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What changed in ENERGIZER HOLDINGS, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ENERGIZER HOLDINGS, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+321 added−284 removedSource: 10-K (2024-11-19) vs 10-K (2023-11-14)

Top changes in ENERGIZER HOLDINGS, INC.'s 2024 10-K

321 paragraphs added · 284 removed · 225 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+10 added−8 removed149 unchanged
Biggest changeConsequently, we are subject to a number of risks associated with doing business in foreign countries, including: • unfavorable and uncertain macroeconomic and geopolitical conditions and potential operational or supply chain disruptions as a result of these developments; • political or economic instability, labor disputes, government corruption and civil unrest, including political or economic instability in the countries of the Eurozone, Egypt, Russia, the Middle East and certain markets in Latin America; • potential disruption from wars and military conflicts; • price controls and related government actions; • the possibility of nationalization of business or industries, expropriation, confiscatory taxation or other similar government action; • the inability to repatriate foreign-based cash for strategic needs in the U.S., either at all or without incurring significant income tax and earnings consequences, as well as the heightened counterparty, internal control and country-specific risks associated with holding cash overseas; • the effect of foreign income taxes, value-added taxes and withholding taxes, including the inability to recover amounts owed to us by a government authority without extended proceedings or at all; • the effect of the U.S. tax treatment of foreign source income and losses, and other restrictions on the flow of capital between countries; • adverse changes in local investment, local employment, local training or exchange control regulations; • legal and regulatory constraints, including the imposition of tariffs, trade restrictions, price, profit or other government controls, labor laws, immigration restrictions, travel restrictions, including as a result of COVID-19 or other outbreaks of infectious diseases, import and export laws or other government actions generating a negative impact on our business, including changes in trade policies that may be implemented; • currency fluctuations, including the impact of hyper-inflationary conditions in certain economies, particularly where exchange controls limit or eliminate our ability to convert from local currency; • difficulties in hiring and retaining qualified employees; • employment litigation related to employees, contractors and suppliers, particularly in Latin America and Europe; • difficulties in obtaining or unavailability of raw materials; • difficulty in enforcing contractual and intellectual property rights; • continuing legal, political and economic uncertainty from the United Kingdom's exit from the European Union, including the long-term impact of the bilateral trade and cooperation deal governing the relationship between the United Kingdom and the European Union and the potential for increasing divergence between the European Union and United Kingdom legal regimes; • lack of well-established or reliable, and impartial legal systems in certain countries where we operate; • challenges relating to enforcement of or compliance with local laws and regulations and with U.S. laws affecting operations outside of the U.S., including without limitation, the U.S.
Biggest changeConsequently, we are subject to a number of risks associated with doing business in foreign countries, including: • unfavorable and uncertain macroeconomic and geopolitical conditions and potential operational or supply chain disruptions as a result of these developments; 12 • political or economic instability, labor disputes, government corruption and civil unrest, including political or economic instability in the countries of the Eurozone, Egypt, Russia, the Middle East and certain markets in Latin America; • potential disruption from wars and military conflicts; • price controls and related government actions; • the possibility of nationalization of business or industries, expropriation, confiscatory taxation or other similar government action; • the inability to repatriate foreign-based cash for strategic needs in the U.S., either at all or without incurring significant income tax and earnings consequences, as well as the heightened counterparty, internal control and country-specific risks associated with holding cash overseas; • the effect of foreign income taxes, value-added taxes and withholding taxes, including the inability to recover amounts owed to us by a government authority without extended proceedings or at all; • the effect of the U.S. tax treatment of foreign source income and losses, and other restrictions on the flow of capital between countries; • adverse changes in local investment, local employment, local training or exchange control regulations; • legal and regulatory constraints, including the imposition of tariffs, trade restrictions, price, profit or other government controls, labor laws, immigration restrictions, travel restrictions, including as a result of outbreaks of infectious diseases, import and export laws or other government actions generating a negative impact on our business, including changes in trade policies that may be implemented; • currency fluctuations, including the impact of hyper-inflationary conditions in certain economies, particularly where exchange controls limit or eliminate our ability to convert from local currency; • difficulties in hiring and retaining qualified employees; • employment litigation related to employees, contractors and suppliers, particularly in Latin America and Europe; • difficulties in obtaining or unavailability of raw materials; • difficulty in enforcing contractual and intellectual property rights; • lack of well-established or reliable, and impartial legal systems in certain countries where we operate; • challenges relating to enforcement of or compliance with local laws and regulations and with U.S. laws affecting operations outside of the U.S., including without limitation, the U.S.
These competitors may be able to spend more aggressively on advertising and promotional activities, introduce competing products more quickly and respond more effectively to changing business and economic conditions than we can. 10 • Our competitors may have lower production, sales and distribution costs, and higher profit margins. • Our competitors have obtained, and may in the future be able to obtain, exclusivity or sole source at particular retailers or favorable in-store placement. • We may lose market share to certain retailers, including club stores, grocery, dollar stores, mass merchandisers and internet-based retailers, which may offer private label brands that are typically sold at lower prices and compete with our products in certain categories.
These competitors may be able to spend more aggressively on advertising and promotional activities, introduce competing products more quickly and respond more effectively to changing business and economic conditions than we can. • Our competitors may have lower production, sales and distribution costs, and higher profit margins. • Our competitors have obtained, and may in the future be able to obtain, exclusivity or sole source at particular retailers or favorable in-store placement. 10 • We may lose market share to certain retailers, including club stores, grocery, dollar stores, mass merchandisers and internet-based retailers, which may offer private label brands that are typically sold at lower prices and compete with our products in certain categories.
If adverse weather conditions during the first six months of the calendar year (our second and third fiscal quarters) when demand for auto care products typically peaks persist, our business, financial condition and results of operations could be materially and adversely affected. 16 A failure of a key information technology system could adversely impact our ability to conduct business.
If adverse weather conditions persist during the first six months of the calendar year (our second and third fiscal quarters) when demand for auto care products typically peaks, our business, financial condition and results of operations could be materially and adversely affected. 16 A failure of a key information technology system could adversely impact our ability to conduct business.
If the future use of R-134a is phased out or is limited or prohibited in jurisdictions in which we do business, or if substitutes for R-134a become widely used in A/C systems and their use for DIY and retrofit purposes is not approved by the EPA or other regulatory bodies, the future market for our auto care business' products containing R-134a may be limited, which could have a material adverse impact on our results of operations, financial condition, and cash flows.
If the future use of R-134a is phased out or is further limited or prohibited in jurisdictions in which we do business, or if substitutes for R-134a become widely used in A/C systems and their use for DIY and retrofit purposes is not approved by the EPA or other regulatory bodies, the future market for our auto care business' products containing R-134a may be limited, which could have a material adverse impact on our results of operations, financial condition, and cash flows.
If current expectations for revenue growth rates, gross margin rates, operating expenses, and discount rates are not met, or other economic and financial market conditions were to change, we may be required in the future to record impairment of the carrying value of goodwill or other indefinite-lived intangible assets during the period in which any impairment is determined.
If current expectations for revenue growth rates, gross margin rates, operating expenses, and discount rates are not met, or other economic and financial market conditions change, we may be required in the future to record impairment of the carrying value of goodwill or other indefinite-lived intangible assets during the period in which any impairment is determined.
If we cease doing business with a significant customer or if we experience a significant reduction in net sales to a key customer, it could have a material adverse effect on our business, financial condition and results of operations. Customers could reduce their purchasing levels or cease buying products from us at any time and for any reason.
If we cease doing business with a significant customer or if we experience a significant reduction in net sales to a key customer, it could have a material adverse effect on our business, financial condition and results of operations. 11 Customers could reduce their purchasing levels or cease buying products from us at any time and for any reason.
Additionally, if claims made in our marketing 11 campaigns subject us to claims and litigation alleging false advertising, which is common in some categories in our industry, such claims and litigation could damage our brand or cause us to alter our marketing plans in ways that may materially and adversely affect sales, or result in the imposition of significant damages against us.
Additionally, if claims made in our marketing campaigns subject us to claims and litigation alleging false advertising, which is common in some categories in our industry, such claims and litigation could damage our brand or cause us to alter our marketing plans in ways that may materially and adversely affect sales, or result in the imposition of significant damages against us.
When particular tax matters arise, a number of years may elapse before such matters are audited and finally resolved. Unfavorable resolution of any tax matter in any of the jurisdictions in which we operate could increase the effective tax rate, which would have an adverse effect on our financial condition and results of operations.
When particular tax matters arise, a number 22 of years may elapse before such matters are audited and finally resolved. Unfavorable resolution of any tax matter in any of the jurisdictions in which we operate could increase the effective tax rate, which would have an adverse effect on our financial condition and results of operations.
This has caused, and, in the future, could cause us to experience a reduction in sales, increased inventory levels and costs and could adversely affect relationships with existing 14 and prospective customers. In some cases, we may have only one supplier for a product or service.
This has caused, and, in the future, could cause us to experience a reduction in sales, increased inventory levels and costs and could adversely affect relationships with existing and prospective customers. In some cases, we may have only one supplier for a product or service.
Any resolution of a tax issue may require the use of cash in the year of resolution. Risks Specific to Our Common Stock We cannot guarantee the timing, amount or payment of dividends on our common stock. 22 The timing, declaration, amount and payment of future dividends to shareholders will fall within the discretion of our Board of Directors.
Any resolution of a tax issue may require the use of cash in the year of resolution. Risks Specific to Our Common Stock We cannot guarantee the timing, amount or payment of dividends on our common stock. The timing, declaration, amount and payment of future dividends to shareholders will fall within the discretion of our Board of Directors.
Operations of the manufacturing and packaging facilities worldwide and corporate offices of the Company and our suppliers, and the methods we and our suppliers use to obtain supplies and to distribute our products, may be subject to disruption for a variety of reasons, including work stoppages, cyber-attacks and other disruptions in information technology systems, demonstrations, disease outbreaks or pandemics, acts of war or conflicts, terrorism, fire, earthquakes, flooding or other natural disasters, disruptions in logistics, loss or impairment of key manufacturing sites, supplier capacity constraints, raw material and product quality or safety issues, industrial accidents or other occupational health and safety issues, availability of raw materials, and other regulatory issues, trade disputes between countries in which we have operations, such as the U.S. and China.
Operations of the manufacturing and packaging facilities worldwide and corporate offices of the Company and our suppliers, and the methods we and our suppliers use to obtain supplies and to distribute our products, may be subject to disruption for a variety of reasons, including work stoppages, cyberattacks and other disruptions in information technology systems, demonstrations, disease outbreaks or pandemics, acts of war or conflicts, terrorism, fire, earthquakes, flooding or other natural disasters, disruptions in logistics, loss or impairment of key manufacturing sites, supplier capacity constraints, raw material and product quality or safety issues, industrial accidents or other occupational health and safety issues, availability of raw materials, and other regulatory issues, trade disputes between countries in which we have operations, such as the U.S. and China.
In particular, because of the Company’s extensive international operations, we could be adversely affected by violations, or allegations of violations, of the FCPA and similar international anti-bribery and corruption laws. These laws generally prohibit companies and their intermediaries from making improper payments to government officials or other third parties for the purpose of obtaining or retaining business.
In particular, because of our extensive international operations, we could be adversely affected by violations, or allegations of violations, of the FCPA and similar international anti-bribery and corruption laws. These laws generally prohibit companies and their intermediaries from making improper payments to government officials or other third parties for the purpose of obtaining or retaining business.
The Company's financial results depend on the successful execution of its business operating plans. To operate more efficiently and control costs, we have entered into, and may in the future enter into, restructuring and cost reduction plans (including Project Momentum, our previously announced profit recovery program).
Our financial results depend on the successful execution of our business operating plans. To operate more efficiently and control costs, we have entered into, and may in the future enter into, restructuring and cost reduction plans (including Project Momentum, our previously announced profit recovery program).
While we have taken steps to maintain and enhance cyber security and address these risks and uncertainties by implementing security technologies, internal controls, network and data center resiliency, redundancy and recovery processes, upgrading our remote work environment and by obtaining insurance coverage, these measures may be inadequate.
While we have taken steps to maintain and enhance cybersecurity and address these risks and uncertainties by implementing security technologies, internal controls, network and data center resiliency, redundancy and recovery processes, upgrading our remote work environment and by obtaining insurance coverage, these measures may be inadequate.
Energizer's international operations are also subject to regulation in each of the foreign jurisdictions in which it manufactures, markets or distributes its products. There is also an increased risk of fraud or corruption in certain foreign jurisdictions and related difficulties in maintaining effective internal controls.
Our international operations are also subject to regulation in each of the foreign jurisdictions in which it manufactures, markets or distributes its products. There is also an increased risk of fraud or corruption in certain foreign jurisdictions and related difficulties in maintaining effective internal controls.
Privacy and data protection laws and regulations, including with respect to the EU’s General Data Protection Regulation (GDPR), the Brazilian Data Protection Law, and the California CCPA, and the interpretation and enforcement of those and similar laws and regulations, are continuously developing and evolving and there may be uncertainty with respect to how to comply with them.
Privacy, data protection and cybersecurity laws and regulations, including the EU’s General Data Protection Regulation (GDPR), the Brazilian Data Protection Law, and the California CCPA/CPRA, and the interpretation and enforcement of those and similar laws and regulations, are continuously developing and evolving and there may be uncertainty with respect to how to comply with them.
We must accurately predict both the demand for our products and the lead times required to obtain the necessary components and materials. If we overestimate demand, we may experience underutilized capacity and excess inventory levels. If we underestimate demand, we may miss delivery deadlines and sales opportunities and incur additional costs for labor overtime, equipment overuse and logistical complexities.
We must accurately forecast both the demand for our products and the lead times required to obtain the necessary components and materials. If we overestimate demand, we may experience underutilized capacity and excess inventory levels. If we underestimate demand, we may miss delivery deadlines or sales opportunities and incur additional costs for labor overtime, equipment overuse, and logistical complexities.
We maintain business interruption insurance to potentially mitigate the impact of business interruption, but such coverage may not be sufficient to offset the financial or reputational impact of an interruption. 15 The Company's future results may be affected by its operational execution, including its ability to achieve cost savings as a result of any current or future restructuring efforts.
We maintain business interruption insurance to potentially mitigate the impact of business interruption, but such coverage may not be sufficient to offset the financial or reputational impact of an interruption. 15 Our future results may be affected by our operational execution, including our ability to achieve cost savings as a result of any current or future restructuring efforts.
In addition, the Company is executing its digital transformation program that is focused on redefining our processes, implementing new tools and expanding our data to enhance connectivity along the value chain and enable us to make decisions faster. We also continue to seek to penetrate new markets and introduce new products and product innovations.
In addition, we are executing our digital transformation program that is focused on redefining our processes, implementing new tools and expanding our data to enhance connectivity along the value chain and enable us to make decisions faster. We also continue to seek to penetrate new markets and introduce new products and product innovations.
In the US, many of the Company's 20 products and product claims are regulated by the Consumer Product Safety Commission, the US Environmental Protection Agency (EPA), and the Federal Trade Commission, among other regulatory agencies. Additionally, the Company's and its suppliers' manufacturing and distribution operations are also subject to regulation by the Occupational Safety and Health Administration.
In the US, many of our products and 20 product claims are regulated by the Consumer Product Safety Commission, the US Environmental Protection Agency (EPA), and the Federal Trade Commission, among other regulatory agencies. Additionally, our and our suppliers' manufacturing and distribution operations are also subject to regulation by the Occupational Safety and Health Administration.
Additionally, the escalating costs of offering and administering health care, retirement and other benefits for employees could result in reduced profitability. Financial and Strategic Risks We have significant debt obligations that could adversely affect our business. As of September 30, 2023, our total aggregate outstanding indebtedness was approximately $3.4 billion.
Additionally, the escalating costs of offering and administering health care, retirement and other benefits for employees could result in reduced profitability. Financial and Strategic Risks We have significant debt obligations that could adversely affect our business. As of September 30, 2024, our total aggregate outstanding indebtedness was approximately $3.2 billion.
If the Company is found to be noncompliant with applicable laws and regulations in these or other areas, it could be subject to governmental or regulatory actions, including fines, import detentions, injunctions, product withdrawals or recalls or asset seizures, as well as potential criminal sanctions and damage to our reputation and brand image, or require the payment of monetary penalties, any of which could have a material adverse effect on our business.
If we are found to be noncompliant with applicable laws and regulations in these or other areas, we could be subject to governmental or regulatory actions, including fines, import detentions, injunctions, product withdrawals or recalls or asset seizures, as well as potential criminal sanctions and damage to our reputation and brand image, or require the payment of monetary penalties, any of which could have a material adverse effect on our business.
Difficulties in the production process could reduce yields or interrupt production, and, as a result, we may not be able to deliver products on time or in a cost-effective, competitive manner. Our failure to adequately manage our capacity could have a material adverse effect on our business, financial condition and results of operations.
The resulting constraints on our production process could reduce yields or interrupt production, and, as a result, we may not be able to deliver products on time or in a cost-effective, competitive manner. Our failure to adequately manage our forecasting and capacity could have a material adverse effect on our business, financial condition and results of operations.
If holders are willing to permit us to continue to use such intellectual property rights, they could require a payment of a substantial amount for continued use of those rights. Either ceasing use or paying such amounts could cause us to become less competitive and could have a material adverse effect on our business, financial condition and results of operations.
If holders are willing to permit us to continue to use such intellectual property rights, they could require a payment of a substantial amount for continued use of those rights. Either ceasing use or paying such amounts could have a material adverse effect on our business, financial condition and results of operations.
The impact of these matters, including any reserves taken in connection with such matters, on our business, financial condition and results of operations could be material. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to Consolidated Financial Statements in for additional information related to these matters.
The impact of these matters, including any reserves taken in connection with such matters, on our business, financial condition and results of operations could be material. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Legal Proceedings” and the Notes to Consolidated Financial Statements for additional information related to these matters.
Our business is subject to increasing government regulations in both the U.S. and abroad that could impose material costs. In general, the manufacture, marketing, distribution, and sale of Energizer's products and the conduct of its business operations must comply with extensive federal, state and foreign laws and regulations.
Our business is subject to increasing government regulations in both the U.S. and abroad that could impose material costs. In general, the manufacturing, marketing, distribution, and sale of our products and the conduct of our business operations must comply with extensive federal, state and foreign laws and regulations.
Due to a number of factors, including manufacturing lead-times, availability of raw materials, seasonal purchasing patterns and the potential for material price increases, we may be required to shorten our lead-time for production and more closely anticipate our retailers’ and customers’ demands, which has caused us to, and in the future could require us to, carry additional inventories and increase our working capital and related financing requirements.
Due to factors such as manufacturing lead-times, availability of raw materials, seasonal purchasing patterns and the potential for material price increases, we may be required to shorten our lead-time for production and more closely anticipate our retailers’ and customers’ demands, which has previously caused us to, and in the future could require us to, carry additional inventories and increase our working capital and related financing requirements.
If we are unable to respond or perceived to be inadequately responding to sustainability concerns, customers and consumers may choose to purchase products from another company or a competitor, and certain investors may divert from, or avoid investing in, our securities.
If we are unable to respond or perceived to be inadequately responding to sustainability concerns, customers and consumers may choose to purchase products from another company or a competitor, and certain investors may divert from, or avoid investing in, our securities, which may hinder our access to capital.
Our business also depends on our ability to continue to manufacture our existing products to meet the applicable product performance claims. Any decline in these standards could result in the loss of business and negatively impact our performance and financial results.
Our business also depends on our ability to continue to manufacture our existing products to meet the applicable product performance claims. Any decline in these standards or change in the requirements or testing could result in the loss of business and negatively impact our performance and financial results.
Any impairment charges could adversely affect the Company’s financial condition and results of operations. See Note 11, Goodwill and intangible assets for further information related to goodwill and intangible assets, and the impairment charges recorded in the year ended September 30, 2022.
Any impairment charges could adversely affect the Company’s financial condition and results of operations. See Note 11, Goodwill and intangible assets for further information related to goodwill and intangible assets, and the impairment charges recorded in the fiscal years ended September 30, 2024 and 2022.
Additionally, a finding that we have violated the trademark, trade secret, copyright, patent or other intellectual property rights of others, directly or indirectly, through the use of third-party marks, ideas or technologies, could result in the need to cease use of such trademark, trade secret, copyrighted work or patented invention in our business, as well as the obligation to pay for past infringement.
Additionally, a finding that we have violated the trademark, trade secret, copyright, patent or other intellectual property rights of others, directly or indirectly, through the use of third-party marks, ideas or technologies, could result in the need to cease use of such trademark, trade secret, copyrighted work or patented invention in our business, and pay a substantial amount for past infringement.
In addition, we may incur higher costs for transportation, workforce and distribution capability in order to maintain the surety of supplying product to our customers; ▪ Failure of third parties upon which we rely, including our suppliers, contract manufacturers, distributors, contractors and commercial banks, to meet their obligations to us in a timely manner; and ▪ Significant changes in the political and regulatory landscape in the markets in which we manufacture, sell or distribute our products, which may include, but are not limited to, restrictions on international trade, governmental or regulatory actions, closures or other restrictions that limit or suspend our or our third-party partners' or customers' operating and/or manufacturing capabilities, including operations necessary for the production, distribution, sale, and support of our products, which could adversely impact our results.
In addition, we may incur higher costs for transportation, workforce and distribution capability in order to maintain the surety of supplying product to our customers; ▪ Failure of third parties upon which we rely, including our suppliers, contract manufacturers, distributors, contractors and commercial banks, to meet their obligations to us in a timely manner; and ▪ Significant changes in the political and regulatory landscape in the markets in which we manufacture, sell or distribute our products, which may include, but are not limited to, restrictions on international trade, governmental or regulatory actions, closures or other restrictions that limit or suspend our or our third-party partners' or customers' operating and/or manufacturing capabilities, including operations necessary for the production, distribution, sale, and support of our products, which could adversely impact our results. 13 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.
Conversely, rapid increases in demand due to improving economic conditions could lead to supply chain challenges. Global markets continued to face threats and uncertainty during fiscal year 2023. Uncertain economic and financial market conditions may also adversely affect the financial condition of our customers, suppliers and other business partners.
Conversely, rapid increases in demand due to improving economic conditions could lead to supply chain challenges. Global markets continued to face threats and uncertainty during fiscal year 2024. Uncertain economic and financial market conditions, including relating to the results of elections, may also adversely affect the financial condition of our customers, suppliers and other business partners.
This volatility can significantly affect our production cost and may, therefore, have a material adverse effect on our business, results of operations and financial condition. Volatility, availability and increases in the cost of raw materials and transportation have negatively impacted, and are likely to continue to negatively impact, the Company's results of operations.
This volatility can significantly affect our production cost and may, therefore, have a material adverse effect on our business, results of operations and financial condition. Volatility, availability and increases in the cost of raw materials and transportation have negatively impacted, and may in the future negatively impact, the Company's results of operations.
In addition, if our retailers significantly change their inventory management strategies, we may encounter difficulties in filling customer orders or in liquidating excess inventories, or may find that customers are cancelling orders or returning products, which may have a material adverse effect on our business.
In addition, if our retailers significantly change their inventory management strategies, we may encounter difficulties in filling customer orders, in liquidating excess inventories, or may experience customers cancelling or returning their orders, which may have a material adverse effect on our business.
Our ability to maintain consistent quality throughout our operations depends in part upon our ability to acquire certain products in sufficient quantities. Supply shortages for a particular component can delay production and thus delay shipments to customers and the associated revenue of all products using that component.
Our ability to maintain consistent quality throughout our operations depends, in part, upon our ability to acquire certain products in sufficient quantities. Supply shortages for a particular component or material can delay production and thus delay shipments to customers and the realization of revenue associated with any products using that component.
Any determination that the Company's operations or activities are not in compliance with applicable law could expose the Company to future impairment charges or significant fines, penalties or other sanctions that may result in a reduction in net income or otherwise adversely impact the business and reputation of the Company.
Any determination that our operations or activities are not in compliance with applicable law could expose us to future impairment charges or significant fines, penalties or other sanctions that may result in a reduction in net income or otherwise adversely impact our business and reputation.
We currently conduct our business on a worldwide basis, with more than 40% of our sales in fiscal year 2023 arising from foreign countries, and a significant portion of our production capacity and cash is located overseas.
We currently conduct our business on a worldwide basis, with approximately 40% of our sales in fiscal year 2024 arising from foreign countries, and a significant portion of our production capacity and cash is located overseas.
These factors include, but are not limited to, recent supply chain disruptions, labor shortages, wage pressures, rising inflation and potential economic slowdown or growing recession risk, as well as input costs including fuel and energy costs (for example, the price of gasoline), foreign currency exchange rate fluctuations, and other matters that influence consumer spending and preferences.
These factors include, but are not limited to, recent supply chain disruptions, labor shortages, wage pressures, ongoing elevated levels of inflation and potential economic slowdown, as well as input costs including fuel and energy costs (for example, the price of gasoline), foreign currency exchange rate fluctuations, and other matters that influence consumer spending and preferences.
We had $492.9 million of additional capacity available under a senior secured revolving credit facility, inclusive of issued and outstanding letters of credit totaling approximately $7.1 million.
We had $492.4 million of additional capacity available under a senior secured revolving credit facility, inclusive of issued and outstanding letters of credit totaling approximately $7.6 million.
Our efforts to comply with privacy and data protection laws and regulations may impose significant costs and challenges that are likely to increase over time, which could have a material adverse effect on our financial condition and results of operations.
Our efforts to comply with privacy, data protection and cybersecurity laws and regulations may result in additional costs and challenges that are likely to increase over time, which could have a material adverse effect on our financial condition and results of operations.
An increasing number of devices are using built-in battery systems, such as rechargeable hearing aids, particularly in developed markets, leading to potential declining volume trend in the battery category.
An increasing number of devices are using built-in battery systems, such as rechargeable hearing aids and portable lights, particularly in developed markets, leading to potential declining volume trend in the battery and lights categories.
The discussion below addresses the material factors, of 9 which we are currently aware, that could affect, and in certain cases have affected, our businesses, results of operations and financial condition and make an investment in the Company speculative or risky.
The discussion below addresses the material factors, of which we are currently aware, that could affect, and in certain cases have affected, our businesses, results of operations and financial condition and make an investment in the Company speculative or risky. 9 Additional factors that could affect our businesses, results of operations and financial condition are discussed in Forward-Looking Statements in MD&A.
Additionally, the Company could be subject to future inquiries or investigations by governmental and other regulatory bodies.
Additionally, we could be subject to future inquiries or investigations by governmental and other regulatory bodies.
In addition, sales of certain of our products tend to be seasonal. As a result of this seasonality, our inventory and working capital needs fluctuate significantly throughout the year. Orders from retailers are often made late in the period preceding the applicable peak season, making forecasting of production schedules and inventory purchases difficult.
Our forecasting must also account for sales of certain products that tend to experience seasonal sales fluctuations. As a result of this seasonality, our inventory and working capital needs fluctuate significantly throughout the year. Orders from retailers are often made late in the period preceding the applicable peak season, making forecasting of production schedules and inventory purchases difficult.
Additionally, as a result of the desire of retailers to more closely manage inventory levels, there is a growing trend among them to purchase products on a “just-in-time” basis.
Additionally, as a result of the desire of retailers to more closely manage inventory levels, there has been a growing trend among our customers to purchase products on a “just-in-time” basis.
If any of these vendors is unable to fulfill its obligations, or if we are unable to find replacement suppliers in the event of a supply disruption, we could encounter supply shortages and/or incur higher costs to secure adequate supplies, either of which could materially harm our business.
If any of these vendors are unable to fulfill its obligations, and we are unable to find replacement suppliers during the supply disruption, we could encounter supply shortages and/or increased costs to secure adequate supplies, either of which could materially harm our business.
Any such impairment charges could have a material adverse effect on our results of operations. Sales of certain of our products are seasonal and adverse weather conditions during our peak selling seasons for certain auto care products could have a material adverse effect. Sales of certain of our auto care products tend to be seasonal.
Sales of certain of our products are seasonal and adverse weather conditions during our peak selling seasons for certain auto care products could have a material adverse effect. Sales of certain of our auto care products tend to be seasonal.
Our dependence on single -source suppliers subjects us to the possible risks of shortages, interruptions and price fluctuations, and possible litigation when we change vendors because of performance issues. Global economic factors continue to put significant pressure on suppliers, all of which tends to make the supply environment more expensive.
Our dependence on single -source suppliers subjects us to the possible risks of shortages, interruptions and price fluctuations. 14 Global economic factors continue to put significant pressure on suppliers, all of which tends to make the supply environment more expensive.
If such increases occur or exceed our estimates and we are not able to increase the prices of our products or achieve cost savings to offset such cost increases, our results of operation would be harmed.
We believe commodity price and other cost increases and volatility could continue in the future. If such increases occur or exceed our estimates and we are not able to increase the prices of our products or achieve cost savings to offset such cost increases, our results of operation would be harmed.
The failure to perfect and protect our intellectual property rights could make us less competitive and could have a material adverse effect on our business, financial condition and results of operations.
The failure to perfect, enforce and adequately protect our intellectual property rights could make us less competitive and could have a material adverse effect on our business, financial condition and results of operations. We also license certain of our brands to third parties.
Gaining additional efficiencies may become increasingly difficult over time. If we are unable to generate anticipated cost savings, successfully implement our strategies or efficiently manage our supply chain and manufacturing processes, our results of operations could suffer.
Gaining additional efficiencies may become increasingly difficult over time. Our inability to generate anticipated cost savings, successfully implement our strategies or efficiently manage our supply chain and manufacturing processes has caused, and in the future could cause, our results of operations to suffer.
In addition, the COVID-19 pandemic, geopolitical instability, including the conflict in Ukraine, as well as other global events have significantly increased global macroeconomic uncertainty and volatility.
In addition, geopolitical instability, including the conflicts in Ukraine and the Middle East, as well as other global events have significantly increased global macroeconomic uncertainty and volatility.
There is a risk that we will not be able to obtain and perfect or maintain our own intellectual property rights or, where appropriate, license intellectual property rights necessary to support new product introductions.
We cannot be certain that we will be able to effectively utilize these intellectual property rights or that we can successfully assert or defend these rights. There is a risk that we will not be able to obtain, perfect, enforce or maintain our own intellectual property rights or, where appropriate, license intellectual property rights necessary to support new product introductions.
A reduction or interruption in supplies or a significant increase in the price of one or more supplies could have a material adverse effect on our business, financial condition and results of operations. A reduction or disruption in our production capacity or our supplies could delay products and the fulfillment of orders and otherwise negatively impact our business and reputation.
A reduction or interruption in supplies or a significant increase in the price of one or more supplies could have a material adverse effect on our business, financial condition and results of operations.
From time to time, suppliers may extend lead times, limit the amounts supplied to us or increase prices due to capacity constraints or other factors. Supply disruptions may also occur due to shortages of critical materials. In addition, a number of our raw materials are obtained from a single supplier.
From time to time, suppliers may extend lead times, limit the volumes supplied to us or increase prices due to capacity constraints or other factors. Supply disruptions may also occur due to shortages of critical materials.
Energizer is committed to its sustainability journey and has taken meaningful steps including conducting an extensive materiality assessment and publishing ESG goals.
We are committed to our sustainability journey and have taken meaningful steps including conducting an extensive materiality assessment and publishing ESG goals.
Many of our suppliers must undertake a time-consuming qualification process before we can incorporate their raw materials into our production process. If we are unable to obtain materials from a qualified supplier, it can take up to a year to qualify a new supplier, assuming an alternative source of supply is available.
If we are unable to obtain materials from a qualified supplier, it can take up to a year to qualify a new supplier, assuming an alternative source of supply is available.
Additional factors that could affect our businesses, results of operations and financial condition are discussed in Forward-Looking Statements in MD&A. However, other factors not discussed below or elsewhere in this Annual Report on Form 10-K could also adversely affect our businesses, results of operations and financial condition.
However, other factors not discussed below or elsewhere in this Annual Report on Form 10-K could also adversely affect our businesses, results of operations and financial condition. Therefore, the risk factors below should not be considered a complete list of potential risks that we may face.
If we fail to protect our intellectual property rights, competitors may manufacture and market similar products, which could adversely affect our market share and results of operations. The vast majority of our total revenues are from products bearing proprietary trademarks. In addition, we own or license a number of patents, patent applications and other technology.
The vast majority of our total revenues are from products bearing proprietary trademarks. In addition, we own or license a number of patents, patent applications and other technology. We rely on trademark, trade secret, patent and copyright laws to protect our intellectual property rights and goodwill.
A weakening of foreign currencies in which we 13 generate sales relative to the U.S. dollar would decrease our net sales. Accordingly, our reported net earnings may be negatively affected by changes in foreign exchange rates.
A weakening of foreign currencies in which we generate sales relative to the U.S. dollar would decrease our net sales. Accordingly, our reported net earnings may be negatively affected by changes in foreign exchange rates. We must successfully manage the demand, supply, and operational challenges brought about by any disease outbreak, including epidemics, pandemics, or similar widespread public health concerns.
Additionally, loss of or failure to obtain necessary permits and registrations, particularly with respect to our global auto care business, could delay or prevent us from meeting current product demand, introducing new products, building new facilities or acquiring new businesses and could adversely affect our financial condition and results of operations. 21 Increased focus by governmental and non-governmental organizations, customers, consumers and shareholders on environmental, social and governance (ESG) issues, including those related to sustainability and climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation .
Increased focus by governmental and non-governmental organizations, customers, consumers and shareholders on environmental, social and governance (ESG) issues, including those related to sustainability and climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation .
We may not be able to increase our prices in response to production cost increases, which would decrease our profit margins and negatively impact our business and financial results. 12 We have implemented price increases in the past and may implement price increases in the future, which may slow sales growth or create volume declines in the short term as customers and consumers adjust to these price increases.
We have implemented price increases in the past and may implement price increases in the future, which may slow sales growth or create volume declines in the short term as customers and consumers adjust to these price increases. In addition, our competitors may or may not take competitive actions, which may lead to sales declines and loss of market share.
Finally, our ability to maintain favorable margins on our products requires us to manage our manufacturing and other production costs relative to our prices.
Finally, our ability to maintain favorable margins on our products requires us to manage our manufacturing and other production costs relative to our prices. We may not be able to increase our prices in response to production cost increases, which would decrease our profit margins and negatively impact our business and financial results.
Any significant breaches or breakdowns of such databases or systems could result in significant costs, including costs to investigate or remediate.
Furthermore, such attacks may originate from nation states or attempts by outside parties, hackers, criminal organizations or other threat actors. Any significant breaches or breakdowns of such databases or systems could result in significant costs, including costs to investigate or remediate.
Removed
Therefore, the risk factors below should not be considered a complete list of potential risks that we may face.
Added
In addition, the use of the latest technology by our customers regarding pricing may lead to category pricing pressures. Consistent with the ongoing variability in information technology systems industry-wide, our IT platforms may not be fully compatible at all times with those used by our customers and we may not be able to respond to customer data or technology demands.
Removed
We must successfully manage the demand, supply, and operational challenges brought about by any disease outbreak, including epidemics, pandemics, or similar widespread public health concerns.
Added
These licensees’ actions or inaction may dilute or diminish the value of our brands and products in the marketplace or create additional exposure to litigation, investigations, disputes or other proceedings, as well as product safety, quality, sustainability and other concerns.
Removed
In addition, our competitors may or may not take competitive actions, which may lead to sales declines and loss of market share.
Added
In addition, some of our raw materials are obtained from a single supplier and we may experience supply shortages if the single-source supplier experiences quality issues, volume constraints, or shipping delays. Many of our suppliers must undertake a time-consuming qualification process before we can incorporate their raw materials into our production process.
Removed
We rely on trademark, trade secret, patent and copyright laws to protect our intellectual property rights. We cannot be certain that we will be able to effectively utilize these intellectual property rights or that we can successfully assert or defend these rights.
Added
From time to time, we have experienced reductions or disruptions in our production capacity or our production supplies that have delayed, and in the future may delay, the fulfillment of customer orders and otherwise negatively impact our business and reputation.
Removed
Significant inflationary pressures have impacted our gross margin in fiscal 2022, and we expect inflationary pressures to continue into fiscal 2023. We believe commodity price and other cost increases and volatility, especially due to the ongoing COVID-19 pandemic, could continue in the future.
Added
Any such impairment charges could have a material adverse effect on our results of operations. See Note 11, Goodwill and intangible assets for further information related to goodwill and intangible assets, and the impairment charges recorded in the fiscal years ended September 30, 2024 and 2022.
Removed
We have seen an increase in the number of such attacks since a large number of our employees began working remotely. Furthermore, such attacks may originate from nation states or attempts by outside parties, hackers, criminal organizations or other threat actors.
Added
In response to such implementation of, and changes to, cybersecurity and data privacy legal requirements, as well as new tactics used by threat actors to infiltrate our IT systems, we have continued to invest in technology and to adapt our processes to protect our technology infrastructure and our data.
Removed
The changes introduced by existing privacy and data protection laws and regulations and the introduction of similar laws and regulations in other jurisdictions, have subjected, and may continue in the future to subject, us to additional costs and have required, and may in the future require, costly changes to our security systems, policies, procedures and practices.
Added
As privacy, data protection and cybersecurity laws and regulations continue to evolve, we may incur additional costs to further adapt our security systems, policies, procedures and practices to prevent or remediate any potential security issues and maintain compliance with applicable regulatory frameworks.
Removed
We may also be required to incur additional costs to modify or enhance their or our systems or in order to prevent or remediate any such issues.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeNorth America Asheboro, NC (an owned Battery & Lights manufacturing plant and packaging facility) Garrettsville, OH (an owned Battery & Lights manufacturing plant) Marietta, OH (an owned Battery & Lights manufacturing plant) Westlake, OH (an owned research facility for both Battery & Lights and Auto Care) Dayton, OH (a leased Auto Care manufacturing and distribution facility) Fennimore, WI (an owned Battery & Lights manufacturing facility) Portage, WI (an owned Battery & Lights manufacturing facility) Franklin, IN (a leased Battery & Lights distribution and packaging facility) International Bekasi, Indonesia (an owned Battery & Lights manufacturing facility) Cimanggis, Indonesia (an owned Battery & Lights manufacturing facility on leased land) Jurong, Singapore (an owned Battery & Lights manufacturing facility on leased land) Alexandria, Egypt (an owned Battery & Lights manufacturing facility) Washington, UK (a leased Battery & Lights manufacturing facility) Rassau, UK (a leased Auto Care manufacturing facility) Jaboatao, Brazil (an owned Battery & Lights manufacturing facility) In addition to the properties identified above, Energizer and its subsidiaries own or operate sales offices, regional offices, storage facilities, distribution centers and terminals and related properties.
Biggest changeNorth America Asheboro, NC (an owned Battery & Lights manufacturing plant and packaging facility) Garrettsville, OH (an owned Battery & Lights manufacturing plant) Marietta, OH (an owned Battery & Lights manufacturing plant) Westlake, OH (an owned research facility for both Battery & Lights and Auto Care) Dayton, OH (a leased Auto Care manufacturing and distribution facility) Portage, WI (an owned Battery & Lights manufacturing facility) Franklin, IN (a leased Battery & Lights distribution facility) International Bekasi, Indonesia (an owned Battery & Lights manufacturing facility) Cimanggis, Indonesia (an owned Battery & Lights manufacturing facility on leased land) Jurong, Singapore (an owned Battery & Lights manufacturing facility on leased land) Alexandria, Egypt (an owned Battery & Lights manufacturing facility) Washington, UK (a leased Battery & Lights manufacturing facility) Rassau, UK (a leased Auto Care manufacturing facility) Jaboatao, Brazil (an owned Battery & Lights manufacturing facility) Arroio do Meio, Brazil (an owned Auto Care manufacturing facility) Tessenderlo, Belgium (a leased Battery & Lights manufacturing facility) In addition to the properties identified above, Energizer and its subsidiaries own or operate sales offices, regional offices, storage facilities, distribution centers and terminals and related properties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee also the discussion captioned “Governmental Regulations and Environmental Matters” under Item 1 above.
Biggest changeOn September 3, 2024, the Commercial Court of the Canton of Zurich issued a $13.7 million judgment against the Company. On October 3, 2024, the Company appealed the judgment with the Federal Supreme Court of Switzerland. The appeal is pending. See also the discussion captioned “Governmental Regulations and Environmental Matters” under Item 1 above.
Item 3. Legal Proceedings We are parties to a number of legal proceedings in various jurisdictions arising out of our business operations in the normal course of business. Many of these legal matters are in preliminary stages and involve complex issues of law and fact, and may proceed for protracted periods of time.
Item 3. Legal Proceedings We are parties to a number of legal proceedings in various jurisdictions arising out of our business operations in the normal course of business. Many of these legal matters are in preliminary stages, involve complex issues of law and fact, and may proceed for protracted periods of time.
Added
In 2023, three purported class action lawsuits were filed against the Company and Wal-Mart Inc. in the Northern District of California alleging that the defendants conspired to inflate the prices of certain Energizer battery and lighting products (the “Products”) charged by the Company to other retailers and to prevent other retailers from charging consumers 25 ENERGIZER HOLDINGS, INC.
Added
CONSOLIDATED STATEMENTS OF CASH FLOWS prices below Wal-Mart’s pricing, in violation of antitrust and consumer protection laws. The matters were filed on behalf of putative classes of entities that purchased the Products directly from Energizer, persons who purchased the Products directly from a Wal-Mart brick-and-mortar store, and persons who indirectly purchased the Products (other than for resale).
Added
All three lawsuits have been consolidated. The plaintiffs seek, among other things, monetary damages, costs and disbursements, reasonable attorneys’ fees, as well as injunctive relief. The Company has not recorded any accruals in its consolidated financial statements as the likelihood of a loss from these cases is not probable nor estimable at this time.
Added
The Company believes that it has substantial defenses against the claims and intends to vigorously defend against them. In November 2021, Varta Microbattery GmbH filed a lawsuit against the Company alleging breach of a supply agreement related to zinc-air hearing aid batteries.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number That May Yet Be Purchased Under the Plans or Programs July 1, 2023 - July 31, 2023 — $ — — 5,041,940 August 1, 2023 - August 31, 2023 — $ — — 5,041,940 September 1, 2023 - September 30, 2023 — $ — — 5,041,940 Total — $ — — 5,041,940 26 The graph below matches Energizer Holdings, Inc.'s cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the S&P Midcap 400 index, the S&P SmallCap 600 index, and the S&P 500 Household Products index.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number That May Yet Be Purchased Under the Plans or Programs July 1, 2024 - July 31, 2024 — $ — — 5,041,940 August 1, 2024 - August 31, 2024 — $ — — 5,041,940 September 1, 2024 - September 30, 2024 — $ — — 5,041,940 Total — $ — — 5,041,940 (1) On November 12, 2020 the Board of Directors approved a share repurchase program for up to 7.5 million shares of common stock.
See Item 1A - Risk Factors - Risks Related to Our Common Stock - We cannot guarantee the timing, amount or payment of dividends on our common stock. Issuer Purchases of Equity Securities. The following table reports purchases of equity securities during the fourth quarter of fiscal 2023 by Energizer and any affiliated purchasers pursuant to SEC rules.
See Item 1A - Risk Factors - Risks Related to Our Common Stock - We cannot guarantee the timing, amount or payment of dividends on our common stock. Issuer Purchases of Equity Securities. The following table reports purchases of equity securities during the fourth quarter of fiscal 2024 by Energizer and any affiliated purchasers pursuant to SEC rules.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company's Common Stock is listed on the New York Stock Exchange (NYSE). As of September 30, 2023, there were approxima tely 4,780 shareholders of record of the Company's Common Stock under the symbol "ENR".
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company's Common Stock is listed on the New York Stock Exchange (NYSE). As of September 30, 2024, there were approxima tely 4,600 shareholders of record of the Company's Common Stock under the symbol "ENR".
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 9/30/2018 to 9/30/2023.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 9/30/2019 to 9/30/2024.
They are not intended to forecast possible future performance of the Common Stock. 9/30/18 9/30/19 9/30/20 9/30/21 9/30/22 9/30/23 Energizer Holdings, Inc. 100.00 76.39 70.35 72.17 48.17 63.55 S&P Midcap 400 100.00 97.51 95.40 137.07 116.17 134.20 S&P SmallCap 600 100.00 90.66 83.14 131.07 106.39 117.11 S&P 500 Household Products 100.00 140.05 160.23 160.01 146.73 170.06 27
They are not intended to forecast possible future performance of the Common Stock. 9/30/19 9/30/20 9/30/21 9/30/22 9/30/23 9/30/24 Energizer Holdings, Inc. 100.00 92.10 94.48 63.06 83.20 85.77 S&P SmallCap 600 100.00 91.71 144.58 117.35 129.18 162.58 S&P 500 Household Products 100.00 114.41 114.25 104.77 121.43 151.89 29
Removed
Energizer was moved from the S&P MidCap 400 index to the S&P SmallCap 600 index this year, and accordingly, the Company has elected to replace S&P MidCap 400 index with the S&P SmallCap 600 index in the graph below. In this transition year, we have included both indexes in the graph below.
Added
Subsequent to year-end, on November 18, 2024, the Company's Board of Directors approved an authorization for the repurchase of up to 7.5 million shares, which replaced the November 2020 prior authorization. 28 The graph below matches Energizer Holdings, Inc.'s cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the S&P SmallCap 600 index and the S&P 500 Household Products index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

140 edited+72 added−46 removed112 unchanged
Biggest changeFor fiscal 2022, cash flow from financing activities consists of the following: • Cash proceeds from issuance of debt with original maturities greater than 90 days of $300.0 relating to the new Senior Notes due in 2027 issuance in the second quarter of fiscal 2022; • Payments on debt with maturities greater than 90 days of $13.7, primarily related to the quarterly principal payments on the Term Loan; • Net decrease in debt with original maturities of 90 days or less of $99.0, primarily related to repayments of borrowings under our 2020 Revolving Facility; • Debt issuance costs of $7.6 relating to the amendment of the Credit Agreement in December 2021 and the issuance of the $300.0 Senior Notes due in 2027; • Payments to terminate finance lease obligations of $5.1 related to the termination of our Dixon IL packaging facility lease; • Dividends paid on common stock of $84.9 during fiscal 2022; • Dividends paid on Mandatory Convertible Preferred Stock (MCPS) of $8.1 during fiscal 2022; and • Taxes paid for withheld share-based payments of $2.5. 45 For fiscal 2021, cash flow used by financing activities consists of the following: • Cash proceeds from 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 on debt with maturities greater than 90 days of $2,773.8, 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 $102.1, primarily related to borrowings under our 2020 Revolving Facility; • Debt issuance costs of $29.0 relating to the funding of the Term Loan in December 2020 and January 2021 and the 2029 EUR Notes in June 2021; • 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; • Dividends paid on common stock of $83.9 during fiscal 2021; • Dividends paid on MCPS of $16.2 during fiscal 2021; • Purchase of treasury stock of $96.3 representing the cash paid for stock repurchases including the $75.0 Accelerated Share Repurchase program; • Payment of contingent consideration of $6.8 related to the achievement of a CAE acquisition earn out threshold; and • Taxes paid for withheld share-based payments of $6.7.
Biggest changeFor fiscal 2022, cash flow from financing activities consists of the following: • Cash proceeds from issuance of debt with original maturities greater than 90 days of $300.0 relating to the new Senior Notes due in 2027 issuance in the second quarter of fiscal 2022; • Payments on debt with maturities greater than 90 days of $13.7, primarily related to the quarterly principal payments on the Term Loan; • Net decrease in debt with original maturities of 90 days or less of $99.0, primarily related to repayments of borrowings under our 2020 Revolving Facility; • Debt issuance costs of $7.6 relating to the amendment of the Credit Agreement in December 2021 and the issuance of the $300.0 Senior Notes due in 2027; • Payments to terminate finance lease obligations of $5.1 related to the termination of our Dixon IL packaging facility lease; • Dividends paid on common stock of $84.9 during fiscal 2022; • Dividends paid on Mandatory Convertible Preferred Stock (MCPS) of $8.1 during fiscal 2022; and • Taxes paid for withheld share-based payments of $2.5.
The Company also excludes amortization of intangibles and impairment of goodwill and intangible assets from segments as these are non-cash items related to the original purchase of the intangibles and not utilized to evaluate current segment performance.
The Company also excludes amortization of intangibles and impairment of goodwill and intangible assets from segments as these are non-cash items related to the original purchase of the intangibles and are not utilized to evaluate current segment performance.
For Armor All and STP, the non-cash impairments were primarily due to declines in their respective Auto Care category projections late in the fourth quarter of fiscal 2022, significant increases in input costs, and a higher discount rate.
For Armor All and STP, the non-cash impairments were primarily due to declines in their respective Auto Care category projections late in the fourth quarter of fiscal 2022, significant increases in input costs, and a higher discount rate.
For Rayovac, the fair value of the trade name exceeded its carrying value of $422.2 by approximately 5%. The quantitative estimate of fair value for the Rayovac trade name was determined using the multi-period excess earnings method, which requires significant assumptions, including estimates related to revenue growth rates, gross margin rates, operating expenses (SG&A, R&D, and A&P) and discount rates.
For Rayovac, the fair value of the trade name exceeded its carrying value of $422.2 by approximately 5%. The quantitative estimate of fair value for the Rayovac trade name was determined using the multi-period excess earnings method, which requires significant assumptions, including estimates related to revenue growth rates, gross margin rates, operating expenses (SG&A, R&D, and A&P) and discount rate.
There can be no assurances that we will continue to have access to capital markets on terms acceptable to us. See “Risk Factors” for a further discussion. Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing liquid funds.
There can be no assurances that we will continue to have access to capital markets on terms acceptable to us. See “Risk Factors” for a further discussion. Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing 45 liquid funds.
The effective date of these provisions was January 1, 2023. There was no impact on the Company in fiscal 2023 as no shares were repurchased. Any excise tax incurred on corporate stock repurchases will generally be recognized as part of the cost basis of the treasury stock acquired and not reported as part of income tax expense.
The effective date of these provisions was January 1, 2023. There was no impact on the Company in fiscal 2024 as no shares were repurchased. Any excise tax incurred on corporate stock repurchases will generally be recognized as part of the cost basis of the treasury stock acquired and not reported as part of income tax expense.
Reserves are established based on historical data and recorded in cases where the right of return does exist for a particular sale. The Company does not offer warranties on products. Energizer offers a variety of programs, primarily to its retail customers, designed to promote sales of its products.
Reserves are established based on historical data and recorded in cases where the right of return does exist for a particular sale. The Company does not offer warranties on products. 50 Energizer offers a variety of programs, primarily to its retail customers, designed to promote sales of its products.
Shipping and handling activities are accounted for as contract fulfillment costs and recorded in Cost of products sold. 48 • Pension Plans - The determination of the Company’s obligation and expense for pension benefits is dependent on certain assumptions developed by the Company and used by actuaries in calculating such amounts.
Shipping and handling activities are accounted for as contract fulfillment costs and recorded in Cost of products sold. • Pension Plans - The determination of the Company’s obligation and expense for pension benefits is dependent on certain assumptions developed by the Company and used by actuaries in calculating such amounts.
For fiscal 2022, the effective tax rate was a benefit of 24.2%. The current year rate was unfavorably impacted by the tax impact of the goodwill impairment. Excluding the impact of our non-GAAP adjustments, the year to date adjusted effective 39 tax rate was 19.5% as compared to 22.6% in the prior year.
For fiscal 2022, the effective tax rate was a benefit of 24.2%. The current year rate was unfavorably impacted by the tax impact of the goodwill impairment. Excluding the impact of our non-GAAP adjustments, the year to date adjusted effective tax rate was 19.5% as compared to 22.6% in the prior year.
The working capital change of approximately $397.3 was primarily a result of the following: • Approximately $105 is due to collections of accounts receivable in the current year compared to the prior year. The Company had reduced its factoring at the end of fiscal year 2022 compared to the prior year, which resulted in higher collections in fiscal 2023.
The working capital change of approximately $397.3 was primarily a result of the following: • Approximately $105 is due to collections of accounts receivable in fiscal 2023 compared to the prior year. The Company had reduced its factoring at the end of fiscal year 2022 compared to the prior year, which resulted in higher collections in fiscal 2023.
This involves estimating taxable earnings, specific taxable and deductible items, the likelihood of generating sufficient future taxable income to utilize deferred tax assets, the portion of the income of foreign subsidiaries that is expected to 51 be remitted to the U.S. and be taxable and possible exposures related to future tax audits.
This involves estimating taxable earnings, specific taxable and deductible items, the likelihood of generating sufficient future taxable income to utilize deferred tax assets, the portion of the income of foreign subsidiaries that is expected to be remitted to the U.S. and be taxable and possible exposures related to future tax audits.
Share repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934. 46 On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (IRA) which, among other changes, created a new corporate alternative minimum tax (AMT) based on adjusted financial statement income and imposed a 1% excise tax on corporate stock repurchases.
Share repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934. 48 On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (IRA) which, among other changes, created a new corporate alternative minimum tax (AMT) based on adjusted financial statement income and imposed a 1% excise tax on corporate stock repurchases.
However, the Company can elect not to perform the 49 qualitative assessment, and is then required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value.
However, the Company can elect not to perform the qualitative assessment, and is then required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value.
For fiscal 2023, cash flow used by financing activities consists of the following: • Payments on debt with maturities greater than 90 days of $222.1, primarily related to the early retirement of Senior notes of $21.6 and the term loan principal payments of $200.0; • Net increase in debt with original maturities of 90 days or less of $1.2, primarily related to international borrowings; • Dividends paid on common stock of $86.3 during fiscal 2023 (see below); and • Taxes paid for withheld share-based payments of $2.2.
For fiscal 2023, cash flow used by financing activities consists of the following: • Payments on debt with maturities greater than 90 days of $222.1, primarily related to the early retirement of Senior notes of $21.6 and the term loan principal payments of $200.0; • Net increase in debt with original maturities of 90 days or less of $1.2, primarily related to international borrowings; • Dividends paid on common stock of $86.3 during fiscal 2023; and • Taxes paid for withheld share-based payments of $2.2.
This increase of $394.2 was primarily driven by working capital changes year over year of approximately $397.3 as the Company has worked to return to a more normalized working capital levels.
This increase of $394.2 was primarily driven by working capital changes year over year of approximately $397.3 as the Company 46 has worked to return to a more normalized working capital levels.
Based on plan assets at September 30, 2023, a 100 basis point decrease or increase in expected asset returns would increase or decrease the Company’s U.S. pre-tax pension expense by $2.6. In addition, poor asset performance may increase and accelerate the rate of required pension contributions in the future.
Based on plan assets at September 30, 2024, a 100 basis point decrease or increase in expected asset returns would increase or decrease the Company’s U.S. pre-tax pension expense by $2.6. In addition, poor asset performance may increase and accelerate the rate of required pension contributions in the future.
After the evaluation of all available positive and negative evidence, the conclusion was that it is more likely than not that the Company will generate enough future taxable income to realize the U.S. net deferred tax asset on its balance sheet as of September 30, 2023.
After the evaluation of all available positive and negative evidence, the conclusion was that it is more likely than not that the Company will generate enough future taxable income to realize the U.S. net deferred tax asset on its balance sheet as of September 30, 2024.
Brazil Manufacturing Plant Flood In May 2022, the Company's Jaboatao, Brazil battery manufacturing facility had severe flooding due to historic levels of rain in the area. The plant was not operational for the month of June, however some production began again in July and was back on line in fiscal 2023.
Brazil Manufacturing Plant Flood In May 2022, the Company's Jaboatao, Brazil battery manufacturing facility had severe flooding due to historic levels of rain in the area. The plant was not operational for the month of June, however some production began again in July and was fully back on line in early fiscal 2023.
As of September 30, 2023, the Company was in compliance with the provisions and covenants associated with its debt agreements, and expects to remain in compliance for at least the next 12 months. Operating Activities Cash flow from operating activities is the primary funding source for operating needs and capital investments.
As of September 30, 2024, the Company was in compliance with the provisions and covenants associated with its debt agreements, and expects to remain in compliance for at least the next 12 months. Operating Activities Cash flow from operating activities is the primary funding source for operating needs and capital investments.
The appearance and fragrance categories include protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners and washes designed to clean, shine, refresh and protect interior and exterior automobile surfaces under the brand names Armor All, Nu Finish, Refresh Your Car!, LEXOL, Eagle One, California Scents, Driven, Bahama & Co, Carnu, Grand Prix, Kit and Tempo.
The appearance and fragrance categories include protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners and washes designed to clean, shine, refresh and protect interior and exterior automobile surfaces under the brand names Armor All®, Nu Finish®, Refresh Your Car!®, LEXOL®, Eagle One®, NEVR-DULL®, California Scents®, Driven®, Bahama & Co®, Carnu®, Grand Prix®, Kit®, Tempo® and Centralsul®.
On December 22, 2020, the Company entered into a Credit Agreement (Credit Agreement) which provided for a 5-year $400.0 revolving credit facility (2020 Revolving Facility) and a $1,200.0 Term Loan due December 2027. On December 31, 2021 the Company amended the Credit Agreement to increase the 2020 Revolving Facility to $500.0.
In December 2020, the Company entered into a Credit Agreement (Credit Agreement) which provided for a 5-year $400.0 revolving credit facility (2020 Revolving Facility) and a $1,200.0 Term Loan due December 2027. On December 31, 2021 the Company amended the Credit Agreement to increase the 2020 Revolving Facility to $500.0.
Future share repurchase, if any, would be made on the open market and the timing and the amount of any purchases will be determined by the Company based on its evaluation of the market conditions, capital allocation objectives, legal and regulatory requirements and other factors.
Future share repurchases, if any, would be made on the open market and the timing and the amount of any purchases will be determined by the Company based on its evaluation of the market conditions, capital allocation objectives, legal and regulatory requirements and other factors.
Excluding the current year Project Momentum restructuring costs of $29.9, and the prior year integration costs of $6.0, impact of costs from the flooding of our Brazilian manufacturing facility of $9.7 and exiting the Russian market of $1.3, gross profit dollars were $1,153.9 in fiscal 2023 versus $1,136.5 in fiscal 2022.
Excluding the fiscal 2023 Project Momentum restructuring costs of $29.9, and the fiscal 2022 integration costs of $6.0, impact of costs from the flooding of our Brazilian manufacturing facility of $9.7 and exiting the Russian market of $1.3, gross profit dollars were $1,153.9 in fiscal 2023 versus $1,136.5 in fiscal 2022.
The growth was driven by improved operating margins driven by Project Momentum initiatives and decreased overhead and R&D spending. This growth was partially offset by lower organic sales as well as higher A&P spending in the current year. • Auto Care segment profit was $75.0, an increase of $28.5, or 61.3%, versus the prior fiscal year.
The growth was driven by improved operating margins driven by Project Momentum initiatives and decreased overhead and R&D spending. This growth was partially offset by lower organic sales as well as higher A&P spending in fiscal 2023 compared to the prior year. • Auto Care segment profit was $75.0, an increase of $28.5, or 61.3%, versus the prior fiscal year.
Within the next twelve months, operating and finance lease payments are expected to be $20.4 and $2.5, respectively. Refer to Note 10 Leases for further details. Other Matters Environmental Matters The operations of Energizer are subject to various federal, state, foreign and local laws and regulations intended to protect the public health and the environment.
Within the next twelve months, operating and finance lease payments are expected to be $20.9 and $4.0, respectively. Refer to Note 10 Leases for further details. Other Matters Environmental Matters The operations of Energizer are subject to various federal, state, foreign and local laws and regulations intended to protect the public health and the environment.
Macroeconomic Environment We continue to operate in an inflationary environment where macro-economic pressures and geopolitical instability are expected to continue into fiscal year 2024.
Macroeconomic Environment We continue to operate in an inflationary environment where macro-economic pressures and geopolitical instability are expected to continue into fiscal year 2025.
Contractual Obligations and Commitments The Company believes it has sufficient liquidity to fund its operations and meet its short-term and long-term obligations. The Company's material future obligations include the contractual and purchase commitments described below. The Company has a contractual commitment to repay its long-term debt of $3,344.2 based on the defined terms of our debt agreements.
Contractual Obligations and Commitments The Company believes it has sufficient liquidity to fund its operations and meet its short-term and long-term obligations. The Company's material future obligations include the contractual and purchase commitments described below. The Company has a contractual commitment to repay its long-term debt of $3,180.8 based on the defined terms of our debt agreements.
This increase is partially offset by $55 million of changes in accrued sales allowance. • Approximately $227 of less inventory investment compared to the prior year as the Company was proactively building safety stock in the prior year and reduced the investment in the current year as inventory levels continued the return to a more normalized level; and • Approximately $131 due to changes in accounts payable and accrued liabilities driven by timing of payments.
This increase is partially offset by $55 of changes in accrued sales allowance. • Approximately $227 of less inventory investment compared to fiscal 2022 as the Company was proactively building safety stock in the prior year and reduced the investment in fiscal 2023 as inventory levels continued the return to a more normalized level. • Approximately $131 due to changes in accounts payable and accrued liabilities driven by timing of payments.
As a percent of net sales, R&D expense was consistent as a percentage of sales at 1.1% in all three fiscal years. Amortization Expense Amortization expense was $59.4, $61.1 and $61.2 in fiscal 2023, 2022 and 2021, respectively.
As a percent of net sales, R&D expense was consistent as a percentage of sales at 1.1% in all three fiscal years. Amortization Expense Amortization expense was $58.2, $59.4 and $61.1 in fiscal 2024, 2023 and 2022, respectively.
In July 2023, the Company's Board of Directors approved an expansion of this program to include an additional year, which will allow for additional optimization of our battery manufacturing, distribution and global supply chain networks, further review of our global real estate footprint and the implementation of IT systems that will allow us to streamline our organization and fully execute the program and increase the savings by $50 annually.
In July 2023, the Company's Board of Directors approved an expansion of this program to include an additional year, which will allow for additional optimization of our battery manufacturing, distribution and global supply chain networks, further review of our global real estate footprint and the implementation of IT systems that will allow us to streamline our organization and fully execute the program.
Fiscal 2022 also included $5.8 related to the exit of the Russian market. In fiscal 2023, SG&A excluding Project Momentum restructuring and related costs was $459.4 or 15.5%, compared to fiscal 2022 of $467.3 or 15.3%, when excluding acquisition and integration costs, the earn out, costs from exiting the Russian market and Project Momentum restructuring and related costs.
In fiscal 2023, SG&A excluding Project Momentum restructuring and related costs was $459.4 or 15.5%, compared to fiscal 2022 of $467.3 or 15.3%, when excluding acquisition and integration costs, the earn out, costs from exiting the Russian market and Project Momentum restructuring and related costs.
Taking into account outstanding letters of credit, $492.9 remained available as of September 30, 2023. 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.
Taking into account outstanding letters of credit, $492.4 remained available as of September 30, 2024. 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.
Excluding the current year Project Momentum restructuring costs and the prior year costs from the flooding of our Brazilian manufacturing facility, exiting the Russian market and integration costs, the gross margin was 39.0% for the fiscal year, up 170 basis points from prior 37 year.
Excluding the fiscal year 2023 Project Momentum restructuring costs and the fiscal year 2022 costs from the flooding of our Brazilian manufacturing facility, exiting the Russian market and integration costs, the gross margin was 39.0% for fiscal year 2023, up 170 basis points from the prior year.
For further discussion regarding net sales in each of our reportable product segments, including a summary of reported versus organic changes, please see the section titled “Segment Results” provided below. Gross Profit Gross profit dollars were $1,124.0 in fiscal 2023 versus $1,119.5 in fiscal 2022.
For further discussion regarding net sales in each of our reportable product segments, including a summary of reported versus organic changes, please see the section titled “Segment Results” provided below. Gross Profit Gross profit dollars were $1,104.3 in fiscal 2024 versus $1,124.0 in fiscal 2023.
Organic segment profit increased $29.5, or 63.4%. The growth was driven by improved operating margins driven by Project Momentum initiatives and decreased overhead spending. This growth was partially offset by lower organic sales as well as higher A&P and R&D spending in the current year.
Organic segment profit increased $29.5, or 63.4%. The growth was driven by improved operating margins driven by Project Momentum initiatives and decreased overhead spending. This growth was partially offset by lower organic sales as well as higher A&P and R&D spending in fiscal 2023 compared to the prior year.
(8) The effective tax rate for the Adjusted - Non-GAAP Net earnings and Diluted net earnings per common share was 21.2%, 19.5% and 22.6% for the years ended September 30, 2023, 2022 and 2021, respectively, as calculated utilizing the statutory rate for where the costs were incurred.
(11) The effective tax rate for the Adjusted - Non-GAAP Net earnings and Diluted net earnings per common share was 22.9%, 21.2% and 19.5% for the years ended September 30, 2024, 2023 and 2022, respectively, as calculated utilizing the statutory rate for where the costs were incurred.
Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses (including share-based compensation costs), amortization of intangibles, impairment of goodwill and intangible assets, acquisition and integration activities, Project Momentum restructuring and related costs, acquisition earn out, the costs of the flooding of our manufacturing facility in Brazil, the costs of exiting the Russian market, the settlement loss on U.S. pension annuity buy out and other items determined to be corporate in nature.
Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses (including share-based compensation costs), amortization of intangibles, impairment of goodwill and intangible assets, acquisition and integration activities, Project Momentum restructuring and related costs, network transition costs, acquisition earn out, a litigation matter, the costs of the flooding of our manufacturing facility in Brazil, the costs of exiting the Russian market, the December 2023 Argentina Economic Reform, the settlement loss on U.S. pension annuity buy out and other items determined to be corporate in nature.
Financial items, such as interest income and expense, gain on finance lease termination and (gain)/loss on extinguishment of debt are managed on a global basis at the corporate level. The exclusion of acquisition and integration and Project Momentum restructuring and related costs from segment results reflects management’s view on how it evaluates segment performance.
Financial items, such as interest income and expense, gain on finance lease termination and loss/(gain) on extinguishment of debt are managed on a global basis at the corporate level. The exclusion of these costs from segment results reflects management's view on how it evaluates segment performance.
It may also be required to share in the cost of cleanup with respect to state-designated sites or other sites outside of the U.S. Accrued environmental costs at September 30, 2023 were $14.0, of which approximately $3.9 is expected to be spent during fiscal 2024.
It may also be required to share in the cost of cleanup with respect to state-designated sites or other sites outside of the U.S. Accrued environmental costs at September 30, 2024 were $10.3, of which approximately $3.1 is expected to be spent during fiscal 2025.
This was partially offset by unfavorable movement in foreign currency of $22.0, or 3.7%, the change in Russian operating profit of $1.2 from exiting the Russian market and a decline of $1.4, or 0.2%, in Argentina operations.
The increase was driven by organic segment profit increase of 8.5%. This was partially offset by unfavorable movement in foreign currency of $22.0, or 3.7%, the change in Russian operating profit of $1.2 from exiting the Russian market and a decline of $1.4, or 0.2%, in Argentina operations.
Earnings before income tax was negatively impacted by $21.3, or $0.23 per share, compared to the prior year. Currency, excluding hyperinflationary markets, had an adverse impact to fiscal 2022 compared to fiscal 2021.
Earnings before income tax was negatively impacted by $2.5, or $0.03 per share, compared to the prior year. 37 Currency, excluding hyperinflationary markets, had an adverse impact to fiscal 2023 compared to fiscal 2022. Earnings before income tax was negatively impacted by $21.3, or $0.23 per share, compared to the prior year.
Finally, Energizer has operating and financing leases for real estate, equipment, and other assets that include future minimum payments with initial terms of one year or more. Total future operating and finance lease payments at September 30, 2023 are $145.2 and $66.2, respectively.
Finally, Energizer has operating and financing leases for real estate, equipment, and other assets that include future minimum payments with initial terms of one year or more. Total future operating and finance lease payments at September 30, 2024 are $145.3 and $90.1, respectively.
Year Ended September 30, 2023 Year Ended September 30, 2022 Reported Adjusted Reported Adjusted Gross Margin - Prior Year 36.7 % 37.3 % 38.4 % 39.6 % Pricing 4.2 % 4.2 % 4.3 % 4.3 % Project Momentum initiatives 1.4 % 1.4 % — % — % Mix impact 0.1 % 0.1 % — % — % Product cost impacts (3.7) % (3.7) % (5.8) % (5.8) % Year-over-year impact of restructuring costs, Brazil flood, exiting the Russian market and integration costs, net (0.4) % — % 0.6 % — % Reduction of FY 2021 COVID-19 cost impact — % — % 0.4 % 0.4 % Synergy realization — % — % 0.2 % 0.2 % Currency impact and other (0.3) % (0.3) % (1.4) % (1.4) % Gross Margin - Current Year 38.0 % 39.0 % 36.7 % 37.3 % Selling, General and Administrative (SG&A) SG&A expenses were $489.4 in fiscal 2023, or 16.5% of net sales, as compared to $484.5, or 15.9% of net sales for fiscal 2022, and $487.2, or 16.1% of net sales for fiscal 2021.
For the Years Ended September 30, 2024 2023 Reported Adjusted Reported Adjusted Gross Margin - Prior Year 38.0 % 39.0 % 36.7 % 37.3 % Pricing (1.5) % (1.5) % 4.2 % 4.2 % Project Momentum initiatives 1.9 % 1.9 % 1.4 % 1.4 % Product cost impacts 1.8 % 1.8 % (3.7) % (3.7) % Year-over-year impact of restructuring costs, Brazil flood, exiting the Russian market and integration costs, net (1.6) % — % (0.4) % — % Currency impact and other (0.3) % (0.3) % (0.2) % (0.2) % Gross Margin - Current Year 38.3 % 40.9 % 38.0 % 39.0 % Selling, General and Administrative (SG&A) SG&A expenses were $526.3 in fiscal 2024, or 18.2% of net sales, as compared to $489.4, or 16.5% of net sales for fiscal 2023, and $484.5, or 15.9% of net sales for fiscal 2022.
The company has entered into an interest rate swap agreement that fixed the variable benchmark component (SOFR) on $700.0 of variable rate debt. Refer to Note 12 Debt for further details. The Company has an obligation to pay a mandatory transition tax of $16.7 over the next three years.
The company has entered into an interest rate swap agreement that fixed the variable benchmark component (SOFR) on $700.0 of variable rate debt. Refer to Note 12 Debt for further details. The Company has an obligation to pay a mandatory transition tax of $12.8.
The increase was driven by was primarily driven by increased factoring fees, higher mark to market expenses on our deferred compensation plans as well as increased stock compensation in the current year. For fiscal 2022, general corporate expenses were $101.6, an increase of $5.6 compared to fiscal 2021 expense of $96.0.
The increase was primarily driven by increased factoring and legal fees, higher mark to market expenses on our deferred compensation plans as well as increased stock compensation in the current year. For fiscal 2023, general corporate expenses were $107.2, an increase of $5.6 compared to fiscal 2022 expense of $101.6.
General corporate and other expenses, amortization expense, impairment of goodwill and intangible 28 assets, interest expense, (gain)/loss on extinguishment of debt, other items, net, Project Momentum restructuring and related costs, acquisition and integration costs, an acquisition earn out, settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market and the costs of the flooding of our Brazilian manufacturing facility have all been excluded from segment profit.
General corporate and other expenses, amortization expense, impairment of goodwill and intangible 30 assets, interest expense, loss/(gain) on extinguishment of debt, other items, net, Project Momentum restructuring and related costs, network transition costs, acquisition and integration costs, an acquisition earn out, a litigation matter, the December 2023 Argentina Economic Reform, settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market and the costs of the flooding of our Brazilian manufacturing facility have all been excluded from segment profit.
Other intangible assets are expected to have determinable useful lives. Our assessment of intangible assets that have an indefinite life and those that have a determinable life is based on a number of factors including the competitive environment, market share, brand history, underlying product life cycles, operating plans and the macroeconomic environment.
Our assessment of intangible assets that have an indefinite life and those that have a determinable life is based on a number of factors including the competitive environment, market share, brand history, underlying product life cycles, operating plans and the macroeconomic environment. Our estimates of the useful lives of determinable-lived 51 intangible assets are primarily based on the same factors.
This is the tax rate when excluding the pre-tax impact of Project Momentum restructuring and related costs, acquisition and integration costs, an acquisition earn out, an impairment of goodwill and intangible assets, the (gain)/loss on extinguishment of debt, the settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market and the costs of the flooding of our Brazilian manufacturing facility, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred, as well as the one-time impact of Tax structuring.
This is the tax rate when excluding the pre-tax impact of Project Momentum restructuring and related costs, network transition costs, acquisition and integration costs, an acquisition earn out, a litigation matter, an impairment of goodwill and intangible assets, the loss/(gain) on extinguishment of debt, the December 2023 Argentina Economic Reform, the settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market and the costs of the flooding of our Brazilian manufacturing facility, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.
The increase in gross profit dollars was driven by the positive impact of executed price increases in battery and auto care and Project Momentum savings of approximately $47. Partially offsetting these margin impacts were higher operating costs, including raw material costs, as well as adverse currency impacts. Gross profit dollars were $1,119.5 in fiscal 2022 versus $1,161.4 in fiscal 2021.
The increase in gross profit dollars was driven by the positive impact of executed price increases in battery and auto care and Project Momentum savings of approximately $47. Partially offsetting these margin impacts were higher operating costs, including raw material costs, as well as adverse currency impacts.
These consisted of charges for employee severance, retention, related benefit costs, accelerated depreciation, asset write-offs, relocation and decommissioning costs, environmental investigatory and mitigation costs, consulting costs and other exit costs, offset by a gain on finance lease termination in fiscal 2022 and a gain on sale of fixed assets in fiscal 2021.
These consisted of charges for employee severance, retention, related benefit costs, accelerated depreciation, asset write-offs, relocation and decommissioning costs, environmental investigatory and mitigation costs, consulting costs, IT enablement and other exit costs, offset by a gain on sale of fixed assets in fiscal 2024.
A lthough the Company's restructuring costs are recorded outside of segment profit, if allocated to our reportable segments, the restructuring costs noted above fiscal 2023 would have been included in our Batteries & Lights and Auto Care segments in the amount of $52.7 and $7.0, respectively.
A lthough the Company's Project Momentum restructuring costs are recorded outside of segment profit, if allocated to our reportable segments, the restructuring costs noted above for fiscal 2024 would have been included in our Batteries & Lights and Auto Care segments in the amount of $87.0 and $4.7, respectively.
Net earnings/(loss) and diluted net earnings/(loss) per common share for the time periods presented were impacted by certain items related to Project Momentum restructuring and related costs, costs related to acquisition and integration, an acquisition earn out, impairment of goodwill and intangible assets, the (gain)/loss on extinguishment of debt, the settlement loss on U.S. pension annuity buy out, the costs of exiting the Russian market, the gain on finance lease termination, the costs of the flooding of our manufacturing facility in Brazil, and the one-time impact of Tax structuring as described in the tables below.
Net earnings/(loss) and diluted net earnings/(loss) per common share for the time periods presented were impacted by certain items related to Project Momentum restructuring and related costs, network transition costs, costs related to acquisition and integration, an acquisition earn out, a litigation matter, impairment of goodwill and intangible assets, the (gain)/loss on extinguishment of debt, the December 2023 Argentina Economic Reform, the settlement loss on U.S. pension annuity buy out, the costs of exiting the Russian market, the gain on finance lease termination and the costs of the flooding of our manufacturing facility in Brazil as described in the tables below.
Within the next twelve months, the company is obligated to pay $12.0 of this total debt. Our interest commitments based on the current debt balance and SOFR rate on drawn debt at September 30, 2023 is $769.6 with $150.3 expected within the next twelve months.
Within the next twelve months, the company is obligated to pay $12.0 of this total debt. Our interest commitments based on the current debt balance and SOFR rate on drawn debt at September 30, 2024 is $568.1 with $136.6 expected within the next twelve months.
Subsequent to the fiscal year end, on November 6, 2023, the Board of Directors declared a dividend for the first quarter of fiscal 2024 of $0.30 per share of common stock, payable on December 14, 2023, to all shareholders of record as of the close of business on November 29, 2023.
Subsequent to the fiscal year end, on November 4, 2024, the Board of Directors declared a dividend for the first quarter of fiscal 2025 of $0.30 per share of common stock, payable on December 12, 2024, to all shareholders of record as of the close of business on November 27, 2024.
These measures exclude the impact of Project Momentum restructuring and related costs, acquisition and integration costs, an acquisition earn out, the settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market and the costs of the flooding of our manufacturing facility in Brazil.
These measures exclude the impact of Project Momentum restructuring and related costs, network transition costs, acquisition and integration costs, an acquisition earn out, a litigation matter, the December 2023 Argentina Economic Reform, the settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market and the costs of the flooding of our manufacturing facility in Brazil.
See disclosure under Non-GAAP Financial Measures above. 34 For the Twelve Months Ended September 30, 2023 2022 2021 Net earnings/(loss) attributable to common shareholders $ 140.5 $ (235.5) $ 144.7 Mandatory preferred stock dividends — (4.0) (16.2) Net earnings/(loss) 140.5 (231.5) 160.9 Pre-tax adjustments Project Momentum Restructuring and related costs (1) 59.7 0.9 — Acquisition and integration (2) — 16.5 68.9 Acquisition earn out (3) — 1.1 3.4 Impairment of goodwill & intangible assets — 541.9 — (Gain)/loss on extinguishment of debt (1.5) — 103.3 Settlement loss on U.S. pension annuity buy out (4) 50.2 — — Exit of Russian market (5) — 14.6 — Gain on finance lease termination (6) — (4.5) — Brazil flood damage, net of insurance proceeds (7) — 9.7 — Total adjustments, pre-tax $ 108.4 $ 580.2 $ 175.6 Total adjustments, after tax (8) $ 83.5 $ 452.6 $ 94.5 Adjusted net earnings $ 224.0 $ 221.1 $ 255.4 For the Twelve Months Ended September 30, 2023 2022 2021 Diluted net earnings/(loss) per common share $ 1.94 $ (3.37) $ 2.11 Adjustments Project Momentum Restructuring and related costs 0.64 0.01 — Acquisition and integration — 0.17 0.79 Acquisition earn out — 0.01 0.03 Impairment of goodwill & intangible assets — 5.86 — (Gain)/loss on extinguishment of debt (0.02) — 1.11 Settlement loss on U.S. pension annuity buy out 0.53 — — Exit of Russian market — 0.17 — Gain on finance lease termination — (0.05) — Brazil flood damage, net of insurance proceeds — 0.14 — Tax structuring (9) — — (0.56) Impact for diluted share calculation (10) — 0.14 — Adjusted diluted net earnings per diluted share $ 3.09 $ 3.08 $ 3.48 Weighted average shares of common stock - Diluted 72.4 69.9 68.7 Adjusted weighted average shares of common stock - Diluted (10) 72.4 71.7 68.7 Currency, excluding hyperinflationary markets, had an adverse impact to fiscal 2023 compared to fiscal 2022.
See disclosure under Non-GAAP Financial Measures above. 36 For the Twelve Months Ended September 30, 2024 2023 2022 Net earning/(loss) attributable to common shareholders $ 38.1 $ 140.5 $ (235.5) Mandatory preferred stock dividends — — (4.0) Net earnings/(loss) 38.1 140.5 (231.5) Pre-tax adjustments Project Momentum Restructuring and related costs (1) 91.7 59.7 0.9 Network transition costs (2) 11.7 — — Acquisition and integration (3) 7.2 — 16.5 Acquisition earn out (4) — — 1.1 Impairment of goodwill & intangible assets 110.6 — 541.9 Litigation matter (5) 13.7 — — Loss/(gain) on extinguishment of debt 2.4 (1.5) — December 2023 Argentina Economic Reform (6) 22.0 — — Settlement loss on U.S. pension annuity buy out (7) — 50.2 — Exit of Russian market (8) — — 14.6 Gain on finance lease termination (9) — — (4.5) Brazil flood damage, net of insurance proceeds (10) — — 9.7 Total adjustments, pre-tax $ 259.3 $ 108.4 $ 580.2 Total adjustments, after tax (11) $ 203.2 $ 83.5 $ 452.6 Adjusted net earnings $ 241.3 $ 224.0 $ 221.1 For the Twelve Months Ended September 30, 2024 2023 2022 Diluted net earnings/(loss) per common share $ 0.52 $ 1.94 $ (3.37) Adjustments Project Momentum Restructuring and related costs 0.97 0.64 0.01 Network transition costs 0.12 — — Acquisition and integration 0.08 — 0.17 Acquisition earn out — — 0.01 Impairment of goodwill & intangible assets 1.16 — 5.86 Litigation matter 0.14 — — Loss/(gain) on extinguishment of debt 0.03 (0.02) — December 2023 Argentina Economic Reform 0.30 — — Settlement loss on U.S. pension annuity buy out — 0.53 — Exit of Russian market — — 0.17 Gain on finance lease termination — — (0.05) Brazil flood damage, net of insurance proceeds — — 0.14 Impact for diluted share calculation (12) — — 0.14 Adjusted diluted net earnings per diluted share $ 3.32 $ 3.09 $ 3.08 Weighted average shares of common stock - Diluted 72.7 72.4 69.9 Adjusted weighted average shares of common stock - Diluted (12) 72.7 72.4 71.7 Currency, excluding hyperinflationary markets, had an adverse impact to fiscal 2024 compared to fiscal 2023.
Restructuring Costs In November 2022, the Board of Directors approved a profit recovery program, Project Momentum, which includes an enterprise-wide restructuring focused on recovering operating margins, optimizing our manufacturing, distribution and global supply chain networks, and enhancing our organizational efficiency across the Company.
The Company also recorded $1.1 in R&D related to the integration of these acquisitions. 32 Project Momentum Costs In November 2022, the Board of Directors approved a profit recovery program, Project Momentum, which includes an enterprise-wide restructuring focused on recovering operating margins, optimizing our manufacturing, distribution and global supply chain networks, and enhancing our organizational efficiency across the Company.
GENERAL CORPORATE For the Years Ended September 30, 2023 2022 2021 General corporate and other expenses $ 107.2 $ 101.6 $ 96.0 % of net sales 3.6 % 3.3 % 3.2 % For fiscal 2023, general corporate expenses were $107.2, an increase of $5.6 compared to fiscal 2022 expense of $101.6.
GENERAL CORPORATE For the Years Ended September 30, 2024 2023 2022 General corporate and other expenses $ 115.3 $ 107.2 $ 101.6 % of net sales 4.0 % 3.6 % 3.3 % For fiscal 2024, general corporate expenses were $115.3, an increase of $8.1 compared to fiscal 2023 expense of $107.2.
At September 30, 2023, Energizer had $223.3 of cash and cash equivalents, approximately 84% of which was outside of the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies.
At September 30, 2024, Energizer had $216.9 of cash and cash equivalents, approximately 77% of which was outside of the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies.
Cash flow from operating activities was $395.2 in fiscal 2023, $1.0 in fiscal 2022, and $179.7 in fiscal 2021. Cash flow from operating activities was $395.2 in fiscal 2023 as compared to $1.0 in the prior fiscal year.
Cash flow from operating activities was $429.6 in fiscal 2024, $395.2 in fiscal 2023, and $1.0 in fiscal 2022. Cash flow from operating activities was $429.6 in fiscal 2024 as compared to $395.2 in the prior fiscal year.
A&P was $162.1 in fiscal 2021. A&P as a percent of net sales was 4.8%, 4.5% and 5.4% in fiscal years 2023, 2022 and 2021, respectively. Research and Development (R&D) R&D expense was $32.9 in fiscal 2023, $34.7 in fiscal 2022, $34.5 in fiscal 2021.
A&P as a percent of net sales was 5.0%, 4.8% and 4.5% in fiscal years 2024, 2023 and 2022, respectively. 40 Research and Development (R&D) R&D expense was $31.6 in fiscal 2024, $32.9 in fiscal 2023, $34.7 in fiscal 2022.
These non-GAAP financial measures exclude items that are not reflective of the Company's on-going operating performance, such as Project Momentum restructuring and related costs, acquisition and integration costs, an acquisition earn out, an impairment of goodwill and intangible assets, the (gain)/loss on extinguishment of debt, the settlement loss on U.S. pension annuity buyout, the costs of exiting the Russian market, the gain on finance lease termination, the costs of the May 2022 flooding of our Brazilian manufacturing facility, and the one-time impact of Tax structuring.
These non-GAAP financial measures exclude items that are not reflective of the Company's on-going operating performance, such as Project Momentum restructuring and related costs, network transition costs, acquisition and integration costs, an acquisition earn out, a litigation matter, impairments of goodwill and intangible assets, the loss/(gain) on extinguishment of debt, the December 2023 Argentina Economic Reform, the settlement loss on U.S. pension annuity buyout, the costs of exiting the Russian market, the gain on finance lease termination and the costs of the May 2022 flooding of our Brazilian manufacturing facility.
Segment Profit For the Years Ended September 30, 2023 % Chg 2022 % Chg Batteries & Lights Segment Profit - prior year $ 553.6 $ 553.6 Organic 21.5 3.9 % 14.6 2.6 % Change in Russia operations (1.2) (0.2) % (4.0) (0.7) % Change in Argentina operations (1.4) (0.3) % 9.6 1.7 % Impact of currency (21.0) (3.8) % (20.2) (3.6) % Segment Profit - current year $ 551.5 (0.4) % $ 553.6 — % Auto Care Segment Profit - prior year $ 46.5 $ 98.2 Organic 29.5 63.4 % (48.2) (49.1) % Change in Argentina operations — — % 0.1 0.1 % Impact of currency (1.0) (2.1) % (3.6) (3.5) % Segment Profit - current year $ 75.0 61.3 % $ 46.5 (52.6) % Total Segment Profit Segment Profit - prior year $ 600.1 $ 651.8 Organic 51.0 8.5 % (33.6) (5.2) % Change in Russia operations (1.2) (0.2) % (4.0) (0.6) % Change in Argentina operations (1.4) (0.2) % 9.7 1.5 % Impact of currency (22.0) (3.7) % (23.8) (3.6) % Segment Profit - current year $ 626.5 4.4 % $ 600.1 (7.9) % Refer to Note 9, Segments, in the Consolidated Financial Statements for a reconciliation from segment profit to Earnings/(loss) before income taxes.
Segment Profit For the Years Ended September 30, 2024 % Chg 2023 % Chg Batteries & Lights Segment Profit - prior year $ 551.5 $ 553.6 Organic 14.0 2.5 % 21.5 3.9 % Change in Russia operations — — % (1.2) (0.2) % Change in Argentina operations (5.2) (0.9) % (1.4) (0.3) % Impact of currency (5.5) (1.0) % (21.0) (3.8) % Segment Profit - current year $ 554.8 0.6 % $ 551.5 (0.4) % Auto Care Segment Profit - prior year $ 75.0 $ 46.5 Organic 19.4 25.9 % 29.5 63.4 % Change in Argentina operations (0.2) (0.3) % — — % Impact of currency (0.1) (0.1) % (1.0) (2.1) % Segment Profit - current year $ 94.1 25.5 % $ 75.0 61.3 % Total Segment Profit Segment Profit - prior year $ 626.5 $ 600.1 Organic 33.4 5.3 % 51.0 8.5 % Change in Russia operations — — % (1.2) (0.2) % Change in Argentina operations (5.4) (0.9) % (1.4) (0.2) % Impact of currency (5.6) (0.8) % (22.0) (3.7) % Segment Profit - current year $ 648.9 3.6 % $ 626.5 4.4 % Refer to Note 9, Segments, in the Consolidated Financial Statements for a reconciliation from segment profit to Earnings/(loss) before income taxes. 44 Total segment profit in fiscal 2024 was $648.9, an increase of 3.6% versus the prior fiscal year.
A 100 basis point decrease in the discount rate would increase U.S. pension obligations by $18.5 at September 30, 2023.
A 100 basis point decrease in the discount rate would increase U.S. pension obligations by $20.2 at September 30, 2024.
These measures exclude the impact of Project Momentum restructuring and related costs, costs related to acquisition and integration, an acquisition earn out, an impairment of goodwill and intangible assets, the (gain)/loss on extinguishment of debt, the settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market, the costs of the flooding of our Brazilian manufacturing facility and the one-time impact of Tax structuring.
These measures exclude the impact of Project Momentum restructuring and related costs, network transition costs, costs related to acquisition and integration, an acquisition earn out, a litigation matter, an impairment of goodwill and intangible assets, the loss/(gain) on extinguishment of debt, the December 2023 Argentina Economic Reform, the settlement loss on U.S. pension annuity buyout, the gain on finance lease termination, the costs of exiting the Russian market and the costs of the flooding of our Brazilian manufacturing facility.
Operations for Energizer are managed via two major reportable product groupings: Battery & Lights and Auto Care. 33 Financial Results Net earnings for the fiscal year ended September 30, 2023 was $140.5, or $1.94 per diluted common share, compared to Net loss of $231.5, or a loss of $3.37 per diluted common share, for the fiscal year ended September 30, 2022, and Net earnings of $160.9, or $2.11 per diluted common share, for the fiscal year ended September 30, 2021.
Operations for Energizer are managed via two major reportable product groupings: Battery & Lights and Auto Care. 35 Financial Results Net earnings for the fiscal year ended September 30, 2024 were $38.1, or $0.52 per diluted common share, compared $140.5, or $1.94 per diluted common share, for the fiscal year ended September 30, 2023, and a Net loss of $231.5, or a loss of $3.37 per diluted common share, for the fiscal year ended September 30, 2022.
Additionally, along side the restructuring component of the program, Project Momentum includes continuous improvement and working capital initiatives that are designed to strengthen our balance sheet, focus on cash flow, and generate P&L savings of approximately $15 to $20 annually.
Additionally, along side the restructuring component of the program, Project Momentum includes continuous improvement and working capital initiatives that are designed to strengthen our balance sheet, focus on cash flow, and generate P&L savings of approximately $20 annually. Total expected pre-tax savings of Project Momentum are between $180 and $200 by the end of fiscal year 2025.
The restructuring component of the program is now expected to generate $115 to $130 of annual pre-tax savings, and the Company estimates that it will incur one-time cash operating costs of $95 to $110, non-cash costs of $12, and capital expenditures of $70 to $80 over the three year program.
The restructuring component of the program is now expected to generate $160 to $180 of annual pre-tax savings, and the Company estimates that it will incur one-time restructuring cash operating costs of $180 to $185, non-cash restructuring costs of approximately $30, and capital expenditures of $80 to $90 over the three year program.
In determining whether a valuation allowance against the net deferred tax assets are warranted, the Company assesses all available positive and negative evidence such as prior earnings history, expected future earnings, carry-back and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset.
To the extent the estimates described above change, adjustments to income taxes are made in the period in which the estimate is changed. 54 In determining whether a valuation allowance against the net deferred tax assets are warranted, the Company assesses all available positive and negative evidence such as prior earnings history, expected future earnings, carry-back and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset.
For the twelve months ended September 30, 2022, the Company recorded costs related to the flood net of insurance proceeds of $9.7 in Cost of products sold, primarily related to damaged inventory at the plant. In fiscal 2023, the insurance claim was settled and no further losses are expected.
For the twelve months ended September 30, 2022, the Company recorded costs related to the flood net of insurance proceeds of $9.7 in Cost of products sold, primarily related to damaged inventory at the plant.
Of this amount, $4.3 is due within the next twelve months. Refer to Note 17 Other Commitments and Contingencies for further details. Energizer is also party to various service and supply contracts that generally extend approximately one to three months.
Total future commitments for these obligations over the next 5 years is $10.6. Of this amount, $7.8 is due within the next twelve months. Refer to Note 17 Other Commitments and Contingencies for further details. Energizer is also party to various service and supply contracts that generally extend approximately one to three months.
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.
It is difficult to determine what continuing impact the new president and his economic reform or 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, as well as any additional reforms that may be issued by the new Argentine Administration.
Interest expense Interest expense for fiscal 2023 was $168.7, as compared to fiscal 2022 expense of $158.4 and $161.8 in fiscal 2021. The increased interest expense in fiscal 2023 was due to higher interest rates compared to fiscal 2022, partially offset by lower average outstanding debt in the current year.
Interest expense Interest expense for fiscal 2024 was $155.7, as compared to fiscal 2023 expense of $168.7 and $158.4 in fiscal 2022. The lower interest expense in fiscal 2024 was due to a lower average outstanding debt balance in the current year due to the Company's initiatives to pay down debt, partially offset by higher interest rates.
A change in the useful life of these assets could have a material impact on our financial statements. The Company has certain trade names with indefinite lives that are reviewed for impairment during the fourth quarter of each fiscal year following the annual forecasting process, or more frequently if facts and circumstances indicate the trade name may be impaired.
The Company has certain trade names with indefinite lives that are reviewed for impairment during the fourth quarter of each fiscal year following the annual forecasting process, or more frequently if facts and circumstances indicate the trade name may be impaired.
For the year ended September 30, 2021, the Company completed a qualitative annual impairment assessment and no impairments were identified. 50 • Goodwill - In fiscal 2022, the Company changed its reportable segments and correspondingly reallocated goodwill to the current reporting units: Battery & Lights North America, Battery & Lights International, Auto Care North America and Auto Care International.
For the year ended September 30, 2022, a qualitative analysis was performed over the Energizer, Eveready and Varta trade names and no impairments were identified. • Goodwill - In fiscal 2022, the Company changed its reportable segments and correspondingly reallocated goodwill to the current reporting units: Battery & Lights North America, Battery & Lights International, Auto Care North America and Auto Care International.
The extinguishment of this debt, less the write-off of associated deferred financing fees, resulted in a gain on extinguishment of debt for the fiscal year ended September 30, 2023 of $1.5. As of September 30, 2023, the Company had no borrowings outstanding under the 2020 Revolving Facility and $7.1 of outstanding letters of credit.
The write-off of associated deferred financing fees as well as the Term Loan reprice resulted in a loss on extinguishment of debt for the fiscal year ended September 30, 2024 of $2.4. As of September 30, 2024, the Company had no borrowings outstanding under the 2020 Revolving Facility and $7.6 of outstanding letters of credit.
(7) These are the costs associated with the May 2022 flooding of our Brazilian manufacturing facility, net of insurance proceeds, which were recorded in COGS. The majority is related to damaged inventory.
The gain was recorded in Other items, net in the Consolidated Statement of Earnings and Comprehensive Income. 38 (10) These are the costs associated with the May 2022 flooding of our Brazilian manufacturing facility, net of insurance proceeds, which were recorded in COGS. The majority is related to damaged inventory.
(4) The Settlement loss is due to the execution of a partial retiree annuity buy out on the U.S. pension plan in the fourth quarter of fiscal 2023. This charge is included in Other items, net in the Consolidated Statement of Earnings and Comprehensive Income.
(7) The Settlement loss is due to the execution of a partial retiree annuity buy out on the U.S. pension plan in fiscal 2023. This charge is included in Other items, net in the Consolidated Statement of Earnings and Comprehensive Income. (8) These are the costs associated with the Company's exit of the Russian market during fiscal 2022.
Gross margin rate assumptions are based on historical trends and management's cost cutting strategies. The discount rates are based on a weighted-average cost of capital utilizing industry market data of similar companies. In fiscal 2023, the Company completed a quantitative analysis on the Auto Care North America reporting unit and a qualitative analysis over the Battery & Lights reporting units.
Gross margin rate assumptions are based on historical trends and management's cost cutting strategies. The discount rates are based on a weighted-average cost of capital utilizing industry market data of similar companies. In fiscal 2024, the Company completed a qualitative analysis on all four reporting units and no impairments were identified.
The increase was driven by increased travel expense, and increased bonus and stock compensation expense, partially offset by lower mark to market expense on our deferred compensation plans. Liquidity and Capital Resources Energizer’s primary future cash needs are centered on operating activities, working capital and strategic investments.
The increase was primarily driven by increased factoring fees, higher mark to market expenses on our deferred compensation plans as well as increased stock compensation in fiscal 2023. Liquidity and Capital Resources Energizer’s primary future cash needs are centered on operating activities, working capital and strategic investments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+9 added−4 removed13 unchanged
Biggest changeArgentina 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.
Biggest changeFor the year ended September 30, 2024, our weighted average interest rate on variable rate debt was 3.40%. Hyperinflationary Economies and Foreign Currency Exposure 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.
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.
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 or USD) 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.
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. 52 Currency Exposure Our business is conducted on a worldwide basis, with approximately 40% of our sales in fiscal 2023 arising from foreign countries, and a significant portion of our production capacity and cash located overseas.
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. 55 Currency Exposure Our business is conducted on a worldwide basis, with approximately 40% of our sales in fiscal 2024 arising from foreign countries, and a significant portion of our production capacity and cash located overseas.
These foreign currencies represent a significant portion of Energizer's foreign currency exposure. At September 30, 2023 and 2022, Energizer had an unrealized pre-tax gain of $3.3 and $16.3, respectively, on these forward currency contracts accounted for as cash flow hedges included in Accumulated other comprehensive loss on the Consolidated Balance Sheets.
These foreign currencies represent a significant portion of Energizer's foreign currency exposure. At September 30, 2024 and 2023, Energizer had an unrealized pre-tax loss of $4.6 and an unrealized pre-tax gain of $3.3, respectively, on these forward currency contracts accounted for as cash flow hedges included in Accumulated other comprehensive loss on the Consolidated Balance Sheets.
The change in estimated fair value of the foreign currency contracts for the twelve months ended September 30, 2023 resulted in a loss of $2.0 and was recorded in Other items, net on the Consolidated Statements of Earnings and Comprehensive Income. Commodity Price Exposure The Company uses raw materials that are subject to price volatility.
The change in estimated fair value of the foreign currency contracts for the twelve months ended September 30, 2024 resulted in a gain of $6.2 and was recorded in Other items, net on the Consolidated Statements of Earnings and Comprehensive Income. Commodity Price Exposure The Company uses raw materials that are subject to price volatility.
Assuming foreign exchange rates versus the U.S. dollar remain at September 30, 2023 levels, over the next twelve months, $3.0 of the pre-tax gain included in Accumulated other comprehensive loss is expected to be included in earnings.
Assuming foreign exchange rates versus the U.S. dollar remain at September 30, 2024 levels, over the next twelve months, $4.3 of the pre-tax loss included in Accumulated other comprehensive loss is expected to be included in earnings.
At September 30, 2023, Energizer had variable rate debt outstanding with a principal balance of $990.2 under the 2020 Term Loans and international borrowings. There were no outstanding borrowings on the 2020 Revolving Credit Facility at September 30, 2023.
At September 30, 2024, Energizer had variable rate debt outstanding with a principal balance of $784.1 under the 2020 Term Loans and international borrowings. There were no outstanding borrowings on the 2020 Revolving Credit Facility at September 30, 2024.
The unrealized pre-tax loss on the zinc contracts was $0.7 and $6.1 at September 30, 2023 and 2022. These were included in Accumulated other comprehensive loss on the Consolidated Balance Sheet. 53 Interest Rate Exposure The Company has interest rate risk with respect to interest expense on variable rate debt.
Energizer had an unrealized pre-tax gain on the zinc contracts of $4.0 and an unrealized pre-tax loss of $0.7 at September 30, 2024 and 2023, respectively. These were included in Accumulated other comprehensive loss on the Consolidated Balance Sheet. 56 Interest Rate Exposure The Company has interest rate risk with respect to interest expense on variable rate debt.
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. 54
It is difficult to determine what future impact the use of highly inflationary accounting for Argentina or Egypt or the new Argentine president and his economic reforms 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 USD and the amount of monetary assets and liabilities included in our affiliates' balance sheet, as well as any additional reforms that may be issued by the new Argentine Administration. 57
The Argentina economy exceeded the three year cumulative inflation rate of 100 percent as of June 2018, and remains highly inflationary as of September 30, 2023.
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, and remains highly inflationary as of September 30, 2024.
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 Company has an interest rate swap that fixes the variable benchmark component (SOFR) at an interest rate of 1.042% on variable debt of $700.0. 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.
These were included in Accumulated other comprehensive loss on the Consolidated Balance Sheet. For the year ended September 30, 2023, our weighted average interest rate on variable rate debt was 4.59%.
The notional vale of the swap was $700.0 at September 30, 2024. The pre-tax gain recognized on this interest rate swap was $39.8 and $79.8 as of September 30, 2024 and 2023, respectively. These were included in Accumulated other comprehensive loss on the Consolidated Balance Sheet.
Removed
In December 2020, the Company 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 debt of $550.0.
Added
In November 2023, a new president was elected in Argentina who implemented significant economic reform. Upon his inauguration in December 2023, the government devalued the Argentine Peso (ARS) approximately 50%. On December 13, 2023, the ARS exchange rate moved from 367:1 to 800:1 with the USD.
Removed
In February 2023, the Company amended its Credit Agreement to transition the interest reference rate from LIBOR to SOFR. The amendment was entered into because the LIBOR rate historically used was no longer published after June 30, 2023.
Added
The rate remained around this level throughout December, ending December 31, 2023 at a rate of 808:1. The rates have continued to devalue and ended September 30, 2024 at 969:1. The currency devaluation had a significant impact on the remeasurement of the Company's monetary assets and liabilities during the first quarter of fiscal 2024.
Removed
The Company also amended the 2020 Interest rate swap to coincide with the amended credit agreement, effectively fixing the variable benchmark component (SOFR) at an interest rate of 1.042%. There were no other changes to the interest rate swap agreement or expected timing of cash flows associated with the swap.
Added
As of September 30, 2023, the Company's assets and liabilities on the Argentina subsidiary's balance sheet translated to USD was $40.1 and $14.7, respectively. The translated asset and liability balances declined to $25.8 and $14.6, respectively, at December 31, 2023, and resulted in an exchange loss of $14.7 in Other items, net during the month of December.
Removed
The Company utilized expedients within ASC 848 to conclude that this modification should be accounted for as a continuation of the existing swap agreement, resulting in no impact on the Company's financial statements. The pre-tax gain recognized on this interest rate swap was $79.8 and $86.4 as of September 30, 2023 and 2022, respectively.
Added
The Company does not manufacture in Argentina and is an importer primarily of batteries in this region. As a result, the liability balances included USD denominated debt of $10.3 and $8.8 at December 31, 2023 and September 30, 2023, respectively.
Added
In addition to the revaluation, the Company also recorded $6.3 of transactional currency exchange losses in Other items, net during December 2023.
Added
The Company also recorded a loss of $1.0 on the purchase and sale of bonds issued by the Argentina Central Bank (BCRA), named BOPREALs, which were issued to provide a USD denominated instrument for import companies to pay import debts existing before December 12, 2023, and regulate the flow of reserves from BCRA.
Added
As of September 30, 2024, the USD denominated debt has decreased to $8.6. Effective October 1, 2024, the financial statements for our Egypt subsidiary will also be consolidated under the rules governing the translation of financial information in a highly inflationary economy.
Added
As of September 30, 2024, the USD value of monetary assets, net of monetary liabilities, which will now be subject to an earnings impact from translation rate movements for our Egypt affiliate under highly inflationary accounting was $2.4.
Added
We have not included any adjustments for Egypt's highly inflationary accounting in our current results as the economy was deemed highly inflationary subsequent to year-end.

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