Segment note

Operations for the Company are managed via two segments - Personal Care (Wet Shave, Skin Care, Feminine Care and Infant Care) and Household Products (Battery and Portable Lighting products). In October 2013, the Company completed the acquisition of the Stayfree pad, Carefree liner and o.b. tampon feminine care brands in the U.S., Canada and the Caribbean from Johnson & Johnson (the feminine care acquisition) and the financial performance related to these brands will be included in the Company’s Personal Care segment and within the Feminine Care product category. Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with most restructuring initiatives including the 2013 restructuring detailed below, acquisition integration or business realignment activities, and amortization of intangible assets. Financial items, such as interest income and expense, are managed on a global basis at the corporate level. The exclusion of the above mentioned items from segment results reflects management's view on how it evaluates segment performance.

The Company's operating model includes a combination of stand-alone and combined business functions between the Personal Care and Household Products businesses, varying by country and region of the world. Shared functions include product warehousing and distribution, various transaction processing functions, and in some countries, a combined sales force and management. The Company applies an allocated cost basis, in which the costs of shared segment business functions are allocated between the segments. Such allocations are estimates, and do not represent the costs of such services if performed on a stand-alone basis.

Effective October 1, 2013, the Company centralized certain corporate administrative functions across the organization as part of the 2013 restructuring project. A portion of these costs were previously reported at the segment level, but are now reported within General corporate and other expenses. Periods prior to this change have not been adjusted to conform to this current presentation.

For the quarter ended December 31, 2013, the Company recorded a pre-tax inventory valuation adjustment of approximately $8 related to the feminine care acquisition representing the increased fair value of the inventory based on the estimated selling price of the finished goods acquired at the close date less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity. Approximately $6.4 of this amount was recorded within Cost of products sold based upon the write-up and subsequent sale of inventory acquired in the feminine care acquisition for the quarter ended December 31, 2013. The remaining amount of the inventory valuation adjustment will be recorded to Cost of products sold during the second fiscal quarter, upon the subsequent sale of the remaining inventory. These amounts are not reflected in the Personal Care segment, but rather presented as a separate line item below segment profit, as it is a non-recurring item directly associated with the feminine care acquisition. Such presentation reflects management’s view on how segment results are evaluated.

For the quarter ended December 31, 2013, the Company recorded $24.4 in restructuring charges related to its 2013 restructuring as compared to $49.0 in the prior year quarter. The 2013 restructuring charges were reported on a separate line in the Consolidated Statements of Earnings and Comprehensive Income (Condensed). In addition, pre-tax costs of $2.3 for the quarter ended December 31, 2013 associated with certain information technology enablement activities related to the Company's restructuring initiatives were included in SG&A on the Consolidated Statement of Earnings and Comprehensive Income (Condensed). These information technology costs are considered part of the total project costs incurred for the restructuring initiative. See Note 3 to the Condensed Financial Statements.

In the first quarter of fiscal 2013, the Company approved and communicated changes to its U.S. pension plan, which is the most significant of the Company's pension obligations. Effective January 1, 2014, the pension benefit earned to date by active participants under the legacy Energizer U.S. pension plans was frozen and future service benefits are no longer being accrued under these retirement programs. For the quarter ended December 31, 2012, the Company recorded a non-cash, pre-tax curtailment gain of $37.4 as a result of this plan change. The pension curtailment gain was reported on a separate line in the Consolidated Statements of Earnings and Comprehensive Income (Condensed).

Segment sales and profitability for the quarter ended December 31, 2013 and 2012, respectively, are presented below.



	For the quarter ended December 31,
	2013			2012
Net Sales
Personal Care	$	550.2		$	554.3
Household Products	563.7			638.2
Total net sales	$	1,113.9		$	1,192.5

	For the quarter ended December 31,
	2013			2012
Segment Profit
Personal Care	$	130.3		$	116.2
Household Products	133.4			160.6
Total segment profit	263.7			276.8

General corporate and other expenses	(40.2		)	(29.5		)
2013 restructuring (1)	(26.7		)	(49.0		)
Feminine care acquisition/integration costs	(4.9		)	—
Acquisition inventory valuation	(6.4		)	—
Pension curtailment	—			37.4
Amortization of intangibles	(4.5		)	(5.6		)
Interest and other financing items	(29.2		)	(41.4		)
Total earnings before income taxes	$	151.8		$	188.7

(1) Includes pre-tax costs of $2.3 for the quarter ended December 31, 2013, associated with certain information technology and related activities, which are included in Selling, general and administrative expense on the Consolidated Statements of Earnings and Comprehensive Income (Condensed).

Supplemental product information is presented below for revenues from external customers:



	For the quarter ended December 31,
Net Sales	2013		2012
Alkaline batteries	$	365.6	$	401.7
Wet Shave	365.2		394.5
Other batteries and lighting products	198.1		236.5
Feminine Care	80.9		42.0
Skin Care	56.2		63.1
Infant Care	35.3		41.0
Other personal care products	12.6		13.7
Total net sales	$	1,113.9	$	1,192.5

Total assets by segment are presented below:



	December 31, 2013		September 30, 2013
Personal Care	$	1,387.2	$	1,208.3
Household Products	1,040.9		1,033.0
Total segment assets	2,428.1		2,241.3
Corporate	1,019.1		1,164.8
Goodwill and other intangible assets, net	3,353.3		3,311.3
Total assets	$	6,800.5	$	6,717.4