not subject to significant market risk.
The following table provides the Company's estimated fair values as of September 30, 2015 and 2014, and the amounts of gains
and losses on derivative instruments classified as cash flow hedges as of and for the twelve months ended September 30, 2015
and 2014, respectively:
At September 30, 2015 For the Year Ended September 30, 2015
Derivatives designated as Cash Flow Hedging
Relationships Estimated Fair Value Asset
(Liability) (1) (2) Pre-Tax Gain/(Loss)
Recognized in OCI(3)
Pre-Tax Gain/(Loss)
Reclassified From OCI into
Income (Effective Portion)
(4) (5)
Foreign currency contracts $ 4.5 $ 10.1 $ 11.0
Interest rate contracts (5.2) (5.2) —
Total $ (0.7) $ 4.9 $ 11.0
At September 30, 2014 For the Year Ended September 30, 2014
Derivatives designated as Cash Flow Hedging
Relationships Estimated Fair Value Asset
(Liability) (1) (2) Gain/(Loss) Recognized in
OCI(3)
Gain/(Loss)
Reclassified From OCI into
Income (Effective Portion)
(4) (5)
Foreign currency contracts $ 5.4 $ 6.6 $ (1.1)
1. All derivative assets are presented in Other current assets or Other assets.
2. All derivative liabilities are presented in Other current liabilities or Other liabilities.
3. OCI is defined as other comprehensive income.
4. Gain/(loss) reclassified to Income was recorded as follows: Foreign currency contracts in other financing items, net.
5. Each of these hedging relationships has derivative instruments with a high correlation to the underlying exposure being hedged and has been deemed highly
effective in offsetting the underlying risk.
The following table provides estimated fair values as of September 30, 2015 and 2014, and the gains and losses on derivative
instruments not classified as cash flow hedges as of and for the twelve months ended September 30, 2015 and 2014,
respectively.
At September 30, 2015 For the Year Ended
September 30, 2015
Derivatives not designated as Cash Flow Hedging Relationships Estimated Fair Value Asset
(Liability) Gain/(Loss) Recognized in
Income (1)
Share option (2) $ — $ 0.2
Foreign currency contracts — 2.2
Total $ — $ 2.4