UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


(Mark One)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2017June 30, 2021
Or
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                         to
Commission File Number: 001-36837

enr-20210630_g1.jpg
ENERGIZER HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Missouri36-4802442
(State or other jurisdiction of(I. R. S. Employer
incorporation or organization)Identification No.)
533 Maryville University Drive
St. Louis, MissouriMissouri63141
(Address of principal executive offices)(Zip Code)
(314)985-2000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per shareENRNew York Stock Exchange
7.50% Series A Mandatory Convertible Preferred Stock, par value $.01 per shareENR PRANew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No o☐


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x☒ No o☐


1


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”,filer,” “accelerated filer”,filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerx☒Accelerated filero☐
Non-accelerated filero☐Smaller reporting companyo☐
(Do not check if smaller reporting company)   Emerging growth companyo☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o☐ No x☒

Indicate the number of shares of Energizer Holdings, Inc. common stock, $.01 par value, outstanding as of the close of business on January 29, 2018: 59,685,726.

August 5, 2021: 68,371,727.
2

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, 2017June 30, 2021 and 20162020
34
Consolidated Balance Sheets (Condensed) as of December 31, 2017June 30, 2021 and September 30, 20172020
45
Consolidated Statements of Cash Flows (Condensed) for the ThreeNine Months Ended December 31, 2017June 30, 2021 and 20162020
56
Consolidated Statements of Shareholders' Equity (Condensed) for the Nine Months Ended June 30, 2021 and 2020
7

Notes to Consolidated (Condensed) Financial Statements
69
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
2133
Item 3. Quantitative and Qualitative Disclosures About Market Risk
3249
Item 4. Controls and Procedures
3350
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
3452
Item 1A. Risk Factors
3452
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
3652
Item 6. Exhibits
3752
SIGNATURESEXHIBIT INDEX
3853
EXHIBIT INDEXSIGNATURES
3956









3

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 2021202020212020
Net sales$573.3
 $559.6
Net sales$721.8 $658.0 $2,255.5 $1,981.8 
Cost of products sold295.0
 288.0
Cost of products sold448.5 394.8 1,373.8 1,181.7 
Gross profit278.3
 271.6
Gross profit273.3 263.2 881.7 800.1 
   
Selling, general and administrative expense99.2
 84.4
Selling, general and administrative expense117.5 112.8 365.4 351.0 
Advertising and sales promotion expense37.3
 34.3
Advertising and sales promotion expense44.1 37.3 120.8 106.9 
Research and development expense5.3
 5.8
Research and development expense8.2 8.4 24.8 25.6 
Amortization of intangible assets2.8
 2.6
Amortization of intangible assets15.2 14.3 46.0 42.3 
Spin restructuring—
 (1.3)
Interest expense13.4
 13.3
Interest expense38.6 50.8 125.0 144.8 
Loss on extinguishment of debtLoss on extinguishment of debt27.6 0 103.3 4.2 
Other items, net1.3
 (1.6)Other items, net(1.5)0.7 (0.8)5.8 
Earnings before income taxes119.0
 134.1
Earnings before income taxes23.6 38.9 97.2 119.5 
Income tax provision58.6
 38.5
Income tax provision2.8 9.9 19.5 31.0 
Net earnings$60.4
 $95.6
Net earnings from continuing operationsNet earnings from continuing operations20.8 29.0 77.7 88.5 
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, 2020Net 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, 20200 0.8 0 (130.3)
Net earnings/(loss)Net earnings/(loss)20.8 29.8 77.7 (41.8)
Mandatory preferred stock dividendsMandatory preferred stock dividends(4.0)(4.0)(12.1)(12.1)
Net earnings/(loss) attributable to common shareholdersNet earnings/(loss) attributable to common shareholders$16.8 $25.8 $65.6 $(53.9)
   
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 operationsBasic net earnings per common share - continuing operations$0.25 $0.37 $0.96 $1.11 
Basic net earnings/(loss) per common share - discontinued operationsBasic net earnings/(loss) per common share - discontinued operations0 0.01 0 (1.89)
Basic net earnings/(loss) per common shareBasic net earnings/(loss) per common share$0.25 $0.38 $0.96 $(0.78)
Diluted net earnings per common share - continuing operationsDiluted net earnings per common share - continuing operations$0.24 $0.37 $0.95 $1.10 
Diluted net earnings/(loss) per common share - discontinued operationsDiluted net earnings/(loss) per common share - discontinued operations0 0.01 0 (1.88)
Diluted net earnings/(loss) per common shareDiluted net earnings/(loss) per common share$0.24 $0.38 $0.95 $(0.78)
   
Weighted average shares of common stock - Basic60.2
 61.8
Weighted average shares of common stock - Basic68.4 68.5 68.4 68.9 
Weighted average shares of common stock - Diluted61.5
 62.9
Weighted average shares of common stock - Diluted68.6 68.7 68.7 69.4 
   
Statements of Comprehensive Income:   Statements of Comprehensive Income: 
Net earnings$60.4
 $95.6
Net earnings/(loss)Net earnings/(loss)$20.8 $29.8 $77.7 $(41.8)
Other comprehensive income/(loss), net of tax expense/(benefit)   Other comprehensive income/(loss), net of tax expense/(benefit)
Foreign currency translation adjustments7.4
 (31.9)Foreign currency translation adjustments(1.4)2.0 24.8 (3.2)
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 and $1.3 for the quarter and nine months ended June 30, 2021, respectively, and $0.5 and $2.2 for the quarter and nine months ended June 30, 2020, respectively.Pension activity, net of tax of $0 and $1.3 for the quarter and nine months ended June 30, 2021, respectively, and $0.5 and $2.2 for the quarter and nine months ended June 30, 2020, respectively.1.4 1.1 3.4 6.3 
Deferred (loss)/gain on hedging activity, net of tax of ($1.1) and $4.7 for the quarter and nine months ended June 30, 2021, respectively and ($0.6) and ($2.8) for the quarter and nine months ended June 30, 2020, respectively.Deferred (loss)/gain on hedging activity, net of tax of ($1.1) and $4.7 for the quarter and nine months ended June 30, 2021, respectively and ($0.6) and ($2.8) for the quarter and nine months ended June 30, 2020, respectively.(3.6)(1.3)15.2 (10.1)
Total comprehensive income/(loss)Total comprehensive income/(loss)$17.2 $31.6 $121.1 $(48.8)
The above financial statements should be read in conjunction with the Notes Toto Consolidated (Condensed) Financial Statements (Unaudited).

4



ENERGIZER HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Condensed)
(In millions - Unaudited)
 
AssetsJune 30,
2021		September 30,
2020
Current assets 
Cash and cash equivalents$207.7 $459.8 
Restricted cash0 790.0 
Trade receivables, less allowance for doubtful accounts of $3.3 and $2.8, respectively332.3 292.0 
Inventories691.1 511.3 
Other current assets183.1 157.8 
Total current assets1,414.2 2,210.9 
Property, plant and equipment, net372.6 352.1 
Operating lease assets115.5 121.9 
Goodwill1,058.2 1,016.0 
Other intangible assets, net1,887.3 1,909.0 
Deferred tax asset23.8 24.3 
Other assets105.8 94.1 
Total assets$4,977.4 $5,728.3 
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt$12.0 $841.3 
Current portion of capital leases2.4 1.7 
Notes payable103.4 3.8 
Accounts payable407.9 378.1 
Current operating lease liabilities15.6 14.8 
Other current liabilities290.4 408.7 
Total current liabilities831.7 1,648.4 
Long-term debt3,355.6 3,306.9 
Operating lease liabilities105.4 111.9 
Deferred tax liability149.6 140.4 
Other liabilities194.5 211.6 
Total liabilities4,636.8 5,419.2 
Shareholders' equity
Common stock0.7 0.7 
Mandatory convertible preferred stock0 0 
Additional paid-in capital850.3 859.2 
Retained earnings(64.3)(66.2)
Treasury stock(181.8)(176.9)
Accumulated other comprehensive loss(264.3)(307.7)
Total shareholders' equity340.6 309.1 
Total liabilities and shareholders' equity$4,977.4 $5,728.3 
AssetsDecember 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, respectively214.8
 230.2
Inventories276.2
 317.1
Other current assets93.7
 94.9
Total current assets1,039.0
 1,020.2
Property, plant and equipment, net171.7
 176.5
Goodwill230.1
 230.0
Other intangible assets, net220.9
 223.8
Deferred tax asset34.1
 47.7
Other assets68.3
 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 payable110.5
 104.1
Accounts payable190.8
 219.3
Other current liabilities241.6
 254.6
Total current liabilities546.9
 582.0
Long-term debt977.9
 978.5
Other liabilities205.6
 178.0
Total liabilities1,730.4
 1,738.5
Shareholders' equity   
Common stock0.6
 0.6
Additional paid-in capital198.7
 196.7
Retained earnings180.4
 198.7
Treasury stock(118.3) (72.1)
Accumulated other comprehensive loss(227.7) (238.8)
Total shareholders' equity33.7
 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 Toto Consolidated (Condensed) Financial Statements (Unaudited).

5


ENERGIZER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Condensed)
(In millions - Unaudited)
 For the Nine Months Ended June 30,
 20212020
Cash Flow from Operating Activities  
Net earnings/(loss)$77.7 $(41.8)
Net loss from discontinued operations0 (130.3)
Net earnings from continuing operations77.7 88.5 
Non-cash integration and restructuring charges4.5 12.1 
Depreciation and amortization88.7 84.3 
Deferred income taxes2.1 2.1 
Share-based compensation expense13.3 21.2 
Loss on extinguishment of debt103.3 4.2 
Non-cash items included in income, net12.8 18.4 
Other, net(3.5)0.2 
Changes in current assets and liabilities used in operations(281.4)0.9 
Net cash from operating activities from continuing operations17.5 231.9 
Net cash used by operating activities from discontinued operations0 (12.9)
Net cash from operating activities17.5 219.0 
Cash Flow from Investing Activities
Capital expenditures(42.7)(44.4)
Proceeds from sale of assets0 1.5 
Acquisitions, net of cash acquired(67.2)(4.5)
Net cash used by investing activities from continuing operations(109.9)(47.4)
Net cash from investing activities from discontinued operations0 280.9 
Net cash (used by)/from investing activities(109.9)233.5 
  
Cash Flow from Financing Activities  
Cash proceeds from issuance of debt with original maturities greater than 90 days1,982.6 620.6 
Payments on debt with maturities greater than 90 days(2,770.2)(770.3)
Net increase in debt with original maturities of 90 days or less106.6 171.5 
Premiums paid on extinguishment of debt(141.1)0 
Debt issuance costs(27.6)(6.1)
Payment of contingent consideration(3.9)0 
Dividends paid on common stock(63.8)(64.3)
Dividends paid on mandatory convertible preferred stock(12.1)(12.1)
Common stock purchased(21.3)(45.0)
Taxes paid for withheld share-based payments(6.7)(9.7)
Net cash used by financing activities from continuing operations(957.5)(115.4)
Net cash used by financing activities from discontinued operations0 (1.1)
Net cash used by financing activities(957.5)(116.5)
Effect of exchange rate changes on cash7.8 1.1 
Net (decrease)/increase in cash, cash equivalents, and restricted cash from continuing operations(1,042.1)70.2 
Net increase in cash, cash equivalents, and restricted cash from discontinued operations0 266.9 
Net (decrease)/increase in cash, cash equivalents, and restricted cash(1,042.1)337.1 
Cash, cash equivalents, and restricted cash, beginning of period1,249.8 258.5 
Cash, cash equivalents, and restricted cash, end of period$207.7 $595.6 
 For the Three Months Ended December 31,
 2017 2016
Cash Flow from Operating Activities   
Net earnings$60.4
 $95.6
Depreciation and amortization12.0
 10.6
Deferred income taxes12.2
 4.8
Share-based compensation expense6.7
 5.2
Mandatory transition tax30.0
 —
Non-cash items included in income, net3.0
 (0.4)
Other, net0.1
 (2.1)
Changes in current assets and liabilities used in operations16.6
 (21.9)
Net cash from operating activities141.0
 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 less6.5
 (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 cash4.7
 (17.6)
    
Net increase in cash and cash equivalents76.3
 10.4
Cash and cash equivalents, beginning of period378.0
 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 Toto Consolidated (Condensed) Financial Statements (Unaudited).

6

ENERGIZER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Condensed)
(Amounts in millions, Shares in thousands - Unaudited)

Number of SharesAmount
Preferred StockCommon StockPreferred StockCommon StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive (Loss)/IncomeTreasury StockTotal Shareholders' Equity
September 30, 20202,156 68,518 $0 $0.7 $859.2 $(66.2)$(307.7)$(176.9)$309.1 
Net earnings from continuing operations— — — — — 67.1 — — 67.1 
Share-based payments— — — — 4.0 — — — 4.0 
Common stock purchased— (500)— — — — — (21.3)(21.3)
Activity under stock plans— 314 — — (20.6)(0.9)— 14.8 (6.7)
Deferred compensation plan— 22 — — (1.0)— — 1.0 0 
Dividends to common shareholders ($0.30 per share)— — — — — (21.0)— — (21.0)
Dividends to preferred shareholders ($1.875 per share)— — — — — (4.0)— — (4.0)
Other comprehensive income— — — — — — 2.4 — 2.4 
December 31, 20202,156 68,354 $0 $0.7 $841.6 $(25.0)$(305.3)$(182.4)$329.6 
Net loss from continuing operations— — — — — (10.2)— — (10.2)
Share-based payments— — — — 5.4 — — — 5.4 
Activity under stock plans— 12 — — (0.6)— — 0.6 — 
Dividends to common shareholders ($0.30 per share)— — — — — (20.9)— — (20.9)
Dividends to preferred shareholders ($1.875 per share)— — — — — (4.1)— — (4.1)
Other comprehensive income— — — — — — 44.6 — 44.6 
March 31, 20212,156 68,366 $0 $0.7 $846.4 $(60.2)$(260.7)$(181.8)$344.4 
Net earnings from continuing operations— — — — — 20.8 — — 20.8 
Share-based payments— — — — 3.9 — — — 3.9 
Activity under stock plans— 1 — — — — — — — 
Dividends to common shareholders ($0.30 per share)— — — — — (20.9)— — (20.9)
Dividends to preferred shareholders ($1.875 per share)— — — — — (4.0)— — (4.0)
Other comprehensive loss— — — — — — (3.6)— (3.6)
June 30, 20212,156 68,367 $0 $0.7 $850.3 $(64.3)$(264.3)$(181.8)$340.6 

7
ENERGIZER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Condensed)
(Amounts in millions, Shares in thousands - Unaudited)

Number of SharesAmount
Preferred StockCommon StockPreferred StockCommon StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive (Loss)/IncomeTreasury StockTotal Shareholders' Equity
September 30, 20192,156 68,902 $0 $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, 20192,156 69,276 $0 $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 0 
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, 20202,156 68,457 $0 $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, 20202,156 68,459 $0 $0.7 $859.1 $10.8 $(305.3)$(179.5)$385.8 

The above financial statements should be read in conjunction with the Notes to Consolidated (Condensed) Financial Statement (Unaudited).
8
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 distributerdistributor of householdprimary batteries, specialty batteriesportable lights, and auto care appearance, performance, refrigerants and fragrance products.

Batteries and lights are sold under the Energizer®, Eveready®, Rayovac® and Varta® brand names following the 2019 acquisition of Spectrum Holdings, Inc.'s (Spectrum) global battery, lighting, and portable lights under the Energizer® and Eveready® brand names.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 products (auto care acquisition). Withare 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 2019 acquisition of Spectrum's global auto care business (Auto Care Acquisition).


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. 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, 20172020 included in the Annual Report on Form 10-K dated November 14, 2017.17, 2020.


Recently Adopted Accounting Pronouncements - During the quarter ended December 31, 2017, the Company adopted ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update requires the service componentThe operations 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, netDivestment Business for the quarter and nine months ended June 30, 2020 have 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 discontinued operations.

Recently Issued Accounting Pronouncements – In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendment provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships and other transactions that reference LIBOR. These updates are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2016. All non-compensation related pension costs will be recorded in Other items, net going forward.2022. The Company is currently evaluating its contracts and the optional expedients provided by this update.


DuringIn August 2020, the quarter ended December 31, 2017,FASB issued ASU 2020-06 Changes to Accounting for Convertible Debt. This amendment simplifies the Company adopted ASU 2015-11, Inventory (Topic 330), which alignsaccounting for certain financial instruments with characteristics of liabilities and equity. The FASB has reduced the measurementnumber of inventory under GAAP more closely with International Financial Reporting Standards. Underaccounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to financial statement users. The new guidance an entityalso modifies how particular convertible instruments and certain contracts that measures inventory using the first-in, first-outmay be settled in cash 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.

9
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)




Duringshares impact the quarter endeddiluted EPS computation. The amendment goes into effect for fiscal years starting after 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,15, 2021, 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 would be the beginning October 1, 2018.of fiscal year 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently assessingevaluating the new guidance againstimpact that this updated may have on 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 atfinancial statements; however, the effective date. While the Company’s assessment is not yet complete, the new guidanceimpact is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. be material.

(2) Revenue Recognition

The Company, through its operating subsidiaries, is still assessingone of the overall impact on the Company’s disclosures.
On February 25, 2016, the FASB issued ASU 2016-02, Leases. This update aligns the measurementworld’s largest manufacturers, marketers and distributors of leases under GAAP more closely with International Financial Reporting Standards by recognizing lease assetshousehold batteries, specialty batteries and lease liabilities on the balance sheetlighting products, and disclosing key information about leasing arrangements. The amendments in this update will be effective for Energizer beginning October 1, 2019 with early adoption permitted. Energizer is in the processa leading designer and marketer 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 Receiptsautomotive fragrance, appearance, performance 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.air conditioning recharge products. The Company distributes its 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. The Company sells to its customers through a combination of a direct sales force and exclusive and non-exclusive third-party distributors and wholesalers.

The Company’s revenue is currently assessingprimarily generated from the impactsale 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 revised guidance will havecustomer. 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 our current classification on the Statement of Cash Flows.contract terms.
On August 28, 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting
Supplemental product and market information is presented below 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 effectiverevenues from external customers for the quarters and nine months ended June 30, 2021 and 2020:
 For the Quarter Ended June 30,For the Nine Months Ended June 30,
Net Sales2021202020212020
Batteries$482.9 $470.7 $1,701.8 $1,520.3 
Auto Care206.4 161.4 447.1 370.3 
Lights, Licensing and Other32.5 25.9 106.6 91.2 
Total Net Sales$721.8 $658.0 $2,255.5 $1,981.8 

 For the Quarter Ended June 30,For the Nine Months Ended June 30,
 2021202020212020
Net Sales 
North America$465.5 $443.4 $1,401.7 $1,257.4 
Latin America59.7 48.5 192.1 158.9 
     Americas525.2 491.9 1,593.8 1,416.3 
Modern Markets112.1 96.0 407.0 339.9 
Developing Markets51.0 42.5 157.7 139.9 
Distributors Markets33.5 27.6 97.0 85.7 
     International196.6 166.1 661.7 565.5 
 Total Net Sales$721.8 $658.0 $2,255.5 $1,981.8 

(3) Acquisitions

Formulations Acquisition - During the first quarter of fiscal 2021, the Company beginning Octoberentered into an agreement with Green Global Holdings, LLC to acquire a North Carolina-based company that specializes in developing formulations for cleaning tasks (Formulations Acquisition). On December 1, 2019.2020, the Formulations Acquisition was completed for a cash purchase price of $51.2, subject to post-closing working capital adjustments. The Company is currently assessing the impact the revised guidance will have on its accounting practices and financial statements.product formulations
10
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)




are both sold to customers directly and licensed to manufacturers. This acquisition is expected to bring significant innovation capabilities in formulations to the Company.
(2) Spin Costs

On July 1, 2015, Energizer completed its legal separation from Edgewell Personal Care Company (Edgewell) viaThe acquisition is being accounted for as a tax free spin-off (the spin-off or spin). The Company incurred costs associated withbusiness combination using the evaluation, planningacquisition method of accounting which requires assets acquired and executionliabilities assumed to be recognized at fair value as of the spin transaction. Foracquisition date. The preliminary fair value of proprietary technology acquired and customer relationships were determined by applying the three months ended December 31, 2017,multi-period excess earnings method under the Company recorded no activity related to spin. During the quarter ended December 31, 2016, the Company sold a facility in North America that was previously closed as part of the spin and recorded a gain of $1.3 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.income approach.


The following table representsoutlines the spin restructuring accrual activity and ending accrual balancepreliminary purchase price allocation as of December 31, 2016 on the Consolidated Condensed Balance Sheet. At December 31, 2016, $2.2date 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:
Trade receivables$1.8 
Inventories0.1 
Goodwill29.2 
Other intangible assets, net20.5 
Operating lease assets0.5 
Accounts payable(0.2)
Current operating lease liabilities(0.2)
Other current liabilities(0.2)
Operating lease liabilities(0.3)
Net assets acquired$51.2 
      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


(3) Income Taxes    


The three month effectivetable below identifies the initial estimate for purchased intangible assets of $20.5:
TotalWeighted Average Useful Lives
Proprietary technology$19.5 7
Customer relationships1.0 15
Total Other intangible assets, net$20.5 

The Company will continue to review its allocation of fair value to assets acquired and liabilities assumed for this acquisition, including income tax rateconsiderations. The goodwill acquired in this acquisition is attributable to the value the Company expects to achieve from the significant innovation capabilities in formulations that the acquired company will bring to our organization, as well as the workforce acquired. The goodwill has been allocated to the Americas segment. The goodwill is deductible for tax purposes.

In conjunction with the acquisition, the Company entered into incentive compensation agreements with certain key personnel. These agreements allow for potential earn out payments of up to $35.0 based on the achievement of a combination of financial and product development and commercialization performance targets and continued employment with the Company. These agreements are not considered a component of the acquisition purchase price but rather as employee compensation arrangements. The Company has recognized $2.3 of the total potential payments based on estimated earn out achieved at June 30, 2021. This was 49.2% as comparedrecorded on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income in Selling, general and administrative expense and in Other current liabilities on the Consolidated (Condensed) Balance Sheet.

FDK Indonesia Acquisition - During fourth quarter of fiscal 2020, the Company entered into an agreement with FDK Corporation to 28.7%acquire its subsidiary PT FDK Indonesia, a battery manufacturing facility (FDK Indonesia Acquisition). On October 1, 2020, the Company completed the acquisition for a contractual purchase price of $18.2. After contractual and working capital adjustments, the Company initially paid cash of $16.9 and paid $0.7 for a working capital adjustment during the nine months ending June 30, 2021. The acquisition of the FDK Indonesia facility increased the Company's alkaline battery production capacity and allows for the prior year comparative period. On December 22, 2017, H.R. 1, formally knownavoidance of future planned capital expenditures.

The FDK Indonesia Acquisition is being accounted for as a business combination using the Tax Cutsacquisition method of accounting which requires assets acquired and Jobs Act (the Act) was enacted into law.liabilities assumed to be recognized at fair value as of the acquisition date. The Act providesfair value of the Property, plant and equipment were estimated using the cost approach. After
11
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


determining the fair value of the real property acquired, allocation of purchase price for numerous significant tax law changesthe acquisition resulted in no intangible assets or goodwill.

The following table outlines the purchase price allocation as of the date of acquisition:
Cash and cash equivalents$1.7 
Trade receivables4.3 
Inventories8.3 
Other current assets0.6 
Property, plant and equipment, net19.6 
Other assets0.7 
Accounts payable(10.0)
Other current liabilities(1.2)
Other liabilities(6.4)
Net assets acquired$17.6 

The Company will continue to review its allocation of fair value to assets acquired and modifications with varying effective dates, which include reducing the corporateliabilities assumed for this acquisition, including income tax rate from 35%considerations.

Custom Accessories Europe Acquisition - On January 31, 2020, the Company entered into a share purchase agreement to 21%, creatingacquire Custom Accessories Europe Group International Limited (CAE) for $1.9 in cash. CAE is a territorial tax system (withwell-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 earn out payments that could increase the purchase price up to $9.9 if certain financial metrics are achieved over the next three years. During the first quarter of fiscal 2021, the Company determined that it is likely the full earn out payment will be met over the next three years and increased the purchase price to $9.9. The Company has allocated the purchase price to the assets acquired and liabilities assumed, resulting in identified intangible assets for vendor relationships of approximately $8.0, which will be amortized over the three-year lives of the vendor agreements.

During the second quarter of fiscal 2021, CAE achieved the next earn out threshold under the share purchase agreement, which resulted in a mandatory transition tax on previously deferred foreign earnings)cash payment of $3.9. Subsequent to June 30, 2021, it was determined that CAE achieved the full earn out payment under the agreement. The Company expects to make the final earn out payment of $2.9 during the fourth quarter of fiscal 2021.

Pro Forma Financial Information- Pro forma results for the Formulations Acquisition, FDK Indonesia Acquisition and allowing for immediate capital expensing of certain qualified property. As aCAE acquisition were not considered material and, as such, are not included.

Acquisition and Integration Costs- Acquisition and integration costs incurred during fiscal year end taxpayer, certain provisions of2021 and 2020 relate to the Act will begin to impact us in our fiscal first quarter ended December 31, 2017, while other provisions will impact us beginningFDK Indonesia Acquisition, Formulations Acquisition, and the Battery and Auto Care Acquisitions which occurred in fiscal year 2019. The corporateCompany incurred pre-tax acquisition and integration costs of $19.5 and $54.6 in the quarter and nine months ended June 30, 2021, respectively, and $11.4 and $47.6 for the quarter and nine months ended June 30, 2020, respectively, related to these acquisitions.

Pre-tax costs recorded in Costs of products sold were $9.6 and $24.6 for the quarter and nine months ended June 30, 2021, respectively, and $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 acquisition and integration costs recorded in Selling, general and administrative expense (SG&A) were $9.7 and $28.7 for the quarter and nine months ended June 30, 2021, respectively, related to the integration of the Battery and Auto Care acquisitions, including costs of integrating the auto care information technology systems of the businesses and consulting costs associated with the 2020 restructuring program discussed in Note 5, Restructuring, and legal fees incurred for the fiscal year 2021 acquisitions. 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
12
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


to the integration of the Battery and Auto Care Acquisitions, including consulting fees and costs of integrating both the battery and auto care information technology systems of the business.

For the quarter and nine months ended June 30, 2021, the Company recorded $0.1 and $1.1, respectively, of acquisition and integration related costs in research and development. For the quarter and nine months ended June 30, 2020, the Company recorded $0.2 and $1.2, respectively, in research and development.

Included in Other items, net for the quarter and nine months ended June 30, 2021 was $0.1 and $0.2 of acquisition and integration costs, respectively. Other items, net for the quarter and nine months ended June 30, 2020 included pre-tax income of $0.4 and expense of $0.4, respectively. The prior year pre-tax expense 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 of transition services income.

(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.

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.

During the quarter and nine months ended June 30, 2020, the Company recorded a pre-tax benefit of $0.4 and loss of $137.2 for the divestment, respectively, which included the estimated working capital settlement, contractual adjustments and recognition of tax rate reduction is effectiveand other indemnifications under the definitive purchase agreement. Under the definitive purchase agreement, the Company indemnified VARTA AG for Energizercertain tax liabilities that existed as of January 1, 2018the 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 accordingly, will reduce our current fiscal year federal statutory rateliability, where necessary, has been recorded to a blended rate of approximately 24.5% for fiscal year 2018.reflect these arrangements.


The changesfollowing 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:
For the Quarter Ended June 30,For the Nine Months Ended June 30,
20202020
Net sales$0 $115.8 
Cost of products sold0 88.2 
Gross profit0 27.6 
Selling, general and administrative expense0 18.0 
Advertising and sales promotion expense0 0.3 
Research and development expense0 0.8 
Interest expense0 12.1 
Loss on sale of disposition(0.4)137.2 
Other items, net0 (3.9)
Earnings/(loss) before income taxes0.4 (136.9)
Income tax (benefit)/expense(0.4)(6.6)
Net earnings/(loss) from discontinued operations$0.8 $(130.3)

13
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


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 Act are broad and complex. The final transition impactsNet loss from discontinued operations for the nine months ended June 30, 2020 is the write off of the Act may differ from our current estimates, possibly materially, due to, among other things, changes in interpretations$6.9 of the Act, any legislative action to address questions that arise because of the Act, any changes in accounting standards for income taxes ordeferred financing fees related interpretations in response to the Act, or any updates or changes to estimatespre-payment of debt from the divestment proceeds. For the nine months ended June 30, 2020, the Net loss from discontinued operations also included $5.0 of allocated pre-tax interest expense.

(5) Restructuring

In the fourth fiscal quarter of 2019, the Company has utilizedbegan implementing 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 calculatereduce complexity and realize greater efficiencies in our manufacturing, packaging and distribution processes. All activities within this plan are expected to be substantially complete by December 31, 2021. As planned, the transition impacts, including impacts from changesCompany expects 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 periodincur additional exit-related costs associated with these plans of up to oneapproximately $12 through the end of calendar 2021.

In the fourth fiscal quarter of 2020, the Company initiated a new restructuring program with a primary focus on reorganizing its global end-to-end supply chain network and ensuring accountability by category. This program includes streamlining the Company’s end-to-end supply chain model to enable rapid response to category specific demands and enhancing our ability to better serve our customers. Planning and execution of this program began in fiscal year 2021, with completion expected by the beginning of fiscal year after2022. The expected remaining costs associated with this project are approximately $3 through the enactment dateend of the Act to finalize the recording of the related tax impacts.fiscal year.


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 recordedpre-tax expense for charges related to the remeasurementrestructuring plans for the quarter and nine months ended June 30, 2021 and 2020 are noted in the table below and were reflected in the Consolidated (Condensed) Statement of our deferred tax balance was tax expense of approximately $1.Earnings and Comprehensive Income:
For the Quarter Ended June 30,For the Nine Months Ended June 30,
2021202020212020
2019 Restructuring Program
Costs of products sold
Severance and related benefit costs$0 $0.2 $(0.1)$1.3 
Accelerated depreciation & asset write-offs1.2 2.2 4.0 8.1 
Other exit costs(1)
4.4 4.9 14.1 11.6 
2019 Restructuring Total$5.6 $7.3 $18.0 $21.0 
2020 Restructuring Program
Costs of products sold
Severance and related benefit costs$0.5 $0 $0.5 $0 
Other restructuring related costs(2)
3.3 0 5.3 0 
Selling, general and administrate expense
Severance and related benefit costs0.1 0 0.3 0 
Other restructuring related costs(2)
0.3 0 7.5 0 
Research and development expense
Severance and related benefit costs0.2 0 0.2 0 
2020 Restructuring Total$4.4 $0 $13.8 $0 
Total restructuring related expense$10.0 $7.3 $31.8 $21.0 
(1) Includes charges primarily related to consulting, relocation, environmental investigatory and mitigation costs, and other facility exit costs.
(2) Primarily includes consulting fees for the restructuring program.

The mandatory transition taxrestructuring costs noted above for the quarter and nine months ended June 30, 2021 were incurred within the Americas segment in the amounts of $9.3 and $29.7, and the International segment in the amounts of $0.7 and $2.1, respectively. The restructuring costs for the quarter and nine months ended June 30, 2020 were incurred
14
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


within the Americas segment in the amounts of $6.8 and $19.6, and the International segment in the amounts of $0.5 and $1.4, respectively.

The following table summarizes the activity related to the 2019 restructuring program for the nine months ended June 30, 2021. At June 30, 2021, the restructuring reserve 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 partOther current liabilities on the amount of those earnings held in cash and other specified assets. This amount may change when we finalizeConsolidated (Condensed) Balance sheet.
Utilized
September 30, 2020Charge to IncomeCashNon-CashJune 30, 2021
Severance & termination related costs$5.3 $(0.1)$3.6 $0 $1.6 
Accelerated depreciation & asset write-offs0 4.0 0 4.0 0 
Other exit costs2.9 14.1 14.5 0 2.5 
   Total$8.2 $18.0 $18.1 $4.0 $4.1 

The following table summarizes 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 subjectactivity related to the mandatory transition tax, or any additional outside basis difference inherent2020 restructuring program for the nine months ended June 30, 2021. At June 30, 2021, the restructuring reserve is recorded on the Consolidated (Condensed) Balance Sheet in these entities, as these amounts continueOther current liabilities.
Utilized
September 30, 2020Charge to IncomeCashNon-CashJune 30, 2021
Severance & termination related costs$0.4 $1.0 $0.5 $0 $0.9 
Other restructuring related costs0.8 12.8 12.0 0 1.6 
   Total$1.2 $13.8 $12.5 $0 $2.5 

The following table summarizes the activity related to be indefinitely reinvestedthe 2019 restructuring program for the nine months ended June 30, 2020:
Utilized
September 30, 2019Charge to IncomeCashNon-Cash
June 30, 2020(1)
Severance & termination related costs$9.8 $1.3 $0.2 $0 $10.9 
Accelerated depreciation & asset write-offs0 8.1 0 8.1 0 
Other exit costs0 11.6 8.6 0 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 foreign operations.Other current liabilities of $13.2 and Other liabilities of $0.7.

(4)
15
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


(6) Share-Based Payments


Total compensation cost charged against income for Energizer’s share-based compensation arrangements was $6.7$3.9 and $13.3 for the quarter and nine months ended December 31, 2017June 30, 2021, respectively, and $5.2$5.3 and $21.2 for the quarter and nine months ended December 31, 2016June 30, 2020, respectively, and was recorded in SG&A expense.


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

In November 2017,2020, the Company granted RSE awards to a group of key employees of approximately 100,000120,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 68,00071,000 shares that vest on the third anniversary of the date of grant. In addition, the Company granted approximately 238,000272,000 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 476,000544,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $44.20.$42.98.


In November 2016,2019, the Company granted RSE awards to a group of key employees of approximately 92,000134,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 73,00081,000 shares that vest on the third anniversary of the date of the grant. In addition, the Company granted approximately 249,000306,000 performance shares to a group of key employees and key executives that will vest subject to meeting targetedtarget 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 498,000612,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $43.84.$43.10.


In November 2015,2018, the Company granted RSE awards to a group of key employees of approximately 106,00073,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 87,00055,000 shares that vest on the third anniversary of the date of the grant. In addition, the Company granted approximately 290,000190,000 performance shares to a group of key employees and key executives that will vest subject to meeting targetedtarget 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 580,000380,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $37.34.$60.25.




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. The closing stock price on the date of the grant used to determine the award fair value was $44.20.
(5)
(7)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 andRSE awards, performance share awards.awards and deferred compensation equity plans. Common shares issuable upon conversion of the Mandatory convertible preferred stock (MCPS) are included in the calculation of diluted earnings per share using the if-converted method and are only included if the conversion would be further dilutive to the calculation.


The following table sets forth the computation of basic and diluted earnings per share for the quarters and nine months ended December 31, 2017June 30, 2021 and 2016:2020:
16
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 outstanding60.2
 61.8
Effect of dilutive restricted stock equivalents0.4
 0.6
Effect of dilutive performance shares0.9
 0.5
Diluted average shares outstanding61.5
 62.9
Basic earnings per common share$1.00
 $1.55
Diluted earnings per common share$0.98
 $1.52
(in millions, except per share data)For the Quarter Ended June 30,For the Nine Months Ended June 30,
Basic net earnings/(loss) per share2021202020212020
Net earnings from continuing operations$20.8 $29.0 $77.7 $88.5 
Mandatory preferred stock dividends(4.0)(4.0)(12.1)(12.1)
Net earnings from continuing operations attributable to common shareholders16.8 25.0 65.6 76.4 
Net earnings/(loss) from discontinued operations, net of tax0 0.8 0 (130.3)
Net earnings/(loss) attributable to common shareholders$16.8 $25.8 $65.6 $(53.9)
Weighted average common shares outstanding - Basic68.4 68.5 68.4 68.9 
Basic net earnings per common share - continuing operations$0.25 $0.37 $0.96 $1.11 
Basic net earnings/(loss) per common share - discontinued operations0 0.01 0 (1.89)
Basic net earnings/(loss) per common share$0.25 $0.38 $0.96 $(0.78)
Diluted net (loss)/earnings per share
Weighted average common shares outstanding - Basic68.4 68.5 68.4 68.9 
Dilutive effect of RSE0.1 0.1 0.1 0.1 
Dilutive effect of performance shares0 0 0.1 0.3 
Dilutive effect of stock based deferred compensation plan0.1 0.1 0.1 0.1 
Weighted average common shares outstanding - Diluted68.6 68.7 68.7 69.4 
Diluted net earnings per common share - continuing operations$0.24 $0.37 $0.95 $1.10 
Diluted net earnings/(loss) per common share - discontinued operations0 0.01 0 (1.88)
Diluted net earnings/(loss) per common share$0.24 $0.38 $0.95 $(0.78)


For the quartersquarter and nine months ended December 31, 2017June 30, 2021, 0.1 million RSE were anti-dilutive and December 31, 2016, all restricted stock equivalents and performance shares were dilutive andnot included in the diluted net earnings per share calculations.calculation. For the quarter and nine months ended June 30, 2020, 0.5 million and 0.3 million, respectively, of RSE were anti-dilutive and not included in the diluted net earnings/(loss) per share calculation.


Performance based RSE awards of 1.4 million and 1.3 million were excluded for the quarter and nine months ended June 30, 2021, respectively, and 1.4 million and 1.2 million for the quarter and nine months ended June 30, 2020, respectively, as they were anti-dilutive or the performance targets for those awards 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.

(8) Segments


Operations for Energizer are currently managed via three2 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, acquisition earn out, 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 and loss on extinguishment of debt are managed on a global basis at the corporate level. The exclusion of substantially all acquisition integration, restructuring and realignmentintegration costs from segment results reflects management’s view on how it evaluates segment performance.


Energizer’s operating model includes a combination of standalone and shared business functions between the
17
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


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.


Segment sales and profitability for the quarters and nine months ended June 30, 2021 and 2020, respectively, are presented below:
 For the Quarter Ended June 30,For the Nine Months Ended June 30,
 2021202020212020
Net Sales  
Americas$525.2 $491.9 $1,593.8 $1,416.3 
International196.6 166.1 661.7 565.5 
Total net sales$721.8 $658.0 $2,255.5 $1,981.8 
Segment Profit  
Americas$127.7 $122.9 $415.9 $353.9 
International35.8 34.8 135.2 127.4 
Total segment profit163.5 157.7 $551.1 $481.3 
    General corporate and other expenses (1)(21.5)(25.6)(71.3)(74.0)
    Global marketing expense (2)(9.8)(7.4)(28.7)(19.1)
    Research and development expense - Adjusted (3)(8.1)(8.2)(23.7)(24.4)
    Amortization of intangible assets(15.2)(14.3)(46.0)(42.3)
    Acquisition and integration costs (4)(19.5)(11.4)(54.6)(47.6)
    Acquisition earn out (5)(1.2)0 (2.3)0 
Interest expense(38.6)(50.8)(125.0)(144.8)
Loss on extinguishment of debt(27.6)0 (103.3)(4.2)
Other items, net - Adjusted (6)1.6 (1.1)1.0 (5.4)
Total earnings before income taxes$23.6 $38.9 $97.2 $119.5 
(1) Included in SG&A in the Consolidated (Condensed) Statement of Earnings and Comprehensive Income.
(2) Global marketing expense for the quarters and nine months ended June 30, 2021 includes $4.9 and $14.5 recorded in SG&A, respectively, and $4.9 and $14.2 recorded in Advertising and sales promotion expense, respectively, in the Consolidated (Condensed) Statement of Earnings and Comprehensive Income. The quarters and nine months ended June 30, 2020 includes $3.0 and $8.5 recorded in SG&A, respectively, and $4.4 and $10.6 recorded in Advertising and sales promotion expense, respectively, in the Consolidated (Condensed) Statement of Earnings and Comprehensive Income.
(3) Research and development expense for the quarters and nine months ended June 30, 2021 includes $0.1 and $1.1, respectively, and included $0.2 and $1.2 for the quarter and nine months ended June 30, 2020, respectively, of acquisition and integration costs which have been reclassified for purposes of the reconciliation above.
(4) Acquisition and integration costs were included in the following lines in the Consolidated (Condensed) Statement of Earnings and Comprehensive Income:
For the Quarter Ended June 30,For the Nine Months Ended June 30,
2021202020212020
Cost of products sold$9.6 $5.5 $24.6 $20.7 
Selling, general and administrative expense9.7 6.1 28.7 25.3 
Research and development expense0.1 0.2 1.1 1.2 
Other items, net0.1 (0.4)0.2 0.4 
Total acquisition and integration costs$19.5 $11.4 $54.6 $47.6 
(5) This represents the estimated earn out achieved through June 30, 2021 under the incentive agreements entered into with the Formulations Acquisition and is recorded in SG&A on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income.
18
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)




Segment sales and profitability for the quarter ended December 31, 2017 and 2016, respectively, are presented below:
 For the Quarter Ended December 31,
 2017 2016
Net Sales   
Americas$373.1
 $365.1
EMEA117.6
 114.7
Asia Pacific82.6
 79.8
Total net sales$573.3
 $559.6
Segment Profit   
Americas$123.1
 $123.1
EMEA25.5
 26.1
Asia Pacific23.7
 24.7
Total segment profit172.3
 173.9
    General corporate and other expenses (1) (2)(21.6) (17.2)
    Global marketing expense (1)(3.2) (3.0)
    Research and development expense(5.3) (5.8)
    Amortization of intangible assets(2.8) (2.6)
    Acquisition and integration costs (1)(5.7) (0.8)
Spin restructuring—
 1.3
Interest expense(13.4) (13.3)
Other items, net (2)(1.3) 1.6
Total earnings before income taxes$119.0
 $134.1
(1) Included in SG&A in the unaudited Consolidated Condensed Statement of Earnings and Comprehensive Income.
(2) As a result of the adoption of ASU 2017-07 in the current quarter, a $3.1 benefit was reclassified from SG&A to(6) Other items, net for the quarter and nine months ended December 31, 2016.June 30, 2021 included acquisition related costs of $0.1 and $0.2, respectively, which has been reclassified for purposes of the reconciliation above. For the quarter and nine months ended June 30, 2020, Other items, net included acquisition related income of $0.4 and costs of $0.4, respectively, which has been reclassified for purposes of the reconciliation above.


Supplemental product information is presented below for revenues from external customers:
 For the Quarter Ended December 31,
Net Sales2017 2016
Batteries$524.5
 $503.1
Other48.8
 56.5
Total net sales$573.3
 $559.6

Corporate assets shown in the following table include all financial instruments, deferredpension assets, amounts indemnified by Spectrum per the purchase agreements and tax assets and deferred chargesasset balances that are managed outside of operating segments. Total assets by segment are presented below:In addition, the Restricted cash held at September 30, 2020 is an asset utilized outside of the operating segments.

Total AssetsJune 30, 2021September 30, 2020
Americas$1,230.1 $1,238.0 
International642.5 668.5 
Total segment assets$1,872.6 $1,906.5 
Corporate159.3 106.8 
Restricted cash0 790.0 
Goodwill and other intangible assets2,945.5 2,925.0 
Total assets$4,977.4 $5,728.3 

 December 31, 2017 September 30, 2017
Americas$510.0
 $533.9
EMEA246.3
 240.3
Asia Pacific489.8
 457.9
Total segment assets$1,246.1
 $1,232.1
Corporate67.0
 137.7
Goodwill and other intangible assets451.0
 453.8
Total assets$1,764.1
 $1,823.6



(7)(9) Goodwill and intangible assets


Goodwill and intangible assets deemed to have an indefinite life are not amortized, but are evaluated annually for impairment as part of our annual business planning cycle in the fourth fiscal quarter, or when indicators of a potential impairment are present.


The following table sets forth goodwill by segment as of October 1, 20172020 and December 31, 2017:
June 30, 2021:
 Americas EMEA Asia Pacific Total
Balance at October 1, 2017$213.8
 $5.5
 $10.7
 $230.0
Cumulative translation adjustment(0.2) 0.1
 0.2
 0.1
Balance at December 31, 2017$213.6
 $5.6
 $10.9
 $230.1


AmericasInternationalTotal
Balance at October 1, 2020$865.8 $150.2 $1,016.0 
Formulations Acquisition29.2 0 29.2 
Cumulative translation adjustment0.4 12.6 13.0 
Balance at June 30, 2021$895.4 $162.8 $1,058.2 

Energizer had indefinite-lived intangible assets of $78.2$1,366.2 at December 31, 2017June 30, 2021 and $78.3$1,365.4 at September 30, 2017. Changes in indefinite-lived intangible assets are due to changes in foreign2020. The difference between the periods is driven by currency translation.

Total amortizable intangible assets at December 31, 2017 are as follows:adjustments.
19
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Trademarks$40.1
 $4.0
 $36.1
Customer relationships84.4
 8.8
 75.6
Patents34.5
 3.8
 30.7
Non-compete0.5
 0.2
 0.3
Total intangible assets at December 31, 2017$159.5
 $16.8
 $142.7

Total amortizable intangible assets at September 30, 2017 were as follows:
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Trademarks$40.1
 $3.4
 $36.7
Customer relationships84.4
 7.3
 77.1
Patents34.5
 3.2
 31.3
Non-compete0.5
 0.1
 0.4
Total intangible assets at September 30, 2017$159.5
 $14.0
 $145.5

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)





(8)Total intangible assets at June 30, 2021 are as follows:

Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Trademarks and trade names$59.7 $(16.8)$42.9 
Customer relationships395.2 (80.7)314.5 
Patents34.5 (12.7)21.8 
Proprietary technology172.5 (54.1)118.4 
Proprietary formulas21.9 (2.3)19.6 
Non-compete0.5 (0.5)0 
Vendor relationships8.0 (4.1)3.9 
    Total Amortizable intangible assets692.3 (171.2)521.1 
Trademarks and trade names - indefinite lived1,366.2 — 1,366.2 
     Total Other intangible assets, net$2,058.5 $(171.2)$1,887.3 

Total intangible assets at September 30, 2020 were as follows:

Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Trademarks and trade names$59.7 $(13.9)$45.8 
Customer relationships394.2 (60.8)333.4 
Patents34.5 (10.8)23.7 
Proprietary technology172.5 (37.6)134.9 
Proprietary formulas2.4 (0.5)1.9 
Non-compete0.5 (0.4)0.1 
Vendor relationships5.0 (1.2)3.8 
    Total Amortizable intangible assets668.8 (125.2)543.6 
Trademarks and trade names - indefinite lived1,365.4 — 1,365.4 
    Total Other intangible assets, net$2,034.2 $(125.2)$1,909.0 

20
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


(10) Debt


The detail of long-term debt was as follows:
June 30, 2021September 30, 2020
Senior Secured Term Loan A Facility due 2022$0 $319.4 
Senior Secured Term Loan B Facility due 20250 313.5 
Senior Secured Term Loan Facility due 20271,197.0 0 
6.375% Senior Notes due 20260 750.0 
4.625% Senior Notes due 2026 (Euro Notes of €650.0)— 761.9 
7.750% Senior Notes due 20270 600.0 
4.750% Senior Notes due 2028600.0 600.0 
4.375% Senior Notes due 2029800.0 800.0 
3.50% Senior Notes due 2029 (Euro Notes of €650.0)770.8 — 
Capital lease obligations44.9 45.8 
Total long-term debt, including current maturities$3,412.7 $4,190.6 
Less current portion(14.4)(843.0)
Less unamortized debt premium and debt issuance fees(42.7)(40.7)
Total long-term debt$3,355.6 $3,306.9 
 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 2025600.0
 600.0
Total long-term debt, including current maturities991.0
 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


The Company's $600.0 of 5.50%Long-term debt - On September 30, 2020, the Company completed a bond offering for $800.0 Senior Notes due 2025 (Seniorin 2029 at 4.375% (2029 Notes) were sold. On October 16, 2020, the Company used the proceeds from the sale of the 2029 Notes to qualified institutional buyers and will not be registered under federal or applicable state securities laws. Interest is payable semi-annually onfund the redemption of all the $750.0 Senior Notes due in December and June. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by each of the Company's domestic restricted subsidiaries that is a borrower or guarantor under the Revolving Facility and Term Loan.

2026 at 6.375%. The Company haspaid a credit agreementredemption premium of $55.9 in the first fiscal quarter of 2021 related to this redemption.

On December 22, 2020, the Company entered in a Credit Agreement which providesprovided for a five-year $350.0 senior secured5-year $400 revolving credit facility (Revolving(2020 Revolving Facility) which matures in June 2020 and a seven-year $400.0 senior secured term loan$550.0 Term Loan due December 2027. The $550.0 of proceeds were used to pay down the remaining balances on the Term Loan A facility due in 2022, Term Loan B facility (Term Loan) which is due in 2025 and the amounts outstanding on the existing 2018 Revolving Credit Facility. The pay down of the Term Loan A and B facilities were deemed to be extinguishments and the Company wrote-off $5.7 of deferred financing fees during the first fiscal quarter of 2021.

On January 7, 2021, the Company amended the Credit Agreement and borrowed an incremental $650.0 on the Term Loan. The Company utilized the proceeds to fund the redemption of the Company’s outstanding $600.0 7.750% Senior Notes due 2027 (2027 Notes) at a redemption price equal to 110.965% of the aggregate principal amount. As a result, the Company paid a redemption premium of $66.6 during the quarter ended March 31, 2021. The Company also wrote off deferred financings fees associated with the 2027 Notes resulting in a total loss on extinguishment recognized in the quarter ended March 31, 2021 of $70.0.

On June 2022.23, 2021, the Company completed a bond offering for €650 Senior Notes due in 2029 at 3.50% (2029 EUR Notes). Also on June 23, 2021, the proceeds from the offering, combined with cash on hand, were used to satisfy its outstanding legal obligation on the €650 Senior Notes due in 2026 at 4.625% (2026 EUR Notes). The Company used approximately $45.9 of cash on hand to fund the redemption costs, accrued interest and fees associated with the redemption of the 2026 EUR Notes and issuance of the 2029 EUR Notes. The Company paid a redemption premium of $18.6 during the quarter ended June 30, 2021. The Company also wrote off deferred financing and interest and fees associated with the 2026 EUR Notes resulting in a total loss on extinguishment recognized in the quarter ended June 30, 2021 of $27.6.

Debt issuances fees paid associated with the Credit Agreement, Term Loans and 2029 EUR Notes were $27.6 in the nine months ended June 30, 2021.
21
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


The 2020 Revolving Facility replaced the previously outstanding 2018 Revolving Facility. Borrowings under the Term Loan require quarterly principal payments at a rate of 0.25% of the original principal balance, or $3.0. Borrowings under the 2020 Revolving Facility 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 totalmargin. The Term Loan bears interest at a rate per annum equal to, at the option of the Company, leverage. LIBOR or Base Rate (as defined) plus the applicable margin. The new Credit Agreement also contains customary affirmative and restrictive covenants.

As of December 31, 2017,June 30, 2021, the Company had $87.5 of outstanding borrowings of $103.0 under the 2020 Revolving Facility and had $6.7$7.7 of outstanding letters of credit. Taking into account outstanding letters of credit, $255.8 remains$289.3 remained available under the 2020 Revolving Facility as of December 31, 2017.June 30, 2021. As of December 31, 2017, ourJune 30, 2021 and September 30, 2020, the Company's weighted average interest rate on short-term borrowings was 3.19%.2.4% and 6.7%, respectively.


The $400.0 Term Loan was issued at a $1.0 discount which is amortized with a corresponding charge to interest expense over the remaining life of the loan. The original interest rate was LIBOR subject to a 75 basis points floor, plus 250 basis points. On March 13, 2017, the Company completed the repricing of its Term Loan reducing the interest to LIBOR plus 200 basis points and eliminating the 75 basis points floor. The loans and commitments under the Term Loan require quarterly principal payments at a rate of 0.25%, or $1.0, of the original principal balance.

Obligations under the Revolving Facility and Term Loan are jointly and severally guaranteed by certain of its existing and future direct and indirectly wholly-owned U.S. subsidiaries. There is a first priority perfected lien on substantially all of the assets and property of the Company and guarantors and proceeds therefrom excluding certain excluded assets. No other terms were changed as result of the Term Loan repricing.

Interest Rate Swaps - In March 2017, the Company entered into an interest rate swap agreement with one major financial institution that fixed the variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03%.


ForIn February 2018, the Company entered into a forward starting interest rate swap with an effective date of October 1, 2018 with one major financial institution that fixed the variable benchmark component (LIBOR) on additional variable rate debt at an interest rate of 2.47%. At the effective date, the swap had a notional value of $400.0. Beginning April 1, 2019, the notional amount decreased $50.0 each quarter, endedand continued to decrease until its termination date of December 31, 2017, our weighted average2020.

In conjunction with the term loan refinance in December 2020, the Company terminated both of these interest rate swaps and entered into a new interest rate swap with an effective date of December 22, 2020, that fixed the variable benchmark component (LIBOR) at an interest rate of 0.95% on variable rate debt inclusive of $550.0. On January 22, 2021, the notional value increased to $700.0 and will stay at that value through December 22, 2024. The notional value will decrease by $100.0 on December 22, 2024 and by $100.0 each year thereafter until its termination date on December 22, 2027.

Refer to Note 13, Financial Instruments and Risk Management, for additional information on the Company's interest rate swap was 3.42%.transactions.


Notes payable -The notes payable balance was $110.5$103.4 at December 31, 2017June 30, 2021 and $104.1$3.8 at September 30, 2017.2020. The December 31, 2017June 30, 2021 balance was comprised of $87.5$103.0 of outstanding borrowings on the 2020 Revolving Facility as well as $23.0$0.4 of other borrowings, including those fromrelated to foreign affiliates. The September 30, 20172020 balance was comprised of $95.0 outstanding borrowings on the Revolving facility as well as $9.1 of other borrowings, including those fromrelated to foreign affiliates.


Debt Covenants

- The agreements governing the Company's debt contain certain customary representations and warranties, affirmative, negative and financial covenants and provisions relating to events of default. If the Company fails to comply with these covenants or with other requirements of these debt agreements, the lenders may have the right to accelerate the maturity of the debt. Acceleration under one of these facilitiesdebt agreements would trigger cross defaults to other
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


borrowings. As of December 31, 2017,June 30, 2021, the Company was and expects to remain, in compliance with the provisions and covenants associated with its debt agreements.

Aggregate maturities of long-term debt, including current maturities, at December 31, 2017 were as follows: $4.0 in one year, $4.0 in two years, $4.0 in three years, $4.0 in four years, $375.0 in five years and $600.0 thereafter.


The counterparties to long-term committed borrowings consist of a number of major financial institutions. The Company consistently monitors positions with, and credit ratings of, counterparties both internally and by using outside ratings agencies.


22
ENERGIZER HOLDINGS, INC.
(9)NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


Debt Maturities - Aggregate maturities of long-term debt as of June 30, 2021 are as follows:
Long-term debt
One year$12.0 
Two year12.0 
Three year12.0 
Four year12.0 
Five year12.0 
Thereafter3,307.8 
Total long-term debt payments due$3,367.8 

(11) Pension Plans


The Company has several defined benefit pension plans covering many of its employees in the U.S. and certain employees in other countries. The plans provide retirement benefits based on various factors including years of service and in certain circumstances, earnings. The U.S. plan was frozen in fiscal year 2015.2014.
The Company’s net periodic pension (benefit)/cost for these plans are as follows:
For the Quarter Ended June 30,
U.S.International
2021202020212020
Service cost$0 $0 $0.2 $0.2 
Interest cost3.1 4.0 0.4 0.3 
Expected return on plan assets(5.5)(6.1)(0.8)(0.6)
Amortization of unrecognized net losses1.8 1.6 0.4 0.3 
Net periodic (benefit)/cost$(0.6)$(0.5)$0.2 $0.2 
For the Nine Months Ended June 30,
U.S.International
2021202020212020
Service cost$0 $0 $0.6 $0.6 
Interest cost9.5 12.0 1.2 0.9 
Expected return on plan assets(16.5)(18.3)(2.4)(1.8)
Amortization of unrecognized net losses5.4 4.8 1.2 0.9 
Net periodic (benefit)/cost$(1.6)$(1.5)$0.6 $0.6 
 For the Quarter Ended December 31,
 U.S. International
 2017 2016 2017 2016
Service Cost$—
 $—
 $0.2
 $0.4
Interest Cost4.7
 4.5
 1.1
 0.9
Expected return on plan assets(7.5) (8.6) (1.6) (2.0)
Amortization of unrecognized net losses1.0
 1.2
 0.5
 0.9
Settlement charge0.1
 —
 —
 —
Net periodic (benefit)/cost$(1.7) $(2.9) $0.2
 $0.2

The Company adopted ASU 2017-07 in the current quarter. The service cost component of the net periodic (benefit)/cost above is recorded in Selling, general and administrative expense on the Consolidated (Condensed) Statement of Earnings and Comprehensive Income, while the remaining components are recorded to Other items, net. The prior year amounts have been reclassified to provide comparable presentation in line with the guidance.


The Company also sponsors or participates in a number of other non-U.S. pension arrangements, including various retirement and termination benefit plans, some of which are required by local law or coordinated with government-sponsored plans, which are not significant in the aggregate and, therefore, are not included in the information presented above.


23
(10) Shareholder's
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


(12) Shareholders' Equity


In July 2015,On November 12, 2020, the Company's Board of Directors approved an authorizationa new share repurchase program for the Company to acquire up to 7.5 million shares of its common stock.stock, replacing the prior authorization from July 2015. During the threenine months ended December 31, 2017,June 30, 2021, the Company repurchased 1,126,379500,000 shares for $50.0,$21.3, at an average price of $44.41$42.61 per share, under this authorization. During the nine months ended June 30, 2020, the Company repurchased 980,136 shares for $45.0, at an average price of $45.93 per share, under the prior authorization. Future share 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.


On November 13, 2017,12, 2020, the Board of Directors declared a cash dividend for the first quarter of fiscal 20182021 of $0.29$0.30 per share of common stock. The dividend was paidstock, payable on December 14, 201718, 2020, to all shareholders of record as of the close of business on November 30, 2017 and totaled $17.3. The incremental dividend payments of $0.3 made in fiscal 2018 were related to restricted stock awards that vested during November 2017.

Subsequent to the fiscal quarter end, on January 29, 2018,2020. On February 1, 2021, the Board of Directors declared a cash dividend for the second quarter of 20182021 of $0.29$0.30 per share of common stock, payable on March 13, 2018,11, 2021, to all shareholders of record as of the close of business February 20, 2018.
ENERGIZER HOLDINGS, INC.19, 2021. On May 3, 2021, the Board of Directors declared a cash dividend for the third quarter of fiscal 2021 of $0.30 per share of common stock, payable on June 15, 2021, to all shareholders of record as of the close of business on May 24, 2021.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)During the nine months ended June 30, 2021 and 2020, total dividends declared were $62.8 and $63.6, respectively. The payments made of $63.8 and $64.3 during the nine months ended June 30, 2021 and 2020, respectively, included the cumulative dividends paid upon the vesting of restricted shares during the periods.



The Company paid a cash dividend of $1.875 per share of MCPS on October 15, 2020 which had been declared in fiscal 2020. On November 12, 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 January 1, 2021, which was paid on January 15, 2021. On February 1, 2021, 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 business on April 1, 2021, which was paid on April 15, 2021. On May 3, 2021, the Board of Directors declared a cash dividend of $1.875 per share of MCPS to all shareholders as of July 1, 2021, to be paid July 15, 2021. This dividend was accrued as of June 30, 2021 and was paid on July 15, 2021.
(11)
Subsequent to the end of the fiscal quarter, on August 2, 2021, the Board of Directors declared a cash dividend for the fourth quarter of fiscal 2021 of $0.30 per share of common stock, payable on September 14, 2021, to all shareholders of record as of the close of business on August 24, 2021.

Subsequent to the end of the fiscal quarter, on August 2, 2021, the Board of Directors declared a cash dividend of $1.875 per share of MCPS, payable on October 15, 2021, to all shareholders of record as of the close of business on October 1, 2021.

(13) Financial Instruments and Risk Management


The market risk inherent in the Company's operations creates potential earnings volatility arising from changes in currency rates, interest rates and commodity prices. The Company's policy allows derivatives to be used only for identifiable exposures and, therefore, the Company does not enter into hedges for trading or speculative purposes where the sole objective is to generate profits.


Concentration of Credit Risk—The counterparties to derivative contracts consist of a number of major financial institutions and are generally institutions with which the Company maintains lines of credit. The Company does not enter into derivative contracts through brokers nor does it trade derivative contracts on any other exchange or over-the-counter markets. Risk of currency positions and mark-to-market valuation of positions are strictly monitored.monitored at all times.


The Company continually monitors positions with, and credit ratings of, counterparties both internally and by using outside rating agencies. While nonperformance by these counterparties exposes Energizer to potential credit losses, such losses are not anticipated.


In the ordinary course of business, the Company may enter into contractual arrangements (derivatives) to reduce its exposure to commodity price and foreign currency risks. The section below outlines the types of derivatives that
24
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


existed at December 31, 2017June 30, 2021 and September 30, 2017,2020, as well as the Company's objectives and strategies for holding these derivative instruments.


Commodity Price Risk—EnergizerThe Company uses raw materials that are subject to price volatility. TheAt times, the Company has used, and may in the future use,uses hedging instruments to reduce exposure to variability in cash flows associated with future purchases of certain materials and commodities. At December 31, 2017 and September 30, 2017, there were no open derivative or hedging instruments for future purchases of raw materials or commodities.


Foreign Currency Risk—A significant portion of Energizer’s product cost is more closely tied to the U.S. dollar than to the local currencies in which the product is sold. As such, a weakening of currencies relative to the U.S. dollar results in margin declines unless mitigated through pricing actions, which are not always available due to the economic or competitive environment. Conversely, a strengthening inof currencies relative to the U.S. dollar can improve margins. The primary currencies to which Energizer is exposed include the Euro, the British pound, the Canadian dollar and the Australian dollar. However, the Company also has significant exposures in many other currencies which, in the aggregate, may have a material impact on the Company's operations.


Additionally, Energizer’s foreign subsidiaries enter into internal and external transactions that create nonfunctional
currency balance sheet positions at the foreign subsidiary level. These exposures are generally the result of intercompany purchases, intercompany loans and, to a lesser extent, external purchases, and are revalued in the foreign subsidiary’s local currency at the end of each period. Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary’s local currency results in a transaction gain or loss recorded in Other items, net on the Consolidated Statements(Condensed) Statement of Earnings and Comprehensive Income. The primary currency to which Energizer’s foreign subsidiaries are exposed is the U.S. dollar.


Interest Rate Risk—Energizer has interest rate risk with respect to interest expense on variable rate debt. At December 31, 2017,June 30, 2021, Energizer had variable rate debt outstanding with an original principal balance of $400.0$1,300.0 under the 2020 Term Loan. Loan and the 2020 Revolving Facility.

In March 2017, the Company entered into an interest rate swap agreement with one major financial institution(2017 Interest rate swap) 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%.


This hedging instruments is consideredIn February 2018, the Company entered into a cash flow hedge for accounting purposes. Atforward starting interest rate swap (2018 Interest rate swap) with an effective date of October 1, 2018, 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 decreased $50.0 each quarter until its termination date of December 31, 20172020.

In December 2020, the Company terminated both of these swap arrangements and entered into an interest rate swap (2020 Interest rate swap) with an effective date of December 22, 2020, that fixed the variable benchmark component (LIBOR) at an interest rate of 0.95% on variable rate debt of $550.0. The notional value increased to $700.0 on January 22, 2021 and will stay at that value through December 22, 2024. The notional value will decrease by $100.0 on December 22, 2024 and by $100.0 each year thereafter until its termination date on December 22, 2027. The notional value of the swap had an unrecognized pre-tax gain of $0.7 andwas $700.0 at SeptemberJune 30, 2017 the swap had an unrecognized pre-tax loss of $1.3, both of which were included in Accumulated other comprehensive loss on the Consolidated Balance Sheet.2021.


ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


Derivatives Designated as Cash Flow Hedges - Hedging Relationships—The Company has entered into a series of forward currency contracts to hedge the cash flow uncertainty of the 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, 2017June 30, 2021 and September 30, 2017,2020, Energizer had an unrealized pre-tax loss of $4.2$1.6 and $5.8,$4.9, 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, 2017June 30, 2021 levels, over the next 12 months, $4.1$1.8 of the pre-tax loss included in Accumulated other comprehensive loss is expected to be recognized in earnings. Contract maturities for these hedges extend into fiscal year 2019.2022. There were 64 open foreign currency contracts at December 31, 2017,June 30, 2021, with a total notional value of approximately $134.$206.


25
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


The Company has entered into hedging contracts on future zinc purchases to reduce exposure to variability in cash flows associated with price volatility. The contracts are determined to be cash flow hedges and qualify for hedge accounting. The contract maturities for these hedges extend into 2022. There were 12 open contracts at June 30, 2021, with a total notional value of approximately $18. The pre-tax gain recognized on the zinc contracts was $7.3 and $4.4 at June 30, 2021 and September 30, 2020, respectively, and was included in Accumulated other comprehensive loss on the Consolidated (Condensed) Balance Sheet.

The 2017 Interest rate swap was terminated early in December 2020 and resulted in a $5.6 loss, which was recorded in accumulated other comprehensive loss on the Consolidated (Condensed) Balance Sheet. This loss will be amortized into interest expense over the remainder of the interest payments associated with the Term Loan through June 2022, the original ending date of the 2017 Interest rate swap. The 2018 Interest rate swap was terminated in December 2020, which is consistent with the end of the original swap agreement.

At June 30, 2021, Energizer recorded an unrealized pre-tax net gain of $9.8 on the 2020 Interest rate swap agreement, and at September 30, 2020, the Company recorded an unrealized pre-tax net loss of $7.3 on the 2017 and 2018 interest rate swap contracts, both of which were included in Accumulated other comprehensive loss on the Consolidated (Condensed) Balance Sheet.

Derivatives not Designated in Hedging Relationships - —Energizer enters into foreign currency derivative contracts, which are not designated as cash flow hedges for accounting purposes, to hedge existing balance sheet exposures. Any gains or losses on these contracts are expected to be offset by corresponding exchange losses or gains on the underlying exposures;exposures, and as such are not subject to significant market risk. There were 106 open foreign currency derivative contracts which are not designated as cash flow hedges at December 31, 2017,June 30, 2021, with a total notional value of approximately $85.$62.

26
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


The following table provides the Company's estimated fair values as of December 31, 2017June 30, 2021 and September 30, 2017,2020, and the amounts of gains and losses on derivative instruments classified as cash flow hedges for the quartersquarter and nine months ended December 31, 2017June 30, 2021 and 2016,2020, respectively:

 At December 31, 2017 For the Quarter Ended December 31, 2017At June 30, 2021For the Quarter Ended June 30, 2021For the Nine Months Ended June 30, 2021
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 RelationshipsEstimated Fair Value (Liability)/Asset (1)(Loss)/Gain Recognized in OCI (2)(Loss)/Gain Reclassified From OCI into Income (3)(4)(Loss)/Gain Recognized in OCI (2)(Loss)/Gain Reclassified From OCI into Income (3) (4)
Foreign currency contracts $(4.2) $(0.8) $(2.4)Foreign currency contracts$(1.6)$(0.4)$(3.0)$(5.7)$(9.0)
Interest rate contracts 0.7
 1.5
 (0.5)
Interest rate swaps contractsInterest rate swaps contracts9.8 (7.9)(1.8)8.8 (4.9)
Zinc contractsZinc contracts7.3 0.8 2.0 4.6 1.7 
Total $(3.5) $0.7
 $(2.9)Total$15.5 $(7.5)$(2.8)$7.7 $(12.2)
      
 At September 30, 2017 For the Quarter Ended December 31, 2016At September 30, 2020For the Quarter Ended June 30, 2020For the Nine Months Ended June 30, 2020
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 RelationshipsEstimated Fair Value (Liability)/Asset (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 $(5.8) $5.2
 $0.5
Foreign currency contracts$(4.9)$(4.5)$1.8 $(1.2)$4.5 
Interest rate contracts (1.3) 6.5
 (0.7)
Interest rate swaps contractsInterest rate swaps contracts(7.3)(1.2)(1.6)(6.6)(2.7)
Zinc contractsZinc contracts4.4 3.2 (0.3)(3.1)(0.6)
Total $(7.1) $11.7
 $(0.2)Total$(7.8)$(2.5)$(0.1)$(10.9)$1.2 
(1) All derivative assets are presented in Other current assets or Other assets.
(2) All derivative liabilities are presented in Other current liabilities or Other liabilities.
(3)(2) OCI is defined as other comprehensive income.
(4)(3) Gain/(loss)(Loss) reclassified to Income was recorded as follows: Foreign currency contracts in other items, net andCost of products sold, interest rate contracts in interest expense.Interest expense, and commodity contracts in Cost of products sold.
(5)(4) Each of these hedging relationships has derivative instruments with a high correlation to the underlying exposure being hedged and has been deemed highly effective in offsetting the underlying risk.


27
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)




The following table provides estimated fair values as of December 31, 2017June 30, 2021 and September 30, 20172020 and the gains and losses on derivative instruments not classified as cash flow hedges for the quarterquarters and nine months ended December 31, 2017June 30, 2021 and 2016,2020, respectively:
  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)

At June 30, 2021For the Quarter Ended June 30, 2021For the Nine Months Ended June 30, 2021
Estimated Fair Value Asset (1)Loss Recognized in Income (2)Loss Recognized in Income (2)
Foreign currency contracts$0.2 $(0.3)$(0.9)
 At September 30, 2020For the Quarter Ended June 30, 2020For the Nine Months Ended June 30, 2020
Estimated Fair Value Liability (1)Loss Recognized in Income (2)Loss Recognized in Income (2) (3)
Foreign currency contracts$(0.2)$(0.6)$(2.2)
(1) Gain/(loss)All derivative assets and liabilities are presented in Other current assets or Other assets and Other current liabilities or Other liabilities, respectively.
(2) Gain / (Loss) recognized in Income was recorded as foreign currency in Other items, net.

(3) Includes a $2.2 loss on a hedge contract on the proceeds from the Varta Divestiture.

Energizer has the following recognized financial assets resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting.

Offsetting of derivative assets
At June 30, 2021At September 30, 2020
DescriptionBalance Sheet locationGross amounts of recognized assetsGross amounts offset in the Balance SheetNet amounts of assets presented in the Balance SheetGross amounts of recognized assetsGross amounts offset in the Balance SheetNet amounts of assets presented in the Balance Sheet
Foreign Currency ContractsOther Current Assets, Other Assets$2.6 $(1.2)$1.4 $0.8 $(0.4)$0.4 
Offsetting of derivative liabilities
At June 30, 2021At September 30, 2020
DescriptionBalance Sheet locationGross amounts of recognized liabilitiesGross amounts offset in the Balance SheetNet amounts of liabilities presented in the Balance SheetGross amounts of recognized liabilitiesGross amounts offset in the Balance SheetNet amounts of liabilities presented in the Balance Sheet
Foreign Currency ContractsOther Current Liabilities, Other Liabilities$(4.0)$1.2 $(2.8)$(6.0)$0.5 $(5.5)

Offsetting of derivative assets
    At December 31, 2017 At September 30, 2017
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 $1.0
 $—
 $1.0
 $1.1
 $—
 $1.1
               
Offsetting of derivative liabilities
    At December 31, 2017 At September 30, 2017
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 $(4.9) $0.2
 $(4.7) $(6.4) $0.4
 $(6.0)

Fair Value Hierarchy—Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified in one of the following three categories:


Level 1: Quoted market prices in active markets for identical assets or liabilities.


Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

28
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)



Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)



Under the fair value accounting guidance hierarchy, an entity is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The following table sets forth the Company's financial assets and liabilities, which are carried at fair value, as of December 31, 2017June 30, 2021 and September 30, 20172020 that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy:
 Level 2
(Liabilities)/Assets at estimated fair value:June 30,
2021		September 30,
2020
Deferred compensation$(26.6)$(26.8)
Derivatives - Foreign Currency contracts(1.6)(4.9)
Derivatives - Foreign Currency contracts (non-hedge)0.2 (0.2)
Derivatives - Interest Rate Swap contracts9.8 (7.3)
Derivatives - Zinc contracts7.3 4.4 
Net Liabilities at estimated fair value$(10.9)$(34.8)
 Level 2
Liabilities at estimated fair value:December 31,
2017		 September 30,
2017
Deferred Compensation$(41.8) $(41.0)
Derivatives - Foreign Currency Contracts(3.7) (4.9)
Derivatives - Interest Rate Swap0.7
 (1.3)
Exit lease liability—
 (0.3)
Net Liabilities at estimated fair value$(44.8) $(47.5)


Energizer had no Level 1 financial assets or liabilities, other than pension plan assets, and no Level 3 financial assets or liabilities at December 31, 2017June 30, 2021 and at September 30, 2017.2020.


Due to the nature of cash and cash equivalents carrying amounts on the balance sheets approximate estimated fair value. The estimated fair value of cash and cash equivalents has beenwas determined based on level 1 inputs and cash equivalents and restricted cash are determined based on level 2 inputs, respectively.inputs.


At December 31, 2017,June 30, 2021, the estimated fair value of the Company's unfunded deferred compensation liability is determined based upon the quoted market prices of investment options that are offered under the plan. The estimated fair value of foreign currency contracts, and interest rate swap and zinc contracts, as described above, is the amount that the Company would receive or pay to terminate the contracts, considering first, quoted market prices of comparable agreements, or in the absence of quoted market prices, such factors as interest rates, currency exchange rates and remaining maturities. The estimated fair value of the exit lease liability was determined based on the discounted cash flows of the remaining lease rentals reduced by estimated sublease rentals that could be reasonably obtained for the property.


At December 31, 2017 and SeptemberJune 30, 2017,2021, the fair market value of fixed rate long-term debt was $610.3 and $615.7, respectively$2,187.4 compared to its carrying value of $600.0.$2,170.7, and at September 30, 2020, the fair market value of fixed rate long-term debt was $2,858.3 compared to its carrying value of $2,761.9. The estimated fair value of the long-term debt is estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements. The estimated fair value of fixed rate long-term debt has been determined based on Level 2 inputs.


(12)(14) Accumulated Other Comprehensive (Loss)/Income


The following table presents the changes in accumulated other comprehensive (loss)/income (AOCI), net of tax by component:
Foreign Currency Translation AdjustmentsPension ActivityZinc ContractsForeign Currency ContractsInterest Rate ContractsTotal
Balance at September 30, 2020$(137.4)$(163.5)$3.4 $(4.1)$(6.1)$(307.7)
OCI before reclassifications24.8 (1.7)3.5 (4.2)6.7 29.1 
Reclassifications to earnings0 5.1 (1.3)6.8 3.7 14.3 
Balance at June 30, 2021$(112.6)$(160.1)$5.6 $(1.5)$4.3 $(264.3)


29
 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) $(238.8)
OCI before reclassifications7.4
 —
 (0.7) 0.9
 7.6
Reclassifications to earnings—
 1.2
 1.9
 0.4
 3.5
Balance at December 31, 2017$(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,
2021202020212020
Details of AOCI ComponentsAmount 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$3.0 $(1.8)$9.0 $(4.5)Cost of products sold
Interest rate contracts1.8 1.6 4.9 2.7 Interest expense
Zinc contracts(2.0)0.3 (1.7)0.6 Cost of products sold
2.8 0.1 12.2 (1.2)Loss / (earnings) before income taxes
(0.7)0 (3.0)0.3 Income tax (benefit)/expense
$2.1 $0.1 $9.2 $(0.9)Net loss / (earnings)
Amortization of defined benefit pension items
Actuarial loss2.2 1.9 6.6 5.7 (2)
(0.5)(0.5)(1.5)(1.3)Income tax benefit
$1.7 $1.4 $5.1 $4.4 Net loss
Total reclassifications to earnings$3.8 $1.5 $14.3 $3.5 Net loss
(1) Amounts in parentheses indicate debitscredits 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 9,11, Pension Plans, for further details).

(15) 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,
2021202020212020
Other items, net
Interest income$(0.2)$(0.2)$(0.5)$(0.4)
Foreign currency exchange (gain)/loss(0.9)2.9 0.9 8.0 
Pension benefit other than service costs(0.6)(0.5)(1.6)(1.5)
Acquisition foreign currency loss0 0 0 2.2 
Transition services agreement income0 (0.4)0 (0.8)
       Other0.2 (1.1)0.4 (1.7)
Total Other items, net$(1.5)$0.7 $(0.8)$5.8 
30
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, 2021September 30, 2020
Inventories  
Raw materials and supplies$145.6 $85.2 
Work in process200.9 148.7 
Finished products344.6 277.4 
Total inventories$691.1 $511.3 
Other Current Assets  
Miscellaneous receivables$21.9 $15.8 
Due from Spectrum13.5 30.6 
Prepaid expenses105.0 76.5 
Value added tax collectible from customers29.6 20.4 
Other13.1 14.5 
Total other current assets$183.1 $157.8 
Property, Plant and Equipment  
Land$15.8 $8.9 
Buildings125.0 121.9 
Machinery and equipment855.8 821.4 
Capital leases52.8 51.4 
Construction in progress49.7 39.3 
Total gross property1,099.1 1,042.9 
Accumulated depreciation(726.5)(690.8)
Total property, plant and equipment, net$372.6 $352.1 
Other Current Liabilities  
Accrued advertising, sales promotion and allowances$18.3 $12.1 
Accrued trade allowances48.1 45.4 
Accrued salaries, vacations and incentive compensation52.7 68.1 
Accrued interest expense11.8 36.9 
Accrued redemption premium0 55.9 
Restructuring reserve6.6 9.4 
Income taxes payable16.2 30.2 
Other136.7 150.7 
Total other current liabilities$290.4 $408.7 
Other Liabilities  
Pensions and other retirement benefits$84.1 $89.9 
Deferred compensation22.8 26.8 
Mandatory transition tax16.7 16.7 
Other non-current liabilities70.9 78.2 
Total other liabilities$194.5 $211.6 


 December 31, 2017 September 30, 2017
Inventories   
Raw materials and supplies$42.9
 $36.6
Work in process72.8
 84.8
Finished products160.5
 195.7
Total inventories$276.2
 $317.1
Other Current Assets   
Miscellaneous receivables$11.1
 $13.7
Prepaid expenses47.7
 52.7
Value added tax collectible from customers30.6
 23.4
Other4.3
 5.1
Total other current assets$93.7
 $94.9
Property, Plant and Equipment   
Land$4.6
 $4.6
Buildings123.1
 122.4
Machinery and equipment693.9
 697.9
Construction in progress24.1
 19.4
Total gross property845.7
 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 allowances50.8
 51.1
Accrued salaries, vacations and incentive compensation24.1
 54.4
Income taxes payable29.3
 21.6
Other114.2
 105.7
Total other current liabilities$241.6
 $254.6
Other Liabilities   
Pensions and other retirement benefits$83.9
 $87.7
Deferred compensation41.8
 41.0
Mandatory transition tax27.6
 —
Other non-current liabilities52.3
 49.3
Total other liabilities$205.6
 $178.0


ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


(14)(16) 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 these proceedings cannot be determined with certainty. WeThe Company and its affiliates are a party to legal
31
ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED (CONDENSED) FINANCIAL STATEMENTS
(In millions - Unaudited)


proceedings and claims that arise during the ordinary course of business. We reviewThe Company reviews our legal proceedings and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and followfollows appropriate accounting guidance when making accrual and disclosure decisions. We establishThe Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and we disclosediscloses 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 doThe Company does 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, 2021, the Company had approximately $98$34.0 of purchase obligations.obligations under these contracts.


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(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 (Condensed) 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,” "will," “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:
•Global economic and financial market conditions, including the conditions resulting from the ongoing COVID-19 pandemic, and actions taken by our customers, suppliers, other business partners and governments in markets in which we compete might materially and negatively impact us.
•    Competition in our product categories might hinder our ability to execute our business strategy, achieve profitability, or maintain relationships with existing customers.
•    Changes in the retail environment and consumer preferences could adversely affect our business, financial condition and results of operations.
•    We must successfully manage the demand, supply, and operational challenges brought about by the COVID-19 pandemic and any other disease outbreak, including epidemics, pandemics, or similar widespread public health concerns.
•    Loss or impairment of the reputation of our Company or our leading brands or failure of our marketing plans could have an adverse effect on our business.
•    Loss of any of our principal customers could significantly decrease our sales and profitability.
•    Our ability to meet our growth targets depends on successful product, marketing and operations innovation and successful responses to competitive innovation and changing consumer habits.
•    We are subject to risks related to our international operations, including currency fluctuations, which could adversely affect our results of operations.
•    If we fail to protect our intellectual property rights, competitors may manufacture and market similar products, which could adversely affect our market share and results of operations.
•    Our reliance on certain significant suppliers subjects us to numerous risks, including possible interruptions in supply, which could adversely affect our business.
•    Our business is vulnerable to the availability of raw materials, our ability to forecast customer demand and our ability to manage production capacity.
•    Changes in production costs, including raw material prices, freight and labor, could erode our profit margins and negatively impact operating results, and reactions to our pricing actions.
•    The manufacturing facilities, supply channels or other business operations of the Company and our suppliers may be subject to disruption from events beyond our control.
•    We may be unable to generate anticipated cost savings (including from our restructuring programs), successfully implement our strategies, or efficiently manage our supply chain and manufacturing processes, and our profitability and cash flow could suffer as a result.
33
•    Sales of certain of our products are seasonal and adverse weather conditions during our peak selling seasons for certain auto care products could have a material adverse effect.
•    A failure of a key information technology system could adversely impact our ability to conduct business.
•    Our operations depend on the use of information technology systems that are subject to data privacy regulations, including recently effective European Union requirements, and could be the target of cyberattack.
•    We have significant debt obligations that could adversely affect our business and our ability to meet our obligations.
•    We may experience losses or be subject to increased funding and expenses related to our pension plans.
•    The estimates and assumptions on which our financial projections are based may prove to be inaccurate, which may cause our actual results to materially differ from our projections, which may adversely affect our future profitability, cash flows and stock price.
•    If we pursue strategic acquisitions, divestitures or joint ventures, we might experience operating difficulties, dilution, and other consequences that may harm our business, financial condition, and operating results, and we may not be able to successfully consummate favorable transactions or successfully integrate acquired businesses.
•    We may be unable to realize the anticipated benefits of the 2019 acquisitions of the global auto care and battery, lighting and power businesses from Spectrum Brands.
•    The 2019 auto care and battery acquisitions may have liabilities that are not known to us and the acquisition agreements may not provide us with sufficient indemnification with respect to such liabilities.
•    Our business involves the potential for claims of product liability, labeling claims, commercial claims and other legal claims against us, which could affect our results of operations and financial condition and result in product recalls or withdrawals.
•    Our business is subject to increasing regulation in the U.S. and abroad, the uncertainty and cost of future compliance and consequence of non-compliance with which may have a material adverse effect on our business.
•    Increased focus by governmental and non-governmental organizations, customers, consumers and shareholders on sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
•    We are subject to environmental laws and regulations that may expose us to significant liabilities and have a material adverse effect on our results of operations and financial condition.
•    We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our stock and diminish our cash reserves.

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 discussed herein and detailed from time to time in our other 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 17, 2020.

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 related to the spin,acquisition earn out and the one-time impactloss on extinguishment of the new U.S. tax legislation.debt. In addition, these measures help investors to seeanalyze 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.

34

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 geographictwo reportable segments including allocations for shared support functions. General corporate and other expenses, Global marketing expenses, R&DResearch and development expenses amortization(R&D), Amortization expense, interestInterest expense, otherLoss on extinguishment of debt, Other items, net, and charges related to acquisition and integration, and the spin-offacquisition earn out 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,acquisition earn out and the one-timeloss on extinguishment of debt.

Non-GAAP Tax Rate. This is the tax rate when excluding the pre-tax impact of acquisition and integration, acquisition earn out and the new U.S. incomeloss on extinguishment of debt, as well as the related tax legislation.impact for these items, calculated utilizing the statutory rate for where the impact was incurred.


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 two acquisitions in the first fiscal quarter of 2021, a battery plant in Indonesia on October 1, 2020 and a formulation company in the United States on December 1, 2020. 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.integration and acquisition earn out.


Forward-Looking StatementsCOVID-19


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

Our core batteries and auto care businesses performed strongly in the nine months ended June 30, 2021. This document contains both historicalwas partially due to increased replenishment volumes, primarily in North America, driven by elevated demand and forward-looking statements. Forward-looking statements are not based on historical facts but instead reflectcategory growth due to COVID-19. Although our expectations, estimates or projections concerning future results or events, including, without limitation,demand and sales have seen growth from the future sales,pandemic this year, the Company experienced incremental costs related to air freight, fines and penalties and personal protection equipment which unfavorably impacted our gross margins,margin by $11.7 during the first fiscal quarter of 2021. The costs were partially offset by a reduction in SG&A travel expenses in the first fiscal quarter of 2021 compared to the prior comparable period of $2.2, for a net COVID-19 impact of $9.5 during the first fiscal quarter of 2021. Incremental costs related to COVID-19 were immaterial in the second and third fiscal quarters of 2021. These costs resulted in a net reduction to reported and adjusted earnings cash flows, tax ratesper share of $0.10 for the nine months ended June 30, 2021.

In the prior quarter ended June 30, 2020, the Company had incremental operating cost of approximately $9 to maintain business continuity and performanceapproximately $4 of Energizer.higher interest to strengthen liquidity in the third fiscal quarter. These statements generally can be identifiedincremental costs were offset by lower net SG&A of approximately $4 as we reduced travel related costs due
35
to restrictions caused by the use of forward-looking words or phrases such as "believe," "expect," "expectation," "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "predict," "likely," "will," "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 that any of our expectations, estimates or projections will be achieved.pandemic. The forward-looking statements included in this document are only made asnet impact of the dateincremental costs reduced reported and adjusted earnings per share of this document$0.11 for the third fiscal quarter of 2020. The impact for the nine months ended June 30, 2020 was incremental operating costs of approximately $10 and we disclaim any obligationhigher interest costs of approximately $5, offset by the lower SG&A of approximately $4, for a net reduction to publicly update any forward-looking statement to reflect subsequent events or circumstances. Numerous factors could cause our actual resultsreported and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation:adjusted earnings per share of $0.12.


market and economic conditions;

market trends inWhile the categories in which we compete;
the success of new products and the ability to continually develop and market new products;
our ability to attract, retain and improve distribution with key customers;
our ability to continue planned advertising and other promotional spending;
our ability to timely execute strategic initiatives, including restructurings, and international go-to-market changes in a manner that will positively impact our financial condition and results of operations and does not disrupt our business operations;
thefull impact of strategic initiatives, including restructurings, on our relationships with employees, customers and vendors;
our abilityCOVID-19 remains uncertain as new variations continue to maintain and improve market share in the categories in whichdevelop, we operate despite heightened competitive pressure;
our abilitybelieve we have multiple options 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 all due to 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;
further mitigate the impact of the pending Acquisitionpandemic and preserve our financial flexibility in light of current uncertainty in the global markets, including the deferral or reduction of capital expenditures and reduction or delay of overhead expenses and other expenditures. Such delays could slow future growth or impact our business plan. The full impact of COVID-19 on our financial and operating performance will depend significantly on the respective business operations;
our abilityduration and severity of the outbreak, the actions taken to improve operations and realize cost savings;
thecontain or mitigate its impact, of foreign currency exchange rates and currency controls, as well as offsetting hedges, including the impactadministration of approved vaccines, disruption to our global supply chain (including the United Kingdom's referendum voteability of suppliers to keep pace with any demand increases), and announced intentionthe pace with which customers and consumers return to exitmore normalized purchasing behavior, among others factors beyond our current knowledge or control.

Fiscal Year 2021 Acquisitions

During the European Union;
the impactfourth quarter of raw materials and other commodity costs;
the impact of legislative changes or regulatory determinations or changes by federal, state and local, and foreign authorities, as well as the impact of potential changes to tax laws, policies and regulations;
costs and reputational damage associated with cyber-attacks or information security breaches or other events;
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 in Item 1A. Risk Factors of this Form 10-Q.

Acquisition

On January 15, 2018,fiscal 2020, the Company entered into a definitive acquisitionan agreement with Spectrum Brands Holdings, Inc.FDK Corporation to acquire its globalsubsidiary PT FDK Indonesia, a battery lighting, and portable power businessmanufacturing facility. On October 1, 2020, the Company completed the acquisition for a contractual purchase price of $2,000.0$18.2. After contractual and working capital adjustments, the Company initially paid cash of $16.9 and paid $0.7 for a working capital adjustment during the nine months ended June 30, 2021. The acquisition of the FDK Indonesia facility increased the Company's alkaline battery production capacity and allows us to avoid future planned capital expenditures.

On December 1, 2020 the Company acquired a North Carolina-based company that specializes in developing formulations for cleaning tasks. Their products are both sold to customers directly and licensed to manufacturers. This acquisition is expected to bring significant innovation capabilities in formulations to our organization. The purchase price and total cash paid for the acquisition was $51.2, subject to certain purchase pricepost-closing working capital adjustments. Energizer intends to fund

For the acquisition through a combination of existing cashquarter ended June 30, 2021, the incremental revenues and committed debt facilities, expected to ultimately consist of a new term loansegment profit from these acquisitions was $4.9 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$0.3, respectively. For the nine months ended June 30, 2021, the incremental revenues and regulatory approvals, but is expected by the end of calendar 2018.segment profit from these acquisitions was $25.2 and $3.4, respectively


The Company is also committed to pay a $100.0 termination fee to Spectrum if the transaction does not close by July 15, 2019,Acquisition and all conditions precedentIntegration Costs

Acquisition and integration costs incurred during fiscal year 2021 and 2020 relate to the Company’s obligation to consummateFDK Indonesia Acquisition, Formulations Acquisition, and the acquisition have otherwise been satisfied except for one or more of the regulatory approval conditions specifiedBattery and Auto Care Acquisitions which occurred 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.

fiscal year 2019. The Company incurred $5.7pre-tax acquisition and integration costs of $19.5 and $54.6 in the quarter and nine months ended June 30, 2021, respectively, and $11.4 and $47.6 for the quarter and nine months ended June 30, 2020, respectively, related to these acquisitions.

Pre-tax costs recorded in Costs of products sold were $9.6 and $24.6 for the quarter and nine months ended June 30, 2021, respectively, and $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 acquisition and integration costs recorded in SG&A were $9.7 and $28.7 for the quarter and nine months ended June 30, 2021, respectively, related to the integration of the Battery and Auto Care acquisitions, including costs of integrating the auto care information technology systems of the businesses and consulting costs associated with the 2020 restructuring program discussed in Note 5, Restructuring, and legal fees incurred for the fiscal year 2021 acquisitions. 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 Battery and Auto Care Acquisitions, including consulting fees and costs of integrating both the battery and auto care information technology systems of the business.

For the quarter and nine months ended June 30, 2021, the Company recorded $0.1 and $1.1, respectively, of acquisition and integration related costs in research and development. For the quarter and nine months ended June 30, 2020, the Company recorded $0.2 and $1.2, respectively, in research and development.
36

Included in Other items, net for the quarter and nine months ended June 30, 2021 was $0.1 and $0.2 of acquisition and integration costs, respectively. Other items, net for the quarter and nine months ended June 30, 2020 included pre-tax income of $0.4 and expense of $0.4, respectively. The prior year pre-tax expense 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 of transition services income.

Restructuring Costs

In the fourth fiscal quarter of 2019, the Company began implementing 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 substantially complete by December 31, 2021.

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

The total pre-tax expense related to these restructuring plans for the quarter and nine months ended June 30, 2021 was $10.0 and $31.8, respectively. Total pre-tax expense for the restructuring plans for the quarter and nine months ended June 30, 2020 was $7.3 and $21.0, respectively. The expense consisted of charges for employee severance, retention, related benefit costs, accelerated depreciation, asset write-offs, relocation, environmental investigatory and mitigation costs, consulting costs and other exit costs. The costs were reflected in Cost of products sold, Selling, general and administrative expense and Research and Development on the Consolidated Statement(Condensed) Statements of Earnings and Comprehensive Income. These restructuring costs for the quarter and nine months ended June 30, 2021, were incurred within the Americas segment in the firstamounts of $9.3 and $29.7, and the International segment in the amount of $0.7 and $2.1, respectively. The restructuring costs for the quarter and nine months ended June 30, 2020 were incurred within the Americas segment in the amounts of 2018 related$6.8 and $19.6, and the International segment in the amounts of $0.5 and $1.4, respectively.

Total pre-tax charges relating to the 2019 restructuring program since inception were $59.2. As planned, we expect to incur additional exit-related costs associated with this transaction.program of approximately $12 through the end of calendar 2021. Total pre-tax charges relating to the 2020 restructuring program since inception are $15.0. We expect to incur approximately $3 of additional costs for this program through the end of fiscal year 2021.



These programs are expected to generate approximately $67 to $75 of total cost savings annually by the end of fiscal 2022, primarily within Costs of products sold. The Company has already begun realizing cost savings from the 2019 restructuring program (approximately $28 program to date), and began realizing cost savings from the 2020 restructuring program in fiscal 2021 (approximately $1.5 program to date). The Company believes it is on track to achieve the planned program savings.


Refer to Note 5, Restructuring, to the Consolidated (Condensed) Financial Statements for additional discussion on our restructuring costs.

Highlights / Operating Results


Financial Results (in millions, except per share data)


Energizer reported firstthird fiscal quarter netNet earnings from continuing operations of $60.4,$20.8, or $0.98$0.24 per diluted share. This comparescommon share, compared to net earningsNet income from continuing operations of $95.6,$29.0, or $1.52$0.37 per diluted common share, in the prior year firstthird fiscal quarter. Adjusted diluted net earnings from continuing operations per dilutedcommon share were $1.55was $0.74 for the firstthird fiscal quarter as compared to $1.51$0.50 in the prior year quarter, an increase of 2.6%48%.
Earnings before income taxes,For the nine months ended June 30, 2021, Energizer reported Net earnings from continuing operations of $77.7, or $0.95 per diluted common share. This compares to the net earnings from continuing operations of $88.5, or $1.10 per diluted common share in the prior year comparable period. Adjusted diluted net earnings from continuing
37
operations per common share was $2.69 for the nine month period compared to the $1.73 in the prior year comparable period, an increase of 55%.
Net earnings from continuing operations and Diluted EPSnet 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, acquisition earn out and the one-time impactloss on extinguishment of the new U.S. tax legislationdebt as described in the tables below. The impact of these items areis provided below as a reconciliation of Earning before income taxes, Net earnings from continuing operations and Diluted EPSnet earnings from continuing operations per common share to adjusted Earnings before income taxes, adjusted NetAdjusted 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 measuresNon-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,
2021202020212020
Net earnings/(loss) attributable to common shareholders$16.8 $25.8 $65.6 $(53.9)
Mandatory preferred stock dividends(4.0)(4.0)(12.1)(12.1)
Net earnings/(loss)20.8 29.8 77.7 (41.8)
Net earnings/(loss) from discontinued operations— 0.8 — (130.3)
Net earnings from continuing operations$20.8 $29.0 $77.7 $88.5 
Pre-tax adjustments
Acquisition and integration (1)19.5 11.4 54.6 47.6 
Acquisition earn out1.2 — 2.3 — 
Loss on extinguishment of debt27.6 — 103.3 4.2 
Total adjustments, pre-tax$48.3 $11.4 $160.2 $51.8 
After tax adjustments
Acquisition and integration14.8 7.8 42.1 35.3 
Acquisition earn out0.9 — 1.7 — 
Loss on extinguishment of debt18.1 — 76.1 3.2 
One-time impact of the CARES Act— 1.7 — 5.1 
Total adjustments, after tax$33.8 $9.5 $119.9 $43.6 
Adjusted net earnings from continuing operations (2)$54.6 $38.5 $197.6 $132.1 
Mandatory preferred stock dividends(4.0)(4.0)(12.1)(12.1)
Adjusted net earnings from continuing operations attributable to common shareholders$50.6 $34.5 $185.5 $120.0 
Diluted net earnings per common share - continuing operations$0.24 $0.37 $0.95 $1.10 
Adjustments (per common share)
Acquisition and integration0.22 0.11 0.57 0.51 
Acquisition earn out0.01 — 0.02 — 
Loss on extinguishment of debt0.27 — 1.04 0.05 
One time impact of the CARES Act— 0.02 — 0.07 
Impact for diluted share calculation (3)— — 0.11 — 
Adjusted diluted net earnings per diluted common share - continuing operations (3)$0.74 $0.50 $2.69 $1.73 
Weighted average shares of common stock - Diluted68.6 68.7 68.7 69.4 
Adjusted Weighted average shares of common stock - Diluted (3)68.6 68.7 73.4 69.4 
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(1) AmountsAcquisition and integration costs were included in SG&Athe following lines in the unaudited Consolidated Condensed(Condensed) Statement of Earnings and Comprehensive Income.Income:
For the Quarter Ended June 30,For the Nine Months Ended June 30,
2021202020212020
Cost of products sold$9.6 $5.5 $24.6 $20.7 
SG&A9.7 6.1 28.7 25.3 
Research and development0.1 0.2 1.1 1.2 
Other items, net0.1 (0.4)0.2 0.4 
Acquisition and integration related items$19.5 $11.4 $54.6 $47.6 

(2) The effective tax rate for the quarters ended December 31, 2017June 30, 2021 and 20162020 for the Adjusted - Non-GAAP Net Earnings and Diluted EPS was 23.4%24.1% and 28.8%23.5%, respectively, and for the nine months ended June 30, 2021 and 2020 was 23.2% and 22.9%, respectively, as calculated utilizing the statutory rate for where the costs were incurred. The

(3) For the nine months ended June 30, 2021, the Adjusted diluted net tax impact associated withearnings per common share is assuming the non-GAAP adjustments highlightedconversion of the mandatory convertible preferred stock to 4.7 million of common stock, and excluding the mandatory preferred stock dividends from net earnings as that is more dilutive.

For the quarter ended June 30, 2021 and the quarter and nine months ended June 30, 2020, the conversion of the mandatory convertible preferred stock is not dilutive and the mandatory preferred stock dividends are included in the table was a benefit of $29.4 and zero, respectively, for the quarters ended December 31, 2017 and 2016.adjusted dilution calculation.






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, 2021For the Nine Months Ended June 30, 2021
$ Change% Chg$ Change% Chg
Net sales - prior year$658.0 $1,981.8 
Organic38.3 5.8 %206.3 10.4 %
Impact of FY 2021 Acquisitions4.9 0.7 %25.2 1.3 %
Change in Argentina1.9 0.3 %5.5 0.3 %
Impact of currency18.7 2.9 %36.7 1.8 %
Net Sales - current year$721.8 9.7 %$2,255.5 13.8 %
See non-GAAP measure disclosures above.


Net sales were $573.3$721.8 for the firstthird fiscal quarter of 2018,2021, an increase of $13.7$63.8 as compared to the prior year quarter, driven by the following items:


•Organic netNet sales were up 1.1%increased 5.8%, or $38.3, in the firstthird 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 year over year volumes globally contributed approximately 3.0%, primarily driven by elevated demand and timing of orders in our auto care business;

◦New distribution, predominately in North America, contributed approximately 1.8%; and

◦Favorable currency impactspricing contributed approximately 1%.

•Two acquisitions completed in the first quarter of fiscal 2021 contributed $4.9, or 0.7% of growth.

•Favorable movement in foreign currencies resulted in increased sales of $18.7, or 2.9%.

Net sales for the nine months ended June 30, 2021 were $7.8,$2,255.5, an increase of $273.7 as compared to the prior
year comparative period, driven by the following items:

•Organic Net sales increased 10.4%, or $206.3, in the third fiscal quarter due to the following items:
39

◦Increased year over year volumes globally contributed approximately 5.0%, driven by elevated demand in both battery and auto care;

◦New distribution, predominately in North America, contributed approximately 4.5%; and

◦Favorable pricing contributed approximately 1%.

•Two acquisitions completed in the first quarter of fiscal 2021 contributed $25.2, or 1.3%. of growth.


•Favorable movement in foreign currencies resulted in increased sales of $36.7, or 1.8%.

Gross margin percentageon a reported basis for the firstthird fiscal quarter of 20182021 was 48.5%37.9%, compared to 40.0% in the prior year. Excluding $9.6 of integration costs in the current quarter and was flat to$5.5 of acquisition and integration costs in the prior year quarter results, adjusted gross margin was 39.2% compared to 40.8% in the prior year, a decrease of 160 basis points.

Gross margin percentage on a reported basis for the nine months ended June 30, 2021 was 39.1%, compared to
40.4% in the prior year comparative period. Excluding $24.6 of acquisition and integration costs in the current year and $20.7 in the prior year period, adjusted gross margin was 40.2% compared to 41.4% in the prior year, a decrease of 120 basis points
Q3'FY21Q3'FY21 YTD
ReportedAdjustedReportedAdjusted
Gross Margin - FY'2040.0 %40.8 %40.4 %41.4 %
Incremental COVID-19 costs— %— %(0.5)%(0.5)%
Mix and product cost impacts(3.9)%(3.9)%(2.8)%(2.8)%
Lower margin rate profile of the FY 21 acquired businesses(0.1)%(0.2)%(0.3)%(0.3)%
Synergy realization2.2 %2.2 %2.1 %2.1 %
Currency impact0.3 %0.3 %0.2 %0.2 %
Other(0.6)%— %— %0.1 %
Gross Margin - FY'2137.9 %39.2 %39.1 %40.2 %
Gross margin was impacted primarily by higher operating costs, including higher labor costs, tariffs and transportation, consistent with ongoing inflationary trends. Additionally, gross margin was negatively impacted by the lower margin rate profile of our auto care business, which comprised a higher mix of our business as it experienced strong organic growth in the third fiscal quarter of 2021.

For the nine months ended June 30, 2021, direct incremental COVID-19 costs of approximately $11.7 were largely related to air freight, fines and penalties and personal protection equipment necessary to meet the sustained, elevated demand at the beginning of the year.

Partially offsetting these margin impacts were synergies of approximately $14 and $41 for the three and nine months ended June 30, 2021, respectively, as well as favorable currency exchange rates.

Selling, general, and administrative expense (SG&A) was $117.5 in the third fiscal quarter of 2021, or 16.3% of Net sales, as compared to $112.8, or 17.1% of Net sales, in the prior year period. Included in the third fiscal quarter of 2021 and 2020 results were acquisition and integration costs of $9.7 and $6.1, respectively, and acquisition earn out costs of $1.2 in the third quarter of 2021. Excluding acquisition and integration costs and the acquisition earn out, adjusted SG&A was $106.6, or 14.8% of Net sales in the third fiscal quarter of 2021, as compared to $106.7, or 16.2% of Net sales, in the prior year period. The decrease as a percent of Net sales resulted from higher sales and synergy realization, while SG&A expense remained consistent with prior year.
SG&A was $365.4 for the nine months ended June 30, 2021, or 16.2% of Net sales, as compared to $351.0, or 17.7% of Net sales, in the prior year comparative period. Included in the nine months ended June 30, 2021 and 2020 results were acquisition and integration costs of $28.7 and $25.3, respectively, and acquisition earn out costs of $2.3 in 2021. Excluding the acquisition and integration costs and acquisition earn out, adjusted SG&A was
40
$334.4, or 14.8% of Net sales, as compared to the $325.7, or 16.4% of net sales, in the prior year. The decrease as a percent of Net sales was the result of benefits from higher sales, synergy realization as a result of transition service agreement exits, and reduced spending, due in part to travel restrictions imposed as a result of COVID-19.
On an absolute dollar basis, adjusted SG&A increased $8.7 for the nine months ended June 30, 2021. The change was primarily driven by improved pricinghigher overhead associated with the top-line sales growth and the favorable impact of foreign currency. These items were primarilyunfavorable currency headwinds, which was partially offset by less favorable overhead absorption versus the prior fiscal quarter and investments made in continuous improvement initiatives.synergies of approximately $16.

Advertising and sales promotion expense (A&P) was $37.3 in the first fiscal quarter of 2018, or 6.5% of net sales, as compared to $34.3,$44.1, or 6.1% of net sales, in the prior period primarily in support of portfolio initiatives and holiday programs.
Selling, general, and administrative expense (SG&A) was $99.2 in the firstthird fiscal quarter of 2018,2021, as compared to $37.3, or 17.3%5.7% of Net sales, in the third fiscal quarter 2020. A&P was $120.8, or 5.4% of Net sales, for the nine months ended June 30, 2021 as compared to $106.9, or 5.4% of Net sales, in the prior year comparative period. The increase in the current year periods was due to planned incremental investment in our product portfolio as we continue to invest to support our brands and innovation.
Research and Development (R&D) was $8.2, or 1.1% of Net sales, for the quarter ended June 30, 2021, as compared to $8.4, or 1.3% of Net sales, in the prior year comparative period. For the nine months ended June 30, 2021, R&D was $24.8, or 1.1% of net sales, as compared to $84.4,$25.6, or 15.1% of net sales, in the prior period. Included in the first fiscal quarter 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 and integration costs. Excluding acquisition and integration costs in both years, 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% of net sales as compared to 14.9% in the prior year.
Research and Development (R&D) decreased to $5.3, or 0.9% of net sales, for the quarter ended December 31, 2017, as compared to $5.8, or 1.0%1.3% of net sales, in the prior year comparative period.

Interest expense was $13.4$38.6 for the firstthird fiscal quarter of 2018,2021 compared to $13.3$50.8 for the prior year comparative period.
Other items, net For the nine months ended June 30, 2021, Interest expense was expense of $1.3 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 exposures$125.0 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%$144.8 for the prior year comparative period. The interest savings in the current year rate includes a $31.0 chargewere primarily driven by the debt refinancing activity completed over the past 15 months.
Loss on extinguishment of debt was $27.6 and $103.3 for the one-time impactthree and nine months ended June 30, 2021, respectively. The Company took advantage of favorable debt markets and refinanced its €650 2026 Senior Notes in June 2021. Earlier this fiscal year, the new U.S.Company had refinanced its existing Revolver, Term Loans and 2027 Senior Notes with $1,200.0 in Term Loans. The Company also amended certain covenants in its credit agreement, which will create additional capacity and flexibility.
Other items, net was a benefit of $1.5 for the third fiscal quarter of 2021 compared to expense of $0.7 for the prior year third quarter. Other items, net was benefit of $0.8 and expense $5.8 for the nine months ended June 30, 2021 and 2020, respectively.
For the Quarter Ended June 30,For the Nine Months Ended June 30,
2021202020212020
Other items, net
Interest income$(0.2)$(0.2)$(0.5)$(0.4)
Foreign currency exchange (gain)/loss(0.9)2.9 0.9 8.0 
Pension benefit other than service costs(0.6)(0.5)(1.6)(1.5)
Acquisition foreign currency loss— — — 2.2 
Transition services agreement income— (0.4)— (0.8)
Other0.2 (1.1)0.4 (1.7)
Total Other items, net$(1.5)$0.7 $(0.8)$5.8 

The effective tax legislation passedrate on a year to date basis was 20.1% as compared to 25.9% in December 2017.the prior year. Excluding the impact of our non-GAAPthese Non-GAAP adjustments, the year to date adjusted effective tax rate was 23.4%23.2% as compared to 28.8%,22.9% in the prior year. The decrease in the rate is driven by the U.S. tax legislation and takes into account the new statutory U.S. rate that is now effective for fiscal year 2018.


Spin Costs
41

There were no costs associated with the spin transaction recorded in the first fiscal quarter of 2018 as the project has been completed. During the quarter ended December 31, 2016, the Company recorded $1.3 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.

Segment Results


Operations for Energizer are currently managed via threetwo 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, acquisition earn out, 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 and loss on extinguishment of debt, are managed on a global basis at the corporate level. The exclusion of substantially all acquisition integration, restructuring and realignmentintegration costs from segment results reflects management’s view on how it evaluates segment performance.


Energizer’s operating model includes a combination of standalone and shared business functions between the geographic segments, varying by country and region of the world. Shared functions include, but are not limited to, IT, procurement and finance. 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 6,8, Segments, to the unaudited Consolidated Condensed(Condensed) Financial Statements for the quarterperiods ended December 31, 2017.

June 30, 2021 and 2020. Segment sales and profitabilitySegment profit analysis for the quarter and nine months ended December 31, 2017June 30, 2021 are presented below.



Quarter Ended June 30, 2021Nine Months Ended June 30, 2021
$ Change% Chg$ Change% Chg
Americas
Net sales - FY '20$491.9 $1,416.3 
Organic23.2 4.7 %153.1 10.8 %
Impact of FY 2021 Acquisitions3.6 0.7 %18.5 1.3 %
Change in Argentina1.9 0.4 %5.5 0.4 %
Impact of currency4.6 1.0 %0.4 — %
Net sales - FY '21$525.2 6.8 %$1,593.8 12.5 %
International
Net sales - FY '20$166.1 $565.5 
Organic15.1 9.1 %53.2 9.4 %
Impact of FY 2021 Acquisitions1.3 0.8 %6.7 1.2 %
Impact of currency14.1 8.5 %36.3 6.4 %
Net sales - FY '21$196.6 18.4 %$661.7 17.0 %
Total Net sales
Net sales - FY '20$658.0 $1,981.8 
Organic38.3 5.8 %206.3 10.4 %
Impact of FY 2021 Acquisitions4.9 0.7 %25.2 1.3 %
Change in Argentina1.9 0.3 %5.5 0.3 %
Impact of currency18.7 2.9 %36.7 1.8 %
Net sales - FY '21$721.8 9.7 %$2,255.5 13.8 %
Net Sales (In millions)
Quarter Ended December 31, 2017
 Quarter Ended December 31, 2017
 $ Change% Chg
Americas  
Net sales - FY '17$365.1
 
Organic7.2
2.0 %
Impact of currency0.8
0.2 %
Net Sales - FY '18$373.1
2.2 %
   
EMEA  
Net sales - FY '17$114.7
 
Organic(3.0)(2.6)%
Impact of currency5.9
5.1 %
Net Sales - FY '18$117.6
2.5 %
   
Asia Pacific  
Net sales - FY '17$79.8
 
Organic1.7
2.1 %
Impact of currency1.1
1.4 %
Net Sales - FY '18$82.6
3.5 %
   
Total Net Sales  
Net sales - FY '17$559.6
 
Organic5.9
1.1 %
Impact of currency7.8
1.3 %
Net Sales - FY '18$573.3
2.4 %

Results for the Quarter Ended December 31, 2017June 30, 2021


Americas reported a netNet sales increase of 2.2% which was positively impacted by6.8% as compared to the prior year. Excluding favorable foreign currency impact of 0.8,$4.6, or 0.2%. Organic1.0%, and the favorable impact of the fiscal year 2021 acquisitions of 0.7% and Argentina operations of 0.4%, organic net sales increased 2.0% due primarily to price4.7% for the third fiscal quarter. The organic increase was driven by distribution gains in both the auto care and battery categories in North America and Latin America as well as strong auto replenishment. These increases and the favorable net impact of our portfolio optimization. These amounts were partially offset by a decline in North America battery sales compared to the retailer merchandising changes, lappingstrong COVID-19 related sales of storm volumethe prior year.

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International reported a Net sales increase of 18.4% as compared to the prior year. Excluding the impact of favorable foreign currency movement of $14.1, or 8.5%, and the May 2017 divestitureimpact of the non-core promotional sales business acquired with the auto care acquisition.

EMEA reportedfiscal year 2021 acquisitions of 0.8%, organic net sales increased 2.5%9.1% for the quarter. The increase was driven by auto care distribution gains and elevated demand in both the battery and auto care categories.

Results for the Nine Months Ended June 30, 2021

Americas reported a Net sales increase of 12.5% as compared to the prior year. Excluding the impact of acquisitions, which positively impacted Net sales by $18.5, or 1.3%, the favorable impact of Argentina operations of $5.5, or 0.4%, and favorable foreign currency impact of 5.1%. Organic$0.4, organic net sales decreased by 2.6%increased 10.8% for the nine months ended June 30, 2021. The organic increase was driven by distribution gains across both product groups, strong replenishment partially due to the shiftnet impacts of COVID-19 demand and price increases.

International reported Net sales increase of 17.0% as compared to the prior year. Excluding the impact of acquisitions, which positively impacted net sales by $6.7, or 1.2%, and the favorable foreign currency movement of $36.3, or 6.4%, organic net sales increased 9.4% driven by increased distribution and strong replenishment due to elevated COVID-19 demand levels and timing of activity between quarters as we lapped the prior year shifting of holiday orders from the first quarter of fiscal 2020 into the fourth quarter of fiscal 2017.2019.


Asia Pacific reported net sales increased by 3.5%, including the positive impact of foreign currency of 1.4%. Organic net sales increased 2.1% driven by price increases taken in several markets.

Segment Profit (In millions)
Quarter Ended December 31, 2017
 Quarter Ended December 31, 2017
 $ Change% Chg
Americas  
Segment Profit - FY '17$123.1
 
Organic(0.5)(0.4)%
Impact of currency0.5
0.4 %
Segment Profit - FY '18$123.1
— %
   
EMEA  
Segment Profit - FY '17$26.1
 
Organic(4.5)(17.2)%
Impact of currency3.9
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 currency0.5
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 currency4.9
2.8 %
Segment Profit - FY '18$172.3
(0.9)%
Segment Profit (In millions)Quarter Ended June 30, 2021Nine Months Ended June 30, 2021
$ Change% Chg$ Change% Chg
Americas
Segment profit - FY '20$122.9 $353.9 
Organic3.2 2.6 %58.8 16.6 %
Impact of FY 2021 Acquisitions0.4 0.3 %3.0 0.8 %
Change in Argentina1.2 1.0 %4.3 1.2 %
Impact of currency— — %(4.1)(1.1)%
Segment profit - FY '21$127.7 3.9 %$415.9 17.5 %
International
Segment profit - FY '20$34.8 $127.4 
Organic(5.2)(14.9)%(10.5)(8.2)%
Impact of FY 2021 Acquisitions(0.1)(0.3)%0.4 0.3 %
Impact of currency6.3 18.1 %17.9 14.0 %
Segment profit - FY '21$35.8 2.9 %$135.2 6.1 %
Total Segment profit
Segment profit - FY '20$157.7 $481.3 
Organic(2.0)(1.3)%48.3 10.0 %
Impact of FY 2021 Acquisitions0.3 0.2 %3.4 0.7 %
Change in Argentina1.2 0.8 %4.3 0.9 %
Impact of currency6.3 4.0 %13.8 2.9 %
Segment profit - FY '21$163.5 3.7 %$551.1 14.5 %
Refer to Note 6,8, Segments, in the unaudited Condensed Consolidated (Condensed) Financial Statements for a reconciliation from segment profit to earnings before income taxes.

43

Results for the Quarter Ended December 31, 2017June 30, 2021


Global reported segment profit declinedincreased 3.7% as compared to the prior year, driven by $1.6,favorable currency of 4.0%. Offsetting this increase was the organic decrease was $2.0, or 0.9%1.3%. ExcludingThe Company had strong top-line growth, but this was almost fully offset by increased operating costs including higher labor, tariffs and transportation costs, which unfavorably impacted gross margin. The Company also had synergies resulting in lower SG&A, but this was fully offset by the higher planned A&P investment in the quarter.

Americas reported segment profit increased by 3.9% as compared to the prior year. Organic segment profit increased by $3.2, or 2.6%, driven by top-line growth and realized synergies resulting in decreased SG&A. This was partially offset by higher operating costs, which unfavorably impacted gross margin as well as planned higher A&P spending.

International reported segment profit increased 2.9% as compared to the prior year. The favorable movement in foreign currencies of $4.9,$6.3, or 18.1%, was partially offset by the unfavorable organic segment profit decreased $6.5,decline of $5.2, or 3.7%14.9%. The organic decline was driven by increased labor, tariffs and transportation costs, and an unfavorable mix shift to our auto care products, which negatively impacted gross margin and mostly offset the organic revenue growth. The segment profit was further impacted by higher overhead spending and planned higher A&P spending in the period.

Results for the Nine Months Ended June 30, 2021

Global reported segment profit increased 14.5% as compared to the prior year. The organic increase of $48.3, or 10.0%, was driven by top-line organic growth and realized synergies in the current fiscal period. Top-lineyear. Slightly offsetting the organic growth in the quarter was more than offset by increases inwere operational costs related to COVID-19, unfavorable mix as well as increased operating costs that resulted from higher labor, tariffs and transportation costs, which negatively impacted gross margin, as well as slightly higher SG&A overhead due to our continuous improvement initiatives to simplifythe increased revenue and streamline our business processes to reduce costs andplanned higher A&P spending related to our portfolio optimization and holiday programs.investment.


Americas reported segment profit remained flatincreased by 17.5% as compared to the prior period inclusiveyear. The organic increase of the positive impact from foreign currency of $0.5. Organic$58.8, or 16.6%, was driven by strong top-line growth and synergy realization partially offset by operational costs related to COVID-19 and planned higher A&P spending.

International reported segment profit decreased by $0.5increased 6.1% as top-line growth was fullycompared to the prior year. The favorable movements in foreign currencies of $17.9, or 14.0%, were partially offset by the unfavorable organic segment profit decline of $10.5, or 8.2%. The organic decline was driven by operational costs related to COVID-19, unfavorable mix as well as increased operating costs that resulted from higher labor, tariffs and transportation costs, which negatively impacted gross margin. The segment profit was further impacted by higher overhead spending and planned higher A&P spending in support of portfolio initiatives and holiday programs.the period.


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 driven by the decrease in sales due to the shift of holiday orders into the fourth quarter of fiscal 2017 as well as increased overhead spending due to current year investments in our continuous improvement initiatives.
General Corporate and Global Marketing ExpensesFor the Quarter Ended June 30,For the Nine Months Ended June 30,
2021202020212020
    General corporate and other expenses$21.5 $25.6 $71.3 $74.0 
    Global marketing expense9.8 7.4 28.7 19.1 
General corporate and global marketing expense$31.3 $33.0 $100.0 $93.1 
% of Net Sales4.3 %5.0 %4.4 %4.7 %

Asia Pacific reported segment profit decreased $1.0. Excluding the favorable impact from foreign currency of $0.5, organic segment profit declined by $1.5 as top-line growth was more than offset by increased overhead spending due to current year investments in our continuous improvement initiatives.


General Corporate and Global Marketing Expenses
 For the Quarter Ended December 31,
 2017 2016
    General corporate and other expenses$21.6
 $17.2
    Global marketing expense3.2
 3.0
General corporate and global marketing expense$24.8
 $20.2
% of Net Sales4.3% 3.6%


For the quarter ended December 31, 2017,June 30, 2021, general corporate and other expenses were $21.6, an increase$21.5, a decrease of $4.4$4.1 as compared to the prior year comparative period dueand for the nine months ended June 30, 2021 was $71.3, a decrease of $2.7 as compared to increased compensation costs and higherthe prior year comparative period. The current quarter decrease was primarily driven by lower mark to market expenseexpenses on our unfunded deferred compensation liability.plans as well as reduced stock compensation expense in the current year. The decrease for the nine month period was driven by synergy realization and reduced spending, due in part to travel restrictions imposed as a result of COVID-19, partially offset by higher legal and corporate development costs and mark to market expenses on our deferred compensation plans.

44

For the quarter and nine months ended December 31, 2017,June 30, 2021, global marketing expenses were $3.2$9.8 and $28.7, respectively, compared to $3.0$7.4 and $19.1, 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. The increase was primarily driven by planned incremental investment in our branded product portfolio.


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 financial condition and prospects, (ii) for debt, our credit rating, (ii)(iii) the liquidity of the overall capital markets and (iii)(iv) 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, 20172020 filed with the Securities and Exchange Commission on November 14, 2017 as well as in Item 1A. Risk Factors of this Form 10-Q.17, 2020 for additional information.

Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing liquid funds. At December 31, 2017,June 30, 2021, Energizer had $454.3$207.7 of cash and cash equivalents, substantially allapproximately 90% 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.


TheOn December 22, 2020, the Company hasentered into a $350.0 senior securedCredit Agreement which provided for a 5-year $400.0 revolving credit facility (Revolving(2020 Revolving Facility) which maturesand a $1,200.0 Term Loan due December 2027. In December 2020, $550.0 was used to pay down the remaining balances on the Term Loan A facility due in 2020.2022, Term Loan B facility due in 2025 and the amounts outstanding on the existing 2018 Revolving Credit Facility. In January 2021, the remaining $650.0 of proceeds were utilized to fund the redemption of the Company’s $600.0 7.750% Senior Notes due in 2027 at a redemption price equal to 110.965% of the aggregate principal amount.

The borrowings under the Term Loan require quarterly principal payments at a rate of 0.25% of the original principal balance. Borrowings under the 2020 Revolving Facility 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 totalmargin. The Term Loan bears interest at a rate per annum equal to, at the option of the Company, leverage.LIBOR or Base Rate (as defined) plus the applicable margin.

The 2020 Revolving Facility replaced the previously outstanding 2018 Revolving Facility. The Company also amended certain covenants in its Credit Agreement, which are intended to create additional capacity and flexibility. As of December 31, 2017,June 30, 2021, the Company had $87.5$103.0 of outstanding borrowingsborrowing under the 2020 Revolving Facility and had $6.7$7.7 of outstanding letters of credit. Taking into account outstanding letters of credit, $255.8 remains$289.3 remained available as of December 31, 2017.June 30, 2021.

Subsequent to the quarter, 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.



Operating Activities


Cash flow from operating activities from continuing operations was $141.0$17.5 in the threenine months ended December 31, 2017,June 30, 2021, as compared to $91.8$231.9 in the prior year comparative period. The increaseThis decrease of $214.4 was primarily driven by theworking capital changes year over year improvementof approximately $282, partially offset by the increase in cash earnings of approximately $72. The working capital change of $38.5. Accounts receivableapproximately $281 was primarily result of the main driverfollowing:

•Approximately $115 in increased inventory investment compared to the working capital improvementprior year as we have taken a proactive approach to invest in incremental safety stock given the strong operating performancecontinued volatility of the global supply network–including uncertainty around product sourcing, transportation challenges and labor availability;

•Approximately $71 due to changes in the last quarter of fiscal 2017, largelyaccounts payable and accrued interest driven by hurricane activity in the U.S., distribution gains in international markets and timing of holiday activity resultedpayments;

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•Approximately $39 in accounts receivable due to higher collections in the first fiscal quarter of 2018 ascurrent year sales compared to 2017.prior year; and


•The prior year receipt of approximately $30 related to the agreement and final cash settlement from the Central Authority in Spain on a Spanish VAT refund payment.

Investing Activities


Net cash used by investing activities from continuing operations was $5.5$109.9 and $0.6 in three$47.4 for the nine months ended December 31, 2017June 30, 2021 and 2016,2020, respectively, and consisted of the following:


•Capital expenditures of $5.5$42.7 and $4.9$44.4 in the threenine months ended December 31, 2017June 30, 2021 and 2016,2020, 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 in the nine months ended June 30, 2020.

•Acquisitions, net of cash acquired was $67.2 in the nine months ended June 30, 2021 for the fiscal year 2021 acquisitions.

•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 salefinalization 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.


Investing cash outflows of approximately $30 to $35$37 are anticipated for the full fiscal year 20182021 for capital expenditures relating to maintenance, product development and cost reduction initiatives. Totalinvestments. Additional investing cash outflows of approximately $40 to $48 are anticipated in full fiscal year 2021 for integration related capital expenditures are expectedexpenditures. 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$957.5 for the threenine months ended December 31, 2017June 30, 2021 as compared to $63.2$115.4 in the prior fiscal year comparative period. For threethe nine months ended December 31, 2017,June 30, 2021, 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 $1,982.6 relating to the Term Loan funded in December 2020 and January 2021, and the June 2021 issuance of €650.0 Senior Notes due in 2029 (2029 EUR Notes);

•Payments of debt with maturities greater than 90 days of $2,770.2, primarily related to the October 2020 repayment of the $750.0 Senior Notes due in 2026 (2026 Notes), the $319.4 repayment of the Term Loan A and $313.5 Term Loan B in December 2020, the January 2021 repayment of the $600.0 Senior Notes due in 2027 (2027 Notes), and the June 2021 repayment of the €650.0 Senior Notes due in 2026 (2026 EUR Notes).

•Net increase in debt with original maturities of 90 days or less of $6.5;$106.6 primarily related to borrowing under our 2020 Revolving Facility;


•Premiums paid on extinguishment of debt of $141.1 funded the October 2020 redemption of the 2026 Notes, the January 2021 redemption of the 2027 Notes, and the June 2021 repayment of the 2026 EUR Notes;

•Debt issuance costs of $27.6 relating to the funding of the Term Loan in December 2020 and January 2021 and the 2029 EUR Notes in June 2021;

•Payment of contingent consideration of $3.9 related to the achievement of a CAE acquisition earn out threshold;

•Dividends paid on common stock of $17.6$63.8 (see below);


•Dividends paid on mandatory convertible preferred stock (MCPS) of $12.1 (see below);

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•Common stock repurchases of $50.0$21.3 at an average price of $44.41$42.61 per share (see below); and


•Taxes paid for withheld share-based payments of $1.8;$6.7.

For the nine months ended June 30, 2020, cash from financing activities from continuing operations consisted 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 2026 Notes and the refinancing of the 2018 Term Loans in December 2019;


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

For$770.3, related to the three months endedTerm Loan refinancing in December 31, 2016, cash used by financing activities consisted2019, the repayment of $345.8 of debt from the proceeds of the following:Varta divestiture as well as incremental payments on the 2018 Term Loan A and 2018 Term Loan B;


•Net decreaseincrease in debt with original maturities of 90 days or less of $27.9,$171.5, primarily related to the repayment of
borrowings on the 2018 Revolving Credit Facility;

•Debt issuance costs of $6.1 relating to the add on offering of $250.0 of our Revolving Facility;2026 Notes and the Term Loan refinancing;


•Dividends paid on common stock of $18.1;$64.3;


•Dividends paid on MCPS of $12.1;

•Common stock repurchases of $8.1$45.0 at an average price of $44.43$45.93 per share; and


•Taxes paid for withheld share-based payments of $8.1; and$9.7.

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



Dividends


On November 13, 2017,12, 2020, the Board of Directors declared a cash dividend for the first quarter of fiscal 20182021 of $0.29$0.30 per share of common stock. The dividend was paidstock, payable 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, 2018,18, 2020. On February 1, 2021, the Board of Directors declared a cash dividend for the second quarter of 20182021 of $0.29$0.30 per share of common stock, payable on March 13, 201811, 2021. On May 3, 2021, the Board of Directors declared a cash dividend for the third quarter of fiscal 2021 of $0.30 per share of common stock, payable on June 15, 2021.

The Company also paid a cash dividend of $1.875 per share of MCPS on October 15, 2020 which had been declared in fiscal 2020. On November 12, 2020, the Board of Directors declared a cash dividend of $1.875 per share of MCPS, which was paid on January 15, 2021. On February 1, 2021, the Board of Directors declared a cash dividend of $1.875 per share of MCPS, which was paid on April 15, 2021. On May 3, 2021, the Board of Directors declared a cash dividend of $1.875 per share of MCPS, payable on July 15, 2021, to all shareholders of record as of the close of business February 20, 2018.on July 1, 2021. This dividend was accrued at June 30, 2021.


Subsequent to the end of the fiscal quarter, on August 2, 2021, the Board of Directors declared a cash dividend for the fourth quarter of fiscal 2021 of $0.30 per share of common stock, payable on September 14, 2021, to all shareholders of record as of the close of business on August 24, 2021.

Subsequent to the end of the fiscal quarter, on August 2, 2021, the Board of Directors declared a cash dividend of $1.875 per share of MCPS, payable on October 15, 2021, to all shareholders of record as of the close of business on October 1, 2021.

Share Repurchases


In July 2015,November 2020, the Company's Board of Directors approved anput in place a new authorization for the Company to acquire up to 7.5 million shares of its common stock. During the threenine months ended December 31, 2017,June 30, 2021, the Company repurchased 1,126,379500,000 shares for $21.3, at an average price of $44.41$42.61 per share, or $50.0, under this authorization.


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The Company intends to enter into a $75.0 accelerated share repurchase (ASR) program in the fourth quarter of fiscal 2021, which, based on the August 6, 2021 closing price of the Company's common stock, equates to approximately 1.8 million shares and represents approximately 2.5% of the Company's fully diluted outstanding stock. The Company expects to fund these repurchases using available cash on hand and revolver borrowings, and anticipates that the ASR program will be completed before the end of the calendar year 2021.

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 pricepurchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of $42.17 underRule 10b5-1 of the current shareSecurities Exchange Act of 1934.

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, 2017June 30, 2021 were $5.2.$9.2. 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, 2017June 30, 2021 is showshown below:
 TotalLess than 1 year1 - 3 years3 - 5 yearsMore 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 payable110.5
110.5
—
—
—
Operating leases55.0
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 tax30.0
2.6
4.7
9.2
13.5
Total$1,602.7
$210.0
$176.7
$486.4
$729.6


TotalLess than 1 year1 - 3 years3 - 5 yearsMore than 5 years
Long-term debt, including current maturities$3,367.8 $12.0 $24.0 $24.0 $3,307.8 
Interest on long-term debt (1)919.8 126.3 251.7 249.5 292.3 
Notes payable103.4 103.4 — — 
Operating leases (2)174.5 19.6 34.5 31.5 88.9 
Capital leases (3)85.4 5.0 9.9 10.0 60.5 
Pension plans (4)1.1 1.1 — — — 
Purchase obligations and other (5)34.0 12.8 14.2 6.2 0.8 
Mandatory transition tax16.7 — — 9.4 7.3 
Total$4,702.7 $280.2 $334.3 $330.6 $3,757.6 
(1) The above table is based upon the debt balance and LIBOR rate as of December 31, 2017. In March 2017,June 30, 2021. Energizer entered intohas an interest rate swap agreement with one major financial institution that fixed the variable benchmark component (LIBOR) on $200$700 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03%0.95%.
(2) Operating lease payments include the net present value of the lease obligation of $121.0 as well as the imputed interest included in the payment of $53.5.
(3) Capital lease payments include the full capital leases obligation of $44.9 as well as the interest included in the payment of $40.5.
(4) Globally, total expected pension contributions for the Company for fiscal year 20182021 are estimated to be $8.9.$4.4. The Company has made payments of $1.2$3.3 year to date. The projected payments beyond fiscal year 20182021 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
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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, 2017June 30, 2021 and September 30, 2017,2020, Energizer had an unrealized pre-tax loss of $4.2$1.6 and $5.8,$4.9, 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, 2017June 30, 2021 levels over the next twelve months, $4.1$1.8 of the pre-tax loss included in Accumulated other comprehensive loss at December 31, 2017,June 30, 2021 is expected to be includedrecognized in earnings. Contract maturities for these hedges extend into fiscal year 2019.2022.


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 (Condensed) 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 quarterquarters ended December 31, 2017June 30, 2021 and 2020 resulted in incomea loss of $0.3 and expense$0.6, respectively, and a loss of $1.9$0.9 and $2.2 for the quarternine months ended December 31, 2016June 30, 2021 and 2020, respectively, and was recorded in Other items, net on the unaudited Consolidated (Condensed) Statements of Earnings and Comprehensive Income (Condensed).Income.


Commodity Price Exposure


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The Company uses raw materials that are subject to price volatility. TheAt 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 has entered into hedging contracts on future zinc purchases to reduce exposure to variability in cash flows associated with price volatility. 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 no12 open derivative or hedging instruments for future purchasescontracts at June 30, 2021, with a total notional value of raw materials or commodities.approximately $18. The pre-tax gain recognized on the zinc contracts was $7.3 at June 30, 2021 and $4.4 at September 30, 2020, 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, 2021, Energizer had variable rate debt outstanding with an original principal balance of $400.0$1,300.0 under the 2020 Term Loan. Loan and the 2020 Revolving Facility.

In March 2017,December 2020, the Company also entered into ana new interest rate swap agreement(2020 Interest rate swap) with one major financial institutionan effective date of December 22, 2020, 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%.0.95% on variable rate debt of $550.0. The notional value increased to $700.0 on January 22, 2021, and will stay at that value through December 22, 2024. The notional value will decrease by $100.0 on December 22, 2024 and by $100.0 each year thereafter until its termination date on December 22, 2027.

At June 30, 2021, Energizer recorded a unrealized pre-tax gain of $9.8 on the 2020 Interest rate swap, and at September 30, 2020, the Company recorded an unrealized pre-tax net loss of $7.3 on the 2017 and 2018 interest rate swaps. For the quarter ended December 31, 2017,June 30, 2021, our weighted average interest rate on variable rate debt, inclusive of the interest rate swap, was 3.42%2.96%.


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, 2021, 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.

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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, 2017June 30, 2021 that has materially affected or is reasonably likely to materially affect the Company's internal control over financial reporting.



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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, 2017,2020, which was filed with the Securities and Exchange Commission on November 14, 2017,17, 2020, 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 to the risk factors included in our Annual Report on Form 10-K for the year ended September 30, 2017, except for the addition of the following:10-K.


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 of a material adverse effect on the Business, (ii) the expiration or termination 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 subject 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 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 our obligations, and if sufficient financing on favorable terms or other sources of capital are not available, we may be subject to significant monetary or other damages under the Acquisition Agreement.
We currently expect 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 that could negatively affect 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


The following table reports purchases of equity securities during the firstthird quarter of fiscal 20182021 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
PeriodTotal Number of Shares Purchased (1)Average Price Paid Per ShareTotal 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)
April 1 - April 30— — — 7,000,000 
May 1 - May 31— $— — 7,000,000 
June 1 - June 30150 $42.20 — 7,000,000 
Total150 $42.20 — 7,000,000 
Issuer Purchases of Equity Securities
PeriodTotal Number of Shares Purchased (1)Average Price Paid Per ShareTotal 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 301,167,170
$44.38
1,126,379
4,151,623
December 1 - December 31—
—
—
4,151,623
Total1,167,170
$44.38
1,126,379
 
(1) 40,791150 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,November 12, 2020, the Board of Directors approved a new share repurchase authorization for the repurchase of up to 7.5 million shares. 1,126,379 shares were repurchased onThis replaced the open market during the quarter under this share repurchase authorization.prior authorization that was outstanding.

Item 6. Exhibits


See the Exhibit Index hereto.

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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).
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).
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).
ThirdFourth Amended and Restated Bylaws of Energizer Holdings, Inc. (incorporated by reference to Exhibit 3.23.1 to the Company's Current Report on Form 8-K filed November 17, 2020).
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Certificate of Designations of the 7.50% Series A Mandatory Convertible Preferred Stock of Energizer Holdings, Inc., filed with the Secretary of State of the State of Missouri and effective January 17, 2019 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed January 29, 2018)18, 2019).
Commitment Letter,Indenture, dated January 15, 2018,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).
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).
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).
Indenture dated September 30, 2020 by and among Energizer Holdings, Inc., the Guarantor party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed October 1, 2020.)
Form of 4.375% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed October 1, 2020)
Indenture, dated as of June 23, 2021, by and among Energizer Gamma Acquisition B.V., the Guarantors party thereto from time to time, The Bank of New York Mellon Trust Company, N.A., as Trustee and Registrar, and The Bank of New York Mellon, London Branch, as Paying Agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 23, 2021).
Form of 3.500% Senior Notes due 2029 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed June 23, 2021).
Amendment No. 3 dated as of April 24, 2020, to the Credit Agreement dated as of December 17, 2018, as amended, among the Company, Barclays Bank PLCthe 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).
Retirement Transition Agreement dated November 20, 2020 between Energizer Brands, LLC and Alan R. Hoskins (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed November 20, 2020.)
Amendment and Restatement Agreement dated December 22, 2020 by and among Energizer Holdings, Inc., certain of its subsidiaries, as guarantors, JPMorgan Chase Bank, N.A. as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed December 22, 2020.)
Amended and Restated Credit Agreement dated December 22, 2020, by and among Energizer Holdings, Inc., JPMorgan Chase Bank, N.A. as administrative agent and lender parties thereto (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed December 22, 2020.)
Incremental Term Loan Amendment No. 1 dated January 7, 2021, by and among Energizer Holdings, Inc., certain of its subsidiaries, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed January 16, 2018).8, 2021)
54


Retirement Transition Agreement, dated as of June 29, 2021, by and between Timothy W. Gorman and Energizer Brands, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 2, 2021)
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.
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.

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.
Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Chief Financial Officer of Energizer Holdings, Inc.
101101.INS*
AttachedInline 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.
104Cover 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 EarningsInline 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 contractspecified date, are modified or compensatory planqualified 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.
40
55

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 9, 2021
56