ENERGIZER HOLDINGS INC

Previous wording

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

Current wording

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

Previous wording

•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 events.

Current wording

•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.

Previous wording

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

Current wording

•We have significant debt obligations that could adversely affect our business.

Previous wording

The Company reports its financial results in accordance with accounting principles generally accepted in the U.S. ("GAAP"). However, management believes that certain non-GAAP financial measures provide users with additional meaningful comparisons to the corresponding historical or future period, and are used for management incentive compensation. These non-GAAP financial measures exclude items that are not reflective of the Company's on-going operating performance, such as impairment of intangible assets, restructuring and related costs, acquisition and integration costs, the loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform. In addition, these measures help investors to analyze year over year comparability when excluding currency fluctuations as well as other Company initiatives that are not on-going. We believe these non-GAAP financial measures are an enhancement to assist investors in understanding our business and in performing analysis consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or superior to, the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in methods and in the items being adjusted.

Current wording

The Company reports its financial results in accordance with accounting principles generally accepted in the U.S. ("GAAP"). However, management believes that certain non-GAAP financial measures provide users with additional meaningful comparisons to the corresponding historical or future period, and are used for management incentive compensation. These non-GAAP financial measures exclude items that are not reflective of the Company's on-going operating performance, such as restructuring and related costs, network transition costs, acquisition and integration costs, the loss on extinguishment of debt and the December 2023 Argentina Economic Reform. In addition, these measures help investors to analyze year-over-year comparability when excluding currency fluctuations as well as other Company initiatives that are not on-going. We believe these non-GAAP financial measures are an enhancement to assist investors in understanding our business and in performing analysis consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or superior to, the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in methods and in the items being adjusted.

Previous wording

Segment Profit. This amount represents the operations of our two reportable segments including allocations for shared support functions. General corporate and other expenses, Amortization of intangible assets, Impairment of intangible assets, Interest expense, Loss/(gain) on extinguishment of debt, Other items, net, restructuring and related costs, and the charges related to acquisition and integration costs have all been excluded from segment profit.

Current wording

Segment Profit. This amount represents the operations of our two reportable segments including allocations for shared support functions. General corporate and other expenses, Intangible amortization expense, Interest expense, Loss on extinguishment of debt, Other items, net, restructuring and related costs, network transition costs and the charges related to acquisition and integration costs have all been excluded from segment profit.

Previous wording

Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Common Share (EPS). These measures exclude the impact of restructuring and related costs, acquisition and integration, Impairment of intangible assets, the Loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform.

Current wording

Adjusted Net Earnings and Adjusted Diluted Net Earnings Per Common Share (EPS). These measures exclude the impact of the costs related to restructuring activities, network transition costs, acquisition and integration, the Loss on extinguishment of debt and the December 2023 Argentina Economic Reform.

Previous wording

Non-GAAP Tax Rate. This is the tax rate when excluding the pre-tax impact of restructuring and related costs, acquisition and integration, Impairment of intangible assets, the Loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.

Current wording

Non-GAAP Tax Rate. This is the tax rate when excluding the pre-tax impact of restructuring activities, network transition activities, acquisition and integration, the loss on extinguishment of debt and the December 2023 Argentina Economic Reform, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.

Previous wording

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

Current wording

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

Previous wording

Change in Argentina Operations. The Company is presenting separately all changes in sales and segment profit from our Argentina affiliate due to the designation of the economy as highly inflationary as of July 1, 2018.

Current wording

Change in Hyperinflationary Markets. The Company is presenting separately all changes in sales and segment profit from our Egypt and Argentina affiliates due to the designation of the economies as highly inflationary as of October 1, 2024 and July 1, 2018, respectively.

Previous wording

Impact of currency. The Company evaluates the operating performance of our Company on a currency neutral basis. The Impact of Currency is the change in foreign currency exchange rates year-over-year on reported results, which is calculated by comparing the value of current year foreign operations at the current period USD exchange rate versus the value of current year foreign operations at the prior period USD exchange rate. The impact of currency also includes gains/(losses) of currency hedging programs, and it excludes hyper-inflationary markets.

Current wording

Impact of currency. The Company evaluates the operating performance of our Company on a currency neutral basis. The Impact of Currency is the change in foreign currency exchange rates year-over-year on reported results, which is calculated by comparing the value of current year foreign operations at the current period USD exchange rate versus the value of current year foreign operations at the prior period USD exchange rate. The impact of currency also includes (gains)/losses of currency hedging programs, and it excludes hyperinflationary markets.

Previous wording

Adjusted Selling, General & Administrative Expense (SG&A) and Adjusted Gross Margin as a percent of sales. Detail for Adjusted Gross margin and Adjusted SG&A as a percent of sales are also supplemental non-GAAP measures. These measures exclude the impact of costs related to restructuring and related costs and acquisition and integration costs.

Current wording

Adjusted Selling, General & Administrative Expense (SG&A) and Gross Margin as a percent of sales. Detail for Adjusted Gross margin and Adjusted SG&A as a percent of sales are also supplemental non-GAAP measures. These measures exclude the impact of costs related to restructuring activities, network transition activities, and acquisition and integration.

Previous wording

We continue to operate in an inflationary environment where macro-economic pressures and geopolitical instability are expected to continue through the remainder of fiscal year 2024. While we did not experience significant disruptions in our operations so far in fiscal year 2024, the risks of future negative impacts due to transportation, including transportation issues in the Red Sea, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company could continue to experience corresponding incremental costs and gross margin pressures.

Current wording

We continue to operate in an inflationary environment where macro-economic pressures and geopolitical instability are expected to continue in fiscal year 2025. While we did not experience significant disruptions in our operations in the first quarter of fiscal year 2025, the risks of future negative impacts due to transportation, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company could continue to experience corresponding incremental costs and gross margin pressures as well as currency headwinds throughout the year.

Previous wording

In November 2023, a new president was elected in Argentina who is implementing significant economic reform. Upon his inauguration in December 2023, the government devalued the Argentine Peso (ARS) approximately 50% over night. As a result, the Company anticipates that Argentina's operating costs may rise quicker than the Company is able to implement future price increases to offset rising costs, which may result in a near term decline to operating profit during fiscal 2024. The Company had net sales of $9.4 and $10.4 in the quarters ended June 30, 2024 and 2023, respectively, and $28.8 and $34.3 for the nine months ended June 30, 2024 and 2023, respectively. The Company had operating profit of $2.2 and $3.9 in the quarters ended June 30, 2024 and 2023, respectively, and $8.8 and $11.7 in the nine months ended June 30, 2024 and 2023, respectively.

Current wording

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% over night. As a

Previous wording

The December 2023 currency devaluation and economic reform resulted in $22.0 of currency and related losses recognized in Other items, net during the nine months ended June 30, 2024. This includes exchange losses of $14.7 from the December remeasurement of the Company's Argentina monetary assets and liabilities and $6.3 of transactional currency exchange losses on the ARS in December which are discussed further in Item 3 Quantitative and Qualitative Disclosures About Market Risk. 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.

Current wording

This devaluation and economic reform resulted in $21.0 of currency losses recognized in Other items, net in the three months ended December 31, 2023. This included exchange losses of $14.7 from the remeasurement of the Company's Argentina monetary assets and liabilities and $6.3 of transactional currency exchange losses on the ARS.

Previous wording

On October 27, 2023, the Company acquired certain battery manufacturing assets in Belgium from Advanced Power Solutions Belgium NV (APS) for a contractual purchase price of EUR3.5 (Belgium Acquisition). The Company also acquired certain raw materials from APS, procured by APS on the Company's behalf to facilitate the transition, for a total acquisition purchase price of $11.6 (including value added taxes). The Company assumed a building lease and the production employees as part of the acquisition, and acquired these assets to provide a battery manufacturing location in Europe.

Current wording

On October 27, 2023, the Company acquired certain battery manufacturing assets in Belgium from Advanced Power Solutions Belgium NV (APS Belgium) to provide a battery manufacturing location in Europe (Belgium Acquisition).

Previous wording

On May 8, 2024, the Company acquired all the outstanding shares of Centralsul Ltda. (Centralsul), an auto appearance and fragrance manufacturer and distributor based in Southern Brazil (Centralsul Acquisition), which is expected to increase the Company's Auto Care presence in the region. The share purchase agreement (SPA) included a contractual purchase price of approximately $15, which was adjusted by Centralsul's outstanding debt, an indemnity holdback and working capital adjustments, resulting in an initial cash payment of $10.6, which is subject to a post closing working capital adjustment.

Current wording

On May 8, 2024, the Company acquired all the outstanding shares of Centralsul Ltda. (Centralsul), an auto appearance and fragrance manufacturer and distributor based in Southern Brazil (Centralsul Acquisition), which is expected to increase the Company's Auto Care presence in the region.

Previous wording

The Company recorded $1.6 and $4.9 of acquisition and integration costs during the quarter and nine months ended June 30, 2024, respectively. Costs of good sold included $0.2 and $3.1 recorded in the quarter and nine months ended June 30, 2024, respectively. The majority of this was recorded in the first fiscal quarter as the Company was awaiting the receipt of the raw materials procured on the Company's behalf by APS as part of the Belgium Acquisition. These costs were offset by $1.0 of income during the nine months ended June 30, 2024, recorded in Other items, net, from producing inventory for APS under a transaction services agreement (TSA) entered into at the closing of the transaction. No further income is expected from this TSA. The Company also recorded $1.4 and $2.8 of legal and diligence fees in Selling, general and administrative expenses related to acquisition and integration activities during the quarter and nine months ended June 30, 2024, respectively.

Current wording

The Company recorded $1.2 of legal fees and other costs associated with these acquisitions during the three months ended December 31, 2024. The Company recorded $2.6 of acquisition and integration costs associated with the Belgium Acquisition during the three months ended December 31, 2023. The costs included $2.9 of operating costs recorded in Costs of good sold as the Company was awaiting the receipt of the raw materials procured on the Company's behalf by APS Belgium. These costs were offset by $1.0 of income recorded in Other items, net from producing inventory for APS Belgium under a transaction services agreement (TSA) entered into at the closing of the transaction. No further income is expected from this TSA. The Company also recorded $0.7 of legal and diligence fees associated with the closing of this acquisition recorded in Selling, general and administrative expenses.

Previous wording

Following the Belgium Acquisition in the first quarter of fiscal 2024, the Company expanded the Project Momentum program and increased the savings and cost expectations, partially due to the impact the expanded manufacturing capacity will have on the Company's battery network. The restructuring component of the program is expected to generate $155 to $170 of annual pre-tax savings, and the Company estimates that it will incur one-time cash operating costs of $150 to $170, non-cash costs of approximately $30, and capital expenditures of $75 to $85 over the three year program. 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 $25 to $30 annually. Total expected pre-tax savings of Project Momentum are between $180 and $200 by the end of fiscal year 2025, with approximately $80 to $90 of those savings to be recognized in fiscal year 2024.

Current wording

Following the Belgium Acquisition in the first quarter of fiscal 2024, the Company expanded the Project Momentum program and increased the savings and cost expectations, partially due to the impact the expanded manufacturing capacity will have on the Company's battery network. The restructuring component of the program is expected to generate approximately $180 of annual pre-tax savings, and the Company estimates that it will incur one-time cash operating costs of $180 to $185, non-cash costs of approximately $30, and capital expenditures of $80 to $90 over the three year program. 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.

Previous wording

As of June 30, 2024, the Company has realized approximately $117 of these savings from Project Momentum, with approximately $63 in fiscal year 2024. The savings were primarily within Cost of products sold and SG&A on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income.

Current wording

Total expected pre-tax savings of Project Momentum are approximately $200 by the end of fiscal year 2025. As of December 31, 2024, the Company has realized approximately $161 of these savings from Project Momentum, with approximately $19 in fiscal year 2025. The savings were primarily within Cost of products sold and SG&A on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income.

Previous wording

In the quarters ended June 30, 2024 and 2023, the total Project Momentum restructuring and related pre-tax costs were $18.8 and $9.1, respectively. For the nine months ended June 30, 2024 and 2023, the total Project Momentum restructuring and related pre-tax costs were $64.6 and $23.2, respectively. The expenses primarily consisted of severance and other benefit related costs, accelerated depreciation, asset write-offs, environmental cleanup, consulting costs, IT enablement, decommissioning, relocation, and other exit related costs. These costs were reflected within Cost of products sold, SG&A and Other items, net on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income.

Current wording

In the quarters ended December 31, 2024 and 2023, the total Project Momentum restructuring and related pre-tax costs were $20.3 and $22.4, respectively. The expenses primarily consisted of severance and other benefit related costs, accelerated depreciation, asset write-offs, consulting costs, IT enablement, decommissioning, relocation, and other exit related costs. These costs were reflected within Cost of products sold, SG&A and Other items, net on the Consolidated (Condensed) Statements of Earnings and Comprehensive Income. Project Momentum restructuring and related costs since inception are $172.6. Refer to Note 4, Restructuring, to the Consolidated (Condensed) Financial Statements for additional discussion on the Company's restructuring costs.

Previous wording

Although the Company's restructuring costs are recorded outside of segment profit, if allocated to our reportable segments, the pre-tax restructuring and related costs for the quarter and nine months ended June 30, 2024 would be incurred within the Battery & Lights segment in the amounts of $15.7 and $56.9, respectively, and the Auto Care segment in the amount of $3.1 and $7.7, respectively. For the quarter and nine months ended June 30, 2023, the pre-tax restructuring and related costs would have been incurred within the Battery & Lights segment in the amount of $8.3 and $20.9, respectively, and the Auto Care segment in the amount of $0.8 and $2.3, respectively.

Current wording

Although the Company's Project Momentum restructuring costs are recorded outside of segment profit, if allocated to our reportable segments, the restructuring and related costs for the quarter ended December 31, 2024 would be incurred within the Battery & Lights segment in the amount of $18.7 and the Auto Care segment in the amount of $1.6. The Company's Project Momentum restructuring costs for the quarter ended December 31, 2023 would be incurred within the Battery & Lights segment in the amount of $20.8 and the Auto Care segment in the amount of $1.6.

Previous wording

Energizer reported a third fiscal quarter Net loss of $43.8, or a loss of $0.61 per common share, compared to Net earnings of $31.8, or $0.44 per diluted common share, in the prior year third fiscal quarter. Adjusted Diluted net earnings per common share was $0.79 for the third fiscal quarter as compared to $0.54 in the prior year quarter, an increase of 46%.

Current wording

Energizer reported first fiscal quarter Net earnings of $22.3, or $0.30 per diluted common share, compared to Net earnings of $1.9, or $0.03 per diluted common share, in the prior year first fiscal quarter. Adjusted Diluted net earnings per common share was $0.67 for the first fiscal quarter as compared to $0.59 in the prior year quarter, an increase of approximately 14%.

Previous wording

Net (loss)/earnings and Diluted net (loss)/earnings per common share for the time periods presented were impacted by certain items related to restructuring and related costs, acquisition and integration costs, Impairment of intangible assets, the Loss/(gain) on extinguishment of debt and the December 2023 Argentina Economic Reform as described in the tables below. The impact of these items is provided below as a reconciliation of Net (loss)/earnings and Diluted net (loss)/earnings per common share to Adjusted Net earnings and Adjusted Diluted net earnings per common share, which are non-GAAP measures. See disclosure on Non-GAAP Financial Measures above.

Current wording

Net earnings and Diluted net earnings per common share for the time periods presented were impacted by certain items related to restructuring and related costs, network transition costs, acquisition and integration costs, the Loss on extinguishment of debt and the December 2023 Argentina Economic Reform as described in the tables below. The impact of these items is provided below as a reconciliation of Net earnings and Diluted net earnings per common share to Adjusted Net earnings and Adjusted Diluted net earnings per common share, which are non-GAAP measures. See disclosure on Non-GAAP Financial Measures above.

Previous wording

Currency, excluding hyperinflationary markets, had an adverse impact to the quarter ended June 30, 2024 of $1.9 in Earnings before income taxes, or $0.02 per share. For the nine months ended June 30, 2024, currency benefited the period by $1.2 in Earnings before income taxes, or $0.01 per share.

Current wording

Currency, excluding hyperinflationary markets, favorably impacted the quarter ended December 31, 2024 by $1.5 in Earnings before income taxes, or $0.02 per share, compared to the prior year quarter.

Previous wording

(3) During December 2023, a new president was inaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $22.0 of exchange and related losses for the nine months ended June 30, 2024 in Other items, net on the Consolidated (Condensed) Statement of Earnings.

Current wording

(4) During December 2023, a new president was inaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $21.0 of exchange losses in Other items, net on the Consolidated (Condensed) Statement of Earnings.

Previous wording

(4) The effective tax rate for the Adjusted Net earnings and Adjusted Diluted EPS for the quarters ended June 30, 2024 and 2023 was 23.2% and 21.9%, respectively, and for the nine months ended June 30, 2024 and 2023 was 23.4% and 21.4%, respectively, as calculated utilizing the statutory rate for where the costs were incurred.

Current wording

(5) The effective tax rate for the Adjusted Net earnings and Adjusted Diluted EPS for the quarters ended December 31, 2024 and 2023 was 24.8% and 24.0%, respectively, as calculated utilizing the statutory rate for where the costs were incurred.

Previous wording

Net sales were $701.4 for the third fiscal quarter of 2024, an increase of $2.0 as compared to the prior year quarter. Organic Net sales increased 1.2%, due to the following items:

Current wording

Net sales were $731.7 for the first fiscal quarter of 2025, an increase of $15.1 as compared to the prior year quarter. Organic Net sales improved 3.8%, primarily driven by the following items:

Previous wording

Gross margin percentageon a reported basis for the third fiscal quarter of 2024 was 39.5%, compared to 37.9% in the prior year, an increase of 160 basis points. Excluding restructuring costs in the current and prior year of $13.4 and $6.5, respectively, and integration costs in the current year of $0.2, Adjusted Gross margin was 41.5% compared to 38.8% in the prior year, an increase of 270 basis points.

Current wording

Gross margin percentageon a reported basis for the first fiscal quarter of 2025 was 36.8%, compared to 37.3% in the prior year. Excluding restructuring costs in the current and prior year of $9.4 and $12.8, respectively, network transition costs of $14.0 in the current year and acquisition and integration costs of $2.9, Adjusted Gross margin was 40.0% compared to 39.5% in the prior year, an increase of 50 basis points.

Previous wording

SG&A was $129.6 in the third fiscal quarter of 2024, or 18.5% of Net sales, as compared to $116.1, or 16.6% of Net sales, in the prior year period. Included in SG&A during the third fiscal quarter of 2024 were acquisition and integration costs of $1.4, and included in the third fiscal quarter of both 2024 and 2023 were restructuring and related costs of $9.8 and $2.8, respectively. Excluding these restructuring and related costs and acquisition and integration costs, Adjusted SG&A was $118.4, or 16.9% of Net sales in the third fiscal quarter of 2024, as compared to $113.3, or 16.2% of Net sales in the prior year period. The year-over-year increase was primarily driven by an increase in labor and benefit costs, higher travel expense, increased depreciation expense related to our digital transformation initiatives and increased legal fees. This increase was partially offset by savings from Project Momentum of approximately $7.

Current wording

SG&A was $131.3 in the first fiscal quarter of 2025, or 17.9% of Net sales, as compared to $128.1, or 17.9% of Net sales, in the prior year period. Included in SG&A during the first fiscal quarter of 2025 and 2024 were acquisition and integration costs of $1.2 and $0.7, respectively, and included in both the first fiscal quarters of 2025 and 2024 were restructuring and related costs of $10.9 and $9.6, respectively. Excluding these restructuring and related costs and acquisition and integration costs, adjusted SG&A was $119.2, or 16.3% of Net sales in the first fiscal quarter of 2025, as compared to $117.8, or 16.4% of Net sales in the prior year period. The year-over-year dollar increase was primarily driven by increased depreciation expense related to our digital transformation initiatives and increased legal fees. The increase was partially offset by Project Momentum savings of approximately $3 in the quarter as well as lower factoring and environmental expense.

Previous wording

R&D was $7.4, or 1.1% of Net sales, for the quarter ended June 30, 2024, as compared to $8.8, or 1.3% of Net sales, in the prior year comparative period. R&D was $23.1, or 1.1% of Net sales, for the nine months ended June 30, 2024, as compared to $24.4, or 1.1% of Net sales, in the prior year comparative period.

Current wording

R&D was $8.0, or 1.1% of Net sales, for the quarter ended December 31, 2024, as compared to $7.8, or 1.1% of Net sales, in the prior year comparative period.

Previous wording

Interest expensewas $38.5 for the third fiscal quarter of 2024 compared to $42.2 for the prior year comparative period. For the nine months ended June 30, 2024 interest expense was $117.9 as compared to $127.1 for the prior year comparative period. The lower interest expense 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.

Current wording

Interest expensewas $37.0 for the first fiscal quarter of 2025 compared to $40.7 for the prior year comparative period. The lower interest expense was due to a lower average outstanding debt balance in the current year due to the Company's initiatives to pay down debt.

Previous wording

Other items, netwas a benefit of $5.0 and an expense of $5.2 for the third fiscal quarters of 2024 and 2023, respectively. Other items, net was expense of $19.5 and $4.6 for the nine months ended June 30, 2024 and 2023, respectively.

Current wording

Other items, netwas a benefit of $5.0 and an expense of $19.0 for the first fiscal quarters of 2025 and 2024, respectively.

Previous wording

(1) Foreign currency exchange loss includes the currency impact from the December 2023 Argentina economic reform. During December 2023, a new president wasinaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $21.0 of exchange losses for the nine months ended June 30, 2024 in Other items, net on the Consolidated (Condensed) Statement of Earnings.

Current wording

(1) Foreign currency exchange loss for the quarter ended December 31, 2023 includes the currency impact from the December 2023 Argentina economic reform. During December 2023, a new president wasinaugurated in Argentina bringing significant economic reform to the country including devaluing the Argentine Peso by 50% in the month of December. As a result of this reform and devaluation, the Company recorded $21.0 of exchange losses in Other items, net on the Consolidated (Condensed) Statement of Earnings.

Previous wording

The effective tax rate on a year to date basis was expense of 66.7% as compared to 21.1% in the prior year. The current year rate was impacted by the charges from the December 2023 Argentina Reform which did not result in a statutory tax benefit as well as the non-cash intangible impairment. Excluding the impact of the Impairment of intangible assets, restructuring and related costs, acquisition and integration costs, the Loss/(gain) on extinguishment in debt and the December 2023 Argentina Economic Reform, the year to date adjusted effective tax rate was 23.4% as compared to 21.4% in the prior year. The higher current year rate is driven by the higher foreign rate differential compared to the prior year.

Current wording

The effective tax rate on a year to date basis was 25.9% as compared to 79.8% in the prior year. The prior year rate was driven by the charges from the December 2023 Argentina Reform which did not result in a statutory tax benefit. Excluding the impact of restructuring and related costs, network transition costs, acquisition and integration costs, the Loss on extinguishment in debt and the December 2023 Argentina Economic Reform, the year to date adjusted effective tax rate was 24.8% as compared to 24.0% in the prior year. The higher current year rate is driven by the higher foreign rate differential compared to the prior year.

Previous wording

Operations for Energizer are managed via two product segments: Batteries & Lights and Auto Care. Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses (including share-based compensation costs), amortization of intangibles, impairment of intangible assets, acquisition and integration activities, restructuring and related costs, and other items determined to be corporate in nature. Financial items, such as interest income and expense and the (Loss)/gain on extinguishment of debt, are managed on a global basis at the corporate level. The exclusion of restructuring and related costs and acquisition and integration costs from segment results reflects management’s view on how it evaluates segment performance. The Company also excludes amortization of intangibles and impairment of 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.

Current wording

Operations for Energizer are managed via two product segments: Batteries & Lights and Auto Care. Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses (including share-based compensation costs), amortization of intangibles, acquisition and integration activities, restructuring and related costs, and other items determined to be corporate in nature. Financial items, such as interest income and expense and the loss on extinguishment of debt, are managed on a global basis at the corporate level. The exclusion of restructuring and related costs, network transition costs and acquisition and integration costs from segment results reflects management’s view on how it evaluates segment performance.

Previous wording

Auto Care reported Net sales increase of 3.0% as compared to the prior year period, driven by an organic Net sales increase of $13.7, or 3.0%. The increase was driven by increased distribution globally (approximately 2.8%), increased volumes from timing of refrigerant sales (approximately 0.4%), partially offset by pricing declines driven by planned strategic pricing and promotional investments in the period (approximately 0.2%).

Current wording

Auto Care reported Net Sales increase of 0.5% as compared to the prior year period, driven by an organic net sales increase of $2.1, or 2.1%. The increase was due to higher volumes driven by distribution gains, international market expansion and digital economy growth, which was partially offset by the shift in holiday orders to the prior quarter (approximately 4%) partially offset by pricing declines driven by planned strategic pricing and promotional investments in the period (approximately 2%).

Previous wording

Auto Care reported segment profit increased by 54.0% as compared to the prior year. Organic segment profit increased by $9.9, or 56.9%. The increase was driven by higher organic Net sales discussed above and improved gross margin and lower R&D spending compared to the prior year. This was partially offset by slightly higher SG&A and A&P spending over prior year.

Current wording

Auto Care reported segment profit increased by 197.1% as compared to the prior year. Organic segment profit increased by $14.7, or 213.0%. The increase was driven by higher organic sales and higher gross margin partially offset by higher SG&A and A&P spending over the prior year.

Previous wording

For the quarter ended June 30, 2024, General corporate and other expenses were $29.1, an increase of $1.7 as compared to the prior year comparative period. For the nine months ended June 30, 2024, General corporate and other expenses were $86.6, an increase of $6.0 as compared to the prior year comparative period. The increase was primarily driven by increased stock compensation, travel, legal fees and factoring fees in the current year.

Current wording

For the quarter ended December 31, 2024, general corporate and other expenses were $27.4, a decrease of $1.8 as compared to the prior year comparative period. The decrease was primarily driven by a decline in factoring fees and lower mark to market expenses on our deferred compensation plans, partially offset by increased legal fees in the current year.

Previous wording

Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing liquid funds. At June 30, 2024, Energizer had $146.7 of cash and cash equivalents, approximately 93% of which was held outside of the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. We manage our worldwide cash requirements by reviewing available funds among the many subsidiaries through which we conduct our business and the cost effectiveness with which those funds can be accessed. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to regulatory capital requirements; however, those balances are generally available without legal restrictions to fund ordinary business operations.

Current wording

Cash is managed centrally with net earnings reinvested locally and working capital requirements met from existing liquid funds. At December 31, 2024, Energizer had $195.9 of cash and cash equivalents, approximately 96% of which was held outside of the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. We manage our worldwide cash requirements by reviewing available funds among the many subsidiaries through which we conduct our business and the cost effectiveness with which those funds can be accessed. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences or be subject to regulatory capital requirements; however, those balances are generally available without legal restrictions to fund ordinary business operations.

Previous wording

At June 30, 2024, the Company had $832.0 outstanding on the Term Loan. Borrowings under the Term Loan require quarterly principal payments at a rate of 0.25% of the original principal balance, or $3.0. Borrowings under the 2020 Revolving Facility bear interest at a rate per annum equal to, at the option of the Company, SOFR or the Base Rate (as defined) plus the applicable margin. The Term Loan bears interest at a rate per annum equal to SOFR plus the applicable margin. The Company completed a Term Loan reprice in the current quarter which decreased the applicable margin.

Current wording

Borrowings under the Term Loan require quarterly principal payments at a rate of 0.25% of the original principal balance, or $3.0. Borrowings under the 2020 Revolving Facility bear interest at a rate per annum equal to, at the option of the Company, SOFR or the Base Rate (as defined) plus the applicable margin. The Term Loan bears interest at a rate per annum equal to SOFR plus the applicable margin.