ENERGIZER HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(Condensed)

(In millions, except per share data - Unaudited)


	For the Quarter Ended December 31,						For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2017		2016				2020		2019		2020		2019
Net sales	$	573.3	$	559.6		Net sales	$	658.0	$	647.2	$	1,981.8	$	1,775.5
Cost of products sold	295.0		288.0			Cost of products sold	394.8		400.9		1,181.7		1,059.5
Gross profit	278.3		271.6			Gross profit	263.2		246.3		800.1		716.0

Selling, general and administrative expense	99.2		84.4			Selling, general and administrative expense	112.8		127.6		351.0		373.5
Advertising and sales promotion expense	37.3		34.3			Advertising and sales promotion expense	37.3		34.3		106.9		99.9
Research and development expense	5.3		5.8			Research and development expense	8.4		9.5		25.6		23.7
Amortization of intangible assets	2.8		2.6			Amortization of intangible assets	14.3		14.4		42.3		30.1
Spin restructuring	—		(1.3		)
Interest expense	13.4		13.3			Interest expense	50.8		51.9		149.0		177.3
Other items, net	1.3		(1.6		)	Other items, net	0.7		(0.8)		5.8		(13.9)
Earnings before income taxes	119.0		134.1			Earnings before income taxes	38.9		9.4		119.5		25.4
Income tax provision	58.6		38.5			Income tax provision	9.9		0.2		31.0		7.7
Net earnings	$	60.4	$	95.6
Net earnings from continuing operations						Net earnings from continuing operations	29.0		9.2		88.5		17.7
Net earnings/(loss) from discontinued operations, net of income tax benefit of $0.4 and $6.6 for the quarter and nine months ended June 30, 2020, respectively, and an expense of $0.4 and a benefit of $2.5 for the quarter and nine months ended June 30, 2019, respectively						Net earnings/(loss) from discontinued operations, net of income tax benefit of $0.4 and $6.6 for the quarter and nine months ended June 30, 2020, respectively, and an expense of $0.4 and a benefit of $2.5 for the quarter and nine months ended June 30, 2019, respectively	0.8		(1.8)		(130.3)		(12.8)
Net earnings/(loss)						Net earnings/(loss)	29.8		7.4		(41.8)		4.9
Mandatory preferred stock dividends						Mandatory preferred stock dividends	(4.0)		(4.4)		(12.1)		(7.7)
Net earnings/(loss) attributable to common shareholders						Net earnings/(loss) attributable to common shareholders	$	25.8	$	3.0	$	(53.9)	$	(2.8)

Basic net earnings per share	$	1.00	$	1.55
Diluted net earnings per share	$	0.98	$	1.52
Basic net earnings per common share - continuing operations						Basic net earnings per common share - continuing operations	$	0.37	$	0.07	$	1.11	$	0.15
Basic net earnings/(loss) per common share - discontinued operations						Basic net earnings/(loss) per common share - discontinued operations	0.01		(0.03)		(1.89)		(0.19)
Basic net earnings/(loss) per common share						Basic net earnings/(loss) per common share	$	0.38	$	0.04	$	(0.78)	$	(0.04)

Diluted net earnings per common share - continuing operations						Diluted net earnings per common share - continuing operations	$	0.37	$	0.07	$	1.10	$	0.15
Diluted net earnings/(loss) per common share - discontinued operations						Diluted net earnings/(loss) per common share - discontinued operations	0.01		(0.03)		(1.88)		(0.19)
Diluted net earnings/(loss) per common share						Diluted net earnings/(loss) per common share	$	0.38	$	0.04	$	(0.78)	$	(0.04)

Weighted average shares of common stock - Basic	60.2		61.8			Weighted average shares of common stock - Basic	68.5		69.6		68.9		65.5
Weighted average shares of common stock - Diluted	61.5		62.9			Weighted average shares of common stock - Diluted	68.7		70.6		69.4		66.5

Statements of Comprehensive Income:						Statements of Comprehensive Income:
Net earnings	$	60.4	$	95.6
Net earnings/(loss)						Net earnings/(loss)	$	29.8	$	7.4	$	(41.8)	$	4.9
Other comprehensive income/(loss), net of tax expense/(benefit)						Other comprehensive income/(loss), net of tax expense/(benefit)
Foreign currency translation adjustments	7.4		(31.9		)	Foreign currency translation adjustments	2.0		(12.3)		(3.2)		4.3
Pension activity, net of tax of $0.5 and $0.6, respectively.	1.2		3.8
Deferred gain on hedging activity, net of tax of $1.1 and $3.7, respectively.	2.5		8.2
Total comprehensive income	$	71.5	$	75.7
Pension activity, net of tax of $0.5 and $2.2 for the quarter and nine months ended June 30, 2020, and $0.2 and $0.8, for the quarter and nine months ended June 30, 2019 respectively.						Pension activity, net of tax of $0.5 and $2.2 for the quarter and nine months ended June 30, 2020, and $0.2 and $0.8, for the quarter and nine months ended June 30, 2019 respectively.	1.1		0.9		6.3		3.0
Deferred loss on hedging activity, net of tax of ($0.6) and ($2.8) for the quarter and nine months ended June 30, 2020, respectively, and ($1.9) and ($3.7) for the quarter and nine months ended June 30, 2019, respectively.						Deferred loss on hedging activity, net of tax of ($0.6) and ($2.8) for the quarter and nine months ended June 30, 2020, respectively, and ($1.9) and ($3.7) for the quarter and nine months ended June 30, 2019, respectively.	(1.3)		(6.4)		(10.1)		(10.8)
Total comprehensive gain/(loss)						Total comprehensive gain/(loss)	$	31.6	$	(10.4)	$	(48.8)	$	1.4

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

ENERGIZER HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(Condensed)

(In millions - Unaudited)


Assets	June 30, 2020		September 30, 2019
Current assets
Cash and cash equivalents	$	595.6	$	258.5
Trade receivables, less allowance for doubtful accounts of $4.7 and $3.8, respectively	317.9		340.2
Inventories	518.6		469.3
Other current assets	186.0		177.1
Assets held for sale	—		791.7
Total current assets	1,618.1		2,036.8

Property, plant and equipment, net	344.9		362.0
Operating lease assets	123.0		—
Goodwill	1,008.7		1,004.8
Other intangible assets, net	1,923.4		1,958.9
Deferred tax asset	22.8		22.8
Other assets	85.6		64.3
Total assets	$	5,126.5	$	5,449.6

Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt	$	91.3	$	—
Current portion of capital leases	1.7		1.6
Notes payable	205.4		31.9
Accounts payable	321.7		299.0
Current operating lease liabilities	14.3		—
Other current liabilities	350.0		333.6
Liabilities held for sale	—		402.9
Total current liabilities	984.4		1,069.0
Long-term debt	3,252.5		3,461.6
Operating lease liabilities	112.6		—
Deferred tax liability	172.5		170.6
Other liabilities	218.7		204.6
Total liabilities	4,740.7		4,905.8
Shareholders' equity
Common stock	0.7		0.7
Mandatory convertible preferred stock	—		—
Additional paid-in capital	859.1		870.3
Retained earnings	10.8		129.5
Treasury stock	(179.5)		(158.4)
Accumulated other comprehensive loss	(305.3)		(298.3)
Total shareholders' equity	385.8		543.8
Total liabilities and shareholders' equity	$	5,126.5	$	5,449.6

Assets December 31,
2017 September 30,
2017
Current assets
Cash and cash equivalents $ 454.3
$ 378.0
Trade receivables, less allowance for doubtful accounts of $6.1 and $5.8, respectively 214.8
230.2
Inventories 276.2
317.1
Other current assets 93.7
94.9
Total current assets 1,039.0
1,020.2
Property, plant and equipment, net 171.7
176.5
Goodwill 230.1
230.0
Other intangible assets, net 220.9
223.8
Deferred tax asset 34.1
47.7
Other assets 68.3
125.4
Total assets $ 1,764.1
$ 1,823.6

Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 4.0
$ 4.0
Note payable 110.5
104.1
Accounts payable 190.8
219.3
Other current liabilities 241.6
254.6
Total current liabilities 546.9
582.0
Long-term debt 977.9
978.5
Other liabilities 205.6
178.0
Total liabilities 1,730.4
1,738.5
Shareholders' equity
Common stock 0.6
0.6
Additional paid-in capital 198.7
196.7
Retained earnings 180.4
198.7
Treasury stock (118.3 ) (72.1 )
Accumulated other comprehensive loss (227.7 ) (238.8 )
Total shareholders' equity 33.7
85.1
Total liabilities and shareholders' equity $ 1,764.1
$ 1,823.6

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

ENERGIZER HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Condensed)

(In millions - Unaudited)


	For the Nine Months Ended June 30,
	2020		2019
Cash Flow from Operating Activities
Net (loss)/earnings	$	(41.8)	$	4.9
Net loss from discontinued operations	(130.3)		(12.8)
Net earnings from continuing operations	88.5		17.7
Non-cash integration and restructuring charges	12.1		—
Depreciation and amortization	84.3		70.8

Deferred income taxes	2.1		(1.2)
Share-based compensation expense	21.2		20.8

Mandatory transition tax	—		0.7
Inventory step up	—		33.7
Non-cash items included in income, net	22.6		(3.0)
Other, net	0.2		(16.7)
Changes in current assets and liabilities used in operations	0.9		(92.4)
Net cash from operating activities from continuing operations	231.9		30.4
Net cash used by operating activities from discontinued operations	(12.9)		(23.4)
Net cash from operating activities	219.0		7.0

Cash Flow from Investing Activities
Capital expenditures	(44.4)		(36.4)
Proceeds from sale of assets	1.5		0.1
Acquisitions, net of cash acquired	(4.5)		(2,453.8)
Net cash used by investing activities from continuing operations	(47.4)		(2,490.1)
Net cash from/(used by) investing activities from discontinued operations	280.9		(403.1)
Net cash from/(used by) investing activities	233.5		(2,893.2)

Cash Flow from Financing Activities
Cash proceeds from issuance of debt with original maturities greater than 90 days	620.6		1,800.0
Payments on debt with maturities greater than 90 days	(770.3)		(513.8)
Net increase/(decrease) in debt with original maturities of 90 days or less	171.5		(204.5)
Debt issuance costs	(6.1)		(40.1)
Net proceeds from issuance of mandatory convertible preferred stock	—		199.5
Net proceeds from issuance of common stock	—		205.3
Dividends paid on mandatory convertible preferred stock	(12.1)		(4.0)
Dividends paid on common stock	(64.3)		(61.7)
Common stock purchased	(45.0)		(45.0)
Taxes paid for withheld share-based payments	(9.7)		(7.2)


Net cash (used by)/from financing activities from continuing operations	(115.4)		1,328.5
Net cash used by financing activities from discontinued operations	(1.1)		(2.9)
Net cash (used by)/from financing activities	(116.5)		1,325.6

Effect of exchange rate changes on cash	1.1		(1.3)

Net increase/(decrease) in cash, cash equivalents, and restricted cash from continuing operations	70.2		(1,132.5)
Net increase/(decrease) in cash, cash equivalents, and restricted cash from discontinued operations	266.9		(429.4)
Net increase/(decrease) in cash, cash equivalents, and restricted cash	337.1		(1,561.9)
Cash, cash equivalents, and restricted cash, beginning of period	258.5		1,768.3
Cash, cash equivalents, and restricted cash, end of period	$	595.6	$	206.4

For the Three Months Ended December 31,
2017 2016
Cash Flow from Operating Activities
Net earnings $ 60.4
$ 95.6
Depreciation and amortization 12.0
10.6
Deferred income taxes 12.2
4.8
Share-based compensation expense 6.7
5.2
Mandatory transition tax 30.0
—
Non-cash items included in income, net 3.0
(0.4 )
Other, net 0.1
(2.1 )
Changes in current assets and liabilities used in operations 16.6
(21.9 )
Net cash from operating activities 141.0
91.8

Cash Flow from Investing Activities
Capital expenditures (5.5 ) (4.9 )
Proceeds from sale of assets —
4.3
Net cash used by investing activities (5.5 ) (0.6 )

Cash Flow from Financing Activities
Payments on debt with maturities greater than 90 days (1.0 ) (1.0 )
Net increase/(decrease) in debt with original maturities of 90 days or less 6.5
(27.9 )
Dividends paid (17.6 ) (18.1 )
Common stock purchased (50.0 ) (8.1 )
Taxes paid for withheld share-based payments (1.8 ) (8.1 )
Net cash used by financing activities (63.9 ) (63.2 )

Effect of exchange rate changes on cash 4.7
(17.6 )

Net increase in cash and cash equivalents 76.3
10.4
Cash and cash equivalents, beginning of period 378.0
287.3
Cash and cash equivalents, end of period $ 454.3
$ 297.7

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

ENERGIZER HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY/(DEFICIT)

(Condensed)

(Amounts in millions, Shares in thousands - Unaudited)


	Number of Shares				Amount
	Preferred Stock	Common Stock	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Treasury Stock		Total Shareholders' Equity
September 30, 2019	2,156	68,902	$	—	$	0.7	$	870.3	$	129.5	$	(298.3)	$	(158.4)	$	543.8
Net earnings from continuing operations	—	—	—		—		—		45.8		—		—		45.8
Net earnings from discontinued operations	—	—	—		—		—		0.3		—		—		0.3
Share based payments	—	—	—		—		7.2		—		—		—		7.2



Activity under stock plans	—	374	—		—		(24.9)		(1.1)		—		16.6		(9.4)
Dividends to common shareholders ($0.30 per share)	—	—	—		—		—		(21.4)		—		—		(21.4)
Dividends to preferred shareholders ($1.875 per share)	—	—	—		—		—		(4.0)		—		—		(4.0)
Other comprehensive income	—	—	—		—		—		—		25.2		—		25.2
December 31, 2019	2,156	69,276	$	—	$	0.7	$	852.6	$	149.1	$	(273.1)	$	(141.8)	$	587.5
Net earnings from continuing operations	—	—	—		—		—		13.7		—		—		13.7
Net loss from discontinued operations	—	—	—		—		—		(131.4)		—		—		(131.4)
Share based payments	—	—	—		—		8.7		—		—		—		8.7
Common stock purchased	—	(980)	—		—		—		—		—		(45.0)		(45.0)


Activity under stock plans	—	36	—		—		(1.7)		(0.1)		—		1.5		(0.3)
Deferred compensation plan	—	125	—		—		(5.7)		—		—		5.7		—
Dividends to common shareholders ($0.30 per share)	—	—	—		—		—		(21.4)		—		—		(21.4)
Dividends to preferred shareholders ($1.875 per share)	—	—	—		—		—		(4.1)		—		—		(4.1)
Other comprehensive loss	—	—	—		—		—		—		(34.0)		—		(34.0)
March 31, 2020	2,156	68,457	$	—	$	0.7	$	853.9	$	5.8	$	(307.1)	$	(179.6)	$	373.7
Net earnings from continuing operations	—	—	—		—		—		29.0		—		—		29.0
Net earnings from discontinued operations	—	—	—		—		—		0.8		—		—		0.8
Share based payments	—	—	—		—		5.3		—		—		—		5.3



Activity under stock plans	—	2	—		—		(0.1)		—		—		0.1		—

Dividends to common shareholders ($0.30 per share)	—	—	—		—		—		(20.8)		—		—		(20.8)
Dividends to preferred shareholders ($1.875 per share)	—	—	—		—		—		(4.0)		—		—		(4.0)
Other comprehensive income	—	—	—		—		—		—		1.8		—		1.8
June 30, 2020	2,156	68,459	$	—	$	0.7	$	859.1	$	10.8	$	(305.3)	$	(179.5)	$	385.8

ENERGIZER HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY/(DEFICIT)

(Condensed)

(Amounts in millions, Shares in thousands - Unaudited)


	Number of Shares				Amount
	Preferred Stock	Common Stock	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Treasury Stock		Total Shareholders' Equity
September 30, 2018	—	59,608	$	—	$	0.6	$	217.8	$	177.3	$	(241.8)	$	(129.4)	$	24.5
Net earnings from continuing operations	—	—	—		—		—		70.8		—		—		70.8
Share based payments	—	—	—		—		6.5		—		—		—		6.5

Activity under stock plans	—	290	—		—		(16.1)		(3.6)		—		12.6		(7.1)
Dividends to common shareholders ($0.30 per share)	—	—	—		—		—		(18.4)		—		—		(18.4)
Other comprehensive loss	—	—	—		—		—		—		(5.9)		—		(5.9)
December 31, 2018	—	59,898	$	—	$	0.6	$	208.2	$	226.1	$	(247.7)	$	(116.8)	$	70.4
Net loss from continuing operations	—	—	—		—		—		(62.3)		—		—		(62.3)
Net loss from discontinued operations	—	—	—		—		—		(11.0)		—		—		(11.0)
Share based payments	—	—	—		—		7.6		—		—		—		7.6

Issuance of common stock	—	9,966	—		0.1		445.7		—		—		—		445.8
Issuance of preferred stock	2,156	—	—		—		199.5		—		—		—		199.5
Activity under stock plans	—	11	—		—		(0.5)		—		—		0.5		—
Dividends to common shareholders ($0.30 per share)	—	—	—		—		—		(21.6)		—		—		(21.6)
Dividends to preferred shareholders ($1.83 per share)	—	—	—		—		—		(3.3)		—		—		(3.3)
Other comprehensive income	—	—	—		—		—		—		20.2		—		20.2
March 31, 2019	2,156	69,875	$	—	$	0.7	$	860.5	$	127.9	$	(227.5)	$	(116.3)	$	645.3
Net earnings from continuing operations	—	—	—		—		—		9.2		—		—		9.2
Net loss from discontinued operations	—	—	—		—		—		(1.8)		—		—		(1.8)
Share based payments	—	—	—		—		6.7		—		—		—		6.7
Common stock purchased	—	(1,036)	—		—		—		—		—		(45.0)		(45.0)


Activity under stock plans	—	1	—		—				—		—		(0.1)		(0.1)
Dividends to common shareholders ($0.30 per share)	—	—	—		—		—		(21.4)		—		—		(21.4)
Dividends to preferred shareholders ($1.875 per share)	—	—	—		—		—		(4.4)		—		—		(4.4)
Other comprehensive loss	—	—	—		—		—		—		(17.8)		—		(17.8)
June 30, 2019	2,156	68,840	$	—	$	0.7	$	867.2	$	109.5	$	(245.3)	$	(161.4)	$	570.7

The above financial statements should be read in conjunction with the Notes To Consolidated (Condensed) Financial Statement (Unaudited).

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

(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, and automotive appearance, performance, refrigerants and freshener products.

Batteries and lights are sold under the Energizer®, Eveready®, Rayovac® and ~~Eveready®~~Varta® brand ~~names.~~names following the fiscal 2019 acquisition of Spectrum Holdings, Inc.'s (Spectrum) global battery, lighting, and portable power business (Battery Acquisition). 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~~

Automotive appearance, performance, refrigerants and ~~marketer of automotive fragrance and appearance~~freshener products ~~(auto care acquisition). With~~are sold under the ~~auto care acquisition, the Company's brands include~~ Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL®, Eagle One®, Armor All®, STP®, and ~~Eagle One®~~A/C PRO® brands following the fiscal 2019 acquisition of Spectrum's global auto care business (Auto Care Acquisition). Refer to Note 3, Acquisitions, for additional discussion on the fiscal 2019 acquisitions.

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. 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 $137.2. Refer to Note 4, Divestment, for further discussion.

Basis of Presentation - The accompanying ~~unaudited~~ Consolidated ~~Condensed~~(Condensed) 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 non-controlling interests.

The accompanying ~~unaudited~~ Consolidated ~~Condensed~~(Condensed) Financial Statements have been prepared in accordance with Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The year-end ~~condensed~~ Consolidated (Condensed) Balance Sheet was derived from the audited financial statements included in Energizer's Report on Form 10-K, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of our operations, financial position and cash flows

have been included. ~~Certain reclassifications have been made to the prior year financial statements to conform to the current presentation.~~ Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. These statements should be read in conjunction with the financial statements and notes thereto for Energizer for the year ended September 30, ~~2017~~2019 included in the Annual Report on Form 10-K dated November ~~14, 2017.~~19, 2019.

As a result of the 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 (Condensed) Balance Sheet. There were no assets or liabilities from these operations as of June 30, 2020. The respective operations of the Divestment Business, including the loss recorded on divestment, for the three and nine months ended June 30, 2020 and 2019 have also been classified as discontinued operations in the accompanying Consolidated (Condensed) Statements of Earnings and Comprehensive Income and Consolidated (Condensed) Statements of Cash Flows. Refer to Note 4, Divestment, for more information on the assets and liabilities classified as held for sale and discontinued operations.

Recently Adopted Accounting Pronouncements -~~During the quarter ended December 31, 2017,~~ Effective October 1, 2019, the Company adopted ASU ~~2017-07,~~ ~~Improving the Presentation of Net Periodic Pension Cost~~ 2016-02and ~~Net Periodic Postretirement Benefit Cost.~~related standards (collectively ASC 842, Leases). This update requires the service component of the net periodic pension cost to be reported in the same income statement line item as similar compensation costs, while all other pension cost components should be reported separately from the service cost component on the income statement. The adoption of this update resulted in $1.7 of non-compensation related pension benefit in Other items, net in the quarter ended December 31, 2017 and a reclassification of $3.1 of pension benefit out of Selling, general and administrative expense and into Other items, net for the quarter ended December 31, 2016. All non-compensation related pension costs will be recorded in Other items, net going forward.

~~During the quarter ended December 31, 2017, the Company adopted 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 impact of adoption was immaterial.

~~During the quarter ended December 31, 2017, the Company early adopted ASU 2016-16,~~ ~~Intra-entity Transfers of Assets Other Than Inventory~~. This update requires tax expense to be recognized from the sale of intra-entity assets, other than inventory, when the transfer occurs, even though the effects of the transaction are eliminated in consolidation. Under the previous guidance, the tax effects of transfers would have been deferred until the transferred asset was sold or otherwise recovered through use. Upon adoption, any deferred charge previously established upon the intra-company transfer is recorded as a cumulative effect adjustment to retained earnings. During the quarter ended December 31, 2017, a deferred charge of $59.2 was removed from Other assets and recorded as an adjustment to retained earnings. Any future tax impacts will be recognized as incurred.

~~During the quarter ended December 31, 2017, the Company early adopted ASU 2017-01,~~ ~~Clarifying the Definition of a Business~~. This update 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 and the Company will apply this definition for future acquisitions.

~~ENERGIZER HOLDINGS, INC.~~

~~NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS~~

~~(In millions - Unaudited)~~

~~During the quarter ended December 31, 2017, the Company early adopted ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~. This update 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 is now determined based on the comparison of the fair value of a reporting unit to its carrying amount. The Company will apply the new guidance when completing its goodwill testing procedures in the current year.

~~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. This update is effective for Energizer beginning October 1, 2018. The Company is currently assessing the new guidance 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 this update 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 February 25, 2016, the FASB issued ASU 2016-02,~~ ~~Leases. This update~~ 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 ~~amendments in this update will be effective for Energizer beginning October 1, 2019~~Company elected the optional transition method and adopted the new guidance on a modified retrospective basis with ~~early adoption permitted. Energizer is in the process~~no restatement of ~~evaluating the impact the revised guidance will have on its financial statements.~~

~~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 the impact the revised guidance will have on our current classification on the Statement of Cash Flows.

~~On August 28, 2017, the FASB issued ASU 2017-12,~~ ~~Targeted Improvements to Accounting for Hedging Activities. This update intends to simplify hedge accounting and decrease complexity for both the preparation and understanding of hedging disclosures in the financial statements. This update is effective for~~prior period amounts. Further, the Company ~~beginning October 1, 2019. The Company is currently assessing~~elected to apply the ~~impact the revised guidance will have on its~~package of practical expedients which allows companies to carry forward original lease determinations, lease classifications, and accounting ~~practices and financial statements.~~for

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

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 (Condensed) Balance Sheet for the Company's operating leases; however, it did not have a material impact on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income, the Consolidated (Condensed) Statement of Cash Flows and the Consolidated (Condensed) Statement of Shareholders' Equity/(Deficit), including retained earnings. Refer to Note 10, Leases, for further information.

Recently Announced 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.

(2) ~~Spin Costs~~Revenue Recognition

~~On July 1, 2015, Energizer completed its legal separation from Edgewell Personal Care Company (Edgewell) via a tax free spin-off (the spin-off or spin).~~ The Company, ~~incurred costs associated~~through its operating subsidiaries, is one of the world’s largest manufacturers, marketers and distributors of household batteries, specialty batteries and lighting products, and automotive appearance, performance, refrigerants and freshener 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.

The Company’s revenue is primarily generated from the sale of finished product to customers. Sales predominantly contain a single delivery element, or performance obligation, and revenue is recognized at a single point in time when title, ownership and risk of loss pass to the customer. This typically occurs when finished goods are delivered to the customer or when finished goods are picked up by a customer or customer’s carrier, depending on contract terms.

Supplemental product and market information is presented below for revenues from external customers for the quarters and nine months ended June 30, 2020 and 2019:


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
Net Sales	2020		2019		2020		2019
Batteries	$	470.7	$	457.2	$	1,520.3	$	1,398.5
Auto Care	161.4		160.8		370.3		289.9
Lights and Licensing	25.9		29.2		91.2		87.1
Total Net Sales	$	658.0	$	647.2	$	1,981.8	$	1,775.5

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2020		2019		2020		2019
Net Sales
North America	$	443.4	$	410.3	$	1,257.4	$	1,075.2
Latin America	48.5		54.8		158.9		145.0
Americas	491.9		465.1		1,416.3		1,220.2
Modern Markets	96.0		101.9		339.9		331.8
Developing Markets	42.5		47.6		139.9		142.2
Distributors Markets	27.6		32.6		85.7		81.3
International	166.1		182.1		565.5		555.3
Total Net Sales	$	658.0	$	647.2	$	1,981.8	$	1,775.5

(3) Acquisitions

Custom Accessories Europe Acquisition - On January 31, 2020, the Company 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 branded automotive accessories throughout the United Kingdom and Europe. CAE partners with major automotive accessory brand owners to identify and develop complimentary brand extensions supported by sourcing and distribution activities. The purchase agreement has potential earnout payments that could increase the purchase price up to $9.9 if certain financial metrics are achieved over the next three years. The Company has estimated the preliminary purchase price to be $7.0 and has preliminarily allocated the purchase price to the assets acquired and liabilities assumed, resulting in identified intangible assets for vendor relationships of approximately $5.7, which will be amortized over the three-year lives of the vendor agreements.

Battery Acquisition - On January 2, 2019, the Company completed the Battery Acquisition with a contractual purchase price of $2,000.0, subject to certain purchase price adjustments. The acquisition expanded our battery portfolio globally with the ~~evaluation, planning~~addition of a strong value brand. The final cash paid after contractual and ~~execution~~working capital adjustments was $1,962.4. Included in that amount is $400.0 of cash consideration that has been allocated to the Divestment Business.

The Battery Acquisition was accounted for as a business combination using the acquisition method of accounting which requires assets acquired and liabilities assumed to be recognized at fair value as of the ~~spin transaction. For~~acquisition date. We have calculated fair values of assets and liabilities acquired for the ~~three months ended December 31, 2017, the Company recorded no activity related to spin.~~Battery Acquisition. During the quarter ended December 31, ~~2016,~~2019, the Company ~~sold a facility in North America that was previously closed as part~~completed the valuation analysis for the Battery Acquisition and no significant changes were made to the valuation.

For purposes of the ~~spin~~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 fair value adjustment for the inventory of $14.6 was recorded ~~a gain~~as expense to Cost of ~~$1.3~~products sold as that inventory was sold in ~~spin restructuring. On a project to date basis,~~fiscal 2019.

The fair values of the ~~total costs incurred or~~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 variations of the income approach. The fair value of the acquired trade names 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 discussed above. The fair value adjustment for the inventory of $11.2 was recorded as expense in the results from discontinued operations in fiscal 2019 as that inventory was sold. Goodwill was also allocated to ~~Energizer for~~ the ~~spin were $197.6, inclusive~~Divestment Business. The assets and liabilities of the ~~costs of early debt retirement recorded in fiscal 2015. We do not expect any additional costs related to spin.~~Divestment Business were included as held for sale on the purchase price allocation.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

The following table ~~represents~~outlines the ~~spin restructuring accrual activity and ending accrual balance~~purchase price allocation as of ~~December 31, 2016 on~~ the ~~Consolidated Condensed Balance Sheet. At December 31, 2016, $2.2~~date of ~~the liability was recorded in Other current liabilities and the remaining $2.1 was recorded in Other liabilities. There were no liabilities outstanding at September 30, 2017 or December 31, 2017.~~acquisition:


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 table below outlines the purchased identifiable intangible assets of $805.8:


	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 goodwill acquired in this acquisition is attributable to the workforce of the acquired business and the synergies expected to arise with this transaction through network optimization, Selling, general and administrative expense (SG&A) reductions and procurement efficiencies. The goodwill associated with this acquisition is deductible for tax purposes.

Auto Care Acquisition - On January 28, 2019, Energizer completed the acquisition of Spectrum’s global auto care business, including the 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 in fiscal 2019 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 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 equity consideration was $1,182.8. The acquisition allowed for the Company to become a global leader in the auto care market and added automotive performance and air conditioning recharge products to its auto care portfolio.

The Auto Care Acquisition was accounted for as a business combination using the acquisition method of accounting which 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.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

For purposes of 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 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.

The fair values of the Auto Care Acquisition's Property, plant and equipment were estimated using variations of the cost approach for the building and equipment. The fair values of the Auto Care Acquisition's identifiable intangible assets were estimated using variations of the income approach. The fair value of trade names and customer relationships acquired 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 following table outlines the purchase price allocation as of the 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		15.0
Proprietary technology	113.5		9.8
Customer relationships	134.8		15.0
Total Other intangible assets, net	$	965.3

The goodwill acquired in this acquisition is attributable to the workforce of the acquired business and the synergies expected to arise with this transaction through network optimization, SG&A reductions and procurement efficiencies. The goodwill is not deductible for tax purposes.

Pro Forma Financial Information- Pro forma net sales, Pro forma net earnings from continuing operations and Pro forma diluted net earnings per common share - continuing operations for the quarter and nine months ended June 30, 2019 are shown in the table below. The 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 results the Company

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

would have achieved if the acquisitions had occurred that date or indicative of the results of the future operation of the combined company.

The pro forma adjustments are based upon purchase price allocations and 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 and property, plant and equipment, interest and financing costs and the impact of the equity consideration completed to fund the acquisitions. Cost synergies that may result from combining Energizer and the Battery and Auto Care Acquisitions are not included in the pro forma table below.


	For the Quarter Ended June 30, 2019		For the Nine Months Ended June 30, 2019
Pro forma net sales	$	647.2	$	2,000.4
Pro forma net earnings from continuing operations	14.2		113.6
Pro forma mandatory preferred stock dividends	4.1		12.2
Pro forma net earnings from continuing operations attributable to common shareholders	$	10.1	$	101.4
Pro forma diluted net earnings per common share - continuing operations	$	0.14	$	1.43
Pro forma weighted average shares of common stock - Diluted	70.6		71.0

The shares included in the above are adjusted to assume that the issuance of the common stock and Mandatory Convertible Preferred Shares (MCPS) shares for the Auto Care Acquisition occurred as of October 1, 2017. For the quarter and nine months ended June 30, 2019, the MCPS conversion was anti-dilutive and not assumed in the calculation.

The unaudited pro forma data above includes the following significant adjustments for certain costs in order to present results 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 the respective period:


Expense removed/(Additional expense)	For the Quarter Ended June 30, 2019		For the Nine Months Ended June 30, 2019
Inventory step up (1)	$	5.0	$	27.5
Acquisition and integration costs (2)	—		30.1
Interest and ticking fees on escrowed debt (3)	—		27.5
Gains on escrowed funds (4)	—		(12.0)

(1) The inventory step up was removed from the quarter and nine months ended June 30, 2019 pro forma results as the inventory turn would have occurred in the first quarter of fiscal 2018.

(2) Acquisition and integration costs incurred to obtain legal approval, investment banking fees and other transaction related expenses that occurred prior to closing of the acquisitions, were removed from the various periods as those costs would have occurred in 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. The interest from the new capital structure was included in the results and the pre-tax interest expense amounts of $50.0 and $150.0 for the three and nine month periods, respectively, were included in the results above.

(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 October 1, 2017.

Excluded from the above pro forma results is the write down of assets of business held for sale to fair value less cost to sell of $107.2 recorded by the Auto Care business during the nine months ended June 30, 2019. This loss was recorded as a direct result of the transaction and would not have impacted the combined Company results.

Acquisition and Integration Costs- The Company incurred pre-tax acquisition and integration costs related to the Battery and Auto Care Acquisitions of $11.4 and $47.6 in the quarter and nine months ended June 30, 2020, respectively, and $28.0 and $159.9 for the quarter and nine months ended June 30, 2019, respectively.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

Pre-tax costs recorded in Costs of products sold were $5.5 and $20.7 for the quarter and nine months ended June 30, 2020, respectively, primarily related to the facility exit and restructuring related costs, discussed in Note 5, Restructuring. Pre-tax costs recorded in Costs of products sold were $12.4 and $44.1 for the the quarter and the nine months ended June 30, 2019, respectively. These costs primarily related to the inventory fair value adjustment of $6.5 and $33.7 for the quarter and nine months, respectively.

Pre-tax acquisition and integration costs recorded in SG&A were $6.1 and $25.3 for the quarter and nine months ended June 30, 2020, respectively, related to the integration of the acquisitions, including consulting fees and costs of integrating the information technology systems of the businesses. Pre-tax acquisition and integration costs recorded in SG&A were $15.1 and $63.1 for the quarter and nine months ended June 30, 2019, respectively, 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 and Auto Care Acquisitions.

For the quarter and nine months ended June 30, 2020, the Company recorded $0.2 and $1.2, respectively, of acquisition and integration related costs in research and development. For the quarter and nine months ended June 30, 2019, the Company recorded $0.3 of acquisition and integration related costs in research and development.

Also included in the pre-tax acquisition costs for the nine months ended June 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.

Included in Other items, net for the quarter ended June 30, 2020 was $0.4 of pre-tax transition services income. Other items, net for the nine months ended June 30, 2020 were pre-tax expenses of $0.4, which included a $2.2 loss related to the hedge contract on the proceeds from the Varta Divestiture, offset by a $1.0 gain on the sale of assets and $0.8 transition services income.

Included in Other items, net for the three and nine months ended June 30, 2019 were pre-tax expenses of $0.2 and pre-tax income of $13.2, respectively. The quarter included transition services income of $0.7 offset by a $0.9 loss related to the hedge contract on the expected proceeds from the Varta Divestiture.

The pre-tax income of $13.2 in Other items, net in the nine months ended June 30, 2019 were 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 during the nine months ended June 30, 2019. The Company also recorded interest income of $5.8 earned on the Restricted cash funds held in escrow associated with the Battery Acquisition during the nine months ended June 30, 2019. The Company also earned income related to transition services agreements of $0.8 for the nine months ended June 30, 2019. These income items were offset by $1.5 of expense to settle hedge contracts of the acquired business as well as the $0.9 loss related to the hedge contract on the expected proceeds of the Varta Divestiture.

(4) Divestment

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

On May 29, 2019, the Company entered into a definitive purchase 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 quarter and nine months ended June 30, 2020 the Company has recorded a pre-tax benefit of $0.4 and loss of $137.2 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

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

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
Long term deferred tax liability	169.9


Other liabilities (1)	57.9
Liabilities held for sale	$	402.9

(1) Included in Other liabilities are pension liabilities of $42.4 related to the Divestment Business as of September 30, 2019, respectively.

The following table summarizes the components of Net loss from discontinued operations in the accompanying Consolidated (Condensed) Statement of Earnings and Comprehensive Income for the quarter and nine months ended June 30, 2020 and 2019.


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2020		2019		2020		2019
Net sales	$	—	$	69.9	$	115.8	$	150.1
Cost of products sold	—		52.5		88.2		122.3
Gross profit	—		17.4		27.6		27.8
Selling, general and administrative expense	—		18.1		18.0		39.2
Advertising and sales promotion expense	—		0.2		0.3		0.5
Research and development expense	—		0.2		0.8		0.2

Interest expense	—		3.7		12.1		10.4

Loss on sale of disposition	(0.4)		—		137.2		—
Other items, net	—		(3.4)		(3.9)		(7.2)
Earnings/(loss) before income taxes	0.4		(1.4)		(136.9)		(15.3)
Income tax (benefit)/expense	(0.4)		0.4		(6.6)		(2.5)
Net earnings/(loss) from discontinued operations	$	0.8	$	(1.8)	$	(130.3)	$	(12.8)

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

Utilized
October 1, 2016 Charge to Income Cash Non-Cash December, 2016
Severance and termination related costs $ 2.8
$ —
$ (1.8 ) $ —
$ 1.0
Contract termination costs 3.6
—
(0.3 ) —
3.3
Net gain on asset sales —

(1.3 )
1.3

—

—
Total $ 6.4
$ (1.3 ) $ (0.8 ) $ —
$ 4.3
Included in the Net loss from discontinued operations for the nine months ended June 30, 2020, are divestment related pre-tax costs of $1.7. Also included in the Net loss from discontinued operations for the nine months ended June 30, 2020 is the write off of $6.9 of deferred financing fees related to the pre-payment of debt from the divestment proceeds. For the nine months ended June 30, 2020 the Net loss from discontinued operations included $5.0 of allocated pre-tax interest expense.

Included in the Net loss from discontinued operations for the quarter ended June 30, 2019 are divestment related pre-tax costs of $4.2 and allocated pre-tax interest expense of $3.7. Included in the nine months ended June 30, 2019, are the inventory fair value pre-tax adjustment of $11.2, divestment related pre-tax costs of $9.9 and allocated pre-tax interest expense of $9.9.

~~(3)~~

(5) 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.

The pre-tax expense for charges related to the restructuring plans for the quarter and nine months ended June 30, 2020 are noted in the table below and were reflected in Cost of products sold on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income:


	For the Quarter Ended June 30, 2020		For the Nine Months Ended June 30, 2020
Severance and related benefit costs	$	0.2	$	1.3
Accelerated depreciation & asset write-offs	2.2		8.1
Other exit costs⁽¹⁾	4.9		11.6
Total	$	7.3	$	21.0

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

The restructuring costs noted above for the quarter ended June 30, 2020, were incurred within the Americas and International segments in the amount of $6.8 and $0.5, respectively. The restructuring costs for the nine months ended June 30, 2020 were incurred within the Americas and International segments in the amount of $19.6 and $1.4, respectively.

The following table summarizes the activity related to the restructuring for the nine months ended June 30, 2020:


					Utilized
	September 30, 2019		Charge to Income		Cash		Non-Cash		June 30, 2020⁽¹⁾
Severance & termination related costs	$	9.8	$	1.3	$	0.2	$	—	$	10.9
Accelerated depreciation & asset write-offs	—		8.1		—		8.1		—
Other exit costs	—		11.6		8.6		—		3.0

Total	$	9.8	$	21.0	$	8.8	$	8.1	$	13.9

(1) At June 30, 2020, the restructuring reserve is recorded on the Consolidated (Condensed) Balance Sheet in Other current liabilities of $13.2 and Other liabilities of $0.7.

The Company expects to incur additional severance and related benefit costs and other exit-related costs associated with these plans of approximately $45 through the end of calendar 2021.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

(6) Income Taxes

The ~~three month~~ effective tax rate for the nine months ended June 30, 2020 was ~~49.2%~~25.9% as compared to ~~28.7%~~30.3% for the prior year comparative period. On

The current year rate includes the unfavorable impact of the Coronavirus Aid, Relief and Economic Security (CARES) Act of $5.1, 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.

The prior year rate includes $0.7 for the one-time impact of the December ~~22,~~ 2017 ~~H.R. 1, formally known as the~~ Tax Cuts and Jobs Act ~~(the Act) was enacted into law. The Act provides for numerous significant~~(2017 tax ~~law changes~~reform) and ~~modifications with varying effective dates,~~the impact of disallowed transaction costs resulting from the acquisitions, which ~~include reducing the corporate income~~drove a higher tax rate ~~from 35% to 21%, creating a territorial tax system (with a mandatory transition tax~~in the prior year.

(7) Share-Based Payments

The Board of Directors adopted the Energizer Holdings, Inc. Equity Incentive Plan (the 2015 Plan) on ~~previously deferred foreign earnings) and allowing for immediate capital expensing of certain qualified property. As a fiscal year end taxpayer, certain provisions~~July 1, 2015, upon completion of the ~~Act~~Company's spin-off from its predecessor. Under the terms of the 2015 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 2015 Plan authorized 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 ~~begin~~be issued under the 2015 Plan, though the terms of the 2015 Plan will continue to ~~impact us in our fiscal first quarter ended December 31, 2017, while~~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 terms of the Omnibus Plan, stock options, stock appreciation rights, restricted stock and restricted stock units (time-based or performance-based), other ~~provisions will impact us beginning in fiscal year 2019. The corporate tax rate reduction is effective~~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 ~~Energizer as of January 1, 2018~~future issuance under the Plan, awards other than stock options and ~~accordingly,~~stock appreciation rights will reduce ~~our current fiscal year federal statutory rate to~~the shares available for future issuance by two for every one share equivalent awarded. Stock options and stock appreciation rights reduce the shares available for future issuance on a ~~blended rate of approximately 24.5% for fiscal year 2018.~~one-for-one basis.

The changes included in the Act are broad and complex. The final transition impacts of the Act may differ from our current estimates, possibly materially, due to, among other things, changes in interpretations of the Act, any legislative action to address questions that arise because of the Act, any changes in accounting standards for income taxes or related interpretations in response to the Act, or any updates or changes to estimates the Company has utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries. The Securities Exchange Commission has issued rules that would allow for a measurement period of up to one year after the enactment date of the Act to finalize the recording of the related tax impacts.

As a result of the reduction of the Federal corporate income tax rate, we have remeasured certain deferred tax assets and liabilities at the rate which they are expected to reverse in the future. We are still analyzing certain aspects of the Act, including the future impacts of the Global Intangible Low-Taxed Income provision, and refining our calculations, which could potentially affect the remeasurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of our deferred tax balance was tax expense of approximately $1.

The mandatory transition tax is based on our total post-1986 earnings and profits (E&P) that we previously deferred from U.S. income taxes. We recorded a provisional amount for our mandatory transition tax liability, resulting in an increase in income tax expense of approximately $30. We have not yet completed our calculation of the total

post-1986 E&P for these foreign subsidiaries. Further, the mandatory transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S federal taxation and finalize the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the mandatory transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.

~~(4) Share-Based Payments~~

Total compensation cost ~~charged against income~~ for Energizer’s share-based compensation arrangements was ~~$6.7~~$5.3 and $21.2 for the quarter and nine months ended ~~December 31, 2017~~June 30, 2020, respectively, and ~~$5.2~~$6.7 and $20.8 for the quarter and nine months ended ~~December 31, 2016~~June 30, 2019, respectively, and was recorded in SG&A expense.

Restricted Stock Equivalents (RSE)—(in whole dollars and total shares)

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.

In November 2018, the Company granted RSE awards to a group of key employees of 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.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

In November 2017, the Company granted RSE awards to a group of key employees of 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 2016, the Company granted RSE awards to a group of key employees of 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 targeted 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. 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.

In November 2015, the Company granted RSE awards to a group of key employees of 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 executives that will vest subject to meeting targeted 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. 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.

~~(5)~~ (8)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, ~~and~~ performance share ~~awards.~~awards and deferred compensation equity plans. Common shares issuable upon conversion of the 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.

The following table sets forth the computation of basic and diluted earnings per share for the quarters and nine months ended ~~December 31, 2017~~June 30, 2020 and ~~2016:~~2019:


(in millions, except per share data)	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
Basic earnings/(loss) per share	2020		2019		2020		2019
Net earnings from continuing operations	$	29.0	$	9.2	$	88.5	$	17.7
Mandatory preferred stock dividends	(4.0)		(4.4)		(12.1)		(7.7)
Net earnings from continuing operations attributable to common shareholders	25.0		4.8		76.4		10.0
Net earnings/(loss) from discontinued operations, net of tax	0.8		(1.8)		(130.3)		(12.8)
Net earnings/(loss) attributable to common shareholders	$	25.8	$	3.0	$	(53.9)	$	(2.8)

Weighted average common shares outstanding - Basic	68.5		69.6		68.9		65.5

Basic net earnings per common share from continuing operations	$	0.37	$	0.07	$	1.11	$	0.15
Basic net earnings/(loss) per common share from discontinued operations	0.01		(0.03)		(1.89)		(0.19)
Basic net earnings/(loss) per common share	$	0.38	$	0.04	$	(0.78)	$	(0.04)

Diluted earnings/(loss) per share




Weighted average common shares outstanding - Basic	68.5		69.6		68.9		65.5

Dilutive effect of restricted stock equivalents	0.1		0.3		0.1		0.3
Dilutive effect of performance shares	—		0.5		0.3		0.5
Dilutive effect of stock based deferred compensation plan	0.1		0.2		0.1		0.2

Weighted average common shares outstanding - Diluted	68.7		70.6		69.4		66.5

Diluted net earnings per common share from continuing operations	$	0.37	$	0.07	$	1.10	$	0.15
Diluted net earnings/(loss) per common share from discontinued operations	0.01		(0.03)		(1.88)		(0.19)
Diluted net earnings/(loss) per common share	$	0.38	$	0.04	$	(0.78)	$	(0.04)

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

(in millions, except per share data)
For the Quarter
Ended December 31,
2017 2016
Net earnings $ 60.4
$ 95.6
Basic average shares outstanding 60.2
61.8
Effect of dilutive restricted stock equivalents 0.4
0.6
Effect of dilutive performance shares 0.9
0.5
Diluted average shares outstanding 61.5
62.9
Basic earnings per common share $ 1.00
$ 1.55
Diluted earnings per common share $ 0.98
$ 1.52

For the ~~quarters~~quarter and nine months ended ~~December 31, 2017~~June 30, 2020, 0.5 million and ~~December 31, 2016, all~~0.3 million, respectively, of restricted stock equivalents were anti-dilutive and ~~performance shares were dilutive and~~not included in the diluted net ~~earnings~~earnings/(loss) per share ~~calculations.~~calculation. For the quarter and nine months ended June 30, 2019, 0.1 million restricted stock equivalents were anti-dilutive and not included in the diluted net earnings/(loss) per share calculation.

Performance based restricted stock equivalents of 1.4 million and 1.2 million were excluded for the quarter and nine months ended June 30, 2020, respectively, and 0.8 million were excluded for the quarter and nine months ended June 30, 2019, as they were anti-dilutive or the performance targets for those shares have not been achieved as of the end of the applicable period.

~~(6)~~

The Company's MCPS were considered anti-dilutive for all periods and excluded for the calculations of diluted earnings/(loss) per share.

(9) Segments

Operations for Energizer are managed via ~~three~~2 major geographic reportable segments: Americas ~~(North America~~ and ~~Latin America), Europe, Middle East and Africa (EMEA), and Asia Pacific.~~

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,~~ research & development costs 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~~integration costs from segment results reflects management’s view on how it evaluates segment performance.

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

Foreign Currency Translation Adjustments Pension Activity Hedging Activity Interest Rate Swap Total
Balance at September 30, 2017 $ (93.1 ) $ (139.4 ) $ (4.5 ) $ (1.8 ) $ (238.8 )
OCI before reclassifications 7.4
—
(0.7 ) 0.9
7.6
Reclassifications to earnings —
1.2
1.9
0.4
3.5
Balance at December 31, 2017 $ (85.7 ) $ (138.2 ) $ (3.3 ) $ (0.5 ) $ (227.7 )

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

The following table presents the reclassifications out of ~~AOCI:~~

AOCI to earnings:

For the Quarter Ended December 31,
2017 2016
Details of AOCI Components
Amount Reclassified
from AOCI (1)
Affected Line Item in the Combined Statements of Earnings
Gains and losses on cash flow hedges
Foreign exchange contracts $ (2.4 ) $ 0.5
Other items, net
Interest rate swap (0.5 ) (0.7 ) Interest expense
(2.9 ) (0.2 ) Total before tax
0.6
0.2
Tax benefit
$ (2.3 ) $ —
Net of tax
Amortization of defined benefit pension items
Actuarial loss (1.5 ) (2.0 ) (2)
Settlement loss (0.1 ) —
(2)
(1.6 ) (2.0 ) Total before tax
0.4
0.6
Tax benefit
$ (1.2 ) $ (1.4 ) Net of tax
Total reclassifications for the period $ (3.5 ) $ (1.4 ) Net of tax


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2020		2019		2020		2019
Details of AOCI Components	Amount Reclassified from AOCI (1)						Amount Reclassified from AOCI (1)			Affected Line Item in the Combined Statements of Earnings
Gains and losses on cash flow hedges
Foreign currency contracts	$	1.8	$	1.9	$	4.5	$	6.7	Cost of products sold
Interest rate contracts	(1.6)		0.2		(2.7)		0.4		Interest expense
Zinc contracts	(0.3)		—		(0.6)		—		Cost of products sold
	(0.1)		2.1		1.2		7.1		(Loss)/Earnings before income taxes
	—		(0.4)		(0.3)		(1.6)		Income tax expense
	$	(0.1)	$	1.7	$	0.9	$	5.5	Net (loss)/earnings
Amortization of defined benefit pension items

Actuarial loss	(1.9)		(1.3)		(5.7)		(3.8)		(2)



	0.5		0.2		1.3		0.6		Income tax benefit
	$	(1.4)	$	(1.1)	$	(4.4)	$	(3.2)	Net loss


Total reclassifications to earnings	$	(1.5)	$	0.6	$	(3.5)	$	2.3	Net (loss)/earnings

(1) Amounts in parentheses indicate debits to Consolidated (Condensed) Statement of ~~Earnings.~~Earnings and Comprehensive Income.

(2) This AOCI component is included in the computation of net periodic pension (benefit)/cost (see Note 9,13, Pension Plans, for further details).

(17) Supplemental Financial Statement Information

The components of certain income statement accounts are as follows:


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2020		2019		2020		2019
Other items, net
Interest income	$	(0.2)	$	(0.3)	$	(0.4)	$	(1.3)

Foreign currency exchange loss/(gain)	2.9		(0.3)		8.0		2.4
Pension benefit other than service costs	(0.5)		(0.7)		(1.5)		(2.1)
Other	(1.1)		0.3		(0.7)		0.3
Acquisition foreign currency loss/(gain)	—		0.9		2.2		(8.1)
Interest income on restricted cash	—		—		—		(5.8)
Transition services agreement income	(0.4)		(0.7)		(0.8)		(0.8)
Gain on sale of assets	—		—		(1.0)		—
Settlement of acquired business hedging contracts	—		—		—		1.5
Total Other items, net	$	0.7	$	(0.8)	$	5.8	$	(13.9)

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

The components of certain balance sheet accounts are as follows:

~~(13) Supplemental Financial Statement Information~~


	June 30, 2020		September 30, 2019
Inventories
Raw materials and supplies	$	103.3	$	70.5
Work in process	139.1		103.7
Finished products	276.2		295.1
Total inventories	$	518.6	$	469.3
Other Current Assets
Miscellaneous receivables	$	18.1	$	16.5
Due from Spectrum	34.7		7.6

Prepaid expenses	96.4		71.3
Value added tax collectible from customers	23.9		23.1

Other	12.9		58.6
Total other current assets	$	186.0	$	177.1
Property, Plant and Equipment
Land	$	9.0	$	9.6
Buildings	119.6		119.9
Machinery and equipment	824.2		823.0
Capital leases	45.7		50.4
Construction in progress	36.0		25.8
Total gross property	1,034.5		1,028.7
Accumulated depreciation	(689.6)		(666.7)
Total property, plant and equipment, net	$	344.9	$	362.0
Other Current Liabilities
Accrued advertising, sales promotion and allowances	$	11.2	$	11.8
Accrued trade allowances	22.9		53.1
Accrued salaries, vacations and incentive compensation	43.9		59.2
Accrued interest expense	63.0		37.4
Due to Spectrum	1.1		2.6
Accrued acquisition and integration costs	1.0		7.9
Restructuring reserve	13.2		9.8
Income taxes payable	29.3		23.4
Other	164.4		128.4
Total other current liabilities	$	350.0	$	333.6
Other Liabilities
Pensions and other retirement benefits	$	101.1	$	109.0
Deferred compensation	26.3		28.1
Restructuring reserve	0.7		—
Mandatory transition tax	16.7		16.7

Other non-current liabilities	73.9		50.8
Total other liabilities	$	218.7	$	204.6

December 31, 2017 September 30, 2017
Inventories
Raw materials and supplies $ 42.9
$ 36.6
Work in process 72.8
84.8
Finished products 160.5
195.7
Total inventories $ 276.2
$ 317.1
Other Current Assets
Miscellaneous receivables $ 11.1
$ 13.7
Prepaid expenses 47.7
52.7
Value added tax collectible from customers 30.6
23.4
Other 4.3
5.1
Total other current assets $ 93.7
$ 94.9
Property, Plant and Equipment
Land $ 4.6
$ 4.6
Buildings 123.1
122.4
Machinery and equipment 693.9
697.9
Construction in progress 24.1
19.4
Total gross property 845.7
844.3
Accumulated depreciation (674.0 ) (667.8 )
Total property, plant and equipment, net $ 171.7
$ 176.5
Other Current Liabilities
Accrued advertising, sales promotion and allowances $ 23.2
$ 21.8
Accrued trade allowances 50.8
51.1
Accrued salaries, vacations and incentive compensation 24.1
54.4
Income taxes payable 29.3
21.6
Other 114.2
105.7
Total other current liabilities $ 241.6
$ 254.6
Other Liabilities
Pensions and other retirement benefits $ 83.9
$ 87.7
Deferred compensation 41.8
41.0
Mandatory transition tax 27.6
—
Other non-current liabilities 52.3
49.3
Total other liabilities $ 205.6
$ 178.0

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

(18) Related Party Transactions

~~(14)~~

On January 28, 2019, the Company completed the Auto Care Acquisition from Spectrum, which included Energizer stock consideration. 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 June 30, 2020, Spectrum owns 2.0 million shares, or 2.9% of the Company's outstanding common shares.

Following the completion of the Battery and Auto Care Acquisitions, the Company and Spectrum entered into transition service agreements (TSA) and reverse TSA. Under the agreements, Energizer and Spectrum 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 June 30, 2020, the Company has exited most of the TSA and reverse TSA. The Company still has certain information systems and back office support agreements that will continue throughout fiscal 2020 as the Company continues its integration of its information systems.

During the quarter and nine months ended June 30, 2020, the Company paid $0.6 and $1.7, respectively, to Spectrum related to rent for office space at their Middleton, Wisconsin headquarters.

For the quarter ended June 30, 2020, the Company incurred expenses of $1.2 in SG&A and $0.1 in Cost of products sold. For the nine months ended June 30, 2020, the Company incurred expenses of $7.5 in SG&A and $0.4 in Cost of products sold. For the quarter and nine months ended June 30, 2019, the Company incurred expense of $5.7 and $10.7 in SG&A, respectively, and $0.3 and $0.7 in Cost of products sold, respectively.

The Company also recorded income of $0.4 and $0.8 in Other items, net related to the reverse transaction services agreements provided for the quarter and nine months ended June 30, 2020, respectively. The Company recorded income of $0.7 and $0.8 in Other items, net related to the reverse transaction services agreements provided for the quarter and nine months ended June 30, 2019, respectively.

Related to these agreements, the Company had a payable to Spectrum of $1.1 and $2.6 in Other current liabilities and a receivable from Spectrum of $34.7 and $7.6 in Other current assets as of June 30, 2020 and September 30, 2019, respectively, as well as a receivable from Spectrum in Other assets of $16.8 as of June 30, 2020. The asset balances from Spectrum also include the tax indemnifications due from Spectrum under the initial purchase agreements.

The Company 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 $3.9 and $13.3 for the quarter and nine months ended June 30, 2020, respectively. The supply agreement resulted in expense of $4.8 and $9.2 for the quarter and nine months ended June 30, 2019, respectively. The Company recorded $1.5 and $0.1 in Accounts payable at June 30, 2020 and September 30, 2019, respectively, related to these purchases.

In discontinued operations, the Company recorded income of $3.8 for reverse TSA, and recorded expense of $0.3 for the nine months ended June 30, 2020. In discontinued operations for the quarter and nine months ended June 30, 2019, the Company recorded income of $4.0 and $8.1 for reverse TSA, respectively, and recorded expense of $0.3 and $1.0, 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 as of September 30, 2019.

(19) Legal proceedings/contingencies and other obligations

Legal proceedings/contingencies - The Company and its affiliates are subject to a number of legal proceedings in various jurisdictions arising out of its operations. Many of these legal matters are in preliminary stages and involve complex issues of law and fact, and may proceed for protracted periods of time. The amount of liability, if any, from

ENERGIZER HOLDINGS, INC.

NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS

(In millions - Unaudited)

these proceedings cannot be determined with certainty. We are a party to legal proceedings and claims that arise during the ordinary course of business. We review our legal proceedings and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and follow appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies where the incurrence of a loss is probable and 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, when taking into account established accruals for estimated liabilities.

Other obligations - 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 ~~December 31, 2017,~~June 30, 2020, the Company had approximately ~~$98~~$24.8 of purchase ~~obligations.~~obligations under these contracts.

~~(15) Subsequent Event~~

On January 15, 2018, the Company entered into a definitive acquisition agreement with Spectrum Brands Holdings, Inc. to acquire its global battery, lighting, and portable power business for a purchase price of $2,000.0 in cash, subject to certain purchase price adjustments. Energizer intends to fund the acquisition through a combination of existing cash and committed debt facilities, expected to ultimately consist of a new term loan and senior notes. In addition, Energizer intends to maintain its existing senior notes, maturing in 2025. The closing of this transaction is subject to various conditions and regulatory approvals.

The Company is also committed to pay a $100.0 termination fee to Spectrum if the transaction does not close by July 15, 2019, and all conditions precedent to the Company’s obligation to consummate the acquisition have otherwise been satisfied except for one or more of the regulatory approval conditions specified in the acquisition agreement. Success fees are due to the financial adviser of $13.0, of which $2.0 was paid in January with the remainder to be paid subject to the closing of the transaction.

~~The Company incurred $5.7 in acquisition costs recorded in SG&A expense on the Consolidated Statement of Earnings in the first quarter of 2018 related to this transaction.~~

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is meant to provide investors with information ~~that~~ management believes is helpful in reviewing Energizer’s historical-basis 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”) 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 Consolidated Financial Statements (unaudited) and corresponding notes included herein. 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 “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017 for a discussion of the uncertainties, risks and assumptions associated with these statements as well as in Item 1A. Risk Factors of this Form 10-Q.

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 the Company. These statements generally can be identified by the use of forward-looking words or phrases such as “believe,” “expect,” “expectation,” “anticipate,” “may,” “could,” “intend,” “belief,” “estimate,” “plan,” “target,” “predict,” “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. 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 impact of the COVID-19 outbreak on consumer demand, costs, product mix, the availability of our products, our strategic initiatives, our and our partners' global supply chains, operations and routes to market;

•our ability to integrate businesses, to realize the projected results of the acquired businesses, and to obtain expected cost savings, synergies and other anticipated benefits of the acquired businesses within the expected timeframe, or at all;

•the impact of the acquired businesses on our business operations;

•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;

•financial strength of distributors and suppliers;

•our ability to improve operations and realize cost savings;

•the impact of the United Kingdom’s future trading relationships following its exit from the European Union;

•the impact of foreign currency exchange rates and currency controls, as well as offsetting hedges;

•the impact of adverse or unexpected weather conditions;

•uncertainty from the expected discontinuance of LIBOR and the transition to any other interest rate benchmark;

•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, including customs and tariff determinations, 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;

•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 detailed from time to time in our publicly filed documents, including those described under the heading “Risk Factors” in our Form 10-K filed with the Securities and Exchange Commission on November 19, 2019, as well as in Item 1A. Risk Factors of this Form 10-Q.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the U.S. ("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 are not reflective of the Company's on-going operating performance, such as acquisition and integration costs ~~costs~~and related ~~to the spin,~~items, loss on extinguishment of debt, and the one-time impact of the ~~new U.S.~~Coronavirus Aid, Relief and Economic Security (CARES) Act and the December 2017 Tax Cuts and Jobs Act (2017 tax ~~legislation.~~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, R&D expenses, ~~amortization~~Amortization expense, ~~interest~~Interest expense, ~~other~~Other items, net and charges related to ~~acquisition~~Acquisition and integration ~~and the spin-off~~ have all been excluded from segment profit.

~~Adjusted Earnings Before Income Taxes,~~ Adjusted Net Earnings From Continuing Operations and Adjusted Diluted Net Earnings From Continuing Operations Per Common Share (EPS). These measures exclude the impact of the costs related to acquisition and integration, the ~~spin-off,~~loss on extinguishment of debt and the one-time impact of the ~~new~~CARES Act and the U.S. income tax ~~legislation.~~legislation from December 2017.

Non-GAAP Tax Rate. This is the tax rate when excluding the pre-tax impact of acquisition and integration and the loss on extinguishment of debt, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred, as well as the one-time impact of the CARES Act and 2017 tax reform.

Organic. This is the non-GAAP financial measurement of the change in revenue, segment profit or other margins that excludes or otherwise adjusts for the impact of acquisitions, change in Argentina Operations and impact of currency from the changes in foreign currency exchange rates as defined below:

Impact of acquisitions. Energizer completed the Auto Care Acquisition on January 28, 2019 and Battery Acquisition on January 2, 2019. These adjustments include the impact of the acquisitions' ongoing operations contributed to each respective income statement caption for the first year's operations directly after the acquisition date. This does not include the impact of acquisition and integration costs associated with any acquisition.

Change in Argentina Operations. The Company is presenting separately all changes in sales and segment 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 Selling, General & Administrative (SG&A) and Gross Margin as a percent of sales. Detail for adjusted gross margin and adjusted SG&A as a percent of sales are also supplemental non-GAAP measures. These measures exclude the impact of costs related to acquisition and integration.

~~Forward-Looking Statements~~Novel Coronavirus (COVID-19)

~~This document contains both historical~~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 ~~forward-looking statements. Forward-looking statements~~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 ~~not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events, including, without limitation,~~following the ~~future sales, gross margins, costs, earnings, cash flows, tax rates and performance of Energizer. These statements generally can be identified~~guidelines issued by the ~~use~~U.S. Center for Disease Control and Prevention and the World Health Organization and have instituted work from home for the majority of ~~forward-looking words~~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 ~~phrases~~their family members are ill.

During natural disasters and other crises such as ~~"believe," "expect," "expectation," "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "predict," "likely," "will," "should," "forecast," "outlook," or~~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 at home, such as water heaters, smoke alarms, carbon monoxide detectors, wireless keyboards and mice.

Auto care products are more discretionary by nature, and COVID-19 has negatively impacted our sales of these products and may continue to do so as we expect an overall reduction in travel due to shelter-in-place orders, work and travel restrictions, and other similar ~~words or phrases. These statements are not guarantees of performance~~measures to try to contain the COVID-19 virus. However, we expect consumers to focus on wipes and ~~are inherently subject~~cleaning products and during recessions consumers often turn to ~~known~~less expensive Do It Yourself versus Do It for Me services. During the third quarter, as countries and ~~unknown risks, uncertainties and assumptions that are difficult~~states began to predict and could cause our actual results to differ materially from those indicated by those statements. We cannot assure that any of our expectations, estimates or projections will be achieved. The forward-looking statements includedreopen, we did experience recovery in ~~this document are only made as~~auto care sales in the latter part of the ~~date of this document~~quarter.

Our core batteries and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances. 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~~auto care businesses in North America performed strongly in the ~~categories~~third fiscal quarter of 2020, but this was partially offset by the softness in ~~which we compete;~~

other markets across both the ~~success~~battery and auto care businesses. In addition, the Company had incremental operating costs 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~~approximately $9 incurred to maintain business continuity and ~~improve market share~~approximately $4 of higher interest to strengthen liquidity in the ~~categories in which~~third fiscal quarter. These incremental costs were offset by lower net SG&A costs of approximately $4 as we ~~operate despite heightened competitive pressure;~~

our ability to close the proposed acquisition of the global battery, lighting, and portable power business (the “Business”) of Spectrum Brands Holdings, Inc. (the “Acquisition”), which may be delayed or may not close at allreduced travel related costs due to restrictions caused by the ~~failure to obtain required regulatory approvals, or satisfy other closing conditions;~~

~~our ability to obtain financing for the Acquisition on favorable terms;~~

our ability to acquire and integrate businesses, and to realize the projected results of acquisitions, including our ability to promptly and effectively integrate the Business after the Acquisition has closed, and our ability to obtain expected cost savings, synergies and other anticipated benefits of the Acquisition within the expected timeframe;

~~the~~pandemic. The net impact of the ~~pending Acquisition on~~incremental costs reduced reported and adjusted earnings per share by $0.11 for the ~~respective business operations;~~third fiscal quarter. The impact for the nine months ended June 30, 2020 was incremental operating costs of approximately $10 and higher interest costs of approximately $5, offset by the lower SG&A of approximately $4 for a net reduction to reported and adjusted earnings per share of $0.12.

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

While the full impact of ~~foreign currency exchange rates and currency controls, as well as offsetting hedges, including~~COVID-19 is uncertain, we have multiple options to further mitigate the liquidity impact of the ~~United Kingdom's referendum vote~~COVID-19 pandemic and ~~announced intention to exit~~preserve our financial flexibility in light of current uncertainty in the ~~European Union;~~

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 ~~raw materials~~COVID-19 on our financial and ~~other commodity costs;~~

operating performance will depend significantly on the duration and severity of the outbreak, the actions taken to contain or mitigate its impact, ~~of legislative changes~~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 ~~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;~~

~~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 detailed from time to time in our publicly filed documents, including those described under the heading “Risk Factors” in our Form 10-K filed with the Securities and Exchange Commission on November 14, 2017 as well as incontrol. See Item 1A. Risk Factors, ~~of this Form 10-Q.~~for additional considerations.

Battery Acquisition

On January ~~15, 2018,~~2, 2019, the Company ~~entered into a definitive~~completed its acquisition ~~agreement with~~of Spectrum ~~Brands~~ Holdings, Inc. ~~to acquire its~~’s (Spectrum) global battery, lighting, and portable power business for a contractual purchase price of $2,000.0, ~~in cash,~~ subject to certain purchase price ~~adjustments. Energizer intends~~adjustments (Battery Acquisition). The Battery Acquisition included the Rayovac® and Varta® brands (Acquired Battery Business). The Company's second quarter of fiscal 2020 and 2019 both included the operations of the Acquired Battery Business. For fiscal 2020, the incremental revenues and segment profit from the Acquired Battery Business were $125.5 and $27.9, respectively, relating to ~~fund~~three months of activity for which they were not owned in the comparable periods in fiscal 2019.

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.

Auto Care Acquisition

On January 28, 2019, the Company acquired Spectrum’s global auto care business, including the Armor All®, STP®, and A/C PRO® brands (Acquired Auto Care Business) for a contractual purchase price of $1,250.0, subject to certain purchase price adjustments (Auto Care Acquisition). The months of February and March of 2019 and 2020 both include the operations of the Acquired Auto Care Business. For fiscal year 2020, the incremental revenues and segment profit from the Acquired Auto Care Business were $85.1 and $17.1, respectively, relating to four months of activity for which they were not owned in the comparable periods in fiscal 2019.

Acquisition and Integration Costs

The Company incurred pre-tax acquisition ~~through~~and integration costs of $11.4 and $47.6 in the quarter and nine months ended June 30, 2020, respectively, and $28.0 and $159.9 for the quarter and nine months ended June 30, 2019, respectively.

Pre-tax costs recorded in Costs of products sold were $5.5 and $20.7 for the quarter and nine months ended June 30, 2020, respectively, primarily related to the facility exit and restructuring related costs, discussed in Note 5, Restructuring. Pre-tax costs recorded in Costs of products sold were $12.4 and $44.1 for the quarter and the nine months ended June 30, 2019, respectively, and primarily related to the inventory fair value adjustment of $6.5 and $33.7, respectively.

For the quarter and nine months ended June 30, 2020, the Company recorded $0.2 and $1.2, respectively, in research and development. For the quarter and nine months ended June 30, 2019, the Company recorded $0.3 in research and development.

The pre-tax income of $13.2 in Other items, net in the nine months ended June 30, 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 during the nine months ended June 30, 2019. The Company also recorded interest income of $5.8 earned on the Restricted cash funds held in escrow associated with the Battery Acquisition during the nine months ended June 30, 2019. The Company also earned income related to transition services agreements of $0.8 for the nine months ended June 30, 2019. These income items were offset by $1.5 of expense to settle hedge contracts of the acquired business as well as the $0.9 loss related to the hedge contract on the expected proceeds of the Varta Divestiture.

Restructuring Costs

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 ~~existing cash~~distribution and ~~committed debt~~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 ~~ultimately consist~~be completed by December 31, 2021.

The total pre-tax expense related to the restructuring plans for the quarter and nine months ended June 30, 2020 were $7.3 and $21.0, respectively. These consisted of ~~a new term loan~~charges for employee severance, retention, related benefit costs, accelerated depreciation, asset write-offs, relocation, environmental investigatory and ~~senior notes. In addition,~~ mitigation costs, and other exit costs. The costs were reflected in Cost of products sold on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income. Costs for the quarter ended June 30, 2020 were incurred within the Americas and International segments in the amount of $6.8 and $0.5, respectively. Costs for the nine months ended June 30, 2020 were incurred within the Americas and International segments in the amount of $19.6 and $1.4, respectively.

Total pre-tax charges relating to the restructuring since inception were $33.1. At June 30, 2020, the restructuring reserve was recorded on the Consolidated (Condensed) Balance sheet in Other current liabilities of $13.2 and Other liabilities of $0.7.

Energizer ~~intends~~expects to ~~maintain its existing senior notes, maturing in 2025. The closing~~incur additional severance and related benefit costs and other exit-related costs associated with these plans of ~~this transaction is subject to various conditions and regulatory approvals, but is expected~~approximately $45 through the end of calendar 2021. Total cost savings by the end of calendar ~~2018.~~

The Company is also committed to pay a $100.0 termination fee to Spectrum if the transaction does not close by July 15, 2019, and all conditions precedent to the Company’s obligation to consummate the acquisition have otherwise been satisfied except for one or more of the regulatory approval conditions specified in the acquisition agreement.~~Success fees~~2021 are ~~due to the financial adviser of $13.0, of which $2.0 was paid in January with the remainder~~expected to be ~~paid subject~~approximately $60 to $65 annually, primarily to be realized within Cost of products sold. Realization of cost savings from the ~~closing of the transaction.~~

~~The Company incurred $5.7 in acquisition costs recorded in SG&A expense on the Consolidated Statement of Earnings~~restructuring plans began in the first quarter of ~~2018 related~~fiscal 2020.

Refer to ~~this transaction.~~Note 5 for additional discussion on our restructuring costs.

Highlights / Operating Results

Financial Results (in millions, except per share data)

Energizer reported ~~first~~third fiscal quarter ~~net~~Net earnings from continuing operations of ~~$60.4,~~$29.0, or ~~$0.98~~$0.37 per diluted ~~share. This compares~~common share, compared to ~~net earnings of $95.6,~~$9.2, or ~~$1.52~~$0.07 per diluted common share, in the prior year ~~first~~third fiscal quarter. Adjusted diluted net earnings from continuing operations per ~~diluted~~common share ~~were $1.55~~was $0.50 for the ~~first~~third fiscal quarter as compared to ~~$1.51~~$0.37 in the prior year quarter, an increase of ~~2.6%~~35.1%.

~~Earnings before income taxes,~~For the nine months ended June 30, 2020, Energizer reported Net earnings from continuing operations of $88.5, or $1.10 per diluted common share, compared to $17.7, or $0.15 per diluted common share in the prior year comparable period. Adjusted diluted net earnings from continuing operations per common share was $1.73 for the nine month period compared to the $2.07 in the prior year comparable period, a decrease of 16.4%.

Net earnings from continuing operations and Diluted ~~EPS~~net earnings from continuing operations per common share for the time periods presented were impacted by certain items related to ~~spin restructuring costs,~~ acquisition and integration costs, the loss on extinguishment of debt and the one-time impact of the ~~new U.S.~~CARES Act and the 2017 tax ~~legislation~~reform as described in the tables below. The impact of these items are provided below as a reconciliation of ~~Earning before income taxes,~~ Net earnings from continuing operations and Diluted ~~EPS~~net earnings from continuing operations per common share to ~~adjusted Earnings before income taxes, adjusted Net~~Adjusted net earnings from continuing operations and ~~adjusted Diluted EPS,~~Adjusted diluted net earnings from continuing operations per common share, which are non-GAAP measures. See disclosure on ~~non-GAAP measures~~Non-GAAP Financial Measures above.

For the Quarters Ended December 31,
(in millions, except per share data) Earnings Before Income Taxes Net Earnings Diluted EPS
2017 2016 2017 2016 2017 2016
Reported - GAAP $ 119.0
$ 134.1
$ 60.4
$ 95.6
$ 0.98
$ 1.52
Impacts: Expense (Income)
  Spin restructuring —
(1.3 ) —
(1.0 ) —
(0.02 )
  Acquisition and integration costs (1) 5.7
0.8
4.1
0.5
0.07
0.01
  One-time impact of the new U.S. tax legislation —
—
31.0
—
0.50
—
     Adjusted - Non-GAAP (2) $ 124.7
$ 133.6
$ 95.5
$ 95.1
$ 1.55
$ 1.51
Weighted average shares - Diluted

61.5
62.9


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2020		2019		2020		2019
Net earnings/(loss) attributable to common shareholders	$	25.8	$	3.0	$	(53.9)	$	(2.8)
Mandatory preferred stock dividends	(4.0)		(4.4)		(12.1)		(7.7)
Net earnings/(loss)	29.8		7.4		(41.8)		4.9
Net earnings/(loss) from discontinued operations	0.8		(1.8)		(130.3)		(12.8)
Net earnings from continuing operations	$	29.0	$	9.2	$	88.5	$	17.7
Pre-tax adjustments
Acquisition and integration (1)	11.4		28.0		47.6		159.9

Loss on extinguishment of debt (2)	—		—		4.2		—
Total adjustments, pre-tax	11.4		28.0		51.8		159.9
After tax adjustments
Acquisition and integration	7.8		22.1		35.3		129.1




Loss on extinguishment of debt	—		—		3.2		—
One-time impact of the CARES Act	1.7		—		5.1		—
One-time impact of 2017 tax reform	—		(0.8)		—		0.7
Total adjustments, after tax	9.5		21.3		43.6		129.8
Adjusted net earnings from continuing operations (3)	$	38.5	$	30.5	$	132.1	$	147.5
Mandatory preferred stock dividends	(4.0)		(4.4)		(12.1)		(7.7)
Adjusted net earnings from continuing operations attributable to common shareholders	$	34.5	$	26.1	$	120.0	$	139.8

Diluted net earnings per common share - continuing operations	$	0.37	$	0.07	$	1.10	$	0.15
Adjustments (per common share)
Acquisition and integration	0.11		0.31		0.51		1.81

Loss on extinguishment of debt	—		—		0.05		—



One time impact of the CARES Act	0.02		—		0.07		—
One-time impact of 2017 tax reform	—		(0.01)		—		0.01
Impact for diluted share calculation (4)	—		—		—		0.10
Adjusted diluted net earnings per diluted common share - continuing operations	$	0.50	$	0.37	$	1.73	$	2.07
Weighted average shares of common stock - Diluted	68.7		70.6		69.4		66.5
Adjusted Weighted average shares of common stock - Diluted (4)	68.7		70.6		69.4		71.2

(1) ~~Amounts~~Acquisition and integration costs were included in ~~SG&A~~the following lines in the ~~unaudited~~ Consolidated ~~Condensed~~(Condensed) Statement of Earnings and Comprehensive Income:


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2020		2019		2020		2019
Inventory step up (COGS)	$	—	$	6.5	$	—	$	33.7
Cost of products sold	5.5		5.9		20.7		10.4
SG&A	6.1		15.1		25.3		63.1
Research and development	0.2		0.3		1.2		0.3
Interest expense	—		—		—		65.6
Other items, net	(0.4)		0.2		0.4		(13.2)
Acquisition and integration related items	$	11.4	$	28.0	$	47.6	$	159.9

(2) This loss on extinguishment of debt is associated with the term loan refinancing which occurred in the first fiscal quarter of 2020 and was recorded in interest expense on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income.

~~(2)~~

(3) The effective tax rate for the ~~quarters~~quarter ended ~~December 31, 2017~~June 30, 2020 and ~~2016~~2019 for the Adjusted - Non-GAAP Net Earnings and Diluted EPS was ~~23.4%~~23.5% and ~~28.8%~~18.4%, respectively, as calculated utilizing the statutory rate for where the costs were incurred. The ~~net~~effective tax ~~impact associated with the non-GAAP adjustments highlighted in the table was a benefit of $29.4 and zero, respectively,~~rate for the ~~quarters~~nine months ended ~~December 31, 2017~~June 30, 2020 and ~~2016.~~2019 for the Adjusted - Non-GAAP Net Earnings and Diluted EPS was 22.9% and 20.4%, respectively, as calculated utilizing the statutory rate for where the costs were incurred.

(4) For the nine months ended June 30, 2019 calculation, the Adjusted Weighted average shares of common stock - Diluted is assuming conversion of the preferred shares as those results are more dilutive. The shares have been adjusted for the 4.7 million share conversion and the preferred dividend has been adjusted out of the Adjusted net earnings.

Highlights

Total Net Sales (In millions - Unaudited)
Quarter Ended December 31, 2017
Total Net Sales Q1 % Chg
Net sales - FY '17 $ 559.6

Organic 5.9
1.1 %
Impact of currency 7.8
1.3 %
Net sales - FY '18 $ 573.3
2.4 %


Total Net sales (In millions - Unaudited)
	For the Quarter Ended June 30, 2020						For the Nine Months Ended June 30, 2020
	$ Change		% Chg		$ Change		% Chg
Net sales - prior year	$	647.2			$	1,775.5
Organic	22.3		3.4	%	17.6		1.0	%
Impact of Battery Acquisition	—		—	%	125.5		7.1	%
Impact of Auto Care Acquisition	—		—	%	85.1		4.8	%

Change in Argentina	0.1		—	%	(0.4)		—	%
Impact of currency	(11.6)		(1.7)	%	(21.5)		(1.3)	%
Net Sales - current year	$	658.0	1.7	%	$	1,981.8	11.6	%

See non-GAAP measure disclosures above.

Net sales were ~~$573.3~~$658.0 for the ~~first~~third quarter of ~~2018,~~2020, an increase of ~~$13.7~~$10.8 as compared to the prior year quarter driven by the following items:

•Organic ~~net~~Net sales ~~were up 1.1%~~increased 3.4%, or $22.3, in the ~~first~~third fiscal quarter due to the following items:


◦	~~Favorable pricing across several markets increased net sales by 3%;~~


◦	~~Investments made for our portfolio realignment in the back half of fiscal 2017 benefited our top-line in the first fiscal quarter of 2018 accounting for 0.5% of the organic sales increase; and~~


◦	Partially offsetting the above increases in organic net sales were retailer merchandising changes in the U.S. that negatively impacted net sales by 1.3%, lapping of storm volume from prior year of 0.6% and the May 2017 divestiture of the non-core promotional sales business acquired with the auto care acquisition that negatively impacted net sales by 0.5%.

◦Increased distribution, primarily in North America, contributed 2.7% to the organic increase;

◦Increased year over year replenishment volume, primarily in North America battery sales, contributed 1.4% to the organic increase, which was almost entirely offset by the decrease in organic sales of 1.3% caused by the pandemic impact, primarily in the international developing and distributor markets; and

◦Favorable pricing added 0.6%.

•Our Argentina operations had a favorable impact on Net sales of $0.1.

•Unfavorable movement in foreign currencies resulted in decreased sales of $11.6, or 1.7%.

Net sales for the nine months ended June 30, 2020 were $1,981.8, an increase of $206.3 as compared to the prior year comparative period, driven by the following items:

•Organic net sales were up 1.0% due to the following items:

◦Increased distribution across both of our segments contributed 2.4% to the organic increase;

◦Pricing actions, slightly offset by channel and product mix in addition to increased trade investment, contributed 0.3% to the organic increase;

◦A net decline in replenishment offset the organic increase by 0.9%, which was driven by the US price increase taken in the prior year and the impacts of a competitive launch, coupled with lower replenishment volumes associated with hurricane activity in the fourth fiscal quarter of 2019. This decline was partially offset by the beneficial net impacts of COVID-19 on battery demand; and

◦Phasing of holiday activity from the first quarter to the fourth quarter of fiscal 2019 offset the organic increase by 0.8%.

•The positive impact of the acquisitions was $210.6, or 11.9%;

•The unfavorable impact due to the change in Argentina operations was $0.4; and

•Unfavorable currency impacts were ~~$7.8,~~$21.5, or 1.3%.

The above sales discussion reflects our view of the impacts of the pandemic on our business based on trends that existed prior to its escalation on a global scale. Overall, we experienced significant disruption in auto care and many of our international markets in the first part of the third quarter, while battery sales in North America experienced a consistently high level of demand throughout the third quarter. As countries and states began to reopen, we did experience recovery in auto care and international sales during the latter part of the third quarter.

Gross margin percentageon a reported basis for the ~~first~~third fiscal quarter of ~~2018~~2020 was ~~48.5% and~~40.0%, compared to 38.1% in the prior year. Excluding $5.5 of integration costs in the current quarter, adjusted gross margin was ~~flat~~40.8%, compared to 40.0% in the prior year, excluding inventory step up costs of $6.5 and acquisition and integration costs of $5.9 in the prior year. The 80 basis point increase from prior year was driven by realized synergies and favorable material pricing partially offset by operational costs related to COVID-19 of approximately $9, or 140 basis points, and unfavorable foreign currency movements of $9.3, or 70 basis points.

Gross margin percentage on a reported basis for the nine months ended June 30, 2020 was 40.4%, compared to 40.3% in the prior year comparative period. Excluding $20.7 of acquisition and integration costs in the current year, adjusted gross margin was 41.4%, compared to 42.8% in the prior year, excluding inventory step up costs of $33.7 and acquisition and integration costs of $10.4 in the prior year. The 140 basis point decrease from prior year was largely driven by the lower margin rate profile of the acquired businesses, as well as unfavorable channel and product mix, foreign currency movements, tariffs and the operational impact of COVID-19 of approximately $10. These decreases were partially offset by improved material pricing and the favorable impact of foreign currency. These items were primarily offset by less favorable overhead absorption versus the prior fiscal quarter and investments made in continuous improvement initiatives.realized synergies.

Advertising and sales promotion expense (A&P) was $37.3, or 5.7% of net sales, in the ~~first~~third fiscal quarter of ~~2018,~~2020, as compared to $34.3, or ~~6.5%~~5.3% of net sales, in the prior third fiscal quarter 2019. The increase of $3.0 was planned incremental investment in our branded product portfolio.

A&P was $106.9, or 5.4% of net sales, as compared to ~~$34.3,~~$99.9, or ~~6.1%~~5.6% of net sales, in the prior ~~period~~year comparative period. The increase of $7.0 over the prior year is driven by incremental spending of $3.5 on our acquired businesses which was primarily for product and packaging innovation and promotional support for our auto care brands, in ~~support of portfolio initiatives and holiday programs.~~addition to planned incremental investment in our branded product portfolio.

Selling, general, and administrative expense (SG&A) was ~~$99.2~~$112.8 in the ~~first~~third fiscal quarter of ~~2018,~~2020, or ~~17.3%~~17.1% of net sales, as compared to ~~$84.4,~~$127.6, or ~~15.1%~~19.7% of net sales, in the prior period. Included in the ~~first~~third fiscal quarter of 2020 and 2019 results were ~~costs of $5.7 related to~~ acquisition and integration ~~costs. Included in the prior year quarter results were~~ costs of ~~$0.8 related to acquisition~~$6.1 and ~~integration costs.~~$15.1, respectively. Excluding acquisition and integration costs, ~~in both years,~~adjusted SG&A was $93.5, an increase of $9.9 over the prior year due to our current year investments in our continuous improvement initiatives to simplify and streamline our business processes to reduce costs. SG&A, excluding acquisition and integration costs, was 16.3%$106.7, or 16.2% of net sales, as compared to ~~14.9%~~$112.5, or 17.4% of net sales, in the prior year. The decrease of $5.8 was driven by synergy realization primarily due to transition service agreement (TSA) exits and reduced spending in the quarter due in part to net COVID-19 impacts, including travel restrictions.

~~Research and Development (R&D)~~ ~~decreased to $5.3,~~SG&A was $351.0 for the nine months ended June 30, 2020, or ~~0.9%~~17.7% of net sales, ~~for the quarter ended December 31, 2017,~~ as compared to ~~$5.8,~~$373.5, or ~~1.0%~~21.0% of net sales, in the prior year comparative period. Included in the nine months ended June 30, 2020 and 2019 results were acquisition and integration costs of $25.3 and $63.1, respectively. Excluding the acquisition and integration costs, adjusted SG&A was $325.7, or 16.4% of net sales, as compared to the $310.4, or 17.5% of net sales, in the prior year. The absolute dollar increase was due to the incremental SG&A of approximately $26 from the acquired businesses in fiscal 2020 compared to fiscal 2019, offset by synergy realization and reduced spending due in part to net COVID-19 impacts, including travel restrictions. The decrease in percentage was driven by synergy realization, primarily due to TSA exits and reduced spending in the back half of the period due in part to COVID-19 impacts and restrictions.

Research and Development (R&D) was $8.4, or 1.3% of net sales, for the quarter ended June 30, 2020, as compared to $9.5, or 1.5% of net sales, in the prior year comparative period. For the nine months ended June 30, 2020, R&D was $25.6, or 1.3% of net sales, as compared to $23.7, or 1.3% of net sales in the prior year comparative period.

Interest expense was ~~$13.4~~$50.8 for the ~~first~~third fiscal quarter of ~~2018,~~2020, compared to ~~$13.3~~$51.9 for the prior year comparative period. Despite approximately $4 in incremental interest resulting from our April 2020 $250.0 bond add on offering and additional revolver draw to increase financial flexibility during the pandemic, interest expense decreased by $1.1 due to lower rates in the current year.

~~Other items, net~~ Interest expense was ~~expense of $1.3~~$149.0 for the first fiscal quarter of 2018 compared to income of $1.6 for the prior year first quarter. The current year expense primarily reflects net revaluation losses on nonfunctional currency balance sheet exposuresnine months ended June 30, 2020, and translational hedge losses offset by the impact of interest income, non-compensation related pension benefit and transactional hedge gains. The prior fiscal quarter income of $1.6 reflects the net impact of interest income, non-compensation related pension benefit and hedging contract gains offset by revaluation losses on nonfunctional currency balance sheet exposures.

~~The effective tax rate~~ ~~was 49.2% in the first three months of the current fiscal year as compared to 28.7%~~$177.3 for the prior year comparative period. Excluding the current year $4.2 loss on extinguishment of debt and the prior year interest expense and ticking fees related to the the Battery Acquisition as well as the issuance fees associated with the Battery and Auto Care Acquisitions' new debt issued in January 2019 of $65.6, the current year interest expense increased $33.1 attributed to a higher average debt balance associated with the acquisitions.

Other items, net was expense of $0.7 for the third fiscal quarter of 2020 compared to a benefit of $0.8 for the prior year third quarter. Other items, net was expense of $5.8 and a benefit of $13.9 for nine months ended June 30, 2020 and 2019, respectively.


	For the Quarter Ended June 30,						For the Nine Months Ended June 30,
	2020		2019		2020		2019
Other items, net
Interest income	$	(0.2)	$	(0.3)	$	(0.4)	$	(1.3)
Foreign currency exchange loss/(gain)	2.9		(0.3)		8.0		2.4
Pension benefit other than service costs	(0.5)		(0.7)		(1.5)		(2.1)
Other	(1.1)		0.3		(0.7)		0.3
Acquisition foreign currency loss/(gain)	—		0.9		2.2		(8.1)
Interest income on restricted cash	—		—		—		(5.8)
Transition services agreement income	(0.4)		(0.7)		(0.8)		(0.8)
Gain on sale of assets	—		—		(1.0)		—
Settlement of acquired business hedging contract	—		—		—		1.5
Total Other items, net	$	0.7	$	(0.8)	$	5.8	$	(13.9)

The effective tax rate on a year to date basis was 25.9% as compared to 30.3% in the prior year. The current year rate includes ~~a $31.0 charge~~costs related to acquisition and integration in addition to the unfavorable impact of $5.1 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. The prior year rate includes $0.7 for the one-time impact of 2017 tax reform and includes the ~~new U.S.~~impact of the disallowed transaction costs resulting from the acquisitions, which drove a higher tax ~~legislation passed~~rate in ~~December 2017.~~ the prior year.

Excluding the impact of ~~our non-GAAP~~these Non-GAAP adjustments, the year to date adjusted effective tax rate was ~~23.4%~~22.9% as compared to ~~28.8%,~~20.4% in the prior year. The ~~decrease~~increase in the rate versus prior year is ~~driven by~~due to the ~~U.S.~~country mix of earnings which drove a higher foreign tax ~~legislation and takes into account the new statutory U.S.~~ rate ~~that is now effective for fiscal year 2018.~~

~~Spin Costs~~

~~There were no costs associated with the spin transaction recorded in the first fiscal quarter of 2018~~as well as the ~~project has been completed. During the quarter ended December 31, 2016, the Company recorded $1.3~~expiration of certain tax holidays in income in spin restructuring. On a project to date basis, the total costs incurred or allocated to Energizer for the spin 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.foreign jurisdictions.

Segment Results

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.~~

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. 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 segments information, as included in the tables in Note 6,9, Segments, to the ~~unaudited~~ Consolidated ~~Condensed~~(Condensed) Financial Statements for the ~~quarter~~periods ended ~~December 31, 2017.~~

June 30, 2020 and 2019. Segment sales and ~~profitability~~Segment profit analysis for the quarter and nine months ended ~~December 31, 2017~~June 30, 2020 are presented below.

Segment Net ~~Sales~~sales (In millions)

Quarter ~~Ended December 31, 2017~~and nine months ended June 30, 2020

Quarter Ended December 31, 2017
$ Change % Chg
Americas
Net sales - FY '17 $ 365.1

Organic 7.2
2.0 %
Impact of currency 0.8
0.2 %
Net Sales - FY '18 $ 373.1
2.2 %

EMEA
Net sales - FY '17 $ 114.7

Organic (3.0 ) (2.6 )%
Impact of currency 5.9
5.1 %
Net Sales - FY '18 $ 117.6
2.5 %

Asia Pacific
Net sales - FY '17 $ 79.8

Organic 1.7
2.1 %
Impact of currency 1.1
1.4 %
Net Sales - FY '18 $ 82.6
3.5 %

Total Net Sales
Net sales - FY '17 $ 559.6

Organic 5.9
1.1 %
Impact of currency 7.8
1.3 %
Net Sales - FY '18 $ 573.3
2.4 %


	Quarter Ended June 30, 2020						Nine Months Ended June 30, 2020

	$ Change		% Chg		$ Change		% Chg
Americas
Net sales - FY '19	$	465.1			$	1,220.2
Organic	33.6		7.2	%	25.5		2.1	%
Impact of Battery Acquisition	—		—	%	107.1		8.8	%
Impact of Auto Care Acquisition	—		—	%	74.0		6.1	%

Change in Argentina	0.1		—	%	(0.4)		—	%
Impact of currency	(6.9)		(1.4)	%	(10.1)		(0.9)	%
Net sales - FY '20	$	491.9	5.8	%	$	1,416.3	16.1	%

International
Net sales - FY '19	$	182.1			$	555.3
Organic	(11.3)		(6.2)	%	(7.9)		(1.4)	%
Impact of Battery Acquisition	—		—	%	18.4		3.3	%
Impact of Auto Care Acquisition	—		—	%	11.1		2.0	%

Impact of currency	(4.7)		(2.6)	%	(11.4)		(2.1)	%
Net sales - FY '20	$	166.1	(8.8)	%	$	565.5	1.8	%

Total Net sales
Net sales - FY '19	$	647.2			$	1,775.5
Organic	22.3		3.4	%	17.6		1.0	%
Impact of Battery Acquisition	—		—	%	125.5		7.1	%
Impact of Auto Care Acquisition	—		—	%	85.1		4.8	%

Change in Argentina	0.1		—	%	(0.4)		—	%
Impact of currency	(11.6)		(1.7)	%	(21.5)		(1.3)	%
Net sales - FY '20	$	658.0	1.7	%	$	1,981.8	11.6	%

Results for the Quarter Ended ~~December 31, 2017~~June 30, 2020

Americas reported a ~~net~~Net sales increase of ~~2.2% which was positively impacted by~~5.8%. Excluding unfavorable foreign currency impact of ~~0.8,~~$6.9, or ~~0.2%. Organic~~1.4%, organic net sales increased ~~2.0% due primarily to price increases~~7.2% for the third fiscal quarter. The organic increase was driven by distribution gains in both the battery and auto categories, the beneficial net impacts of COVID-19 driven by battery sales in North America and favorable ~~net~~pricing.

International reported a Net sales decrease of 8.8%. Excluding the impact of our portfolio optimization. These amounts were partially offset by the retailer merchandising changes, lapping of storm volume and the May 2017 divestiture of the non-core promotional sales business acquired with the auto care acquisition.

~~EMEA reported net sales increased 2.5% positively impacted by~~unfavorable foreign currency movement of ~~5.1%. Organic~~$4.7, or 2.6%, organic net sales decreased ~~by 2.6%~~6.2% driven by the ~~shift~~negative impacts of ~~holiday orders into~~ the ~~fourth quarter~~pandemic across all international markets and increased trade investment. These decreases were slightly offset by increased distribution and replenishment volumes in both modern and developing markets.

Results for the Nine Months Ended June 30, 2020

Americas reported a Net sales increase of ~~fiscal 2017.~~

~~Asia Pacific reported net sales increased by 3.5%, including~~16.1%. Excluding the ~~positive~~ impact of acquisitions, which positively impacted Net sales by $181.1, or 14.9%, and unfavorable foreign currency impact of ~~1.4%. Organic~~$10.1, or 0.9%, organic net sales increased 2.1% for the nine month period. The organic increase was driven by distribution gains, the beneficial net impacts of COVID-19 and favorable pricing. Partially offsetting the organic increase was a net decline in

replenishment driven by the US price ~~increases~~increase taken in ~~several~~the prior year and the impacts of a competitive launch, coupled with lower replenishment volumes associated with hurricane activity in the fourth fiscal quarter of 2019.

International reported a Net sales increase of 1.8%. Excluding the impact of acquisitions, which positively impacted net sales by $29.5, or 5.3%, and the unfavorable foreign currency movement of $11.4, or 2.1%, organic net sales decreased 1.4% driven by the negative impacts of the pandemic and increased trade investment in modern markets. These decreases were slightly offset by increased distribution and replenishment volumes across all markets.

Segment Profit (In millions)

Quarter and Nine Months Ended ~~December 31, 2017~~June 30, 2020

Quarter Ended December 31, 2017
$ Change % Chg
Americas
Segment Profit - FY '17 $ 123.1

Organic (0.5 ) (0.4 )%
Impact of currency 0.5
0.4 %
Segment Profit - FY '18 $ 123.1
— %

EMEA
Segment Profit - FY '17 $ 26.1

Organic (4.5 ) (17.2 )%
Impact of currency 3.9
14.9 %
Segment Profit - FY '18 $ 25.5
(2.3 )%

Asia Pacific
Segment Profit - FY '17 $ 24.7

Organic (1.5 ) (6.1 )%
Impact of currency 0.5
2.1 %
Segment Profit - FY '18 $ 23.7
(4.0 )%

Total Segment Profit
Segment Profit - FY '17 $ 173.9

Organic (6.5 ) (3.7 )%
Impact of currency 4.9
2.8 %
Segment Profit - FY '18 $ 172.3
(0.9 )%


	For the Quarter Ended June 30, 2020						Nine Months Ended June 30, 2020
	$ Change		% Chg		$ Change		% Chg
Americas
Segment profit - FY '19	$	103.8			$	308.6
Organic	22.8		22.0	%	14.3		4.6	%
Impact of Battery Acquisition	—		—	%	21.8		7.1	%
Impact of Auto Care Acquisition	—		—	%	15.8		5.1	%
Change in Argentina	0.4		0.4	%	(0.5)		(0.2)	%
Impact of currency	(4.1)		(4.0)	%	(6.1)		(1.9)	%
Segment profit - FY '20	$	122.9	18.4	%	$	353.9	14.7	%

International
Segment profit - FY '19	$	41.0			$	132.0
Organic	(3.1)		(7.6)	%	(5.3)		(4.0)	%
Impact of Battery Acquisition	—		—	%	6.1		4.6	%
Impact of Auto Care Acquisition	—		—	%	1.3		1.0	%
Impact of currency	(3.1)		(7.5)	%	(6.7)		(5.1)	%
Segment profit - FY '20	$	34.8	(15.1)	%	$	127.4	(3.5)	%

Total Segment profit
Segment Profit - FY '19	$	144.8			$	440.6
Organic	19.7		13.6	%	9.0		2.0	%
Impact of Battery Acquisition	—		—	%	27.9		6.3	%
Impact of Auto Care Acquisition	—		—	%	17.1		3.9	%
Change in Argentina	0.4		0.3	%	(0.5)		(0.1)	%
Impact of currency	(7.2)		(5.0)	%	(12.8)		(2.9)	%
Segment profit - FY '20	$	157.7	8.9	%	$	481.3	9.2	%

Refer to Note 6,9, Segments, in the ~~unaudited Condensed~~ Consolidated (Condensed) Financial Statements for a reconciliation from segment profit to earnings before income taxes.

Results for the Quarter Ended ~~December 31, 2017~~June 30, 2020

Global reported segment profit ~~declined~~increased by ~~$1.6,~~$12.9, or ~~0.9%~~8.9%. The organic increase of $19.7, or 13.6%, was driven by top-line organic growth, realized synergies and improved material pricing. In addition, we experienced favorable SG&A due to reduced spending, driven in pat by COVID-19 related travel restrictions and realized synergies. Slightly offsetting the organic growth were operational costs related to COVID-19 of approximately $9, which impacted gross margin, as well as the planned higher A&P investment. Argentina operations, which had a favorable impact on segment profit, contributed $0.4, or 0.3%, and unfavorable foreign currency impacts had a negative impact of $7.2, or 5.0%.

Americas reported segment profit increased by $19.1, or 18.4%. The change in Argentina operations had a favorable impact on segment profit of $0.4, or 0.4%, while the unfavorable impact from foreign currency was $4.1. Excluding these items, organic segment profit increased by $22.8, or 22.0%, driven by top-line growth, realized synergies, improved material pricing and favorable overhead spending driven in part by net COVID-19 impacts. These increases were slightly offset by planned incremental A&P investment.

International reported segment profit decreased $6.2, or 15.1%. This was driven by the ~~favorable~~unfavorable movement in foreign currencies of ~~$4.9,~~$3.1 and organic segment profit ~~decreased $6.5,~~decrease of $3.1, or ~~3.7%~~7.6%, indriven by the ~~current fiscal period. Top-line growth in the quarter was more than~~net sales decrease and higher operational costs due to COVID-19, which impacted gross margin. These decreases were slightly offset by ~~increases~~lower A&P investment, due to timing, and lower overhead spending, driven in part by COVID-19 impacts and restrictions.

Results for the Nine Months Ended June 30, 2020

Global reported segment profit increased by $40.7, or 9.2%. The favorable impact of the acquisitions added $45.0, or 10.2% while the organic increase of $9.0, or 2.0%, was driven by the net sales increase, realized synergies, favorable material pricing, and favorable SG&A due to ~~our continuous improvement initiatives to simplify and streamline our business processes to reduce~~reduced spending driven by the pandemic. Slightly offsetting the organic growth was the negative impact of tariffs, operational costs ~~and higher A&P spending~~ related to ~~our portfolio optimization~~COVID-19 and ~~holiday programs.~~unfavorable foreign currency movements, which impacted gross margin, as well as slightly higher planned A&P investment. Our Argentina operations had an unfavorable impact on segment profit of $0.5, or 0.1% and foreign currency impacts were unfavorable by $12.8, or 2.9%.

Americas reported segment profit ~~remained flat compared to~~increased by $45.3, or 14.7%. The increase was driven by the ~~prior period inclusive~~acquisitions which contributed $37.6, or 12.2%. The change in Argentina operations had a negative impact on segment profit of $0.5, or 0.2%, while the ~~positive~~unfavorable impact from foreign currency ~~of $0.5. Organic~~was $6.1. Excluding these items, organic segment profit ~~decreased~~increased by ~~$0.5 as top-line growth was fully offset by increased A&P spending in support of portfolio initiatives and holiday programs.~~

~~EMEA reported segment profit declined $0.6 inclusive of the positive impact from foreign currency of $3.9. Organic segment profit decreased by $4.5~~$14.3, or 4.6%, driven by the ~~decrease in~~net sales ~~due to the shift of holiday orders into the fourth quarter of fiscal 2017 as well as increased~~increase, realized synergies, improved material pricing and favorable overhead spending ~~due~~driven in part by net COVID-19 impacts and restrictions. These increases were slightly offset by higher planned incremental A&P investment and operational costs related to ~~current year investments in our continuous improvement initiatives.~~COVID-19, which impacted gross margin.

~~Asia Pacific~~International reported segment profit decreased ~~$1.0.~~$4.6, or 3.5%. Excluding the ~~favorable~~positive impact ~~from~~of the acquisitions of $7.4, the movement in foreign ~~currency of $0.5,~~currencies decreased $6.7 and organic segment profit ~~declined~~decreased $5.3, or 4.0%, driven by ~~$1.5 as top-line growth was more than~~the net sales decrease and higher operational costs due to COVID-19, which impacted gross margin. These decreases were slightly offset by ~~increased~~lower A&P investment, due to timing, and lower overhead spending, ~~due to current year investments~~driven in ~~our continuous improvement initiatives.~~part by COVID-19 impacts and restrictions.

General Corporate and Global Marketing Expenses


	For the Quarter Ended June 30,									For the Nine Months Ended June 30,
	2020			2019			2020			2019
General corporate and other expenses	$	25.6		$	29.9		$	74.0		$	78.3
Global marketing expense	7.4			3.0			19.1			12.5
General corporate and global marketing expense	$	33.0		$	32.9		$	93.1		$	90.8
% of Net Sales	5.0		%	5.1		%	4.7		%	5.1		%

For the Quarter Ended December 31,
2017 2016
General corporate and other expenses $ 21.6
$ 17.2
Global marketing expense 3.2
3.0
General corporate and global marketing expense $ 24.8
$ 20.2
% of Net Sales 4.3 % 3.6 %

For the quarter ended ~~December 31, 2017,~~June 30, 2020, general corporate and other expenses were ~~$21.6, an increase~~$25.6, a decrease of ~~$4.4~~$4.3 as compared to the prior year comparative period, driven by synergy realization primarily due to ~~increased compensation~~TSA exits and reduced spending in the quarter largely driven by COVID-19 impacts and restrictions.

For the nine months ended June 30, 2020, general corporate and other expenses were $74.0, a decrease of $4.3 to prior year. The current year included additional costs from the acquired businesses of $5.6. These costs were offset by synergy realization, primarily due to TSA exits and ~~higher mark to market expense on our unfunded deferred compensation liability.~~reduced spending largely driven by COVID-19 impacts and restrictions.

For the quarter and nine months ended ~~December 31, 2017,~~June 30, 2020, global marketing expenses were ~~$3.2~~$7.4 and $19.1, respectively, compared to $3.0 and $12.5, respectively, in the prior year comparative periods. The global marketing expense represents a center led approach to managing global marketing activities in support of our brands.

Liquidity and Capital Resources

Energizer’s primary future cash needs will be centered on operating activities, working capital, strategic investments and ~~strategic investments.~~debt reductions. We believe that our future cash from operations, together with our access to capital markets, will provide adequate resources to fund our operating and financing needs. Our access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) our credit rating, (ii) the liquidity of the overall capital markets and (iii) the current state of the economy. There can be no assurances that we will continue to have access to capital markets on terms acceptable to us. See the “Risk Factors” section of our Annual Report on Form 10-K for the year ended September 30, ~~2017~~2019 filed with the Securities and Exchange Commission on November ~~14, 2017~~19, 2019, as well as in Item 1A. Risk Factors of this Form 10-Q.

Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing liquid funds. At ~~December 31, 2017,~~June 30, 2020, Energizer had ~~$454.3~~$595.6 of cash and cash equivalents, ~~substantially all~~approximately 40% of which was held outside of the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. 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 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.

~~The~~On December 17, 2018, the Company ~~has~~entered into a ~~$350.0 senior secured~~credit agreement which provided for a 5-year $400.0 revolving credit facility (Revolving Credit Facility) ~~which matures in 2020. Borrowings under the Revolving Facility~~. The borrowings will 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 credit agreement also contains customary affirmative and restrictive covenants. As of ~~December 31, 2017,~~June 30, 2020, the Company had ~~$87.5~~$200.0 of outstanding borrowings under the Revolving Credit Facility and had ~~$6.7~~$7.3 of outstanding letters of credit. Taking into account outstanding letters of credit, ~~$255.8 remains~~$192.7 remained available as of ~~December 31, 2017.~~June 30, 2020. During the year, the Company also amended its credit agreement to reduce the contractual step-down in the maximum Total Net Leverage Ratio at the end of the fourth quarter of fiscal 2021.

On April 22, 2020, the Company completed an add-on offering of $250.0 of our 6.375% Senior Notes due 2026 (2026 Notes). The 2026 Notes priced at 102.25% of principal. The Company utilized the proceeds from the add-on offering to repay indebtedness on the Revolving Credit Facility and to pay fees and expenses relating to the offering. Refer to Note 12 for additional details.

Subsequent to the quarter, on ~~January 15, 2018,~~July 1, 2020, the Company ~~entered into~~completed a ~~definitive acquisition agreement with Spectrum Brands Holdings, Inc. to acquire its global battery, lighting, and portable power business~~bond offering for $600.0 Senior Notes due in 2028 at 4.750% (2028 Notes). The Company utilized a ~~purchase price~~portion of ~~$2,000.0 in cash, subject to certain purchase price adjustments. Energizer intends~~the net proceeds from the sale of the 2028 Notes to fund the ~~acquisition through~~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 ~~combination~~cash tender offer. The Company used the remaining net proceeds from such sale, together with cash on hand, to fund the redemption of ~~existing cash~~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 ~~committed debt facilities, expected~~unpaid interest thereon to, ~~ultimately consist~~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 ~~new term loan~~total call premium for tendered and ~~senior notes. In addition, Energizer intends to maintain its existing senior~~called notes ~~maturing in 2025. The closing~~ of ~~this transaction is subject to various conditions and regulatory approvals.~~$18.3.

The Company's required debt repayments are $93.0 over the next 12 months.

While the Company ~~is also committed~~believes it had sufficient liquidity prior to ~~pay~~taking these actions to fund its operations and meet its obligations, the Company has increased its cash position as a ~~$100.0 termination fee~~precautionary measure in order to Spectrum if the transaction does not close by July 15, 2019, and all conditions precedent to the Company’s obligation to consummate the acquisition have otherwise been satisfied except for one or morepreserve financial flexibility in light of ~~the regulatory approval conditions specified~~current uncertainty in the ~~acquisition agreement. Success fees are due to~~global markets resulting from the ~~financial adviser of $13.0, of which $2.0 was paid in January with the remainder to be paid subject to the closing of the transaction.~~COVID-19 pandemic.

Operating Activities

Cash flow from operating activities from continuing operations was ~~$141.0~~$231.9 in the ~~three~~nine months ended ~~December 31, 2017,~~June 30, 2020, as compared to ~~$91.8~~$30.4 in the prior year comparative period. ~~The increase~~This change of $201.5 was primarily driven by ~~the~~higher year over year ~~improvement~~net earnings resulting from lower cash expenditures of approximately $116 associated with the Battery and Auto Care Acquisitions, most notably the payment of interest and ticking fees associated with the Term Loan facility that was utilized to fund the Battery Acquisition and the fees paid related to the issuance of the bonds to fund the Auto Care Acquisition in the prior year.

In addition, working capital ~~of $38.5. Accounts~~changes favorably impacted cash flow from operations year over year by approximately $93. These changes were driven by approximately $30 related to the agreement and final cash settlement from the Central Authority in Spain on a Spanish VAT refund payment, approximately $30 related to favorable accounts receivable collections as the Company's factoring program was more established throughout fiscal 2020 compared to the ~~main driver in the~~prior year, and approximately $35 related to working capital ~~improvement~~settlements associated with the Acquisitions as ~~the strong operating performance in the last quarter of fiscal 2017, largely~~well as higher trade and A&P accruals driven by ~~hurricane activity in the U.S., distribution gains in international markets and~~ timing of ~~holiday activity resulted in higher collections in the first fiscal quarter of 2018 as compared to 2017.~~payments and programs.

Investing Activities

Net cash used by investing activities from continuing operations was ~~$5.5~~$47.4 and ~~$0.6 in three~~$2,490.1 for the nine months ended ~~December 31, 2017~~June 30, 2020 and ~~2016,~~2019, respectively, and consisted of the following:

•Capital expenditures of ~~$5.5~~$44.4 and ~~$4.9~~$36.4 in the ~~three~~nine months ended ~~December 31, 2017~~June 30, 2020 and ~~2016,~~2019, respectively. ~~These capital expenditures were funded by cash flow~~

•Proceeds from ~~operations.~~

~~The prior year expenditures were partially offset by proceeds from the~~ sale of assets of ~~$4.3 related~~$1.5 and $0.1 in the nine months ended June 30, 2020 and 2019, respectively.

•Acquisitions, net of cash acquired was $4.5 in the nine months ended June 30, 2020. The majority of this payment was due to the ~~sale~~finalization of ~~two previously closed facilities.~~working capital adjustments with Spectrum for the Auto Care Acquisition while $0.9 was utilized to complete the CAE acquisition.

•Acquisitions, net of cash acquired was $2,453.8 in the nine months ended June 30, 2019. This included$1,518.4 for the Battery Acquisition and $935.4 for the cash portion of the Auto Care Acquisition. Net cash from discontinued operations includes the remaining $400.0 currently allocated to the purchase of the Divestment Business.

Investing cash outflows of approximately ~~$30~~$20 to ~~$35~~$30 are anticipated for the full fiscal year ~~2018~~2020 for capital expenditures relating to maintenance, product development and cost reduction ~~initiatives. Total~~investments. Additional investing cash outflows of approximately $40 to $50 are anticipated in full fiscal year 2020 for integration related capital ~~expenditures are expected~~expenditures. The Company will also weigh market conditions and other capital needs, the potential impact of COVID-19 and other factors deemed relevant, in the decisions to ~~be financed with funds generated from operations.~~prioritize or delay funding and may adjust these projected amounts if necessary.

Financing Activities

Net cash used by financing activities from continuing operations was ~~$63.9~~$115.4 for the ~~three~~nine months ended ~~December 31, 2017~~June 30, 2020 as compared to ~~$63.2~~net cash inflow from financing activities from continuing operations of $1,328.5 in the prior fiscal year comparative period. For ~~three~~the nine months ended ~~December 31, 2017,~~June 30, 2020, cash ~~flow~~ used by financing activities from continuing operations consists of the following:

•Cash proceeds from the issuance of debt with original maturities greater than 90 days of $620.6 relating to the add on offering of $250.0 of our 6.375% Senior Notes due 2026 in April 2020 and the refinancing of the 2018 Term Loans in December 2019;

•Payments of debt with maturities greater than 90 days of $770.3, related to the Term Loan refinancing in December 2019, the repayment of $345.8 of debt from the proceeds of the Varta divestiture as well as incremental payments on the 2018 Term Loan A and 2018 Term Loan B;

•Net increase in debt with original maturities of 90 days or less of ~~$6.5;~~$171.5, primarily related to borrowings on the Revolving Credit Facility;

•Dividends paid on common stock of ~~$17.6~~$64.3 (see below);

•Dividends paid on mandatory convertible preferred stock of $12.1;

•Common stock repurchases of ~~$50.0~~$45.0 at an average price of ~~$44.41~~$45.93 per share ~~(see below);~~

•Debt issuance costs of $6.1 relating to the add on offering of $250.0 of our 6.37% Senior Notes due in 2026 and the Term Loan refinancing; and

•Taxes paid for withheld share-based payments of ~~$1.8;~~$9.7.

For the nine months ended June 30, 2019, cash from financing activities from continuing operations consisted of the following:

•Cash proceeds from issuance of debt with original maturities greater than 90 days of $1,800.0 related to the funding of the 2018 Term Loans and the bonds utilized to fund the Battery and Auto Care acquisitions;

•Net proceeds from the issuance of common stock of $205.3 utilized to fund the Auto Care Acquisition;

•Net proceeds from the issuance of Mandatory Preferred Convertible Stock of $199.5 utilized to fund the Auto Care Acquisition;

•Payments of debt with maturities greater than 90 days of ~~$1.0~~.

$513.8, primarily related to the repayment of our Term Loan due in 2022 and an additional $125.0 payment on the 2018 Term Loan A and 2018 Term Loan B;

~~For the three months ended December 31, 2016, cash used by financing activities consisted of the following:~~

•Net decrease in debt with original maturities of 90 days or less of ~~$27.9,~~$204.5, primarily related to ~~the~~ repayment of

borrowings on our Revolving Credit Facility;

•Dividends paid of ~~$18.1;~~$61.7;

•Dividends paid on mandatory convertible preferred stock of $4.0;

•Common stock ~~repurchases~~purchased of ~~$8.1~~$45.0 at an average price of ~~$44.43 per share;~~$43.46;

•Debt issuance costs of $40.1; and

•Taxes paid for withheld share-based payments of ~~$8.1; and~~$7.2.

~~Payments of debt with maturities greater than 90 days of $1.0.~~

Dividends

On November ~~13, 2017,~~11, 2019, the Board of Directors declared a dividend for the first quarter of fiscal ~~2018~~2020 of ~~$0.29~~$0.30 per ~~share of~~ common stock. The dividend was paid on December 14, 2017 to shareholders on record as of November 30, 2017 and totaled $17.3. The incremental dividend payments of $0.3 made in the first three months of 2018 were related to restricted stock awards that vested during November 2017.

~~Subsequent to the fiscal quarter end, on January 29, 2018, the Board of Directors declared a dividend for the second quarter of 2018 of $0.29 per~~ share of common stock, payable on ~~March 13, 2018~~December 17, 2019, to all shareholders of record as of the close of business on November 26, 2019. On January 27, 2020, the Board of Directors declared a cash dividend for the second quarter of fiscal 2020 of $0.30 per common share of common stock, payable on March 18, 2020, to all shareholders of record as of the close of business on February 22, 2020. On April 27, 2020, the Board of Directors declared a cash dividend for the third quarter of 2020 of $0.30 per share of common stock, payable on June 10, 2020, to all shareholders of record as of the close of business May 20, ~~2018.~~2020.

The Company also paid a cash dividend of $1.875 per share of MCPS on October 15, 2019 which had been declared in fiscal 2019. On November 11, 2019, the Board of Directors declared a cash dividend of $1.875 per

share of MCPS to all shareholders of record as of the close of January 1, 2020, which was paid on January 15, 2020. On January 27, 2020, the Board of Directors declared a cash dividend of $1.875 per share of MCPS to all shareholders of record as of the close of April 1, 2020, which was paid on April 15, 2020. On April 27, 2020, the Board of Directors declared a cash dividend of $1.875 per share of MCPS to all shareholders of record as of the close of July 1, 2020. This dividend was accrued at June 30, 2020 and was paid on July 15, 2020.

Subsequent to the end of the fiscal quarter, on July 27, 2020, the Board of Directors declared a cash dividend for the fourth quarter of 2020 of $0.30 per share of common stock, payable on September 10, 2020, to all shareholders of record as of the close of business August 20, 2020.

Subsequent to the end of the fiscal quarter, on July 27, 2020, the Board of Directors declared a cash dividend of $1.875 per share of MCPS, payable on October 15, 2020, to all shareholders of record as of the close of business on October 1, 2020.

Share Repurchases

In July 2015, the Company's Board of Directors approved an authorization for the Company to acquire up to 7.5 million shares of its common stock. During the ~~three~~nine months ended ~~December 31, 2017,~~June 30, 2020, the Company repurchased ~~1,126,379~~980,136 shares for $45.0, at an average price of ~~$44.41~~$45.93 per share, ~~or $50.0,~~ under this authorization. Future share ~~repurchase,~~repurchases, if any, will be determined by the Company based on its evaluation of the market conditions, capital allocation objectives, legal and regulatory requirements and other factors.

~~From July 2015 and~~ Share repurchases may be effected through ~~the date of this filing, a total of 3.3 million shares were repurchased on the~~ open market ~~at an average price~~purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of ~~$42.17 under~~Rule 10b5-1 of the ~~current share~~Exchange Act.

The timing, declaration, amount and payment of future dividends to shareholders or repurchases of the Company’s Common stock will fall within the discretion of our Board of Directors. The Board’s decisions regarding the payment of dividends or repurchase ~~authorization. At January 31, 2018, the date~~ of ~~this filing, 4.2 million~~ shares ~~remain available for repurchase.~~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.

Other Matters

Environmental Matters

Accrued environmental costs at ~~December 31, 2017~~June 30, 2020 were ~~$5.2.~~$8.4. It is difficult to quantify with certainty the cost of environmental matters, particularly remediation and future capital expenditures for environmental control equipment. Total environmental capital expenditures and operating expenses are not expected to have a material effect on our total capital and operating expenditures, earnings or competitive position. However, current environmental spending estimates could be modified as a result of changes in our plans or our understanding of underlying facts, changes in legal requirements, including any requirements related to global climate change, or other factors.

Contractual Obligations

A summary of Energizer's significant contractual obligations at ~~December 31, 2017~~June 30, 2020 is ~~show~~shown below:

Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years
Long term debt, including current maturities $ 991.0
$ 4.0
$ 8.0
$ 379.0
$ 600.0
Interest on long-term debt (1) 310.3
27.2
94.0
90.1
99.0
Notes payable 110.5
110.5
—
—
—
Operating leases 55.0
9.4
20.4
8.1
17.1
Pension plans (2) 7.7
7.7
—
—
—
Purchase obligations and other (3) 98.2
48.6
49.6
—
—
Mandatory transition tax 30.0
2.6
4.7
9.2
13.5
Total $ 1,602.7
$ 210.0
$ 176.7
$ 486.4
$ 729.6


	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Long-term debt, including current maturities	$	3,335.9	$	91.3	$	253.5	$	620.0	$	2,371.1

Interest on long-term debt (1)	1,085.1		92.0		354.9		335.8		302.4
Notes payable	205.4		205.4		—		—
Operating leases (2)	182.9		4.6		35.6		32.2		110.5
Capital leases (3)	90.3		1.2		9.3		9.0		70.8
Pension plans (4)	2.6		2.6		—		—		—
Purchase obligations and other (5)	24.8		15.3		9.5		—		—
Mandatory transition tax	16.7		—		—		9.4		7.3
Total	$	4,943.7	$	412.4	$	662.8	$	1,006.4	$	2,862.1

(1) The above table is based upon the debt balance and LIBOR rate as of ~~December 31, 2017. In March 2017,~~June 30, 2020. Energizer ~~entered into~~has 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% and an interest rate swap agreement that fixed the variable benchmark component (LIBOR) on $400 of variable rate debt at 2.47%.

(2) Operating lease payments include the net present value of the lease obligation of $126.9 as well as the imputed interest included in the payment of $56.

(3) Capital lease payments include the full capital leases obligation of $46.1 as well as the interest included in the payment of $44.2.

(4) Globally, total expected pension contributions for the Company for fiscal year ~~2018~~2020 are estimated to be ~~$8.9.~~$5.7. The Company has made payments of ~~$1.2~~$3.1 year to date. The projected payments beyond fiscal year ~~2018~~2021 are not currently estimable.

~~(3)~~(5) 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.

Energizer is also party to various service and supply contracts that generally extend approximately one to three months. These arrangements are primarily individual, short-term purchase orders for routine goods and services at market prices, which are part of our normal operations and are reflected in historical operating cash flow trends. These contracts can generally be canceled at our option at any time. We do not believe such arrangements will adversely affect our liquidity position.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk Sensitive Instruments and Positions

The market risk inherent in the Company's financial instruments’ positions represents the potential loss arising from adverse changes in currency rates, commodity prices and interest rates. The following risk management discussion and the estimated amounts generated from the sensitivity analysis are forward-looking statements of market risk assuming certain adverse market conditions occur. The Company's derivatives are used only for identifiable exposures, and we have not entered into hedges for trading purposes where the sole objective is to generate profits.

Derivatives Designated as Cash Flow Hedging Relationships

A significant share 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, strengthening of currencies relative to the U.S. dollar can improve reported results. 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.

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 foreign affiliates, which have the largest exposure 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 ~~December 31, 2017~~June 30, 2020 and September 30, ~~2017,~~2019, Energizer had an unrealized pre-tax loss of ~~$4.2~~$1.2 and ~~$5.8,~~unrealized pre-tax gain of $4.5, respectively, on these forward currency contracts accounted for as cash flow hedges, included in Accumulated other comprehensive loss on the ~~Unaudited Condensed~~ Consolidated (Condensed) Balance Sheets. Assuming foreign exchange rates versus the U.S. dollar remain at ~~December 31, 2017~~June 30, 2020 levels over the next twelve months, ~~$4.1~~$1.0 of the pre-tax loss included in Accumulated other comprehensive loss at ~~December 31, 2017,~~June 30, 2020 is expected to be ~~included~~recognized in earnings. Contract maturities for these hedges extend into fiscal year ~~2019.~~2021.

Derivatives Not Designated as Cash Flow Hedging Relationships

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 an exchange 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.

The Company enters into foreign currency derivative contracts which are not designated as cash flow hedges for accounting purposes to hedge balance sheet exposures. Any gains or losses on these contracts are expected to be offset by exchange gains or losses on the underlying exposures, thus they are not subject to significant market risk. The change in estimated fair value of the foreign currency contracts for the ~~quarter~~quarters ended ~~December 31, 2017~~June 30, 2020 and 2019 resulted in ~~income~~a loss of ~~$0.3~~$0.6 and ~~expense~~$1.3, respectively, and a loss of ~~$1.9~~$2.2 and $0.2 for the ~~quarter~~nine months ended ~~December 31, 2016~~June 30, 2020 and ~~was~~2019, respectively. These losses were recorded in Other items, net on the ~~unaudited~~ Consolidated (Condensed) Statements of Earnings and Comprehensive ~~Income (Condensed).~~Income.

Commodity Price Exposure

The Company uses raw materials that are subject to price volatility. ~~The~~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 ~~raw~~ materials and commodities. ~~At December 31, 2017, there~~

The Company began entering into hedging contract on zinc purchases in fiscal 2019. The contracts are determined to be cash flow hedges and qualify for hedge accounting. The contract maturity for these hedges extend into 2022. There were nonineteen open ~~derivative or hedging instruments for future purchases~~contracts at June 30, 2020, with a total notional value of ~~raw materials or commodities.~~approximately $51. The pre-tax loss recognized on the zinc contracts was $3.5 at June 30, 2020 and $1.0 at September 30, 2019, and was included in Accumulated other comprehensive loss on the Consolidated (Condensed) Balance Sheet.

Interest Rate Exposure

The Company has interest rate risk with respect to interest expense on variable rate debt. At ~~December 31, 2017,~~June 30, 2020, Energizer had variable rate debt outstanding with ~~an original~~a principal balance of ~~$400.0~~$855.7 under the refinanced 2018 and 2019 Term ~~Loan.~~Loans and the Revolving Credit Facility. In March 2017, the Company ~~also~~ 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 of $400.0 at an interest rate of 2.47%. Beginning April 1, 2019, the notional amount decreases $50.0 each quarter until its termination date of December 31, 2020.

For the quarter ended ~~December 31, 2017,~~June 30, 2020, our weighted average interest rate on variable rate debt, inclusive of the interest rate swap, was ~~3.42%~~3.51%.

Argentina Currency Exposure and Hyperinflation

Effective July 1, 2018, the financial statements for our Argentina subsidiary were 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 of June 2018. If a subsidiary is considered to be in 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. It is difficult to determine what continuing impact the use of highly inflationary accounting for Argentina may have on our consolidated financial statements as such impact is dependent upon movements in the applicable exchange rates between the local currency and the U.S. dollar and the amount of monetary assets and liabilities included in our affiliates' balance sheet.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain a comprehensive set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported accurately and within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to Energizer's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Based on that evaluation performed, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of ~~December 31, 2017,~~June 30, 2020, to provide reasonable assurance of the achievement of these objectives. Notwithstanding the foregoing, there can be no assurance that the Company's disclosure controls and procedures will detect or uncover all failures of persons within the Company and its consolidated subsidiaries to report material information otherwise required to be set forth in the Company's reports.

~~They~~The Chief Executive Officer and Chief Financial Officer have also determined in their evaluation that there was no change in the Company's internal control over financial reporting during the quarter ended ~~December 31, 2017~~June 30, 2020 that has materially affected or is reasonably likely to materially affect the Company's internal control over financial reporting.

PART II -- OTHER INFORMATION

Item 1. 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 and other legal proceedings on an ongoing basis and follow appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies where the incurrence of a loss is probable and 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, when taking into account established accruals for estimated liabilities.

Item 1A. Risk Factors

Our Annual Report on Form 10-K for the year ended September 30, ~~2017,~~2019, which was filed with the Securities and Exchange Commission on November ~~14, 2017,~~19, 2019, contains a detailed discussion of risk factors that could materially adversely affect our business, our operating results or our financial condition. ~~There have been no material changes~~

Due to the events that occurred during fiscal 2020 relating to the COVID-19 global pandemic, we filed an additional risk factor that should be considered when reviewing our financial information in addition to the risk factors ~~included~~in Item 1A filed on our Annual Report on From 10-K for the year ended September 30, 2019. The additional risk factor is presented below:

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 the novel coronavirus (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 the Company, 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;

•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.

Our management is focused on mitigating COVID-19, which has required and will continue to require, a large investment of time and resources across our enterprise. We expect to expend all necessary efforts to ensure the business continuity of our operations. 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. 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 delay our growth or impact business plan. However, it may be that despite our efforts to manage and remedy these impacts to the Company, the ultimate impact may depend on factors beyond our knowledge or control, including the duration and severity of any widespread public health concern as well as third-party actions, including governments and our business partners upon which we rely, taken to contain the spread and mitigate the public health effects of such concern.

In addition, we cannot predict the impact that COVID-19 will have on our customers, suppliers, vendors and other business partners, and each of their financial conditions; however, any material effect on these parties could adversely impact us. The impact of COVID-19 may also exacerbate other risks discussed in this “Risk Factors” section as well as in Item 1A. Risk Factors in our Annual Report on Form 10-K, ~~for the year ended September 30, 2017, except for the addition~~any of ~~the following:~~

~~Risks Related to the Acquisition of the Global Battery, Lighting, and Portable Power Business of Spectrum Brands Holdings, Inc. (the “Acquisition”)~~

The pending Acquisition is subject to the satisfaction of certain conditions, including obtaining required regulatory approvals, and may not be consummated, and if not consummated under certain circumstances, we may be subject to monetary or other damages under the acquisition agreement.

On January 16, 2018, we announced that we had entered into a definitive acquisition agreement to acquire the global battery, lighting, and portable power business (the “Business”) of Spectrum Brands Holdings, Inc. (“Spectrum”). The consummation of the Acquisition is subject to certain customary conditions, including, among other things, (i) the absence ofwhich could have a material ~~adverse~~ effect on ~~the Business, (ii) the expiration or termination~~us, including risks such as those relating to our high level of required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), (iii) the receipt of certain other antitrust approvals in certain specified foreign jurisdictions (the conditions contained in (ii) and (iii) together, the “Antitrust Conditions”), (iv) the accuracy of the representations and warranties of the parties (generally subjectindebtedness, our need to a customary material adverse effect standard (as described in the acquisition agreement) or other customary materiality qualifications), (v) the absence of governmental restrictions on the consummation of the Acquisition in certain jurisdictions, and (vi) material compliance by the parties with their respective covenants and agreements under the acquisition agreement.

~~Many of the closing conditions are not within~~generate sufficient cash flows to service our control, and there can be no assurance that the closing conditions for the Acquisition will be satisfied in a timely manner, or at all. Any delay could cause us not to realize some or all of the cost savings, synergies and other benefits that we expect to achieve if the Acquisition were to be successfully completed within its expected time frame. If any of these conditions are not satisfied or waived prior to July 15, 2019 (the “Termination Date”), it is possible that the acquisition agreement may be terminated. Further, if the Acquisition has not been consummated by the Termination Date and all conditions precedent to the Company’s obligation to consummate the Acquisition have otherwise been satisfied except for one or more of the Antitrust Conditions, then the Company would be required to pay Spectrum a termination fee of $100 million.

We may be unable to obtain the regulatory clearances required to complete the Acquisition or, in order to do so, we or Spectrum may be required to comply with material restrictions or satisfy material conditions.

The Acquisition is subject to review by the U.S. Department of Justice and the Federal Trade Commission under the HSR Act, and other regulatory agencies. The closing of the Acquisition is subject to the condition that the applicable waiting period, and any applicable extensions thereof, under the HSR Act have expired or been duly terminated, and that certain other antitrust approvals in specified foreign jurisdictions have been received. We cannot provide any assurance that all required antitrust clearances will be obtained. There can be no assurance as to the cost, scope or impact of the actions that may be required to obtain antitrust approval. In addition, the acquisition agreement provides that we are required to commit to dispositions of assets up to a certain amount in order to obtain regulatory clearance. If we are required to or otherwise decide to take such actions in order to close the Acquisition, it could be detrimental to the combined organization following the consummation of the Acquisition. Furthermore, these actions could have the effect of delaying or preventing completion of the proposed Acquisition or imposing additional costs on or limiting the revenues or cash of the combined organization following the consummation of the Acquisition. However, if certain antitrust clearances are not obtained and the acquisition agreement is terminated under specified circumstances, we could be liable to Spectrum for a termination fee of $100 million.

Even if the parties receive early termination of the statutory waiting period under the HSR Act or the waiting period required expires, the U.S. Department of Justice, the Federal Trade Commission, or other regulatory authorities could take action under the antitrust laws to prevent or rescind the Acquisition, require the divestiture of assets or seek other remedies. Additionally, state attorneys general could seek to block or challenge the Acquisition as they deem necessary or desirable in the public interest at any time, including after completion of the transaction. In addition, in some circumstances, a third party could initiate a private action under antitrust laws challenging or seeking to enjoin the merger, before or after it is completed. We may not prevail and may incur significant costs in defending or settling any action under the antitrust laws.

~~Our~~ indebtedness ~~following the completion of the Acquisition will be significant and could adversely affect our business~~ and our ability to ~~meet~~comply with the covenants contained in the agreements that govern our ~~obligations,~~indebtedness. This situation is changing rapidly and ~~if sufficient financing on favorable terms or other sources of capital~~additional impacts may arise that we are not ~~available,~~aware of currently. Even after the COVID-19 outbreak has subsided, we may ~~be subject~~continue to ~~significant monetary or other damages under the Acquisition Agreement.~~

~~We currently expect~~experience materially adverse impacts to incur indebtedness in excess of $2 billion to finance the Acquisition. Interest costs related to this debt or other debt we may incur in connection with the Acquisition will be significant. Our new indebtedness may contain negative or financial covenants that would limit our operational flexibility. Our increased level of indebtedness could reduce funds available for additional acquisitions or other business purposes, restrict our financial and operating flexibility, or create competitive disadvantages compared to other companies with lower debt levels. This in turn may reduce our flexibility in responding to changes in our businesses and in our industry.

Additionally, although we have obtained financing commitments with respect to the Acquisition in an amount which we believe would be sufficient to allow us to complete the transaction, the consummation of the financing pursuant to these commitments is subject to conditions that may not be satisfied. Our ability to obtain any financing to fund a portion of the purchase price is not a condition to closing under the acquisition agreement. However, if we are unable to obtain sufficient financing on favorable terms or experience a significant diminution of our existing cash and cash equivalents or other sources of capital, and as a result we do not have sufficient funds to complete the Acquisition, we may be subject to monetary or other damages under the acquisition agreement as a result of our failure to complete the Acquisition.

~~We may be unable to integrate the Business successfully and realize the anticipated benefits of the Acquisition.~~

The pending Acquisition involves the combination of two companies that have operated independently. We will be required to devote significant management attention and resources to integrating business practices, cultures and operations of each business. Potential difficulties we may encounter as part of the integration process include the following:

~~the inability to successfully combine our respective businesses in a manner that permits us to achieve the cost savings, synergies and other anticipated benefits from the Acquisition;~~

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

~~difficulties in retaining key management and other key employees;~~

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

potential unknown liabilities, liabilities that are significantly larger than we currently anticipate, and unforeseen increased expenses or delays associated with the Acquisition, including cash costs to integrate the two businesses that may exceed the cash costs that we currently anticipate.

~~Any one of these factors could result in increased costs, decreases in the amount of anticipated benefits and diversion of management’s attention, which could materially impact~~ our business financial condition and results of operations. In addition, even if we are able to integrate the Business successfully, the anticipated benefits of the pending Acquisition may not be realized fully, or at all, or may take longer to realize than expected.

~~Failure to complete the Acquisition could impact our stock price and our future business and financial results.~~

If the Acquisition is not completed, our ongoing business and financial results may be adversely affected and we will be subject to a number of risks, including the following: depending on the reasons for the failure to complete the Acquisition, we could be liable to Spectrum for monetary or other damages in connection with the termination or breach of the acquisition agreement, including a termination fee of $100 million; we have dedicated significant time and resources, financial and otherwise, in planning for the Acquisition and the associated integration, of which we would lose the benefit if the Acquisition is not completed; we are responsible for certain transaction costs relating to the Acquisition, whether or not the Acquisition is completed; while the acquisition agreement is in force, we are subject to certain restrictions on the conduct of our business, including our ability to make any other significant acquisition which would reasonably be expected to delay, hinder or otherwise obstruct the consummation of the Acquisition, which restrictions may adversely affect our ability to execute certain of our business strategies; and matters relating to the Acquisition (including integration planning) may require substantial commitments of time and resources by our management, whether or not the Acquisition is completed, which could otherwise have been devoted to other opportunities that may have been beneficial to us.

In addition, if the Acquisition is not completed, we may experience negative reactions from the financial markets and from our customers and employees. We also may be subject to litigation related to any failure to complete the Acquisition or to enforcement proceedings commenced against us to perform our obligations under the acquisition agreement. If the Acquisition is not completed, these risks may materialize and may adversely affect our business, financial results and financial condition, as well as the price of our common stock.

~~While the Acquisition is pending, we and Spectrum will be subject to business uncertainties that could adversely affect our respective businesses.~~

Our success following the Acquisition will depend in part upon the ability of us and Spectrum to maintain our respective business relationships. Uncertainty about the effect of the Acquisition on customers, suppliers, employees and other constituencies may have a material adverse effect on us and the Business. Customers, suppliers and others who deal with us or Spectrum may delay or defer business decisions, decide to terminate, modify or renegotiate their relationships or take other actions as a result of the ~~Acquisition~~virus’s global economic impact, including the availability of credit, adverse impacts on our liquidity and the impacts of any recession that ~~could negatively affect~~has occurred or may occur in the revenues, earnings and cash flows of the Company or the Business. If we are unable to maintain these business and operational relationships, our financial position, results of operations or cash flows could be materially affected.future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table reports purchases of equity securities during the ~~first~~third quarter of fiscal ~~2018~~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 (2)	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 (2)
October 1 - October 31	—	$	—	—	5,278,002
November 1 - November 30	1,167,170	$	44.38	1,126,379	4,151,623
December 1 - December 31	—	—		—	4,151,623
April 1 - April 30						April 1 - April 30	—	—		—	1,822,655
May 1 - May 31						May 1 - May 31	—	$	—	—	1,822,655
June 1 - June 30						June 1 - June 30	787	$	46.29	—	1,822,655
Total	1,167,170	$	44.38	1,126,379		Total	787	$	46.29	—	1,822,655

(1) ~~40,791~~787 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.

(2) On July 1, 2015, the Board of Directors approved a share repurchase authorization for the repurchase of up to 7.5 million shares. ~~1,126,379~~No shares were repurchased on the open market during the quarter under this share repurchase authorization.

Item 6. Exhibits

See the Exhibit Index hereto.

~~SIGNATURES~~

~~Pursuant to the requirements 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.~~

		~~Registrant~~

		~~By:~~	~~/s/ Timothy W. Gorman~~
			~~Timothy W. Gorman~~
			~~Executive Vice President and Chief Financial Officer~~



~~Date:~~	~~January 31, 2018~~

EXHIBIT INDEX

The exhibits below are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.



Exhibit No.						Description of Exhibit
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**						Employee 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 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 by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed June 30, 2015).

2.6**†						Agreement and Plan of Merger, dated as of May 24, 2016, by and among the Company, Energizer Reliance, Inc., Trivest Partners V, L.P., and HandStands Holding Corporation (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed May 27, 2016).

2.7**†						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).

2.8**†						Amended and Restated Acquisition Agreement, dated as of November 15, 2018, by and between Energizer Holdings, Inc. and Spectrum Brands Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed November 15, 2018).

2.9**†						Acquisition Agreement, dated as of November 15, 2018, by and 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).

2.10**†						Acquisition Agreement, dated May 29, 2019, between Energizer Holdings, Inc. and VARTA Aktiengesellschaft (Disclosure Letter and certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of the omitted Disclosure Letter and certain schedules and exhibits upon request) (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on May 29, 2019).

3.1						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 29, 2018).

3.2						Third Amended and Restated Bylaws of Energizer Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed January 29, 2018).


~~10.1~~3.3						~~Commitment Letter, dated~~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 ~~15, 2018, by and among the Company, Barclays Bank PLC and JPMorgan Chase Bank, N.A.~~17, 2019 (incorporated by reference to Exhibit ~~10.1~~3.1 to the Company's Current Report on Form 8-K filed January ~~16, 2018)~~18, 2019).

4.1						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						Form of 4.750% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2 to the Company's current report on Form 8-K filed July 1, 2020).

4.3						Supplemental Indenture, dated June 30, 2020, to the Indenture dated June 1, 2015, 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 July 1, 2020).

10.1						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).

























31(i)*						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(ii)*						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(i)*						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(ii)*						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.

~~101~~101.INS*						~~Attached~~Inline XBRL Instance Document - the instance document does not appear in the 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.

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 ~~Exhibit 101 to this Quarterly Report on Form 10-Q are the following documents formatted in eXtensible Business Reporting Language (XBRL): (i) the unaudited Consolidated Statements of Earnings~~Inline XBRL and Comprehensive Income, (ii) the unaudited Consolidated Balance Sheets, (iii) the unaudited Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements (Condensed). The financial information contained in ~~the XBRL-related documents is “unaudited” and “unreviewed.”~~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† 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 ~~management contract~~specified date, are modified or ~~compensatory plan~~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 ~~arrangement.~~

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.

SIGNATURES

Pursuant to the requirements 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.

Registrant

By:

/s/ Timothy W. Gorman

Timothy W. Gorman

Executive Vice President and Chief Financial Officer

Date:

August 5, 2020


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	ENR	New York Stock Exchange
7.50% Series A Mandatory Convertible Preferred Stock, par value $.01 per share	ENR PRA	New York Stock Exchange



INDEX
			Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Consolidated Statements of Earnings and Comprehensive Income (Condensed) for the Quarters and Nine Months Ended ~~December 31, 2017~~June 30, 2020 and ~~2016~~2019			34

Consolidated Balance Sheets (Condensed) as of ~~December 31, 2017~~June 30, 2020 and September 30, ~~2017~~2019			45

Consolidated Statements of Cash Flows (Condensed) for the ~~Three~~Nine Months Ended ~~December 31, 2017~~June 30, 2020 and ~~2016~~2019			56

Consolidated Statements of Shareholders' Equity/(Deficit) (Condensed) for the Nine Months Ended June 30, 2020 and 2019			7

Notes to Consolidated (Condensed) Financial Statements			69

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2138

Item 3. Quantitative and Qualitative Disclosures About Market Risk			3255

Item 4. Controls and Procedures			3357

PART II — OTHER INFORMATION

Item 1. Legal Proceedings			3458

Item 1A. Risk Factors			3458

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3660

Item 6. Exhibits			3760

~~SIGNATURES~~EXHIBIT INDEX			3861

~~EXHIBIT INDEX~~SIGNATURES			3964



	December 31, 2017		September 30, 2017
Americas	$	510.0	$	533.9
EMEA	246.3		240.3
Asia Pacific	489.8		457.9
Total segment assets	$	1,246.1	$	1,232.1
Corporate	67.0		137.7
Goodwill and other intangible assets	451.0		453.8
Total assets	$	1,764.1	$	1,823.6


	For the Nine Months Ended June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	14.6
Operating cash flows from finance leases	2.2
Financing cash flows from finance leases	1.0

Non-cash increase in lease assets and lease liabilities:
Operating leases (1) (2)	$	86.0



	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks	$	40.1	$	4.0	$	36.1
Customer relationships	84.4		8.8		75.6
Patents	34.5		3.8		30.7
Non-compete	0.5		0.2		0.3
Total intangible assets at December 31, 2017	$	159.5	$	16.8	$	142.7



(Mark One)
x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Assets	December 31, 2017			September 30, 2017
Current assets
Cash and cash equivalents	$	454.3		$	378.0
Trade receivables, less allowance for doubtful accounts of $6.1 and $5.8, respectively	214.8			230.2
Inventories	276.2			317.1
Other current assets	93.7			94.9
Total current assets	1,039.0			1,020.2
Property, plant and equipment, net	171.7			176.5
Goodwill	230.1			230.0
Other intangible assets, net	220.9			223.8
Deferred tax asset	34.1			47.7
Other assets	68.3			125.4
Total assets	$	1,764.1		$	1,823.6

Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt	$	4.0		$	4.0
Note payable	110.5			104.1
Accounts payable	190.8			219.3
Other current liabilities	241.6			254.6
Total current liabilities	546.9			582.0
Long-term debt	977.9			978.5
Other liabilities	205.6			178.0
Total liabilities	1,730.4			1,738.5
Shareholders' equity
Common stock	0.6			0.6
Additional paid-in capital	198.7			196.7
Retained earnings	180.4			198.7
Treasury stock	(118.3		)	(72.1		)
Accumulated other comprehensive loss	(227.7		)	(238.8		)
Total shareholders' equity	33.7			85.1
Total liabilities and shareholders' equity	$	1,764.1		$	1,823.6



	For the Three Months Ended December 31,
	2017			2016
Cash Flow from Operating Activities
Net earnings	$	60.4		$	95.6
Depreciation and amortization	12.0			10.6
Deferred income taxes	12.2			4.8
Share-based compensation expense	6.7			5.2
Mandatory transition tax	30.0			—
Non-cash items included in income, net	3.0			(0.4		)
Other, net	0.1			(2.1		)
Changes in current assets and liabilities used in operations	16.6			(21.9		)
Net cash from operating activities	141.0			91.8

Cash Flow from Investing Activities
Capital expenditures	(5.5		)	(4.9		)
Proceeds from sale of assets	—			4.3
Net cash used by investing activities	(5.5		)	(0.6		)

Cash Flow from Financing Activities
Payments on debt with maturities greater than 90 days	(1.0		)	(1.0		)
Net increase/(decrease) in debt with original maturities of 90 days or less	6.5			(27.9		)
Dividends paid	(17.6		)	(18.1		)
Common stock purchased	(50.0		)	(8.1		)
Taxes paid for withheld share-based payments	(1.8		)	(8.1		)
Net cash used by financing activities	(63.9		)	(63.2		)

Effect of exchange rate changes on cash	4.7			(17.6		)

Net increase in cash and cash equivalents	76.3			10.4
Cash and cash equivalents, beginning of period	378.0			287.3
Cash and cash equivalents, end of period	$	454.3		$	297.7



						Utilized
	October 1, 2016		Charge to Income			Cash			Non-Cash		December, 2016
Severance and termination related costs	$	2.8	$	—		$	(1.8	)	$	—	$	1.0
Contract termination costs	3.6		—			(0.3		)	—		3.3
Net gain on asset sales	—		(1.3		)	1.3			—		—
Total	$	6.4	$	(1.3	)	$	(0.8	)	$	—	$	4.3



(in millions, except per share data)
	For the Quarter Ended December 31,
	2017		2016
Net earnings	$	60.4	$	95.6
Basic average shares outstanding	60.2		61.8
Effect of dilutive restricted stock equivalents	0.4		0.6
Effect of dilutive performance shares	0.9		0.5
Diluted average shares outstanding	61.5		62.9
Basic earnings per common share	$	1.00	$	1.55
Diluted earnings per common share	$	0.98	$	1.52


Balance Sheet Location	June 30, 2020
Operating Leases:
Operating lease asset	$	123.0

Operating lease liabilities - current	14.3
Operating lease liabilities	112.6
Total Operating Lease Liabilities	$	126.9

Weighted-average remaining lease term (in years)	16.1
Weighted-average discount rate	4.2		%

Finance Leases:
Property, plant and equipment, net	$	45.7

Current portion of capital leases	1.7
Long-term debt	44.4
Total Finance Lease Liabilities	$	46.1

Weighted Average remaining lease term (in years)	20.6
Weighted-average discount rate	6.8		%


	For the Quarter Ended June 30, 2020		For the Nine Months Ended June 30, 2020
Operating lease cost	$	5.4	$	14.9
Finance lease cost:
Amortization of assets	0.8		2.4
Interest on lease liabilities	0.8		2.3
Variable lease costs	1.4		2.5
Total lease costs	$	8.4	$	22.1


	Operating Leases		Finance Leases
2020	$	4.6	$	1.2
2021	18.2		4.6
2022	17.4		4.7
2023	16.2		4.6
2024	16.0		4.4
Thereafter	110.5		70.8
Total lease payments	182.9		90.3

Less: Imputed interest	(56.0)		(44.2)
Present value of lease liabilities	$	126.9	$	46.1


	June 30, 2020		September 30, 2019
2019 Senior Secured Term Loan A Facility Due 2022	$	342.2	$	—
Senior Secured Term Loan A Facility due 2021	—		77.5
Senior Secured Term Loan B Facility due 2025	313.5		982.5
5.50% Senior Notes due 2025	600.0		600.0
6.375% Senior Notes due 2026	750.0		500.0
4.625% Senior Notes due 2026 (Euro Notes of €650.0)	730.2		708.4
7.750% Senior Notes due 2027	600.0		600.0


Capital lease obligations	46.1		46.9
Total long-term debt, including current maturities	3,382.0		3,515.3
Less current portion	(93.0)		(1.6)
Less unamortized debt premium and debt issuance fees	(36.5)		(52.1)
Total long-term debt	$	3,252.5	$	3,461.6



	December 31, 2017			September 30, 2017
Senior Secured Term Loan B Facility, net of discount due 2022	$	391.0		$	392.0
5.50% Senior Notes due 2025	600.0			600.0
Total long-term debt, including current maturities	991.0			992.0
Less current portion	(4.0		)	(4.0		)
Less unamortized debt discount and debt issuance fees	(9.1		)	(9.5		)
Total long-term debt	$	977.9		$	978.5


	Long-term debt
One year	$	91.3
Two year	91.3
Three year	162.2
Four year	10.0
Five year	610.0

Thereafter	2,371.1
Total long-term debt payments due	$	3,335.9


														For the Quarter Ended June 30,
														U.S.						International
														2020		2019		2020		2019
Service cost													Service cost	$	—	$	—	$	0.2	$	0.1
Interest cost													Interest cost	4.0		5.1		0.3		0.8
Expected return on plan assets													Expected return on plan assets	(6.1)		(6.6)		(0.6)		(1.3)
Amortization of unrecognized net losses													Amortization of unrecognized net losses	1.6		1.1		0.3		0.2

Net periodic (benefit)/cost													Net periodic (benefit)/cost	$	(0.5)	$	(0.4)	$	0.2	$	(0.2)

	For the Quarter Ended December 31,
	U.S.						International							For the Nine Months Ended June 30,
	2017			2016			2017			2016				U.S.						International
Service Cost	$	—		$	—		$	0.2		$	0.4
Interest Cost	4.7			4.5			1.1			0.9
														2020		2019		2020		2019
Service cost													Service cost	$	—	$	—	$	0.6	$	0.4
Interest cost													Interest cost	12.0		15.3		0.9		2.3
Expected return on plan assets	(7.5		)	(8.6		)	(1.6		)	(2.0		)	Expected return on plan assets	(18.3)		(19.6)		(1.8)		(3.8)
Amortization of unrecognized net losses	1.0			1.2			0.5			0.9			Amortization of unrecognized net losses	4.8		3.1		0.9		0.7
Settlement charge	0.1			—			—			—

Net periodic (benefit)/cost	$	(1.7	)	$	(2.9	)	$	0.2		$	0.2		Net periodic (benefit)/cost	$	(1.5)	$	(1.2)	$	0.6	$	(0.4)


	At December 31, 2017			For the Quarter Ended December 31, 2017							At June 30, 2020		For the Quarter Ended June 30, 2020						For the Nine Months Ended June 30, 2020
Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value (Liability)/Asset (1) (2)			(Loss)/Gain Recognized in OCI (3)			Loss Reclassified From OCI into Income (Effective Portion) (4) (5)			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 (3)(4)		Loss Recognized in OCI (2)		Gain/(Loss) Reclassified From OCI into Income (3) (4)
Foreign currency contracts	$	(4.2	)	$	(0.8	)	$	(2.4	)	Foreign currency contracts	$	(1.2)	$	(4.5)	$	1.8	$	(1.2)	$	4.5
Interest rate contracts	0.7			1.5			(0.5		)
Interest rate swaps (2017 and 2018)										Interest rate swaps (2017 and 2018)	(8.9)		(1.2)		(1.6)		(6.6)		(2.7)
Zinc contracts										Zinc contracts	(3.5)		3.2		(0.3)		(3.1)		(0.6)
Total	$	(3.5	)	$	0.7		$	(2.9	)	Total	$	(13.6)	$	(2.5)	$	(0.1)	$	(10.9)	$	1.2

	At September 30, 2017			For the Quarter Ended December 31, 2016							At September 30, 2019		For the Quarter Ended June 30, 2019						For the Nine Months Ended June 30, 2019
Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value Liability (1) (2)			Gain Recognized in OCI (3)			Gain/(Loss) Reclassified From OCI into Income (Effective Portion) (4) (5)			Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value Asset/(Liability) (1)		Loss Recognized in OCI (2)		Gain Reclassified From OCI into Income (3)(4)		Gain/(Loss) Recognized in OCI (2)		Gain Reclassified From OCI into Income (3)(4)
Foreign currency contracts	$	(5.8	)	$	5.2		$	0.5		Foreign currency contracts	$	4.5	$	(0.4)	$	1.9	$	3.7	$	6.7
Interest rate contracts	(1.3		)	6.5			(0.7		)

Interest rate swaps (2017 and 2018)										Interest rate swaps (2017 and 2018)	(4.7)		(4.1)		0.2		(11.0)		0.4
Zinc contracts										Zinc contracts	(1.0)		(0.9)		—		(0.7)		—
Total	$	(7.1	)	$	11.7		$	(0.2	)	Total	$	(1.2)	$	(5.4)	$	2.1	$	(8.0)	$	7.1



	At December 31, 2017		For the Quarter Ended December 31, 2017
	Estimated Fair Value Asset		Gain Recognized in Income (1)
Foreign currency contracts	$	0.5	$	0.3

	At September 30, 2017		For the Quarter Ended December 31, 2016
	Estimated Fair Value Asset		Loss Recognized in Income (1)
Foreign currency contracts	$	0.9	$	(1.9	)


Offsetting of derivative assets

		At June 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	$	1.9	$	(0.7)	$	1.2	$	9.4	$	(0.4)	$	9.0

Offsetting of derivative liabilities

		At June 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	$	(3.6)	$	0.7	$	(2.9)	$	(0.4)	$	0.2	$	(0.2)



	Level 2
Liabilities at estimated fair value:	December 31, 2017			September 30, 2017
Deferred Compensation	$	(41.8	)	$	(41.0	)
Derivatives - Foreign Currency Contracts	(3.7		)	(4.9		)
Derivatives - Interest Rate Swap	0.7			(1.3		)
Exit lease liability	—			(0.3		)
Net Liabilities at estimated fair value	$	(44.8	)	$	(47.5	)


	Level 2
(Liabilities)/Assets at estimated fair value:	June 30, 2020		September 30, 2019

Deferred compensation	$	(26.3)	$	(28.1)
Exit lease liability	—		(0.1)
Derivatives - Foreign Currency contracts	(1.2)		4.5
Derivatives - Foreign Currency contracts (non-hedge)	(0.5)		4.3
Derivatives - 2017 and 2018 Interest Rate swaps	(8.9)		(4.7)
Derivatives - Zinc contracts	(3.5)		(1.0)
Net Liabilities at estimated fair value	$	(40.4)	$	(25.1)


	Foreign Currency Translation Adjustments		Pension Activity		Zinc Contracts		Foreign Currency Contracts		Interest Rate Contracts		Total
Balance at September 30, 2019	$	(124.0)	$	(173.3)	$	0.2	$	3.1	$	(4.3)	$	(298.3)
OCI before reclassifications	(22.5)		(1.1)		(2.4)		(0.8)		(5.1)		(31.9)

Reclassifications to earnings	—		4.4		0.5		(3.5)		2.1		3.5
Activity related to discontinued operations	19.3		3.0		(0.9)		—		—		21.4
Balance at June 30, 2020	$	(127.2)	$	(167.0)	$	(2.6)	$	(1.2)	$	(7.3)	$	(305.3)



	Foreign Currency Translation Adjustments			Pension Activity			Hedging Activity			Interest Rate Swap			Total
Balance at September 30, 2017	$	(93.1	)	$	(139.4	)	$	(4.5	)	$	(1.8	)	$	(238.8	)
OCI before reclassifications	7.4			—			(0.7		)	0.9			7.6
Reclassifications to earnings	—			1.2			1.9			0.4			3.5
Balance at December 31, 2017	$	(85.7	)	$	(138.2	)	$	(3.3	)	$	(0.5	)	$	(227.7	)



	For the Quarters Ended December 31,
(in millions, except per share data)	Earnings Before Income Taxes					Net Earnings					Diluted EPS
	2017		2016			2017		2016			2017		2016
Reported - GAAP	$	119.0	$	134.1		$	60.4	$	95.6		$	0.98	$	1.52
Impacts: Expense (Income)
Spin restructuring	—		(1.3		)	—		(1.0		)	—		(0.02		)
Acquisition and integration costs (1)	5.7		0.8			4.1		0.5			0.07		0.01
One-time impact of the new U.S. tax legislation	—		—			31.0		—			0.50		—
Adjusted - Non-GAAP (2)	$	124.7	$	133.6		$	95.5	$	95.1		$	1.55	$	1.51
Weighted average shares - Diluted											61.5		62.9



Total Net Sales (In millions - Unaudited)
Quarter Ended December 31, 2017
Total Net Sales	Q1		% Chg
Net sales - FY '17	$	559.6
Organic	5.9		1.1	%
Impact of currency	7.8		1.3	%
Net sales - FY '18	$	573.3	2.4	%