Available Information

Energizer regularly files periodic reports with the SEC, including annual reports on Form 10-K and quarterly reports on Form 10-Q, as well as, from time to time, current reports on Form 8-K, and amendments to those reports. The SEC maintains an Internet site containing these reports, and proxy and information statements, at www.sec.gov. These filings are also available free of charge on Energizer's website, at www.energizerholdings.com, as soon as reasonably practicable after their electronic filing with the SEC. Information on Energizer's website does not constitute part of this Form 10-K.

Item 1A. Risk Factors.

In the course of conducting our business operations, we are exposed to a variety of risks, some of which are inherent in our industry and others of which are more specific to our own businesses. The discussion below addresses the material factors, of which we are currently aware, that could affect our businesses, results of operations and financial condition and make an investment in the Company speculative or risky.

~~You should carefully consider~~

Some of these risks include:

•Global economic and financial market conditions, including the ~~following risks~~conditions resulting from the COVID-19 pandemic, and actions taken by our customers, suppliers, other ~~information~~business partners and governments in ~~this filing~~markets in ~~evaluating Energizer~~which we compete might materially and ~~Energizer common stock. Any of~~negatively impact us.

•Competition in our product categories might hinder our ability to execute our business strategy, achieve profitability, or maintain relationships with existing customers.

•Changes in the ~~following risks~~retail environment and ~~uncertainties~~consumer preferences could ~~materially~~ adversely affect our business, financial condition orand results of operations.

•We must successfully manage the demand, supply, and operational challenges brought about by the COVID-19 pandemic and any other disease outbreak, including epidemics, pandemics, or similar widespread public health concerns.

~~Risks Related~~•Loss or impairment of the reputation of our Company or our leading brands or failure of our marketing plans could have an adverse effect on our business.

•Loss of any of our principal customers could significantly decrease our sales and profitability.

•Our ability to meet our growth targets depends on successful product, marketing and operations innovation and successful responses to competitive innovation and changing consumer habits.

•We are subject to risks related to our international operations, including currency fluctuations, which could adversely affect our results of operations.

•If we fail to protect our intellectual property rights, competitors may manufacture and market similar products, which could adversely affect our market share and results of operations.

•Our ~~Business~~reliance on certain significant suppliers subjects us to numerous risks, including possible interruptions in supply, which could adversely affect our business.

•Our business is vulnerable to the availability of raw materials, our ability to forecast customer demand and our ability to manage production capacity.

•Changes in production costs, including raw material prices, could erode our profit margins and negatively impact operating results.

•The manufacturing facilities, supply channels or other business operations of the Company and our suppliers may be subject to disruption from events beyond our control.

•We ~~face~~may be unable to generate anticipated cost savings, successfully implement our strategies, or efficiently manage our supply chain and manufacturing processes, and our profitability and cash flow could suffer as a result.

•Sales of certain of our products are seasonal and adverse weather conditions during our peak selling seasons for certain auto care products could have a material adverse effect.

•A failure of a key information technology system could adversely impact our ability to conduct business.

•Our operations depend on the use of information technology systems that are subject to data privacy regulations, including recently effective European Union requirements, and could be the target of cyberattack.

•We have significant debt obligations that could adversely affect our business and our ability to meet our obligations.

•We may experience losses or be subject to increased funding and expenses related to our pension plans.

•The estimates and assumptions on which our financial projections are based may prove to be inaccurate, which may cause our actual results to materially differ from our projections, which may adversely affect our future profitability, cash flows and stock price.

•If we pursue strategic acquisitions, divestitures or joint ventures, we might experience operating difficulties, dilution, and other consequences that may harm our business, financial condition, and operating results, and we may not be able to successfully consummate favorable transactions or successfully integrate acquired businesses.

•We may be unable to realize the anticipated benefits of the 2019 acquisitions of the global auto care and battery, lighting and power businesses from Spectrum Brands.

•The 2019 auto care and battery acquisitions may have liabilities that are not known to us and the acquisition agreements may not provide us with sufficient indemnification with respect to such liabilities.

•Our business involves the potential for claims of product liability, labeling claims, commercial claims and other legal claims against us, which could affect our results of operations and financial condition and result in product recalls or withdrawals.

•Our business is subject to increasing regulation in the U.S. and abroad, the uncertainty and cost of future compliance and consequence of non-compliance with which may have a material adverse effect on our business.

•Increased focus by governmental and non-governmental organizations, customers, consumers and shareholders on sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

•We are subject to environmental laws and regulations that may expose us to significant liabilities and have a material adverse effect on our results of operations and financial condition.

•We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our stock and diminish our cash reserves.

•Our common stock ranks junior to our Mandatory Convertible Preferred Stock with respect to dividends and amounts payable in the event of our liquidation, dissolution or winding-up of our affairs.

•Holders of our Mandatory Convertible Preferred Stock will have the right to elect two directors in the case of certain dividend arrearages.

•Certain rights of the holders of the Mandatory Convertible Preferred Stock could delay or prevent an otherwise beneficial takeover or takeover attempt of us.

Additional factors that could affect our businesses, results of operations and financial condition are discussed in Forward-Looking Statements in MD&A. However, other factors not discussed below or elsewhere in this Annual Report on Form 10-K could also adversely affect our businesses, results of operations and financial condition. Therefore, the risk factors below should not be considered a complete list of potential risks ~~associated~~that we may face.

Any risk factor described in this Annual Report on Form 10-K or in any of our other SEC filings could by itself, or together with ~~global~~other factors, materially adversely affect our liquidity, competitive position, business, reputation, results of operations, capital position or financial condition, including by materially increasing our expenses or decreasing our revenues, which could result in material losses.

Economic, Competitive and Industry Risks

Global economic ~~conditions.~~and financial market conditions, including the conditions resulting from the COVID-19 pandemic, and actions taken by our customers, suppliers, other business partners and governments in markets in which we compete might materially and negatively impact us.

Unfavorable global economic conditions and ~~uncertainty about future~~the economies in regions in which we conduct business have experienced substantial economic ~~prospects could reduce consumer demand for our products. This could occur~~downturns as a result of the COVID-19 pandemic. We are currently experiencing reduced demand for certain of our consumer products, and in the future might be adversely affected in a material way by lower consumer demand as a result of recessionary economic conditions, including after the direct impact of the COVID-19 pandemic has subsided. In response to unfavorable economic conditions, there could be a reduction in discretionary spending, which may lead to reduced net sales or cause a shift in our product mix from higher-margin to lower-margin product offerings or a shift of purchasing patterns to lower cost options such as ~~private label~~“private label” brands sold by retail chains or price brands. This shift could drive the market towards lower margin products or force us to reduce prices for our products in order to compete. Similarly, our retailer

customers could reduce their inventories, shift to different products or require us to lower our prices to retain the shelf placement of our products. ~~Declining~~

Global markets continued to face threats and uncertainty during fiscal year 2020. Future changes to U.S. or foreign tax and trade policies, imposition of new or increased tariffs, other trade restrictions or other government actions, including any government shutdown, foreign currency fluctuations, including devaluations, and fear of exposure to or actual impacts of a widespread disease outbreak, such as the COVID-19 pandemic, may lead to continuation of such risks and uncertainty. Uncertain economic and financial ~~performance by certain~~market conditions may also adversely affect the financial condition of our ~~retailer~~ customers, suppliers and other business partners. Any significant decrease in customers’ purchases of our products or our inability to collect accounts receivable resulting from an adverse impact of the global markets on customers’ financial condition could ~~impact their ability to pay us~~have a material adverse effect on ~~a timely basis, or at all. Worsening economic conditions could harm~~ our ~~sales~~business, financial condition and ~~profitability.~~ results of operations.Additionally, disruptions in financial markets could reduce our access to debt and equity capital markets, negatively affecting our ability to implement our business strategy.

Competition in our ~~industries may~~product categories might hinder our ability to execute our business strategy, achieve profitability, or maintain relationships with existing customers.

We face intense competition from consumer product companies both in the U.S. and in global markets. Most of our products compete with other widely advertised, promoted and merchandised brands within each product category. The categories in which we operate are mature and highly competitive, ~~both in the United States and globally,~~ as a limited number of large manufacturers compete for consumer acceptance, limited retail shelf space and e-commerce opportunities. Because of the highly competitive environment in which we operate, ~~as well as increasing retailer concentration,~~ our ~~retailer~~ customers, including online retailers, frequently seek to obtain pricing concessions or better trade terms, resulting in either reduction of our margins or losses of distribution to lower-cost competitors.

Competition in our product categories is based upon brand perceptions, innovation, product performance, customer service and price. Our ability to compete effectively ~~may~~could be affected by a number of factors, including:

~~our~~•Our competitors ~~may~~might have substantially greater financial, marketing, research and development, and other resources and greater market share in certain segments than we do, which could provide them with greater scale and negotiating leverage with retailers and ~~suppliers;~~suppliers. These competitors may be able to spend more aggressively on advertising and promotional activities, introduce competing products more quickly and respond more effectively to changing business and economic conditions than we can.

~~our~~•Our competitors may have lower production, sales and distribution costs, and higher profit ~~margins, which may enable them to offer aggressive retail discounts and other promotional incentives;~~margins.

~~our~~•Our competitors have obtained, and may in the future be able to obtain, exclusivity or sole source at particular retailers or favorable in-store ~~placement; and~~placement.

we•We may lose market share to certain retailers, including club stores, grocery, dollar stores, mass merchandisers and internet-based retailers, which may offer ~~“private label”~~private label brands that are typically sold at lower prices and compete with ~~the Company’s~~our products in certain categories.

•Despite increased demand for many of our products in response to COVID-19, we expect heightened competitive activity from strong local competitors, other large multinational companies, and new entrants into the market in many of our product categories. We expect such activities to include more aggressive product claims and marketing challenges, increased promotional spending and geographic expansion, and marketing of new products. We expect promotional activities to increase as retailers try aggressively to get consumers back into their stores after prolonged “stay at home” and other government restrictions continue to ease over the coming months.Furthermore, our competitors may attempt to gain market share by offering products at prices at or below those we typically offer.

~~The changing~~

Changes in the retail environment and consumer preferences could adversely affect our business, financial condition and results of operations.

Our sales are largely concentrated in the traditional retail grocery, mass retail outlet, warehouse club and dollar store channels. However, ~~alternative~~the retail environment continues to evolve and may change to a more significant extent or at a faster pace in light of the COVID-19 pandemic, with a greater consumer emphasis on health and wellness, and this could significantly change the way traditional retailers do business. Alternative retail channels, including hard discounters, e-commerce retailers and

subscription services, have become more prevalent, and ~~consumer products~~retailers are increasingly ~~being sold~~selling consumer products through such alternative retail channels. In addition, a growing number of alternative sales channels and business models, such as niche brands, native online brands, private label and store brands, direct-to-consumer brands and channels and discounter channels, have emerged in the markets we serve. In particular, the growing presence of, and increasing sales through, e-commerce retailers have affected, and may continue to affect, consumer preferences (as consumers increasingly shop online, including in response to the COVID-19 pandemic) and market dynamics, including any pricing pressures for consumer goods as retailers face added costs to build their e-commerce capacity. These trends have been magnified due to the COVID-19 pandemic in many of our geographies. Although we are engaged in e-commerce with respect to many of our products, if we are not successful in expanding sales in such alternative retail channels, our business, financial condition and results of operations may be negatively impacted. In addition,

the growth of the alternative retail channels that are focused on limiting the number of items they sell and selling predominantly ~~“private label”~~private label products may reduce our ability to market and sell our products through such retailers. ~~The retail environment is changing with the growth of alternative retail channels and this could significantly change the way traditional retailers do business.~~ If these alternative retail channels were to take significant market share away from traditional retailers and/or we are not successful in these alternative retail channels, our margins and results of operations may be negatively impacted.

Our failure to adapt to changing consumer preferences and market dynamics or expand sales through e-commerce retailers, hard discounters and other alternative retail channels, may negatively impact our business, financial condition and results of operations. With the growing trend towards retailer consolidation, both in the U.S. and internationally, the rapid growth of e-commerce and the integration of traditional and digital operations at key retailers, we are increasingly dependent on certain retailers. This trend, which has been magnified due to the COVID-19 pandemic, has resulted in the increased size and influence of large consolidated retailers, who have in the past changed, and may in the future change, their business strategies, demand lower pricing, or higher trade discounts or impose other burdensome requirements on product suppliers. These business demands may relate to inventory practices, in-store on online product placement, transportation and storage or product packaging. Such customers may also shift their focus away from branded products toward private label or other aspects of the customer-supplier relationship. These large consolidated companies could also exert additional competitive pressure on our other customers, which could in turn lead to such customers demanding lower pricing, higher trade discounts or special packaging or imposing other onerous requirements on us. If we cease doing business with a significant customer or if sales of our products to a significant customer materially decrease due to customer inventory reductions or otherwise, our business, financial condition and results of operations may be harmed.

We must successfully manage the demand, supply, and operational challenges brought about by the COVID-19 pandemic and any other disease outbreak, including epidemics, pandemics, or similar widespread public health concerns.

Our operations are impacted by consumer spending levels, impulse purchases, the availability of our products to retail and our ability to manufacture, store and distribute products to our customers and consumers in an effective and efficient manner. The fear of exposure to or actual effects of a disease outbreak, epidemic, pandemic or similar widespread public health concern, such as COVID-19, has negatively impacted portions of our business and could negatively impact our overall business, financial position and financial results. These impacts caused by fear of exposure or the effects of a widespread public health concern may include, but are not limited to:

▪Significant reductions, shifts or fluctuations in demand for one or more of our products, which may be caused by, among other things:

–a decrease in consumer traffic in brick-and-mortar stores across all our major markets and the resulting negative impact on our net sales to customers in that channel;

–the temporary inability of our consumers to purchase our products due to illness, quarantine, other travel restrictions, or financial hardship;

–shifts in demand away from one or more of our premium products to lower priced value or private label products and lower demand in our discretionary product categories;

–stockpiling or similar “pantry-loading” activity by consumers, which may cause volatility in our quarterly results and, if prolonged, further increase the complexity of our operations planning and financial forecasting and adversely impact our results of operations;

–significant reductions in the availability of one or more of our products as a result of retailers, common carriers or other shippers modifying restocking, fulfillment and shipping practices; or

–shifts, fluctuations, or cancellation of orders due to the impact on customers’ operations, including the possibility of temporary or permanent closure.

▪Inability to meet our customers’ needs due to disruptions in our manufacturing and supply chain arrangements caused by the loss or disruption of essential manufacturing and supply chain elements, such as raw materials or other finished product components, transportation, workforce, or other manufacturing and distribution capability. In addition, we may incur higher costs for transportation, workforce and distribution capability in order maintain the surety of supplying product to our customers;

▪Failure of third parties upon which we rely, including our suppliers, contract manufacturers, distributors, contractors and commercial banks, to meet their obligations to us, or significant disruptions in their ability to meet those obligations in a timely manner, which may be caused by their own financial or operational difficulties and may adversely impact our operations, liquidity and financial results; and

▪Significant changes in the political and regulatory landscape in the markets in which we manufacture, sell or distribute our products.These changes may include, but are not limited to, expanded quarantines, restrictions on international trade, governmental or regulatory actions, closures or other restrictions that limit or suspend our operating and manufacturing capabilities, restrict our employees’ ability to travel or perform necessary business functions, or otherwise prevent our third-party partners or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale, and support of our products, which could adversely impact our results.

We have incurred additional costs and may continue to incur additional costs, which may be significant, if we are required to implement additional operational changes in response to this pandemic. For example, our incremental COVID-19 related costs of products sold were approximately $24 million in fiscal 2020. In addition, we cannot predict the impact that COVID-19 will have on our customers, suppliers, vendors and other business partners, and their respective financial conditions. However, any material effects on these parties could adversely impact us. This situation is changing rapidly and additional impacts may arise that we are not aware of currently. Even after the COVID-19 outbreak has subsided, we may continue to experience materially adverse impacts to our business as a result of the virus’s global economic impact, including the availability of credit, adverse impacts on our liquidity and the impacts of any recession that has occurred or may occur in the future.

Loss or impairment of the reputation of our Company or our leading brands or failure of our marketing plans could have an adverse effect on our business.

We depend on the continuing reputation and success of our brands. Maintaining a strong reputation with consumers, customers and trade and other third-party partners is critical to the success of our business. Negative publicity about us or our brands, ~~particularly our Energizer~~including product safety, quality, efficacy, environmental impacts (including packaging, energy and ~~Eveready brands.~~water use and waste management) and other sustainability or similar issues, whether real or perceived, could occur and could be widely and rapidly disseminated, including through the use of social media or network sites. Our operating results could be adversely affected if any of our ~~leading~~ brands suffers damage to its reputation due to real or perceived quality issues. Any damage to ~~the Energizer and Eveready~~our brands could impair our ability to charge premium prices for our products, resulting in the reduction of our margins or losses of distribution to lower price ~~competitors.~~competitors, and adversely affect our business, financial condition and results of operations.

The success of our brands can suffer if our marketing plans or new product offerings do not improve, or have a negative impact on, our brands’ image or ability to attract and retain consumers. Additionally, if claims made in our marketing campaigns ~~become~~ subject us to litigation alleging false advertising, which is common in our industry, itsuch litigation could damage our brand or cause us to alter our marketing plans in ways that may materially and adversely affect sales, or result in the imposition of significant damages against us. ~~Further, a boycott~~In addition, our products could face withdrawal, recall or other ~~campaign critical~~quality issues, which could lead to decreased demand for, and sales of, ~~us, through social media or otherwise, could negatively impact~~such products and harm the reputation of the related brands. We also license certain of our ~~brands’ reputation~~brands to third parties, and ~~consequently our products’ sales.~~such licenses and partnerships may create additional exposure for those brands to product safety, quality, sustainability and other concerns.

Loss of any of our principal customers could significantly decrease our sales and profitability.

Generally, sales to our top customers are made pursuant to purchase orders and we do not have guarantees of minimum purchases from them. As a result, these customers may cancel their purchase orders or reschedule or decrease their level of purchases from us at any time. The loss or a substantial decrease in the volume of purchases by any of our top customers would harm our sales and profitability. Additionally, increasing retailer customer concentration could result in reduced sales outlets for our products, as well as greater negotiating pressures and pricing requirements on us.

~~Sales of our battery products may be impacted by further changes in technology and device trends, which could impair our operating results and growth prospects.~~

We believe an increasing number of devices are using built-in battery systems, particularly in developed markets, leading to a declining volume trend in the battery category, which we expect will continue. This has and will likely continue to have a negative impact on the demand for primary batteries. This trend has and will continue to put additional pressure on results going forward, both directly through reduced consumption and indirectly as manufacturers aggressively price and promote their products to seek to retain market share or gain battery shelf space. Development and commercialization of new battery or device technologies not available to us could also negatively impact our results and prospects.

~~We are subject to risks related to our international operations, including currency fluctuations, which could adversely affect our results of operations.~~

~~Our business is currently conducted on a worldwide basis, with approximately half~~A large percentage of our sales ~~in fiscal year 2017 arising from foreign countries,~~are attributable to a relatively small number of retail customers, and we may continue to derive a significant portion of our ~~production capacity and cash located overseas. Consequently, we are subject to~~future revenues from a small number of ~~risks associated with doing business in foreign countries, including:~~

~~the possibility of expropriation, confiscatory taxation or price controls;~~

~~the inability to repatriate foreign-based cash for strategic needs~~customers. As a result, changes in the ~~U.S., either at all~~strategies of our largest customers, including a reduction in the number of brands they carry, a shift of shelf space to private label or ~~without incurring significant income tax~~competitors’ products or a decision to lower pricing of consumer products, including branded products, may harm our net sales or margins, and ~~earnings consequences, as well as the heightened counterparty, internal control and country-specific risks associated with holding cash overseas;~~

~~the effect of foreign income taxes, value-added taxes and withholding taxes, including the inability to recover amounts owed to us by a government authority without extended proceedings or at all;~~

~~the effect of the U.S. tax treatment of foreign source income and losses, and other restrictions on the flow of capital between countries;~~

~~adverse changes in local investment, local employment, local training or exchange control regulations;~~

~~restrictions on and taxation of international imports and exports;~~

~~currency fluctuations, including the impact of hyper-inflationary conditions in certain economies, particularly where exchange controls limit or eliminate~~reduce our ability to ~~convert from local currency;~~offer new, innovative products to consumers. Furthermore, any loss of a key customer or a

~~political or economic instability, government nationalization of business or industries, government corruption and civil unrest, including political or economic instability~~

significant reduction in ~~the countries of the Eurozone, Egypt, Russia, the~~

~~Middle East and certain markets in Latin America;~~

~~legal and regulatory constraints, including tariffs and other trade barriers;~~

~~difficulty in enforcing contractual and intellectual property rights; and~~

net sales to a significant portion of our sales are denominated in local currencies but reported in U.S. dollars, and a high percentage of product costs for such sales are denominated in U.S. dollars. Therefore, although we may hedge a portion of the exposure, the strengthening of the U.S. dollar relative to such currencies can negatively impact our reported sales and operating profits.

~~The U.S. dollar has strengthened significantly against most currencies, and our segment profit~~key customer, could ~~be impacted by adverse currency movements.~~

~~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. 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, recent reform proposals have introduced greater uncertainty with respect to tax and trade policies, tariffs and government regulations affecting trade between the U.S. and other countries. Major developments in tax policy or trade relations could have a material effect on our balance sheet and results of operations.

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, data privacy 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.~~

~~A failure of a key information technology system could adversely impact our ability to conduct business.~~

Our business is based primarily upon individual sales orders, and ~~complying~~we typically do not enter into long-term contracts with ~~regulatory, legal or tax requirements. These information technology systems~~our customers. Accordingly, customers could ~~be damaged~~reduce their purchasing levels or cease to function properly due to the poor performance or failure of third party service providers, catastrophic events, power outages, security breaches, network outages, failed upgrades or other similar events.buying products from us at any time and for any reason. If ~~our business continuity plans~~we do not effectively ~~resolve such issues on a timely basis, we may suffer interruptions in conducting~~respond to the demands of our ~~business, which may adversely impact~~customers, they could decrease their purchases from us, causing our ~~operating results. In addition, we continuously assess~~net sales and ~~implement upgrades~~net earnings to improve our information technology systems globally. As such, during these implementation periods, we face a heightened risk of system interruptions and deficiencies or failures in our internal controls involving our information systems and processes.decline.

Our ability to meet our growth targets depends on successful product, marketing and operations ~~depend on the use~~innovation and successful responses to competitive innovation and changing consumer habits.

A large percentage of ~~information technology systems~~our revenues comes from mature markets that are subject to ~~data privacy regulations~~high levels of competition, and ~~could be the target of cyberattack.~~

~~If we cannot continue to develop~~part, on successfully developing, introducing and marketing new products ~~in a timely manner, market them at favorable margins,~~ and ~~maintain attractive performance standards in~~on making significant improvements to our ~~existing products, we may not be able to compete effectively.~~

~~The battery, portable lighting, automotive fragrance~~equipment and ~~appearance products industries have been notable for developments in product life, product design and applied technology, and our success depends on future innovations by us.~~manufacturing processes. The successful development and introduction of new products requires retail and consumer acceptance and overcoming the reaction from competitors. New product introductions in categories where we have existing products will likely also reduce the sales of our existing products. Our investments in research and development may not result in successful products or innovation that will recover the costs of such investments. Our customers or end consumers may not purchase our new products once introduced. Additionally, new products could require regulatory approval which may not be available or may require modification to the product which could impact the production process. Our competitors may introduce new or enhanced products that outperform ours, or develop manufacturing technology that permits them to manufacture at a lower cost relative to ours and sell at a lower price. If we fail to develop and launch successful new products or fail to reduce our cost structure to a competitive level, we may be unable to grow our business and compete successfully.

We must also successfully respond to technological advances made by, and intellectual property rights granted to, competitors. Failure to continually innovate, improve and respond to competitive moves and changing consumer habits could compromise our competitive position and adversely impact our results. With respect to the battery category, we have been assessing volume and device trends in the battery category over the last several years, and although baseline emerging device and demographic trends combined with the stabilization of the device universe lead us to believe the long term outlook for category volume will be flat to slightly positive, there is no assurance this trend will continue.An increasing number of devices are using built-in battery systems, such as rechargeable hearing aids, particularly in developed markets, leading to potential declining volume trend in the battery category.Additionally, there could be a negative impact on the demand for primary batteries and could put additional pressure on results going forward, both directly through reduced consumption and indirectly as manufacturers aggressively price and promote their products to seek to retain market share or gain battery shelf space.

Our business also depends on our ability to continue to manufacture our existing products to meet the applicable product performance claims we have made to our customers. Any decline in these standards could result in the loss of business and negatively impact our performance and financial results. Finally, our ability to maintain favorable margins on our products requires us to manage our manufacturing and other production costs relative to our prices. We may not be able to increase our prices in the event that our production costs increase, which would decrease our profit margins and negatively impact our business and financial results.

We have implemented price increases in the past and may implement price increases in the future, which may slow sales growth or create volume declines in the short term as customers and consumers adjust to these price increases. In addition, our competitors may or may not take competitive actions, which may lead to sales declines and loss of market share. If we are unable to increase market share in existing product lines, develop product innovations, undertake sales, marketing and advertising initiatives that grow our product categories or develop, acquire or successfully launch new products or brands, we may not achieve our sales growth objectives. Furthermore, a general decline in the markets for certain product categories has had and may in the future have a negative impact on our financial condition and results of operation. In addition, changes to the mix of products that we sell, as well as the mix of countries in which we sell our products, may adversely impact our net sales, profitability and cash flow.

We are subject to ~~environmental~~risks related to our international operations, including currency fluctuations, which could adversely affect our results of operations.

We currently conduct our business on a worldwide basis, with more than 40% of our sales in fiscal year 2020 arising from foreign countries, and a significant portion of our production capacity and cash is located overseas. Consequently, we are subject to a number of risks associated with doing business in foreign countries, including:

•price controls and related government actions;

•the possibility of nationalization, expropriation, confiscatory taxation or other similar government action;

•the inability to repatriate foreign-based cash for strategic needs in the U.S., either at all or without incurring significant income tax and earnings consequences, as well as the heightened counterparty, internal control and country-specific risks associated with holding cash overseas;

•the effect of foreign income taxes, value-added taxes and withholding taxes, including the inability to recover amounts owed to us by a government authority without extended proceedings or at all;

•the effect of the U.S. tax treatment of foreign source income and losses, and other restrictions on the flow of capital between countries;

•adverse changes in local investment, local employment, local training or exchange control regulations;

•legal and regulatory constraints, including the imposition of tariffs, trade restrictions, price, profit or other government controls, labor laws, immigration restrictions, travel restrictions, including as a result of COVID-19 or other pandemics or epidemics, import and export laws or other government actions generating a negative impact on our business, including changes in trade policies that may be implemented;

•currency fluctuations, including the impact of hyper-inflationary conditions in certain economies, particularly where exchange controls limit or eliminate our ability to convert from local currency;

•political or economic instability, labor disputes, government nationalization of business or industries, government corruption and civil unrest, including political or economic instability in the countries of the Eurozone, Egypt, Russia, the Middle East and certain markets in Latin America;

•difficulties in hiring and retaining qualified employees;

•employment litigation related to employees, contractors and suppliers, particularly in Latin America and Europe;

•difficulties in obtaining or unavailability of raw materials, including as a result of lower rates of production due to the COVID-19 pandemic or the financial condition of suppliers and distributors or restrictions on their operations;

•difficulty in enforcing contractual and intellectual property rights;

•lack of well-established or reliable, and impartial legal systems in certain countries where we operate;

•challenges relating to enforcement of or compliance with local laws and regulations ~~that may expose~~and with U.S. laws affecting operations outside of the U.S., including without limitation, the FCPA; and

•risks related to natural disasters, terrorism and other events beyond our control.

In addition, the impact of the United Kingdom’s exit from, and the related ongoing negotiations with, the European Union (commonly referred to as Brexit) are, at this time, unclear. Brexit has created legal, political and economic uncertainty, which could subject us to heightened risks in that region, including disruptions to trade and free movement of goods, services and people to and from the United Kingdom, disruptions to our workforce or the workforce of our suppliers or business partners, and increased foreign exchange volatility with respect to the British pound. All of the foregoing risks could have a significant ~~liabilities.~~adverse impact on our ability to commercialize our products on a competitive basis in international markets and may have a material adverse effect on our business, financial condition and results of operations.

We ~~must comply~~are also exposed to foreign currency exchange rate risks with ~~various environmental laws~~respect to our net sales, net earnings and ~~regulations~~cash flow driven by movements of the U.S. dollar relative to other currencies. A weakening of the currencies in which generate sales relative to the ~~jurisdictions~~currencies in which costs are denominated would decrease net earnings and cash flow, and. our foreign currency hedges only offset a portion of our exposure to foreign currency fluctuations, including devaluations. Foreign currency fluctuations also may affect our ability to achieve sales growth.A weakening of foreign currencies in which we ~~operate, including those relating~~generate sales relative 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 resultU.S. dollar would decrease our net sales. Accordingly, our reported net earnings may be negatively affected by changes 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 orforeign exchange rates.

Furthermore, the imposition of ~~further cleanup obligations at these~~ tariffs and/or increases in tariffs on various products by the U.S. and other countries has introduced greater uncertainty with respect to trade policies and government regulations affecting trade between the U.S. and other countries,New and increased tariffs have subjected, and may in the future subject, us to additional costs and expenditures of resources. Major developments in trade relations, including the imposition of new or increased tariffs by the U.S. and/or other ~~properties~~countries, and any emerging nationalist trends in specific countries could negatively affect the trade environment and consumer purchasing behavior and have a material adverse effect on our financial condition and results of operations.

If we fail to protect our intellectual property rights, competitors may manufacture and market similar products, which could adversely affect our market share and results of operations.

The vast majority of our total revenues are from products bearing proprietary trademarks and brand names. In addition, we own or license from third parties a number of patents, patent applications and other technology. We rely on trademark, trade secret, patent and copyright laws to protect our intellectual property rights.We cannot be certain that we will be able to effectively utilize these intellectual property rights or that we can successfully assert or defend these rights.There is a risk that we will not be able to obtain and perfect or maintain our own intellectual property rights or, where appropriate, license intellectual property rights necessary to support new product introductions. In addition, even if we can protect such rights in the United States, the laws of some other countries in which we sell our products may not protect intellectual property rights to the same extent as the laws of the United States. It is also possible that our brands may not be available for use in certain countries due to prior third-party rights, thereby limiting expansion of our brands. If other parties infringe our intellectual property rights, they may dilute or diminish the value of our brands and products in the marketplace, which could diminish the value that consumers associate with our brands and harm our net sales. The failure to perfect and protect our intellectual property rights could make us less competitive and could have a material adverse effect on our ~~businesses,~~business, financial condition and results of ~~operations~~operations.

We cannot be certain that our intellectual property rights will not be invalidated, circumvented 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 liabilitieschallenged in the future, and we could incur significant costs in connection with legal actions relating to such rights. As patents expire, we could face increased competition, which could negatively impact our operating results. Additionally, a finding that we have violated the trademark, trade secret, copyright, patent or other intellectual property rights of others, directly or indirectly, through the use of third-party marks, ideas or technologies, could result in the need to cease use of such trademark, trade secret, copyrighted work or patented invention in our business, as well as the obligation to pay for past infringement. If holders are willing to permit us to continue to use such intellectual property rights, they could require a payment of a substantial amount for continued use of those rights. Either ceasing use or paying such amounts could cause us to become less competitive and could have a material adverse effect on our ~~results of operations or~~business, financial ~~condition.~~

~~The resolution of our tax contingencies may result in additional tax liabilities, which could adversely impact our cash flows~~condition and results of operations.

~~Significant estimation~~Operational and ~~judgment~~Technology Risks

Our reliance on certain significant suppliers subjects us to numerous risks, including possible interruptions in supply, which could adversely affect our business.

Our ability to maintain consistent quality throughout our operations depends in part upon our ability to acquire certain products in sufficient quantities.Supply shortages for a particular component can delay production and thus delay shipments to customers and the associated revenue of all products using that component. This could cause us to experience a reduction in sales, increased inventory levels and costs and could adversely affect relationships with existing and prospective customers. In some cases, we may have only one supplier for a product or service.Our dependence on single-source suppliers subjects us to the possible risks of shortages, interruptions and price fluctuations, and possible litigation when we change vendors because of performance issues. Global economic factors, as a result of the COVID-19 pandemic or otherwise, and the weak economic recovery continue to put significant pressure on suppliers, with some suppliers facing financial distress and others attempting to rebuild profitability, all of which tends to make the supply environment more expensive.The shutdown of one or more of our vendors could disrupt the supply of products necessary to our operations. If any of these vendors is unable to fulfill its obligations, or if we are ~~required in determining our tax provisions for taxes~~unable to find replacement suppliers in the ~~U.S.~~event of a supply disruption, we could encounter supply shortages and/or incur higher costs to secure adequate supplies, either of which could materially harm our business.

Our business is vulnerable to the availability of raw materials, our ability to forecast customer demand and ~~jurisdictions outside~~our ability to manage production capacity.

Our ability to meet customer demand depends, in part, on our production capacity and on obtaining supplies, a number of which can only be obtained from a single supplier or a limited number of suppliers. A reduction or disruption in our production capacity or our supplies could delay products and fulfillment of orders and otherwise negatively impact our business.

We must accurately predict both the ~~U.S.~~demand for our products and the lead times required to obtain the necessary components and materials. If we overestimate demand, we may experience underutilized capacity and excess inventory levels. If we underestimate demand, we may miss delivery deadlines and sales opportunities and incur additional costs for labor overtime, equipment overuse and logistical complexities. Additionally, our production capacity could be affected by manufacturing problems. Difficulties in the production process could reduce yields or interrupt production, and, as a result, we may not be able to deliver products on time or in a cost-effective, competitive manner. Our failure to adequately manage our capacity could have a material adverse effect on our business, financial condition and results of operations.

Our ability to meet customer demand also depends on our ability to obtain timely and adequate delivery of materials, parts and components from our suppliers. From time to time, suppliers may extend lead times, limit the amounts supplied to us or increase prices due to capacity constraints or other factors. Supply disruptions may also occur due to shortages in critical materials. In ~~the ordinary course~~addition, a number of our ~~business, there~~raw materials are ~~transactions~~obtained from a single supplier. Many of our suppliers must undertake a time-consuming qualification process before we can incorporate their raw materials into our production process. If we are unable to obtain materials from a qualified supplier, it can take up to a year to qualify a new supplier, assuming an alternative source of supply is available. Our raw materials and ~~calculations in which the ultimate tax determination is uncertain.~~component parts are also susceptible to currency fluctuations and price fluctuations due to supply and demand, transportation, government regulations, price controls, tariffs, economic climate, or other unforeseen circumstances. We have experienced some shortages and allocations of component parts due to COVID-19, mainly related to our auto care operations. We are ~~regularly audited by tax authorities~~working to qualify additional sources to ensure continued supply of these items. A reduction or interruption in supplies or a significant increase in the price of one or more supplies could have a material adverse effect on our business, financial condition and ~~although~~results of operations.

In addition, sales of certain of our products tend to be seasonal. As a result of this seasonality, our inventory and working capital needs fluctuate significantly throughout the year. Orders from retailers are often made late in the period preceding the applicable peak season, making forecasting of production schedules and inventory purchases difficult. If we ~~believe~~are unable to accurately forecast and prepare for customer orders or our ~~tax positions are defensible~~working capital needs, or there is a general downturn in business or economic conditions during these periods, our business, financial condition and ~~our tax provision estimates are reasonable, the final outcome~~results of ~~tax audits and related litigation~~operations could be materially ~~different than~~and adversely affected.

Additionally, as a result of the desire of retailers to more closely manage inventory levels, there is a growing trend among them to purchase products on a “just-in-time” basis. Due to a number of factors, including (i) manufacturing lead-times, (ii) seasonal purchasing patterns and (iii) the potential for material price increases, we may be required to shorten our lead-time for production and more closely anticipate our retailers’ and customers’ demands, which could in the future require us to carry additional inventories and increase our working capital and related financing requirements. This may increase the cost of warehousing inventory or result in excess inventory becoming difficult to manage, unusable or obsolete. In addition, if our retailers significantly change their inventory management strategies, we may encounter difficulties in filling customer orders or in liquidating excess inventories, or may find that ~~reflected in~~customers are cancelling orders or returning products, which may have a material adverse effect on 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.~~business.

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.

Reduced availability of transportation options has caused, and could continue to cause, us to incur unanticipated expenses.We believe commodity price and other cost increases and volatility, especially due to the COVID-19 pandemic, could continue in the future. If such increases occur or exceed our estimates and we are not able to increase the prices of our

products or achieve cost savings to offset such cost increases, its results of operation would be harmed. In addition, even if we increase the prices of our products in response to increases in the cost of commodities or other cost increases, we may not be able to sustain our price increases. Sustained price increases may lead to declines in volume as competitors may not adjust their prices or customers may decide not to pay the higher prices, which could lead to sales declines and loss of market share.Our projections may not accurately predict the volume impact of price increases, which could adversely affect our business, financial condition and results of operations.

The manufacturing facilities, supply channels or other business operations of the Company and our suppliers may be subject to disruption from events beyond our control.

Operations of ~~our~~the manufacturing and packaging facilities worldwide and ~~of our~~ corporate offices of the Company and our suppliers, and the methods we and our suppliers use to obtain supplies and to distribute our products, may be subject to disruption for a variety of reasons, including ~~availability of raw materials,~~ work stoppages, ~~industrial accidents,~~cyber-attacks and other disruptions in information technology systems, demonstrations, disease outbreaks or pandemics, such as the COVID-19 pandemic, acts of war, terrorism, fire, earthquakes, flooding or other natural disasters, disruptions in logistics, loss or impairment of key manufacturing sites, supplier capacity constraints, raw material and product quality or safety issues, ~~licensing requirements~~industrial accidents or other occupational health and safety issues, availability of raw materials, and other regulatory issues, trade disputes between countries in which we have operations, such as the U.S. and ~~China, and acts of war, terrorism, pandemics, fire, earthquake, flooding or other natural disasters. The supply of our raw materials may be similarly disrupted.~~ China.There is also a possibility that third-party manufacturers, which produce a significant portion of certain of our products, could discontinue production with little or no advance notice, or experience financial problems or problems with product quality or timeliness of product delivery, resulting in manufacturing delays or disruptions, regulatory sanctions, product liability claims or consumer complaints. If a major disruption were to occur, it could result in delays in shipments of products to customers or suspension of operations. We maintain business interruption insurance to potentially mitigate the impact of business interruption, but such coverage may not be sufficient to offset the financial or reputational impact of an interruption.

~~In addition,~~We may be unable to generate anticipated cost savings, successfully implement our strategies, or efficiently manage our supply chain and manufacturing processes, and our profitability and cash flow could suffer as a result.

We continue to implement plans to improve our competitive position by reducing material costs and manufacturing inefficiencies and realizing productivity gains, and distribution and supply chain efficiencies. If we cannot successfully implement our cost savings plans or offset the cost of making these changes, we may not realize all anticipated benefits, which could adversely affect our financial condition and results of operations or our long-term strategies. We also continue to seek to penetrate new markets and introduce new products and product innovations. We may fail to implement these goals and strategies or to achieve the desired results, and we may fail to achieve one or more of our financial goals for one or more of the relevant fiscal years.

We expect to continue to restructure our operations as necessary to improve operational efficiency, including occasionally opening or closing offices, facilities or plants. Gaining additional efficiencies may become increasingly difficult over time. There may be one-time and other costs and negative impacts on sales growth relating to facility closures or other restructurings and anticipated cost savings.Our strategies may not be implemented or may fail to achieve desired results. If we are unable to generate anticipated cost savings, successfully implement our strategies or efficiently manage our supply chain and manufacturing processes, our results of operations could suffer. These plans and strategies could also have a negative impact on our relationships with employees or customers, which could also adversely affect our business, financial condition and results of operations.

Sales of certain of our products are seasonal and adverse weather conditions during our peak selling seasons for certain auto care products could have a material adverse effect.

Sales of certain of our auto care products tend to be seasonal. AsHistorically, sales for certain auto care products typically have peaked during the first six months of the calendar year due to customer seasonal purchasing patterns and the timing of promotional activities. Purchases of our auto care products, especially our auto appearance and A/C recharge products, can be significantly impacted by unfavorable weather conditions during the summer period, and as a result we may suffer decreases in net sales if conditions are not favorable for use of ~~this seasonality,~~ our inventory and working capital needs fluctuate significantly throughout the year. Orders from retailers are often made late in the period preceding the applicable peak season, making forecasting of production schedules and inventory purchases difficult.products. If ~~we are unable to accurately forecast and prepare for customer orders or our working capital needs, or there is a general downturn in business or economic~~adverse weather conditions during ~~these periods,~~the first six months of the calendar year (our second and third fiscal quarters) when demand for auto care products typically peaks persist, our business, financial condition and results of operations could be materially and adversely affected.

A failure of a key information technology system could adversely impact our ability to conduct business.

We rely extensively on information technology systems, including some that are managed by third-party service providers, in order to conduct business. These systems include, but are not limited to, programs and processes relating to internal and external communications, ordering and managing materials from suppliers, converting materials to finished products, shipping products to customers, processing transactions, summarizing and reporting results of operations, and complying with regulatory, legal or tax requirements. These information technology systems could be damaged or cease to function properly due to the poor performance or failure of third-party service providers, catastrophic events, power outages, security breaches, network outages, failed upgrades or other similar events. If our business continuity plans do not effectively resolve such issues on a timely basis, we may suffer interruptions in conducting our business, which may adversely impact our operating results. In addition, we continuously assess and implement upgrades to improve our information technology systems globally. As such, during these implementation periods, we face a heightened risk of system interruptions and deficiencies or failures in our internal controls involving our information systems and processes.

We continue to utilize various legacy hardware, software and operating systems, which may be vulnerable to increased risks, including the risk of system failures and disruptions. In addition, we will need to upgrade or replace some of the legacy systems in the future as third-party service providers stop supporting these systems. If we do not successfully upgrade or replace these legacy systems in a timely manner, system outages, disruptions or delays, or other issues may arise. We must also successfully integrate the technology systems of acquired companies into our existing and future technology systems, including with third-party service providers and processes. If a new system does not function properly or is not adequately supported by third-party service providers and processes, it could limit or prevent us from processing and delivering customer orders and processing and receiving payments for our products. This could adversely impact our results of operations and cash flows.

Our operations depend on the use of information technology systems that are subject to data privacy regulations, including recently effective European Union requirements, and could be the target of cyberattack.

Our systems and networks, as well as those of our retailer customers, suppliers, service providers, and banks, have and may in the future become the target of cyberattacks or information security breaches, which in turn could result in the unauthorized release and misuse of confidential or proprietary information about our company, employees, customers or consumers, as well as disrupt their and our operations or damage their and our facilities or those of third parties.We have seen an increase in the number of such attacks recently as a large number of our employees are working remotely and accessing our technology infrastructure remotely as a result of the COVID-19 pandemic. Furthermore, such attacks may originate from nation states or attempts by outside parties, hackers, criminal organizations or other threat actors.We cannot guarantee that our security efforts will prevent or timely detect attacks and resulting breaches or breakdowns of our, or our third-party service providers’, databases or systems. In addition, any significant breaches or breakdowns of such databases or systems could result in significant costs, including costs to investigate or remediate. If the systems are damaged or cease to function properly due to any number of causes, including catastrophic events, power outages, security breaches, cyberattacks or other similar events or as a result of legacy systems, and if our business continuity plans do not effectively resolve such issues on a timely basis, we may experience interruptions in our ability to manage or conduct business.We might also experience reputational harm, governmental fines, penalties, regulatory proceedings, litigation and remediation expenses, any of which may adversely impact our business. In addition, such incidents could result in unauthorized disclosure and misuse of material confidential information. Cyber threats are becoming more sophisticated, are constantly evolving and are being made by groups and individuals with a wide range of expertise and motives, and this increases the difficulty of detecting and successfully defending against them. Data breaches or theft of personal information we and our third-party service providers collect, as well as company information and assets, may occur in the future and the failure to implement adequate protections against such intrusions may adversely affect our reputation and financial condition.

Financial and Strategic Risks

We have significant debt obligations that could adversely affect our business and our ability to meet our obligations.

As of September 30, ~~2017,~~2020, our total aggregate outstanding indebtedness was approximately ~~$1.1~~$4.2 billion, ~~with $248.3~~which included $750 million of senior notes which we repaid on October 16, 2020. We had $392.7 million of additional capacity available under a senior secured revolving credit facility, inclusive of issued and outstanding letters of credit totaling ~~$6.7~~approximately $7.3 million.

This significant amount of debt could have important consequences to us and our shareholders, including:

•requiring a substantial portion of our cash flow from operations to make payments on this debt, thereby limiting the cash we have available to fund future growth opportunities, such as research and development, capital expenditures and acquisitions;

•restrictive covenants in our debt arrangements which limit our operations and borrowing, and place restrictions on our ability to pay dividends or repurchase common stock;

•the risk of a future credit ratings downgrade of our debt or rising interest rates on our variable rate debt increasing future debt costs and limiting the future availability of debt financing;

•increasing our vulnerability to general adverse economic and industry conditions and limiting our flexibility in planning for, or reacting to, changes in our business and industry, due to the need to use our cash to service our outstanding debt;

•placing us at a competitive disadvantage relative to our competitors that are not as highly leveraged with debt and that may therefore be able to invest more in their business or use their available cash to pursue other opportunities, including acquisitions; and

•limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.

In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to repay all of our outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt.

We ~~may need additional financing in the future, and such financing may not be available on favorable terms, or at all, and may be dilutive to existing shareholders.~~

~~In addition to any debt obligations we incurred in connection with the separation from our former parent, we~~ may need to seek additional financing for our general corporate purposes. For example, we may need to increase our investment in research and development activities or require funding to make acquisitions. Although the indentures and credit agreements relating to our existing debt contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, and, under certain circumstances, the amount of debt that could be incurred in compliance with these restrictions could be substantial. If new debt is added to our and our subsidiaries’ existing debt levels, the related risks that we now face would increase. In addition, none of the indentures or credit agreements relating to our existing debt will prevent us from incurring obligations that do not constitute debt under those agreements. We may be unable to obtain desired additional financing on terms favorable to us, or at all. For example, during periods of volatile credit markets, there is a risk that lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their credit commitments and obligations, including, but not limited to, extending credit up to the maximum permitted by a credit

facility and otherwise accessing capital or honoring loan commitments. If our lenders are unable to fund borrowings under their loan commitments or we are unable to borrow, it could be difficult to replace such loan commitments on similar terms or at all. If adequate funds are not available on acceptable terms, we may be unable to fund growth opportunities, successfully develop or enhance products, or respond to competitive pressures, any of which could negatively affect our business. If we raise additional funds through the issuance of equity securities, our shareholders will experience dilution of their ownership interest. If we raise additional funds by issuing debt, we may be subject to limitations on our operations and ability to pay dividends due to restrictive covenants. Generally, to the extent that we incur additional indebtedness, all of the risks described above in connection with our debt obligations could increase.

In addition, the London Interbank Offered Rate, or LIBOR, the interest rate benchmark used as a reference rate for certain borrowings under our revolving credit facility and certain derivative instruments, is expected to be phased out by the end of calendar year 2021. A reference rate based on the Secured Overnight Financing Rate, or another alternative benchmark rate, is expected to be established to replace LIBOR. Once the relevant administrator announces that LIBOR has ceased or will cease to be available, or the required lenders elect to opt-in early to a new reference rate, the Company and the lenders under the revolving credit facility will be required to mutually select a substitute reference rate, and if such substitute reference rate, or the replacement reference rate for our derivative instruments, is higher than LIBOR, our interest expense related to such borrowings may increase.

We may experience losses or be subject to increased funding and expenses related to our pension plans.

We assumed pension plan liabilities related to our current and former employees in connection with the separation. Effective January 1, 2014, the pension benefit earned to date by active participants under the legacy U.S. pension plan was frozen and future retirement service benefits are no longer accrued under this retirement program; however, our pension plan obligations remain significant. If the investment of plan assets does not provide the expected long-term returns, if interest rates or other assumptions change, or if governmental regulations change the timing or amounts of required contributions to the plans, we could be ~~able~~required to ~~achieve~~ make significant additional pension contributions, which may have an adverse impact on our

liquidity, our ability to comply with debt covenants and may require recognition of increased expense within our financial statements.

The estimates and assumptions on which our financial projections are based may prove to be inaccurate, which may cause our actual results to materially differ from our projections, which may adversely affect our future profitability, cash flows and stock price.

Our financial projections, including any sales or earnings guidance or outlook we may provide from time to time, depend on certain estimates and assumptions related to, among other things, a number of factors:

•product category growth;

•development and launch of innovative new products;

•market share projections;

•product pricing and sale, volume and product mix;

•foreign exchange rates and volatility;

•tax rates;

•manufacturing costs including commodity prices;

•distribution channel volume and costs;

•cost ~~savings~~savings;

•accruals for estimated liabilities, including litigation reserves, measurement of benefit obligations for pension and other postretirement benefit plans; and

•our ability to generate sufficient cash flow to reinvest in our existing business, fund internal growth, repurchase our stock, make acquisitions, pay dividends and meet debt obligations.

We develop our financial projections based on historical experience and on various other estimates and assumptions that we believe to be reasonable under the circumstances and at the time they are made.Our actual results may differ materially from our financial projections, especially in light of the increased difficulty in making such estimates and assumptions as a result of ~~any current or future restructuring efforts.~~

~~To operate more efficiently~~the COVID-19 pandemic. Any material variation between our financial projections and ~~control costs, we have entered into, and~~our actual results may seek to enter into additional restructuring and cost reduction plans. We may be unable to identify cost savings opportunities to be achieved by such plans in the future. Our ability to achieve the anticipated cost savings and other benefits from these initiatives within the expected time frame is subject to many estimates and assumptions and other factors that we may not be able to control. We may also incur significant charges related to restructuring plans, which would reduce our profitability in the periods such charges are incurred.

~~Execution of any restructuring program also presents a number of significant risks, including:~~

~~actual or perceived disruption of service or reduction in service standards to customers;~~

~~the failure to preserve adequate internal controls as we restructure our general and administrative functions, including our information technology and financial reporting infrastructure;~~

~~the failure to preserve supplier relationships and distribution, sales and other important relationships and to resolve conflicts that may arise;~~

~~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.

~~If we fail to adequately protect our intellectual property rights, competitors may manufacture and market similar products, which could~~ adversely affect our ~~market share~~future profitability, cash flows and ~~results of operations.~~stock price.

The vast majority of our total revenues are from products bearing proprietary trademarks and brand names. In addition, we own or license from third parties a number of patents, patent applications and other technology. We rely on trademark, trade secret, patent and copyright laws to protect our intellectual property rights. There is a risk that we will not be able to obtain and perfect or maintain our own intellectual property rights or, where appropriate, license intellectual property rights necessary to support new product introductions. In addition, even if such rights are protected in the United States, the laws of some other countries in which our products are or may be sold do not protect intellectual property rights to the same extent as the laws of the United States. We cannot be certain that our intellectual property rights will not be invalidated, circumvented or challenged in the future, and we could incur significant costs in connection with legal actions relating to such rights. As patents expire, we could face increased competition, which could negatively impact our operating results. If other parties infringe on our intellectual property rights, they may dilute the value of our brands in the marketplace, which could diminish the value that consumers associate with our brands and harm our sales.

~~Our future financial performance and success are dependent on our ability to execute our business strategies successfully.~~

Our products are currently marketed and sold through a dedicated commercial organization and exclusive and non-exclusive third-party distributors and wholesalers. As part of the separation from our former parent, we increased our use of exclusive and non-exclusive third-party distributors and wholesalers. We also decreased or eliminated our business operations in certain countries with large numbers of local and regional low-cost competitors in order to increase our profitability. In addition, we shifted from a decentralized management structure to a model in which many functions are managed centrally. We expect that these changes in our business strategy will enable us to reach new retail customers and consumers, and focus our business operations on more profitable markets. However, the use of distributors in markets where we have historically maintained a direct presence could adversely impact the reputation of our brands and negatively

impact our results of operations. Despite our efforts, we cannot guarantee that we will be able to efficiently implement our strategies in a timely manner to exploit potential market opportunities, achieve the goals of our long-term business strategies, or meet competitive challenges. If we are unable to execute our business strategies successfully, our revenues and marketability may be adversely affected.

If we pursue strategic acquisitions, divestitures or joint ventures, we might experience operating difficulties, dilution, and other consequences that may harm our business, financial condition, and operating results, and we may not be able to successfully consummate favorable transactions or successfully integrate acquired businesses.

From time to time, we may evaluate potential acquisitions, divestitures or joint ventures that would further our strategic objectives. With respect to acquisitions, we may not be able to identify suitable candidates, consummate a transaction on terms that are favorable to us, or achieve expected returns and other benefits as a result of integration challenges. ~~With respect~~Some of the areas where we face risks include:

•Diversion of management time and focus from operating our business to ~~proposed divestitures~~challenges related to acquisitions and other strategic transactions;

•Failure to successfully integrate and further develop the acquired business or technology;

•Implementation or remediation of ~~assets~~controls, procedures, and policies at the acquired company;

•Integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of research and development, commercial and marketing functions;

•Transition of operations, users, and customers onto our existing platforms;

•Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval that could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of a transaction;

•In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries;

•Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employees from the businesses we ~~may encounter difficulty~~acquire;

•Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, data privacy and security issues, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; and

•Litigation or other claims in ~~finding acquirers~~connection with the acquired company, including claims from terminated colleagues, customers, former shareholders, or ~~alternative exit strategies on terms that are favorable~~other third parties.

Our failure to ~~us, which~~address these risks or other problems encountered in connection with our past or future acquisitions and other strategic transactions could ~~delay the accomplishment of our strategic objectives, or our divestiture activities may require~~cause us to ~~recognize impairment charges. Companies or operations acquired or joint ventures created may not be profitable or may not achieve sales levels~~fail to realize their anticipated benefits, incur unanticipated liabilities, and profitability that justify the investments made. Our corporate development activities may present financial and operational risks, including diversion of management attention from existing core businesses, integrating or separating personnel and financial and other systems, and may have adverse effects onharm our ~~existing~~ business ~~relationships with suppliers and customers.~~ generally.

Future acquisitions could also result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities or amortization expenses related to certain intangible assets, and increased operating expenses, which could adversely affect our results of operations and financial condition. Furthermore, if we issue equity or debt securities to raise additional funds, our existing shareholders may experience significant dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing shareholders. Furthermore, if we sell a substantial number of shares of common stock in the public markets, the availability of those shares for sale could adversely affect the market price of our common stock. Such sales, or the perception in the market that holders of a large number of shares intend to sell shares, could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. For one or more of these transactions, we may:

•use cash that we may need in the future to operate our business;

•incur large charges or substantial liabilities;

•incur debt on terms unfavorable to us or that we are unable to repay; and

•encounter difficulties retaining key employees of the acquired company.

We have divested and may, in the future, divest certain assets, businesses or brands that do not meet our strategic objectives or growth targets. With respect to any potential future divestiture, we may encounter difficulty finding potential acquirers or other divestiture options on favorable terms. Any future divestiture could affect our profitability as a result of the gains or losses on such sale of a business or brand, the loss of the operating income or sales resulting from such sale or the costs or liabilities that we retain, which may negatively impact profitability and cash flow subsequent to any divestiture. We may also be required to recognize impairment charges or other losses as a result of a divestiture.

We may be unable to realize the anticipated benefits of the 2019 acquisitions of the global auto care and battery, lighting and power businesses from Spectrum Brands.

In order to realize the anticipated benefits of our acquisitions of the global auto care business (“Auto Care Acquisition”) and global battery, lighting and power business (“Battery Acquisition” and, together with the Auto Care Acquisition, the “Acquisitions”) from Spectrum Brands Holdings, Inc. in 2019, we have been and will continue to be required to devote significant management attention and resources to aligning the business practices, cultures and operations of the acquired businesses. We may encounter difficulties as we continue to align these businesses in a manner that permits us to achieve the synergies and other benefits anticipated to result from the Acquisitions. Accordingly, the contemplated benefits of the Acquisitions may not be realized fully, or at all, or may take longer to realize than expected.

The successful integration of these Acquisitions depends on our ability to manage the operations and personnel of the acquired businesses. Integrating operations is complex and requires significant efforts and expenses on the part of both us and the acquired businesses. Potential difficulties we may encounter as part of the integration process include, but are not limited to, the following:

•the challenge of integrating complex systems, operating procedures, compliance programs, technology, networks and other assets of the acquired businesses in a manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;

•employees may voluntarily or involuntarily separate employment from us because of the acquisitions;

•our management may have its attention diverted while trying to integrate the acquired businesses;

•we may encounter obstacles when incorporating the acquired businesses into our operations and management, including integrating or separating personnel, financial systems, operating procedures, regulatory compliance programs, technology, networks and other assets in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;

•the challenge of managing the expanded operations of a significantly larger and more complex company and coordinating geographically separate organizations;

•differences in business backgrounds, corporate cultures and management philosophies;

•integration may be more costly, more time consuming and complex or less effective than anticipated;

•inability to maintain uniform standards, controls and procedures; and

•we may discover previously undetected operational or other issues, such as fraud.

Any of these factors could adversely affect our ability to maintain relationships with customers, suppliers, employees and other constituencies. In addition, the success of the Acquisitions will depend, in part, on our ability to realize the anticipated growth opportunities and cost synergies through the successful integration of the acquired businesses. Even if we are successful in integrating the acquired businesses, we may not realize the full benefit of any anticipated growth opportunities or cost synergies or we may not realize these benefits within the expected time frames. In addition, the acquired businesses may have unanticipated liabilities or contingencies.

The benefits that we expect to achieve as a result of the Acquisitions depend, in part, on our ability to realize anticipated growth opportunities and synergies due to cost reductions, alignment of purchase terms and logistics and pricing optimization. Our success in realizing these growth opportunities and synergies, and the timing of this realization, depends on the successful integration of the businesses and operations of the Acquisitions. Even if we successfully integrate the Acquisitions with our existing operations, this integration may not result in the realization of the full benefits of the growth opportunities and annual run-rate synergies that we currently expect from this integration within the estimated three year anticipated time frame. For example, we may be unable to eliminate duplicative costs, or could lose suppliers or customers if we fail to maintain our business relationships. Accordingly, the benefits from the Acquisitions may be offset by costs or delays incurred in integrating the Acquisitions.

The Acquisitions may have liabilities that are not known to us and the acquisition agreements may not provide us with sufficient indemnification with respect to such liabilities.

The Acquisitions may have liabilities that we failed, or were unable, to discover in the course of performing Energizer’s due diligence investigations of the acquired businesses. We cannot assure you that the indemnification available to us under the acquisition agreements in respect of the Acquisitions will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the acquired businesses or that the terms of the acquisition agreements will be complied with. We may learn additional information about the Acquisitions that materially adversely affects us, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.

Legal, Compliance and Sustainability Risks

Our business involves the potential for claims of product liability, labeling claims, commercial claims and other ~~tort~~legal claims against us, which could affect our results of operations and financial condition and result in product recalls or withdrawals.

We face exposure to claims arising out of alleged defects in our products, including for property damage, bodily injury or other adverse ~~effects.~~effects; alleged contaminants in our products; and allegations that our products provide inadequate instructions or warnings regarding their use; and failure to perform as advertised. Product liability, advertising and labeling claims could result in negative publicity that could harm our reputation, sales and results of operation, If any of our products is found to be defective, we may recall such products, which could result in adverse publicity and significant expenses. We maintain product liability insurance, but this insurance does not cover all types of claims, particularly claims that do not involve personal injury or property damage or claims that exceed the amount of insurance coverage. Further, we may not be able to maintain such insurance in sufficient amounts, on desirable terms, or at all, in the future. In addition to the risk of monetary judgments not covered by insurance, product liability claims could result in negative publicity that could harm our products’ reputation and in

certain cases require a product recall. Product withdrawals or product liability claims, and any subsequent remedial actions, could have a material adverse effect on our business, reputation, brand value, results of operations and financial condition.

In addition, we are, and may in the future become, the subject of, or party to, various pending or threatened legal actions, government investigations and proceedings relating to, among other things, advertising disputes with competitors, consumer class actions, including those related to advertising claims, labor claims, breach of contract claims, antitrust litigation, securities litigation, premises liability claims, data privacy and security disputes, employment litigation related to employees, contractors and suppliers, including class action lawsuits, and litigation in foreign jurisdictions. We have been, and may in the future be, subject to additional claims, proceedings and actions as we expand the products within the global auto care product category. In general, claims made by or against us in litigation, investigations, disputes or other proceedings have been and may in the future be expensive and time-consuming to bring or defend against and could result in settlements, injunctions or damages that could significantly affect our business, financial condition and results of operations and harm our reputation. It is not possible to predict the final resolution of litigation, investigations, disputes or proceedings in which we currently are or may in the future become involved and our assessment of the materiality of these matters and any reserves taken in connection therewith may not be consistent with their final resolutions. The impact of these matters, including any reserves taken in connection with such matters, on our business, financial condition and results of operations could be material. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to Consolidated Financial Statements in for additional information related to these matters.

Our business is subject to increasing regulation in the U.S. and abroad, the uncertainty and cost of future compliance and consequence of non-compliance with which may have a material adverse effect on our business.

Federal, state and foreign governments may introduce new or expand existing legislation and regulations, or courts or governmental authorities could impose more stringent interpretations of existing legislation and regulations, that may adversely affect our operations or require us to increase our resources, capabilities and expertise in certain areas, as well as incur increased compliance costs. In order to conduct our operations in compliance with these laws and regulations we must obtain and maintain numerous permits, approvals and certificates from various federal, foreign, state and local governmental authorities.

Additional regulations may be enacted governing the packaging, use and disposal of our auto care business' products containing refrigerants. In recent years, refrigerants such as R-134a have become the subject of regulatory focus due to their potential to contribute to global warming. The EU has passed regulations that essentially phased out of R-134a in automotive cooling systems in new vehicles by 2017. Canada has also implemented similar regulations, phasing into effect beginning in 2021. In the United States, while such regulations are not currently in effect at the federal level, the applicable regulations could be implemented and if so, depending on the scope and timing of the regulations, could have a materially adverse impact on our business. In addition, individual states are regulating the sale and distribution of products containing R-134a. Regulations may also be enacted governing the packaging, use and disposal of our auto care business' products containing refrigerants. If the future use of R-134a is phased out or is limited or prohibited in jurisdictions in which we do business, or if substitutes for R-134a become widely used in A/C systems and their use for DIY and retrofit purposes is not approved by the EPA or other regulatory bodies, the future market for our auto care business' products containing R-134a may be limited, which could have a material adverse impact on our results of operations, financial condition, and cash flows. In addition, any alternatives to R-134a for use in the A/C systems of new vehicles will likely be at a higher cost than that of R-134a and access to supply may be limited. If an alternative becomes widely used, we may be unable to obtain sufficient supply or we may obtain supply at a cost that impacts our net sales and gross margins if we are unable to price products to reflect the increased cost of the alternatives.

Privacy and data protection laws and regulations, including with respect to the European Union’s GDPR, the Brazilian Data Protection Law, and California's CCPA, and the interpretation and enforcement of those and similar laws and regulations, are continuously developing and evolving and there may be uncertainty with respect to how to comply with them. The changes introduced by existing privacy and data protection laws and regulations and the introduction of similar laws and regulations in other jurisdictions, have subjected, and may continue in the future to subject, us to additional costs and have required, and may in the future require, costly changes to our security systems, policies, procedures and practices. Our systems and those of our business partners are subject to regulation to preserve the privacy of certain data held on those systems.

The GDPR imposes more stringent operational requirements for processors and controllers of personal data, including, for example, increased requirements to erase an individual’s information upon request, mandatory data breach notification requirements and onerous new obligations on service providers. The implementation of the GDPR may require substantial amendments to procedures and policies, and these changes could impact our business by increasing operational and compliance costs. The GDPR significantly increases penalties for non-compliance. Non-compliance could also damage our reputation with

retailer customers and consumers and diminish the strength and reputation of their and our brands, or require the payment of monetary penalties. We may also be required to incur additional costs to modify or enhance their or our systems or in order to prevent or remediate any such issues. Our efforts to comply with privacy and data protection laws and regulations may impose significant costs and challenges that are likely to increase over time, which could have a material adverse effect on our financial condition and results of operations.

If the Company is found to be noncompliant with applicable laws and regulations in these or other areas, it could be subject to governmental or regulatory actions, including fines, import detentions, injunctions, product withdrawals or recalls or asset seizures, as well as potential criminal sanctions, any of which could have a material adverse effect on our business. 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.Additionally, loss of or failure to obtain necessary permits and registrations, particularly with respect to our global auto care business, could delay or prevent us from meeting current product demand, introducing new products, building new facilities or acquiring new businesses and could adversely affect our financial condition and results of operations.

Increased focus by governmental and non-governmental organizations, customers, consumers and shareholders on sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

As climate change, land use, water use, deforestation, plastic waste, recyclability or recoverability of packaging, including single-use and other plastic packaging, and other sustainability concerns become more prevalent, governmental and non-governmental organizations, customers, consumers and investors are increasingly focusing on these issues. In particular, changing consumer preferences may result in increased customer and consumer concerns and demands regarding plastics and packaging materials, including single-use and non-recyclable plastic packaging, and their environmental impact on sustainability, a growing demand for natural or organic products and ingredients, or increased consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of ingredients or substances present in certain consumer products. This increased focus on environmental issues and sustainability may result in new or increased regulations and customer, consumer and investor demands that could cause us to incur additional costs or to make changes to our operations to comply with any such regulations and address demands. If we are unable to respond or perceived to be inadequately responding to sustainability concerns, customers and consumers may choose to purchase products from another company or a competitor. Concern over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate the effects of climate change on the environment. Increased costs of energy or compliance with emissions standards due to increased legal or regulatory requirements may cause disruptions in or increased costs associated with manufacturing our products. Any failure to achieve our goals with respect to reducing our impact on the environment or a perception (whether or not valid) of our failure to act responsibly with respect to the environment or to effectively respond to new, or changes in, legal or regulatory requirements concerning climate change or other sustainability concerns could adversely affect our business and reputation.

We are subject to environmental laws and regulations that may expose us to significant liabilities and have a material adverse effect on our results of operations and financial condition.

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 packaging, the remediation of contamination associated with the use and disposal of hazardous substances, chemicals in products and product safety. A release of such substances due to accident or an intentional act or the presence of contamination that predates our ownership or operation of our facilities 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 their 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 or the assertion of tort claims related to such contamination 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, including with respect to current and formerly owned facilities, as well as disposal sites owned by third parties to whom we have sent waste. As new laws and regulations are introduced, we could become subject to additional environmental liabilities in the future that could have a material adverse effect on our results of operations or financial condition.

Risks Specific to Our Common Stock

We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our stock and diminish our cash reserves.

In November 2020, the Board of Directors authorized the Company to repurchase up to 7.5 million of our Common Stock. Our repurchase program does not have an expiration date and does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares. Our share repurchase program could affect the price of our stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our stock.

Our common stock ranks junior to our Mandatory Convertible Preferred Stock with respect to dividends and amounts payable in the event of our liquidation, dissolution or winding-up of our affairs.

Our common stock ranks junior to our Mandatory Convertible Preferred Stock, with respect to the payment of dividends and amounts payable in the event of our liquidation, dissolution or winding-up of our affairs. This means that, unless accumulated dividends have been paid on all our Mandatory Convertible Preferred Stock through the most recently completed dividend period, no dividends may be declared or paid on our common stock and we will not be permitted to repurchase any of our common stock, subject to limited exceptions. Likewise, in the event of our voluntary or involuntary liquidation, dissolution or winding-up of our affairs, no distribution of our assets may be made to holders of our common stock until we have paid to holders of our Mandatory Convertible Preferred Stock a liquidation preference equal to $100per share plus accumulated and unpaid dividends.

Holders of our Mandatory Convertible Preferred Stock will have the right to elect two directors in the case of certain dividend arrearages.

If dividends on any shares of our Mandatory Convertible Preferred Stock have not been declared and paid for the equivalent of six or more quarterly dividend periods, whether or not for consecutive dividend periods, the holders of shares of our Mandatory Convertible Preferred Stock, voting together as a single class with holders of any and all other series of our capital stock on a parity with our Mandatory Convertible Preferred Stock (as to the payment of dividends and amounts payable on a liquidation, dissolution or winding up of our affairs) upon which like voting rights have been conferred and are exercisable will be entitled to vote for the election of a total of two additional members of our Board of Directors, subject to certain terms and limitations. This right to elect directors will dilute the representation of the holders of our common stock on our Board of Directors and may adversely affect the market price of our common stock.

Certain rights of the holders of the Mandatory Convertible Preferred Stock could delay or prevent an otherwise beneficial takeover or takeover attempt of us.

Certain rights of the holders of the Mandatory Convertible Preferred Stock could make it more difficult or more expensive for a third party to acquire us. For example, if a fundamental change were to occur on or prior to January 15, 2022, holders of the Mandatory Convertible Preferred Stock may have the right to convert their Mandatory Convertible Preferred Stock, in whole or in part, at an increased conversion rate and will also be entitled to receive a make-whole amount equal to the present value of all remaining dividend payments on their Mandatory Convertible Preferred Stock as described in the certificate of designation. These features of the Mandatory Convertible Preferred Stock could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management.

General Risk Factors

Our growth and expansion could adversely affect our internal control over financial reporting and cause us to incur additional material expense to update and maintain an effective system of internal control.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with generally accepted accounting principles in the U.S. Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance that a misstatement of our

financial statements would be prevented or detected. Our continuing growth and expansion in domestic and globally dispersed markets may place significant additional pressure on our system of internal control over financial reporting and require us to update its internal control over financial reporting. Moreover, the Company engages the services of third parties to assist with business operations and financial reporting processes, which injects additional monitoring obligations and risk into the system of internal control. When the Company is required to comply with new or revised accounting standards or implements changes to its external disclosure processes, it must make any appropriate changes to its internal control over financial reporting to fully implement the standards or such changes, which may require significant effort and judgment. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report its results of operations accurately and on a timely basis, or to detect and prevent fraud and could expose it to regulatory enforcement action and stockholder claims, which could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to attract, retain and develop key personnel.

Our future performance depends in significant part upon the continued service of our executive officers and other key personnel. The loss of the services of one or more of our executive officers or other key employees could have a material adverse effect on our business, prospects, financial condition and results of operations. Our success also depends on our continuing ability to attract, retain and develop highly qualified personnel, including future members of our management team. Competition for such personnel is intense, and there can be no assurance that we can retain and motivate our key employees or attract and retain other highly qualified personnel in the future. Additionally, the escalating costs of offering and administering health care, retirement and other benefits for employees could result in reduced profitability.

~~The United Kingdom’s possible departure from the European Union could adversely affect us.~~

~~The June 23, 2016 referendum by United Kingdom voters~~As we continue to exit the European Union (“Brexit”) adversely impacted global markets, including currencies, and resulted in a decline in the value of the British pound and the euro, as compared to the US dollar and other currencies. Volatility in exchange rates could be expected to continue in the short term as the United Kingdom negotiates its exit from the European Union. A weaker British pound and euro compared to the US dollar during a reporting period would cause local currency results of our United Kingdom and other European operations to be translated into fewer U.S. dollars. In the longer term, any impact from Brexit on our United Kingdom and other European operations will depend, in part, on the outcome of tariff, trade, regulatory, and other negotiations. These changes may adversely affectoptimize our operations, the risk of potential employment-related claims and ~~financial results.~~

Wedisputes will also increase. As such, we may ~~experience losses or~~ be subject to ~~increased funding and expenses~~claims, allegations or legal proceedings related to ~~our pension plans.~~

~~We assumed pension plan liabilities related to our current~~employment matters including discrimination, harassment, wrongful termination or retaliation, local, state, federal and ~~former~~non-U.S. labor law violations, injury, and wage violations. In addition, our employees in ~~connection~~certain countries in Europe are subject to works council arrangements, exposing us to associated delays, works council claims and associated litigation. In the event we or our partners are subject to one or more employment-related claims, allegations or legal proceedings, we may incur substantial costs, losses or other liabilities in the defense, investigation, settlement, delays associated with, or other disposition of such claims. In addition to the ~~separation. Effective January 1, 2014,~~economic impact, we may also suffer reputational harm as a result of such claims, allegations and legal proceedings and the ~~pension benefit earned to date by active participants under the legacy U.S. pension plan was~~

~~frozen~~investigation, defense and ~~future retirement service benefits are no longer accrued under this retirement program; however,~~prosecution of such claims, allegations and legal proceedings could cause substantial disruption in our ~~pension plan obligations remain significant. If the investment of plan assets does not provide~~business and operations, including delaying and reducing the expected ~~long-term returns, if interest rates~~benefits of any operations’ optimization. We have policies and procedures in place to reduce our exposure to these risks, but such policies and procedures may not be effective and we may be exposed to such claims, allegations or other assumptions change, or if governmental regulations change the timing or amounts of required contributions to the plans, we could be required to make significant additional pension contributions, which may have an adverse impact on our liquidity, our ability to comply with debt covenants and may require recognition of increased expense within our financial statements.legal proceedings.

Our credit ratings are important to our cost of capital.

We expect that the major credit rating agencies will continue to evaluate our creditworthiness and give us specified credit ratings. These ratings would be based on a number of factors, including our financial strength and financial policies as well as our strategies, operations and execution. These credit ratings are limited in scope, and do not address all material risks related to investment in Energizer, but rather reflect only the view of each rating agency at the time the rating is issued. Nonetheless, the credit ratings we receive will impact our borrowing costs as well as our access to sources of capital on terms that will be advantageous to our business. Failure to obtain sufficiently high credit ratings could adversely affect the interest rate in future financings, our liquidity or our competitive position and could also restrict our access to capital markets. There can be no assurance that any credit ratings we receive will remain in effect for any given period of time or that a rating will not be lowered, suspended or withdrawn entirely by the applicable rating agencies if, in such rating agency’s judgments, circumstances so warrant.

~~Risks Related to~~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 ~~Spin-off~~

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 ~~have limited recent history of operating as an independent company,~~are regularly audited by tax authorities and, although we believe our tax positions are defensible and our ~~historical financial information is not necessarily representative~~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.

When particular tax matters arise, a number of years may elapse before such matters are audited and finally resolved. Unfavorable resolution of any tax matter in any of the ~~results that~~jurisdictions in which we ~~would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.~~

The historical information about Energizer prior to our separation from our former parent refers to Energizer’s business as operated by and integrated with our former parent. Our historical financial information prior to our separation from our former parent is derived fromoperate could increase the consolidated financial statements and accounting records of our former parent. Accordingly, the historical financial information prior to our separation from our former parent does not necessarily reflect the financial condition, results of operations or cash flows that weeffective tax rate, which would ~~have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below:~~

Prior to the separation, our business was operated by our former parent as part of its broader corporate organization, rather than as an independent company. Our former parent or one of its affiliates performed various corporate functions for us, such as legal, treasury, accounting, auditing, human resources, investor relations, public affairs and finance. Our historical financial results reflect allocations of corporate expenses from our former parent for such functions, which are likely to be less than the expenses we would have incurred had we operated as a separate publicly traded company.

Historically, we have shared economies of scope and scale with our former parent in costs, employees, vendor relationships and customer relationships. The loss of the benefits that we have enjoyed as a result of being integrated with our former parent could have an adverse effect on our ~~results of operations and financial conditions.~~

As a part of our former parent, we took advantage of our former parent's overall size and scope to procure more advantageous distribution arrangements, including shipping costs. As a standalone company, we may be unable to obtain similar arrangements to the same extent as our former parent did, or on terms as favorable as those our former parent obtained.

~~The cost of capital for our business may be higher than our former parent's cost of capital prior to the separation.~~

In connection with the separation, we shifted a portion of our business towards exclusive and non-exclusive third-party distribution arrangements rather than directly selling product to our retail customers. Retail customers who prefer to buy directly from us may reduce or terminate their purchases from us as a result of this new strategy. In addition, we cannot ensure that we will be able to negotiate the most advantageous distribution agreements, or that the third-party distributors will operate under the same standards as we would have or will not take actions that could damage our reputations or brands.

Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from our former parent. For additional information about the past financial performance of our business and the basis of presentation of the historical consolidated financial statements see

~~“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and accompanying notes included elsewhere in this Annual Report.~~

In connection with our separation from our former parent, our former parent agreed to indemnify us for certain liabilities and we agreed to indemnify our former parent for certain liabilities. If we are required to pay under these indemnities to our former parent, our financial results could be negatively impacted. The indemnity from our former parent may not be sufficient to hold us harmless from the full amount of liabilities for which our former parent was allocated responsibility, and our former parent may not be able to satisfy its indemnification obligations in the future.

Pursuant to the separation agreement and certain other agreements with our former parent, our former parent agreed to indemnify us for certain liabilities, and we agreed to indemnify our former parent for certain liabilities, in each case for uncapped amounts. Indemnity payments that we may be required to provide to our former parent are not subject to any cap, may be significant and could negatively impact our business. Third parties could also seek to hold us responsible for any of the liabilities that our former parent has agreed to retain. Any amounts we are required to pay pursuant to these indemnification obligations and other liabilities could require us to divert cash that would otherwise have been used in furtherance of our operating business. Further, the indemnity from our former parent may not be sufficient to protect us against the full amount of such liabilities, and our former parent may not be able to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from our former parent any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves. Each of these risks could negatively affect our business, financial condition and results of operations. Any resolution of a tax issue may require the use of cash in the year of resolution.

~~Risks Related to Our Common Stock~~

We cannot guarantee the timing, amount or payment of dividends or share repurchases on our common stock.

~~Although we expect to pay regular cash dividends and conduct periodic share repurchase programs, the~~The timing, declaration, amount and payment of future dividends to shareholders or repurchases of ~~the Company’s common stock~~our Common Stock will fall within the discretion of our Board of Directors.

The Board’s decisions regarding the payment of dividends or repurchase of shares will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, covenants associated with certain of our debt service obligations, industry practice, legal requirements, regulatory constraints and other factors that our Board of Directors deems relevant. The payment of dividends on our common stock is subject to the preferential rights of the Mandatory Convertible Preferred Stock and other preferred stock that the Board may create from time to time. Our indentures and credit agreements relating to our debt also contain limitations on our ability to pay dividends to our shareholders if we are in default, or such dividend payments would cause us to be in default, of our obligations thereunder. In the event that any agreements governing any such debt restrict our ability to declare and pay dividends in cash on our common and preferred stock, we may be unable to declare and pay dividends in cash on our common or preferred stock unless we can repay or refinance the amounts outstanding under such agreements. Our ability to pay dividends and repurchase shares will depend on our ongoing ability to generate cash from operations and on our access to the capital markets. We cannot guarantee that we will pay a dividend or repurchase shares in the future or continue to pay any dividend or conduct share repurchase programs.

~~Your~~We may take actions that may dilute investors’ percentage of ownership in Energizer ~~may be diluted~~ in the future.

In the future, ~~your~~we may dilute investors’ percentage ownership in Energizer ~~may be diluted because of~~by issuing additional equity ~~issuances~~ for acquisitions, engaging in capital market transactions or otherwise, including equity awards that we grant to our directors, officers and employees. From time to time, we will issue additional stock-based awards to our employees under our employee benefits plans.

Such awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.

In addition, our amended and restated articles of incorporation authorizes us to issue, without the approval of our shareholders, one or more additional classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our Board of Directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, as in the case of the Mandatory Convertible Preferred Stock, we could grant the holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of our common stock.

Our business could be negatively impacted as a result of shareholder activism or an unsolicited takeover proposal or proxy contest

In recent years, proxy contests and other forms of shareholder activism have been directed against numerous public companies. If we were subject to any form of shareholder activism, we would likely incur significant costs, which could have an adverse effect on our financial condition and results of operations. Shareholder activists may also seek to involve themselves in the governance, strategic direction and operations of the Company through shareholder proposals or otherwise. Such proposals may disrupt our business and divert the attention of our management and other employees, and any perceived uncertainties as to our future direction resulting from such a situation could result in the loss of potential business opportunities, the perception that the Company needs a change in the direction of its business, or the perception that the Company is unstable or lacks continuity, which may be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult for us to attract and retain qualified personnel and business partners, which could adversely affect our business. In addition, actions of activist shareholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Certain provisions in our amended and restated articles of incorporation and bylaws, and of Missouri law, may deter or delay an acquisition of Energizer.

Our amended and restated articles of incorporation and amended and restated bylaws contain, and the General and Business Corporation Law of Missouri, which we refer to as “Missouri law,” contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the

bidder and to encourage prospective acquirers to negotiate with our Board of Directors rather than to attempt a hostile takeover by making the replacement of incumbent directors more time-consuming and difficult. These provisions include, among others:

•limitations on the ~~inability~~ability of our shareholders to call a special meeting;

•rules regarding how we may present proposals or nominate directors for election at shareholder meetings;

•the right of our Board of Directors to issue preferred stock without shareholder approval;

•a provision that our shareholders may only remove directors “for cause” and with the approval of the holders of two-thirds of our outstanding voting stock at a special meeting of shareholders called expressly for that purpose; and

•the ability of our directors, and not shareholders, to fill vacancies on our Board of ~~Directors; and~~Directors.

the requirement that any amendment or repeal of specified provisions of our amended and restated articles of incorporation (including provisions relating to directors, calling special meetings, shareholder-initiated business and director nominations, action by written consent and amendment of our amended and restated bylaws) must be approved by the holders of at least two-thirds of the outstanding shares of our common stock and any other voting shares that may be outstanding, voting together as a single class.

In addition, because we have not chosen to opt out of coverage of Section 351.459 of Missouri law, which we refer to as the “business combination statute,” these provisions could also deter or delay a change of control. The business combination statute restricts certain business combination transactions between us and an “interested shareholder,” generally any person who, together with his or her affiliates and associates, owns or controls 20% or more of the outstanding shares of our voting stock, for a period of five years after the date of the transaction in which the person becomes an interested shareholder, unless either such transaction or the interested shareholder’s acquisition of stock is approved by our Board on or before the date the interested shareholder obtains such status. The business combination statute also provides that, after the expiration of such five-year period, business combinations are prohibited unless (i) the holders of a majority of the outstanding voting stock, other than the stock owned by the interested shareholder, or any affiliate or associate of such interested shareholder, approve the business combination or (ii) the business combination satisfies certain detailed fairness and procedural requirements.

We believe that these provisions will help to protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board of Directors and by providing our Board of Directors with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some shareholders and could deter or delay an acquisition that our Board of Directors determines is not in our best interests or the best interests of our shareholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal executive office is in St. Louis, Missouri. Below is a list of Energizer's principal plants and facilities as of the date of filing. Management believes that the Company's production facilities are adequate to support the business and the properties and equipment have been well maintained.

~~North America~~Americas

Asheboro, NC (an owned manufacturing plant and an owned packaging facility)

Bennington, VT (an owned manufacturing plant)

Garrettsville, OH (an owned manufacturing plant)

Marietta, OH (an owned manufacturing plant)

Westlake, OH (an owned research facility)

~~Glenshaw, PA~~Dixon, IL (a leased manufacturing and packaging facility)

~~Asia~~

~~Bogang, People’s Republic of China~~Dayton, OH (a leased manufacturing and distribution facility)

Fennimore, WI (an owned manufacturing facility)

Portage, WI (an owned manufacturing facility)

Franklin, IN (a leased distribution and packaging facility)

International

Cimanggis, Indonesia (an owned manufacturing facility on leased land)

Jurong, Singapore (an owned manufacturing facility on leased land)

~~Shenzhen, People’s Republic of China (a leased manufacturing facility)~~

~~Europe, Middle East, and Africa~~

Alexandria, Egypt (an owned manufacturing facility)

Washington, UK (a leased manufacturing facility)

Rassau, UK (a leased manufacturing facility)

Guatemala City, Guatemala (an owned manufacturing facility)

Curado, Brazil (an owned manufacturing facility)

Santo Domingo, Dominican Republic (an owned distribution facility)

In addition to the properties identified above, Energizer and its subsidiaries own or operate sales offices, regional offices, storage facilities, distribution centers and terminals and related properties.

Through our global supply chain and global manufacturing footprint, we strive to meet diverse consumer demands within each of the markets we serve. Our portfolio of household and specialty batteries, and portable lighting, automotive fragrance and appearance products is distributed through a global sales force and global distributor model.

Item 3. Legal Proceedings

We are parties to a number of legal proceedings in various jurisdictions arising out of our business ~~operations.~~operations in the normal course of business. 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, we believe that our 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 our financial position, results of operations, or cash flows, taking into account established accruals for estimated liabilities.

See also the discussion captioned “Governmental ~~Regulation~~Regulations and Environmental Matters” under Item 1 above.

Item 4. Mine Safety Disclosure

None.

Item 4A. Information About Our Executive Officers ~~Of The Registrant.~~

A list of the executive officers of Energizer and their business experience follows. Ages shown are as of ~~September 30, 2017.~~November 17, 2020. Executive officers are appointed by, and hold office at the discretion of, our Board of Directors.

Alan R. Hoskins - ~~President and~~ Chief Executive Officer. Mr. Hoskins was President until November 2019 and served as President and Chief Executive Officer of Energizer Household Products Division, a position he held with our former parent company from April 2012 to June 2015. Prior to that position, Mr. Hoskins held several leadership positions at our former parent company, including Vice President, Asia-Pacific, Africa and Middle East from 2008 to 2011, Vice President, North America Household Products Division from 2005 to 2008, Vice President, Sales and Trade Marketing from 1999 to 2005, and Director, Brand Marketing from 1996 to 1999. He started his career at Union Carbide in 1983 following several years in the retailer, wholesaler and broker industry. Mr. Hoskins holds a B.S. in Business Administration from Western New England University and a Masters of Business Administration from Webster University. He also completed the Senior Executive Program at Columbia University. Age: ~~56.~~59. Effective January 1, 2021, Mr. Hoskins will retire as Chief Executive Officer of the Company. Mr. Hoskins will continue to serve as a Director, upon election at the 2021 Annual Shareholders’ Meeting, and has agreed to serve as an advisor to the Company until September 30, 2021.

Mark S. LaVigne - President since November 2019 and Chief Operating Officer since 2015. He previously served as Executive Vice President from 2015 to November 2019. Mr. LaVigne was with our former parent company since 2010. Mr. LaVigne led our Spin-off from our former parent company in 2015, in addition to serving as Vice President, General Counsel and Secretary. Prior to joining the Company, Mr. LaVigne was a partner at Bryan Cave LLP from 2007 to 2010, where he advised our former parent company on several strategic acquisitions. Mr. LaVigne holds a J.D. from St. Louis University School of Law and a B.A. from the University of Notre Dame. Age: 49. The Board of Directors of the Company has appointed Mr. Lavigne to succeed Mr. Hoskins as Chief Executive Officer, which appointment will become effective on January 1, 2021.

Sue K. Drath - Chief Human Capital Officer since 2015. Ms. Drath is responsible for Energizer's global human resources function including culture, talent acquisition, rewards and development for our global colleagues. Ms. Drath was Vice President, Global Rewards of our former parent company. In this role, Ms. Drath was responsible for the design, development, and implementation of all corporate-driven compensation and benefits programs across Energizer’s businesses and areas. Ms. Drath was with our former parent company since 1992, previously serving as Vice President, Global Compensation and Benefits. Ms. Drath graduated from the University of North Dakota with a B.A. degree in Business Administration. Age: 50.

John J. Drabik - SVP, Corporate Controller. Mr. Drabik was appointed as SVP, Corporate Controller and was designated as our Chief Accounting Officer in November 2019. Mr. Drabik has served as the Company's Treasurer since July 2015. Mr. Drabik is responsible for the Company’s global accounting and financial support functions, including global controllership, external reporting, operations accounting and treasury. Mr. Drabik joined Energizer in December 2001 and has held several roles of increasing responsibility, including Vice President, Corporate Development from October 2013 to October 2017 and Vice President, Corporate Controller and Treasurer from October 2017 to November 2019. Mr. Drabik holds an MBA from Washington University in St. Louis and a BS in Accounting from the University of Missouri at Columbia. Age: 48.

Timothy W. Gorman - Executive Vice President, Chief Financial ~~Officer and Chief Accounting~~ Officer. Mr. Gorman joined the Company in September 2014, and has served as the Chief Financial Officer since June ~~8, 2017.~~2017 and as Chief Accounting Officer from July 2015 until November 2019. Prior to that Mr. Gorman served in finance and accounting leadership roles for the Company, including as Vice President of Finance, Controller and Chief Accounting Officer from July 2015 until June 2017 and Vice President, Controller – Household Products of our former parent company from September 2014 to July 2015. Prior to joining the Company, Mr. Gorman worked as an independent financial consultant and in a variety of senior roles during a twenty-five year career at PepsiAmericas, Inc. (previously known as Whitman Corporation), most recently as Senior Vice President and Controller. Mr. Gorman holds a B.S. in Accounting from Indiana University. Age: ~~57.~~60.

~~Gregory T. Kinder~~

Hannah H. Kim - ~~Executive Vice President~~Chief Legal Officer and Corporate Secretary. Ms. Kim was appointed Chief ~~Supply Chain Officer. Mr. Kinder has strong experience~~Legal Officer and Corporate Secretary in ~~maximizing efficiencies across end-to-end Supply Chain~~November 2019. Ms. Kim served as Energizer's Assistant General Counsel and ~~the ability~~Corporate Secretary from June 2018 to leverage the scale of our company globally. He joined our former parent company in May 2013, bringing with him over 30 years of Procurement, Supply Chain, and Operations experience. He has previously worked with leading manufacturing companies and suppliers across diverse industries and geographies, including experience working and living abroad for five years in Europe and six years in Asia (Singapore and Shanghai, China).November 2019. Prior to joining the Company, Mr. Kinder served as Vice President and Chief Procurement Officer at Doosan Infracore International, Inc. from 2009 to 2013. He has also served as Vice President, Global Sourcing for Modine Manufacturing Company. Mr. Kinder also held a variety of purchasing and supply chain/operations related positions over 21 years with Johnson Controls, Inc., including Vice President of Purchasing, APAC. Mr. Kinder holds a B.A. in Procurement and Materials Management and Production Operations from Bowling Green State University. Age: 56.

~~Mark S. LaVigne - Executive Vice President and Chief Operating Officer since 2015. Mr. LaVigne~~Energizer, Ms. Kim was with our former parent company since 2010. Mr. LaVigne led our Spin-off from our former parent company in 2015, in addition to serving as Vice President, General Counsel and Secretary. Prior to joining the Company, Mr. LaVigne was a partner at Bryan Cave LLP from 2007 to 2010, where he advised our former parent company on several strategic acquisitions. Mr. LaVigne holds a J.D. from St. Louis University School of Law and a B.A. from the University of Notre Dame. Age: 46.

Emily K. Boss - Vice President, General Counsel. Ms. Boss brings over 25 years of experience and expertise to her role as Vice President, General Counsel. She joined our former parent company in September 2013 as Vice President and Associate General Counsel, Commercial and IP. Prior to joining the Company, Ms. Boss spent 14 years at Georgia-Pacific where she was Assistant General Counsel - Consumer Products & Intellectual Property from 2007 to 2013. Before that, she spent nine years at Diageo PLC, a beverage segment consumer packaged goods company where she last served asSenior Vice President and Assistant General ~~Counsel.~~Counsel for Bank of America from May 2016 to June 2018. Previously, Ms. ~~Boss holds a J.D. from George Mason University School of Law and a B.S. in Political Science from James Madison University. Age: 55.~~

Sue K. Drath - Chief Human Resource Officer. Ms. Drath was Vice President, Global Rewards of our former parent company. In this role, Sue was responsible for the design, development, and implementation of all corporate-driven compensation and benefits programs across Energizer’s businesses and areas. Ms. Drath was with our former parent company since 1992, previously servingKim served as Vice President, ~~Global Compensation~~Associate General Counsel, Deputy Chief Compliance Officer and ~~Benefits.~~Assistant Corporate Secretary for Lowe's Companies, Inc. from October 2008 to May 2016. Ms. ~~Drath graduated~~Kim holds a law degree and a bachelor's degree in Business Administration and Marketing from the University of ~~North Dakota with a B.A. degree in Business Administration.~~Tennessee at Knoxville. Age: ~~47.~~42

Part II.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.

The Company's Common Stock is listed on the New York Stock Exchange (NYSE). As of September 30, ~~2017,~~2020, there were ~~approximately 8,613 shareholders~~approximately 5,602 shareholders of record of the Company's Common ~~Stock.~~Stock under the symbol "ENR".

~~The following table sets forth the range of market prices for the period from October 1, 2015 through September 30, 2017.~~

(Dollars Per Share) FY 2017 FY 2016
Low Price High Price Low Price High Price
First Quarter $41.97 - $50.13 $32.56 - $44.52
Second Quarter $45.94 - $56.54 $28.85 - $41.88
Third Quarter $47.80 - $60.07 $40.09 - $51.63
Fourth Quarter $40.98 - $48.84 $44.58 - $53.41

~~The Company issued a $0.275 per share dividend in each quarter of 2017 for a total dividend of $1.10 per share and a $0.25 dividend in each fiscal quarter of 2016 for a total dividend of $1.00.~~ The Company expects to continue to pay regular quarterly dividends. Future dividends are dependent on future earnings, capital requirements and the Company's financial condition and are declared at the sole discretion of the Company's Board of Directors. See Item 1A - Risk Factors - Risks Related to Our Common Stock - We cannot guarantee the timing, amount or payment of dividends or share repurchases on our common stock.

Issuer Purchases of Equity Securities. The following table reports purchases of equity securities during the fourth quarter of fiscal ~~2017~~2020 by Energizer and any affiliated purchasers pursuant to SEC rules, including any treasury shares withheld to satisfy employee withholding obligations upon vesting of restricted stock and the execution of net exercises.


Issuer Purchases of Equity Securities	Issuer Purchases of Equity Securities					Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number That May Yet Be Purchased Under the Plans or Programs	Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number That May Yet Be Purchased Under the Plans or Programs
July 1, 2017 - July 31, 2017	40,102	$	46.42	—	6,475,000
August 1, 2017 - August 31, 2017	1,197,081	$	41.86	1,196,998	5,278,002
September 1, 2017 - September 30, 2017	—	$	—	—	5,278,002
July 1, 2020 - July 31, 2020						July 1, 2020 - July 31, 2020	31,426	$	48.01	—	1,822,655
August 1, 2020 - August 31, 2020						August 1, 2020 - August 31, 2020	75	$	46.29	—	1,822,655
September 1, 2020 - September 30, 2020						September 1, 2020 - September 30, 2020	47	$	40.67	—	1,822,655
Total	1,237,183	$	42.01	1,196,998		Total	31,548	$	47.99	—

(1) ~~40,185~~31,548 shares purchased during the quarter relate to the surrender to the Company of shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock or execution of net exercises. ~~From October 1, 2017 through November 10, 2017, an additional 14,065 shares were surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock.~~

(2) On July 1, 2015, the Board of Directors approved a share repurchase authorization for the repurchase of up to 7.5 million shares, of which approximately 1.8 million shares remained authorized for repurchase. No shares were repurchased on the open market during the quarter under the 2015 share repurchase authorization. On November 12, 2020, the Board of Directors approved a new share repurchase authorization for the repurchase of up to 7.5 million shares. ~~1,196,998 shares were repurchased on~~This replaced the open market during the quarter under this share repurchase authorization. Subsequent to the end of fiscal 2017 and through the date of this report, the Company has repurchased 215,267 shares of its common stock at an average price of $43.93 per share.prior authorization that was outstanding.

The graph below matches ~~Energizer's~~Energizer Holdings, Inc.'s cumulative ~~27-Month~~51-Month total shareholder return on common stock with the cumulative total returns of the S&P Midcap 400 index and the S&P Household Products index. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from ~~6/12/~~9/30/2015 to 9/30/~~2017.~~2020.

These indices are included only for comparative purposes as required by Securities and Exchange Commission rules and do not necessarily reflect management's opinion that such indices are an appropriate measure of the relative performance of the Common Stock. They are not intended to forecast possible future performance of the Common Stock.


	9/30/15	9/30/16	9/30/17	9/30/18	9/30/19	9/30/20
Energizer Holdings, Inc.	100.0	132.2	124.8	162.3	124.0	114.2
S&P Midcap 400	100.0	115.3	135.5	154.8	150.9	147.7
S&P Household Products	100.0	125.1	128.7	125.1	175.2	200.4

6/12/15 9/30/15 9/30/16 9/30/17
Energizer Holdings, Inc. 100.0
111.3
147.2
138.8
S&P Midcap 400 100.0
90.3
104.1
122.4
S&P Household Products 100.0
94.9
118.7
122.1

Item 6. Selected Financial Data.

All amounts discussed are in millions of U.S. dollars, unless otherwise indicated.

We derived the selected statements of earnings data for the years ended September 30, 2020, 2019, 2018, 2017 ~~2016, 2015, 2014~~ and ~~2013~~2016 and selected balance sheet data as of September 30, 2020, 2019, 2018, 2017 ~~2016, 2015, 2014,~~ and ~~2013~~2016 as set forth below, from our audited Consolidated Financial Statements. The historical results do not necessarily indicate the results expected for any future period. To ensure a full understanding, you should read the selected historical financial data presented below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and accompanying notes included elsewhere in this Annual Report.


	For the Years Ended September 30,
	2020		2019		2018		2017		2016
Statements of Earnings Data
Net sales	$	2,744.8	$	2,494.5	$	1,797.7	$	1,755.7	$	1,634.2
Depreciation and amortization	111.9		92.8		45.1		50.2		34.3
Earnings before income taxes	67.7		73.1		175.2		273.3		165.7
Income taxes	20.9		8.4		81.7		71.8		38.0
Net earnings from continuing operations	$	46.8	$	64.7	$	93.5	$	201.5	$	127.7
Earnings per common share from continuing operations:
Basic	$	0.44	$	0.79	$	1.56	$	3.27	$	2.06
Diluted	$	0.44	$	0.78	$	1.52	$	3.22	$	2.04
Average shares outstanding:
Basic	68.8		66.4		59.8		61.7		61.9
Diluted	69.5		67.3		61.4		62.6		62.2
Dividend per common share (a)	$	1.20	$	1.20	$	1.16	$	1.10	$	1.00


	At September 30,
	2020		2019		2018		2017		2016
Balance Sheet Data (b)
Working capital (c)	$	562.5	$	967.8	$	419.9	$	438.2	$	356.4
Property, plant and equipment, net	352.1		362.0		166.7		176.5		201.7
Total assets (d)	5,728.3		5,449.6		3,178.8		1,823.6		1,731.5
Long-term debt (e)	3,306.9		3,461.6		976.1		978.5		981.7
Long-term debt held in escrow (f)	—		—		1,230.7		—		—

(a)The Company issued a $0.30 per share dividend in each quarter of 2020 and 2019 for a total dividend of $1.20 per share, a $0.29 per share dividend in each quarter of 2018 for a total dividend of $1.16 per share, a $0.275 per share dividend in each quarter of 2017 for a total dividend of $1.10 per share, and a $0.25 per share dividend in each quarter of 2016 for a total dividend of $1.00 per share.

(b)The balances as of September 30, 2020 and 2019 include the working capital and assets of the Battery and Auto Care Acquisitions, as well as the debt assumed to complete those transactions in fiscal 2019. The balances as of September 30, 2019 also included the assets and liabilities held for sale related to the Varta Divestment Business which was sold in fiscal 2020.

(c)Working capital is current assets less current liabilities.

(d)At September 30, 2020, total assets included $790.0 of restricted cash associated with the net proceeds from the September 2020 bond offering which were released subsequent to year-end to fund the full redemption of the $750.0 of Senior Notes. At September 30, 2018, total assets included $1,246.2 of restricted cash associated with the debt from the Battery Acquisition which was funded into escrow in fiscal 2018 and utilized to complete the transaction in fiscal 2019.

(e)At September 30, 2020, the $750.0 of Senior Notes that were redeemed October 16, 2020 were included in the Current portion of long-term debt, which is not included in this Long-term debt balance.

(f)This represents the debt related to the Battery Acquisition which was funded into escrow in fiscal 2018 and then released from escrow in fiscal 2019 to complete the acquisition.

For the Years Ended September 30,
2017 2016 2015 2014 2013
Statements of Earnings Data
Net sales $ 1,755.7
$ 1,634.2
$ 1,631.6
$ 1,840.4
$ 2,012.2
Depreciation and amortization 50.2
34.3
41.8
42.2
55.9
Earnings/(loss) before income taxes 273.3
165.7
(0.7 ) 215.2
162.0
Income taxes 71.8
38.0
3.3
57.9
47.1
Net earnings/(loss) $ 201.5
$ 127.7
$ (4.0 ) $ 157.3
$ 114.9
Earnings/(loss) per share: (a)
     Basic $ 3.27
$ 2.06
$ (0.06 ) $ 2.53
$ 1.85
     Diluted $ 3.22
$ 2.04
$ (0.06 ) $ 2.53
$ 1.85
Average shares outstanding: (a)
     Basic 61.7
61.9
62.2
62.2
62.2
     Diluted 62.6
62.5
62.2
62.2
62.2
Dividend per common share (b) $ 1.10
$ 1.00
$ 0.25
$ —
$ —

At September 30,
2017 2016 2015 2014 2013
Balance Sheet Data
Working capital (c) $ 438.2
$ 356.4
$ 610.5
$ 323.5
$ 310.0
Property, plant and equipment, net 176.5
201.7
205.6
212.5
240.6
Total assets 1,823.6
1,731.5
1,618.6
1,194.6
1,238.3
Long-term debt 978.5
981.7
984.3
—
—

~~(a)~~

On July 1, 2015, Edgewell distributed 62.2 million shares of Energizer common stock to Edgewell shareholders in connection with its Spin-off of Energizer. See Note 1, Description of Business and Basis of Presentation, to the Consolidated Financial Statements for more information. Basic and diluted earnings per common share, and the average number of common shares outstanding were retrospectively restated for the number of Energizer shares outstanding immediately following this transaction.


~~(b)~~	The Company issued a $0.275 per share dividend in each quarter of 2017 for a total dividend of $1.10 per share, a $0.25 per share dividend in each quarter of 2016 for a total dividend of $1.00 per share and a $0.25 dividend in the fourth fiscal quarter of 2015.


~~(c)~~	~~Working capital is current assets less current liabilities.~~

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion is a summary of the key factors management considers necessary in reviewing the Company's results of operations, operating segment results, and liquidity and capital resources. Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(“MD&A”)~~(MD&A) that are not historical may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

You should read the following MD&A in conjunction with the audited Consolidated Financial Statements and corresponding notes included elsewhere in this Annual Report. This MD&A contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from those projected or implied in the forward-looking statements. Please see above “Risk Factors” and “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

All amounts discussed are in millions of U.S. dollars, unless otherwise indicated.

Forward-Looking Statements

This document contains both historical and forward-looking statements. Forward-looking statements are not based

on historical facts but instead reflect our expectations, estimates or projections concerning future results or events,

including, without limitation, the future sales, gross margins, costs, earnings, cash flows, tax rates and performance

of ~~Energizer.~~the Company. These statements generally can be identified by the use of forward-looking words or phrases such as

~~"believe,~~ "believe," "expect," "expectation," "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "predict,"

~~"likely," "will,~~ "likely," "should," "forecast," "outlook," or other similar words or phrases. These statements are not

guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions

that are difficult to predict and could cause our actual results to differ materially from those indicated by those

statements. We cannot assure you that any of our expectations, estimates or projections will be achieved. The forward-looking

statements included in this document are only made as of the date of this document and we disclaim any

obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.

All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Numerous factors could cause our actual results and events to differ materially from those expressed or implied by

~~forward-looking statements, including, without limitation:~~

~~market and economic conditions;~~

~~market trends in the categories in which we compete;~~

~~the success of new products and the ability to continually develop and market new products;~~

~~our ability to attract, retain and improve distribution with key customers;~~

~~our ability to continue planned advertising and other promotional spending;~~

our ability to timely execute strategic initiatives, including restructurings, and international go-to-market changes in a manner that will positively impact our financial condition and results of operations and does not disrupt our business operations;

~~the impact of strategic initiatives, including restructurings, on our relationships with employees, customers and vendors;~~

~~our ability to maintain and improve market share in the categories in which we operate despite heightened competitive pressure;~~

~~our ability to improve operations and realize cost savings;~~

the impact of foreign currency exchange rates and currency controls, as well as offsetting hedges, including the impact of the United Kingdom's referendum vote and announced intention to exit the European Union at some future date;

~~the impact of raw materials and other commodity costs;~~

the impact of legislative changes or regulatory determinations or changes by federal, state and local, and foreign authorities, as well as the impact of potential changes to tax laws, policies and regulations;

~~costs and reputational damage associated with cyber-attacks or information security breaches or other events;~~

our ability to acquire and integrate businesses, and to realize the projected results of acquisitions, including our ability to achieve the anticipated cost savings, synergies, and other anticipated benefits;

~~the impact of advertising and product liability claims and other litigation; and~~

~~compliance with debt covenants and maintenance of credit ratings as well as the impact of interest and principal repayment of our existing and any future debt.~~

~~In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the~~

~~accuracy of any such~~ forward-looking statements. ~~The list of factors above is illustrative, but by no means~~

~~exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.~~

~~Additional risks and uncertainties include those described in the sections entitled~~See Part I, Item 1A, “Risk ~~Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report,~~Factors," as updated from time to time in the Company’s ~~public~~SEC filings.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the U.S.

~~("GAAP")~~ (GAAP). However, management believes that certain non-GAAP financial measures provide users with additional meaningful comparisons to the corresponding historical or future period. These non-GAAP financial measures exclude items that ~~management believes~~ are not reflective of the Company's on-going operating performance, such as acquisition and integration costs ~~acquisition inventory step up costs, gain~~and related items, loss on extinguishment of debt, settlement loss on pension plan termination, gains on sale of real estate, ~~restructuring activities, costs related to~~and the ~~spin, cost~~one-time impact of ~~early debt retirement, Venezuela deconsolidation charge~~Coronavirus Aid, Relief and ~~income~~Economic Security (CARES) Act and the December 2017 Tax Cuts and Jobs Act (2017 tax ~~adjustments. These~~reform). In addition, these measures help investors to ~~see~~analyze year over year comparability when excluding currency fluctuations, acquisition activity as well as other company initiatives that are not on-going. We believe these non-GAAP financial measures are an enhancement to assist investors in understanding our business and in performing analysis consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or superior to, the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items being adjusted.

We provide the following non-GAAP measures and calculations, as well as the corresponding reconciliation to the closest GAAP measure:

Segment Profit. This amount represents the operations of our ~~three geographic~~two reportable segments including allocations for shared support functions. General corporate and other expenses, global marketing expenses, ~~research and development (R&D)~~R&D expenses, amortization ~~of intangible assets,~~expense, interest expense, loss on extinguishment of debt, other items, net, charges related to acquisition and integration, ~~costs, gain~~settlement loss on pension plan termination and gains on sale of real estate ~~restructuring activities, costs related to the spin, cost of early debt retirement, Venezuela deconsolidation charge and income tax adjustments~~ have all been excluded from segment profit.

Adjusted ~~Earnings Before Taxes, Adjusted Net Earnings~~net earnings from continuing operations and Adjusted Diluted ~~EPS~~net earnings per common share - continuing operations (EPS). These measures exclude the impact of the costs related to acquisition and integration, ~~costs,~~loss on extinguishment of debt, settlement loss on pension plan terminations and the gain on sale of real estate ~~restructuring activities, costs related to~~and the ~~spin, cost~~one-time impact of ~~early debt retirement, Venezuela deconsolidation charge~~the CARES Act and ~~income~~2017 tax ~~adjustments.~~reform.

Organic. This is the non-GAAP financial measurement of the change in revenue or segment profit ~~or other margins~~ that excludes or otherwise adjusts for the impact of acquisitions, ~~the impact of our go-to-market initiatives, the~~ change in ~~our Venezuela results from the deconsolidation of those~~Argentina operations and the impact of currency from the changes in foreign currency exchange rates as defined below:

Impact of ~~acquisition.~~ ~~On July 1, 2016,~~ acquisitions. Energizer completed ~~its auto care acquisition. This includes~~the Auto Care Acquisition on January 28, 2019, the Battery Acquisition on January 2, 2019, and the Nu Finish Acquisition on July 2, 2018. These adjustments include the impact ~~the auto care~~each acquisition's on-going operations contributed to each respective income statement ~~caption.~~caption for the first year's operations directly after the acquisition date. This does not include the impact of acquisition and integration costs or the one time inventory fair value step up costs associated with the ~~auto care acquisition.~~acquisitions.

~~International Go-to-market initiatives.~~To compete more effectively as an independent company, we increased our use of exclusive and non-exclusive third-party distributors and wholesalers, and decreased or eliminated our business operations in certain countries, consistent with our international go-to-market strategy. In order to capture the impact of these international go-to-market changes and exits, we have separately identified the impact of these changes, which represents the year over year change in those markets since the date of exit. The impact from these changes was fully realized during the third quarter 2016.

Change in ~~Venezuela Results.~~ As previously announced, we deconsolidated our Venezuelan subsidiaries on March 31, 2015 and began accounting for our investment in our Venezuelan operations using the cost method of accounting. Subsequent to March 31, 2015, our financial results do not include the operating results of our Venezuelan operations. As a result of the deconsolidation, we have taken the year over year change in Venezuela results andArgentina Operations. The Company is presenting separately ~~identified the impact in our change~~all changes in sales and segment ~~profit.~~profit from our Argentina affiliate due to the designation of the economy as highly inflationary as of July 1, 2018.

Impact of currency. The Company evaluates the operating performance of our Company on a currency neutral basis. The impact of currency is the difference between the value of current year foreign operations at the current period ending USD exchange rate, compared to the value of the current year foreign operations at the prior period ending USD exchange rate.

Adjusted Gross Profit, Adjusted Gross Margin and adjusted Selling, General & Administrative (SG&A) as a percent of sales. Details for adjusted gross margin and adjusted SG&A as a percent of sales are also supplemental non-GAAP measure disclosures. These measures exclude the impact of costs related to acquisition and integration and inventory step up ~~restructuring activities,~~from purchase accounting.

Novel Coronavirus (COVID-19)

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic. The COVID-19 health crisis poses significant and widespread risks to the Company’s business as well as to the business environment and the markets in which the Company operates.

During these challenging times, the Company is operating with two enduring principles - ensuring the health of our colleagues and business continuity. We are following the guidelines issued by the U.S. Center for Disease Control and Prevention and the World Health Organization and have instituted work from home for our office locations. We have also instituted additional measures at our production facilities, including temperature monitoring, enhanced facility cleaning, visual cues to aid in social distancing, and staggered shifts to minimize the number of colleagues on-site at any given time. We track and monitor suspected and confirmed cases of COVID-19, and we encourage colleagues to stay home if they or their family members are ill.

During natural disasters and other crises such as the COVID-19 pandemic, our battery products are needed not only by end consumers, but also by healthcare professionals and others who are directly combatting COVID-19, including doctors, nurses and first responders, as well as others who are performing essential services, such as truck drivers. This has been evident in the recent increased demand for our battery products in the U.S. across nearly all retail channels. Energizer provides batteries that power medical devices, including thermometers, blood pressure, heart and fall monitors and pulse oximeters, and other products that are critical during the COVID-19 outbreak. Energizer’s batteries also power devices and equipment that keep people safe and working and studying at home, such as water heaters, smoke alarms, carbon monoxide detectors and wireless keyboards.

Initially, auto care products were negatively impacted by COVID-19 due to shelter in place orders that negatively impacted auto travel. However, as countries and states began to reopen, the use of automobiles increased as consumers avoided public transportation, including turning to car travel versus air for vacations. During this time, consumers turned their focus to Do It Yourself versus Do It for Me with strong demand for wipes and cleaning products as the year progressed. Specifically, during the third and fourth quarter of fiscal 2020, as countries and states began to reopen, we did experience recovery in auto care sales. If countries return to shelter-in-place orders, work and travel restrictions or other similar measures in order to contain the virus, this could have a negative impact on our auto care products.

Our core batteries and auto care businesses had strong net sales growth in the later part of fiscal 2020, however, this did not translate to earnings growth due to COVID-19. Gross margin was down reflecting the impact from elevated and prolonged demand, especially in batteries, which put significant stress on our global battery supply network. This impact was compounded in the fourth fiscal quarter due to preparation for the upcoming holiday season. In order to serve our customers,

we took a series of actions, including increasing internal production, aggressively sourcing raw materials and finished goods, which triggered tariffs, and increasing air freight and co-packing capacity. These efforts resulted in incremental COVID-19 costs in fiscal 2020 of approximately $29 and approximately $7 of higher interest to strengthen liquidity in the later half of the fiscal year.

While the full impact of COVID-19 is uncertain, we have multiple options to further mitigate the liquidity impact of the COVID-19 pandemic and preserve our financial flexibility in light of current uncertainty in the global markets, including the deferral or reduction of capital expenditures and reduction or delay of overhead expenses and other expenditures. Such delays could slow future growth or impact our business plan. The full impact of COVID-19 on our financial and operating performance will depend significantly on the duration and severity of the outbreak, the actions taken to contain or mitigate its impact, disruption to our global supply chain, and the pace with which customers and consumers return to more normalized purchasing behavior, among others factors beyond our knowledge or control. See the section entitled “Risk Factors” in this Report for further considerations.

Battery Acquisition

On January 2, 2019, the Company acquired Spectrum Brands Holdings, Inc.'s (Spectrum) global battery, lighting and portable power business (Battery Acquisition) including the brands Rayovac® and Varta® (Acquired Battery Business). The acquisition expanded our battery portfolio globally with the addition of a strong value brand. For the twelve months ended September 30, 2020, the revenue and segment profit from the Acquired Battery Business was $125.5 and $27.9, respectively, relating to the three months of activity for which they were not owned in the comparable periods in fiscal 2019. For the twelve months ended September 30, 2019, the revenue and segment profit from the Acquired Battery Business was $338.9 and $62.7, respectively.

On January 2, 2020, the Company sold the Varta® consumer battery business in the Europe, Middle East and Africa regions, including manufacturing and distribution facilities in Germany (Divestment Business) to VARTA Aktiengesellschaft (VARTA AG) for a contractual purchase price of €180.0, subject to purchase price adjustments (Varta Divestiture). In addition, pursuant to the terms of the Battery Acquisition agreement, Spectrum also contributed cash proceeds toward this sale. Total cash proceeds received, net of the working capital settlement, were approximately $323.1.

Auto Care Acquisition

On January 28, 2019, the Company acquired Spectrum’s global auto care business, including Armor All®, STP®, and A/C PRO® brands (Auto Care Acquisition). For the twelve months ended September 30, 2020, the revenue and segment profit associated with the Auto Care Acquisition was $85.1 and $17.1, respectively, relating to the four months of activity for which they were not owned in the comparable periods in fiscal 2019. For the twelve months ended September 30, 2019, the revenue and segment profit associated with the Auto Care Acquisition was $315.8 and $76.8, respectively.

Nu Finish Acquisition

On July 2, 2018, the Company acquired all of the assets of Reed-Union Corporation's automotive appearance business, including Nu Finish Car Polish® and Scratch Doctor® brands (Nu Finish Acquisition). The acquisition purchase price of $38.1 was funded through a combination of cash on hand and committed debt facilities. The revenue in the first nine months of fiscal 2019 and the last quarter of fiscal 2018 associated with the Nu Finish acquisition was $5.9 and 2.3, respectively, and segment profit was $2.0 and 0.9, respectively.

Acquisition and Integration Costs

The Company incurred pre-tax acquisition and integration costs related to the ~~spin.~~Battery Acquisition, the Auto Care Acquisition, and the Nu Finish Acquisition of $68.0, $188.4 and $84.6 in the twelve months ended September 30, 2020, 2019, and 2018, respectively.

~~Acquisition~~Pre-tax costs recorded in Costs of products sold were $32.0 for the twelve months ended September 30, 2020 and primarily related to the integration restructuring costs of $29.3 as discussed in Note 6, Restructuring. Pre-tax costs recorded in Costs of products sold were $58.7 for the twelve months ended September 30, 2019, which primarily related to the inventory fair value adjustment of $36.2 and integration restructuring costs of $12.1. Pre-tax costs recorded in Costs of products sold were $0.2 for the twelve months ended September 30, 2018.

~~On July 1, 2016,~~

Pre-tax acquisition and integration costs recorded in SG&A were $38.8, $82.3 and $62.9 for the ~~Company completed an~~twelve months ended September 30, 2020, 2019 and 2018, respectively. In fiscal 2020 these expenses primarily related to consulting fees, success incentives, and costs of integrating the information technology systems of the business. In fiscal 2019 and 2018 these expenses primarily related to acquisition ~~of a leading designer~~success fees and ~~marketer of automotive fragrance~~legal, consulting and ~~appearance products (auto care acquisition). We have completed~~advisory fees to assist with obtaining regulatory approval around the globe and to plan for the closing and integration of the ~~auto care business. During~~Battery Acquisition and Auto Care Acquisition.

For the ~~year~~twelve months ended September 30, ~~2017,~~2020 and 2019 the Company recorded $1.3 and $1.1 in research and development, respectively.

Also included in the pre-tax acquisition costs for the twelve months ended September 30, 2019 was $65.6 of interest expense, including ticking fees, related to the escrowed debt for the Battery Acquisition and the financing fees incurred ~~$8.4~~related to amending and issuing the debt for the Battery and Auto Care Acquisitions. The pre-tax acquisition costs for the twelve months ended September 30, 2018 was $41.9 of interest expense, including ticking fees, related to the escrowed debt for the Battery Acquisition and the financing fees incurred related to amending and issuing the debt for the Battery and Auto Care Acquisitions.

Included in Other items, net was pre-tax income of $4.1, $19.3 and $20.4 in the twelve months ended September 30, 2020, 2019 and 2018, respectively. The pre-tax income recorded in fiscal 2020 was primarily driven by pre-acquisition insurance proceeds of $4.9, a $1.0 gain on the sale of assets and $0.9 of transition services income, offset by a $2.2 loss related to the hedge contract on the proceeds from the Varta Divestiture and $0.5 of other items.

The pre-tax income of $19.3 recorded in fiscal 2019 was primarily driven by the escrowed debt funds held in restricted cash prior to the closing of the Battery Acquisition. The Company recorded a pre-tax gain of $9.0 related to the favorable movement in the escrowed USD restricted cash held in our European Euro functional entity. The Company also recorded interest income of $5.8 earned on the Restricted cash funds held in escrow associated with the Battery Acquisition. The Company recorded a gain of $4.6 related to the hedge contract on the expected proceeds from the anticipated Varta Divestiture and recorded income on transition services agreements of $1.4 for the twelve months ended September 30, 2019. These income items were offset by $1.5 of expense to settle hedge contracts of the acquired business.

The Company recorded pre-tax income in Other items, net of $15.2 on foreign currency gains related to the Battery Acquisition during the twelve months ended September 30, 2018. Of the gain, $9.4 was related to contracts which were entered into in June 2018 and locked in the U.S. dollar (USD) value of the Euro notes related to the Battery Acquisition. These contracts were terminated when the funds were placed into escrow on July 6, 2018. The remaining $5.8 related to the movement in the escrowed USD restricted cash held in our European Euro functional entity. The Company also recorded interest income in Other items, net of $5.2 earned in Restricted cash funds held in escrow associated with this acquisition during the twelve months ended September 30, 2018.

The Company incurred $6.0 of tax withholding costs in the twelve months ended September 30, 2018, related to the cash movement to fund the Battery Acquisition, which were recorded in Income tax provision.

Restructuring Costs

In the fourth fiscal quarter of 2019, Energizer's Board of Directors approved restructuring related integration plans for our manufacturing and ~~integration~~distribution networks. These plans include the closure and combination of distribution and manufacturing facilities in order to reduce complexity and realize greater efficiencies in our manufacturing, packaging and distribution processes. All activities within this plan are expected to be completed by December 31, 2021.

In the fourth fiscal quarter of 2020, the Company initiated a new restructuring program with a primary focus on reorganizing our global end-to-end supply chain network and ensuring accountability by category. This program includes streamlining the Company’s end-to-end supply chain model to enable rapid response to category specific demands and enhancing our ability to better serve our customers. Planning and execution of this program will begin in fiscal year 2021, with completion by the beginning of fiscal year 2022.

The total pre-tax expense related to these restructuring plans for the twelve months ended September 30, 2020 and September 30, 2019 were $30.3 and $12.1, respectively. These consisted of charges for employee severance, retention, related benefit costs, accelerated depreciation, asset write-offs, relocation, environmental investigatory and mitigation costs, consulting costs and other exit costs. The costs were reflected in Cost of products sold and Selling, general and administrative expense on the Consolidated Statements of Earnings and Comprehensive Income. The restructuring costs for fiscal year 2020 were

included within the Americas and International segments in the amount of $27.5 and $2.8, respectively. The restructuring costs for fiscal year 2019, were incurred within the Americas and International segments in the amount of $6.0 and $6.1, respectively.

Total ~~acquisition~~pre-tax charges relating to the 2019 restructuring program since inception were $41.2. We expect to incur additional severance and ~~integration~~ related benefit costs and other exit-related costs associated with these plans of up to $34 through the ~~auto care acquisition incurred~~end of calendar 2021.Total pre-tax charges relating to ~~date were $27.7.~~the 2020 restructuring program since inception are $1.2. We expect to incur a total of approximately $10 to $12 for this program through the end of fiscal year 2021.

~~The Separation~~Through September 30, 2020 we have realized approximately $10 of savings from the 2019 restructuring program. There have been no savings realized for the 2020 restructuring program as of September 30, 2020. Total cost savings by the end of fiscal 2022 are expected to be approximately $67 to $75 annually for both programs primarily within Costs of products sold.

On July 1, 2015, Energizer completed its legal separation from Edgewell via a tax free spin-off. Energizer's first three fiscal quarters of 2015 are based on carve out financial data. Net sales, Gross profit, Advertising & promotion (A&P) and R&D spending are directly attributableRefer to ~~our business. However, certain SG&A, Interest expense, including the cost of early debt retirement, and Spin-off and~~Note 6 Restructuring ~~related charges are allocated from Edgewell and not necessarily representative of Energizer's stand-alone results or expected future results of Energizer as an independent company.~~for further detail.

Overview

General

Energizer, through its operating subsidiaries, is one of the world’s largest manufacturers, marketers and distributors of household batteries, specialty batteries and lighting products, and a leading designer and marketer of automotive fragrance, appearance, performance and ~~appearance~~air conditioning recharge products. Energizer manufactures, markets and/or licenses one of the most extensive product portfolios of household batteries, specialty batteries, auto care products and portable lights. Energizer is the beneficiary of over 100 years of expertise in the battery and portable lighting products industries. Its brand names, Energizer and Eveready, have worldwide recognition for innovation, quality and dependability, and are marketed and sold around the world.

Energizer has a long history of innovation within our categories. Since our commercialization of the first dry-cell battery in 1893 and the first flashlight in 1899, we have been committed to developing and marketing new products to meet evolving consumer needs and consistently advancing battery technology as the universe of devices powered by batteries has evolved. Over the past 100+ years we have developed or brought to market:

•the first flashlight;

•the first dry cell alkaline battery;

•the first mercury-free alkaline battery; and

• ~~the first mercury-free hearing aid battery; and~~

•Energizer Ultimate ~~Lithium,~~Lithium®, the world’s longest-lasting AA and AAA battery for high-tech devices.

~~Today,~~ Energizer offers batteries using many technologies including lithium, alkaline, carbon zinc, nickel metal hydride, zinc air, and silver oxide. These products are sold under the Energizer and Eveready brands, and the Battery Acquisition added the Rayovac brand globally and the Varta brand in ~~the performance, premium~~Latin America and ~~price segments and~~Asia Pacific, as well as Rayovac-branded hearing aid batteries sold globally. These products include primary, rechargeable, specialty and hearing aid ~~products.~~batteries and are offered in the performance, premium and price segments.

In addition, ~~Energizer has~~we offer an extensive line of lighting products designed to meet a ~~breadth~~variety of consumer needs. We manufacture, distribute, and market ~~and/or license~~ lighting products including headlights, lanterns, children’s lights and area lights. In addition to the Energizer, Eveready and ~~Eveready~~Rayovac brands, we market our flashlights under the Hard ~~Case, Dolphin,~~Case®, Dolphin®, and ~~WeatherReady~~WeatherReady® sub-brands. In addition to batteries and portable lights, Energizer licenses the Energizer and Eveready brands to companies developing consumer solutions in gaming, automotive batteries, portable power for critical devices (like smart phones), generators, power tools, household light bulbs and other lighting products.

In addition, we offer auto care products in the appearance, fragrance, performance and air conditioning recharge product categories. The appearance and fragrance categories include protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners and washes designed to clean, shine, refresh and protect interior and exterior automobile surfaces under the brand names Armor All®, Nu Finish®, Refresh Your Car!®, LEXOL®, Eagle One®, California Scents®, Driven® and Bahama & Co.®

The performance product category includes STP branded fuel and oil additives, functional fluids and other performance chemical products that benefit from a rich heritage in the car enthusiast and racing scenes, characterized by a commitment to technology, performance and motor sports partnerships for over 60 years. The brand equity of STP also provides for attractive licensing opportunities that augment our presence in our core performance categories.

The air conditioning recharge product category includes do-it-yourself automotive air conditioning recharge products led by the A/C PRO brand name, along with other refrigerant and recharge kits, sealants and accessories.

Through our global supply chain, global manufacturing footprint and seasoned commercial organization, we seek to meet diverse customer demands within each of the markets we serve. Energizer distributes its portfolio of batteries, lighting and auto care products through a global sales force and global distributor model. We sell our products in multiple retail and business-to-business channels, including: mass merchandisers, club, electronics, food, home improvement, dollar store, auto, drug, hardware, e-commerce, convenience, sporting goods, hobby/craft, ~~e-commerce,~~ office, industrial, medical and catalog.

In recent years, we have also focused on reducing our costs and improving our cash flow from operations. Our restructuring efforts and working capital initiative have resulted in substantial cost reductions and improved cash flows. These initiatives, coupled with our strong product margins over recent years, have significantly contributed to our results of operations and working capital position.

We use the Energizer name and logo as our trademark as well as those of our subsidiaries. Product names appearing throughout are trademarks of Energizer. This ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~MD&A also may refer to brand names, trademarks, service marks and trade names of other companies and organizations, and these brand names, trademarks, service marks and trade names are the property of their respective owners.

~~As of October 1, 2016, the Company changed its internal reporting structure and is managing operations~~ Operations for Energizer are managed via ~~three~~two major geographic reportable segments: Americas ~~(North America~~ and Latin America), Europe, Middle East and Africa (EMEA), and Asia Pacific. Prior to this year, the Americas segment was reported as two separate geographic reportable segments. The Company changed its internal reporting structure to combine these two geographic regions to better reflect how the Company is managing the operations. Our three geographic segments have distinct characteristics that help Energizer deliver its strategic objectives.International.

Financial Results

Net earnings from continuing operations for the fiscal year ended September 30, ~~2017~~2020 was ~~$201.5,~~$46.8, or ~~$3.22~~$0.44 per diluted common share, compared to ~~net earnings of $127.7,~~$64.7, or ~~$2.04~~$0.78 per diluted common share, and ~~net loss of $4.0,~~$93.5, or ~~$0.06~~$1.52 per diluted common share, for the fiscal years ended September 30, ~~2016~~2019 and ~~2015,~~2018, respectively.

~~Earnings/(loss) before income taxes, net earnings/(loss)~~ Net earnings from continuing operations and diluted ~~earnings/(loss)~~net earnings from continuing operations per common share ~~(EPS)~~ for the time periods presented were impacted by certain items related to acquisition and integration costs, ~~acquisition inventory step up costs,~~loss on extinguishment of debt, settlement loss on pension plan termination, gain on sale of real estate, ~~restructuring costs,~~and the ~~spin-off transaction, cost~~one-time impact of ~~early debt retirement, Venezuela deconsolidation~~the CARES Act and ~~income~~2017 tax ~~adjustments~~reform as described in the tables below. The impact of these items on reported ~~earnings/(loss) before income taxes, reported~~ net ~~earnings/(loss)~~earnings from continuing operations and reported ~~EPS~~diluted net earnings from continuing operations per common share are provided below as a reconciliation to arrive at respective non-GAAP measures. See disclosure under Non-GAAP Financial Measures above.

For The Years Ended September 30,
Earnings/(Loss) Before Income Taxes Net Earnings/(Loss) Diluted EPS
2017 2016 2015 2017 2016 2015 2017 2016 2015
Reported - GAAP $ 273.3
$ 165.7
$ (0.7 ) $ 201.5
$ 127.7
$ (4.0 ) $ 3.22
$ 2.04
$ (0.06 )
Impacts: Expense (Income)
  Acquisition and integration (1) 8.4
11.2
1.6
4.2
9.0
1.2
0.06
0.14
0.01
  Inventory step up (2) —
8.1
—
—
5.0
—
—
0.08
—
  Gain on sale of real estate (16.9 ) —
—
(16.5 ) —

(0.26 ) —

  Restructuring (3) —
4.9
13.0
—
3.1
6.5
—
0.05
0.10
  Spin costs (4) —
10.4
98.1
—
7.0
68.7
—
0.11
1.09
  Spin restructuring (3.8 ) 5.8
39.1
(2.4 ) 4.2
27.0
(0.04 ) 0.07
0.43
  Cost of early debt retirement (5) —
—
26.7
—
—
16.7
—
—
0.27
  Venezuela deconsolidation charge

—
65.2
—
—
65.2
—
—
1.04
  Income tax adjustments —
—
—
—
(11.4 ) (4.0 ) —
(0.18 ) (0.06 )
     Adjusted - Non-GAAP (6) $ 261.0

$ 206.1

$ 243.0
$ 186.8
$ 144.6
$ 177.3
$ 2.98
$ 2.31
$ 2.82
Weighted average shares - Diluted (7) 62.6
62.5
62.2


	For the Twelve Months Ended September 30,
	2020		2019		2018
Net (loss)/earnings attributable to common shareholders	$	(109.5)	$	39.1	$	93.5
Mandatory preferred stock dividends	(16.2)		(12.0)		—
Net (loss)/earnings	(93.3)		51.1		93.5
Net loss from discontinued operations, net of income tax expense	(140.1)		(13.6)		—
Net earnings from continuing operations	$	46.8	$	64.7	$	93.5
Pre-tax adjustments
Acquisition and integration (1)	68.0		188.4		84.6
Loss on extinguishment of debt	94.9		—		—
Settlement loss on pension plan terminations (2)	—		3.7		14.1
Gain on sale of real estate	—		—		(4.6)


Total adjustments, pre-tax	$	162.9	$	192.1	$	94.1
After tax adjustments
Acquisition and integration	55.2		148.1		61.6
Loss on extinguishment of debt	73.0		—		—
Settlement loss on pension terminations	—		3.7		10.4
Gain on sale of real estate	—		—		(3.5)
One-time impact of the CARES Act	1.8		—		—
Acquisition withholding tax (3)	—		—		6.0
One-time impact of 2017 tax reform	—		(0.4)		39.1
Total adjustments, after tax	$	130.0	$	151.4	$	113.6
Adjusted net earnings from continuing operations (4)	$	176.8	$	216.1	$	207.1

	For the Twelve Months Ended September 30,
	2020		2019		2018
Diluted net earnings per common share - continuing operations	$	0.44	$	0.78	$	1.52
Adjustments
Acquisition and integration	0.79		2.06		1.00
Loss on extinguishment of debt	1.05		—		—
Settlement loss on pension terminations	—		0.05		0.17
Gain on sale of real estate	—		—		(0.06)
One-time impact of the CARES Act	0.03		—		—
Acquisition withholding tax	—		—		0.10
One-time impact of the new U.S. Tax Legislation	—		(0.01)		0.64
Impact for diluted share calculation	—		0.12		—
Adjusted diluted net earnings per diluted share - continuing operations	$	2.31	$	3.00	$	3.37
Weighted average shares of common stock - Diluted	69.5		67.3		61.4
Adjusted weighted average shares of common stock - Diluted (5)	69.5		72.0		61.4

(1) ~~Includes pre-tax~~Acquisition and integration costs ~~of $1.1 recorded~~were included in ~~Cost of products sold, $4.0 recorded~~the following lines in SG&A, and $3.3 in other items, net for the year ended September 30, 2017, pre-tax costs of $10.0 recorded in SG&A and $1.2 recorded interest expense for the year ended September 30, 2016 and $0.3 recorded in Cost of products sold and $1.3 recorded in SG&A for the year ended September 30, 2015.

~~(2) Included in Cost of products sold on~~ the Consolidated ~~Statements~~Statement of Earnings and Comprehensive ~~Income.~~Income:


	Twelve Months Ended September 30,
	2020		2019		2018
Cost of products sold	$	32.0	$	58.7	$	0.2
Selling, general and administrative expense	38.8		82.3		62.9
Research and development expense	1.3		1.1		—
Interest expense	—		65.6		41.9
Other items, net	(4.1)		(19.3)		(20.4)
Total acquisition and integration costs	$	68.0	$	188.4	$	84.6

(2) Represents the actuarial losses that were previously recorded to Other comprehensive loss, and then recognized to Other items, net upon the termination of the Ireland pension plan in 2019 and Canadian pension plan in 2018.

(3) ~~Includes pre-tax costs~~This represents the $6.0 of ~~$2.4 and $3.1~~tax withholding expense related to cash movement to fund the Battery Acquisition for the ~~years~~twelve months ended September 30, ~~2016 and 2015, respectively, recorded within Cost of products sold and $0.3 for the year ended September 30, 2015~~2018 recorded in ~~SG&A on the Consolidated Statements of Earnings and Comprehensive Income.~~Income tax provision.

(4) Includes pre-tax costs of $10.0 and $97.6 recorded in SG&A for the years ended September 30, 2016 and 2015, respectively, and $0.4 and $0.5 recorded in cost of products sold for the years ended September 30, 2016 and 2015 on the Consolidated Statements of Earnings and Comprehensive Income.

~~(5) Included in Interest expense on the Consolidated Statements of Earnings and Comprehensive Income.~~

~~(6)~~ The effective tax rate for the Adjusted - Non-GAAP Net ~~Earnings~~earnings from continuing operations and Diluted ~~EPS~~net earnings from continuing operations per common share was ~~28.4%~~23.3%, ~~29.8%,~~18.5% and ~~27.0%~~23.1% for the years ended September 30, ~~2017, 2016, 2015,~~2020, 2019 and 2018, respectively, as calculated utilizing the statutory rate for where the costs were incurred. ~~The net tax impact associated with the non-GAAP adjustments highlighted in the table was an expense of $2.4, $23.5 and $62.4, respectively, for~~

(5) For the twelve ~~months~~month ended September 30, ~~2017, 2016 and 2015.~~

~~(7) For twelve months ended September 30, 2015, adjusted earnings per share is calculated utilizing~~2019 calculation, the ~~diluted weighted~~Adjusted Weighted average shares of common stock - Diluted assumes conversion of the preferred shares as those results are more dilutive. The shares have been adjusted for the ~~Company~~4.7 million share conversion and the preferred dividend has ~~Adjusted - Non GAAP~~been excluded from the net ~~earnings rather than a loss.~~

earnings.

Operating Results

Net Sales



	For the Years Ended September 30,
	2020		% Chg		2019		% Chg		2018
Net sales - prior year	$	2,494.5			$	1,797.7			$	1,755.7
Organic	61.4		2.5	%	73.4		4.1	%	22.5
Impact of Battery Acquisition	125.5		5.0	%	338.9		18.9	%	—
Impact of Auto Care Acquisition	85.1		3.4	%	315.8		17.6	%	—
Impact of Nu Finish Acquisition	—		—	%	5.9		0.3	%	2.3

Change in Argentina operations	1.6		0.1	%	(4.5)		(0.3)	%	(1.9)
Impact of currency	(23.3)		(1.0)	%	(32.7)		(1.8)	%	19.1
Net sales - current year	$	2,744.8	10.0	%	$	2,494.5	38.8	%	$	1,797.7

For the Years Ended September 30,
2017 % Chg 2016 % Chg 2015
Net sales - prior year $ 1,634.2
$ 1,631.6
$ 1,840.4
Organic 59.7
3.7 % 60.4
3.7 % (65.4 )
Impact of acquisition 83.1
5.1 % 32.3
2.0 % —
International Go-to-Market —
— % (14.7 ) (0.9 )% (16.4 )
Change in Venezuela results —
— % (8.5 ) (0.5 )% (17.3 )
Impact of currency (21.3 ) (1.4 )% (66.9 ) (4.1 )% (109.7 )
Net sales - current year $ 1,755.7
7.4 % $ 1,634.2
0.2 % $ 1,631.6

Net sales for the year ended September 30, ~~2017~~2020 increased ~~7.4%~~10.0%. The increase was driven by the impact of the ~~auto care acquisition on July 1, 2016~~acquisitions which added ~~$83.1,~~$210.6, or ~~5.1%~~8.4%, ~~as well as~~ the increase in organic sales of ~~$59.7,~~$61.4, or ~~3.7%~~2.5%, and favorable change in Argentina's operations of $1.6, or 0.1%. These increases were partially offset by the unfavorable impact of currency of ~~$21.3,~~$23.3, or ~~1.4%~~1.0%.

Organic net sales increased ~~3.7%~~2.5% primarily due to:

~~The~~•Distribution gains contributed 2.7% of the increase;

•Favorable carryover ~~benefit of new distribution and shelf space gains of approximately 2%;~~

~~Improved pricing across several markets of approximately 2%;~~

~~The~~ impact of ~~U.S. hurricane~~the fiscal 2019 price increases, together with the net COVID-19 pandemic impact driven by North America battery, contributed 1.0% of the increase; and

•Lower replenishment volume early in the year, and the year-over-year impact of ~~approximately 1%;~~lower storm activity partially offset the increases.

~~Partially offset by investments made related to our portfolio optimization of approximately 1%.~~

Net sales for the year ended September 30, ~~2016~~2019 increased ~~0.2%~~38.8%. ~~This~~The increase was driven by the impact of the ~~auto care acquisition on July 1, 2016~~acquisitions which added ~~$32.3,~~$660.6, or ~~2.0%~~36.8%, ~~as well as~~and the increase in organic sales of ~~$60.4,~~$73.4, or ~~3.7%~~4.1%. These increases were partially offset by the unfavorable impact of currency of ~~$66.9,~~$32.7, or ~~4.1%, $8.5, or 0.5%, due to~~1.8% and the unfavorable change in ~~Venezuela results as a result~~Argentina's operations of ~~the deconsolidation and $14.7,~~$4.5, or ~~0.9%, related to the impacts of the international go-to-market changes (including exits and shift to distributors)~~0.3%.

Organic net sales increased ~~$60.4, or 3.7%,~~4.1% primarily due to:

~~Net~~•Category growth and distribution ~~and space gain~~gains which ~~accounted for 2.3%~~contributed 2.7% to the organic increase;

•Favorable pricing across several markets increased net sales by 0.9%; and

•The impact of the ~~total organic increase;~~reclassification of licensing revenues contributed 0.5%.

~~Pricing actions and the timing of holiday shipments;~~

~~Partially offset by heightened competitive activity in certain Asia developed markets.~~

For further discussion regarding net sales in each of our geographic segments, including a summary of reported versus organic changes, please see the section titled “Segment Results” provided below.

Gross Profit

Gross profit dollars were ~~$811.3~~$1,081.9 in fiscal ~~2017~~2020 versus ~~$712.4~~$1,003.8 in fiscal ~~2016.~~2019. Excluding the current and prior year acquisition and integration costs and the prior year inventory step up resulting from purchase accounting, gross profit dollars were $1,113.9 in fiscal 2020 versus $1,062.5 in fiscal 2019. The increase in gross profit dollars was due ~~primarily~~ to the impact of our acquisitions and synergies achieved during the year, as well as the increase in net sales mentioned earlier partially offset by incremental COVID-19 costs and ~~productivity initiatives implemented~~unfavorable movement in ~~the prior year.~~foreign currencies and tariffs.

Gross margin as a percent of net sales for fiscal ~~2017~~2020 was ~~46.2% compared to 43.6%~~39.4% versus 40.2% in the prior year. Excluding the ~~impact from the fiscal 2017~~current and prior year acquisition and integration costs ~~of $1.1~~ and ~~the one-time accounting adjustment of $8.1 related to the fair market value~~prior year inventory step up ~~of the auto care acquisition inventory and spin and restructuring charges of $2.8 in fiscal 2016,~~resulting from purchase accounting, gross margin ~~percentage~~ was ~~46.3% or~~40.6%, down 200 basis points ~~above~~from prior year. ~~This increase~~The decrease was driven by ~~cost reductions realized from continued productivity improvements,~~the lower margin rate profile of the acquired businesses, which accounted for 80 basis points, unfavorable movement in foreign currencies and tariffs (60 basis points) and a shift in market, customer and product mix as well as ~~the year over year benefit~~$29 of ~~lapping productivity investments recorded in the prior year, material and purchased product cost favorability, improved overhead absorption~~incremental costs to serve, both of which were driven by the ~~strong volume performance in~~COVID-19 pandemic and decreased margin by 190 basis points. Partially offsetting these impacts was the ~~first part~~realization of the year and improved pricing. These items were partially offset by increased investments related to our portfolio optimization and the unfavorable impact of foreign currencies on our gross margin rate.synergies, which contributed 130 basis points.

Gross profit dollars were ~~$712.4~~$1,003.8 in fiscal ~~2016~~2019 versus ~~$756.2~~$830.9 in fiscal ~~2015.~~2018. Excluding the current and prior year inventory step up resulting from purchase accounting and the current and prior year acquisition and integration costs, gross profit dollars were $1,062.5 in fiscal 2019 versus $831.1 in fiscal 2018. The ~~decrease~~increase in gross profit dollars was due ~~primarily~~ to the impact of our acquisitions and the increase in net sales mentioned earlier slightly offset by unfavorable movement in foreign ~~currency movements of approximately $60.~~currencies.

Gross margin as a percent of net sales for fiscal ~~2016~~2019 was ~~43.6% compared to 46.3%~~40.2% versus 46.2% in the prior year. Excluding the ~~impact from the one-time accounting adjustment ($8.1) related to the fair market value~~current and prior year inventory step up resulting from purchase accounting and the current year acquisition and integration costs, gross margin was 42.6%, down 360 basis points from prior year, largely driven by the lower margin rate profile of the ~~auto care acquisition inventory and spin and integration charges ($2.8 in fiscal 2016 and $3.9 in fiscal 2015), gross margin percentage was 44.3% or 230~~acquired businesses, which accounted for 350 basis points ~~below prior year. This change~~of the decrease. The remaining decrease was driven by ~~a 180 basis point impact due to an~~ unfavorable movement in foreign currencies ~~increased costs related to planned as well as accelerated discrete productivity initiatives~~ and ~~increased costs in support of product innovation.~~tariffs partially offset by benefits realized from pricing, synergy recognition and continuous improvement initiatives.

Selling, General and Administrative

SG&A expenses were ~~$349.6~~$483.3 in fiscal ~~2017,~~2020, or ~~19.9%~~17.6% of net sales as compared to ~~$352.6,~~$515.7, or ~~21.6%~~20.7% of net sales for fiscal ~~2016~~2019 and ~~$426.3,~~$421.7, or ~~26.1%~~23.5% of net sales for fiscal ~~2015.~~2018. Included in SG&A in fiscal ~~2017~~2020, 2019 and 2018 were acquisition and integration costs of ~~$4.0 related to the auto care acquisition. Included in SG&A in fiscal 2016 were separation charges of $10.0 related to the execution of the spin-off transaction as well as $10.0 of acquisition~~$38.8, $82.3 and integration costs related to the auto care acquisition. Similarly, included in SG&A in fiscal 2015 was approximately $107 of special charges. Separation charges of $97.6 were included in this amount and primarily related to the execution of the spin-off transaction. Also included were approximately $9 related to integration, restructuring initiatives and transitional expenses related to the separation.$62.9, respectively. Excluding the impacts of these items, SG&A as a percent of net sales was ~~19.7%~~16.2% in fiscal ~~2017~~2020 as compared to ~~20.4%~~17.4% in fiscal ~~2016~~2019 and 20.0% in fiscal ~~2015.~~2018.

In fiscal 2020, the SG&A excluding acquisition and integration costs was $444.5 compared to fiscal 2019 of $433.4. The ~~improved percentage comparison~~changes were due to incremental SG&A of approximately $26 due to the acquisitions partially offset by synergy realization and reduced spending.

In fiscal 2019, the acquired businesses added $83.8 of SG&A. The legacy business as a percent of net sales, and excluding acquisition and integration costs, was 19.1%, or $349.6, down 90 basis points to fiscal 2018. The improvement versus the prior ~~years~~year reflects ~~the~~ improved top-line performance due to organic sales growth, the realization of synergies and ~~incremental sales~~cost

savings from our continuous improvement initiatives and the ~~auto care acquisition, as well as a continuous focus on managing costs.~~lapping of prior year investments in those initiatives. These improvements were slightly offset by the licensing revenue reclassification to net sales.

Advertising and Sales Promotion

A&P was ~~$116.1,~~$147.1 in fiscal 2020, up ~~$13.7~~$19.8 as compared to fiscal ~~2016.~~2019. A&P as a percent of net sales was ~~6.6% for fiscal 2017~~5.4%, 5.1% and ~~was~~ 6.3% ~~and 8.1%~~ in fiscal years ~~2016~~2020, 2019, and ~~2015,~~2018, respectively. The ~~lower level~~increase over prior year is driven by incremental spending of $3.5 for our acquired businesses, which was primarily for product and packaging innovation and promotional support for our auto care brands, in addition to planned incremental investment in our branded product portfolio.

In fiscal 2019, excluding $15.9 of A&P ~~spending as a percent~~from the acquired businesses, the legacy business A&P was $111.4, or 6.1% of net sales, inconsistent with the fiscal ~~years 2017 and 2016 versus 2015 was due to higher spending related to a new product launch in fiscal 2015.~~year 2018. A&P expense may vary from year to year due to new product launches, strategic brand support initiatives, the overall competitive environment, as well as the type of A&P spending.

Research and Development

R&D expense was ~~$22.0~~$35.4 in fiscal ~~2017, $26.6~~2020, $32.8 in fiscal ~~2016 and $24.9~~2019, $22.4 in fiscal ~~2015.~~2018. As a percent of net sales, R&D expense was consistent as a percentage of sales at 1.3% in fiscal ~~2017, 1.6%~~2020, 1.3% in fiscal ~~2016~~2019, and ~~1.5%~~1.2% in fiscal ~~2015.~~2018.

Amortization Expense

Amortization expense for fiscal 2020 was $56.5 compared to $43.2 in fiscal 2019 and $11.5 in fiscal 2018. The fiscal 2020 results included the full year of amortization on the Acquired Battery and Auto Care businesses, as well as amortization for the Custom Accessories Europe (CAE) acquisition, discussed in Note 4. The fiscal 2019 results only included a partial year of amortization for the Acquired Battery and Auto Care businesses.

Gain on Sale of Real Estate

Gain on sale of real estate was ~~$16.9~~$4.6 in fiscal ~~2017~~2018, and included ~~$15.2 related to the sale of office building space~~a previously closed manufacturing facility in ~~Asia and $1.7 associated with the sale of land related to a market we exited as part of our international go-to-market changes initiated after the spin.~~Asia.

Interest expense

Interest expense for fiscal ~~2017~~2020 was ~~$53.1, a decrease of $1.2~~$195.0, as compared to fiscal ~~2016~~2019 expense of ~~$54.3. The~~$226.0 and $98.4 in fiscal ~~2017~~2018. Interest expense for fiscal 2019 and ~~2016 expense is~~2018 include $65.6 and $41.9, respectively, for ticking and debt commitment fees related to the acquisitions. Excluding the prior year acquisition costs of $65.6, the current year interest expense increased $34.6 attributable to higher debt associated with the acquisitions, which was outstanding ~~senior notes,~~the full fiscal year 2020. Excluding acquisition amounts for both years, fiscal 2019 interest expense increased $103.9 over fiscal 2018 attributable to higher debt ~~outstanding~~associated with the acquisitions.

Loss on extinguishment of debt

The Loss on the ~~credit facility~~extinguishment of debt was $94.9 for fiscal year 2020 and relates to the Company's July 2020 redemption of its $600.0 Senior Notes due in 2025 and the redemption of the $750.0 Senior Notes due in 2026, which were redeemed subsequent to year-end on October 16, 2020. The loss also includes the write off of deferred financing fees related to the term loan ~~inclusive~~refinancing in December 2019.

During the fourth quarter, the Company took advantage of favorable debt markets and refinanced its Senior Notes due 2025 and 2026, totaling $1.35 billion in principal amount, with new Senior Notes which come due in 2028 and 2029, respectively. The new Senior Notes have significantly lower interest ~~rate swap activity. Fiscal 2016~~rates and will result in approximately $17.5 in annual interest ~~expense includes $1.2~~savings, as well as an extension of ~~expense from~~ the ~~bridge loan associated with the auto care acquisition. Interest expense in fiscal 2015 was $51.2, exclusive~~weighted average maturity of ~~$26.7 in debt breakage fees. Interest expense for the first~~these borrowings by roughly three ~~quarters of fiscal 2015 was based on an allocation from Edgewell.~~years.

Other Items, Net

Other items, net was expense of ~~$6.7~~$2.0, and income of $14.3 and $6.6 in fiscal ~~2017~~2020, 2019 and ~~includes a loss of $3.3 from~~2018, respectively, and is summarized below:


	For the Years Ended September 30,
	2020		2019		2018
Other items, net
Interest income	$	(0.6)	$	(7.7)	$	(1.4)
Interest income on restricted cash (1)	—		(5.8)		(5.2)
Foreign currency exchange loss	8.7		5.2		8.1
Pension benefit other than service costs	(1.7)		(2.3)		(6.3)
Settlement loss on pension plan terminations (2)	—		3.7		14.1
Acquisition foreign currency loss/(gain) (3)	2.2		(13.6)		(15.2)
Pre-acquisition insurance proceeds (4)	(4.9)		—		—
Settlement of acquired business hedging contracts (5)	—		1.5		—
Transition services agreement income	(0.9)		(1.4)		—
Gain on sale of assets	(1.0)		—		—
Other	0.2		6.1		(0.7)
Total Other items, net	$	2.0	$	(14.3)	$	(6.6)

(1) Represents the sale of a non core promotional sales business acquired with the auto care acquisition. The remaining expense primarily reflects net revaluation losses on nonfunctional currency balance sheet exposures slightly offset by the net impact of interest income earned on the restricted cash held for the Battery Acquisition.

(2) Represents the actuarial losses that were previously recorded to Other comprehensive income, and ~~hedging contract gains.~~then recognized to Other items, net ~~was income~~upon the termination of ~~$0.3~~the Ireland pension plan in ~~fiscal 2016 reflecting~~2019 and Canadian pension plan in 2018.

(3) The loss for the ~~net impact~~twelve months ended September 30, 2020 related to the hedge contract on the proceeds from the Varta Divestiture. The gain for the twelve months ended September 30, 2019, includes $9.0 related to currency movement in the escrowed USD funds held in our European Euro functional currency entity and $4.6 related to the gain on our hedge contract for the expected proceeds from the anticipated sale of ~~hedging contract gains and interest income~~the Divestment Business. The gain for the twelve months ended September 30, 2018, includes $9.4 related to contracts which were ~~almost fully offset by revaluation losses~~entered into in June 2018 and locked in the U.S. dollar (USD) value of the Euro notes related to the Battery Acquisition. These contracts were terminated when the funds were placed into escrow on ~~nonfunctional currency balance sheet exposures and an impairment charge~~July 6, 2018. The remaining $5.8 related to the movement in the escrowed USD funds held in our European Euro functional entity.

(4) The pre-acquisition insurance proceeds are related to assets from the Battery Acquisition that were damaged after signing the acquisition agreement, but prior to closing on ~~an available for sale security~~the acquisition.

(5) Settlement of ~~$2.0. In fiscal 2015, Other items, net was income of $18.4 reflecting~~acquired business hedging contracts that were terminated upon the ~~net impact of hedging contract gains, interest income and net revaluation gains on nonfunctional currency balance sheet exposures.~~Company's request at the acquisition date.

Income Taxes

For fiscal ~~2017,~~2020, the effective tax rate was ~~26.3%~~30.9%. ~~Impacting this~~The current year rate includes costs related to acquisition and integration in addition to the unfavorable impact of $1.8 for the CARES Act, which was signed into law on March 27, 2020 and provides, among other things, increased interest deduction limitations to companies which can decrease overall cash taxes paid. Excluding the impact of these non-GAAP adjustments, the year to date adjusted effective tax rate was 23.3% as compared to 18.5% in the ~~favorable impacts of $1.3 of adjustments related to our~~prior year. The increase in the rate versus prior year is due to the country mix of earnings which drove a higher foreign tax rate as well as the expiration of certain tax holidays in foreign jurisdictions.

For fiscal 2019, the effective tax rate was 11.5%. The current year rate was favorably impacted by lower overall foreign tax rates and a return to provision ~~estimates, the~~ benefit of the non-taxable gain on the sale of real estate in Asia during the second quarter, and the $1.6 tax benefit recognized in our income tax provision as a result of the new stock compensation guidance adopted in the first quarter.slightly offset by disallowed transaction costs. Excluding the impact of all of our non-GAAP adjustments, the effective tax rate for fiscal 2019 was 18.5% as compared to 23.1% in the prior year. The decrease in the rate is driven primarily by the new 21% statutory U.S. rate that is now effective for all of fiscal year ~~2017 was 28.4%.~~2019 compared to the statutory rate of 24.5% in fiscal year 2018 as well as more favorable return to provision adjustments in the current fiscal year.

For fiscal ~~2016,~~2018, the effective tax rate was ~~22.9%~~46.6%. ~~which was favorably impacted by certain return to provision adjustments~~The rate includes a $39.1 charge for the one-time impact of the Tax Cuts and Jobs Act (the Tax Act) passed in December 2017, as well as the impact of $6.0 related to ~~prior year provision estimates and certain spin related adjustments of $11.4. In addition,~~tax withholding expense for cash movement to fund the rate was favorably impacted by costs related to integration, separation and restructuring charges as a majority of these charges were primarily incurred in the U.S., which resulted in a higher tax benefit as compared to our overall global effective tax rate.Battery Acquisition. Excluding the impact of all of our non-GAAP adjustments, the effective tax rate for fiscal ~~year 2016~~2018 was ~~29.8%~~23.1%.

~~For fiscal 2015, the effective tax rate~~ The decrease was ~~455.1%. This rate was largely impacted~~driven primarily by the ~~Venezuela deconsolidation charge of $65.2, which had no accompanying tax benefit. Partially offsetting this expense were pre-tax losses in high tax~~lower statutory U.S. rate ~~jurisdictions driven~~that became effective for fiscal 2018 brought about by ~~spin costs of $137.2, interest payments as a result~~the Tax Act passed at the end of the ~~early debt retirement of $26.7 and restructuring charges of $13.0. Excluding the impact of all of our non-GAAP adjustments, the effective tax rate for fiscal~~calendar year ~~2015 was 27.0%.~~2017.

Energizer’s effective tax rate is highly sensitive to the mix of countries from which earnings or losses are derived. Declines in earnings in lower tax rate countries, earnings increases in higher tax rate countries, repatriation of foreign earnings or foreign operating losses in the future could increase future tax rates. In addition, the enactment of legislation implementing changes in the U.S. on the taxation of international business activities or the adoption of other U.S. tax reform could impact our effective tax rate in the future.

~~Spin Costs~~Argentina Hyperinflation

~~The Company incurred costs associated with~~Effective July 1, 2018, the ~~evaluation, planning and execution~~financial statements for our Argentina subsidiary are consolidated under the rules

governing the translation of financial information in a highly inflationary economy. Under U.S. GAAP, an economy is considered highly inflationary if the spin transaction. During the twelve months ended September 30, 2017, the Company recorded income of $3.8 in spin restructuring which included income in the second quarter of $2.5 reflecting the true up of previously accrued exit lease costs related to the right-sizing of the corporate headquarters and the first quarter sale of a facility in North America that was previously closed as part of the spincumulative inflation rate for a ~~gain~~three year period meets or exceeds 100 percent. The Argentina economy exceeded the three year cumulative inflation rate of ~~$1.3.~~

During the twelve months ended September 30, 2016, the Company incurred $16.2 in spin costs including $10.0 recorded in SG&A, $0.4 recorded in cost of products sold and $5.8 recorded in spin restructuring. Included in spin restructuring were contract termination costs related to the exit of a corporate office building as we right-sized our headquarters' footprint. The contract termination costs were $3.7 based on the estimated fair value of the future cash flows associated with this operating lease.

For the twelve months ended September 30, 2015, the Company recorded spin costs of $163.9, of which $97.6 was recorded in SG&A, $0.5 was recorded in cost of products sold, $39.1 was recorded in spin restructuring and $26.7 of cost of early debt retirement was recorded in interest expense.

On a project to date basis, the total costs incurred and allocated to Energizer for the spin-off were $197.6, inclusive of the costs of early debt retirement recorded in fiscal 2015. We do not expect any additional costs related to spin.

~~2013 Restructuring~~

In November 2012, Edgewell's Board of Directors authorized an enterprise-wide restructuring plan and delegated authority to Edgewell's management to determine the final actions with respect to this plan (2013 restructuring project). For the twelve months ended September 30, 2016, Energizer recorded $2.5 in pre-tax restructuring charges related to the 2013 restructuring project as compared to $9.6 in fiscal 2015. Restructuring charges were reflected on a separate line in the Consolidated Statements of Earnings and Comprehensive Income. In addition, pre-tax costs of $3.1 associated with certain inventory obsolescence charges were recorded within Cost of products sold and $0.3 associated with information technology enablement activities were recorded within SG&A on the Consolidated Statements of Earnings and Comprehensive Income for the twelve months ended September 30, 2015. These inventory obsolescence and information technology costs are considered part of the total project costs incurred for the 2013 restructuring project.

The 2013 restructuring project was completed in fiscal 2016 and the full amount of savings are now included within our run-rate cost structure. Energizer estimates that total project savings exceeded $218. The primary impacts of savings were reflected in improved gross margin and lower overhead expenses. Savings related to the 2013 restructuring project were fully realized100 percent as of June ~~30, 2015.~~

~~Venezuela Deconsolidation Charge~~

Venezuelan exchange control regulations have resulted in an other-than-temporary lack of exchangeability between the Venezuelan bolivar and U.S. dollar, and have restricted our Venezuelan operations’ ability2018. If a subsidiary is considered to pay dividends and settle intercompany obligations. The severe currency controls imposed by the Venezuelan government have significantly limited Energizer’s ability to realize the benefits from earnings of Energizer’s Venezuelan operations and access the resulting liquidity provided by those earnings. Energizer expects that this condition will continue for the foreseeable future. This lack of exchangeability has resultedbe in a ~~lack~~highly inflationary economy, the financial statements of ~~control over our Venezuelan subsidiaries for accounting purposes. We deconsolidated our Venezuelan subsidiaries on March 31, 2015~~the subsidiary must be remeasured into the Company’s reporting currency (U.S. dollar) and ~~began~~future exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in current earnings, rather than exclusively in the equity section of the balance sheet, until such time as the economy is no longer considered highly inflationary. It is difficult to determine what continuing impact the use of highly inflationary accounting for our investment in our Venezuelan operations using the cost method of accounting. Subsequent to March 31, 2015, our financial results do not include the operating results of our Venezuelan operations. Instead, we record revenue for sales of inventory to our Venezuelan operations inArgentina may have on our consolidated financial statements ~~to the extent cash~~as such impact is ~~received. Further, dividends from our Venezuelan subsidiaries are recorded as other income~~dependent upon receipt of the cash. Included within the results for the twelve months ended September 30, 2015, for Venezuela are net sales of $8.5 and segment profit of $2.5. See further discussion in "Segment Results" below.

~~As a result of deconsolidating its Venezuelan subsidiaries at March 31, 2015, Edgewell recorded a one-time charge of $144.5~~movements in the ~~second quarter of 2015, of which $65.2 was allocated to Energizer based on~~applicable exchange rates between the ~~Venezuelan operations being distributed as part of Energizer. This charge included:~~

~~foreign~~local currency ~~translation losses previously recorded in accumulated other comprehensive income, of which $16.2 was allocated to Energizer~~

and the ~~write-off of Edgewell’s Venezuelan operations’ cash balance, of which $44.6 was allocated to Energizer, (at the 6.30 per~~ U.S. dollar ~~rate)~~and the amount of monetary assets and liabilities included in our affiliates balance sheet.

~~the write-off of Edgewell’s Venezuelan operations’ other net assets, of which $4.4 was allocated to Energizer~~

Segment Results

Operations for Energizer are managed via ~~three geographic segments – Americas (North America and Latin America), Europe, Middle East and Africa (EMEA) and Asia Pacific. Prior to this year, the Americas segment was reported as~~ two ~~separate~~major geographic reportable ~~segments. The Company changed its internal reporting structure to combine these two~~

~~geographic regions to better reflect how the Company is managing the operations.~~

segments: Americas and International. Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses,

share-based compensation costs, ~~costs associated with restructuring initiatives,~~ acquisition and integration

activities, amortization costs, business realignment activities, Rresearch & Ddevelopment costs, gains on sale of real

estate,settlement loss on pension plan termination, and other items determined to be corporate in nature. Financial items, such as interest income and expense

and the loss on extinguishment of debt, are managed on a global basis at the corporate level. The exclusion of substantially all acquisition, integration,

restructuring and realignment costs from segment results reflects management’s view on how it evaluates segment performance.

~~performance.~~

Energizer’s operating model includes a combination of standalone and shared business functions between the

geographic segments, varying by country and region of the world. Shared functions include ~~but are not limited to,~~ IT ~~procurement~~ and ~~finance.~~finance shared service costs. Energizer applies a fully allocated cost basis, in which shared business functions are allocated between segments. Such allocations are estimates, and do not represent the costs of such services if performed on a standalone basis. This structure is the basis for Energizer’s reportable operating segment information, as included in the tables in Note 20, Segments, to the Consolidated Financial Statements for the year ended September 30, 2017.


Segment Net Sales	For the Years Ended September 30,														Segment Net Sales	For the Years Ended September 30,
	2017			% Chg		2016			% Chg			2015				2020		% Chg		2019		% Chg		2018
Americas															Americas
Net sales - prior year	$	1,002.0				$	956.4					$	1,071.3		Net sales - prior year	$	1,734.8			1,135.6				$	1,111.8
Organic	$	43.9		4.4	%	$	53.3		5.6	%		$	(69.4	)	Organic	69.8		4.0	%	36.1		3.2	%	20.5
International Go-to-Market	$	—		—	%	$	(8.5	)	(0.9	)%		$	(17.3	)
Change in Venezuela results	$	—		—	%	$	(2.0	)	(0.2	)%		$	(4.3	)
Impact of acquisition	$	74.2		7.4	%	$	29.3		3.1	%		$	—
Impact of Battery Acquisition															Impact of Battery Acquisition	107.1		6.2	%	278.5		24.5	%	—
Impact of Auto Care Acquisition															Impact of Auto Care Acquisition	74.0		4.3	%	288.7		25.4	%	—
Impact of Nu Finish Acquisition															Impact of Nu Finish Acquisition	—		—	%	5.7		0.5	%	2.2
Change in Argentina operations															Change in Argentina operations	1.6		0.1	%	(4.5)		(0.4)	%	(1.9)
Impact of currency	$	(8.3	)	(0.8	)%	$	(26.5	)	(2.8	)%	��	$	(23.9	)	Impact of currency	(16.1)		(1.0)	%	(5.3)		(0.4)	%	3.0
Net sales - current year	$	1,111.8		11.0	%	$	1,002.0		4.8	%		$	956.4		Net sales - current year	$	1,971.2	13.6	%	1,734.8		52.8	%	$	1,135.6
EMEA
International															International
Net sales - prior year	$	353.8				$	370.4					$	419.1		Net sales - prior year	$	759.7			662.1				$	643.9
Organic	11.8			3.3	%	12.0			3.2	%		9.7			Organic	(8.4)		(1.1)	%	37.3		5.6	%	2.0
International Go-to-Market	—			—	%	(3.5		)	(0.9	)%		1.3
Impact of acquisition	5.8			1.6	%	2.1			0.6	%		—
Impact of currency	(13.6		)	(3.8	)%	(27.2		)	(7.4	)%		(59.7		)
Net sales - current year	$	357.8		1.1	%	$	353.8		(4.5	)%		$	370.4
Asia Pacific
Net sales - prior year	$	278.4				$	304.8					$	350.0
Organic	4.0			1.4	%	(4.9		)	(1.6	)%		(5.7		)
International Go-to-Market	—			—	%	(9.2		)	(3.0	)%		(13.4		)
Impact of acquisition	3.1			1.1	%	0.9			0.3	%		—
Impact of Battery Acquisition															Impact of Battery Acquisition	18.4		2.4	%	60.4		9.1	%	—
Impact of Auto Care Acquisition															Impact of Auto Care Acquisition	11.1		1.5	%	27.1		4.1	%	—
Impact of Nu Finish Acquisition															Impact of Nu Finish Acquisition	—		—	%	0.2		—	%	0.1
Impact of currency	0.6			0.3	%	(13.2		)	(4.4	)%		(26.1		)	Impact of currency	(7.2)		(1.0)	%	(27.4)		(4.1)	%	16.1
Net sales - current year	$	286.1		2.8	%	$	278.4		(8.7	)%		$	304.8		Net sales - current year	$	773.6	1.8	%	$	759.7	14.7	%	$	662.1
Total Net Sales															Total Net Sales
Net sales - prior year	$	1,634.2				$	1,631.6					$	1,840.4		Net sales - prior year	$	2,494.5			$	1,797.7			$	1,755.7
Organic	59.7			3.7	%	60.4			3.7	%		(65.4		)	Organic	61.4		2.5	%	73.4		4.1	%	22.5
International Go-to-Market	—			—	%	(14.7		)	(0.9	)%		(16.4		)
Change in Venezuela results	—			—	%	(8.5		)	(0.5	)%		(17.3		)
Impact of acquisition	83.1			5.1	%	32.3			2.0	%		—
Impact of Battery Acquisition															Impact of Battery Acquisition	125.5		5.0	%	338.9		18.9	%	—
Impact of Auto Care Acquisition															Impact of Auto Care Acquisition	85.1		3.4	%	315.8		17.6	%	—
Impact of Nu Finish Acquisition															Impact of Nu Finish Acquisition	—		—	%	5.9		0.3	%	2.3
Change in Argentina operations															Change in Argentina operations	1.6		0.1	%	(4.5)		(0.3)	%	(1.9)
Impact of currency	(21.3		)	(1.4	)%	(66.9		)	(4.1	)%		(109.7		)	Impact of currency	(23.3)		(1.0)	%	(32.7)		(1.8)	%	19.1
Net sales - current year	$	1,755.7		7.4	%	$	1,634.2		0.2	%		$	1,631.6		Net sales - current year	$	2,744.8	10.0	%	$	2,494.5	38.8	%	$	1,797.7

Report of Independent Registered Public Accounting Firm

Tothe Board of Directors and Shareholders of Energizer Holdings, Inc.:

Opinions on the Financial Statements and Internal Control over Financial Reporting

~~In our opinion,~~

We have audited the accompanying consolidated balance sheets of Energizer Holdings, Inc. and its subsidiaries (the “Company”) as of September 30, 2020 and 2019, and the related consolidated statements of earnings and comprehensive income, ~~cash flows,~~of shareholders' equity/(deficit) and ~~shareholders’ equity/(deficit) present fairly, in all material respects, the financial position~~ of ~~Energizer Holdings, Inc. and its subsidiariesas of September 30, 2017 and 2016, and the results of their operations and their~~ cash flows for each of the three years in the period ended September 30, ~~2017~~2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of September 30, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, ~~2017,~~2020, based on criteria established in Internal Control - Integrated Framework (2013)issued by the ~~Committee of Sponsoring Organizations of~~COSO.

Change in Accounting Principle

As discussed in Note 2 to the ~~Treadway Commission (COSO).~~ consolidated financial statements, the Company changed the manner in which it accounts for leases on October 1, 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in ~~Management's~~Management’s Report on Internal Control ~~over~~Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on ~~these~~the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our ~~integrated~~ audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the consolidated financial ~~statements, assessing~~statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, ~~and~~as well as evaluating the overall presentation of the consolidated financial ~~statement presentation.~~statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition - Trade Promotion Programs

As described in Notes 2 and 20 to the consolidated financial statements, the Company offers a variety of trade promotion programs, primarily to its retail customers, designed to promote sales of its products. These programs resulted in an allowance for trade promotions of $152.7 million, which is reflected as a reduction of trade receivables, net and $45.4 million of accrued trade promotions within other current liabilities as of September 30, 2020. Such programs require periodic payments and allowances based on estimated results of specific programs and are recorded as a reduction to net sales. Methodologies for determining these provisions are dependent on specific customer pricing and promotional practices, which range from contractually fixed percentage price reductions to reimbursement based on actual occurrence or performance. Where applicable, future reimbursements are estimated based on a combination of historical patterns and future expectations regarding specific in-market product performance. Management accrues, at the time of sale, the estimated total payments and allowances associated with each transaction. Customers redeem trade promotions in the form of payments from the accrued trade allowances or invoice credits against trade receivables.

The principal considerations for our determination that performing procedures relating to revenue recognition for trade promotion programs is a critical audit matter are (i) the significant judgment by management when developing the allowance for trade promotions and accrued trade promotions and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the historical patterns and future expectations regarding specific in-market product performance used to estimate the allowance for trade promotions and accrued trade promotions recorded by management.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the completeness, accuracy, and valuation of the estimated allowance for trade promotions and accrued trade promotions. These procedures also included, among others (i) testing management’s process for determining the allowance for trade promotions and accrued trade promotions; (ii) testing the completeness and accuracy of underlying data used in the estimates; and (iii) evaluating the reasonableness of the significant assumptions related to the historical patterns and future expectations regarding in-market product performance. Evaluating management’s assumptions related to historical patterns and future expectations regarding specific in-market product performance involved evaluating the historical performance of similar trade programs and testing payments and invoice credits related to these trade programs.

Indefinite-Lived Intangible Assets Impairment Assessments - Certain Battery and Auto Care Trade Names

As described in Notes 2 and 12 to the consolidated financial statements, the Company’s consolidated other intangible assets, net balance as of September 30, 2020 was $1,909.0 million, of which $1,365.4 million related to indefinite-lived intangible assets, which includes certain battery and auto care trade names. Management conducts an impairment test annually in the fourth fiscal quarter or when indicators of a potential impairment are present. Potential impairment is identified by comparing the fair value of a trade name to its carrying value. Fair value is estimated by management using a discounted cash flow model. Management uses judgments, assumptions and estimates in the impairment testing including discount rates, revenue growth rates, future operating results and related cash flow projections.

The principal considerations for our determination that performing procedures relating to the indefinite-lived intangible assets impairment assessments for certain battery and auto care trade names is a critical audit matter are (i) the significant judgment by management when developing the fair values of the trade names; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the revenue growth rates and discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s indefinite-lived trade names impairment assessments, including controls over the determination of the fair value of certain battery and auto care trade names. These procedures also included, among others (i) testing management’s process for developing the fair value estimates of certain battery and auto care trade names; (ii) evaluating the appropriateness of the discounted cash flow models; (iii) testing the completeness and accuracy of underlying data used in the models; and (iv) evaluating the reasonableness of the significant assumptions used by management related to the revenue growth rates and the discount rates. Evaluating management’s assumptions related to the revenue growth rates involved evaluating whether the assumptions used were reasonable considering (i) the current and past performance of the businesses related to the trade names; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluating the appropriateness of the discounted cash flow model and evaluating the reasonableness of the discount rate assumptions.

/s/PricewaterhouseCoopers LLP

St. Louis, Missouri

November ~~14, 2017~~17, 2020

We have served as the Company’s auditor since 2014.

ENERGIZER HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(Dollars in millions, except per share data)


	FOR THE YEARS ENDED SEPTEMBER 30,										FOR THE YEARS ENDED SEPTEMBER 30,
Statement of Earnings	2017			2016			2015			Statement of Earnings	2020		2019		2018
Net sales	$	1,755.7		$	1,634.2		$	1,631.6		Net sales	$	2,744.8	$	2,494.5	$	1,797.7
Cost of products sold	944.4			921.8			875.4			Cost of products sold	1,662.9		1,490.7		966.8
Gross profit	811.3			712.4			756.2			Gross profit	$	1,081.9	$	1,003.8	$	830.9
Selling, general and administrative expense	349.6			352.6			426.3			Selling, general and administrative expense	483.3		515.7		421.7
Advertising and sales promotion expense	116.1			102.4			132.3			Advertising and sales promotion expense	147.1		127.3		112.9
Research and development expense	22.0			26.6			24.9			Research and development expense	35.4		32.8		22.4
Amortization of intangible assets	11.2			2.8			—			Amortization of intangible assets	56.5		43.2		11.5
Venezuela deconsolidation charge	—			—			65.2
Spin restructuring	(3.8		)	5.8			39.1
Restructuring	—			2.5			9.6

Gain on sale of real estate	(16.9		)	—			—			Gain on sale of real estate	0		0		(4.6)
Interest expense	53.1			54.3			77.9			Interest expense	195.0		226.0		98.4
Loss on extinguishment of debt										Loss on extinguishment of debt	94.9		0		0
Other items, net	6.7			(0.3		)	(18.4		)	Other items, net	2.0		(14.3)		(6.6)
Earnings/(loss) before income taxes	273.3			165.7			(0.7		)
Earnings before income taxes										Earnings before income taxes	$	67.7	$	73.1	$	175.2
Income tax provision	71.8			38.0			3.3			Income tax provision	20.9		8.4		81.7
Net earnings/(loss)	$	201.5		$	127.7		$	(4.0	)
Net earnings from continuing operations										Net earnings from continuing operations	$	46.8	$	64.7	$	93.5
Net loss from discontinued operations, net of income tax benefit of $1.2 in 2020 and income tax expense of $4.0 in 2019										Net loss from discontinued operations, net of income tax benefit of $1.2 in 2020 and income tax expense of $4.0 in 2019	(140.1)		(13.6)		0
Net (loss) / earnings										Net (loss) / earnings	$	(93.3)	$	51.1	$	93.5
Mandatory preferred stock dividends										Mandatory preferred stock dividends	(16.2)		(12.0)		0
Net (loss) / earnings attributable to common shareholders										Net (loss) / earnings attributable to common shareholders	$	(109.5)	$	39.1	$	93.5

Earnings Per Share										Earnings Per Share
Basic net earnings/(loss) per share	$	3.27		$	2.06		$	(0.06	)
Diluted net earnings/(loss) per share	$	3.22		$	2.04		$	(0.06	)
Basic net earnings per common share - continuing operations										Basic net earnings per common share - continuing operations	$	0.44	$	0.79	$	1.56
Basic net loss per common share - discontinued operations										Basic net loss per common share - discontinued operations	(2.03)		(0.20)		0
Basic net (loss) / earnings per common share										Basic net (loss) / earnings per common share	$	(1.59)	$	0.59	$	1.56

Diluted net earnings per common share - continuing operations										Diluted net earnings per common share - continuing operations	$	0.44	$	0.78	$	1.52
Diluted net loss per common share - discontinued operations										Diluted net loss per common share - discontinued operations	(2.02)		(0.20)		0
Diluted net (loss) / earnings per common share										Diluted net (loss) / earnings per common share	$	(1.58)	$	0.58	$	1.52

Weighted average shares of common stock - Basic										Weighted average shares of common stock - Basic	68.8		66.4		59.8
Weighted average shares of common stock- Diluted										Weighted average shares of common stock- Diluted	69.5		67.3		61.4

Dividend Per Common Share	$	1.10		$	1.00		$	0.25		Dividend Per Common Share	$	1.20	$	1.20	$	1.16

Statement of Comprehensive Income/(Loss)
Net earnings/(loss)	$	201.5		$	127.7		$	(4.0	)
Other comprehensive income/(loss), net of tax expense/(benefit)
Statement of Comprehensive Income										Statement of Comprehensive Income
Net (loss) / earnings										Net (loss) / earnings	$	(93.3)	$	51.1	$	93.5
Other comprehensive (loss)/income, net of tax (benefit)/expense										Other comprehensive (loss)/income, net of tax (benefit)/expense
Foreign currency translation adjustments	6.3			10.2			(81.7		)	Foreign currency translation adjustments	(13.4)		(10.4)		(20.5)
Pension activity, net of tax of $9.0 in 2017, ($6.2) in 2016 and ($19.7) in 2015	20.5			(20.1		)	(37.2		)
Deferred gain/(loss) on hedging activity, net of tax of $1.7 in 2017, ($3.2) in 2016 and ($2.3) in 2015	0.5			(6.9		)	(4.8		)
Total comprehensive income/(loss)	$	228.8		$	110.9		$	(127.7	)
Pension activity, net of tax of $3.5 in 2020, ($12.1) in 2019, and $6.3 in 2018										Pension activity, net of tax of $3.5 in 2020, ($12.1) in 2019, and $6.3 in 2018	9.8		(36.9)		22.9
Deferred (loss)/gain on hedging activity, net of tax of ($1.5) in 2020, ($3.1) in 2019, and $4.4 in 2018										Deferred (loss)/gain on hedging activity, net of tax of ($1.5) in 2020, ($3.1) in 2019, and $4.4 in 2018	(5.8)		(9.2)		15.0

Total comprehensive (loss)/income										Total comprehensive (loss)/income	$	(102.7)	$	(5.4)	$	110.9

The above financial statements should be read in conjunction with the Notes To Consolidated Financial Statements.

ENERGIZER HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except share count and par values)


	SEPTEMBER 30,							SEPTEMBER 30,
	2017			2016				2020		2019
Assets							Assets
Current assets							Current assets
Cash and cash equivalents	$	378.0		$	287.3		Cash and cash equivalents	$	459.8	$	258.5
Restricted cash							Restricted cash	790.0		0
Trade receivables, net	230.2			190.9			Trade receivables, net	292.0		340.2
Inventories	317.1			289.2			Inventories	511.3		469.3
Other current assets	94.9			122.1			Other current assets	157.8		177.1
Assets held for sale							Assets held for sale	0		791.7
Total current assets	1,020.2			889.5			Total current assets	$	2,210.9	$	2,036.8

Property, plant and equipment, net	176.5			201.7			Property, plant and equipment, net	352.1		362.0
Operating lease assets							Operating lease assets	121.9		0
Goodwill	230.0			229.7			Goodwill	1,016.0		1,004.8
Other intangible assets, net	223.8			234.7			Other intangible assets, net	1,909.0		1,958.9
Deferred tax asset	47.7			63.7			Deferred tax asset	24.3		22.8
Other assets	125.4			112.2			Other assets	94.1		64.3
Total assets	$	1,823.6		$	1,731.5		Total assets	$	5,728.3	$	5,449.6
Liabilities and Shareholders' Equity/(Deficit)

Liabilities and Shareholders' Equity							Liabilities and Shareholders' Equity
Current liabilities							Current liabilities
Current maturities of long-term debt	$	4.0		$	4.0		Current maturities of long-term debt	$	841.3	$	0
Note payable	104.1			57.4
Current portion of capital leases							Current portion of capital leases	1.7		1.6
Notes payable							Notes payable	3.8		31.9
Accounts payable	219.3			217.0			Accounts payable	378.1		299.0
Current operating lease liabilities							Current operating lease liabilities	14.8		0
Other current liabilities	254.6			254.7			Other current liabilities	408.7		333.6
Liabilities held for sale							Liabilities held for sale	0		402.9
Total current liabilities	582.0			533.1			Total current liabilities	$	1,648.4	$	1,069.0
Long-term debt	978.5			981.7			Long-term debt	3,306.9		3,461.6

Operating lease liabilities							Operating lease liabilities	111.9		0
Deferred tax liability							Deferred tax liability	140.4		170.6
Other liabilities	178.0			246.7			Other liabilities	211.6		204.6
Total liabilities	$	1,738.5		$	1,761.5		Total liabilities	$	5,419.2	$	4,905.8
Shareholders' equity/(deficit)
Common stock, $0.01 par value, 62,420,421 and 62,420,421
shares issued at 2017 and 2016, respectively	0.6			0.6
Shareholders' equity							Shareholders' equity

Common stock, $0.01 par value, 72,386,840 shares issued at 2020 and 2019							Common stock, $0.01 par value, 72,386,840 shares issued at 2020 and 2019	0.7		0.7
Mandatory convertible preferred stock, $0.01 par value, 2,156,250 shares issued at 2019							Mandatory convertible preferred stock, $0.01 par value, 2,156,250 shares issued at 2019	0		0
Additional paid-in capital	196.7			194.6			Additional paid-in capital	859.2		870.3
Retained earnings	198.7			70.9			Retained earnings	(66.2)		129.5
Common stock in treasury, at cost, 1,711,858 and 747,475 shares in 2017 and 2016, respectively	(72.1		)	(30.0		)
Common stock in treasury, at cost, 3,868,438 and 3,484,807 shares							Common stock in treasury, at cost, 3,868,438 and 3,484,807 shares
in 2020 and 2019, respectively							in 2020 and 2019, respectively	(176.9)		(158.4)

Accumulated other comprehensive loss	(238.8		)	(266.1		)	Accumulated other comprehensive loss	(307.7)		(298.3)
Total shareholders' equity/(deficit)	$	85.1		$	(30.0	)
Total liabilities and shareholders' equity/(deficit)	$	1,823.6		$	1,731.5
Total shareholders' equity							Total shareholders' equity	$	309.1	$	543.8
Total liabilities and shareholders' equity							Total liabilities and shareholders' equity	$	5,728.3	$	5,449.6

The above financial statements should be read in conjunction with the Notes To Consolidated Financial Statements.

ENERGIZER HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

FOR THE YEARS ENDED SEPTEMBER 30,
2017 2016 2015
Cash Flow from Operating Activities
Net earnings/(loss) $ 201.5
$ 127.7
$ (4.0 )
Adjustments to reconcile net earnings/(loss) to net cash flow from operations:

Non-cash restructuring (income)/costs (2.5 ) 4.9
13.1
Depreciation and amortization 50.2
34.3
41.8
Venezuela deconsolidation charge —
—
65.2
Deferred income taxes (4.4 ) 4.2
(7.1 )
Share based compensation expense 24.3
20.4
13.5
Gain on sale of real estate (16.9 ) —
—
Non-cash items included in income, net 6.2
13.1
(13.0 )
Other, net (28.7 ) (22.0 ) (9.4 )
Changes in assets and liabilities used in operations, net of acquisitions

(Increase)/Decrease in trade receivables, net (43.7 ) (4.1 ) 9.7
(Increase)/Decrease in inventories (30.7 ) 11.9
(0.1 )
Decrease in other current assets 20.8
10.4
3.5
Increase/(Decrease) in accounts payable 13.4
43.7
(18.2 )
Increase/(Decrease) in other current liabilities 7.7
(50.6 ) 66.8
Net cash flow from operating activities 197.2
193.9
161.8
Cash Flow from Investing Activities
Capital expenditures (25.2 ) (28.7 ) (40.4 )
Proceeds from sale of assets 27.2
1.5
13.7
Acquisitions, net of cash acquired —
(344.0 ) (12.1 )
Net cash from/(used by) investing activities 2.0
(371.2 ) (38.8 )
Cash Flow from Financing Activities
Net transfers to Edgewell —
—
(648.8 )
Cash Proceeds from issuance of debt with original maturities greater than 90 days —
—
999.0
Payments on debt with maturities greater than 90 days (4.0 ) (3.0 ) (1.0 )
Net increase/(decrease) in debt with maturities 90 days or less 36.5
58.9
(12.4 )
Dividends paid (69.1 ) (62.7 ) (15.5 )
Debt issuance costs (0.8 ) (1.6 ) (12.1 )
Common stock purchased (59.5 ) (31.8 ) —
Excess tax benefits from share-based payments —
1.0
—
Taxes paid for withheld share-based payments (10.0 ) (6.2 ) —
Net cash (used by)/from financing activities (106.9 ) (45.4 ) 309.2
Effect of exchange rate changes on cash (1.6 ) 7.9
(19.7 )
Net increase/(decrease) in cash and cash equivalents 90.7
(214.8 ) 412.5
Cash and cash equivalents, beginning of period 287.3
502.1
89.6
Cash and cash equivalents, end of period $ 378.0
$ 287.3
$ 502.1


	FOR THE YEARS ENDED SEPTEMBER 30,
Cash Flow from Operating Activities	2020		2019		2018

Net (loss) / earnings	$	(93.3)	$	51.1	$	93.5
Loss from discontinued operations, net of tax	(140.1)		(13.6)		0
Net earnings from continuing operations	$	46.8	$	64.7	$	93.5

Non-cash integration and restructuring charges	17.8		3.0		0
Depreciation and amortization	111.9		92.8		45.1
Deferred income taxes	(34.8)		(33.3)		1.8
Share based compensation expense	24.5		27.1		28.2
Loss on extinguishment of debt	94.9		0		0
Gain on sale of real estate	0		0		(4.6)
Mandatory transition tax	0		(0.4)		33.1
Inventory step up	0		36.2		0.2
Settlement loss on pension plan terminations	0		3.7		14.1
Non-cash items included in income, net	23.1		(4.2)		7.6
Other, net	(7.1)		22.1		(4.7)
Changes in assets and liabilities used in operations, net of acquisitions
Decrease / (increase) in trade receivables, net	47.8		(24.9)		(1.1)
Increase in inventories	(39.8)		(15.2)		(12.1)
Decrease / (increase) in other current assets	53.4		(44.3)		2.8
Increase in accounts payable	76.2		5.2		4.4
(Decrease) / increase in other current liabilities	(25.4)		9.6		20.4
Net cash from operating activities from continuing operations	$	389.3	$	142.1	$	228.7
Net cash (used by) / from operating activities from discontinued operations	(12.9)		7.4		0
Net cash from operating activities	$	376.4	$	149.5	$	228.7
Cash Flow from Investing Activities
Capital expenditures	(65.3)		(55.1)		(24.2)
Proceeds from sale of assets	6.4		0.2		6.1
Acquisitions, net of cash acquired	(5.1)		(2,460.0)		(38.1)
Net cash used by investing activities from continuing operations	$	(64.0)	$	(2,514.9)	$	(56.2)
Net cash from / (used by) investing activities from discontinued operations	280.9		(407.4)		0
Net cash from / (used by) investing activities	$	216.9	$	(2,922.3)	$	(56.2)
Cash Flow from Financing Activities

Cash proceeds from issuance of debt with maturities greater than 90 days	2,020.6		1,800.0		1,259.9
Payments on debt with maturities greater than 90 days	(1,393.5)		(529.5)		(4.0)
Net (decrease)/increase in debt with maturities 90 days or less	(30.2)		(214.1)		143.4
Debt issuance costs	(26.5)		(40.1)		(22.6)
Premiums paid on extinguishment of debt	(18.3)		0		0
Net proceeds from issuance of mandatory convertible preferred stock	0		199.5		0
Net proceeds from issuance of common stock	0		205.3		0
Dividends paid on common stock	(85.4)		(83.0)		(70.0)
Dividends paid on mandatory convertible preferred shares	(16.2)		(8.0)		0
Common stock purchased	(45.0)		(45.0)		(70.0)

Taxes paid for withheld share-based payments	(11.3)		(8.3)		(10.4)
Net cash from financing activities from continuing operations	$	394.2	$	1,276.8	$	1,226.3
Net cash used by financing activities from discontinued operations	(1.1)		(4.7)		0
Net cash from financing activities	$	393.1	$	1,272.1	$	1,226.3
Effect of exchange rate changes on cash	4.9		(9.1)		(8.5)
Net increase / (decrease) in cash, cash equivalents, and restricted cash from continuing operations	724.4		(1,105.1)		1,390.3
Net increase / (decrease) in cash, cash equivalents, and restricted cash from discontinued operations	266.9		(404.7)		0
Net increase / (decrease) in cash, cash equivalents, and restricted cash	$	991.3	$	(1,509.8)	$	1,390.3
Cash, cash equivalents, and restricted cash, beginning of period	258.5		1,768.3		378.0
Cash, cash equivalents, and restricted cash, end of period	$	1,249.8	$	258.5	$	1,768.3

The above financial statements should be read in conjunction with the Notes To Consolidated Financial Statements.

ENERGIZER HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY/(DEFICIT)

(Dollars in millions, shares in thousands)


																								Number of Shares		Amount
	Common Shares Outstanding		Common Stock		Additional Paid-in Capital			Retained Earnings			Net Investment of Edgewell			Accumulated Other Comprehensive (Loss)/Income			Treasury Stock			Total Shareholders' Equity/(Deficit)				Preferred Shares Outstanding	Common Shares Outstanding	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Treasury Stock		Total Shareholders' Equity/(Deficit)
Balance, September 30, 2014	—		—		—			—			756.2			(31.7		)	—			724.5
Net earnings/(loss)	—		—		—			23.1			(27.1		)	—			—			(4.0		)
Net decrease in Edgewell investment	—		—		—			—			(946.6		)				—			(946.6		)
Separation related adjustments	—		—		—			—			393.5			(93.9		)	—			299.6
Reclassification of net investment to additional paid-in capital	—		—		176.0			—			(176.0		)	—			—			—
Issuance of common stock at spin-off	62,193		0.6		(0.6		)	—			—			—			—			—
Share based payments	—		—		6.3			—			—			—			—			6.3
Activity under stock plans	2		—		—			—			—			—			—			—
Dividends to shareholders	—		—		—			(16.2		)	—			—			—			(16.2		)
Other comprehensive loss	—		—		—			—			—			(123.7		)	—			(123.7		)
Balance, September 30, 2015	62,195		0.6		181.7			6.9			—			(249.3		)	—			(60.1		)
Balance, September 30, 2017																							Balance, September 30, 2017	0	60,709	$	0	$	0.6	$	196.7	$	198.7	$	(238.8)	$	(72.1)	85.1
Net earnings	—		—		—			127.7			—			—			—			127.7			Net earnings	—	—	—		—		—		93.5		—		—		93.5
Share based payments	—		—		20.4			—			—			—			—			20.4
Common stock purchased	(833	)	—		—			—			—			—			(32.6		)	(32.6		)
Activity under stock plans	311		—		(7.5		)	—			—			—			2.6			(4.9		)
Dividends to shareholders	—		—		—			(63.7		)	—			—			—			(63.7		)
Other comprehensive loss	—		—		—			—			—			(16.8		)	—			(16.8		)
Balance, September 30, 2016	61,673		$	0.6	$	194.6		$	70.9		$	—		$	(266.1	)	$	(30.0	)	$	(30.0	)
Net earnings			—		—			201.5			—			—			—			201.5
Adoption of ASU 2016-16																							Adoption of ASU 2016-16	—	—	—		—		—		(59.2)		—		—		(59.2)
Adoption of ASU 2018-02																							Adoption of ASU 2018-02	—	—	—		—		—		20.4		(20.4)		—		0
Deferred compensation plan																							Deferred compensation plan	—	—	—		—		12.0		—		—		—		12.0
Share based payments			—		24.3			—			—			—			—			24.3			Share based payments	—	—	—		—		28.2		—		—		—		28.2
Common stock purchased	(1,389	)	—		—			—			—			—			(58.7		)	(58.7		)	Common stock purchased	—	(1,439)	—		—		—		—		—		(70.0)		(70.0)
Activity under stock plans	425		—		(22.2		)	(4.4		)	—			—			16.6			(10.0		)	Activity under stock plans	—	338	—		—		(19.1)		(4.0)		—		12.7		(10.4)
Dividends to shareholders			—		—			(69.3		)	—			—			—			(69.3		)	Dividends to shareholders	—	—	—		—		—		(72.1)		—		—		(72.1)
Other comprehensive income			—		—			—			—			27.3			—			27.3			Other comprehensive income	—	—	—		—		—		—		17.4		—		17.4
Balance, September 30, 2017	60,709		$	0.6	$	196.7		$	198.7		$	—		$	(238.8	)	$	(72.1	)	$	85.1
Balance, September 30, 2018																							Balance, September 30, 2018	0	59,608	$	0	$	0.6	$	217.8	$	177.3	$	(241.8)	$	(129.4)	$	24.5
Net earnings from continuing operations																							Net earnings from continuing operations	—	—	—		—		—		64.7		—		—		64.7
Net loss from discontinued operations																							Net loss from discontinued operations	—	—	—		—		—		(13.6)		—		—		(13.6)

Share based payments																							Share based payments	—	—	—		—		27.1		—		—		—		27.1
Issuance of common stock																							Issuance of common stock	—	9,966	—		0.1		445.7		—		—		—		445.8
Issuance of preferred stock																							Issuance of preferred stock	2,156	—	—		—		199.5		—		—		—		199.5
Common stock purchased																							Common stock purchased	—	(1,036)	—		—		—		—		—		(45.0)		(45.0)
Activity under stock plans																							Activity under stock plans	—	364	—		—		(19.8)		(4.5)		—		16.0		(8.3)
Dividends to common shareholders																							Dividends to common shareholders	—	—	—		—		—		(82.4)		—		—		(82.4)
Dividends to preferred shareholders																							Dividends to preferred shareholders	—	—	—		—		—		(12.0)		—		—		(12.0)
Other comprehensive loss																							Other comprehensive loss	—	—	—		—		—		—		(56.5)		—		(56.5)
Balance, September 30, 2019																							Balance, September 30, 2019	2,156	68,902	$	0	$	0.7	$	870.3	$	129.5	$	(298.3)	$	(158.4)	$	543.8
Net earnings from continuing operations																							Net earnings from continuing operations	—	—	—		—		—		46.8		—		—		46.8
Net loss from discontinued operations																							Net loss from discontinued operations	—	—	—		—		—		(140.1)		—		—		(140.1)
Share based expense																							Share based expense	—	—	—		—		24.5		—		—		—		24.5

Common stock purchases																							Common stock purchases	—	(980)	—		—		—		—		—		(45.0)		(45.0)
Activity under stock plans																							Activity under stock plans	—	471	—		—		(29.9)		(2.2)		—		20.8		(11.3)
Deferred compensation plan																							Deferred compensation plan	—	125	—		—		(5.7)		—		—		5.7		—
Dividends to common shareholders																							Dividends to common shareholders	—	—	—		—		—		(84.0)		—		—		(84.0)
Dividends to preferred shareholders																							Dividends to preferred shareholders	—	—	—		—		—		(16.2)		—		—		(16.2)
Other comprehensive loss																							Other comprehensive loss	—	—	—		—		—		—		(9.4)		—		(9.4)
Balance, September 30, 2020																							Balance, September 30, 2020	2,156	68,518	$	0	$	0.7	$	859.2	$	(66.2)	$	(307.7)	$	(176.9)	$	309.1

The above financial statements should be read in conjunction with the Notes To Consolidated Financial Statements.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(1) Description of Business and Basis of Presentation

Description of Business–Energizer Holdings, Inc. and its subsidiaries (Energizer or the Company) is a global manufacturer, marketer and ~~distributer~~distributor of household batteries, specialty batteries and portable lights under the Energizer® and Eveready® brand names. Energizer offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air and silver oxide constructions. On July 1, 2016, Energizer expanded its portfolio of brands with an acquisition of a leading designer and marketer of automotive fragrance and appearance products (auto care acquisition). With the auto care acquisition, the Company's brands now include Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®.

On July 1, 2015, Energizer completed its legal separation from our former parent company, Edgewell Personal Care Company (Edgewell), via a tax free spin-off (the Spin-off or Spin). Energizer operates as an independent, publicly traded company on the New York Stock Exchange trading under the symbol "ENR."

On July 1, 2016, Energizer expanded its portfolio of brands with an acquisition of a leading designer and marketer of automotive fragrance and appearance products. The Company's brands now include Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. On July 2, 2018, Energizer acquired the Nu Finish® and Scratch Doctor® brands to add to its automotive appearance offerings (Nu Finish Acquisition).

On January 2, 2019, Energizer expanded its battery portfolio with the acquisitions of Spectrum Holdings, Inc.’s (Spectrum) global battery, lighting, and portable power business (Battery Acquisition). The Battery Acquisition included the Rayovac® and Varta® brands (Acquired Battery Business).

On January 28, 2019, Energizer further expanded its auto care portfolio with the acquisition of Spectrum's global auto care business (Auto Care Acquisition). The Auto Care Acquisition included the Armor All®, STP®, and A/C PRO® brands (Acquired Auto Care Business).

On January 2, 2020, the Company sold the Varta® consumer battery business in the Europe, Middle East and Africa regions, including manufacturing and distribution facilities in Germany (Divestment Business) to VARTA Aktiengesellschaft (VARTA AG) for a contractual purchase price of €180.0, subject to purchase price adjustments (Varta Divestiture). This business was acquired as part of the Battery Acquisition and was required to be divested per regulatory requirements. Pursuant to the terms of the Battery Acquisition agreement, Spectrum also contributed cash proceeds toward this sale. Total cash proceeds received, including related hedging arrangements, net of the final working capital settlement, were $323.1 and the Company recorded a pre-tax loss of $141.6. Refer to Note 5, Divestment, for further discussion.

Basis of Presentation– The consolidated financial statements include the accounts of Energizer and its subsidiaries. All significant intercompany transactions are eliminated. Energizer has no material equity method investments, variable interests or ~~variable~~non-controlling interests.

~~Prior to~~As a result of the ~~Spin-off~~Varta Divestiture, the assets and liabilities associated with the Divestment Business as of September 30, 2019 were classified as held for sale in the accompanying Consolidated Balance Sheets. There were no assets or liabilities from these operations as of September 30, 2020. The respective operations of the Divestment Business, including a loss recorded on ~~July 1, 2015, our financial statements were prepared on a combined standalone basis derived from~~divestment, have been classified as discontinued operations in the ~~financial statements~~accompanying Consolidated Statements of Earnings and ~~accounting records~~Comprehensive Income and Statements of ~~Edgewell and included expense allocations for: (1) certain product warehousing and distribution; (2) various transaction process functions; (3) a consolidated sales force and management~~ Cash Flows. See Note 5 - Divestmentfor certain countries; (4) certain support functions that were provided on a centralized basis within Edgewell and not recorded at the business division level, including, but not limited to, finance, audit, legal,more information technology, human resources, communications, facilities, and compliance; (5) employee benefits and compensation; (6) share-based compensation; (7) financing costs; (8) the effects of restructurings and the Venezuela deconsolidation; and (9) cost of early debt retirement. These expenses were allocated to Energizer on the ~~basis of direct usage where identifiable, with the remainder allocated on a basis of global net sales, cost of sales, operating income, headcount or other measures of Energizer~~assets and Edgewell. Management believes the assumptions regarding allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by Energizer during the periods prior to the Spin-off. Nevertheless, the allocations may not include all of the actual expenses that would have been incurred by Energizerliabilities classified as held for sale and may not reflect our results of operations, financial position and cash flows had we been an independent standalone company during the periods prior to July 1, 2015. It is not practicable to estimate actual costs that would have been incurred had Energizer been a standalone company during the periods prior to the Spin-off. Actual costs that would have been incurred if Energizer had been a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.discontinued operations.

(2) Summary of Significant Accounting Policies

Energizer’s significant accounting policies, which conform to GAAP and are applied on a consistent basis in all years presented, except as indicated, are described below.

Use of Estimates – The preparation of the Company's Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. On an ongoing basis, Energizer evaluates its estimates, including those related to customer promotional programs and incentives, product returns, bad debts, the carrying value of inventories, intangible and other long-lived assets, income taxes, pensions and other postretirement benefits, share-based compensation, contingencies and acquisitions. Actual results could differ materially from those estimates. In regard to ongoing impairment testing of goodwill and indefinite lived intangible assets, significant deterioration in future cash flow projections, changes in discount rates used in discounted cash flow models or changes in other assumptions used in estimating fair values, versus those anticipated at the time of the initial acquisition, as well as subsequent estimated valuations, could result in impairment charges that may materially affect the financial statements in a given year.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Cash and Cash Equivalents – Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. At September 30, ~~2017~~2020 and ~~2016,~~2019, Energizer had ~~$378.0~~$459.8 and ~~$287.3,~~$258.5, respectively, in available cash, ~~98%~~61.8% and ~~96%~~75.8% of which was outside of the U.S., respectively. The Company has extensive operations, including a significant manufacturing footprint outside of the U.S. We manage our worldwide cash requirements by reviewing available funds among the many subsidiaries through which we conduct our business and the cost effectiveness with which those funds

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

can be accessed. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to regulatory capital requirements; however, those balances are generally available without legal restrictions to fund ordinary business operations. ~~U.S. income taxes have not been provided on a significant portion of undistributed earnings of international subsidiaries.~~ Our intention is to reinvest these ~~earnings~~funds indefinitely.

Restricted Cash – The Company defines restricted cash as cash that is legally restricted as to withdrawal or usage. The amount included in restricted cash on the Consolidated Balance Sheet at September 30, 2020 represents the net proceeds from the September bond offering for the $800.0 Senior Notes at 4.375% due in 2029. These funds are net of the bank fees paid at funding. The funds were released subsequent to year-end on October 16, 2020 and were used to fund the full redemption of the USD 2026 Senior Notes at 6.375%. See Note 13, Debt, for further information. There was no restricted cash at September 30, 2019.


	At September 30,
	2020		2019
Cash and cash equivalents	$	459.8	$	258.5
Restricted cash	790.0		0
Total Cash, cash equivalents and restricted cash shown in the statement of cash flows	$	1,249.8	$	258.5

Foreign Currency Translation – Financial statements of foreign operations where the local currency is the functional currency are translated using end-of-period exchange rates for assets and liabilities and average exchange rates during the period for results of operations. Related translation adjustments are reported as a component within accumulated other comprehensive ~~income~~loss in the equity section of the Consolidated Balance ~~Sheets, except~~Sheets.

Effective July 1, 2018, the financial statements for our Argentina subsidiary are consolidated under the rules governing the translation of financial information in a highly inflationary economy. Under U.S. GAAP, an economy is considered highly inflationary if the cumulative inflation rate for a three year period meets or exceeds 100 percent. The Argentina economy exceeded the three year cumulative inflation rate of 100 percent as ~~noted~~of June 2018. If a subsidiary is considered to be in ~~Note 6, Venezuela.~~a highly inflationary economy, the financial statements of the subsidiary must be remeasured into the Company’s reporting currency (U.S. dollar) and future exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in current earnings, rather than exclusively in the equity section of the balance sheet, until such time as the economy is no longer considered highly inflationary.

Financial Instruments and Derivative Securities – Energizer uses financial instruments, from time to time, in the management of foreign currency, interest rate risk and commodity price risks that are inherent to its business operations. Such instruments are not held or issued for trading purposes.

Every derivative instrument (including certain derivative instruments embedded in other contracts) is required to be recorded on the balance sheet at fair value as either an asset or liability. Changes in fair value of recorded derivatives are required to be recognized in earnings unless specific hedge accounting criteria are met.

Foreign exchange instruments, including currency forwards, are used primarily to reduce cash transaction exposures and to manage other translation exposures. Foreign exchange instruments used are selected based on their risk reduction attributes, costs and the related market conditions. The Company has designated certain foreign currency contracts as cash flow hedges for accounting purposes as of September 30, ~~2017~~2020 and ~~2016.~~2019.

The Company has interest rate risk with respect to interest expense on variable rate debt. The Company is party to an interest rate swap agreement with one major financial institution that fixes the variable benchmark component (LIBOR) on $200.0 of the Company's variable rate debt at September 30, ~~2017~~2020 and ~~2016.~~2019. In February 2018, the Company entered into a forward starting interest rate swap with an effective date of October 1, 2018, with one major financial institution that fixed the variable benchmark component (LIBOR) on additional variable rate debt at an interest rate of 2.47%. At the effective date, the swap had a notional value of $400.0. Beginning April 1, 2019, the notional amount decreased $50.0 each quarter, and continues to decrease until its termination date of December 31, 2020. The notional value of the swap was $100.0 at September 30, 2020.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Energizer uses raw materials that are subject to price volatility. The Company may use hedging instruments to reduce exposure to variability in cash flows associated with future purchases of commodities. ~~There were no outstanding~~At September 30, 2020 and 2019, the Company had derivative contracts for the future purchases of ~~commodities as of September 30, 2017 and 2016.~~zinc.

Cash Flow Presentation – The Consolidated Statements of Cash Flows are prepared using the indirect method, which reconciles net earnings to cash flow from operating activities. The reconciliation adjustments include the removal of timing differences between the occurrence of operating receipts and payments and their recognition in net earnings. The adjustments also remove cash flows arising from investing and financing activities, which are presented separately from operating activities. Cash flows from foreign currency transactions and operations are translated at an average exchange rate for the period. Cash flows from hedging activities are included in the same category as the items being hedged, which is primarily operating activities. Cash payments related to income taxes are classified as operating activities. Cash flows are also distinguished between our continuing operations and our discontinued operations.

Trade Receivables, net – Trade receivables are stated at their net realizable value. The allowance for trade promotions reflects management's estimate of the amount of trade promotions that customers will take as an invoice reduction, rather than receiving cash payments for the trade allowances earned. See additional discussion on the trade allowances in the revenue recognition discussion further in this note. The allowance for doubtful accounts reflects the Company's best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. Receivables that the Company has factored at September 30, 2020 and 2019 are excluded from the Trade receivables, net balance. Bad debt expense is included in Selling, general and administrative expense (SG&A) in the Consolidated Statements of Earnings and Comprehensive Income.

Trade Receivables, net consists of:

September 30,
2017 2016
Trade Receivables $ 236.0
$ 197.8
Allowance for returns and doubtful accounts (5.8 ) (6.9 )
Trade Receivables, net $ 230.2
$ 190.9


	September 30,
	2020		2019
Trade receivables	$	447.5	$	473.1
Allowance for trade promotions	(152.7)		(129.1)
Allowance for returns and doubtful accounts	(2.8)		(3.8)
Trade receivables, net	$	292.0	$	340.2

Trade Receivables Factoring - Energizer enters into various factoring agreements and early pay programs with our customers to sell our trade receivables under non-recourse agreements in exchange for cash proceeds. In fiscal year 2019, the credit agreement was amended so that Energizer may sell their accounts receivable up to a maximum of $500.0 annually.

During fiscal years 2020 and 2019, the Company sold $439.5 and $300.2, respectively, of receivables under this program. At September 30, 2020 and 2019, Energizer had $132.9 and $87.8, respectively, of outstanding sold receivables, which are excluded from the Trade receivables, net balance above. In some instances, we may continue to service the transferred receivables after factoring has occurred. However, any servicing of the trade receivable does not constitute significant continuing involvement and we do not carry any material servicing assets or liabilities. These receivables qualify for sales treatment under ASC 860 Transfers and Servicing, and the proceeds for the sale of these receivables is included in net cash from operating activities in the Consolidated Statement of Cash Flows.

As of September 30, 2020 and 2019, cash from factored receivables collected but not yet due to the bank included in Other current liabilities was $0.5 and $12.4, respectively. Additionally, the fees associated with factoring our receivables were $4.7 and $4.9 during the years ended September 30, 2020 and 2019, respectively. Any discounts and factoring fees related to these receivables are expensed as incurred in the Consolidated Statement of Earnings and Comprehensive Income in Selling, general and administrative expense. There were no material factoring arrangements during fiscal 2018.

Inventories – Inventories are valued at the lower of cost ~~or market,~~and net realizable value, with cost generally being determined using average cost or the first-in, first-out (FIFO) method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company records a reserve for excess and obsolete inventory based upon the historical usage rates, sales patterns of its products and specifically-identified obsolete inventory.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Capitalized Software Costs – Capitalized software costs are included in ~~other~~Other assets. These costs are amortized using the straight-line method over periods of related benefit ranging from three to seven years. Expenditures related to capitalized software are included in the Capital expenditures caption in the Consolidated Statements of Cash Flows. For the twelve months ended September 30, ~~2017, 2016~~2020, 2019 and ~~2015,~~2018, amortization expense was ~~$5.3, $3.6~~$8.1, $9.1 and ~~$4.7,~~$7.4, respectively.

Property, Plant and Equipment, net – Property, plant and equipment, net is stated at historical costs. Expenditures for new facilities and expenditures that substantially increase the useful life of property, including interest during construction, are capitalized and reported in the Capital expenditures caption in the Consolidated Statements of Cash Flows. Maintenance, repairs and minor renewals are expensed as incurred. When property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and gains or losses on the disposition are reflected in earnings. Property, plant and equipment, net held under capital leases are amortized on a straight-line bases over the shorter of the lease term or estimated useful life of the asset and such amortization is included in depreciation expense.

Depreciation is generally provided on the straight-line basis by charges to pre-tax earnings at rates based on estimated useful lives. Estimated useful lives range from two to twenty-five years for machinery and equipment and three to thirty years for buildings and building improvements. Depreciation expense in ~~2017, 2016,~~2020, 2019, and ~~2015~~2018 was ~~$33.7, $27.9,~~$63.2, $43.5, and ~~$37.1,~~$26.2, respectively, ~~excluding~~including accelerated depreciation charges of ~~$2.4~~$15.9 and ~~$9.1,~~$3.0 in ~~2016~~2020 and ~~2015,~~2019, respectively, primarily related to the IT integration assets and certain manufacturing assets including ~~properly,~~property, plant and equipment located at ~~the~~ facilities that ~~were closed or streamlined. See Note 4, Restructuring,~~are being consolidated as part of the ~~Notes to~~integration of the ~~Consolidated Financial Statements.~~Battery and Auto Care Acquisitions.

Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.

Impairment of Long-Lived Assets – Energizer reviews long-lived assets, other than goodwill and other intangible assets for impairment, when events or changes in business circumstances indicate that the remaining useful life may warrant revision or that the carrying amount of the long-lived asset may not be fully recoverable. Energizer performs undiscounted cash flow analysis to determine if impairment exists. If impairment is determined to exist, any related impairment loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less cost of disposal.

~~In November 2012, Edgewell’s Board~~Acquisitions – Energizer accounts for the acquisition of ~~Directors authorized~~a business using the acquisition method of accounting and allocates the cost of an ~~enterprise-wide restructuring plan, which included~~acquired business to the ~~closure~~assets acquired and liabilities assumed based on their estimated fair values at the date of ~~certain facilities in fiscal 2013, 2014 and 2015. As a result~~acquisition. The excess value of the ~~Spin-off,~~cost of an acquired business over the fair value of the assets acquired and liabilities assumed is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to assets acquired and liabilities assumed with the corresponding offset to goodwill.

During fiscal 2019, Energizer ~~was allocated~~used variations of the income approach in determining the fair value of intangible assets acquired in the Battery and ~~recorded~~Auto Care Acquisitions. Specifically, the Company utilized the multi-period excess earnings method for determining the fair value of the indefinite lived trade names and customer relationships acquired, and the relief from royalty method to determine the fair value of the proprietary technology acquired. Our determination of the fair value of the indefinite lived trade names acquired involved the use of significant estimates and assumptions related to revenue growth rates and discount rates. Our determination of the fair value of customer relationships acquired involved significant estimates and assumptions related to revenue growth rates, discount rates, and customer attrition rates. Our determination of the fair value of the proprietary technology acquired involved the use of significant estimates and assumptions related to revenue growth rates, royalty rates and discount rates. Energizer believes that the fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that marketplace participants would use. However, our assumptions are inherently risky and actual results could differ from those estimates. Adverse changes in the judgments, assumptions and estimates used in future measurements of fair value, including discount rates or future operating results and related cash flow projections, could result in an impairment of goodwill or intangible assets that would require a ~~portion~~non-cash charge to the consolidated statements of ~~these expenses including accelerated depreciation charges of $9.1 for the twelve months ended September 30, 2015, related primarily to certain manufacturing assets including property, plant~~operations and ~~equipment located at the facilities that were closed or streamlined. This restructuring plan has concluded.~~may have a material effect on our financial condition and operating results.

Goodwill and Other Intangible Assets – Goodwill and indefinite-lived intangibles are not amortized, but are evaluated annually for impairment as part of the Company's annual business planning cycle in the fourth fiscal quarter, or when indicators of a potential impairment are present. Intangible assets with finite lives are amortized on a straight-line basis over expected lives. Such intangibles are also evaluated for impairment including ongoing monitoring of potential impairment indicators.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Revenue Recognition – ~~Energizer’s~~The Company measures revenue ~~is from~~as the ~~sale~~amount of ~~its products. Revenue is recognized when title, ownership and risk~~consideration for which it expects to be entitled in exchange for transferring goods. Net sales reflect the transaction prices for contracts, which include units shipped at selling list prices reduced by variable consideration as determined by the terms of ~~loss pass to the customer.~~each individual contract. Discounts are offered to customers for early payment and an estimate of the discount is recorded as a reduction of net sales in the same period as the sale. Our standard sales terms are final and returns or exchanges are not permitted unless a special exception is made. Reserves are established and recorded in cases where the right of return does exist for a particular sale.

Energizer offers a variety of ~~programs, such as consumer coupons and similar consumer rebate~~ programs, primarily to its retail customers, designed to promote sales of its products. Such programs require periodic payments and allowances based on estimated results of specific programs and are recorded as a reduction to net sales. Methodologies for determining these provisions are dependent on specific customer pricing and promotional practices, which range from contractually fixed percentage price reductions to reimbursement based on actual occurrence or performance. Where applicable, future reimbursements are estimated based on a combination of historical patterns and future expectations regarding specific in-market product performance. Energizer accrues, at the time of sale, the estimated total payments and allowances associated with each transaction. Customers redeem trade promotions in the form of payments from the accrued trade allowances or invoice credits against trade receivables. Additionally, Energizer offers programs directly to consumers to promote the sale of its products. Promotions which reduce the ultimate consumer sale prices are recorded as a reduction of net sales at the time the promotional offer is made, generally using estimated redemption and participation levels. Revenue is recorded net of the taxes we collect on behalf of governmental authorities which are generally included in the price to the customer. Energizer continually assesses the adequacy of accruals for customer and consumer promotional program costs not yet paid. To the extent total program payments differ from estimates, adjustments may be necessary. Historically, these adjustments have not been material.

~~ENERGIZER HOLDINGS, INC.~~Our standard sales terms generally include payments within 30 to 60 days and are final with returns or exchanges not permitted unless a special exception is made. Our Auto Care channel terms are longer, in some cases up to 365 days, in which case we use our Trade Receivables factoring program for more timely collection. Reserves are established based on historical data and recorded in cases where the right of return does exist for a particular sale. The Company does not offer warranties on products.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars~~The Company’s contracts with customers do not have significant financing components or non-cash consideration and the Company does not have unbilled revenue or significant amounts of prepayments from customers. Revenue is recorded net of the taxes we collect on behalf of governmental authorities which are generally included in ~~millions, except per share)~~the price to the customer. Shipping and handling activities are accounted for as contract fulfillment costs and recorded in Cost of products sold.

Advertising and Sales Promotion Costs – The Company advertises and promotes its products through national and regional media and expenses such activities as incurred. Advertising costs were ~~$86.2, $65.0,~~$115.1, $96.7, and ~~$87.5~~$80.1 for the fiscal years ended September 30, ~~2017, 2016, 2015,~~2020, 2019, 2018, respectively.

Research and Development Costs - The Company expenses research and development costs as incurred.

Income Taxes – Our annual effective income tax rate is determined based on our income, statutory tax rates and the tax impacts of items treated differently for tax purposes than for financial reporting purposes. Tax law requires certain items be included in the tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities.

The Company has repatriated a portion of current year earnings from select non-U.S. subsidiaries. Generally, these non-U.S. subsidiaries are in tax jurisdictions with effective tax rates that do not result in materially higher U.S. tax provisions related to the repatriated earnings. No provision is made for additional taxes on undistributed earnings of foreign affiliates that are intended and planned to be indefinitely invested in foreign affiliates. The Company intends to reinvest these earnings indefinitely in our foreign subsidiaries to fund local operations, fund strategic growth objectives, and fund capital projects. See Note 8, Income Taxes, for further discussion.

The Company estimates income taxes and the effective income tax rate in each jurisdiction that it operates. This involves estimating taxable earnings, specific taxable and deductible items, the likelihood of generating sufficient future taxable income to utilize deferred tax assets, the portion of the income of foreign subsidiaries that is expected to be remitted to the U.S. and be taxable and possible exposures related to future tax audits. Deferred tax assets are evaluated on a subsidiary by subsidiary basis to ensure that the asset will be realized. Valuation allowances are established when the realization is not deemed to be more likely than not. Future performance is monitored, and when objectively measurable operating trends change, adjustments are made to the valuation allowances accordingly. To the extent the estimates described above change, adjustments to income taxes are made in the period in which the estimate is changed.

The Company operates in multiple jurisdictions with complex tax and regulatory environments, which are subject to differing interpretations by the taxpayer and the taxing authorities. At times, the Company may take positions that management believes are supportable, but are potentially subject to successful challenges by the appropriate taxing authority. The Company evaluates its tax positions and establishes liabilities in accordance with guidance governing accounting for uncertainty in income taxes. The Company reviews these tax uncertainties in light of the changing facts and circumstances, such as the progress of tax audits, and adjusts them accordingly.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

In January 2018, the Financial Accounting Standard Board released guidance on the accounting for tax on the global intangible low-taxed income (GILTI) provisions of the Tax Cuts and Jobs Act (the Tax Act). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as a period cost are both acceptable methods subject to an accounting policy election. The Company has completed its analysis of the GILTI rules and has made an accounting policy election to treat the taxes due from GILTI as a period expense when incurred.

Share-Based Payments – The Company grants restricted stock equivalents, which generally vest over two to four years. Stock compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized on a straight-line basis over the full restriction period of the award, with forfeitures recognized as they occur.

Estimated Fair Values of Financial Instruments – Certain financial instruments are required to be recorded at the estimated fair value. Changes in assumptions or estimation methods could affect the fair value estimates; however, we do not believe any such changes would have a material impact on our financial condition, results of operations or cash flows. Other financial instruments including cash and cash equivalents, restricted cash, and short-term borrowings, including notes payable, are recorded at cost, which approximates estimated fair value.

Reclassifications - Certain reclassifications have been made to the prior year financial statements to conform to the current presentation.

Recently Adopted Accounting Pronouncements – ~~During the year ended September 30, 2017,~~Effective October 1, 2019, the Company adopted ASU ~~2015-07,~~ ~~Fair Value Measurement (Topic 820)~~2016-02 and related standards (collectively ASC 842, Leases). This ASU removes the requirement to categorize investments for which fair values are measured using the net asset value per share (NAV) in the fair value hierarchy. As a result of this ASU, Energizer's pension plan assets, as disclosed in Note 12, Pension Plans, that are valued using their NAV are no longer disclosed in the fair value hierarchy disclosures of ASC 820, Fair Value Measurements.

~~During the quarter ended December 31, 2016, the Company early adopted FASB ASU 2016-09,~~ ~~Compensation - Stock Compensation. ASU 2016-09 simplifies the accounting for share-based payment transactions, including the income tax~~

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~consequences and classifications on the statement of cash flows. The provisions in ASU 2016-09 resulted in the following impacts upon adoption:~~

Excess tax benefits created upon the vesting of restricted stock equivalent awards (RSEA) are now recorded within the income tax provision. These amounts were previously recorded as an adjustment to Additional paid in capital. During the twelve months ended September 30, 2017, $1.6 was recorded as a benefit in our income tax provision. This ASU provision was applied on a modified retrospective basis; however no cumulative effect adjustment was necessary to retained earnings.

Excess tax benefits are now required to be classified with other income tax cash flows as a Cash Flow from Operating Activities. This was previously reported as a Cash Flow from Financing Activity. The $1.6 excess tax benefit for the twelve months ended September 30, 2017 is reflected within the Changes in current assets and liabilities used in operations line. The Company has applied this provision prospectively and the comparable prior year amount of $1.0 is reflected in Cash Flow from Financing Activities.

Cash paid by an employer when directly withholding shares for tax withholding purposes are now required to be classified as a Cash Flow from Financing Activities. For the twelve months ended September 30, 2017 and September 30, 2016, the Company has reported $10.0 and $6.2, respectively, for Taxes paid for withheld share payments as a Cash Flow used by Financing Activity. This presentation is consistent with prior year.

~~No other provisions of this guidance had an impact on the financial statements.~~

~~During the quarter ended December 31, 2016, the Company adopted ASU 2015-05,~~ ~~Intangibles Goodwill and other internal-use software~~ (Subtopic 350-40), which provides criteria to review cloud computing arrangements to determine whether the arrangement contains a software license or is solely a service contract. If the arrangement is determined to be a software license, fees paid to the vendor would be within the scope of internal-use software guidance. If not, the fees paid would be expensed as incurred. The Company's historical accounting for cloud computing arrangements was consistent with this guidance and no change in accounting was required.

~~During the quarter ended December 31, 2016, the Company adopted FASB ASU 2014-15,~~ ~~Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern~~, which requires management to assess the Company's ability to continue as a going concern and to provide related disclosures in certain circumstances. Management's assessment discovered no uncertainties about the Company's ability to continue as a going concern.

~~Recently Issued Accounting Pronouncements~~ – ~~On May 28, 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers,~~ which provides a single comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. On August 12, 2015, the FASB issued a one-year deferral of the effective date of the ASU. The update is effective for Energizer beginning October 1, 2018. The Company is currently assessing the new standard against its current accounting policies and procedures, through activities that include analysis of standard sales transactions and terms, coordination and discussion with our commercial teams and reviewing contracts with customers. The Company plans to adopt the new standard on a modified retrospective basis at the effective date. While the Company’s assessment is not yet complete, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. The Company is still assessing the overall impact on the Company’s disclosures.

~~On July 22, 2015, the FASB issued ASU 2015-11,~~ ~~Inventory (Topic 330),~~ which aligns the measurement of inventory under GAAP more closely with International Financial Reporting Standards. Under the new guidance, an entity that measures inventory using the first-in, first-out or average cost should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The update is effective for Energizer beginning October 1, 2017 and will not have a material impact.

~~On February 25, 2016, the FASB issued ASU 2016-02,~~ ~~Leases. This ASU~~ aligns the measurement of leases under GAAP more closely with International Financial Reporting Standards by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company elected the optional transition method and adopted the new guidance on a modified retrospective basis with no restatement of prior period amounts. Further, the Company elected to apply the package of practical expedients which allows companies to carry forward original lease determinations, lease classifications, and accounting for initial direct costs. Energizer also made the policy elections upon adoption for the exclusion of short term leases on the balance sheet and to not separate lease and non-lease components

The adoption of ASC 842, Leases, resulted in the recognition of additional assets and corresponding liabilities on the Consolidated Balance Sheet for the Company's operating leases; however, it did not have a material impact on the Consolidated Statement of Earnings and Comprehensive Income, the Consolidated Statement of Cash Flows and the Consolidated Statement of Shareholders' Equity/(Deficit), including retained earnings. Refer to Note 11, Leases, for further information.

Recently Issued Accounting Pronouncements – In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendment provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships and other transactions that reference LIBOR. These updates are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating our contracts and the optional expedients provided by this update.

In August 2020, the FASB issued ASU 2020-06 Changes to Accounting for Convertible Debt. This amendment simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB has reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to financial statement users. The new guidance also modifies how particular convertible instruments and certain contracts that may be settled in ~~this update will be effective~~cash or shares impact the diluted EPS computation. The amendment goes into effect for fiscal years starting after December 15, 2021, which for Energizer would be the beginning ~~October 1, 2019 with early~~of fiscal year 2023. Early adoption ~~permitted. Energizer~~ is ~~in the process of evaluating the impact the revised guidance will have on its financial statements.~~permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

~~On August 26, 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows- Classification of Certain Cash Receipts and Cash Payments,~~ which is intended to reduce diversity in practice in how certain transactions are classified in the statements of cash flows. This update will be effective for Energizer beginning October 1, 2018. The Company is currently ~~assessing~~evaluating the impact ~~the revised guidance will~~that this updated may have on our ~~current classification on the Statement of Cash Flow.~~

~~On October 24, 2016, the FASB issued ASU 2016-16,~~ ~~Intra-entity Transfers of Assets Other Than Inventory. This ASU requires tax expense~~financial statements, however it is not expected to be ~~recognized from the sale~~material.

(3) Revenue

Nature of ~~intra-entity assets, other than inventory, when the transfer occurs, even though the effects~~Our Business - The Company, through its operating subsidiaries, is one of the ~~transaction~~world’s largest manufacturers, marketers and distributors of household batteries, specialty batteries and lighting products, and a leading designer and marketer of automotive fragrance, appearance, performance and air conditioning recharge products. We distribute our products to consumers through numerous retail locations worldwide, including mass merchandisers and warehouse clubs, food, drug and convenience stores, electronics specialty stores and department stores, hardware and automotive centers, e-commerce and military stores. We sell to our customers through a combination of a direct sales force and exclusive and non-exclusive third-party distributors and wholesalers.

Our Americas segment sales are ~~eliminated~~comprised of North America and Latin America market groups. North America sales are generally through large retailers with nationally or regionally recognized brands. Latin America sales are generally through distributors or sales by wholesalers or small retailers who may not have national or regional presence.

Our International segment sales are comprised of modern trade, developing and distributor market groups. Modern trade, which is most prevalent in ~~consolidation. Under~~Western Europe and more developed economies throughout the ~~current guidance, the tax effects of transfers would~~world, generally refers to sales through large retailers with nationally or regionally recognized brands. Developing markets generally include sales by wholesalers or small retailers who may not have ~~been deferred until the transferred asset was sold~~a national or otherwise recovered through use. Upon adoption, any deferred charge previously established upon the intra-company transfer would be recorded as a cumulative effect adjustment to retained earnings. At September 30, 2016,regional presence. Distributors are utilized in other markets where the Company ~~had~~does not have a deferred charge of $51.2 included in Other assets. During the quarter ended December 31, 2016, new IRS regulations were passed that resulted in the recognition of an additional deferred charge. As of September 30, 2017, the total deferred chargedirect sales force. Each market's determination is $59.2. The update will be effective for Energizer beginning October 1, 2018 with early adoption permitted in the first interim period of a fiscal year. The Company expects to adopt the new guidance during the first quarter of fiscal 2018.

~~On January 5, 2017, the FASB issued ASU 2017-01,~~ ~~Clarifying the Definition of a Business~~. This ASU creates a more practical definition and guidelines to determine whether a set of assets and activities is a business. This simplifies the decision making process of determining whether a purchase constitutes a business combination or an acquisition of assets. This ASU is effective for the Company for any new acquisitions starting October 1, 2018.

~~On January 26, 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment. This ASU eliminates the need to assign the fair value of a reporting unit to each of its assets and liabilities when quantifying an impairment charge. The impairment charge would now be determined~~ based on the comparison of the fair value of a reporting unit to its carrying amount. The Company will adjust its goodwill testing procedures accordingly upon adoption. This ASU is effective for the Company starting with its annual goodwill impairment tests for fiscal year 2021.

~~On March 10, 2017, the FASB issued ASU 2017-07,~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU requires the service component of the net periodic pension cost to be reported~~predominant customer type or sales strategy utilized in the ~~same income statement line item as similar compensation costs, while all other pension cost components should be reported separately~~market.

Supplemental product and market information is presented below for revenues from ~~the service cost component on the income statement. The update will be effective~~external customers for Energizer beginning October 1, 2018 with early adoption permitted in the first interim period of a fiscal year. The Company expects to adopt the new guidance during the first quarter of fiscal 2018. The adoption will result in the service component of net periodic pension costs being accounted for in Selling, general and administrative expenses and the other components of net periodic pension costs being accounted for in Other items, net and will be applied retrospectively.

~~On August 28, 2017, the FASB issued ASU 2017-12,~~ ~~Targeted Improvements to Accounting for Hedging Activities.~~ This ASU intends to simplify hedge accounting and decrease complexity for both the preparation and understanding of hedging disclosures in the financial statements. This ASU is effective for the Company beginning October 1, 2019. The Company is currently assessing the impact the revised guidance will have on its accounting practices and financial statements.

~~(3) Spin Costs~~

~~The Company incurred costs associated with the evaluation, planning and execution of the Spin-off. During~~ the twelve months ended September 30, ~~2017,~~2020, 2019 and 2018:


	For the Twelve Months Ended September 30,
Net Sales	2020		2019		2018
Batteries	$	2,099.8	$	1,959.9	$	1,612.7
Auto Care	513.0		409.3		95.4
Lights and Licensing	132.0		125.3		89.6
Total Net Sales	$	2,744.8	$	2,494.5	$	1,797.7


	For the Twelve Months Ended September 30,
Net Sales	2020		2019		2018
North America	$	1,753.0	$	1,534.7	$	1,017.8
Latin America	218.2		200.1		117.8
Americas	1,971.2		1,734.8		1,135.6
Modern Markets	462.0		444.7		381.9
Developing Markets	189.6		193.4		181.0
Distributor Markets	122.0		121.6		99.2
International	773.6		759.7		662.1
Total Net Sales	$	2,744.8	$	2,494.5	$	1,797.7

When Performance Obligations are Satisfied - The Company’s revenue is primarily generated from the ~~Company recorded income~~sale of ~~$3.8~~finished product to customers. Sales predominantly contain a single delivery element, or performance obligation, and revenue is recognized at a single point in ~~spin restructuring which included $2.5~~time when title, ownership and risk of ~~income in the second quarter reflecting the true up of previously accrued contract termination costs related~~loss pass to the ~~2016 right-sizing of the corporate headquarters and the first quarter sale of a facility in North America that was previously closed as part of the spin for a gain of $1.3.~~

During the twelve months ended September 30, 2016, the Company incurred $16.2 in spin costs including $10.0 recorded in SG&A, $0.4 recorded in cost of products sold and $5.8 recorded in spin restructuring. Included in spin restructuring were contract termination costs relatedcustomer. This typically occurs when finished goods are delivered to the ~~exit of~~customer or when finished goods are picked up by a ~~corporate office building as we right-sized our headquarters' footprint. The~~customer or customer’s carrier, depending on contract ~~termination costs were $3.7 based on the estimated fair value of the future cash flows associated with this operating lease.~~terms.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(4) Acquisitions

~~For the twelve months ended September 30, 2015,~~

Custom Accessories Europe Acquisition- On January 31, 2020, the Company ~~recorded spin costs~~entered into a share purchase agreement to acquire Custom Accessories Europe Group International Limited (“CAE”) for $1.9 in cash. CAE is a well-established marketer of ~~$163.9, of which $97.6 was recorded in SG&A, $0.5 was recorded in cost of products sold, $39.1 was recorded in spin restructuring~~branded automotive accessories throughout the United Kingdom and ~~$26.7 of cost of early debt retirement was recorded in interest expense.~~

~~On a project~~Europe. CAE partners with major automotive accessory brand owners to ~~date basis,~~identify and develop complimentary brand extensions supported by sourcing and distribution activities. The purchase agreement has potential earnout payments that could increase the ~~total costs incurred and allocated~~purchase price up to ~~Energizer~~$9.9 if certain financial metrics are achieved over the next three years. During the fiscal year the Company paid an additional $0.6 for the ~~Spin-off were $197.6, inclusive~~first earnout payment threshold. The preliminary purchase price of the ~~costs~~acquisition is $6.4 after working capital adjustments, and the Company has allocated the purchase price to the assets acquired and liabilities assumed, resulting in identified intangible assets for vendor relationships of ~~early debt retirement recorded in fiscal 2015. We do not expect any additional costs related to spin.~~

~~Energizer does not include~~approximately $5.0. These vendor relationship intangibles which will be amortized over the ~~spin restructuring costs in the results of its reportable segments. The estimated impact of allocating such charges to segment results would have been as follows:~~

Twelve Months Ended September 30, 2017
Americas EMEA Asia Pacific Corporate Total
Contract termination costs $ —
$ —
$ —
$ (2.5 ) $ (2.5 )
Net gain on asset sale (1.3 ) —
—
—
(1.3 )
Total $ (1.3 )
$ —

$ —

$ (2.5 )
$ (3.8 )

Twelve Months Ended September 30, 2016
Americas EMEA Asia Pacific Corporate Total
Severance and termination related costs $ (2.2 ) $ 1.1
$ 0.8
$ 0.5
$ 0.2
Non-cash asset write-down —
0.5
—
—
0.5
Contract termination costs 3.7
—
—
—
3.7
Other exit costs 0.3
0.7
1.0
—
2.0
Net gain on asset sale —
(0.6 ) —
—
(0.6 )
Total $ 1.8
$ 1.7
$ 1.8
$ 0.5
$ 5.8

Twelve Months Ended September 30, 2015
Americas EMEA Asia Pacific Corporate Total
Severance and termination related costs $ 9.1
$ 6.0
$ 5.3
$ 12.0
$ 32.4
Non-cash asset write-down 3.2
0.2
0.6
—
4.0
Other exit costs 0.4
0.6
1.7
—
2.7
Total $ 12.7
$ 6.8
$ 7.6
$ 12.0
$ 39.1

The following tables represent the spin restructuring accrual activity and ending accrual balance at September 30, 2017 and September 30, 2016 on the Consolidated Balance Sheet. At September 30, 2016, $4.0three-year lives of the ~~liability was recorded in Other current liabilities~~vendor agreements.

FDK Indonesia Acquisition - During fourth quarter of fiscal 2020, the Company entered into an agreement with FDK Corporation to acquire its subsidiary FDK Indonesia, a battery manufacturing facility. Subsequent to the fiscal year end, on October 1, 2020, the Company completed the acquisition for a contractual purchase price of $18.2, and ~~the remaining $2.4 was recorded in Other liabilities.~~

Utilized
October 1, 2016 Charge to Income Cash Non-Cash September 30, 2017
Severance and termination related costs $ 2.8
$ —
$ (2.8 ) $ —
$ —
Contract termination costs 3.6
(2.5 ) (1.1 ) —
—
Net gain on asset sale —
(1.3 ) 1.3
—
—
Total $ 6.4
$ (3.8 ) $ (2.6 ) $ —
$ —

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Utilized
October 1, 2015 Charge to Income Cash Non-Cash September 30, 2016
Severance and termination related costs $ 12.0
$ 0.2
$ (9.4 ) $ —
$ 2.8
Non-cash asset write down —
0.5
—
(0.5 ) —
Contract termination costs —
3.7
(0.1 ) —
3.6
Other exit costs 0.3
2.0
(2.3 ) —
—
Net gain on asset sale —
(0.6 ) 0.6
—
—
Total $ 12.3
$ 5.8
$ (11.2 ) $ (0.5 ) $ 6.4

~~(4) Restructuring~~

~~2013 Restructuring~~

~~In November 2012, Edgewell’s Board~~paid cash of ~~Directors authorized an enterprise-wide restructuring plan and delegated authority~~$16.9 after contractual adjustments to Edgewell’s management to determine the final actions with respect to this plan (2013 restructuring project). This initiative impacted Edgewell’s Household Products and Personal Care businesses. In January 2014, Edgewell’s Board of Directors authorized an expansion of scopeFDK Corporation. The acquisition of the ~~previously announced 2013 restructuring project.~~

~~No restructuring expense was incurred in~~FDK Indonesia facility increases the ~~period ending September 30, 2017. The pre-tax expense for charges~~Company's alkaline battery production capacity and ~~credits related~~allows us to ~~the 2013 restructuring project for Energizer for the twelve months ended September 30, 2016 and 2015 are noted in the tables below:~~

Twelve Months Ended September 30, 2016
Americas EMEA Asia Pacific Corporate Total
Severance and related benefit costs $ 0.3
$ —
$ —
$ —
$ 0.3
Consulting, program management and other exit costs —
—
0.2
—
0.2
Net loss on asset sale 2.0
—
—
—
2.0
Total $ 2.3
$ —
$ 0.2
$ —
$ 2.5

Twelve Months Ended September 30, 2015
Americas EMEA Asia Pacific Corporate Total
Severance and related benefit costs $ 0.1
$ 0.5
$ 6.6
$ (0.2 ) $ 7.0
Accelerated depreciation —
—
9.1
—
9.1
Consulting, program management and other exit costs 2.3
0.3
1.9
—
4.5
Net gain on asset sale —
—
(11.0 ) —
(11.0 )
Total $ 2.4
$ 0.8
$ 6.6
$ (0.2 ) $ 9.6

Total pre-tax restructuring charges since the inception of the project and through September 30, 2017, have totaled approximately $200. The 2013 Restructuring project concluded as of September 30, 2016.

For the twelve months ended September 30, 2016, Energizer recorded $2.5 in pre-tax restructuring charges related to the 2013 restructuring project as compared to $9.6 in fiscal 2015. Restructuring charges were reflected on a separate line in the Consolidated Statements of Earnings and Comprehensive Income. In addition, pre-tax costs of $3.1 associated with certain inventory obsolescence charges were recorded within Cost of products sold and $0.3 associated with information technology enablement activities were recorded within SG&A on the Consolidated Statements of Earnings and Comprehensive Income for the twelve months ended September 30, 2015. These inventory obsolescence and information technology costs are considered part of the total project costs incurred for the 2013 restructuring project.

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~The following tables summarize the activity related to the 2013 restructuring project for the twelve months ended September 30, 2017 and 2016.~~

Utilized
October 1, 2016 Charge to Income Cash Non-Cash September 30, 2017
Severance and termination related costs $ 1.2
$ —
$ (1.2 ) $ —
$ —
Other related costs 0.3
—
(0.3 ) —
—
Total $ 1.5
$ —
$ (1.5 ) $ —
$ —

Utilized
October 1, 2015 Charge to Income Cash Non-Cash September 30, 2016
Severance and termination related costs $ 4.0
$ 0.2
$ (3.0 ) $ —
$ 1.2
Other related costs —
0.3
—
—
0.3
Net loss on asset sales —
2.0
—
(2.0 ) —
Total $ 4.0
$ 2.5
$ (3.0 ) $ (2.0 ) $ 1.5

~~Other Activities~~

avoid future planned capital expenditures. The Company is ~~also streamlining certain manufacturing operations. During~~still analyzing the ~~twelve months ended September 30, 2016~~opening balance sheet and ~~2015,~~overall purchase price, but does not expect there to be significant intangible assets or goodwill recognized with this acquisition.

Battery Acquisition - On January 2, 2019, the Company ~~recorded $2.4 of accelerated depreciation and $0.8 of severance, respectively, in Cost of products sold on~~completed the ~~Consolidated Statements of Earnings and Comprehensive Income related to the streamlining of~~Battery Acquisition with a ~~plant in North America. The streamlining of this plant was completed in fiscal 2016.~~

~~(5) Acquisitions~~

~~On July 1, 2016, the Company acquired HandStands Holdings Corporation, a leading designer and marketer of automotive fragrance and appearance products, for a total~~contractual purchase price of ~~$340.0 plus~~$2,000.0, subject to certain purchase price adjustments. The acquisition expanded our battery portfolio globally with the addition of a strong value brand. The final cash consideration after contractual and working capital adjustments was $1,962.4. Included in the above amount is $400.0 of ~~$4.0, net of acquired cash.~~ cash consideration that has been allocated to the Divestment Business discussed below.

The ~~Company financed~~Battery Acquisition was accounted for as a business combination using the acquisition ~~with $300.0~~method of ~~cash on hand~~accounting which requires assets acquired and ~~$44.0~~liabilities assumed to be recognized at fair value as of ~~borrowings on our senior secured revolving credit facility (Revolving Facility). The Company initially utilized a $200.0 bridge loan and $144.0 of borrowings on our Revolving Facility to complete~~ the transaction. In the month of July 2016, the bridge loan and $100.0 of our Revolving Facility borrowings were paid down utilizing cash on hand. The Company incurred an additional $1.2 of interest expense in July related to this outstanding bridge loan. The Company did not incur incremental U.S. taxes in the current year from utilizing foreign cash for this transaction.

~~With the auto care~~ acquisition Energizer's brands now include Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. The acquisition will allow the Company to expand its portfolio, increase presence at existing customers, and utilize its scale and global supply chain to drive efficiencies. The Company incurred $8.4 of acquisition and integration costs in the year ended September 30, 2017, of which $1.1 were recorded on Cost of products sold, $4.0 were recorded in SG&A, and $3.3 were recorded in Other items, net on the Consolidated Condensed Statements of Earnings and Comprehensive Income. The Company incurred $10.0 of acquisition and integration costs in the year ended September 30, 2016, which were recorded within SG&A on the Consolidated Condensed Statements of Earnings and Comprehensive Income.

date. We have calculated fair values of assets and liabilities acquired for the ~~auto care acquisition based on our~~Battery Acquisition. During the fiscal quarter ended December 31, 2019, the Company completed the valuation ~~analysis.~~ analysis for the Battery Acquisition and no significant changes were made to the valuation.

For purposes of the allocation, the Company determined a fair value adjustment for inventory based on the estimated selling price of finished goods on hand at the closing date less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity. The preliminary fair value adjustment for the inventory of ~~$8.1~~$14.6 was recorded as expense to Cost of products sold ~~in the fourth quarter 2016~~ as that inventory was ~~sold. The fair value adjustment for acquired property, plant and equipment was established using a cost approach.~~ sold in fiscal 2019.

The fair values of the ~~auto care acquisition's~~Battery Acquisition's Property, plant and equipment were estimated using the market approach for land and variations of the cost approach for the buildings and equipment. The fair values of the Battery Acquisition's identifiable intangible assets were estimated using ~~various~~variations of the income approach. The fair value of acquired trade names acquired and customer relationships was determined by applying the multi-period excess earnings method under the income approach. The fair value of proprietary technology acquired was determined by applying the relief-from-royalty method under the income approach.

The Divestment Business included the valuation of Inventory, Property, plant and equipment and Intangible assets consistent with the valuation methods ~~including discounted cash flows utilizing an income approach~~discussed above. The fair value adjustment for the inventory of $11.2 was recorded as expense in the results from discontinued operations in 2019 as that inventory was sold. Goodwill was also allocated to the Divestment Business. The assets and ~~relief from royalties. Deferred income tax impacts~~liabilities of the Divestment Business were included as ~~a result of~~held for sale on the purchase ~~accounting adjustments are reflected using the applicable statutory income tax rates.~~price allocation.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The following table outlines the purchase price allocation is as ~~follows:~~of the date of acquisition:

Accounts receivable $ 22.5
Inventory 30.9
Other current assets 6.5
Property, plant and equipment 4.7
Goodwill 193.1
Other identifiable intangible assets 159.5
Accounts payable (6.2 )
Other liabilities (6.4 )
Deferred income taxes (60.6 )
Net assets acquired $ 344.0


Cash and cash equivalents	$	37.8
Trade receivables	54.2
Inventories	80.8
Other current assets	28.2
Assets held for sale	794.6
Property, plant and equipment, net	133.2
Goodwill	496.0
Other intangible assets, net	805.8
Other assets	10.3
Current portion of capital leases	(1.2)
Accounts payable	(39.2)
Other current liabilities	(19.3)
Long-term debt	(14.7)
Liabilities held for sale	(394.6)
Other liabilities	(9.5)
Net assets acquired	$	1,962.4

The ~~break out of~~table below outlines the purchased identifiable intangible assets of ~~$159.5 is included in the table below.~~ $805.8:

Total Weighted Average Useful Lives
Trademarks $ 40.1
15.0 years
Customer Relationships 84.4
14.6 years
Patents 34.5
14.1 years
Non-Compete 0.5
5.0 years
Total Other Intangible Assets $ 159.5
14.6 years


	Total		Weighted Average Useful Lives
Trade names	$	587.0	Indefinite
Proprietary technology	59.0		6.2
Customer relationships	159.8		15.0
Total Other intangible assets, net	$	805.8

~~The purchase price allocation was finalized in fiscal 2016.~~ The goodwill acquired in this acquisition is attributable to the workforce of the acquired business and the synergies expected to arise with this ~~transaction. The acquired goodwill has been allocated to the Americas' reportable segment.~~transaction through network optimization, Selling, general and administrative expense (SG&A) reductions and procurement efficiencies. The goodwill associated with this acquisition is ~~not~~ deductible for tax purposes.

InAuto Care Acquisition - On January 28, 2019, Energizer entered into a definitive acquisition agreement to acquire Spectrum’s global auto care business, including the ~~fourth~~Armor All, STP, and A/C PRO brands for a contractual purchase price of $1,250.0, subject to certain purchase price adjustments. The contractual purchase price was comprised of $937.5 in cash and $312.5 of newly-issued Energizer common stock to Spectrum. The initial cash paid after contractual and estimated working capital adjustments was $938.7. During the quarter ended December 31, 2019, the Company finalized the working capital adjustments with Spectrum and paid an additional $3.6 of ~~2016, Net sales~~cash. The equity consideration paid to Spectrum was fair valued at $240.5 based on the 5.3 million shares issued to Spectrum at the Energizer closing stock price of $45.55 on January 28, 2019. The final purchase price paid in cash and ~~Loss before income taxes attributable~~equity consideration was $1,182.8. The acquisition allowed for the Company to become a global leader in the auto care ~~acquisition~~market and added automotive performance and air conditioning recharge products to its auto care portfolio.

The Auto Care Acquisition was ~~$32.3 and $3.5, respectively. Included in the Loss before income taxes was $8.1~~accounted for ~~the inventory fair value adjustment.~~

Pro forma Net sales, Net earnings/(loss) and Earnings/(loss) per diluted share results for fiscal years 2016 and 2015 are shown in the table below. The pro forma adjustments include interest and financing costs related toas a business combination using the acquisition ~~and purchase~~method of accounting adjustments including the impact of the inventory step up charge as well as depreciation and amortization expense from the fair value of the intangible assets and property, plant and equipment. The impacts of any revenue or cost synergies that may result from combining Energizer and the auto care acquisition are not included in the pro forma table below. The pro forma results are as if the auto care acquisition had occurred on October 1, 2014:

2016 2015
(Unaudited) (Unaudited)
Pro forma Net sales $ 1,719.6
$ 1,759.9
Pro forma Net earnings/(loss) (a) 140.0
(8.2 )
Pro forma Earnings/(loss) per diluted share (a) $ 2.24
$ (0.13 )

(a) The fiscal year 2015 pro forma net loss and loss per diluted share includes the charges for the $8.1 inventory fair value adjustment, $10.0 of acquisition and integration costs, and $1.2 of interest expense discussed above that were incurred in fiscal 2016. These charges were excluded from the fiscal year 2016 pro forma net earnings and earnings per diluted share.

On December 12, 2014, Edgewell, on behalf of Energizer, completed an acquisition of a battery manufacturing facility in China related to the Household Products business for $12.1, primarily related to the purchase of fixed assets. As of September 30, 2015, the purchase price allocation was complete. We have determined the fair values ofwhich requires assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date. We have calculated fair values of assets and liabilities acquired for the Auto Care Acquisition. During the quarter ended December 31, 2019, the Company completed the valuation analysis for the Auto Care Acquisition. The only significant change in the analysis since the end of fiscal 2019 was the increase in purchase price of $3.6 mentioned above.

For purposes of ~~allocating~~ the ~~purchase price in accordance with accounting guidance~~allocation, the Company determined a fair value adjustment for ~~business combinations. Based~~inventory based on the ~~allocation~~estimated selling price of finished goods on hand at the ~~purchase price, this transaction resulted in $2.3~~closing date less the sum of ~~goodwill.~~(a) costs of disposal and (b) a reasonable profit allowance for

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

the selling effort of the acquiring entity. The fair value adjustment for the inventory was $21.6 and was recorded to Cost of products sold as the respective inventory was sold in fiscal 2019.

~~(6) Venezuela~~

~~Effective January 1, 2010,~~The fair values of the ~~financial statements~~Auto Care Acquisition's Property, plant and equipment were estimated using variations of the cost approach for ~~our Venezuela subsidiary~~the building and equipment. The fair values of the Auto Care Acquisition's identifiable intangible assets were ~~consolidated~~estimated using variations of the income approach. The fair value of trade names acquired and customer relationships was determined by applying the multi-period excess earnings method under the ~~rules governing~~income approach. The fair value of proprietary technology acquired was determined by applying the ~~translation of financial information in a highly inflationary economy based on~~relief-from-royalty method under the ~~use~~income approach.

The following table outlines the purchase price allocation as of the ~~blended National Consumer Price Index~~date of acquisition:


Cash and cash equivalents	$	3.3
Trade receivables	39.7
Inventories	98.6
Other current assets	8.9
Property, plant and equipment, net	70.8
Goodwill	274.0
Other intangible assets, net	965.3
Deferred tax assets	4.2
Other assets	1.7
Current portion of capital leases	(0.4)
Accounts payable	(28.6)
Other current liabilities	(10.9)
Long-term debt	(31.9)
Other liabilities (deferred tax liabilities)	(211.9)
Net assets acquired	$	1,182.8

The table below outlines the purchased identifiable intangible assets of $965.3:


	Total		Weighted Average Useful Lives
Trade names	$	701.6	Indefinite
Trade names	15.4		15
Proprietary technology	113.5		9.8
Customer relationships	134.8		15
Total Other intangible assets, net	$	965.3

The goodwill acquired in ~~Venezuela. Under generally accepted accounting principles, an economy~~this acquisition is ~~considered highly inflationary if~~attributable to the ~~cumulative inflation rate for a three-year period meets or exceeds 100%. If a subsidiary is considered to be in a highly inflationary economy, the financial statements~~workforce of the ~~subsidiary must be remeasured into our reporting currency (U.S. dollar)~~acquired business and ~~future exchange gains~~the synergies expected to arise with this transaction through network optimization, selling, general and ~~losses~~administrative reductions and procurement efficiencies. The goodwill is not deductible for tax purposes.

Pro Forma Financial Information (Unaudited)- Pro forma net sales (unaudited), Pro forma net earnings from ~~the re-measurement of monetary assets~~continuing operations (unaudited), Pro from net earnings from continuing operations attributable to common shareholders (unaudited) and ~~liabilities are reflected in current~~Pro forma diluted net earnings ~~rather than exclusively in the equity section of the balance sheet, until such times as the economy is no longer considered highly inflationary.~~

~~Prior to March 31, 2015, Edgewell included the results of its Venezuelan~~per common share - continuing operations in its consolidated financial statements using the consolidation method of accounting. Edgewell’s Venezuelan earnings and cash flows were reflected in their consolidated financial statements at the official exchange rate of 6.30 bolivars per U.S. dollar for the sixth months ended March 31, 2015. At March 31, 2015, Edgewell had $33.8 of USD intercompany receivables due from its Venezuela subsidiaries, for household and personal care products previously imported, the majority of which have been outstanding since Fiscal 2010. As of March 31, 2015, Edgewell’s Venezuela subsidiary held bolivar denominated cash deposits of $93.8 (at the 6.30 per U.S. dollar rate).

~~foreign currency translation losses previously recorded in accumulated other comprehensive income, of which $16.2 was allocated to Energizer~~

~~the write-off of Edgewell’s Venezuelan operations’ cash balance, of which $44.6 was allocated to Energizer, (at the 6.30 per U.S. dollar rate)~~

~~the write-off of Edgewell’s Venezuelan operations’ other net assets, of which $4.4 was allocated to Energizer~~

Since the deconsolidation as of March 31, 2015, Energizer's financial results do not include the operating results of the Venezuelan operations. Instead, Energizer records revenue for sales of inventory to our Venezuelan operations in our consolidated financial statements to the extent cash is received. Further, dividends from Energizer’s Venezuelan subsidiaries are recorded as other income upon receipt of the cash. Included within the results(unaudited) for the twelve months ended September 30, ~~2015, for Venezuela~~2019 and 2018 are ~~net sales of $8.5 and segment profit of $2.5 recorded~~shown in the ~~first six months~~table below. The unaudited pro forma results are presented as if the Battery and Auto Care Acquisitions had occurred on October 1, 2017. Pro forma results for the CAE acquisition were not considered material and, as such, are not included below. The pro forma results are not indicative of the ~~year.~~results the Company would have achieved if the acquisitions had occurred that date or indicative of the results of the future operation of the combined company. The ~~Venezuela activity recorded since~~Nu Finish Acquisition was immaterial for this disclosure and is only included for the ~~deconsolidation has been immaterial. The Company has begun~~periods owned by the ~~process of liquidating the Venezuela operations and does not expect any material future costs associated with these operations.~~Company.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

~~(7) Goodwill~~The unaudited pro forma adjustments are based upon purchase price allocations and ~~intangible assets~~

~~Goodwill~~include purchase accounting adjustments for the impact of the inventory step up charge, depreciation and amortization expense from the fair value of the intangible assets ~~deemed~~and property, plant and equipment, interest and financing costs and the impact of the equity consideration completed to ~~have an indefinite life~~fund the acquisitions. Cost synergies that may result from combining Energizer and the Battery and Auto Care Acquisitions are not amortized, but are reviewed annually for impairment of value or when indicators of a potential impairment are present. As part of our business planning cycle, we performed our annual goodwill impairment testing for our North America, Latin America, EMEA and Asia Pacific reporting unitsincluded in the ~~fourth~~pro forma table below.


	For the Year Ended September 30,
	2019		2018
Pro forma net sales (unaudited)	$	2,719.4	$	2,773.7
Pro forma net earnings from continuing operations (unaudited)	159.7		40.1
Pro forma mandatory preferred stock dividends (unaudited)	16.2		16.2
Pro forma net earnings from continuing operations attributable to common shareholders (unaudited)	143.5		23.9
Pro forma diluted net earnings per common share - continuing operations (unaudited)	$	2.02	$	0.33
Pro forma weighted average shares of common stock - Diluted (unaudited)	71.0		71.4

The shares included in the above are adjusted to assume that the common stock and Mandatory convertible preferred (MCPS) shares issued for the Auto Care Acquisition occurred as of October 1, 2017. For all periods presented, the MCPS conversion was anti-dilutive and not assumed in the calculation.

The unaudited pro forma data above includes the following significant adjustments made to account for certain costs to adjust for as if the acquisitions had occurred as of October 1, 2017. The following expenses, which are net of the applicable tax rates, were added to or removed from the net earnings amounts for each respective period:


	For the Year Ended September 30,
Expense removed/(additional expense)	2019		2018
Inventory step up (unaudited) (1)	$	28.5	$	(27.8)
Acquisition and integration costs (unaudited) (2)	44.3		(43.3)
Interest and ticking fees on escrowed debt (unaudited) (3)	21.6		(75.7)
Gains on escrowed debt (unaudited) (4)	(10.5)		(15.7)

(1) The inventory step up was removed from fiscal 2019 and recorded in fiscal 2018 as the inventory turn would have occurred in that year.

(2) Acquisition and integration costs incurred to obtain legal services, pay investment banking fees and other transaction related expenses were removed from the various periods and recorded in the first quarter of fiscal 2018 when the transaction is assumed to have occurred.

(3) Interest and ticking fees from the acquisition related debt were accrued over the periods prior to the acquisition occurring. These fees were removed as they would not have been incurred if the acquisition occurred October 1, 2017. ~~There were no indications~~The interest from the new capital structure was included in the results and the pre-tax amount of ~~impairment~~$200.0 was included in each period.

(4) The escrowed debt funds earned interest income and had gains on the non functional currency balances. These gains would not have been realized if the transaction had occurred as of ~~goodwill noted during this testing or throughout fiscal~~October 1, 2017.

The ~~following table represents~~pro-forma results above include restructuring charges recorded by the ~~change in the carrying amount~~Auto Care Business of ~~goodwill at September 30, 2017:~~

Americas EMEA Asia Pacific Total
Balance at October 1, 2016 $ 213.7
$ 5.3
$ 10.7
$ 229.7
Cumulative translation adjustment 0.1
0.2
—
0.3
Balance at September 30, 2017 $ 213.8

$ 5.5
$ 10.7
$ 230.0

The Company had indefinite-lived intangible assets of $78.3 at September 30, 2017 and $78.0 at September 30, 2016. Changes in indefinite-lived intangible assets are due to changes in foreign currency translation. We completed impairment testing on indefinite-lived intangible assets other than goodwill, which are trademarks/brand names used in our various battery and lighting product categories. No impairment was indicated as a result of this testing.

Future changes in the judgments, assumptions and estimates that are used in our impairment testing including discount rates or future operating results and related cash flow projections, could result in significantly different estimates of the fair values in the future.

~~Total amortizable intangible assets at September 30, 2017 and 2016, respectively, are as follows:~~

Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Trademarks $ 40.1
$ 3.4
$ 36.7
Customer Relationships 84.4
7.3
77.1
Patents 34.5
3.2
31.3
Non-Compete 0.5
0.1
0.4
Total Intangible Assets at September 30, 2017 $ 159.5
$ 14.0
$ 145.5

Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Trademarks $ 40.1
$ 0.7
$ 39.4
Customer Relationships 84.4
1.5
82.9
Patents 34.5
0.6
33.9
Non-Compete 0.5
—
0.5
Total Intangible Assets at September 30, 2016 $ 159.5
$ 2.8
$ 156.7

Amortizable intangible assets, with a weighted average remaining life of 13.3 years, are amortized on a straight-line basis over expected lives of 5 to 17 years. Amortization expense for intangible assets totaled $11.2 and $2.8 for$18.4 during the twelve months ended September 30, ~~2017 and 2016, respectively. Estimated amortization expense~~2018. Excluded from the above is the write-down of assets of business held for ~~amortizable intangible assets at~~sale to fair value less cost to sell of $107.2 recorded by the Auto Care Business during the twelve months ended September 30, ~~2017 is: $11.2~~2019 and the write-off impairment of goodwill of $92.5 recorded by the Auto Car Business during the twelve months ended September 30, 2018. These losses were recorded as a direct result of the transaction and would not have impacted the combined company results.

Net sales and Earnings before income taxes for the Battery and Auto Care Acquisitions included in ~~2018, $11.2~~the Company's Consolidated Statement of Earnings and Comprehensive Income are shown in ~~2019, $11.2 in 2020, $11.1 in 2021,~~the following table. The Earnings before income taxes includes the inventory fair value adjustment recorded for the acquisitions, but excludes all acquisition and ~~$11.1 in 2022, and $89.7 thereafter.~~integration costs as well as any additional interest incurred by the Company for the debt issuances to complete the acquisitions:

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)


	For the Year Ended September 30, 2019
	Battery Acquisition		Auto Care Acquisition
Net sales	$	338.9	$	315.8
Inventory fair value adjustment	14.6		21.6
Earnings before income taxes	8.7		19.6

~~(8) Income Taxes~~

Acquisition and Integration Costs- The Company incurred pre-tax acquisition and integration costs related to the Battery Acquisition, the Auto Care Acquisition, and the Nu Finish Acquisition of $68.0, $188.4 and $84.6 in the twelve months ended September 30, 2020, 2019, and 2018, respectively.

Pre-tax costs recorded in Costs of products sold were $32.0 for the twelve months ended September 30, 2020 and primarily related to the integration restructuring costs of $29.3 as discussed in Note 6, Restructuring. Pre-tax costs recorded in Costs of products sold were $58.7 for the twelve months ended September 30, 2019, which primarily related to the inventory fair value adjustment of $36.2 and integration restructuring costs of $12.1. Pre-tax costs recorded in Costs of products sold were $0.2 for the twelve months ended September 30, 2018.

Pre-tax acquisition and integration costs recorded in SG&A were $38.8, $82.3 and $62.9 for the twelve months ended September 30, 2020, 2019 and 2018, respectively. In fiscal 2020 these expenses primarily related to consulting fees, success incentives, and costs of integrating the information technology systems of the business. In fiscal 2019 and 2018 these expenses primarily related to acquisition success fees and legal, consulting and advisory fees to assist with obtaining regulatory approval around the globe and to plan for the closing and integration of the Battery Acquisition and Auto Care Acquisition.

For the twelve months ended September 30, 2020 and 2019 the Company recorded $1.3 and $1.1 in research and development, respectively.

Also included in the pre-tax acquisition costs for the twelve months ended September 30, 2019 was $65.6 of interest expense, including ticking fees, related to the escrowed debt for the Battery Acquisition and the financing fees incurred related to amending and issuing the debt for the Battery and Auto Care Acquisitions. The pre-tax acquisition costs for the twelve months ended September 30, 2018 was $41.9 of interest expense, including ticking fees, related to the escrowed debt for the Battery Acquisition and the financing fees incurred related to amending and issuing the debt for the Battery and Auto Care Acquisitions.

The ~~provisions for~~pre-tax income ~~taxes consisted~~of $19.3 recorded in fiscal 2019 was primarily driven by the escrowed debt funds held in restricted cash prior to the closing of the ~~following:~~Battery Acquisition. The Company recorded a pre-tax gain of $9.0 related to the favorable movement in the escrowed USD restricted cash held in our European Euro functional entity. The Company also recorded interest income of $5.8 earned on the Restricted cash funds held in escrow associated with the Battery Acquisition. The Company recorded a gain of $4.6 related to the hedge contract on the expected proceeds from the anticipated Varta Divestiture and recorded income on transition services agreements of $1.4 for the twelve months ended September 30, 2019. These income items were offset by $1.5 of expense to settle hedge contracts of the acquired business.

For the Years Ended September 30,
2017 2016 2015
Currently payable:
United States - Federal $ 39.4
$ 9.5
$ (20.6 )
State 4.2
3.0
(1.4 )
Foreign 32.6
21.3
32.4
Total current 76.2
33.8
10.4
Deferred:
United States - Federal (7.4 ) 5.5
(3.5 )
State (0.2 ) (2.4 ) (0.2 )
Foreign 3.2
1.1
(3.4 )
Total deferred (4.4 ) 4.2
(7.1 )
Provision for income taxes $ 71.8
$ 38.0
$ 3.3

The ~~source~~Company recorded a pre-tax gain in Other items, net of ~~pre-tax earnings/(loss) was:~~$15.2 on foreign currency gains related to the Battery Acquisition during the twelve months ended September 30, 2018. Of the gain, $9.4 was related to contracts which were entered into in June 2018 and locked in the U.S. dollar (USD) value of the Euro notes related to the Battery Acquisition. These contracts were terminated when the funds were placed into escrow on July 6, 2018. The remaining $5.8 related to the movement in the escrowed USD restricted cash held in our European Euro functional entity. The Company also recorded interest income in Other items, net of $5.2 earned in Restricted cash funds held in escrow associated with this acquisition during the twelve months ended September 30, 2018.

For the Years Ended September 30,
2017 2016 2015
United States $ 96.4
$ 40.2
$ (144.5 )
Foreign 176.9
125.5
143.8
Pre-tax earnings/(loss) $ 273.3
$ 165.7
$ (0.7 )

~~A reconciliation of income taxes with the amounts computed at the statutory federal income tax rate follows:~~

For the Years Ended September 30,
2017 2016 2015
Computed tax at federal statutory rate $ 95.7
35.0 % $ 58.0
35.0 % $ (0.3 ) 35.0 %
State income taxes, net of federal tax benefit 2.8
1.0
1.7
1.0
(1.6 ) N/M
Foreign tax less than the federal rate (26.5 ) (9.7 ) (21.7 ) (13.1 ) (20.8 ) N/M
Other taxes including repatriation of foreign earnings 2.2
0.8
5.7
3.4
2.2
N/M
Nondeductible spin costs —
—
—
—
2.0
N/M
Deconsolidation of Venezuela operations —
—
—
—
22.8
N/M
Other, net (2.4 ) (0.8 ) (5.7 ) (3.4 ) (1.0 ) N/M
Total $ 71.8
26.3 % $ 38.0
22.9 % $ 3.3
455.1 %

~~N/M - The percentage rate reconciliation of income taxes is not meaningful.~~

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(5) Divestment

As discussed in Note 1, Description of Business and Basis of Presentation, the Divestment Business was classified as held for sale in the accompanying Consolidated Balance Sheets as of September 30, 2019 and as discontinued operations in the accompanying Consolidated Statement of Earnings and Comprehensive Income as of September 30, 2020 and 2019.

On May 29, 2019, the Company entered into a definitive agreement with VARTA AG to sell the Divestment Business for €180.0, subject to approval by the European Commission and certain purchase price adjustments. On January 2, 2020, the Company sold the business to VARTA AG. Total cash proceeds, including related hedging arrangements, net of the final working capital settlement, were $323.1 from Varta AG and Spectrum. Spectrum contributed proceeds pursuant to the terms of the Battery Acquisition agreement.

For the twelve months ended September 30, 2020 the Company has recorded a pre-tax loss of $141.6 for the divestment, which includes contractual adjustments and recognition of tax and other indemnifications under the definitive purchase agreement. Under the definitive purchase agreement, the Company indemnified VARTA AG for certain tax liabilities that existed as of the divestment date. As previously disclosed, Spectrum has further indemnified the Company for those liabilities that arose from the tax years prior to the Company's acquisition of the Divestment Business. An indemnification asset and liability, where necessary, has been recorded to reflect these arrangements.

The following table summarizes the assets and liabilities of the Divestment Business classified as held for sale as of September 30, 2019:


	September 30, 2019
Assets
Trade receivables	$	50.9
Inventories	59.8
Other current assets	41.5
Property, plant and equipment, net	78.8
Goodwill	50.5
Other intangible assets, net	489.0
Other assets	21.2
Assets held for sale	$	791.7

Liabilities
Current portion of capital leases	$	5.3
Accounts payable	45.9
Notes payable	0.6
Other current liabilities	99.8
Long-term debt	23.5
Deferred tax liability	169.9
Other liabilities (1)	57.9
Liabilities held for sale	$	402.9

(1) Included in other liabilities is a pension liability of $42.4 related to the Divestment Business.

The following table summarizes the components of Loss from discontinued operations in the accompanying Consolidated Statement of Earnings and Comprehensive Income for the twelve months ended September 30, 2020 and 2019:

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)


	For the Years Ended September 30,
	2020		2019
Net sales	$	115.8	$	235.1
Cost of products sold	88.2		180.4
Gross profit	27.6		54.7
Selling, general and administrative expense	18.0		56.8
Advertising and sales promotion expense	0.3		0.8
Research and development expense	0.8		0.8
Interest expense	12.1		15.8
Loss on sale of business	141.6		0
Other items, net	(3.9)		(9.9)
Loss before income taxes from discontinued operations	(141.3)		(9.6)
Income tax (benefit)/provision	(1.2)		4.0
Net loss from discontinued operations	$	(140.1)	$	(13.6)

Included in the Net loss from discontinued operations for the twelve months ended September 30, 2020, are the deferred financing fee write off related to the pre-payment of debt from the divestment proceeds of $6.9, divestment related pre-tax costs of $1.7 and allocated pre-tax interest expense of $5.0.

Included in the Net loss from discontinued operations for the twelve months ended September 30, 2019 are the inventory fair value pre-tax adjustment of $11.2, divestment related pre-tax costs of $13.8 and allocated pre-tax interest expense of $14.9.

(6) Restructuring

In the fourth fiscal quarter of 2019, Energizer's Board of Directors approved restructuring related integration plans for our manufacturing and distribution networks. These plans include the closure and combination of distribution and manufacturing facilities in order to reduce complexity and realize greater efficiencies in our manufacturing, packaging and distribution processes. All activities within this plan are expected to be completed by December 31, 2021. For this program we expect to incur additional severance and related benefit costs and other exit-related costs associated with these plans of up to $34 through the end of calendar 2021.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The pre-tax expense for charges related to the restructuring plans for the twelve months ended September 30, 2020 and 2019 are noted in the table below and were reflected in Cost of products sold and Selling, general and administrative expense on the Consolidated Statement of Earnings and Comprehensive Income:


	For the Year Ended September 30,
	2020		2019
2019 Restructuring Program
Costs of products sold
Severance and related benefit costs	$	0.8	$	9.8
Accelerated depreciation	12.0		2.3
Other exit costs(1)	16.3		0
Total 2019 Restructuring costs	$	29.1	$	12.1
2020 Restructuring Program
Costs of products sold
Other restructuring related costs(2)	$	0.2	$	0
Selling, general and administrate expense
Severance and related benefit costs	0.4		0
Other restructuring related costs(2)	0.6		0
Total 2020 Restructuring Costs	$	1.2	$	0
Total restructuring related expense	$	30.3	$	12.1

(1) Includes charges primarily related to environmental investigatory and mitigation costs, consulting, relocation and other facility exit costs.

(2) Primarily includes consulting fees for the restructuring program.

The restructuring costs noted above for fiscal year 2020 were included within the Americas and International segments in the amount of $27.5 and $2.8, respectively. The restructuring costs noted above for fiscal year 2019, were incurred within the Americas and International segments in the amount of $6.0 and $6.1, respectively.

The following table summarizes the activity related to the 2019 restructuring program for the Twelve Months Ended September 30, 2020:


					Utilized
	September 30, 2019		Charge to Income		Cash		Non-Cash		September 30, 2020 (1)
Severance & termination related costs	$	9.8	$	0.8	$	5.3	$	0	$	5.3
Accelerated depreciation & asset write-offs	0		12.0		0		12.0		0
Other exit costs	0		16.3		13.4		0		2.9

Total	$	9.8	$	29.1	$	18.7	$	12.0	$	8.2

(1) At September 30, 2020 and 2019, the restructuring reserve is recorded on the Consolidated Balance Sheet in Other current liabilities of $8.2 and $9.8, respectively.

The following table summarizes the activity related to the 2020 restructuring program for the Twelve Months Ended September 30, 2020:


			Utilized
	Charge to Income		Cash		Non-Cash		September 30, 2020 (1)
Severance & termination related costs	$	0.4	$	0	$	0	$	0.4
Other restructuring related costs	0.8		0		0		$	0.8
Total	$	1.2	$	0	$	0	$	1.2

(1) At September 30, 2020, the restructuring reserve is recorded on the Consolidated Balance Sheet in Other current liabilities of $1.2.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(7) Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The CARES Act provides, among other things, increased interest deduction limitations to companies which can decrease overall cash taxes paid. The CARES Act had an unfavorable impact to the Company's current fiscal year's provision of $1.8.

On December 22, 2017, H.R. 1, formally known as the Tax Cuts and Jobs Act (the Tax Act) was enacted into law. The Tax Act provides for numerous significant tax law changes and modifications with varying effective dates, which include reducing the corporate income tax rate from 35% to 21%, creating a territorial tax system (with a mandatory transition tax on previously deferred foreign earnings) and allowing for immediate capital expensing of certain qualified property. In response to the Tax Act, the Securities and Exchange Commission has issued rules that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts (SAB 118).

As a result of the reduction of the Federal corporate income tax rate, we have remeasured certain deferred tax assets and ~~deferred tax~~ liabilities at the ~~end of each year~~rate which they are ~~as follows:~~

September 30,
2017 2016
Deferred tax assets:
Accrued liabilities $ 57.3
$ 45.6
Deferred and stock-related compensation 25.0
26.8
Tax loss carryforwards and tax credits 18.3
19.9
Intangible assets 0.8
1.6
Pension plans 24.3
41.9
Inventory differences and other tax assets 10.2
13.0
Gross deferred tax assets 135.9
148.8
Deferred tax liabilities:
Depreciation and property differences (16.2 ) (16.2 )
Intangible assets (65.6 ) (62.3 )
Other tax liabilities (3.6 ) (3.0 )
Gross deferred tax liabilities (85.4 )
(81.5 )
Valuation allowance (19.3 ) (19.7 )
Net deferred tax assets $ 31.2
$ 47.6

~~There were no material tax loss carryforwards that expired~~expected to reverse in fiscal 2017. Future expirations of tax loss carryforwards and tax credits, if not utilized, are $11.1 between 2018 and 2021 at September 30, 2017. In addition, there are $4.6 of tax loss carryforwards and credits with no expiration at September 30, 2017. The valuation allowance is attributed to tax loss carryforwards and tax credits outside the ~~U.S.~~

future. The Company has ~~repatriated~~finalized the remeasurement and did not have any adjustments to the $3.0 recorded in fiscal 2018.

The mandatory transition tax is based on our total post-1986 earnings and profits (E&P) previously deferred from U.S. income taxes as well as the amount of non-U.S. income tax paid on such earnings. We have completed our accounting for the income tax effect of the mandatory transition tax and recorded a ~~portion~~benefit of ~~current~~$0.4 in fiscal 2019 and expense of $36.0 in fiscal 2018, for a total impact of $35.6. The Company has elected to pay its transition tax over the eight year ~~earnings from select non-U.S. subsidiaries. Generally, these non-U.S. subsidiaries are~~period provided in ~~tax jurisdictions with effective tax rates that do not result in materially higher U.S. tax~~the Tax Act.

The Tax Act also contains new provisions related to Global Intangible Low Taxed Income (GILTI). The Company has completed its analysis of the ~~repatriated earnings.~~GILTI tax rules and have made the accounting policy to treat the taxes due from GILTI as a period expense when incurred.

In general, it is our practice and intention to permanently reinvest the earnings of our foreign subsidiaries and repatriate earnings only when the tax impact is zero or very minimal and that position has not changed after incurring the transition tax under the Tax Act. No provision has been ~~made~~provided for ~~additional~~ taxes ~~on undistributed earnings~~that would result upon repatriation of our foreign ~~affiliates that~~investments to the ~~Company intended and planned to be indefinitely invested in the affiliate.~~United States. At September 30, ~~2017,~~2020, approximately ~~$800~~$780 of basis differential in our investment in foreign ~~subsidiary earnings related to Energizer~~affiliates was considered indefinitely invested in those businesses. We estimate that the U.S. federal income tax liability that could potentially arise if indefinitely invested ~~earnings~~basis of foreign subsidiaries were repatriated in full to the U.S. would be significant. While it is not practicable to calculate a specific potential U.S. tax exposure due to changing statutory rates in foreign jurisdictions over time, as well as other factors, we estimate the ~~range of~~ potential U.S. tax may be in excess of ~~$110,~~$165, if all ~~undistributed earnings~~unrealized basis differences were repatriated assuming foreign cash was available to do so. ~~Applicable~~

The provisions for income taxes consisted of the following:


	For the Years Ended September 30,
	2020		2019		2018
Current:
United States - Federal	$	13.5	$	1.2	$	42.5
State	3.0		3.0		0.1
Foreign	39.2		37.5		37.3
Total current	$	55.7	$	41.7	$	79.9
Deferred:
United States - Federal	(29.4)		(22.1)		4.5
State	(3.1)		(4.1)		(0.5)
Foreign	(2.3)		(7.1)		(2.2)
Total deferred	$	(34.8)	$	(33.3)	$	1.8
Provision for income taxes	$	20.9	$	8.4	$	81.7

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The source of pre-tax earnings was:


	For the Years Ended September 30,
	2020		2019		2018
United States	$	(114.1)	$	(139.9)	$	8.7
Foreign	181.8		213.0		166.5
Pre-tax earnings	$	67.7	$	73.1	$	175.2

A reconciliation of income taxes with the amounts computed at the statutory federal income tax rate follows:


	For the Years Ended September 30,
	2020				2019				2018
Computed tax at federal statutory rate	$	14.2	21.0	%	$	15.3	21.0	%	$	42.9	24.5	%
State income taxes, net of federal tax benefit	(0.7)		(1.0)		(2.3)		(3.2)		0.3		0.2
Foreign tax less than the federal rate	2.0		3.0		(9.0)		(12.3)		0.7		0.4
Other taxes including repatriation of foreign earnings and GILTI	4.4		6.5		2.2		3.0		2.1		1.2
Foreign tax incentives	(3.6)		(5.3)		(5.3)		(7.3)		(6.3)		(3.6)
Uncertain tax positions	2.1		3.1		1.7		2.3		4.1		2.3
Impact of the Tax Act	0		0		(0.4)		(0.5)		39.0		22.3
Nondeductible transaction expenses	1.0		1.5		4.8		6.6		0		0
Other, net	1.5		2.1		1.4		1.9		(1.1)		(0.7)
Total	$	20.9	30.9	%	$	8.4	11.5	%	$	81.7	46.6	%

The Company has been granted two foreign tax incentives providing for a reduced tax rate on profits related to certain battery productions. One incentive expired in December 2019 and the second expires in March 2023.

The deferred tax assets and deferred tax liabilities at the end of each year are as follows:


	September 30,
	2020		2019
Deferred tax assets:
Accrued liabilities	$	53.4	$	32.4
Deferred and stock-related compensation	10.9		14.0
Tax loss carryforwards and tax credits	24.7		29.6
Intangible assets	1.9		3.3
Pension plans	17.1		22.1
Inventory differences and other tax assets	15.8		6.6
Operating lease assets	26.8		0
Interest expense limited under Sec 163j	54.6		34.8
Gross deferred tax assets	205.2		142.8
Deferred tax liabilities:
Depreciation and property differences	(24.6)		(26.7)
Intangible assets	(246.9)		(249.1)
Operating lease liabilities	(26.8)		0
Other tax liabilities	(9.9)		(2.9)
Gross deferred tax liabilities	(308.2)		(278.7)
Valuation allowance	(13.1)		(11.9)

Net deferred tax liabilities	$	(116.1)	$	(147.8)

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Future expirations of tax loss carryforwards and tax credits, if not utilized, are $7.8 between fiscal years 2021 and 2024 at September 30, 2020. In addition, there are $13.3 of tax loss carryforwards and credits with no expiration at September 30, 2020. The valuation allowance is primarily attributed to tax loss carryforwards and tax credits outside the U.S. ~~income and foreign withholding taxes would be provided on these earnings in the periods in which they are no longer considered indefinitely reinvested.~~

The unrecognized tax benefits activity is summarized below:



	For the Years Ended September 30,
	2020		2019		2018
Unrecognized tax benefits, beginning of year	$	12.8	$	10.9	$	9.5
Additions based on current year tax positions and acquisitions	0.1		0		0
Additions based on prior year tax positions and acquisitions	2.8		2.7		1.4
Reductions for prior year tax positions	(0.6)		0		0
Settlements with taxing authorities/statute expirations	(0.9)		(0.8)		0

Unrecognized tax benefits, end of year	$	14.2	$	12.8	$	10.9

For the Years Ended September 30,
2017 2016 2015
Unrecognized tax benefits, beginning of year $ 9.4
$ 8.5
$ 12.7
Additions based on current year tax positions and acquisitions 1.3
0.9
6.1
Reductions for prior year tax positions —
—
(10.3 )
Settlements with taxing authorities/statute expirations (1.2 ) —
—
Unrecognized tax benefits, end of year $ 9.5
$ 9.4
$ 8.5

Included in the unrecognized tax benefits noted above are ~~$9.5~~$14.2 of uncertain tax positions that would affect Energizer’s effective tax rate, if recognized. Energizer does not expect any significant increases or decreases to their unrecognized tax benefits within twelve months of this reporting date. In the Consolidated Balance Sheets, unrecognized tax benefits are classified as Other

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

liabilities (non-current) to the extent that payments are not anticipated within one year. ~~The fiscal 2015 reduction to prior year tax positions was related to transfers of the unrecognized tax benefits to Edgewell as of the date of the Spin-off.~~

Energizer classifies accrued interest and penalties related to unrecognized tax benefits in the income tax provision. The accrued interest and penalties are not included in the table above. Energizer has accrued ~~$1.8~~$5.6 of interest (net of the deferred tax asset of ~~$0.3)~~$0.8) and penalties of ~~$2.3~~$4.0 at September 30, ~~2017, $1.4~~2020, $4.9 of interest (net of the deferred tax asset of ~~$0.3)~~$0.7) and penalties of ~~$1.5~~$3.9 at September 30, ~~2016,~~2019, and ~~$0.7~~$3.2 of interest (net of the deferred tax asset of ~~$0.2)~~$0.4) and penalties of ~~$1.3~~$3.8 at September 30, ~~2015.~~2018. Interest was computed on the difference between the tax position recognized in accordance with GAAP and the amount expected to be taken in the Company's tax return.

The Company has a Tax Matters Agreement with Edgewell which provides that Edgewell shall be liable for and shall indemnify Energizer against all U.S. federal income taxes as well as various foreign legal entities, where Edgewell has retained the legal entity past separation, resulting from tax obligations arising from operations prior to July 1, 2015. In addition, Energizer is liable for and shall indemnify Edgewell against tax obligations arising from operations prior to July 1, 2015 for certain foreign legal entities where the Company has retained the legal entity past separation.

The Company files income tax returns in the U.S. federal jurisdiction, various cities and states, and more than 5060 foreign jurisdictions where Energizer has operations. U.S. federal, state and local income tax returns for tax years ended September 30, 2015 and after remain subject to examination by the Internal Revenue Service. There are open examinations in the U.S. and at some of the foreign entities and the status of ~~international~~ income tax examinations varies by jurisdiction. At this time, Energizer does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.

~~(9) Earnings per share~~

~~Basic earnings per share~~The Company is ~~based on~~contractually indemnified by Spectrum for any tax liability of the ~~average number~~Acquired Battery and Auto Care Businesses arising from tax years prior to the acquisitions. The Company is also contractually obligated to pay Spectrum any tax benefit it receives in a tax year after the acquisitions as a result of ~~common shares outstanding during the period. Diluted earnings per share is based on the average number of shares used~~an indemnification payment made by Spectrum. An indemnification asset and liability, where necessary, has been recorded to reflect this arrangement. The Company has also indemnified VARTA AG for ~~the basic earnings per share calculation, adjusted for the dilutive effect of restricted stock equivalents and performance shares.~~

~~The following table sets forth the computation of basic and diluted earnings/(loss) per share for the years ended September 30,~~ ~~2017, 2016 and 2015:~~

For the Years Ended September 30,
(in millions, except per share data) 2017 2016 2015
Net earnings/(loss) $ 201.5
$ 127.7
$ (4.0 )
Basic average shares outstanding 61.7
61.9
62.2
Effect of dilutive restricted stock equivalents 0.5
0.5
—
Effect of dilutive performance shares 0.4
0.1
—
Diluted average shares outstanding 62.6
62.5
62.2
Basic earnings/(loss) per common share $ 3.27

$ 2.06

$ (0.06 )
Diluted earnings/(loss) per common share $ 3.22

$ 2.04

$ (0.06 )

For the years ended September 30, 2017 and 2016, all restricted stock equivalents were dilutive and included in the diluted net earnings per share calculations. Performance based restricted stock equivalents of 0.5 and 0.5 were excluded for the years ended September 30, 2017 and 2016, respectively, as the performance targets for those shares had not been achievedcertain tax liabilities that existed as of the ~~end of the current period.~~divestment date. An indemnification asset, where necessary, has been recorded to reflect these arrangements.

Due to the loss incurred for the year ended September 30, 2015, all restricted shares outstanding were excluded from the earnings per share calculation as their inclusion would have been anti-dilutive.

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~(10) Shareholders' Equity~~

The Company's articles of incorporation authorized 300 million shares of common stock and 10 million shares of preferred stock, each with a par value of $0.01 per share. On July 1, 2015, Edgewell distributed 62,193,281 shares of Energizer Holdings, Inc. common stock to its shareholders. Each Edgewell common stockholder of record as of the close of business on June 16, 2015, the record date for the distribution, received one share in Energizer for each share of Edgewell common stock they held.

~~As of September 30, 2017, approximately 1.8 million shares were reserved for issuance under the Equity Incentive Plan. There were no preferred stock issued or outstanding as of September 30, 2017.~~

On July 1, 2015, the Company's Board of Directors approved an authorization for Energizer to acquire up to 7.5 million shares of its common stock. During the twelve months ended September 30, 2017, the Company repurchased 1,389,027 shares for $58.7, at an average price of $42.23 per share, under this authorization. During the twelve months ended September 30, 2016, the Company repurchased 832,971 shares for $32.6, at an average price of $39.06 per share, under this authorization. At September 30, 2016, the Company had a current liability of $0.8 for a portion of these repurchases with the cash payment occurring in the first three days of fiscal 2017. Future share repurchases, if any, would be made on the open market and the timing and the amount of any purchases will be determined by the Company based on its evaluation of the market conditions, capital allocation objectives, legal and regulatory requirements and other factors.

~~Subsequent to fiscal year end and through the date of this report, the Company repurchased 215,267 shares at an average price of $43.93 per share.~~

For the twelve months ended September 30, 2017, total dividends declared to shareholders were $69.3, of which $69.1 was paid. For the twelve months ended September 30, 2016, total dividends declared to shareholders were $63.7 of which $62.7 was paid. For the twelve months ended September 30, 2015, total dividends declared to shareholders were $16.2 of which $15.5 was paid. The unpaid dividends were associated with unvested restricted shares and were recorded in other liabilities.

Subsequent to the fiscal year end, on November 13, 2017, the Board of Directors declared a dividend for the first quarter of fiscal 2018 of $0.29 per share of common stock, payable on December 14, 2017, to all shareholders of record as of the close of business on November 30, 2017.

~~(11)~~(8) Share-Based Payments

The Board of Directors adopted the Energizer Holdings, Inc. Equity Incentive Plan (the 2015 Plan) on July 1, 2015, upon completion of the Spin-off. Under the terms of the Plan, stock options, restricted stock awards, restricted stock equivalents, stock appreciation rights and performance-based stock awards may be granted to directors, officers and employees of the Company. The Plan authorizes a maximum number of 10 million common shares to be awarded.

On January 27, 2020, the Company's shareholders approved the Energizer Holdings, Inc. Omnibus Incentive Plan (Omnibus Plan). The Omnibus Plan replaces and supersedes the 2015 Plan. No new awards will be issued under the 2015 Plan, though the terms of the 2015 Plan will continue to govern all awards granted under that plan.

The Omnibus Plan authorizes 6.5 million shares to be awarded, as well as the 0.3 million shares that were still available for grant under the 2015 Plan. Under the Omnibus Plan, stock options, stock appreciation rights, restricted stock and ~~will remain in effect until June 30, 2025.~~restricted stock units (time-based or performance-based), other stock awards and cash-based awards may be granted to directors, officers and employees of the Company. For purposes of determining the number of shares available for future issuance under the

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Omnibus Plan, awards other than stock options and stock appreciation rights, will reduce the shares available for future issuance by two for every one share awarded. Stock options and stock appreciation rights reduce the shares available for future issuance on a ~~one-for-one~~1-for-one basis. The Plan also allowed for the conversion of Edgewell restricted stock equivalents held by Energizer employees and Board of Directors outstanding immediately prior to Spin-off, to be converted to Energizer restricted stock equivalents (RSE) upon completion of the Spin-Off. At September 30, ~~2017,~~2020, there were ~~4.1~~6.9 million shares available for future awards under the Plan.

Total compensation cost charged against income for Energizer’s share-based compensation arrangements was ~~$24.3, $20.4~~$24.5, $27.1 and ~~$13.5~~$28.2 for the years ended September 30, ~~2017, 2016~~2020, 2019 and ~~2015,~~2018, respectively, and was recorded in SG&A expense. The fiscal year 2015 expense included $2.4 of additional expense recorded as a result of the modification of certain Edgewell RSE from performance based to time based awards upon consummation of the Spin-off. The expense prior to the Spin-off was based on an allocation from Edgewell which included $7.2 allocated to Energizer in fiscal 2015 prior to the Spin-off. The total income tax benefit recognized in the Consolidated Statements of Earnings and Comprehensive Income for share-based compensation arrangements was ~~$10.2, $6.9~~$4.7, $5.8 and ~~$5.0~~$7.8 for the years ended September 30, ~~2017, 2016~~2020, 2019 and ~~2015,~~2018, respectively.

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Restricted Stock Equivalents (RSE)

The remaining RSE converted in connection with the Spin-off are time based and vest ratably over four years from their initial date of grant. The fair value of the restricted stock at the date of grant is amortized to earnings over the remaining restriction period.

On July 8, 2015, the Company granted RSE awards to a group of key executives which included approximately 573,700 shares that vest ratably over five years as well as 50,300 shares to the Board of Directors that vest on the three year anniversary from date of grant. The closing stock price on the date of the grant used to determine the award fair value was $34.92.

In November 2015, the Company granted RSE awards to a group of key employees which included approximately 106,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 87,000 shares that vest on the third anniversary of the date of the grant. In addition, the Company granted approximately 290,000 performance shares to a group of key employees and key exe~~cutives that will vest subject to meeting target amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period.~~ ~~These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 580,000~~ ~~shares. The closing stock price on the date of the grant used to determine the award fair value was $37.34.~~

In November 2016, the Company granted RSE awards to a group of key employees which included approximately 92,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 73,000 shares that vest on the third anniversary of the date of the grant. In addition, the Company granted approximately 249,000 performance shares to a group of key employees and key executives that will vest subject to meeting target amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 498,000 shares.years. The closing stock price on the date of the grant used to determine the award fair value was $43.84.

~~The following table summarizes the Company's RSE activity during the current fiscal year (shares in millions):~~

Shares
Weighted-Average
Grant Date Estimated Fair Value per Share
Nonvested RSE at October 1, 2016 1.9
$ 35.39
Granted 0.7
$ 43.93
Vested (0.6 ) $ 34.33
Canceled (0.2 ) $ 38.24
Nonvested RSE at September 30, 2017 1.8
$ 38.72

As of September 30, 2017, there was an estimated $38.0 of total unrecognized compensation costs related to the outstanding RSE awards, which will be recognized over a weighted-average period of 1.5 years. The weighted average estimated fair value for RSE awards granted in fiscal 2017 was $30.5. The estimated fair value of RSE awards that vested in fiscal 2017 was $29.3.

~~Subsequent to year-end, in~~In November 2017, the Company granted RSE awards to a group of key employees ofwhich included approximately 100,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 68,000 shares that vest on the third anniversary of the date of grant. In addition, the Company granted approximately 238,000 performance shares to a group of key employees and key executives that will vest subject to meeting target amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 476,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $44.20.

In November 2018, the Company granted RSE awards to a group of key employees which included approximately 73,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 55,000 shares that vest on the third anniversary of the date of grant. In addition, the Company granted approximately 190,000 performance shares to a group of key employees and key executives that will vest subject to meeting target amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 380,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $60.25.

In November 2019, the Company granted RSE awards to a group of key employees of approximately 134,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 81,000 shares that vest on the third anniversary of the date of grant. In addition, the Company granted approximately 306,000 performance shares to a group of key employees and key executives that will vest subject to meeting target amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 612,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $43.10.

The following table summarizes the Company's RSE activity during the current fiscal year (shares in millions):


	Shares	Weighted-Average Grant Date Estimated Fair Value per Share
Nonvested RSE at October 1, 2019	1.8	$	47.70
Granted	0.9	$	43.28
Vested	(0.7)	$	42.70
Canceled	(0.1)	$	46.66
Nonvested RSE at September 30, 2020	1.9	$	47.56

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

As of September 30, 2020, there was an estimated $15.2 of total unrecognized compensation costs related to the outstanding RSE awards, which will be recognized over a weighted-average period of 1.2 years. The weighted average estimated fair value for RSE awards granted in fiscal 2020 was $36.8. The estimated fair value of RSE awards that vested in fiscal 2020 was $34.0.

Subsequent to year-end, in November 2020, the Company granted RSE awards to a group of key employees of approximately 120,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 71,000 shares that vest on the third anniversary of the date of grant. In addition, the Company granted approximately 272,000 performance shares to a group of key employees and key executives that will vest subject to meeting target amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 544,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $42.98.

(9) Earnings per share

Basic earnings per share is based on the average number of common shares outstanding during the period. Diluted earnings per share is based on the average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of restricted stock equivalents, performance shares and deferred compensation equity plan. Common shares issuable upon conversion of the Mandatory Convertible Preferred Stock (MCPS) are included in the calculation of diluted earnings per share using the if-converted method and are only included if the conversion would be further dilutive to the calculation.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The following table sets forth the computation of basic and diluted earnings per share for the years ended September 30, 2020, 2019 and 2018:



	For the Years Ended September 30,
(in millions, except per share data)	2020		2019		2018
Basic earnings per share
Net earnings from continuing operations	$	46.8	$	64.7	$	93.5
Mandatory preferred stock dividends	(16.2)		(12.0)		0
Net earnings from continuing operations attributable to common shareholders	30.6		52.7		93.5
Net loss from discontinued operations, net of tax	(140.1)		(13.6)		0
Net (loss) / earnings attributable to common shareholders	$	(109.5)	$	39.1	$	93.5

Weighted average common shares outstanding - basic	68.8		66.4		59.8

Basic net earnings per common share from continuing operations	$	0.44	$	0.79	$	1.56
Basic net loss per common share from discontinued operations	(2.03)		(0.20)		0
Basic net earnings per common share	$	(1.59)	$	0.59	$	1.56

Diluted earnings per share
Net earnings attributable to common shareholders	$	(109.5)	$	39.1	$	93.5

Weighted average common shares outstanding - basic	68.8		66.4		59.8
Effect of dilutive restricted stock equivalents	0.2		0.3		0.5
Effect of dilutive performance shares	0.4		0.4		0.9
Effect of stock based deferred compensation plan	0.1		0.2		0.2
Weighted average common shares outstanding - diluted	69.5		67.3		61.4

Diluted earnings per common share from continuing operations	$	0.44	$	0.78	$	1.52
Diluted loss per common share from discontinued operations	(2.02)		(0.20)		0
Diluted net earnings per common share	$	(1.58)	$	0.58	$	1.52

For the year ended September 30, 2020 and 2019, 0.2 million restricted stock equivalents were anti-dilutive and not included in the diluted net earnings per share calculations. For the year ended September 30, 2018, all restricted stock equivalents were dilutive and included in the diluted net earnings per share calculations. Performance based restricted stock equivalents of 1.1, 0.9, and 0.5 were excluded for the years ended September 30, 2020, 2019, and 2018, respectively, as the performance targets for those shares had not been achieved as of the end of the current period.

The Company's MCPS were considered anti-dilutive for all periods and excluded for the calculations of diluted

earnings/(loss) per share.

(10) Segments

Operations for Energizer are managed via 2 major geographic reportable segments: Americas and International. Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with acquisition and integration activities, amortization costs, business realignment activities, research & development costs, gains on sale of real estate, settlement loss on pension plan termination, and other items determined to be corporate in nature. Financial items, such as interest income and expense and loss on extinguishment of debt, are managed on a global basis at the corporate level. The exclusion of substantially all acquisition, integration, restructuring and realignment costs from segment results reflects management’s view on how it evaluates segment performance.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Energizer’s operating model includes a combination of standalone and shared business functions between the geographic segments, varying by country and region of the world. Shared functions include IT and finance shared service costs. Energizer applies a fully allocated cost basis, in which shared business functions are allocated between segments. Such allocations are estimates, and do not represent the costs of such services if performed on a standalone basis.


	For the Years Ended September 30,
Net Sales	2020		2019		2018
Americas	$	1,971.2	$	1,734.8	$	1,135.6
International	773.6		759.7		662.1
Total net sales	$	2,744.8	$	2,494.5	$	1,797.7
Segment Profit
Americas	498.5		456.6		326.1
International	155.8		174.9		149.6
Total segment profit	$	654.3	$	631.5	$	475.7
General corporate and other expenses (1)	(103.8)		(111.5)		(97.3)
Global marketing expenses (2)	(28.2)		(18.2)		(19.0)
Research and development expense (3)	(34.1)		(31.7)		(22.4)
Amortization of intangible assets	(56.5)		(43.2)		(11.5)
Acquisition and integration costs (4)	(68.0)		(188.4)		(84.6)

Settlement loss on pension plan termination (5)	0		(3.7)		(14.1)
Gain on sale of real estate	0		0		4.6
Loss on extinguishment of debt	(94.9)		0		0
Interest expense (6)	(195.0)		(160.4)		(56.5)
Other items, net (7)	(6.1)		(1.3)		0.3
Total earnings before income taxes	$	67.7	$	73.1	$	175.2

(1) Of this amount, $2.9 and $2.3 were recorded in Cost of products sold in the Consolidated Statement of Earnings and Comprehensive Income for the twelve months ended September 30, 2020 and 2019, respectively. All other amounts were recorded in SG&A.

(2) The twelve months ended September 30, 2020 includes $12.1 recorded in SG&A and $16.1 recorded in A&P. The twelve months ended September 30, 2019 includes $6.3 recorded in SG&A and $11.9 recorded in A&P. The twelve months ended September 30, 2018 includes $4.9 recorded in SG&A and $14.1 recorded in A&P.

(3) R&D expense for the twelve months ended September 30, 2020 and 2019 on the Consolidated Statement of Earnings and Comprehensive Income includes $1.3 and $1.1, respectively, which has been reclassified to Acquisition and integration costs for purposes of the reconciliation above.

(4) Acquisition and integration costs were included in the following lines in the Consolidated Statement of Earnings and Comprehensive Income:


	For the Years Ended September 30,
Acquisition and Integration Costs	2020		2019		2018
Inventory step up (COGS)	$	0	$	36.2	$	0.2
Cost of products sold	32.0		22.5		0
SG&A	38.8		82.3		62.9
Research and development	1.3		1.1		0
Interest expense	0		65.6		41.9
Other items, net	(4.1)		(19.3)		(20.4)
Total Acquisition and Integration Costs	$	68.0	$	188.4	$	84.6

(5) Included in Other items, net in the Consolidated Statements of Earnings and Comprehensive Income. Refer to Note 14, Pension plans, for further information.

(6) The amount for the twelve months ended September 30, 2019 and 2018 on the Consolidated Statements of Earnings and Comprehensive Income included $65.6 and $41.9 of expense, respectively, which has been reclassified to Acquisition and integration costs from Interest expense for purposes of the reconciliation above.

(7) The amount for the twelve months ended September 30, 2020, 2019 and 2018 on the Consolidated Statements of Earnings and Comprehensive Income included a gain of $4.1, $19.3 and $20.4, respectively, which has been reclassified to Acquisition and integration costs from Other items, net and the Settlement loss on pension plan terminations for the twelve months ended September 30, 2019 and 2018 of $3.7 and $14.1, respectively, that have been reclassified out of Other items, net for purposes of the above reconciliation.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Corporate assets shown in the following table include all financial instruments, pension assets and tax asset balances that are managed outside of operating segments. In addition, the Restricted cash held as of September 30, 2020 and the Assets held for sale at September 30, 2019 are assets utilized outside of the operating segments.



































	September 30,
Total Assets	2020		2019
Americas	$	1,238.0	$	991.9
International	668.5		621.0
Total segment assets	$	1,906.5	$	1,612.9
Corporate	106.8		81.3
Restricted cash	790.0		0
Assets held for sale	0		791.7
Goodwill and other intangible assets, net	2,925.0		2,963.7
Total assets	$	5,728.3	$	5,449.6


	September 30,
Long-Lived Assets	2020		2019
United States	$	399.7	$	275.6
Singapore	67.3		67.3
United Kingdom	62.2		46.7
Other International	63.2		59.5
Total long-lived assets excluding goodwill and intangibles	$	592.4	$	449.1

Capital expenditures and depreciation and amortization by segment for the years ended September 30 are as follows:













































	For the Years Ended September 30,
Capital Expenditures	2020		2019		2018
Americas	$	55.0	$	42.7	$	16.2
International	10.3		12.4		8.0
Total segment capital expenditures	$	65.3	$	55.1	$	24.2
Depreciation and Amortization
Americas	$	37.9	$	34.6	$	21.2
International	17.5		15.0		12.4
Total segment depreciation and amortization	55.4		49.6		33.6
Corporate intangible amortization	56.5		43.2		11.5
Total depreciation and amortization	$	111.9	$	92.8	$	45.1

Geographic segment information for the years ended September 30 are as follows:


	For the Years Ended September 30,
Net Sales to Customers	2020		2019		2018
United States	$	1,641.9	$	1,435.8	$	935.8
International	1,102.9		1,058.7		861.9
Total net sales	$	2,744.8	$	2,494.5	$	1,797.7

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(11) Leases

The Company determines whether an arrangement contains a lease at the inception of the contract by determining if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Energizer's portfolio of leases contains certain real estate, equipment, vehicles and office equipment leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Additionally, the Company's leases do not contain material residual value guarantees or material restrictive covenants.

Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company does not account for lease components separately from non-lease components. The discount rate used to calculate present value for both operating and financing leases is Energizer's incremental borrowing rate based on information available at the commencement date, or if available, the rate implicit in the lease. The incremental borrowing rate used is determined based on fully secured borrowings at the time of adoption, or going forward, at the date of lease commencement. Many of these agreements contain options to renew or terminate the lease. For calculating lease liabilities, the Company includes these options within the lease term when it is reasonably certain that the Company will execute such options. Some of the leases include variable payments, which primarily are tied to asset usage or sales rather than an index or rate. As such, these variable payments are not included in the calculation of the Company's lease assets and liabilities.

As of September 30, 2020 the amounts for leases included in our Consolidated Balance Sheet include:


Balance Sheet Location	September 30, 2020
Operating Leases:
Operating lease asset	$	121.9

Operating lease liabilities - current	14.8
Operating lease liabilities	111.9
Total Operating Lease Liabilities	$	126.7

Weighted-average remaining lease term (in years)	16.2
Weighted-average discount rate	4.2		%

Finance Leases:
Property, plant and equipment, net	$	43.9

Current portion of capital leases	1.7
Long-term debt	44.1
Total Finance Lease Liabilities	$	45.8

Weighted Average remaining lease term (in years)	20.4
Weighted-average discount rate	6.7		%

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The following table presents the components of lease expense:


	Twelve Months Ended September 30, 2020
Operating lease cost	$	20.4
Finance lease cost:
Amortization of assets	3.2
Interest on lease liabilities	3.0
Variable lease costs	3.9
Total lease costs	$	30.5

Supplemental cash and non-cash information related to leases:


	Twelve Months Ended September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19.3
Operating cash flows from finance leases	2.9
Financing cash flows from finance leases	1.4

Non-cash increase in lease assets and lease liabilities:
Operating leases (1) (2)	$	88.4

(1) During the first quarter of fiscal 2020, Energizer entered into a material embedded lease agreement which resulted in operating lease asset and lease liabilities of approximately $34. The embedded operating lease commenced on November 1, 2019. During the second quarter of fiscal 2020, Energizer renewed the North America headquarters lease, which resulted in a material lease modification and additional operating lease assets and lease liabilities of approximately $17. During the third quarter of fiscal 2020, a material lease commenced for the Company's new battery distribution and packaging center in North America, resulting in approximately $36 of additional operating lease related assets and lease liabilities.

(2) The non-cash increase in operating lease assets and liabilities above does not include the lease assets and lease liabilities recorded due to the ASC 842 implementation on October 1, 2019.

Minimum lease payments under operating and finance leases with non-cancellable terms in excess of one year as of September 30, 2020 are as follows:


	Operating Leases		Finance Leases
2021	$	18.9	$	4.9
2022	18.1		5.0
2023	16.8		5.0
2024	16.2		4.9
2025	15.4		5.0
Thereafter	97.0		64.3
Total lease payments	182.4		89.1

Less: Imputed interest	(55.7)		(43.3)
Present value of lease liabilities	$	126.7	$	45.8

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(12) Goodwill and intangible assets

Goodwill and intangible assets deemed to have an indefinite life are not amortized, but are reviewed annually for impairment of value or when indicators of a potential impairment are present. As part of our business planning cycle, we performed our annual goodwill impairment testing for our reporting units in the fourth quarter of fiscal 2020. There were no indications of impairment of goodwill noted during this testing or throughout fiscal 2020.

The following table represents the change in the carrying amount of goodwill at September 30, 2020 and 2019:


	Americas		International		Total





Balance at September 30, 2018	$	228.4	$	15.8	$	244.2
Battery acquisition	369.4		125.7		495.1
Auto Care acquisition	263.5		6.6		270.1
Cumulative translation adjustment	0.3		(4.9)		(4.6)
Balance at September 30, 2019	$	861.6	$	143.2	$	1,004.8
Battery acquisition	0.7		0.2		0.9
Auto Care acquisition	3.8		0.1		3.9
Cumulative translation adjustment	(0.3)		6.7		6.4
Balance at September 30, 2020	$	865.8	$	150.2	$	1,016.0

The Company had indefinite-lived intangible assets of $1,365.4 at September 30, 2020 and $1,363.8 at September 30, 2019. The increase was due to foreign currency movement. We completed impairment testing on indefinite-lived intangible assets other than goodwill, which are trademarks/brand names used in our various battery, auto care and lighting product categories. No impairment was indicated as a result of this testing.

Future changes in the judgments, assumptions and estimates that are used in our impairment testing including discount rates, revenue growth rates, future operating results and related cash flow projections, could result in significantly different estimates of the fair values in the future.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Total intangible assets at September 30, 2020 are as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and trade names	$	59.7	$	(13.9)	$	45.8
Customer Relationships	394.2		(60.8)		333.4
Patents	34.5		(10.8)		23.7
Proprietary technology	172.5		(37.6)		134.9
Proprietary formulas	2.4		(0.5)		1.9
Non-Compete	0.5		(0.4)		0.1
Vendor relationships	5.0		(1.2)		3.8
Total amortizable intangible assets	$	668.8	$	(125.2)	$	543.6
Trademarks and trade names - indefinite lived	1,365.4		—		1,365.4
Total Other intangible assets, net	$	2,034.2	$	(125.2)	$	1,909.0

Total intangible assets at September 30, 2019 are as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and trade names	$	59.7	$	(9.9)	$	49.8
Customer Relationships	394.2		(34.3)		359.9
Patents	34.5		(8.2)		26.3
Proprietary technology	172.5		(15.7)		156.8
Proprietary formulas	2.4		(0.3)		2.1
Non-compete	0.5		(0.3)		0.2
Total amortizable intangible assets	$	663.8	$	(68.7)	$	595.1
Trademarks and trade names - indefinite lived	1,363.8		—		1,363.8
Total Other intangible assets, net	$	2,027.6	$	(68.7)	$	1,958.9

Amortizable intangible assets, with a weighted average remaining life of 11.0 years, are amortized on a straight-line basis over expected lives of 3 to 15 years. Amortization expense for intangible assets totaled $56.5, $43.2, and $11.5 for the twelve months ended September 30, 2020, 2019 and 2018, respectively. Estimated amortization expense for amortizable intangible assets at September 30, 2020 is: $57.1 in 2021, $56.9 in 2022, $52.1 in 2023, $50.7 in 2024, and $50.6 in 2025, and $276.2 thereafter.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(13) Debt

The detail of long-term debt was as follows:


	September 30,
	2020		2019
Senior Secured Term Loan A Facility due 2021	$	0	$	77.5
Senior Secured Term Loan B Facility due 2025	313.5		982.5
Senior Secured Term Loan A Facility due 2022	319.4		0
5.50% Senior Notes due 2025	0		600.0
6.375% Senior Notes due 2026	750.0		500.0
4.625% Senior Notes due 2026 (Euro Notes of €650.0)	761.9		708.4
7.750% Senior Notes due 2027	600.0		600.0
4.750% Senior Notes due 2028	600.0		0
4.375% Senior Notes due 2029	800.0		0

Capital lease obligations	45.8		46.9
Total gross long-term debt, including current maturities	$	4,190.6	$	3,515.3
Less current portion	(843.0)		(1.6)
Less unamortized debt discount and debt issuance fees	(40.7)		(52.1)
Total long-term debt	$	3,306.9	$	3,461.6

Revolving Credit Facility - On December 17, 2018, the Company entered into a credit agreement which provided for a 5-year $400.0 revolving credit facility (2018 Revolving Credit Facility) and which provided for a $200.0 3-year term loan A facility and $1,000.0 7-year term loan B facility (Term Loan Agreement). On December 27, 2019, the Company amended the existing Term Loan Agreement and refinanced $365.0 of term loan debt. The amendment established a new $365.0 Term Loan A facility due December 2022, which was used to pay down $300.0 of the existing Term Loan B facility due in 2025 and $65.0 of the existing Term Loan A facility due in 2021. The pay down of the Term Loan B facility was deemed to be an extinguishment and the Company recorded a Loss on extinguishment of debt of $4.2 during the first quarter.

The Company utilized the available proceeds from the Varta Divestiture and the related hedging arrangements to pay down $345.8 of the borrowings outstanding on the Term Loan B facility due in 2025.

The borrowings under the Term Loan A require quarterly principal payments at a rate of 6.25% of the original principal balance, or $22.8. The borrowings under the Term Loan B require quarterly payments at a rate of 0.25% of the original principal balance, or $2.5. The borrowings bear interest at a rate per annum equal to, at the option of the Company, LIBOR or the Base Rate (as defined) plus the applicable margin based on total Company leverage. The 2018 Revolving Credit Facility also contains customary affirmative and restrictive covenants. Obligations under the 2018 Revolving Credit Facility and Term Loan A and Term Loan B are jointly and severally guaranteed by certain of its existing and future direct and indirectly wholly-owned U.S. subsidiaries. There is a first priority perfected lien on substantially all of the assets and property of the Company and guarantors and proceeds therefrom excluding certain excluded assets.

As of September 30, 2020, there were no borrowings outstanding under the 2018 Revolving Credit Facility, but the Company did have $7.3 of outstanding letters of credit. Taking into account outstanding letters of credit, $392.7 remained available as of September 30, 2020. As of September 30, 2020 and September 30, 2019, our weighted average interest rate on short-term borrowings was 6.7% and 3.8%, respectively.

Subsequent to September 30, 2020, the Company paid down $120.0 on Term loan B and $42.8 on Term loan A, which included the required quarterly payments.

Senior Notes - On April 22, 2020, the Company finalized an add-on offering of $250.0 of our 6.375% Senior Notes due 2026 (2026 Notes Add-On). The 2026 Notes Add-On priced at 102.25% of the principal amount. The Company used the net proceeds from the offering to repay indebtedness outstanding under its Revolving Credit Facility and to pay fees and expenses related to the offering. The 2026 Notes Add-On was offered to qualified institutional buyers and will not be registered under federal or applicable state securities laws. Interest is payable semi-annually on the 2026 Notes in January and July.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

On July 1, 2020, the Company completed a bond offering for $600.0 Senior Notes due in 2028 at 4.750% (2028 Notes). The Company utilized a portion of the net proceeds from the sale of the 2028 Notes to fund the purchase of $488.8 in aggregate principal amount of the Company’s outstanding 5.50% Senior Notes due 2025 (2025 Notes) accepted for purchase pursuant to a cash tender offer. The Company used the remaining net proceeds from such sale, together with cash on hand, to fund the redemption of 2025 Notes not purchased pursuant to the tender offer, at a redemption price equal to 102.750% of the aggregate principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date. As a result of such redemption, all 2025 Notes that were not tendered and purchased by the Company pursuant to the tender offer were redeemed. The Company paid a total call premium for tendered and called notes of $18.3. The transaction resulted in a Loss on extinguishment of debt of $22.1.

The 2028 Notes were sold to qualified institutional buyers and will not be registered under federal or applicable state securities laws. Interest is payable semi-annually on the 2028 Notes in December and June. The 2028 Notes are jointly and severally guaranteed on an unsecured basis by certain of the Company's domestic restricted subsidiaries that guarantee indebtedness of the Company under its 2018 Revolving Credit Facility.

On September 30, 2020, the Company completed a bond offering for $800.0 Senior Notes due in 2029 at 4.375% (2029 Notes). Subsequent to the fiscal year, on October 16, 2020, the Company used the proceeds from the sale of the 2029 Notes to fund the redemption of all the $750.0 USD Senior Notes due in 2026 at 6.375% (2026 USD Notes). Due to the timing of the transaction crossing fiscal years and the Company's obligation to redeem the 2026 USD Notes, the 2026 USD Notes were classified as Current maturities of long term debt and the proceeds from the 2029 Notes, net of financing fees paid, were classified as Restricted cash on the Consolidated Balance Sheet at September 30, 2020. The company paid a redemption premium of $55.9 in fiscal 2021, and the transaction resulted in a Loss on extinguishment of debt of $68.6.

The 2029 Notes were sold to qualified institution buyers and will not be registered under federal or applicable state securities laws. Interest is payable semi-annually on the 2029 Notes in March and September. The 2029 Notes are jointly and severally guaranteed on an unsecured basis by certain of the Company's domestic restricted subsidiaries that guarantee indebtedness of the Company under its 2018 Revolving Credit Facility.

Debt issuance fees paid related to the term loan refinancing and Senior Note offerings were $26.5 during the twelve months ended September 30, 2020. The Company wrote-off a total of $20.7 of debt issuance fees as a result of the extinguishment activity during the year.

Interest Rate Swaps - In March 2017, the Company entered into an interest rate swap agreement with one major financial institution that fixed the variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03%.

In February 2018, the Company entered into a forward starting interest rate swap with an effective date of October 1, 2018, with one major financial institution that fixed the variable benchmark component (LIBOR) on additional variable rate debt at an interest rate of 2.47%. At the effective date, the swap had a notional value of $400.0. Beginning April 1, 2019, the notional amount decreases $50.0 each quarter, and continues to decrease until its termination date of December 31, 2020. The notional value of the swap was $100.0 at September 30, 2020.

Notes Payable - The notes payable balance was $3.8 at September 30, 2020 and $31.9 at September 30, 2019. The 2020 balance is comprised of $3.8 of other borrowings, including those from foreign affiliates. The 2019 balance consists of $25.0 outstanding borrowings on the 2018 Revolving Credit Facility as well as $6.9 of other borrowings, including those from foreign affiliates.

Debt Covenants - The agreements governing the Company's debt contain certain customary representations and warranties, affirmative, negative and financial covenants, and provisions relating to events of default. If the Company fails to comply with these covenants or with other requirements of these credit agreements, the lenders may have the right to accelerate the maturity of the debt. Acceleration under one of these facilities would trigger cross defaults to other borrowings. As of September 30, 2020, the Company was, and expects to remain, in compliance with the provisions and covenants associated with its debt agreements.

The counterparties to long-term committed borrowings consist of a number of major financial institutions. The Company consistently monitors positions with, and credit ratings of, counterparties both internally and by using outside ratings agencies.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Debt Maturities - Aggregate maturities of long-term debt as of September 30, 2020 were as follows:


	Long-term debt
2021	$	841.3
2022	91.3
2023	141.9
2024	10.0
2025	10.0
Thereafter	3,050.3
Total long-term debt payments due	$	4,144.8

(14) Pension Plans

The Company has several defined benefit pension plans covering many of its employees in the U.S. and certain employees in other countries. The plans provide retirement benefits based on various factors including years of service and in certain circumstances, earnings. ~~All~~Most plans are now frozen to new entrants and ~~most of the plans are frozen~~ for additional service.

During fiscal ~~2016, we~~year 2019, the Company completed the ~~legal separation~~termination procedures with the Trustees of ~~a non-U.S.~~its Ireland pension ~~plan~~plan. The Company has no remaining obligations or risks related to ~~Energizer retirees in Germany that was previously included in the Edgewell~~this pension plan. AsThis resulted in a ~~result~~plan settlement to the projected benefit obligation of ~~this legal separation, this $11.6~~$8.6 and plan assets of $11.4 and a settlement loss of $3.7 recorded to Other items, net on the Consolidated Statement of Earnings and Comprehensive Income.

During fiscal year 2018, the Company received approval from the Financial Services Commission of Ontario to terminate its Canadian pension plan. The Company purchased annuity contracts for its participants and transferred the liability to an insurance provider. This resulted in a plan settlement to the projected benefit obligation ~~transferred from Edgewell in fiscal 2016.~~and plan assets of $36.9 and a settlement loss of $14.1 recorded to Other items, net on the Consolidated Statement of Earnings and Comprehensive Income.

The Company also sponsors or participates in a number of other non-U.S. pension arrangements, including various retirement and termination benefit plans, some of which are required by local law or coordinated with government-sponsored plans, which are not significant in the aggregate and, therefore, are not included in the information presented in the following tables.

~~The following tables present the benefit obligation, plan assets and funded status of the plans:~~

100

September 30,
U.S. International
2017 2016 2017 2016
Change in Projected Benefit Obligation
Benefit obligation at beginning of year $ 556.8
$ 550.1
$ 210.2
$ 175.9
Service cost —
—
1.4
1.2
Interest cost 18.3
22.1
3.4
4.6
Plan participants' contributions —
—
0.1
0.1
Actuarial (gain)/loss (7.8 ) 26.1
(6.0 ) 38.6
Benefits paid (39.7 ) (39.5 ) (8.9 ) (7.0 )
Expenses paid —
—
(0.2 ) (0.5 )
Plan curtailments —
—
(1.8 ) —
Plan settlements (1.7 ) (2.0 ) (0.5 ) (2.1 )
Obligations transferred from Edgewell —
—
—
11.6
Foreign currency exchange rate changes —
—
5.8
(12.2 )
Projected Benefit Obligation at end of year $ 525.9
$ 556.8
$ 203.5
$ 210.2
Change in Plan Assets
Estimated fair value of plan assets at beginning of year $ 474.7
$ 457.9
$ 159.5
$ 158.8
Actual return on plan assets 39.8
52.9
8.2
18.1
Company contributions 4.1
5.4
10.3
4.3
Plan participants' contributions —
—
0.1
0.1
Plan settlements (1.7 ) (2.0 ) (0.5 ) (2.1 )
Benefits paid (39.7 ) (39.5 ) (8.9 ) (7.0 )
Expenses paid —
—
(0.2 ) (0.5 )
Foreign currency exchange rate changes —
—
5.3
(12.2 )
Estimated fair value of plan assets at end of year $ 477.2
$ 474.7
$ 173.8
$ 159.5
Funded status at end of year $ (48.7 ) $ (82.1 ) $ (29.7 ) $ (50.7 )

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The following tables present the benefit obligation, plan assets and funded status of the plans:


	September 30,
	U.S.				International
	2020		2019		2020		2019
Change in Projected Benefit Obligation
Benefit obligation at beginning of year	$	531.3	$	494.5	$	145.8	$	142.6
Service cost	0		0		0.8		0.5
Interest cost	15.9		20.4		1.5		2.9

Actuarial loss/(gain)	31.3		52.2		(2.2)		22.2
Benefits paid	(37.4)		(35.8)		(4.9)		(5.3)


Plan settlements	0		0		(2.3)		(10.7)


Foreign currency exchange rate changes	0		0		9.7		(6.4)
Projected Benefit Obligation at end of year	$	541.1	$	531.3	$	148.4	$	145.8
Change in Plan Assets
Estimated fair value of plan assets at beginning of year	$	463.5	$	456.0	$	122.8	$	131.6
Actual return on plan assets	62.8		40.8		0.2		12.6
Company contributions	2.8		2.5		1.1		3.3

Plan settlements	0		0		(2.3)		(13.5)
Benefits paid	(37.4)		(35.8)		(4.9)		(5.3)



Foreign currency exchange rate changes	0		0		7.6		(5.9)
Estimated fair value of plan assets at end of year	$	491.7	$	463.5	$	124.5	$	122.8
Funded status at end of year	$	(49.4)	$	(67.8)	$	(23.9)	$	(23.0)

The following table presents the amounts recognized in the Consolidated Balance Sheets and Consolidated Statements of Shareholders’ Equity:


	September 30,
	U.S.						International							September 30,
	2017			2016			2017			2016				U.S.				International
Amounts Recognized in the Consolidated Balance Sheets													Amounts Recognized in the Consolidated Balance Sheets	2020		2019		2020		2019

Noncurrent assets	$	—		$	—		$	4.1		$	0.2		Noncurrent assets	$	0	$	0	$	10.4	$	12.1
Current liabilities	(3.0		)	(2.7		)	(0.6		)	(0.6		)	Current liabilities	(2.4)		(2.4)		(0.6)		(0.6)
Noncurrent liabilities	(45.7		)	(79.4		)	(33.2		)	(50.3		)	Noncurrent liabilities	(47.0)		(65.4)		(33.7)		(34.5)
Net amount recognized	$	(48.7	)	$	(82.1	)	$	(29.7	)	$	(50.7	)	Net amount recognized	$	(49.4)	$	(67.8)	$	(23.9)	$	(23.0)
Amounts Recognized in Accumulated Other Comprehensive Loss													Amounts Recognized in Accumulated Other Comprehensive Loss
Net loss, pre tax	$	(149.7	)	$	(168.4	)	$	(57.1	)	$	(67.2	)	Net loss, pre tax	$	(169.1)	$	(182.7)	$	(42.9)	$	(40.9)

Pre-tax changes recognized in other comprehensive ~~income~~loss for the year ended September 30, ~~2017~~2020 are as follows:

U.S. International
Changes in plan assets and benefit obligations recognized in other comprehensive income/(loss)

Net gain arising during the year $ 13.4
$ 7.9
Effect of exchange rates —
(1.3 )
Amounts recognized as a component of net periodic benefit cost
Amortization or settlement recognition of net gain 5.3
3.5
Total income recognized in other comprehensive income/(loss) $ 18.7
$ 10.1


Changes in plan assets and benefit obligations recognized in other comprehensive (loss)/income	U.S.		International

Net gain/(loss) arising during the year	$	7.1	$	(1.1)
Effect of exchange rates	0		(2.9)
Amounts recognized as a component of net periodic benefit cost
Amortization or settlement recognition of net gain	6.5		2.0
Total gain recognized in other comprehensive loss	$	13.6	$	(2.0)

Energizer expects to contribute ~~$3.0~~$2.4 to its U.S. plans and ~~$5.9~~$2.0 to its International plans in fiscal ~~2018.~~2021.

101

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Energizer’s expected future benefit payments for the plans are as follows:

For The Years Ending September 30,
U.S. International
2018 $ 38.3
$ 7.8
2019 37.7
7.8
2020 36.8
7.8
2021 36.3
8.2
2022 35.6
8.4
2023 to 2027 170.6
42.4



For The Years Ending September 30,	U.S.		International
2021	$	38.2	$	5.6
2022	38.4		5.5
2023	37.9		5.4
2024	38.1		5.5
2025	36.2		5.7
2026 to 2030	163.4		29.2

The accumulated benefit obligation for the US plans was ~~$525.9~~$541.1 and ~~$556.8~~$531.3 and for the foreign plans was ~~$202.0~~$146.0 and ~~$206.8~~$143.7 at September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. The following table shows the plans with an accumulated benefit obligation in excess of plan assets at the dates indicated.


	September 30,
	U.S.				International
	2020		2019		2020		2019
Projected benefit obligation	$	541.1	$	531.3	$	74.6	$	73.5
Accumulated benefit obligation	541.1		531.3		72.2		71.4
Estimated fair value of plan assets	491.7		463.5		40.3		38.5

September 30,
U.S. International
2017 2016 2017 2016
Projected benefit obligation $ 525.9
$ 556.8
$ 121.0
$ 176.3
Accumulated benefit obligation $ 525.9
$ 556.8
$ 119.5
$ 172.9
Estimated fair value of plan assets $ 477.2
$ 474.7
$ 87.3
$ 125.4

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Pension plan assets in the U.S. plan represent approximately ~~75%~~80% of assets in all of the Company's defined benefit pension plans. Investment policy for the U.S. plan includes a mandate to diversify assets and invest in a variety of assets classes to achieve that goal. The U.S. plan's assets are currently invested in several funds representing most standard equity and debt security classes. The broad target allocations are approximately: (a) equities, including U.S. and foreign: ~~50%~~40%, and (b) debt securities, including U.S. bonds: ~~50%~~60%. Actual allocations at September 30, ~~2017~~2020 approximated these targets. The U.S. plan held no shares of Company common stock at September 30, ~~2017.~~2020. Investment objectives are similar for non-U.S. pension arrangements, subject to local requirements.

The following table presents plan pension expense:


	For the Years Ended September 30,																			For the Years Ended September 30,
	U.S.									International										U.S.						International
	2017			2016			2015			2017			2016			2015				2020		2019		2018		2020		2019		2018
Service cost	$	—		$	—		$	—		$	1.4		$	1.2		$	0.8		Service cost	$	0	$	0	$	0	$	0.8	$	0.5	$	0.6
Interest cost	18.3			22.1			5.7			3.4			4.6			1.9			Interest cost	15.9		20.4		18.7		1.5		2.9		3.9
Expected return on plan assets	(34.3		)	(34.6		)	(9.1		)	(8.0		)	(7.8		)	(3.1		)	Expected return on plan assets	(24.3)		(26.2)		(30.1)		(3.6)		(4.9)		(6.3)
Recognized net actuarial loss	4.8			4.3			0.9			3.4			2.1			0.5			Recognized net actuarial loss	6.5		4.1		4.4		1.5		0.9		2.0
Settlement loss recognized	0.5			0.5			—			0.2			0.8			0.1
Settlement loss on Canadian pension plan termination																			Settlement loss on Canadian pension plan termination	0		0		0		0		0		14.1
Settlement loss on Ireland pension plan termination																			Settlement loss on Ireland pension plan termination	0		0		0		0		3.7		0
Settlement loss recognized on other pension plans																			Settlement loss recognized on other pension plans	0		0		0.1		0.5		0.4		1.0
Net periodic (benefit)/expense	$	(10.7	)	$	(7.7	)	$	(2.5	)	$	0.4		$	0.9		$	0.2		Net periodic (benefit)/expense	$	(1.9)	$	(1.7)	$	(6.9)	$	0.7	$	3.5	$	15.3

~~Total Edgewell benefit plan costs allocated to us prior to~~The service cost component of the ~~Spin-off were $5.9~~net periodic (benefit)/expense above is recorded in ~~the first nine months of 2015 are not included in the table above. The~~Selling, general and administrative expense allocations for these benefits were determined based on a review of personnel by business unit and based on allocations of corporate or other shared functional personnel. These allocated costs are reflected in our cost of products sold and SG&A expenses(SG&A) on the Consolidated ~~Statements~~Statement of Earnings and Comprehensive ~~Income. These costs were funded through intercompany transactions with Edgewell and were reflected within~~Income, while the ~~parent company investment equity balance.~~remaining components are recorded to Other items, net.

102

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Amounts expected to be amortized from accumulated other comprehensive loss into net period benefit cost during the year ending September 30, ~~2018~~2021 are net actuarial losses of ~~$4.4~~$7.4 for the USU.S. Plan and ~~$2.2~~$1.4 for the ~~foreign~~International plans.

The following table presents assumptions, which reflect weighted averages for the component plans, used in determining the above information:

September 30,
U.S. International
2017 2016 2015 2017 2016 2015
Plan obligations:
Discount rate 3.7 % 3.4 % 4.2 % 2.1 % 1.7 % 2.8 %
Compensation increase rate — % — % — % 2.4 % 3.2 % 3.3 %
Net periodic benefit cost:
Discount rate 3.4 % 4.2 % 4.3 % 1.7 % 2.8 % 3.0 %
Expected long-term rate of return on plan assets 7.5 % 7.8 % 7.8 % 5.1 % 5.2 % 5.1 %
Compensation increase rate — % — % — % 3.2 % 3.3 % 3.3 %


	September 30,
	U.S.						International
	2020		2019		2018		2020		2019		2018
Plan obligations:
Discount rate	2.5	%	3.1	%	4.3	%	1.0	%	1.6	%	2.1	%
Compensation increase rate	0		0		0		2.1	%	2.1	%	2.1	%
Net periodic benefit cost:
Discount rate	3.1	%	4.3	%	3.7	%	1.0	%	2.1	%	2.1	%
Expected long-term rate of return on plan assets	5.6	%	5.9	%	6.6	%	2.8	%	3.8	%	3.8	%
Compensation increase rate	0		0		0		2.1	%	2.1	%	2.4	%

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

The following tables set forth the estimated fair value of Energizer’s plan assets as of September 30, ~~2017~~2020 and ~~2016~~2019 segregated by level within the estimated fair value hierarchy. Refer to Note ~~15,~~17, Financial Instruments and Risk Management, ~~to the Consolidated Financial Statements~~ for further discussion on the estimated fair value hierarchy and estimated fair value principles.


ASSETS AT ESTIMATED FAIR VALUE	At September 30, 2017												ASSETS AT ESTIMATED FAIR VALUE	At September 30, 2020
	U.S. Pension Plan Assets						International Pension Plan Assets							U.S. Pension Plan Assets						International Pension Plan Assets
	Level 1		Level 2		Total		Level 1		Level 2		Total			Level 1		Level 2		Total		Level 1		Level 2		Total
EQUITY													EQUITY
U.S. Equity	$	87.3	$	—	$	87.3	$	—	$	1.4	$	1.4	U.S. Equity	$	57.8	$	0	$	57.8	$	0	$	0	$	0
International Equity	3.7		—		3.7		—		5.7		$	5.7	International Equity	2.4		0		2.4		0		9.8		9.8
DEBT													DEBT
U.S. Government	—		216.4		216.4		—		—		$	—	U.S. Government	0		278.1		278.1		0		0		0
Other Government	—		—		—		—		16.2		16.2		Other Government	0		18.9		18.9		0		22.5		22.5
Corporate	—		—		—		—		12.9		12.9		Corporate	0		0		0		0		0		0
CASH & CASH EQUIVALENTS	—		—		—		—		10.0		10.0		CASH & CASH EQUIVALENTS	0		0		0		0		0.4		0.4
OTHER	—		—		—		—		41.0		41.0		OTHER	0		7.3		7.3		0		7.7		7.7

Assets Measured at Net Asset Value													Assets Measured at Net Asset Value
U.S. Equity					70.9						—		U.S. Equity					77.6						0
International Equity					98.9						45.0		International Equity					49.6						21.1
Other Government					—						29.6

Corporate					—						12.0		Corporate					0						45.2
Other													Other					0						17.8
TOTAL	$	91.0	$	216.4	$	477.2	$	—	$	87.2	$	173.8	TOTAL	$	60.2	$	304.3	$	491.7	$	0	$	40.4	$	124.5

103

At September 30, 2016

U.S. Pension
Plan Assets

International Pension
Plan Assets

Level 1
Level 2
Total Level 1 Level 2 Total
EQUITY
   U.S. Equity $ 147.9
$ —
$ 147.9
$ —
$ 1.6
$ 1.6
   International Equity 5.9
—
5.9
—
5.8
5.8
DEBT
   U.S. Government —
164.0
164.0
—
—
—
   Other Government —
—
—
—
13.3
13.3
   Corporate —
—
—
—
13.5
13.5
CASH & CASH EQUIVALENTS

—
—
—
1.4
1.4
OTHER —
—
—
—
6.2
6.2
Assets measured at Net Asset Value
   U.S. Equity 50.3
2.7
   International Equity 106.6
46.6
   Other Government —
33.1
   Corporate —
12.9
   Other —
22.4
TOTAL $ 153.8
$ 164.0
$ 474.7
$ —
$ 41.8
$ 159.5

~~There were no Level 3 pension assets at September 30, 2017 and 2016.~~

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)


	At September 30, 2019
	U.S. Pension Plan Assets						International Pension Plan Assets
	Level 1		Level 2		Total		Level 1		Level 2		Total
EQUITY
U.S. Equity	$	66.0	$	0	$	66.0	$	0	$	0	$	0
International Equity	3.1		0		3.1		0		8.7		8.7
DEBT
U.S. Government	0		276.2		276.2		0		0		0
Other Government	0		1.8		1.8		0		9.0		9.0
Corporate	0		0		0		0		30.2		30.2
CASH & CASH EQUIVALENTS	0		0		0		0		2.5		2.5
OTHER	0		6.8		6.8		0		5.8		5.8

Assets measured at Net Asset Value
U.S. Equity					64.6						0
International Equity					45.0						28.9

Corporate					0						37.7


TOTAL	$	69.1	$	284.8	$	463.5	$	0	$	56.2	$	122.8

There were no Level 3 pension assets at September 30, 2020 and 2019.

The investment objective for plan assets is to satisfy the current and future pension benefit obligations. The investment philosophy is to achieve this objective through diversification of the retirement plan assets. The goal is to earn a suitable return with an appropriate level of risk while maintaining adequate liquidity to distribute benefit payments. The diversified asset allocation includes equity positions, as well as fixed income investments. The increased volatility associated with equities is offset with higher expected returns, while the long duration fixed income investments help dampen the volatility of the overall portfolio. Risk exposure is controlled by re-balancing the retirement plan assets back to target allocations, as needed. Investment firms managing retirement plan assets carry out investment policy within their stated guidelines. Investment performance is monitored against benchmark indices, which reflect the policy and target allocation of the retirement plan assets.

~~(13)~~(15) Defined Contribution Plan

The Company sponsors a defined contribution ~~plan,~~plans globally, which extends participation eligibility to the vast majority of ~~U.S.~~ employees. ~~As of January 1, 2014,~~In the U.S., the Company matches 100% of participant’s before tax or Roth contributions up to 6% of eligible compensation. Amounts charged to expense for the U.S. plan during fiscal ~~2017, 2016~~2020, 2019 and ~~2015~~2018 were ~~$7.1, $9.1,~~$9.6, $7.8, and ~~$7.7,~~$5.7, respectively, and are reflected in SG&A and Cost of products sold in the Consolidated Statements of Earnings and Comprehensive Income. With the Battery and Auto Care Acquisitions on January 2, 2019 and January 28, 2019, respectively, the Company added approximately 900 colleagues to the Plan which drove the increase in the contributions in fiscal 2019 and 2020. Contributions to the remaining global plans are not significant in the aggregate.

~~(14) Debt~~(16) Shareholders' Equity

~~The detail of long-term debt was as follows:~~

September 30,
2017 2016
5.50% Senior Notes due 2025 600.0
600.0
Senior Secured Term Loan B Facility, net of discount, due 2022 $ 392.0
$ 396.0
Total long-term debt, including current maturities 992.0
996.0
Less current portion (4.0 ) (4.0 )
Less unamortized debt discount and debt issuance fees (9.5 ) (10.3 )
Total long-term debt $ 978.5
$ 981.7

The Company's ~~$600.0~~articles of ~~5.50% Senior Notes due 2025 (Senior Notes) were sold to qualified institutional buyers~~incorporation authorized 300 million shares of common stock and are not registered under the Securities Act or applicable state securities laws. Interest is payable semi-annually on the Senior Notes in December and June. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by10 million shares of preferred stock, each with a par value of ~~Energizer's domestic restricted subsidiaries that is a borrower or guarantor under the Revolving Facility and Term Loan.~~

The Company has a credit agreement which provides for a five-year $350.0 senior secured revolving credit facility (Revolving Facility) which matures in June of 2020 and a seven-year $400.0 senior secured term loan B facility (Term Loan) which is due in June 2022. Borrowings under the Revolving Facility will bear interest at LIBOR or the Base Rate (as defined) plus the applicable margin based on total Company leverage.$0.01 per share. As of September 30, ~~2017,~~2020 and 2019, the Company had $95.0 of outstanding borrowings under the Revolving Facility and had $6.7 of outstanding letters of credit. Taking into account outstanding letters of credit, $248.3 remains available as of September 30, 2017.72,386,840 common stock issued. As of September 30, ~~2017, our weighted average interest rate on short-term borrowings was 2.98%.~~

The $400.0 Term Loan was issued at a $1.0 discount which is amortized with a corresponding charge to interest expense over the remaining life of the loan. The original interest rate was LIBOR subject to a 75 basis point floor, plus 250 basis points. On March 13, 2017,2020, the Company ~~completed~~had approximately 1.9 million shares reserved for issuance under the ~~repricing~~Equity Incentive Plan and approximately 85,000 shares reserved for issuance under the deferred compensation plan.

On July 1, 2015, the Company's Board of Directors approved an authorization for Energizer to acquire up to 7.5 million shares of its Term Loan reducing the interest to LIBOR plus 200 basis points and eliminating the 75 basis point floor. The loans and commitments under the Term Loan require quarterly principal payments at a rate of 0.25%, or $1.0 million, of the original principal balance.

Obligations under the Revolving Facility and Term Loan are jointly and severally guaranteed by certain of its existing and future direct and indirectly wholly-owned U.S. subsidiaries. There is a first priority perfected lien on substantially all of the assets and property ofcommon stock. Under this authorization, the Company ~~and guarantors and proceeds therefrom excluding certain excluded assets. No other terms were changed as a result of the Term Loan repricing.~~

In August 2015, the Company entered into an interest rate swap agreement with one major financial institution that fixed the variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022has repurchased 980,000 shares for $45.0, at an ~~interest rate~~average price of ~~2.22%. This swap agreement was terminated in March 2017, in conjunction with the Term Loan repricing,~~$45.93 per share, 1,036,000 shares for $45.0, at an average price of $43.46 per share, and ~~the Company~~1,439,211 shares for $70.0, at an

104

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

~~entered into a new interest rate swap agreement with one major financial institution that continued to fix~~average price of $48.66 per share, during the ~~variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03%.~~

~~For the year~~twelve months ended September 30, ~~2017, our weighted average interest rate on variable rate debt, inclusive of the swap, was 3.40%.~~

~~The notes payable balance was $104.1 at September 30, 2017~~2020, 2019 and $57.4 at September 30, 2016. The 2017 balance is comprised of $95.0 outstanding borrowings on the Revolving Facility as well as $9.1 of other borrowings, including those from foreign affiliates. The 2016 balance consists of $52.5 outstanding borrowings on the Revolving Facility as well as $4.9 of other borrowings, including those from foreign affiliates.

~~Debt Covenants~~

The credit agreements governing the Company's debt contain certain customary representations and warranties, affirmative, negative and financial covenants, and provisions relating to events of default. If the Company fails to comply with these covenants or with other requirements of these credit agreements, the lenders may have the right to accelerate the maturity of the debt. Acceleration under one of these facilities would trigger cross defaults to other borrowings.2018. As of September 30, ~~2017,~~2020, the Company had approximately 1.8 million shares still authorized under this authorization.

Subsequent to year-end, on November 12, 2020, the Board of Directors approved a new share repurchase program for up to 7.5 million shares. This replaced the prior authorization that was outstanding.

Future share repurchases, if any, would be made on the open market and ~~expects~~the timing and the amount of any purchases will be determined by the Company based on its evaluation of the market conditions, capital allocation objectives, legal and regulatory requirements and other factors.

For the twelve months ended September 30, 2020, total dividends declared to ~~remain,~~shareholders were $84.0, of which $85.4 was paid. The dividends paid included amounts on restricted shares that vested in ~~compliance with~~ the ~~provisions and covenants~~period. For the twelve months ended September 30, 2019, total dividends declared to shareholders were $82.4, of which $83.0 was paid. For the twelve months ended September 30, 2018, total dividends declared to shareholders were $72.1 of which $70.0 was paid. The unpaid dividends were associated with ~~its debt agreements.~~unvested restricted shares and were recorded in Other liabilities.

~~Aggregate maturities~~Subsequent to the fiscal year end, on November 12, 2020, the Board of ~~long-term debt,~~Directors declared a dividend for the first quarter of fiscal 2021 of $0.30 per share of common stock, payable on December 18, 2020, to all shareholders of record as of the close of business on November 30, 2020.

Series A Mandatory Convertible Preferred Stock - In January 2019, the Company issued 2,156,250 shares of Series A Mandatory Convertible Preferred Stock (MCPS), with a par value of $0.01 per share and liquidation preference of $100.00 per share. There were 2,156,250 preferred shares issued and outstanding as of September 30, 2020, and 2019.

Each outstanding share of MCPS will convert automatically on the mandatory conversion date, which is expected to be January 15, 2022, into between 1.7892 and 2.1739 shares of common stock, subject to certain anti-dilution and other adjustments. The number of shares of common stock issuable upon conversion will be determined based on the average VWAP per share of common stock over the 20 consecutive trading day period beginning on, and including, ~~current maturities,~~the 21st scheduled trading day immediately prior to January 15, 2022.

Dividends on the MCPS will be payable on a cumulative basis at an annual rate of 7.50% of the liquidation preference of $100.00 per share of MCPS, and may be paid in cash or, subject to certain limitations, in shares of common stock, or in any combination of cash and shares of common stock. If declared, dividends on the MCPS will be payable quarterly on January 15, April 15, July 15 and October 15 of each year, commencing on April 15, 2019 and ending on, and including, January 15, 2022.

During the twelve months ended September 30, 2020, dividends declared and paid to preferred shareholders were $16.2. The payment included an accrued dividend from fiscal 2019 and the final dividend of fiscal 2020 was recorded in Other liabilities at September 30, ~~2017 were~~2020 and was paid to the preferred shareholders on October 15, 2020.

Subsequent to the end of the fiscal year, on November 12, 2020, the Board of Directors declared a cash dividend of $1.875 per share of MCPS, payable on January 15, 2021, to all shareholders of record as ~~follows: $4.0 in one year, $4.0 in two years, $4.0 in three years, $4.0 in four years, $376.0 in five years~~of the close of business January 1, 2021.

No dividend or distributions may be declared or paid on shares of common stock, and ~~$600.0 thereafter.~~

~~The counterparties to long-term committed borrowings consist~~no common stock shall be, directly or indirectly, purchased, redeemed, or otherwise acquired for consideration by the Company, or any of its subsidiaries, unless all accumulated and unpaid dividends for all preceding dividend periods have been declared and paid upon, or a sufficient sum of cash or number of ~~major financial institutions.~~shares of common stock has been set aside for the payment of such dividends upon, all outstanding shares of MCPS.

In connection with the offering of the MCPS, the Company entered into capped call transactions with certain counterparties. The capped call options are expected to reduce potential dilution to the Company’s Common Stock, subject to a cap, upon any conversion of MCPS. The Company ~~consistently monitors positions with, and credit ratings of, counterparties both internally and by using outside ratings agencies.~~paid $9.0 for the capped call transactions which reduced the net proceeds received from the MCPS.

105

~~(15)~~

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(17) Financial Instruments and Risk Management

The market risk inherent in the Company's operations creates potential earnings volatility arising from changes in currency rates, interest rates and commodity prices. The Company's policy allows derivatives to be used only for identifiable exposures and, therefore, the Company does not enter into hedges for trading or speculative purposes where the sole objective is to generate profits.

Concentration of Credit Risk –The counterparties to derivative contracts consist of a number of major financial institutions and are generally institutions with which the Company maintains lines of credit. The Company does not enter into derivative contracts through brokers nor does it trade derivative contracts on any other exchange or over-the-counter markets. Risk of currency positions and mark-to-market valuation of positions are strictly monitored at all times.

The Company continually monitors positions with, and credit ratings of, counterparties both internally and by using outside rating agencies. While nonperformance by these counterparties exposes Energizer to potential credit losses, such losses are not anticipated.

The Company sells to a large number of customers primarily in the retail trade, including those in mass merchandising, drugstore, supermarket and other channels of distribution throughout the world. Wal-Mart Stores, Inc. accounted for ~~12.1%~~14.1%, ~~10.4%~~13.8%, and ~~10.0%~~11.5% of total net sales in fiscal ~~2017, 2016~~2020, 2019 and ~~2015,~~2018, respectively, primarily in North America. The Company performs ongoing evaluations of its customers’ financial condition and creditworthiness, but does not generally require collateral. While the competitiveness of the retail industry presents an inherent uncertainty, the Company does not believe a significant risk of loss from a concentration of credit risk exists with respect to accounts receivable.

In the ordinary course of business, the Company enters into contractual arrangements (derivatives) to reduce its exposure to commodity price and foreign currency risks. The section below outlines the types of derivatives that existed at September 30, ~~2017~~2020 and ~~2016,~~2019, as well as the Company's objectives and strategies for holding these derivative instruments.

Commodity Price Risk – ~~Energizer~~The Company uses raw materials that are subject to price volatility. At times, the Company ~~has used, and may in the future use,~~uses hedging instruments to reduce exposure to variability in cash flows associated with future purchases of certain materials and commodities. ~~At September 30, 2017 and 2016, there were no open derivative or hedging instruments for future purchases of raw materials or commodities.~~

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Foreign Currency Risk–A significant portion of Energizer’s product cost is more closely tied to the U.S. dollar than to the local currencies in which the product is sold. As such, a weakening of currencies relative to the U.S. dollar results in margin declines unless mitigated through pricing actions, which are not always available due to the economic or competitive environment. Conversely, a strengthening in currencies relative to the U.S. dollar can improve margins. The primary currencies to which Energizer is exposed include the Euro, the British pound, the Canadian dollar and the Australian dollar. However, the Company also has significant exposures in many other currencies which, in the aggregate, may have a material impact on the Company's operations.

Additionally, Energizer’s foreign subsidiaries enter into internal and external transactions that create nonfunctional currency balance sheet positions at the foreign subsidiary level. These exposures are generally the result of intercompany purchases, intercompany loans and, to a lesser extent, external purchases, and are revalued in the foreign subsidiary’s local currency at the end of each period. Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary’s local currency results in a transaction gain or loss recorded in Other items, net on the Consolidated Statements of Earnings and Comprehensive Income. The primary currency to which Energizer’s foreign subsidiaries are exposed is the U.S. dollar.

Interest Rate Risk – Energizer has interest rate risk with respect to interest expense on variable rate debt. At September 30, ~~2017,~~2020, Energizer had variable rate debt outstanding with ~~an original~~a principal balance of ~~$400.0~~$632.9 under the 2019 and 2018 Term ~~Loan~~Loans and ~~$95.0 of outstanding borrowings on~~ the 2018 Revolving Credit Facility. ~~During fiscal year 2015,~~In March 2017, the Company entered into an interest rate swap agreement (2017 Interest rate swap) with one major financial institution that fixed the variable benchmark component (LIBOR) on $200.0 of the Company's variable rate debt through June 2022 at an interest rate of 2.22% (2015 Swap). The 2015 Swap was terminated in March 2017, in conjunction with the Term Loan repricing, and was settled resulting in a $1.7 loss. In March 2017, the Company also entered into a new interest rate swap agreement with one major financial institution that continued to fix the variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03% ~~(2017 Swap)~~.

~~Both hedging instruments were considered~~ In February 2018, the Company entered into a ~~cash flow hedge for accounting purposes. At~~forward starting interest rate swap (2018 Interest rate swap) with an effective date of October 1, 2018, with one major financial institution that fixed the ~~time~~variable benchmark component (LIBOR) on additional variable rate debt of $400.0 at an interest rate of 2.47%. Beginning April 1, 2019, the notional amount decreases $50.0 each quarter, and continues to decrease until its termination date of December 31, 2020. The notional value of the ~~termination of the 2015 Swap, the $1.7 loss~~swap was recorded in accumulated other comprehensive loss on the Consolidated Balance Sheet and will be amortized into interest expense over the remainder of the interest payments associated with the Term Loan through June 2022.

~~At September 30, 2017, the 2017 Swap had an unrecognized pre-tax loss of $1.3 and~~$100.0 at September 30, ~~2016, the 2015 Swap, which was terminated~~2020.

106

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in ~~March of 2017, had an unrecognized pre-tax loss of $9.7, both of which were included in Accumulated other comprehensive loss on the Consolidated Balance Sheets.~~millions, except per share)

Derivatives Designated as Cash Flow ~~Hedges~~Hedging Relationships– The Company has entered into a series of forward currency contracts to hedge the cash flow uncertainty of forecasted payment of inventory purchases due to short term currency fluctuations. Energizer’s primary foreign affiliates, which are exposed to U.S. dollar purchases, have the Euro, the British pound, the Canadian dollar and the Australian dollar as their local currencies. These foreign currencies represent a significant portion of Energizer's foreign currency exposure. At September 30, ~~2017~~2020 and ~~2016,~~2019, Energizer had an unrealized pre-tax loss of ~~$5.8~~$4.9 and ~~$1.1,~~gain of $4.5, 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, ~~2017~~2020 levels, over the next twelve months, ~~$5.7~~$4.9 of the pre-tax loss included in Accumulated other comprehensive loss is expected to be recognized in earnings. Contract maturities for these hedges extend into fiscal year ~~2019.~~2022. There were 64 open foreign currency contracts at September 30, ~~2017,~~2020, with a total notional value of ~~$142.~~approximately $170.

The Company began a hedging program on zinc purchases in March 2019. The contracts were determined to be cash flow hedges and qualify for hedge accounting. The contract maturities for these hedges extend into 2022. There were 17 open contracts at September 30, 2020, with a total notional value of approximately $41. The pre-tax gain on the zinc contracts of $4.4 and the pre-tax loss of $1.0 was recognized at September 30, 2020 and 2019, respectively, and was included in Accumulated other comprehensive loss on the Consolidated Balance Sheet.

As noted above, in March 2017, the Company entered into an interest rate swap agreement (2017 Interest rate swap) with one major financial institution that fixed the variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03%. In February 2018, the Company entered into a forward starting interest rate swap (2018 Interest rate swap) with an effective date of October 1, 2018, with one major financial institution that fixed the variable benchmark component (LIBOR) on additional variable rate debt of $400.0 at an interest rate of 2.47%. Beginning April 1, 2019, the notional amount decreases $50.0 each quarter, and continues to decrease until its termination date of December 31, 2020. The notional value of the swap was $100.0 at September 30, 2020. These hedging instruments were considered cash flow hedges for accounting purposes. At September 30, 2020 and 2019, Energizer recorded an unrecognized pre-tax loss of $7.3 and $4.7, respectively, on these interest rate swap contracts, both of which were included in Accumulated other comprehensive loss on the Consolidated Balance Sheets.

Derivatives not Designated in Hedging Relationships

- 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; thus are not subject to significant market risk. There were 108 open foreign currency derivative contracts which are not designated as cash flow hedges at September 30, ~~2017,~~2020, with a total notional value of approximately ~~$85.~~$69.

107

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The following table provides the Company's estimated fair values as of September 30, ~~2017~~2020 and ~~2016,~~2019, 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, ~~2017~~2020 and ~~2016,~~2019, respectively:

At September 30, 2017 For the Year Ended September 30, 2017
Derivatives designated as Cash Flow Hedging Relationships Estimated Fair Value Liability (1) (Loss)/Gain Recognized in OCI(2) Gain/(Loss)
Reclassified From OCI into Income (Effective Portion) (3) (4)
Foreign currency contracts $ (5.8 ) $ (4.3 ) $ 0.4
Interest rate contracts (1.3 ) 4.5
(2.4 )
Total $ (7.1 ) $ 0.2
$ (2.0 )


	At September 30, 2016			For the Year Ended September 30, 2016							At September 30, 2020		For the Year Ended September 30, 2020
Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value Liability (1)			Loss Recognized in OCI(2)			Gain/(Loss) Reclassified From OCI into Income (Effective Portion) (3) (4)			Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value (Liability) / Asset (1)		(Loss) / Gain Recognized in OCI (2)		Gain / (Loss) Reclassified From OCI into Income (Effective Portion) (3) (4)
Foreign currency contracts	$	(1.1	)	$	(1.5	)	$	4.1		Foreign currency contracts	$	(4.9)	$	(6.1)	$	3.3
Interest rate contracts	(9.7		)	(7.4		)	(2.9		)
Interest rate swaps (2017 and 2018)										Interest rate swaps (2017 and 2018)	(7.3)		(6.6)		(4.3)
Zinc contracts										Zinc contracts	4.4		3.8		(1.6)
Total	$	(10.8	)	$	(8.9	)	$	1.2		Total	$	(7.8)	$	(8.9)	$	(2.6)


1.	~~All derivative liabilities are presented in Other current liabilities or Other liabilities.~~


2.	~~OCI is defined as other comprehensive income.~~


3.	~~Gain/(loss) reclassified to Income was recorded as follows: Foreign currency contracts in other items, net and interest rate contracts in interest expense.~~


4.	~~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.~~


	At September 30, 2019		For the Year Ended September 30, 2019
Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value Asset/(Liability) (1)		Gain/(Loss) Recognized in OCI (2)		Gain Reclassified From OCI into Income (Effective Portion) (3) (4)
Foreign currency contracts	$	4.5	$	8.6	$	8.4
Interest rate swaps (2017 and 2018)	(4.7)		(11.8)		0.3
Zinc contracts	(1.0)		(1.0)		0
Total	$	(1.2)	$	(4.2)	$	8.7

(1) All derivative liabilities are presented in Other current liabilities or Other liabilities. All derivative assets are presented in Other current assets or Other assets.

(2) OCI is defined as other comprehensive income.

(3) Gain/(Loss) reclassified to Income was recorded as follows: Foreign currency contracts in Cost of products sold, interest rate contracts in Interest expense, and commodity contracts in Cost of products sold.

(4) 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, ~~2017~~2020 and ~~2016,~~2019, and the gains ~~and losses~~ on derivative instruments not classified as cash flow hedges as of and for the twelve months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively.

At September 30, 2017

For the Year Ended September 30, 2017

At September 30, 2020

For the Year Ended September 30, 2020

Derivatives not designated as Cash Flow Hedging Relationships

Estimated Fair Value Asset (1)

Loss Recognized in Income (3)

Derivatives not designated as Cash Flow Hedging Relationships

Estimated Fair Value Liability (1)

Loss Recognized in Income (2) (3)

Foreign currency contracts

0.9

(1.4

)

Foreign currency contracts

(0.2)

(3.1)


	At September 30, 2016		For the Year Ended September 30, 2016			At September 30, 2019		For the Year Ended September 30, 2019
Derivatives not designated as Cash Flow Hedging Relationships	Estimated Fair Value Liability (2)		Loss Recognized in Income (3)		Derivatives not designated as Cash Flow Hedging Relationships	Estimated Fair Value Asset (1)		Gain Recognized in Income (2)(4)

Foreign currency contracts	(1.0	)	(0.4	)	Foreign currency contracts	$	4.3	$	5.3


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. Loss~~(1) All derivative liabilities are presented in Other current liabilities or Other liabilities and derivative assets are presented in Other current assets or Other assets.

(2) Gain (Loss) recognized in Income was recorded in Other items, net.

(3) Includes a $2.2 loss on the hedge contract on the proceeds from the Varta Divestiture.

(4) Includes the gain of $4.6 related to the hedge contract on the expected proceeds from the anticipated Varta Divestiture.

108

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Energizer has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting:


Offsetting of derivative assets

		At September 30, 2020						At September 30, 2019
Description	Balance Sheet location	Gross amounts of recognized assets		Gross amounts offset in the Balance Sheet		Net amounts of assets presented in the Balance Sheet		Gross amounts of recognized assets		Gross amounts offset in the Balance Sheet		Net amounts of assets presented in the Balance Sheet
Foreign Currency Contracts	Other Current Assets, Other Assets	$	0.8	$	(0.4)	$	0.4	$	9.4	$	(0.4)	$	9.0

Offsetting of derivative liabilities

		At September 30, 2020						At September 30, 2019
Description	Balance Sheet location	Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheet		Net amounts of liabilities presented in the Balance Sheet		Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheet		Net amounts of liabilities presented in the Balance Sheet
Foreign Currency Contracts	Other Current Liabilities, Other Liabilities	$	(6.0)	$	0.5	$	(5.5)	$	(0.4)	$	0.2	$	(0.2)

Offsetting of derivative assets
At September 30, 2017 At September 30, 2016
Description Balance Sheet location Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet
Foreign Currency Contracts Other Current Assets, Other Assets $ 1.1
$ —
$ 1.1
$ 0.8
$ —
$ 0.8

Offsetting of derivative liabilities
At September 30, 2017 At September 30, 2016
Description Balance Sheet location Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet
Foreign Currency Contracts Other Current Liabilities, Other Liabilities $ (6.4 ) $ 0.4
$ (6.0 ) $ (3.2 ) $ 0.3
$ (2.9 )

Fair Value Hierarchy – Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

Under the fair value accounting guidance hierarchy, an entity is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The following table sets forth the Company's financial assets and liabilities, which are carried at fair value, as of September 30, ~~2017~~2020 and ~~2016~~2019 that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy:


	Level 2
	September 30,
	2020		2019
(Liabilities)/Assets at estimated fair value:
Deferred Compensation	$	(26.8)	$	(28.1)
Exit lease liability	0		(0.1)
Derivatives - Foreign Currency contracts	(4.9)		4.5
Derivatives - Foreign Currency contracts (non-hedge)	(0.2)		4.3
Derivatives - 2017 and 2018 Interest Rate Swaps	(7.3)		(4.7)
Derivatives - Zinc contracts	4.4		$	(1.0)
Net Liabilities at estimated fair value	$	(34.8)	$	(25.1)

Level 2
September 30,
2017 2016
Liabilities at estimated fair value:
Deferred Compensation $ (41.0 ) $ (47.6 )
Exit lease liability (0.3 ) (3.7 )
Derivatives - Foreign Currency contracts (4.9 ) (2.1 )
Derivatives - Interest Rate Swap (1.3 ) (9.7 )
Total Liabilities at estimated fair value $ (47.5 ) $ (63.1 )

Energizer had no level 1 financial assets or liabilities, other than pension plan assets, and no level 3 financial assets or liabilities at September 30, ~~2017~~2020 and ~~2016.~~2019.

Due to the nature of cash and cash equivalents, carrying amounts on the balance sheets approximate estimated fair value. The estimated fair value of cash and cash equivalents has been determined based on level 1 and level 2 inputs, respectively.

109

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Due to the nature of cash and cash equivalents and restricted cash, carrying amounts on the balance sheets approximate estimated fair value. The estimated fair value of cash was determined based on level 1 inputs and cash equivalents and restricted cash are determined based on level 2 inputs.

At September 30, ~~2017,~~2020, the estimated fair value of the Company's unfunded deferred compensation liability is determined based upon the quoted market prices of ~~the~~ investment options that are offered under the plan. The estimated fair value of the exit lease liability is determined based on the discounted cash flows of the remaining lease rentals reduced by estimated sublease rentals that could be reasonably obtained for the property. The estimated fair value of foreign currency contracts, ~~and~~ interest rate swap and zinc contracts, 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.

At September 30, ~~2017~~2020 and ~~2016,~~2019, the fair market value of fixed rate long-term debt was ~~$615.7~~$2,858.3 and ~~$600.1,~~$2,474.7, respectively, compared to its carrying value of ~~$600.0.~~$2,761.9 and $2,408.4, respectively. 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.

~~(16)~~(18) Other Commitments and Contingencies

In the ordinary course of business, the Company also enters into supply and service contracts. These contracts can include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. At September 30, 2020, the Company had approximately $18.5 of purchase obligations.

(19) Accumulated Other Comprehensive (Loss)/Income

The following table presents the changes in accumulated other comprehensive (loss)/income (AOCI), net of tax by component:


	Foreign Currency Translation Adjustments		Pension Activity		Zinc Contracts		Foreign Currency Contracts		Interest Rate Swap		Total
Balance at September 30, 2017	$	(93.1)	$	(139.4)	$	0	$	(4.5)	$	(1.8)	(238.8)
OCI before reclassifications	(20.5)		6.7		0		4.8		6.5		(2.5)
Reclassifications to earnings	0		16.2		0		3.0		0.7		19.9
Reclassifications to retained earnings	0		(19.9)		0		0		(0.5)		(20.4)
Balance at September 30, 2018	$	(113.6)	$	(136.4)	$	0	$	3.3	$	4.9	$	(241.8)
OCI before reclassifications	9.0		(44.3)		(0.7)		6.3		(9.0)		(38.7)
Reclassifications to earnings	0		7.4		0		(6.5)		(0.2)		0.7
Activity related to discontinued operations	(19.4)		0		0.9		0		0		(18.5)
Balance at September 30, 2019	$	(124.0)	$	(173.3)	$	0.2	$	3.1	$	(4.3)	$	(298.3)
OCI before reclassifications	(32.7)		0.3		2.9		(4.7)		(5.1)		(39.3)
Reclassifications to earnings	0		6.5		1.2		(2.5)		3.3		8.5
Activity related to discontinued operations	19.3		3.0		(0.9)		0		0		21.4
Balance at September 30, 2020	$	(137.4)	$	(163.5)	$	3.4	$	(4.1)	$	(6.1)	$	(307.7)

110

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The following table presents the reclassifications from AOCI:



	For the Year Ended September 30,
Amount Reclassified from AOCI (1)	2020		2019		2018		Affected Line Item in the Consolidated Statements of Earnings
Gains and losses on cash flow hedges
Foreign exchange contracts	$	(3.3)	$	(8.4)	$	3.8	Cost of products sold
Interest rate swaps	4.3		(0.3)		0.9		Interest expense
Zinc contracts	1.6		0		0		Cost of products sold
	2.6		(8.7)		4.7		Loss / (Earnings) before income taxes
	(0.6)		2.0		(1.0)		Income tax (benefit) / provision
	$	2.0	$	(6.7)	$	3.7	Net (earnings) / loss
Amortization of defined benefit pension items
Actuarial losses	$	8.0	$	5.0	$	6.4	(2)
Settlement loss on Canadian pension plan termination	0		0		14.1		(2)
Settlement loss on Ireland pension plan termination	0		3.7		0		(2)
Settlement losses on other plans	0.5		0.4		1.1		(2)
	8.5		9.1		21.6		Loss / (Earnings) before income taxes
	(2.0)		(1.7)		(5.4)		Income tax benefit
	$	6.5	$	7.4	$	16.2	Net (earnings) / loss


Total reclassifications for the period	$	8.5	$	0.7	$	19.9	Net (earnings) / loss

Amounts in parentheses indicate credits to Consolidated Statements of Earnings.

(1) The Company adopted ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities in fiscal 2019 as discussed in Note 2, Summary of Significant Accounting Policies. The fiscal 2020 and 2019 impact is recorded in Cost of products sold and fiscal 2018 is recorded in Other items, net.

(2) These AOCI components are included in the computation of net periodic benefit cost (see Note 14, Pension Plans, for further details) and recorded in Other items, net.

111

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(20) Supplemental Financial Statement Information

The components of certain income statement accounts are as follows:


	For the Years Ended September 30,
Other items, net	2020		2019		2018
Interest income	$	(0.6)	$	(7.7)	$	(1.4)
Interest income on restricted cash (1)	0		(5.8)		(5.2)
Foreign currency exchange loss	8.7		5.2		8.1
Pension benefit other than service costs (2)	(1.7)		(2.3)		(6.3)
Settlement loss on pension plan terminations (2)	0		3.7		14.1
Acquisition foreign currency gains (1)	2.2		(13.6)		(15.2)
Pre-acquisition insurance proceeds (1)	(4.9)		0		0
Settlement of acquired business hedging contracts (1)	0		1.5		0
Gain on sale of assets (1)	(1.0)		0		0
Transition services agreement income (1)	(0.9)		(1.4)		0
Other	0.2		6.1		(0.7)
Total Other items, net	$	2.0	$	(14.3)	$	(6.6)

(1) See Note 4, Acquisitions, for additional information on these items.

(2) See Note 14, Pension Plans, for additional information on this item.

The components of certain balance sheet accounts are as follows:


	September 30,
Inventories	2020		2019
Raw materials and supplies	$	85.2	$	70.5
Work in process	148.7		103.7
Finished products	277.4		295.1
Total inventories	$	511.3	$	469.3
Other Current Assets
Miscellaneous receivables	$	15.8	$	16.5
Due from Spectrum	30.6		7.6
Prepaid expenses	76.5		71.3
Value added tax collectible from customers	20.4		23.1
Other	14.5		58.6
Total other current assets	$	157.8	$	177.1
Property, plant and equipment
Land	$	8.9	$	9.6
Buildings	121.9		119.9
Machinery and equipment	821.4		823.0
Capital leases	51.4		50.4
Construction in progress	39.3		25.8
Total gross property	1,042.9		1,028.7
Accumulated depreciation	(690.8)		(666.7)
Total property, plant and equipment, net	$	352.1	$	362.0

112

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)


	September 30,
	2020		2019
Other Current Liabilities
Accrued advertising, sales promotion and allowances	$	12.1	$	11.8
Accrued trade promotions	45.4		53.1
Accrued salaries, vacations and incentive compensation	68.1		59.2


Accrued interest expense	36.9		37.4
Accrued redemption premium	55.9		0
Due to Spectrum	1.6		2.6
Accrued acquisition and integration costs	4.9		7.9
Restructuring reserve	9.4		9.8
Income taxes payable	30.2		23.4
Other	144.2		128.4
Total other current liabilities	$	408.7	$	333.6
Other Liabilities
Pensions and other retirement benefits	$	89.9	$	109.0
Deferred compensation	26.8		28.1
Mandatory transition tax	16.7		16.7
Other non-current liabilities	78.2		50.8
Total other liabilities	$	211.6	$	204.6


	For the Years Ended September 30,
Allowance for Doubtful Accounts	2020		2019		2018
Balance at beginning of year	$	3.8	$	4.0	$	5.8
Provision charged to expense, net of reversals	1.8		1.5		(0.8)
Write-offs, less recoveries, translation, other	(2.8)		(1.7)		(1.0)
Balance at end of year	$	2.8	$	3.8	$	4.0


	For the Years Ended September 30,
Income Tax Valuation Allowance	2020		2019		2018
Balance at beginning of year	$	11.9	$	12.0	$	19.3
Provision charged to expense, net of reversals	3.1		0.7		(7.3)
Reversal of provision charged to expense	(0.2)		(0.4)		0
Translation, other	(1.7)		(0.4)		0
Balance at end of year	$	13.1	$	11.9	$	12.0

The components of certain cash flow statement components are as follows:


	For the Years Ended September 30,
Certain items from Operating Cash Flow Activities	2020		2019		2018
Interest paid	$	196.0	$	170.3	$	54.3
Income taxes paid, net	46.7		43.3		46.2

113

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

(21) Related Party Transactions

On January 28, 2019, the Company completed the Auto Care Acquisition from Spectrum, which included stock consideration of 5.3 million shares of Energizer common stock. In accordance with the terms of our Shareholder Agreement with Spectrum, Spectrum has the right to sell such shares on or after January 28, 2020, including through one or more registered secondary offerings. Upon Spectrum's written request that is not withdrawn, Energizer is obligated to use commercially reasonable efforts to file a shelf registration statement covering the resale by Spectrum of its Energizer Common stock. As of September 30, 2020, Spectrum owns 1.7 million shares, or 2.5% of the Company's outstanding common shares.

Following the completion of the Battery and Auto Care Acquisitions, the Company and Spectrum have entered into transition service agreements (TSA) and reverse TSA. Under the agreements, Energizer and Spectrum will provide each other certain specified back office support services on a transitional basis, including among other things, payroll and other human resource services, information systems as well as accounting support.

The charges for the transition services are generally intended to allow the providing company to fully recover the allocated direct costs of providing the services, plus all out-of-pocket costs and expenses, and including a nominal profit. As of September 30, 2020, the Company has exited the majority of the TSA and reverse TSA, and anticipates being out of all agreements by December 31, 2020.

During the twelve months ended September 30, 2020 and 2019, the Company paid $2.3 and $0.2, respectively, to Spectrum related to rent for office space at their Middleton, Wisconsin headquarters.

For the twelve months ended September 30, 2020, the Company incurred expense of $8.4 in SG&A and $0.4 in Cost of products sold. The Company also recorded income of $0.9 in Other items, net related to the reverse transaction services agreements provided for the twelve months end period.

For the twelve months ended September 30, 2019, the Company incurred expense of $15.3 in SG&A and $1.0 in Cost of products sold. The Company recorded income of $1.4 in Other items, net related to the reverse transaction services agreements provided for the twelve months ended period.

Related to these agreements, the Company had a payable to Spectrum of $1.6 and $2.6 in Other current liabilities and a receivable from Spectrum of $30.6 and $7.6 in Other current assets as of September 30, 2020 and 2019, respectively, as well as a receivable from Spectrum in Other assets of $18.4 as of September 30, 2020. The asset balance from Spectrum also included the tax indemnification due from Spectrum under the initial purchase agreements.

The Company also entered into a supply agreement with Spectrum, ancillary to the Auto Care Acquisition that became effective upon the consummation of the acquisition. The supply agreement resulted in expense to the Company of $17.8 and $9.8 for the twelve months ended September 30, 2020 and 2019, respectively. The Company recorded $2.7 and $0.1 in Accounts payable at September 30, 2020 and 2019, respectively, related to these purchases.

In discontinued operations, the Company recorded income of $3.8 and $11.8 for reverse TSA, and recorded expense of $0.3 and $1.3 for the twelve months ended September 30, 2020 and 2019, respectively. In addition, there was a payable due to Spectrum of $22.5 recorded in Liabilities held for sale and a receivable from Spectrum of $8.9 recorded in Assets held for sale at September 30, 2019.

(22) Environmental and Regulatory

Government Regulation and 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, collection, recycling and disposal. In connection with some sites, Energizer 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 certain federal “Superfund” sites. Energizer 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, ~~2017~~2020 were ~~$5.5,~~$9.3, of which ~~$1.9~~$2.1 is expected to be spent during fiscal ~~2018.~~2021. It is difficult to quantify with certainty the cost of environmental matters, particularly remediation and future capital expenditures

114

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

for environmental control equipment. Environmental spending estimates could be modified as a result of changes in legal requirements or the enforcement or interpretation of existing requirements.

Legal Proceedings – 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 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 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 probable, but the amount cannot be reasonably estimated. 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, is 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.

~~(17) Other Commitments and Contingencies~~

Total rental expense less sublease rental income for all operating leases was $13.8, $13.0 and $15.9 in fiscal 2017, 2016 and 2015, respectively. Future minimum rental commitments under non-cancellable operating leases directly held by Energizer and in effect as of September 30, 2017, were $13.4 in fiscal 2018, $11.8 in fiscal 2019, $10.2 in fiscal 2020, $6.2 in fiscal 2021, $2.2 in fiscal 2022 and $15.9 thereafter.

In the ordinary course of business, the Company also enters into supply and service contracts. These contracts can include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. At September 30, 2017, the Company had approximately $112 of purchase obligations.

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~(18) Accumulated Other Comprehensive (Loss)/Income~~

~~The following table presents the changes in accumulated other comprehensive (loss)/income (AOCI), net of tax by component:~~

Foreign Currency Translation Adjustments Pension Activity Hedging Activity Interest Rate Swap Total
Balance at September 30, 2014 $ (28.7 ) $ (7.3 ) $ 4.3
$ —
$ (31.7 )
OCI before reclassifications (97.9 ) (38.3 ) 6.7
(3.3 ) (132.8 )
Separation related adjustments 0.8
(95.3 ) 0.6
—
(93.9 )
Venezuela deconsolidation charge 16.2
—
—
—
16.2
Reclassifications to earnings —
1.1
(8.2 ) —
(7.1 )
Balance at September 30, 2015 $ (109.6 ) $ (139.8 ) $ 3.4
$ (3.3 ) $ (249.3 )
OCI before reclassifications 10.2
(25.3 ) (1.0 ) (4.6 ) (20.7 )
Reclassifications to earnings —
5.2
(3.1 ) 1.8
3.9
Balance at September 30, 2016 $ (99.4 ) $ (159.9 ) $ (0.7 ) $ (6.1 ) $ (266.1 )
OCI before reclassifications 6.3
14.3
(3.4 ) 2.8
20.0
Reclassifications to earnings —
6.2
(0.4 ) 1.5
7.3
Balance at September 30, 2017 $ (93.1 ) $ (139.4 ) $ (4.5 ) $ (1.8 ) $ (238.8 )

~~The following table presents the reclassifications out of AOCI :~~

For the Twelve Months Ended
September 30,

Amount Reclassified from AOCI (1) 2017 2016 2015 Affected Line Item in the Consolidated Statements of Earnings
Gains and losses on cash flow hedges
Foreign exchange contracts $ 0.4
$ 4.1
$ 11.0
Other items, net
Interest rate swap (2.4 ) (2.9 ) —
Interest expense
(2.0 )
1.2

11.0
Total before tax
0.9
0.1
(2.8 ) Tax benefit/(expense)
$ (1.1 )
$ 1.3

$ 8.2
Net of tax
Amortization of defined benefit pension items
Actuarial losses $ (8.2 ) $ (6.4 ) $ (1.4 ) (2)
Settlement losses (0.7 ) (1.3 ) (0.1 ) (2)
(8.9 )
(7.7 )
(1.5 ) Total before tax
2.7
2.5
0.4
Tax benefit
$ (6.2 )
$ (5.2 )
$ (1.1 ) Net of tax
Foreign Currency Translation Adjustments
Venezuela deconsolidation charge $ —
$ —
$ (16.2 ) Venezuela deconsolidation charge
Total reclassifications for the period $ (7.3 )
$ (3.9 )
$ (9.1 ) Net of tax


1.	~~Amounts in parentheses indicate debits to Consolidated Statements of Earnings.~~


2.	~~These AOCI components are included in the computation of net periodic benefit cost (see Note 12, Pension Plans, for further details).~~

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~(19) Supplemental Financial Statement Information~~

~~The components of certain balance sheet accounts are as follows:~~

September 30,
2017 2016
Inventories
Raw materials and supplies $ 36.6
$ 46.1
Work in process 84.8
72.0
Finished products 195.7
171.1
Total inventories $ 317.1
$ 289.2
Other Current Assets
Miscellaneous receivables $ 13.7
$ 27.7
Prepaid expenses 52.7
70.0
Value added tax collectible from customers 23.4
22.9
Other 5.1
1.5
Total other current assets $ 94.9
$ 122.1
Property, plant and equipment
Land $ 4.6
$ 9.8
Buildings 122.4
138.2
Machinery and equipment 697.9
771.9
Construction in progress 19.4
16.6
Total gross property 844.3
936.5
Accumulated depreciation (667.8 ) (734.8 )
Total property, plant and equipment, net $ 176.5
$ 201.7
Other Current Liabilities
Accrued advertising, sales promotion and allowances $ 21.8
$ 16.9
Accrued trade allowances 51.1
54.0
Accrued salaries, vacations and incentive compensation 54.4
59.3
Spin restructuring reserve —
4.0
Income taxes payable 21.6
15.0
Other 105.7
105.5
Total other current liabilities $ 254.6
$ 254.7
Other Liabilities
Pensions and other retirement benefits $ 87.7
$ 139.4
Deferred compensation 41.0
47.6
Other non-current liabilities 49.3
59.7
Total other liabilities $ 178.0
$ 246.7

For the Years Ended September 30,
Allowance for Doubtful Accounts 2017 2016 2015
Balance at beginning of year $ 6.9
$ 7.0
$ 7.4
Provision charged to expense, net of reversals (0.7 ) 1.2
1.9
Write-offs, less recoveries, translation, other (0.4 ) (1.3 ) (2.3 )
Balance at end of year $ 5.8
$ 6.9
$ 7.0

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

For the Years Ended September 30,
Income Tax Valuation Allowance 2017 2016 2015
Balance at beginning of year $ 19.7
$ 13.6
$ 14.5
Provision charged to expense 1.6
5.8
0.3
Reversal of provision charged to expense (0.3 ) —
(0.8 )
Translation, other (1.7 ) 0.3
(0.4 )
Balance at end of year $ 19.3
$ 19.7
$ 13.6

For the Years Ended September 30,
Supplemental Disclosure of Cash Flow Information 2017 2016 2015
Interest paid $ 51.0
$ 51.4
$ 73.1
Income taxes paid, net $ 40.2
$ 63.6
$ 37.6

~~(20) Segments~~

As of October 1, 2016, the Company changed its internal reporting structure and is managing operations via three major geographic reportable segments: Americas (North America and Latin America), Europe, Middle East and Africa (EMEA), and Asia Pacific. Prior to this year, the Americas segment was reported as two separate geographic reportable segments. The Company changed its reporting structure to better reflect how the Company is managing the operations as well as what the chief operating decision maker is reviewing to make organizational decisions about resource allocation. The prior period segment information has been recast to reflect the current reportable segment structure of the Company.

Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with restructuring initiatives, acquisition and integration activities, amortization costs, business realignment activities, research & development costs, gains on sale of real estate and other items determined to be corporate in nature. Financial items, such as interest income and expense, are managed on a global basis at the corporate level. The exclusion of substantially all acquisition, integration, restructuring and realignment costs from segment results reflects management’s view on how it evaluates segment performance.

For the year ended September 30, 2015, Edgewell recorded a one-time charge of $144.5 as a result of deconsolidating its Venezuelan subsidiaries, which had no accompanying tax benefit. Energizer was allocated $65.2 of this one-time charge. See Note 6, Venezuela, to the Consolidated Financial Statements.

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~Corporate assets shown in the following table include all financial instruments, deferred tax assets and deferred charges that are managed outside of operating segments.~~

For the Years Ended September 30,
Net Sales 2017 2016 2015
Americas $ 1,111.8
$ 1,002.0
$ 956.4
EMEA 357.8
353.8
370.4
Asia Pacific 286.1
278.4
304.8
Total net sales $ 1,755.7
$ 1,634.2
$ 1,631.6
Segment Profit
Americas 310.0
266.5
255.3
EMEA 64.4
51.6
58.3
Asia Pacific 78.6
70.1
77.9
Total segment profit $ 453.0
$ 388.2
$ 391.5
General corporate and other expenses (80.8 ) (80.8 ) (66.0 )
Global marketing expenses (21.5 ) (19.1 ) (24.8 )
Research and development expense (22.0 ) (26.6 ) (24.9 )
Amortization of intangible assets (11.2 ) (2.8 ) —
Venezuela deconsolidation charge —
—
(65.2 )
Restructuring (1) —
(4.9 ) (13.0 )
Acquisition and integration costs (2) (8.4 ) (10.0 ) (1.6 )
Inventory step up (3) —
(8.1 ) —
Spin costs (4) —
(10.4 ) (98.1 )
Spin restructuring 3.8
(5.8 ) (39.1 )
Acquisition and bridge loan fees (5) —
(1.2 ) —
Cost of early debt retirement (5) —
—
(26.7 )
Gain on sale of real estate 16.9
—
—
Interest expense (53.1 ) (53.1 ) (51.2 )
Other financing items, net (6) (3.4 ) 0.3
18.4
Total earnings/(loss) before income taxes $ 273.3
$ 165.7
$ (0.7 )

Depreciation and Amortization
Americas 23.1
18.8
23.3
EMEA 1.4
1.2
1.1
Asia Pacific 14.5
11.5
12.8
Total segment depreciation and amortization 39.0
31.5
37.2
Corporate 11.2
2.8
4.6
Total depreciation and amortization $ 50.2
$ 34.3
$ 41.8

(1) Includes $0.3 for the twelve months ended September 30, 2015 which is included in SG&A and $2.4 and $3.1 for the twelve months ended September 30, 2016 and 2015, respectively, which were included in Cost of products sold on the Consolidated Statements of Earnings and Comprehensive Income.

(2) Includes $4.0, $10.0 and $1.3 for the twelve months ended September 30, 2017, 2016 and 2015, respectively, recorded in SG&A, $1.1 and $0.3 for the twelve months ended September 30, 2017 and 2015, respectively, recorded in cost of products sold and $3.3 recorded in Other items, net for the twelve months ended September 30, 2017 on the Consolidated Statement of Earnings and Comprehensive Income.

~~(3) Included in COGS in the Consolidated Statements of Earnings and Comprehensive Income.~~

(4) Includes $10.0 and $97.6 for the twelve months ended September 30, 2016 and 2015, respectively, which were included in SG&A and $0.4 and $0.5 for the twelve months ended September 30, 2016 and 2015, respectively, included in COGS in the Consolidated Statements of Earnings and Comprehensive Income.

~~(5) Included in Interest Expense in the Consolidated Statements of Earnings and Comprehensive Income.~~

(6) The amount for the twelve months ended September 30, 2017 on the Consolidated Statements of Earnings and Comprehensive Income included $3.3 of expense which has been reclassified to Acquisition and integration costs from Other items, net for purposes of the reconciliation above.

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

September 30,
Total Assets 2017 2016
Americas $ 533.9
$ 475.2
EMEA 240.3
242.0
Asia Pacific 457.9
390.8
Total segment assets $ 1,232.1
$ 1,108.0
Corporate 137.7
159.1
Goodwill and other intangible assets, net 453.8
464.4
Total assets $ 1,823.6
$ 1,731.5

September 30,
Long-Lived Assets 2017 2016
United States $ 186.4
$ 201.5
Singapore 64.9
67.0
Other International 98.3
109.1
Total long-lived assets excluding goodwill and intangibles $ 349.6
$ 377.6

For the Years Ended September 30,
Capital Expenditures 2017 2016 2015
Americas $ 17.4
$ 18.3
$ 29.6
EMEA 1.5
5.7
2.3
Asia Pacific 6.3
4.7
8.5
Total segment capital expenditures $ 25.2
$ 28.7
$ 40.4

~~Geographic segment information for the years ended September 30 was as follows:~~

For the Years Ended September 30,
2017 2016 2015
Net Sales to Customers
United States $ 923.0
$ 824.1
$ 767.6
International 832.7
810.1
864.0
Total net sales $ 1,755.7
$ 1,634.2
$ 1,631.6

~~Supplemental product information is presented below for net sales for the years ended September 30:~~

For the Years Ended September 30,
2017 2016 2015
Net Sales
Batteries $ 1,548.2
$ 1,498.0
$ 1,516.7
Other 207.5
136.2
114.9
Total net sales $ 1,755.7
$ 1,634.2
$ 1,631.6

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~(21)~~(23) Quarterly Financial Information - (Unaudited)

The results of any single quarter are not necessarily indicative of the Company’s results for the full year. Net earnings of the Company are impacted in the first quarter by the additional battery product sales volume associated with the December holiday season. The Battery and Auto Care Acquisition occurred on January 2, 2019 and January 28, 2019, respectively, and those results are only included in the quarters post close. Per share data is computed independently for each of the periods presented. As a result, the sum of the amounts for the quarter may not equal the total for the year.


Fiscal 2020	First		Second		Third		Fourth
Net sales	$	736.8	$	587.0	$	658.0	$	763.0
Gross profit	301.3		235.6		263.2		281.8
Net earnings/(loss) from continuing operations	45.8		13.7		29.0		(41.7)
Net earnings/(loss) per common share - continuing operations:
Basic	$	0.60	$	0.14	$	0.37	$	(0.67)
Diluted	$	0.60	$	0.14	$	0.37	$	(0.67)
Items decreasing/(increasing) net earnings:
Acquisition and integration costs (pre-tax)	19.3		16.9		11.4		20.4
Loss on extinguishment of debt (pre-tax)	4.2		0		0		90.7
One-time impact of the CARES Act benefit/(expense)	0		3.4		1.7		(3.3)


Fiscal 2019	First		Second		Third		Fourth
Net sales	$	571.9	$	556.4	$	647.2	$	719.0
Gross profit	275.5		194.2		246.3		287.8
Net earnings/(loss) from continuing operations	70.8		(62.3)		9.2		47.0
Net earnings/(loss) per common share - continuing operations:
Basic	$	1.19	$	(0.97)	$	0.07	$	0.62
Diluted	$	1.16	$	(0.97)	$	0.07	$	0.62

Items decreasing/(increasing) net earnings:
Acquisition and integration costs (pre-tax)	36.5		95.4		28.0		28.5
Settlement loss on Ireland pension plan termination (pre-tax)	0		0		0		3.7
One-time impact of the new U.S. Tax Legislation benefit/(expense)	1.5		0		(0.8)		(1.1)

115

Fiscal 2017 First Second Third Fourth
Net sales $ 559.6
$ 359.0
$ 372.0
$ 465.1
Gross profit 271.6
167.9
158.0
213.8
Net earnings 95.6
46.9
24.9
34.1
Earnings per share:
Basic $ 1.55
$ 0.76
$ 0.40
$ 0.56
Diluted $ 1.52
$ 0.75
$ 0.40
$ 0.55

Items (increasing)/decreasing net earnings:

Spin restructuring (1.0 ) (1.4 ) —
—
Acquisition and integration costs 0.5
1.1
3.1
(0.5 )
Gain on sale of real estate —
(15.2 ) (1.3 ) —

Fiscal 2016 First Second Third Fourth
Net sales $ 506.8
$ 334.0
$ 361.0
$ 432.4
Gross profit 229.8
141.6
153.7
187.3
Net earnings 65.5
16.4
24.2
21.6
Earnings per share:
Basic $ 1.06
$ 0.27
$ 0.39
$ 0.35
Diluted $ 1.05
$ 0.26
$ 0.39
$ 0.34

Items decreasing/(increasing) net earnings:
Spin costs 3.9
1.8
1.3
—
Spin restructuring 0.8
(0.6 ) 0.7
3.3
Restructuring 2.1
0.9
0.1
—
     Acquisition and integration costs —
—
2.6
6.4
     Inventory step up —
—
—
5.0
     Adjustments to prior year tax accruals —
—
(8.8 ) (2.6 )

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the Exchange Act) as of September 30, ~~2017.~~2020. Based on that evaluation, our CEO and CFO concluded that, as of that date, our disclosure controls and procedures were effective ~~to ensure~~in providing reasonable assurance that information required to be disclosed in reports that we file or submit is recorded, processed, summarized and reported accurately and within the time periods specified, and that such information is accumulated and communicated to the Company's management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate control over financial reporting, as defined under Exchange Act rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management determined that our internal control over financial reporting was effective as of September 30, ~~2017.~~2020.

The effectiveness of our internal control over financial reporting as of September 30, ~~2017~~2020 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, ~~2017~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Not applicable.

116

Part III.

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item, appearing under the Section captioned ~~“Executive Officers of the Registrant”~~“Information About Our Executive Officers” in Item 4A, Part I of this Annual Report on Form 10-K, and the information which will be in our Proxy Statement under the captions ~~“Information about Nominees and other Directors,” and “The Board~~“Board of Directors - Information about Nominees" and ~~Energizer's Corporate~~"Corporate Governance,” is hereby incorporated by reference.

The information required by this item with respect to Section 16(a) beneficial ownership reporting compliance will be set forth in our Proxy Statement under the caption ~~“Section~~“Delinquent Section 16(a) ~~Beneficial Ownership Reporting Compliance”~~Reports” and is incorporated herein by reference.

The Company has adopted business practices and standards of conduct that are applicable to all employees, including its Chief Executive Officer, Executive Vice President and Chief Financial Officer, and Controller. The Company has also adopted a code of ~~business~~ conduct applicable to the Board of Directors. The codes have been posted on the Company's website at www.energizerholdings.com under “Investors – Corporate Governance.” In the event that an amendment to, or a waiver from, a provision of one of the codes of ethics occurs and it is determined that such amendment or waiver is subject to the disclosure provisions of Item 5.05 of Form 8-K, the Company intends to satisfy such disclosure by posting such information on its website for at least a 12-month period.

Item 11. Executive Compensation.

The information required by this item, which will be in our Proxy Statement under the captions ~~“The Board~~“Board of Directors ~~and Energizer's Corporate Governance~~ – Director Compensation”, “Executive Compensation,” ~~“The Board of Directors and Energizer's Corporate~~“Corporate Governance ~~– Corporate Governance, Risk Oversight and Director Independence – Compensation~~- Committee Composition - Committee Interlocks and Insider Participation” and ~~“Nominating and Executive Compensation~~“Human Capital Committee Report,” is hereby incorporated by reference. The information contained in ~~“Nominating and Executive~~“Executive Compensation - Human Capital Committee Report” shall not be deemed to be “filed” with the SEC or subject to the liabilities of the Exchange Act, except to the extent that the Company specifically incorporates such information into a document filed under the Securities Act or the Exchange Act.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item, which will be in our Proxy Statement under the captions “Stock Ownership Information,” and “Equity Compensation Plan Information” is hereby incorporated by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item, which will be in our Proxy Statement under the captions “The Board of Directors and Energizer’s Corporate Governance – Corporate Governance, Risk Oversight and Director Independence – Director Independence” and “Additional Information – Certain Relationships and Related Transactions,” is hereby incorporated by reference.

Item 14. Principal ~~Accounting~~Accountant Fees and Services.

The information required by this item, which will be in our Proxy Statement under the caption ~~“Ratification of Appointment of Independent Auditor,~~“Audit Committee Matters,” is hereby incorporated by reference.

117

PART IV

Item 15. Exhibits and Financial Statement Schedules

Documents filed with this report:


1.	~~Financial statements included as part of this document as Item 8:~~

1.Financial statements included as part of this document as Item 8:

•Report of Independent Registered Public Accounting Firm.

•Consolidated Statements of Earnings and Comprehensive Income -- for years ended September 30, ~~2017, 2016~~2020, 2019, and ~~2015.~~2018.

•Consolidated Balance Sheets -- at September 30, ~~2017~~2020 and ~~2016.~~2019.

•Consolidated Statements of Cash Flows -- for years ended September 30, ~~2017, 2016~~2020, 2019 and ~~2015.~~2018.

•Consolidated Statements of Shareholders’ Equity/(Deficit)-- at September 30, ~~2017, 2016~~2020, 2019 and ~~2015.~~2018.

•Notes to Consolidated Financial Statements.

Financial statements of the Registrant's 50% or less owned companies have been omitted because, in the aggregate, they are not significant.


2.	~~Financial Statement Schedules.~~

2.Financial Statement Schedules.

Schedules not included have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

3.Exhibits Required by Item 601 of Regulation S-K. Pursuant to the Instructions to Exhibits, certain instruments defining the rights of holders of long-term debt securities of the Company and its consolidated subsidiaries are not filed because the total amount of securities authorized under any such instrument does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. A copy of such instrument will be furnished to the Securities and Exchange Commission upon request.


3.Exhibit No.			Exhibits Required by Item 601 of Regulation S-K. Pursuant to the Instructions to Exhibits, certain instruments defining the rights of holders of long-term debt securities of the Company and its consolidated subsidiaries are not filed because the total amount of securities authorized under any such instrument does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. A copy of such instrument will be furnished to the Securities and Exchange Commission upon request.

Exhibit Description

~~Exhibit No.~~		~~Exhibit Description~~

2.1**#†		Separation and Distribution Agreement by and between Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated as of June 25, 2015 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed June 29, 2015).

2.2**#			Tax Matters Agreement by and between Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated as of June 26, 2015 (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed June 29, 2015).

~~2.3~~2.**3#†			~~Employee Matters~~Acquisition Agreement, dated as of January 15, 2018, by and among the Company and Spectrum Brands Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed January 16, 2018).

2.4#†			Amended and Restated Acquisition Agreement, dated as of November 15, 2018, by and between Energizer Holdings, Inc. ~~(f/k/a Energizer SpinCo, Inc.)~~ and ~~Edgewell Personal Care Company (f/k/a Energizer~~Spectrum Brands Holdings, Inc.~~) dated as of June 25, 2015 (incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K filed June 29, 2015).~~

~~2.4~~**	Transition Services Agreement by and between Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated as of June 25, 2015 (incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K filed June 29, 2015).

~~2.5~~	~~Contribution Agreement by and between the Company and Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) dated June 30, 2015 (incorporated~~ (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed ~~June 30, 2015).~~November 15, 2018.)

~~2.6~~2.**5#†			Acquisition Agreement, ~~and Plan of Merger,~~ dated as of ~~May 24, 2016,~~November 15, 2018, by and ~~among~~between Energizer Holdings, Inc. and Spectrum Brands Holdings, Inc. (Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed November 15, 2018.)

2.6#†			Acquisition Agreement, dated May 29, 2019, between the Company ~~Energizer Reliance, Inc., Trivest Partners V, L.P.,~~ and ~~HandStands Holding Corporation~~Varta Aktiengesellschaft (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed May ~~27, 2016)~~29, 2019).



3.1						~~Second~~Third Amended and Restated Articles of Incorporation of Energizer Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed January ~~31, 2017)~~29, 2018).

118


3.2						~~Second~~Fourth Amended and Restated Bylaws of Energizer Holdings, Inc., as amended through and effective on November 16, 2020 (incorporated by reference to Exhibit ~~3.2~~3.1 to the Company's Current Report on Form 8-K filed November 16, 2020).

3.3						Certificate of Designations of the 7.50% Series A Mandatory Convertible Preferred Stock of Energizer Holdings, Inc., filed with the Secretary of State of the State of Missouri and effective January 17, 2019 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed January ~~31, 2017)~~18, 2019).

~~4.1~~4 .1						Indenture, dated ~~June 1, 2015,~~July 16, 2018, by and among Energizer ~~Holdings,~~Gamma Acquisition, Inc. ~~(f/k/a Energizer SpinCo, Inc.)~~, the Guarantors ~~(as defined therein)~~party thereto from time to time and the Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company's current report on Form 8-K filed July 9, 2018).

4 .2						Form of 6.375% Senior Notes due 2026 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed July 9, 2018).

4 .3						Indenture, dated July 6, 2018, by and among Energizer Gamma Acquisition B.V., the Guarantors party thereto from time to time and The Bank Of New York Mellon Trust Company, N.A., as ~~trustee~~Trustee and Registrar, the Bank of New York Mellon, London Branch, as Paying Agent (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed July 9, 2018).

4 .4						Form of 4.625% Senior Notes due 2026 (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed July 9, 2018).

4 .5						Supplemental Indenture dated January 2, 2019, by and among Energizer Holdings, Inc. as successor by merger to Energizer Gamma Acquisition, Inc., the Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed January 2, 2019).

4 .6						Supplemental Indenture dated January 2, 2019, by and between Energizer Gamma Acquisition B.V., the Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee and Registrar, the Bank of New York Mellon, London Branch, as Paying Agent (incorporated by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed January 2, 2019).

4 .7						Form of Certificate for the 7.50% Series A Mandatory Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed January 18, 2019).

4 .8						Indenture, dated January 28, 2019, by and among Energizer Holdings, Inc., the Guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee. (incorporated by reference to Exhibit 4.1 to the ~~Company’s~~Company's Current Report on Form 8-K filed ~~June~~ January 28, 2019).

4.9						Form of 7.750% Senior Notes due 2027 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed January 28, 2019).

4.1 0						Supplemental Indenture dated January 28, 2019 to the Indenture dated January 28, 2019, by and among Energizer Holdings, Inc., the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed January 28, 2019).

4.1 1						Supplemental Indenture dated January 28, 2019 to the Indenture dated July 6, 2018, by and among Energizer Holdings, Inc., as successor by merger to Energizer Gamma Acquisition, Inc., the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed January 28, 2019).

119


4.1 2 ~~2015)~~		Supplemental Indenture dated January 28, 2019 to the Indenture dated July 6, 2018, by and between Energizer Gamma Acquisition B.V., the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed January 28, 2019).

4.13		Indenture, dated July 1, 2020, by and among Energizer Holdings, Inc, the Guarantors party thereto from time to time and The Bank Of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company's current report on Form 8-K filed July 1, 2020).

~~4.2~~ 4.14		Form of ~~5.500%~~4.750% Senior Notes due ~~2025~~2028 (included in Exhibit ~~4.1)~~4.13).

~~10.1~~4.15~~***~~		Indenture, dated September 30, 2020, by and among Energizer Holdings, Inc, the Guarantors party thereto from time to time and The Bank Of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company's current report on Form 8-K filed October 1, 2020).

4.16		Form of 4.375% Senior Notes due 2029 (included in Exhibit 4.15).

4.17		Description of Securities (incorporated by reference to Exhibit 4.16 to the Company’s Annual Report on Form 10-K filed November 19, 2019)

10.1@		Energizer Holdings, Inc. Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to Amendment No. 3 to the Company’s Registration Statement on Form 10 filed on May 27, 2015).

~~10.2~~10.2@		~~Credit Agreement dated June 30, 2015 by and among~~First Amendment to the Energizer Holdings, Inc. ~~(f/k/a Energizer SpinCo, Inc.), each lender from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent~~Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed ~~June 30,~~November 18, 2015).

~~10.3~~10.3		Incremental Term Loan Amendment No. 1, dated as of May 24, 2016, by and among the Company, the Loan Parties party thereto, JPMorgan Chase Bank, N.A., Citigroup Global Markets, Inc., and Citibank, N.A. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed May 27, 2016).

~~10.4~~	Amendment No. 2 to the Credit Agreement, dated as of July 8, 2016, by and among the Company, the Subsidiary Guarantors party thereto, the financial institutions party thereto, J.P. Morgan Securities LLC and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed August 3, 2016).

~~10.5~~	Refinancing Amendment No. 1 to the Credit Agreement, dated as of March 16, 2017, by and among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed March 20, 2017).

~~10.6~~	Trademark License Agreement by and between Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) and Energizer Brands, LLC dated June 25, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 29, 2015).

~~10.7~~1 0.4		Trademark License Agreement by and between Edgewell Personal Care Company (f/k/a Energizer Holdings, Inc.) and Wilkinson Sword Gmbh, as licensors, and Energizer Holdings, Inc. (f/k/a Energizer SpinCo, Inc.) dated June 25, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 29, 2015).

~~10.8~~10.5		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.3 to Amendment No. 2 to the Company’s Registration Statement on Form 10 filed on May 11, 2015).

~~10.9~~10.~~***~~6@		Energizer Holdings, Inc. Executive Officer Bonus Plan and performance criteria thereunder (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 8, 2015).

~~10.10~~10.~~***~~7@		First Amendment to the Energizer Holdings, Inc. Executive Officer Bonus Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 2, 2017).

~~10.11~~10.~~***~~8@		Form of Restricted Stock Equivalent Agreement for awards granted in July 2015 under the Energizer Holdings, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed July 8, 2015).



~~10.12~~10.~~***~~9@						Form of Change of Control Employment Agreement with certain officers ~~including Messrs. Hoskins, LaVigne and Gorman~~ (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on form 8-K filed July 8, 2015).

~~10.13~~10.1~~***~~0@						Energizer Holdings, Inc. Executive Severance Plan (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed July 8, 2015).

120


~~10.14~~10.~~***~~11@		Energizer Holdings, Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed July 8, 2015).

~~10.15~~10.~~***~~1 2@		First Amendment to the Energizer Holdings, Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on form 10-Q filed August 1, 2018).

10.13@		Energizer Holdings, Inc. Executive Savings Investment Plan (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on ~~form~~Form 8-K filed July 8, 2015).

~~10.16~~10.~~**,~~14@		First Amendment to the Energizer Holdings, Inc. Executive Savings Investment Plan. (incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 10-K filed November 14, 2017).

~~10.17~~10.~~**,~~1 5@		Second Amendment to the Energizer Holdings, Inc. Executive Savings Investment ~~Plan.~~Plan (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed November 14, 2017).

~~10.18~~10.~~***~~16@		Third Amendment to the Energizer Holdings, Inc. Executive Savings Investment Plan (incorporated by reference to Exhibit 10.24 to the Company’s Current Report on form 10-K filed November 16, 2018).

10.17@		Form of Amended and Restated Director Restricted Stock Equivalent Agreement under the Energizer Holdings, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K filed November 20, 2015).

~~10.19~~10.~~***~~18@		~~First Amendment to the Energizer Holdings, Inc. Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 18, 2015).~~

~~10.20***~~	Form of Performance Restricted Stock Equivalent Award Agreement under the Energizer Holdings, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.16 to the Company's Annual Report on Form 10-K filed November 15, 2016).

~~10.21~~10.~~***~~19@		Form of Performance Restricted Stock Equivalent Award Agreement for 2018 under the Energizer Holdings, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.27 to the Company’s Current Report on form 10-K filed November 16, 2018).

10.2 0@		Form of Restricted Stock Equivalent Award Agreement under the Energizer Holdings, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K filed November 15, 2016). .

~~10.22~~10.~~***~~21@		Form of Restricted Stock Equivalent Award Agreement for Directors under the Energizer Holdings, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K filed November 15, 2016).

~~10.23~~10.~~***~~22@		~~Separation~~Transitional Retirement Agreement, dated ~~June 7, 2017,~~November 11, 2019, between Energizer ~~Holdings, Inc.~~Brands, LLC and ~~Brian~~Emily K. ~~Hamm~~Boss (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed ~~June 8, 2017)~~November 12, 2019).

~~10.24~~10.~~***~~2 3		~~Offer Letter,~~Credit Agreement, dated ~~June 6, 2017, from~~as of December 17, 2018, by and among Energizer Holdings, Inc., each lender from time to ~~Timothy W. Gorman (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed June 8, 2017).~~

~~10.25***~~	~~Offer Letter, dated August 8, 2017, from Energizer Holdings, Inc. to Timothy W. Gorman~~time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed ~~August 10, 2017)~~December 17, 2018).

10.24		Amendment No. 1 to Credit Agreement, dated as of June 10, 2019, by and among Energizer Holdings, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report filed August 7, 2019).

10.25		Shareholder Agreement dated January 28, 2019, by and between Energizer Holdings, Inc. and Spectrum Brands Holdings, Inc. and a joinder thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed January 28, 2019).

121


10.2 6						Incremental Term Loan Amendment and Refinancing Amendment No. 2, dated as of December 27, 2019, among the Company, the other loan parties party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s quarterly report on Form 10-Q filed May 7, 2020).

10.2 7						Amendment No. 3 dated as of April 24, 2020, to the Credit Agreement dated as of December 17, 2018, as amended, among the Company, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Company’s quarterly report on Form 10-Q filed May 7, 2020).

10.2 8@						Retirement Transition Agreement, dated February 26, 2020, between Energizer Brands LLC and Gregory T. Kinder (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed February 27, 2020).

10.2 9@						Energizer Holdings, Inc. Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 27, 2020).

10.30*@						Form of Performance Restricted Stock Unit Award Agreement under the Energizer Holdings, Inc. Omnibus Incentive Plan.

10.31@						Form of Restricted Stock Unit Award Agreement under the Energizer Holdings, Inc. Omnibus Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed February 5, 2020).

10.32@						Form of Restricted Stock Unit Award Agreement for directors under the Energizer Holdings, Inc. Omnibus Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed February 5, 2020).

21*						List of subsidiaries.

23*						Consent of Independent Registered Public Accounting Firm.

31.1*						Certification of periodic financial report by the Chief Executive Officer of Energizer Holdings, Inc. pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.




31.2*	Certification of periodic financial report by the Chief Financial Officer of Energizer Holdings, Inc. pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, by the Chief Executive Officer of Energizer Holdings, Inc.

32.2*		Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, by the Chief Financial Officer of Energizer Holdings, Inc.

101101.INS		~~Attached as Exhibit 101 to this Annual Report on Form 10-K are~~XBRL Instance Document - the following documents formatted in eXtensible Business Reporting Language (XBRL): the Consolidated Financial Statements and Notes to Consolidated Financial Statements. The financial information containedinstance document does not appear in the ~~XBRL-related documents is “unaudited” and “unreviewed.”~~Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

122


101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

**# The Company undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such

agreement to the Securities and Exchange Commission.

~~***~~@ Denotes a management contract or compensatory plan or arrangement.

† These exhibits referenced herewith were filed to provide investors with information regarding their terms. They are not intended to provide any other factual information about the Company, the counterparties or the related businesses contemplated thereby. In particular, the assertions embodied in the representations and warranties in the agreements were made as of a specified date, are modified or qualified by information in a confidential disclosure letter prepared in connection with the execution and delivery of the agreements, may be subject to a contractual standard of materiality different from what might be viewed as material to shareholders, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the agreements are not necessarily characterizations of the actual state of facts about the Company, the counterparty(ies), or the related business contemplated thereby at the time they were made or otherwise and should only be read in conjunction with the other information that the Company makes publicly available in reports, statements and other documents filed with the SEC.

Item 16. Form 10-K Summary

None.

123

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



			ENERGIZER HOLDINGS, INC.

			By			/s/ Alan R. Hoskins
						Alan R. Hoskins
						Chief Executive Officer

Date: November ~~14, 2017~~17, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and as of the date indicated.



Signature			Title
/s/ Alan R. Hoskins
Alan R. Hoskins (principal executive officer)			~~President,~~ Chief Executive Officer and Director
/s/ Timothy W. Gorman
Timothy W. Gorman (principal financial ~~officer and principal accounting~~ officer)			Executive Vice President and Chief Financial Officer
/s/ John J. ~~Patrick Mulcahy~~Drabik
John J. Drabik (principal accounting officer)			Senior Vice President, Corporate Controller
/s/ Patrick ~~Mulcahy~~J. Moore
Patrick J. Moore			Independent Chairman of the Board of Directors
/s/ Carlos Abrams-Rivera
Carlos Abrams-Rivera			Director
/s/ Bill G. Armstrong
Bill G. Armstrong			Director
/s/ Cynthia J. Brinkley
Cynthia J. Brinkley			Director
/s/ Rebecca Frankiewicz
Rebecca Frankiewicz			Director
/s/ Kevin J. Hunt
Kevin J. Hunt			Director
/s/ James C. Johnson
James C. Johnson			Director
/s/ John E. Klein
John E. Klein			Director
~~/s/ W. Patrick McGinnis~~
~~W. Patrick McGinnis~~			~~Director~~
~~/s/ Patrick J. Moore~~
~~Patrick J. Moore~~			~~Director~~
/s/ Nneka Rimmer
Nneka Rimmer			Director
/s/ Robert V. Vitale
Robert V. Vitale			Director

Date: November ~~14, 2017~~17, 2020

124



Missouri		36-4802442
(State or other jurisdiction of		(I. R. S. Employer
incorporation or organization)		Identification No.)

533 Maryville University Drive
St. Louis, ~~Missouri~~	Missouri	63141
(Address of principal executive offices)		(Zip Code)

	(314)	985-2000
(Registrant’s telephone number, including area code)



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	ENR	New York Stock Exchange
Series A Mandatory Convertible Preferred Stock, par value $.01 per share	ENR PRA	New York Stock Exchange


INDEX TO FINANCIAL STATEMENTS



~~INDEX TO FINANCIAL STATEMENTS~~



Audited Consolidated Financial Statements	Page
Report of Independent Registered Public Accounting Firm		4764
Consolidated Statements of Earnings and Comprehensive Income		4867
Consolidated Balance Sheets		4968
Consolidated Statements of Cash Flows		5069
Consolidated Statements of Shareholders' Equity/(Deficit)		5170
Notes to Consolidated Financial Statements		5271



INDEX

PART I

Item		Page
1	Business	4
1A	Risk Factors	8
1B	Unresolved Staff Comments	17
2	Properties	18
3	Legal Proceedings	18
4	Mine Safety Disclosure	18
4A	Executive Officers Of The Registrant	19

PART II

5	Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	20
6	Selected Financial Data	22
7	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
7A	Quantitative and Qualitative Disclosure About Market Risk	44
8	Financial Statements and Supplementary Data	46
9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	85
9A	Controls and Procedures	85
9B	Other Information	85

PART III

10	Directors, Executive Officers and Corporate Governance	86
11	Executive Compensation	86
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	86
13	Certain Relationships and Related Transactions, and Director Independence	86
14	Principal Accounting Fees and Services	86

PART IV

15	Exhibits, Financial Statement Schedules	87
16	Form 10-K Summary	90



	For the Years Ended September 30,
(dollar amounts in millions)	2017		2016		2015
Net Sales
Batteries	$	1,548.2	$	1,498.0	$	1,516.7
Other	207.5		136.2		114.9
Total net sales	$	1,755.7	$	1,634.2	$	1,631.6



(Dollars Per Share)	FY 2017			FY 2016
	Low Price		High Price	Low Price		High Price
First Quarter	$41.97	-	$50.13	$32.56	-	$44.52
Second Quarter	$45.94	-	$56.54	$28.85	-	$41.88
Third Quarter	$47.80	-	$60.07	$40.09	-	$51.63
Fourth Quarter	$40.98	-	$48.84	$44.58	-	$53.41



	6/12/15	9/30/15	9/30/16	9/30/17
Energizer Holdings, Inc.	100.0	111.3	147.2	138.8
S&P Midcap 400	100.0	90.3	104.1	122.4
S&P Household Products	100.0	94.9	118.7	122.1


GENERAL CORPORATE	For the Years Ended September 30,
	2020			2019			2018
General corporate and other expenses	$	103.8		$	111.5		$	97.3
Global marketing expenses	28.2			18.2			19.0




Total	$	132.0		$	129.7		$	116.3
% of net sales	4.8		%	5.2		%	6.5		%


													Total			Less than 1 year			1-3 years			3-5 years			More than 5 years
Long-term debt, including current maturities (1)											Long-term debt, including current maturities (1)		$	4,144.8		$	841.3		$	233.2		$	20.0		$	3,050.3
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-term debt, including current maturities	$	992.0	$	4.0	$	8.0	$	380.0	$	600.0
Interest on long-term debt ~~(1)~~(2)	330.3		47.2		94.0		90.1		99.0			1,097.5			165.2			314.0			303.7			314.6
Redemption premium on long-term debt											Redemption premium on long-term debt		55.9			55.9			—			—			—
Notes payable	104.1		104.1		—		—		—		Notes payable		3.8			3.8			—			—			—
Operating leases	59.7		13.4		22.0		8.4		15.9		Operating leases		187.7			20.4			37.1			32.7			97.5
Pension plans (2)	8.9		8.9		—		—		—
Purchase obligations and other (3)	112.3		48.4		63.9		—		—
Capital leases (3)											Capital leases (3)		89.1			4.9			10.0			9.9			64.3
Pension plans (4)											Pension plans (4)		4.4			4.4			—			—			—
Purchase of FDK Indonesia (5)											Purchase of FDK Indonesia (5)		16.9			16.9			—			—			—
Purchase obligations and other (6)											Purchase obligations and other (6)		18.5			8.8			9.4			0.3			—
Mandatory transition tax											Mandatory transition tax		16.7			—			—			9.4			7.3
Total	$	1,607.3	$	226.0	$	187.9	$	478.5	$	714.9	Total		$	5,635.3		$	1,121.6		$	603.7		$	376.0		$	3,534.0


~~(1)~~	The above table is based upon the debt balance and LIBOR rate as of September 30, 2017. 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 2.03%.


~~(2)~~	~~Globally, total pension contributions for the Company in the next year are estimated to be $8.9. The projected payments beyond fiscal year 2018 are not currently estimable.~~


~~(3)~~	~~Included in the table above are future purchase commitments for goods and services which are legally binding and that specify all significant terms including price and/or quantity.~~



	Twelve Months Ended September 30, 2017
	Americas			EMEA		Asia Pacific		Corporate			Total
Contract termination costs	$	—		$	—	$	—	$	(2.5	)	$	(2.5	)
Net gain on asset sale	(1.3		)	—		—		—			(1.3		)
Total	$	(1.3	)	$	—	$	—	$	(2.5	)	$	(3.8	)



	Twelve Months Ended September 30, 2016
	Americas			EMEA			Asia Pacific		Corporate		Total
Severance and termination related costs	$	(2.2	)	$	1.1		$	0.8	$	0.5	$	0.2
Non-cash asset write-down	—			0.5			—		—		0.5
Contract termination costs	3.7			—			—		—		3.7
Other exit costs	0.3			0.7			1.0		—		2.0
Net gain on asset sale	—			(0.6		)	—		—		(0.6		)
Total	$	1.8		$	1.7		$	1.8	$	0.5	$	5.8



	Twelve Months Ended September 30, 2015
	Americas		EMEA		Asia Pacific		Corporate		Total
Severance and termination related costs	$	9.1	$	6.0	$	5.3	$	12.0	$	32.4
Non-cash asset write-down	3.2		0.2		0.6		—		4.0
Other exit costs	0.4		0.6		1.7		—		2.7
Total	$	12.7	$	6.8	$	7.6	$	12.0	$	39.1



						Utilized
	October 1, 2016		Charge to Income			Cash			Non-Cash		September 30, 2017
Severance and termination related costs	$	2.8	$	—		$	(2.8	)	$	—	$	—
Contract termination costs	3.6		(2.5		)	(1.1		)	—		—
Net gain on asset sale	—		(1.3		)	1.3			—		—
Total	$	6.4	$	(3.8	)	$	(2.6	)	$	—	$	—



						Utilized
	October 1, 2015		Charge to Income			Cash			Non-Cash			September 30, 2016
Severance and termination related costs	$	12.0	$	0.2		$	(9.4	)	$	—		$	2.8
Non-cash asset write down	—		0.5			—			(0.5		)	—
Contract termination costs	—		3.7			(0.1		)	—			3.6
Other exit costs	0.3		2.0			(2.3		)	—			—
Net gain on asset sale	—		(0.6		)	0.6			—			—
Total	$	12.3	$	5.8		$	(11.2	)	$	(0.5	)	$	6.4



Accounts receivable	$	22.5
Inventory	30.9
Other current assets	6.5
Property, plant and equipment	4.7
Goodwill	193.1
Other identifiable intangible assets	159.5
Accounts payable	(6.2		)
Other liabilities	(6.4		)
Deferred income taxes	(60.6		)
Net assets acquired	$	344.0



	Total		Weighted Average Useful Lives
Trademarks	$	40.1	15.0 years
Customer Relationships	84.4		14.6 years
Patents	34.5		14.1 years
Non-Compete	0.5		5.0 years
Total Other Intangible Assets	$	159.5	14.6 years



	2016		2015
	(Unaudited)		(Unaudited)
Pro forma Net sales	$	1,719.6	$	1,759.9
Pro forma Net earnings/(loss) (a)	140.0		(8.2		)
Pro forma Earnings/(loss) per diluted share (a)	$	2.24	$	(0.13	)



	Shares		Weighted-Average Grant Date Estimated Fair Value per Share
Nonvested RSE at October 1, 2016	1.9		$	35.39
Granted	0.7		$	43.93
Vested	(0.6	)	$	34.33
Canceled	(0.2	)	$	38.24
Nonvested RSE at September 30, 2017	1.8		$	38.72



	Foreign Currency Translation Adjustments			Pension Activity			Hedging Activity			Interest Rate Swap			Total
Balance at September 30, 2014	$	(28.7	)	$	(7.3	)	$	4.3		$	—		$	(31.7	)
OCI before reclassifications	(97.9		)	(38.3		)	6.7			(3.3		)	(132.8		)
Separation related adjustments	0.8			(95.3		)	0.6			—			(93.9		)
Venezuela deconsolidation charge	16.2			—			—			—			16.2
Reclassifications to earnings	—			1.1			(8.2		)	—			(7.1		)
Balance at September 30, 2015	$	(109.6	)	$	(139.8	)	$	3.4		$	(3.3	)	$	(249.3	)
OCI before reclassifications	10.2			(25.3		)	(1.0		)	(4.6		)	(20.7		)
Reclassifications to earnings	—			5.2			(3.1		)	1.8			3.9
Balance at September 30, 2016	$	(99.4	)	$	(159.9	)	$	(0.7	)	$	(6.1	)	$	(266.1	)
OCI before reclassifications	6.3			14.3			(3.4		)	2.8			20.0
Reclassifications to earnings	—			6.2			(0.4		)	1.5			7.3
Balance at September 30, 2017	$	(93.1	)	$	(139.4	)	$	(4.5	)	$	(1.8	)	$	(238.8	)



	For the Years Ended September 30,
Supplemental Disclosure of Cash Flow Information	2017		2016		2015
Interest paid	$	51.0	$	51.4	$	73.1
Income taxes paid, net	$	40.2	$	63.6	$	37.6



Fiscal 2017	First			Second			Third			Fourth
Net sales	$	559.6		$	359.0		$	372.0		$	465.1
Gross profit	271.6			167.9			158.0			213.8
Net earnings	95.6			46.9			24.9			34.1
Earnings per share:
Basic	$	1.55		$	0.76		$	0.40		$	0.56
Diluted	$	1.52		$	0.75		$	0.40		$	0.55

Items (increasing)/decreasing net earnings:

Spin restructuring	(1.0		)	(1.4		)	—			—
Acquisition and integration costs	0.5			1.1			3.1			(0.5		)
Gain on sale of real estate	—			(15.2		)	(1.3		)	—



Fiscal 2016	First		Second			Third			Fourth
Net sales	$	506.8	$	334.0		$	361.0		$	432.4
Gross profit	229.8		141.6			153.7			187.3
Net earnings	65.5		16.4			24.2			21.6
Earnings per share:
Basic	$	1.06	$	0.27		$	0.39		$	0.35
Diluted	$	1.05	$	0.26		$	0.39		$	0.34

Items decreasing/(increasing) net earnings:
Spin costs	3.9		1.8			1.3			—
Spin restructuring	0.8		(0.6		)	0.7			3.3
Restructuring	2.1		0.9			0.1			—
Acquisition and integration costs	—		—			2.6			6.4
Inventory step up	—		—			—			5.0
Adjustments to prior year tax accruals	—		—			(8.8		)	(2.6		)