FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-10747
Duracell International Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1240267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Berkshire Corporate Park, Bethel, CT 06801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 796-4000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Number of Shares of Common Stock, Par Value $.01,
Outstanding as of January 27, 1995 116,758,174
<PAGE>
DURACELL INTERNATIONAL INC.
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION:
Consolidated Unaudited Financial Statements
Consolidated Income Statement for the
Three and Six Fiscal Months Ended December 31, 1994
and December 25, 1993 1
Consolidated Balance Sheet - December 31, 1994 and
June 30, 1994 2
Statement of Consolidated Cash Flows for the
Six Fiscal Months Ended December 31, 1994
and December 25, 1993 3
Notes to Consolidated Financial Statements 4-5
Management's Discussion and Analysis of Results of Operations
and Financial Condition 6-9
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
<TABLE>
Duracell International Inc.
Consolidated Income Statement
(Unaudited)
<CAPTION>
For the Three Fiscal For the Six Fiscal
Months Ended Months Ended
In millions, except per share amounts
Dec. 31, Dec. 25, Dec. 31, Dec. 25,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenue $730.2 $660.6 $1,222.3 $1,098.1
Operating expenses:
Cost of products sold 240.6 211.8 412.6 364.3
Selling, general and admin. exp. 298.0 275.4 522.7 478.6
Total operating expenses 538.6 487.2 935.3 842.9
Operating income 191.6 173.4 287.0 255.2
Interest expense 6.5 8.3 14.0 16.3
Other expense 2.4 2.0 3.2 3.3
Income before income taxes 182.7 163.1 269.8 235.6
Provision for income taxes 71.6 64.0 105.7 92.1
Net income 111.1 99.1 164.1 143.5
Earnings per share $ 0.92 $ 0.83 $ 1.35 $ 1.21
Weighted average shares and share equivalents
outstanding 121.1 119.6 121.2 118.5
Cash dividends per share on
common stock $ 0.22 $ 0.16 $ 0.44 $ 0.32
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Duracell International Inc.
Consolidated Balance Sheet
<CAPTION>
December 31, June 30,
1994 1994
(unaudited)
In millions
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 34.8 $ 36.1
Accounts receivable, less allowance of
$22.7 and $23.2 537.7 322.8
Inventories 212.5 229.9
Deferred income taxes 56.5 80.3
Prepaid and other current assets 45.7 51.4
Total current assets 887.2 720.5
Property, plant and equipment, net of accumulated
depreciation of $225.1 and $204.8 339.0 313.2
Intangibles, net of accumulated amortization of
$301.3 and $277.0 1,212.1 1,235.4
Other assets 15.6 17.2
Total assets $2,453.9 $2,286.3
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 95.8 $ 107.3
Short-term borrowings 60.4 51.0
Accrued liabilities 269.0 183.2
Total current liabilities 425.2 341.5
Long-term debt 358.0 355.0
Postretirement benefits other than pensions 97.3 95.3
Deferred income taxes 275.4 280.9
Other non-current liabilities 48.8 60.1
Total liabilities 1,204.7 1,132.8
Commitments and contingencies
Equity:
Common stock and capital surplus 1,079.5 1,070.9
Retained earnings 211.0 98.7
Accumulated translation adjustment (22.9) (16.1)
Treasury stock (18.4) --
Total equity 1,249.2 1,153.5
Total liabilities and equity $2,453.9 $2,286.3
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Duracell International Inc.
Statement of Consolidated Cash Flows
(Unaudited)
<CAPTION>
For the Six Fiscal Months Ended
In millions December 31, December 25,
1994 1993
<C> <S> <S>
Operating activities:
Net income $164.1 $143.5
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation 22.0 19.4
Amortization 23.0 21.4
Provision for deferred taxes 19.4 37.1
Other noncash items 3.0 4.7
(Increase) decrease in:
Accounts receivable (224.7) (219.5)
Inventories 15.8 22.3
Other working capital 80.4 81.7
Cash provided by operating activities 103.0 110.6
Investing activities:
Purchase of property, plant & equip. & other (52.9) (25.0)
Cash used by investing activities (52.9) (25.0)
Financing activities:
Issuance of common stock 4.6 7.5
Dividends paid (51.8) (37.1)
Purchases of treasury stock (12.3) -
Repayment of revolving credit borrowings, net (95.2) (93.4)
Issuance of commercial paper, net 96.3 15.8
Net change in other borrowings and other 4.7 22.8
Cash used by financing activities (53.7) (84.4)
Effect of exchange rate changes on cash 2.3 0.5
Increase (decrease) in cash and cash equivalents(1.3) 1.7
Cash and cash equivalents, beginning of period 36.1 25.9
Cash and cash equivalents, end of period $ 34.8 $ 27.6
Cash paid during the period for:
Interest $ 14.6 $ 15.8
Taxes $ 36.2 $ 27.9
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
DURACELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in millions except per share amounts)
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements of Duracell
International Inc. (the "Company") are unaudited, but in the
opinion of management contain all adjustments which are of a
normal and recurring nature necessary to present fairly the
financial position and the results of operations and cash flows
for the periods presented.
The results of operations for these periods are not necessarily
indicative of the results to be expected for the full year.
Worldwide battery sales are significantly greater in the second
half of the calendar year than the first half due to consumers'
traditionally strong purchases during the holiday season.
The Company's fiscal year ends June 30.
Inventories
Inventories are valued at the lower of cost or market using the
first-in, first-out method.
Advertising
Accruals for advertising costs are recorded in interim periods
based upon forecasted expenditures for the current fiscal year
and charged to expense proportionally to the ratio of
year-to-date sales to the most recent forecast of annual sales.
Earnings Per Share
Earnings per share is calculated by dividing net income by the
weighted average number of common shares and share equivalents
outstanding during the period.
2. Inventories
The cost of inventories by stage of manufacture was:
December 31, June 30,
1994 1994
Finished goods $122.5 $141.0
Work in process 52.5 66.3
Raw materials and supplies 37.5 22.6
Total $212.5 $229.9
<PAGE>
3. Income Taxes
The Company has resolved all issues arising from the IRS's audit
of the Company's income tax returns for the years ended June 30,
1988, 1989 and 1990. The settlement was made pursuant to the
IRS's Intangibles Settlement Initiative, a program designed by
the IRS to allow an early settlement of a large number of
pending cases involving acquisitions that included significant
intangible assets. The settlement reduced the U.S. net
operating loss carryforward for tax purposes at June 30, 1994
from $350 to approximately $130 and will impact cash flows
principally over three years. Because the settlement relates to
deductions claimed in connection with assets acquired by the
Company in June 1988, the additional tax that will result from
the settlement has been recorded as an increase to both deferred
tax liabilities and goodwill of $105 on the June 30, 1994
balance sheet. The settlement will not have a significant
impact on the Company's future earnings.
4. Debt
Effective October 28, 1994 the Company amended two of its
principal credit facilities, resulting in a reduction in the
commitment fees and a two year maturity extension to 1999.
5. Equity
The Company paid quarterly cash dividends of $0.22 and $0.16 per
share of common stock during the first six months of fiscal 1995
and 1994, respectively. Total dividends paid during these
periods were $51.8 and $37.1, respectively.
Common stock and capital surplus increased $8.6 reflecting
proceeds of $4.6 from stock option exercises and $4.0 of tax
benefits arising from stock option transactions.
During December 1994 the Company repurchased 441,400 shares of
its stock in open market purchases at a total cost of $18.4.
6. Commitments and Contingencies
In September, 1994, Duracell Inc. (the Company's U.S. operating
subsidiary) entered into an Administrative Order By Consent with
the U.S. Environmental Protection Agency ("EPA") whereunder in
December, 1994 Duracell submitted to the EPA a plan for a
complete remedial investigation and feasibility study relating
to mercury and volatile organic compounds contamination at the
Company's Lexington, North Carolina manufacturing site. The
Company has also agreed to implement such plan following the
EPA's approval of it. Comprehensive remediation actions have
taken place at the Lexington site over the past ten years, but
some additional remediation work is proposed in the plan
submitted to the EPA. As of December 31, 1994, Duracell
estimates that future investigatory and remediation costs will
be approximately $6 million, for which the Company has reserved.
However, due to the uncertainties created by the EPA's
involvement, the ultimate costs could exceed this amount,
although the Company's management does not believe that future
costs will materially affect the Company's earnings or financial
position.
<PAGE>
Management's Discussion and Analysis of Results of Operations
and Financial Condition
Results of Operations
Summarized below are the results of operations for the three and
six fiscal months ended December 31, 1994 and December 25, 1993
(in millions, except per share amounts):
<TABLE>
<CAPTION>
Three Fiscal Months Ended Six Fiscal Months Ended
% Change % Change
Dec. 31, Dec. 25, Dec. 31, Dec. 25,
1994 1993 Reported Perf.* 1994 1993 Reported Perf.*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alkaline unit volume:
North America 489.1 434.0 13 13 828.2 719.6 15 15
Europe 256.7 251.9 2 2 397.9 393.1 1 1
Other International
Markets 210.3 170.9 23 23 366.2 303.6 21 21
956.1 856.8 12 12 1,592.3 1,416.3 12 12
Revenue:
North America$399.3 $361.1 11 11 $681.1 $610.0 12 12
Europe 220.7 214.4 3 (4) 352.4 338.4 4 (2)
Other International
Markets 110.2 85.1 29 30 188.8 149.7 26 27
$730.2 $660.6 11 8 $1,222.3$1,098.1 11 9
Operating income:
North America$138.6 $125.9 10 10 $ 219.2$ 194.2 13 13
Europe 57.0 53.6 6 (1) 83.3 78.1 7 1
Other International
Markets 19.3 14.8 30 32 30.2 23.0 31 32
214.9 194.3 11 9 332.7 295.3 13 11
Corporate/Research &
Development (23.3) (20.9) (11) (11) (45.7) (40.1) (14) (14)
$191.6 $173.4 10 8 $287.0 $255.2 12 11
Interest exp. 6.5 8.3 22 24 14.0 16.3 14 17
Other expense 2.4 2.0 (20) (20) 3.2 3.3 3 6
Income before
income taxes182.7 163.1 12 10 269.8 235.6 15 13
Tax expense 71.6 64.0 (12) (10) 105.7 92.1 (15) (13)
Effective tax
rate 39.2% 39.2% - pp - pp 39.2% 39.1% (0.1pp) (0.1pp)
Net income $ 111.1 $ 99.1 12 10 $164.1 $143.5 14 13
Earnings
per share $0.92 $0.83 11 8 $1.35 $1.21 12 10
<FN>
* Performance - adjusted for foreign exchange (i.e., foreign
currency translation, defined as the impact of translating the
income statement from local currency to U.S. dollars).
</TABLE>
<PAGE>
Overview
Earnings for the second quarter ended December 31, 1995 were
$111 million or $0.92 per share, representing increases of 12%
and 11%, respectively, over the corresponding period in 1994.
These improvements resulted from double-digit gains in worldwide
alkaline volume, revenue and operating income, led by strong
performances in North America and Other International Markets.
Operating income increased 10% on the strength of alkaline
volume driven revenue gains and improved operating leverage,
partially offset by higher spending on research and development
and geographic expansion. Partially offsetting the operating
income growth was higher tax expense, which increased $7.6
million to $71.6 million, primarily as a result of increased
earnings.
For the six months ended December 31, 1994, Duracell's earnings
were $164 million or $1.35, representing increases of 14% and
12%, respectively, over the prior year period. These gains were
driven by worldwide alkaline volume, sales and operating income
growth of 12%, 11% and 12% respectively.
Second Quarter Ended December 31, 1994
North America
Alkaline volume growth was driven by strong growth in the
overall battery category, especially in the mass merchandiser
trade class, and expanded distribution in wholesale clubs. The
revenue increase reflects alkaline volume growth and increased
lithium sales, partially offset by lower priced volume.
Operating income rose 10%, driven by the revenue gain and
leveraging of non-advertising and promotion expenses, partially
offset by higher advertising and promotion costs to support the
DURACELL brand.
Europe
Alkaline volume increased 2% as continuing economic weakness,
particularly in France and Spain, mitigated growth achieved in
the U.K., Italy and Eastern Europe. Excluding favorable
currency translation of $17 million, revenue decreased 4%,
reflecting unfavorable country mix. On a performance basis,
operating income decreased as the impact of lower sales and
increased costs to support new business in Eastern Europe were
substantially offset by leveraging of operating expenses.
Other International Markets
Alkaline volume growth was driven by continued alkaline
penetration and expanding distribution in Asia, Africa and the
Middle East, as well as new distribution in China and market and
share growth in Mexico, Brazil and Australia. Revenue increased
reflecting the volume growth, higher prices and increased high
power sales. Operating income growth was driven by the revenue
increase and leveraging of operating expenses, partially offset
by higher costs associated with continued geographic expansion.
<PAGE>
Six Months Ended December 31, 1994
North America
Alkaline volume grew as a result of expanded warehouse club
distribution and increased demand in the mass merchandiser
category. Higher sales reflect alkaline volume growth and
increased lithium sales. Operating income rose 13%, driven by
higher sales and improved leveraging of non-advertising and
promotion operating expenses, partially offset by increased
investment in advertising and promotion.
Europe
Alkaline volume increased 1% as successful promotional activity
in Italy, new distribution into Eastern Europe, and the launch
of superior performing alkaline batteries and new
environmentally friendly packaging in the United Kingdom were
offset by the impact of unfavorable economic conditions,
particularly in France and Spain. Excluding favorable currency
translation of $22 million, sales decreased 2% due to
unfavorable country mix. On a performance basis, operating
income grew 1% as the impact of lower sales (excluding favorable
currency translation) and increased costs to support new
business in Eastern Europe were offset by leveraging of
operating expenses.
Other International Markets
Expanded distribution throughout Asia (including China), Africa
and the Middle East, combined with market and share growth in
Mexico, Brazil and Australia resulted in alkaline volume and
sales increases of 21% and 26%, respectively. Leveraging of
operating expenses helped operating income grow faster than
sales.
Income Tax Expense
The provision for income taxes increased as a result of higher
pre-tax income.
<PAGE>
<TABLE>
<CAPTION>
Financial Condition Six Months Ended
December 31, 1994 December 25, 1993
<S> <C> <C>
Cash provided by operating activities $103.0 $110.6
Capital expenditures 52.0 22.8
Dividends paid 51.8 37.1
Debt reduction (borrowings), net (4.6) 54.6
</TABLE>
Cash from operations was used principally for continued
investment in the business through capital expenditures. The
increase in capital expenditures is expected to continue during
fiscal 1995 and over the next several years, when compared to
prior years, for capacity expansion, efficiencies in the
manufacturing process, and investments to develop new high power
rechargeable batteries. These expenditures will include the
construction of new alkaline manufacturing facilities, as well
as a rechargeable nickel metal hydride cell manufacturing
facility in the United States. The rechargeable nickel metal
hydride facility will be owned by a joint venture partnership,
formed in October 1994, between affiliates of the Company (40%),
Toshiba Battery Co. Ltd. of Japan (40%) and Varta Batterie AG of
Germany (20%).
The Company will rely on cash generated from operations to fund
its future working capital and capital expenditure requirements
needed to support continued alkaline growth, geographic
expansion and investment in high power rechargeable batteries.
Funds available from unused bank credit facilities will be used
primarily to fund seasonal working capital during the year when
receivables and inventories rise to meet operating requirements.
Taxes paid ($36.2 million) have remained low in relation to the
tax provision ($105.7 million) as taxable income was shielded by
deductions for amortization and depreciation taken earlier for
tax purposes than recognized for book purposes, principally in
the United States. As of the end of fiscal 1994, the U.S. tax
net operating loss carryforward was $130 million. See Footnote
3 in the Notes to Consolidated Unaudited Financial Statements
for discussion regarding the settlement of U.S. Internal Revenue
Service's audit of the Company's 1988, 1989 and 1990 U.S. tax
returns.
Dividends paid increased 40%, reflecting the March 1994 dividend
increase and the greater number of shares outstanding. During
December 1994 the Company repurchased 441,400 shares of its
common stock in open market purchases at a total cost of $18.4
million. During January 1995 the Company purchased an
additional 558,600 shares in open market purhases at a total
cost of $22.8 million. As of January 27, 3,000,000 shares
remained of the Board of Directors' authorization for the
purchase of up to 4,000,000 shares of the Company's common stock.
As of December 31, 1994, Duracell had $813 million in
contractually committed lines of credit from long-term bank
credit facilities under which $353 million was outstanding.
Commitments under the facilities are used to support commercial
paper, of which $218 million was outstanding at December 31,
1994. Duracell's commercial paper program is rated investment
grade. Unused borrowing capacity under its principal bank
credit facilities at December 31, 1994 was $460 million.
<PAGE>
PART II
OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(i) Statement re: computation of earnings per share.
(ii) Sixth Amendment, dated as of October 28, 1994, to the
Second Amendment and Restated Credit Agreement, dated as
of March 29, 1991, among Duracell International Inc. and
certain of its affiliates and the Banks listed therein,
including The First National Bank of Chicago, as agent.
(iii) Ninth Amendment, dated as of October 28, 1994, to the
Amended and Restated Multi-Option Financing Facility
Agreement, dated as of November 16, 1990 among Duracell
International Inc. and certain of its affiliates, the
Financial Institutions listed therein, including Bank of
America International Limited as facility agent and The
First National Bank of Chicago as documentation agent.
(b) Reports on Form 8-K
The Company did not file any report on Form 8-K during the
three fiscal months ended December 31, 1994.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
DURACELL INTERNATIONAL INC.
February 13, 1995 By: Robert A. Burgholzer, Jr.
Robert A. Burgholzer, Jr.
Vice President and Controller
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 35
<SECURITIES> 0
<RECEIVABLES> 560
<ALLOWANCES> 23
<INVENTORY> 213
<CURRENT-ASSETS> 887
<PP&E> 564
<DEPRECIATION> 225
<TOTAL-ASSETS> 2454
<CURRENT-LIABILITIES> 425
<BONDS> 358
<COMMON> 1
0
0
<OTHER-SE> 1248
<TOTAL-LIABILITY-AND-EQUITY> 2454
<SALES> 1222
<TOTAL-REVENUES> 1222
<CGS> 413
<TOTAL-COSTS> 413
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14
<INCOME-PRETAX> 270
<INCOME-TAX> 106
<INCOME-CONTINUING> 164
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 164
<EPS-PRIMARY> $1.35
<EPS-DILUTED> $1.35
</TABLE>
<TABLE>
EXHIBIT i
DURACELL INTERNATIONAL INC.
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
For the Three and Six Fiscal Months Ended
December 31, 1994 and December 25, 1993
<CAPTION>
Three Fiscal Months Ended Six Fiscal Months Ended
In millions, except per share amounts
Dec. 31, 1994 Dec. 25,1993 Dec. 31, 1994 Dec. 25, 1993
<S> <C> <C> <C> <C>
Primary Computations:
Weighted average number
of shares outstanding 117.6 116.2 117.5 115.7
Effect of outstanding
stock options 3.5 3.4 3.7 2.8
Weighted average number of shares and share
equivalents outstanding 121.1 119.6 121.2 118.5
Per share amounts:
Net income (a) $0.92 $0.83 $1.35 $1.21
Fully Diluted Computations:
Weighted average number
of shares outstanding 117.6 116.2 117.5 115.7
Effect of outstanding
stock options 3.6 3.4 3.7 3.1
Weighted average number of shares and share
equivalents outstanding 121.2 119.6 121.2 118.8
Per share amounts:
Net income (a) $0.92 $0.83 $1.35 $1.21
<FN>
_________________________________ (a) These calculations are
submitted in accordance with Regulation S-K item 601 (b)(11)
</TABLE>
SIXTH AMENDMENT, dated as of October 28, 1994 (this "Sixth
Amendment"), to the SECOND AMENDED AND RESTATED CREDIT
AGREEMENT, dated as of March 29, 1991 (as the same may be
further amended, supplemented or otherwise modified from time to
time, the "Agreement") among DURACELL INTERNATIONAL INC., and
DURACELL INC., as borrowers (the "Borrowers"), THE FIRST
NATIONAL BANK OF CHICAGO, as agent (in such capacity, the
"Agent"), and the other financial institutions parties thereto
(the "Banks").
W I T N E S S E T H :
WHEREAS, the parties hereto wish to amend certain provisions
of the Agreement on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as
follows:
1. Definitions. Unless otherwise defined herein, terms defined
in the Agreement shall be used herein as so defined.
2. Amendment to Section 1.01. Section 1.01 of the Agreement
is hereby amended by deleting the defined term "Domestic
Revolving Credit Termination Date" and substituting therefor the
following:
"Domestic Revolving Credit Termination Date" shall mean the
earlier of (i) December 30, 1999 or such later date as shall
have been agreed to by the Borrowers, all of the Banks and the
Agent and (ii) the date of termination in whole of the
Commitments pursuant to Section 2.09(f) or Section 9.02(a).
3. Amendment to Section 2.07(a). The second paragraph of
Section 2.07(a) of the Agreement is hereby amended to read as
follows:
Domestic Revolving Credit Loans shall bear interest, subject
to Section 2.07(d), as follows:
(A) If a Base Rate Loan, then at a rate equal to
the Base Rate in effect from time to time;
(B) If a Fixed CD Rate Loan, then at a rate equal
to the sum of the Fixed CD Rate for the applicable Interest
Period plus 0.525% per annum; or
(C) If a Eurodollar Rate Loan, then at a rate equal
to the sum of the Eurodollar Rate for the applicable Interest
Period plus 0.275% per annum.
4. Amendment to Section 2.08(e). Section 2.08(e) of the
Agreement is hereby amended to read as follows:
(e) Commitment Fees. Holdings and the Company shall pay to
the Agent for the account of the Banks:
(i) a commitment fee (the "Domestic Revolving Credit
Commitment Fee") accruing at the rate of 0.10% per annum upon
the average daily amount by which, from time to time, (A) the
Domestic Revolving Credit Commitments exceed (B) the sum of (1)
the aggregate principal amount of all outstanding Domestic
Revolving Credit Loans (it being understood that such principal
amount excludes the principal amount of all outstanding Domestic
Competitive Bid Loans) and (2) the aggregate Facility Letter of
Credit Obligations of all Borrowers;
(ii) [Intentionally Omitted].
The Commitment Fees shall be calculated on the basis of a year
of 365 (or 366, as applicable) days and actual days elapsed and
shall be payable quarterly, in arrears, on the last day of each
September, December, March and June. In addition, the Domestic
Revolving Credit Fee shall be payable on the Domestic Revolving
Credit Termination Date.
5. Amendment to Section 2.09(g). Section 2.09(g)(i) of the
Agreement is hereby amended to read as follows:
(g) Mandatory Reductions. (i) The Domestic Revolving
Credit Commitments shall be reduced to zero on December 30, 1999.
6. Effective Date. This Sixth Amendment will become effective
as of the date hereof upon its execution by the Borrowers and
the Banks.
7. Representation. Each Borrower represents and warrants to
each Bank that as of the effective date of this Sixth Amendment
(a) this Sixth Amendment constitutes the be legal, valid and
binding obligation of such Borrower, enforceable against it in
accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or limiting creditors' rights generally
or by equitable principles generally and (b) since the date of
the most recent Form 10-K or 10-Q filed by Holdings, there has
occurred no event which has a Material Adverse Effect.
8. Reaffirmation. Holdings, the Company and the Subsidiary
Guarantor reaffirm their obligations under the Holdings
Guaranty, the Company Guaranty and the Subsidiary Guaranty,
respectively, which Holdings Guaranty, Company Guaranty and
Subsidiary Guaranty remain in full force and effect.
9. Continuing Effect. Except as expressly amended hereby, the
Agreement shall continue to be and shall remain in full force
and effect in accordance with its terms.
10. Governing Law. This Sixth Amendment shall be governed by,
and construed and interpreted in accordance with, the laws of
the State of New York.
11. Counterparts. This Sixth Amendment may be executed by the
parties hereto in any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Amendment to be duly executed and delivered by their properly
and duly authorized officers as of the day and year first above
written.
DURACELL INTERNATIONAL INC.
By: Name: Title:
DURACELL INC.
By: Name: Title:
DURANAME CORP.
By: Name: Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Agent and as a Bank
By: Name: Title:
BANKERS TRUST COMPANY
By: Name: Title:
CHEMICAL BANK
By: Name: Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: Name: Title:
THE BANK OF NOVA SCOTIA
By: Name: Title:
CANADIAN IMPERIAL BANK OF COMMERCE
By: Name: Title:
THE CHASE MANHATTAN BANK, NATIONAL ASSOCIATION
By: Name: Title:
THE TOKAI BANK LIMITED
By: Name: Title:
THE TORONTO-DOMINION BANK
By: Name: Title:
UNION TRUST COMPANY
By: Name: Title:
THE BANK OF NEW YORK
By: Name: Title:
INDUSTRIAL BANK OF JAPAN
By: Name: Title:
THE MITSUI TRUST AND BANKING COMPANY, LIMITED
By: Name: Title:
BBL, BANK BRUSSELS LAMBERT, NEW YORK BRANCH
By: Name: Title:
CITIBANK, N.A.
By: Name: Title:
THE FIRST NATIONAL BANK OF BOSTON
By: Name: Title:
NATIONAL WESTMINSTER BANK PLC
By: Name: Title:
BANCA COMMERCIALE ITALIANA, NEW YORK BRANCH
By: Name: Title:
THE FUJI BANK, LIMITED
By: Name: Title:
YASUDA TRUST AND BANKING CO., LTD.
By: Name: Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: Name: Title:
CREDIT SUISSE
By: Name: Title:
NINTH AMENDMENT, dated as of October 28, 1994 (this "Ninth
Amendment"), to the AMENDED AND RESTATED MULTI-OPTION FINANCING
FACILITY AGREEMENT, dated as of November 16, 1990, as heretofore
amended (as the same may be further amended, supplemented or
otherwise modified from time to time, the "Agreement"), among
DURACELL INTERNATIONAL INC., DURACELL BATTERIES LIMITED, N.V.
DURACELL BATTERIES S.A., S.A. DURACELL BENELUX N.V. and DURACELL
S.P.A, formerly known as Diesse S.P.A., as borrowers (the
"Borrowers"), BANK OF AMERICA INTERNATIONAL LIMITED, as Facility
Agent (in such capacity, the "Facility Agent"), THE FIRST
NATIONAL BANK OF CHICAGO, as Documentation Agent (in such
capacity, the "Documentation Agent"), and the other financial
institutions parties thereto (the "Banks").
W I T N E S S E T H :
WHEREAS, the parties hereto wish to amend certain provisions
of the Agreement on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as
follows:
1. Definitions. Unless otherwise defined herein, terms
defined in the Agreement shall be used herein as so defined.
2. Amendment to Section 1.01. Section 1.01 of the Agreement
is hereby amended by deleting the defined terms "LIBOR Interest
Period" and "Scheduled Termination Date" and substituting
therefor the following:
"LIBOR Interest Period" shall mean, with respect to a LIBOR
Loan, a period of one, two, three, six or, if available to each
Bank as reasonably determined by such Bank, nine or twelve
months, commencing on a Business Day selected by a Borrower
pursuant to this Agreement. Such LIBOR Interest Period shall
end on the day in the calendar month one, two, three, six, nine
or twelve months later, as the case may be, which corresponds
numerically to the beginning day of such LIBOR Interest Period;
provided that if there is no such numerically corresponding day
in such succeeding month or if such LIBOR Interest Period
commences on the last Business Day of such succeeding month,
such LIBOR Interest Period shall end on the last Business Day of
such succeeding month. If a LIBOR Interest Period would
otherwise end on a day which is not a Business Day, such LIBOR
Interest Period shall end on the next succeeding Business Day;
provided that if said next succeeding Business Day falls in a
new month, such LIBOR Interest Period shall end on the
immediately preceding Business Day. Notwithstanding the
foregoing, a Borrower may select irregular LIBOR Interest
Periods as agreed between such Borrower and the Facility Agent
(which shall be no less than seven days and no more than six
months); provided that such LIBOR Interest Periods shall only
relate to Eurodollar Revolving Loans or Sterling Revolving
Loans, and there shall be no more than twelve such LIBOR
Interest Periods with respect to Eurodollar Revolving Loans, and
no more than twelve such LIBOR Interest Periods with respect to
Sterling Revolving Loans, in each case in any period of twelve
consecutive months.
"Scheduled Termination Date" shall mean December 30, 1999
or such later date as shall be agreed by the Borrowers and the
Banks.
3. Amendment to Section 2.05(a). Section 2.05(a) of the
Agreement is hereby amended to read as follows:
(a) Rate of Interest. (i) Except as otherwise provided in
Section 2.05(a)(iii), the Committed Loans shall bear interest as
provided in this Section 2.05(a)(i). Revolving Loans other than
Domestic Sterling Revolving Loans shall bear interest on the
unpaid principal amount at a rate equal to the sum of the LIBOR
Rate for the applicable Interest Period plus 0.175% per annum.
Domestic Sterling Revolving Loans shall bear interest on the
unpaid principal amount thereof at a rate equal to the sum of
the Domestic Sterling Rate for the applicable Interest Period
plus 0.175% per annum. Competitive Bid Advances shall bear
interest on the unpaid principal amount thereof from the date
made until paid in full at the rate specified in the applicable
Competitive Bid Borrowing Notice. Same Day Swingline Loans
shall bear interest on the unpaid principal amount thereof at a
rate equal to the greater of (x) the Federal Funds Rate and (y)
0.10% below the Reference Rate. LIBOR Swingline Loans shall
bear interest on the unpaid principal amount thereof at a rate
equal to the sum of the LIBOR Rate for the applicable seven-day
Interest Period plus 0.175% per annum.
(ii) [Intentionally Omitted.]
(iii) [Intentionally Omitted.]
4. Amendment of Section 2.06(b). Section 2.06(b) of the
Agreement is hereby amended to read as follows:
(b) Facility Fee. The Borrowers (other than Diesse) shall
pay to the Facility Agent, for the account of the Banks, a
facility fee (the "Facility Fee") accruing at the rate of 0.10%
per annum of the average daily total of the Commitments. The
Facility Fee shall be calculated on the basis of a year of 365
(or 366, as applicable) days and actual days elapsed and shall
be payable in Dollars quarterly in arrears, on the last day of
each September, December, March and June and on the Termination
Date. The Facility Agent shall promptly remit the Facility Fee,
when paid, to the Banks in accordance with their Pro Rata Shares
thereof.
5. Amendment of Section 2.06(c). Section 2.06(c) of the
Agreement is hereby amended to read as follows:
(c) Fees for Syndicated Letters of Credit. The Borrowers
each agree to pay to the Facility Agent for the account of the
Banks a fee (the "Letter of Credit Fee") with respect to each
Syndicated Letter of Credit issued for its account, for the
period from the date of issuance of such Syndicated Letter of
Credit to the earlier to occur of the expiry date or termination
date of such Syndicated Letter of Credit, computed at a rate for
each day equal to 0.15% per annum of the amount available to be
drawn thereunder on such day. Accrued Letter of Credit fees
shall be computed on the basis of a year of 365 (or 366, as
applicable) days and actual days elapsed and shall be due and
payable (in the currency in which the related Letter of Credit
is denominated) in arrears on the last Business Day of each
September, December, March, and June and on the date the
respective Syndicated Letter of Credit terminates. The Facility
Agent shall promptly remit the Letter of Credit Fee, when paid,
to the Banks in accordance with their Pro Rata Shares thereof.
6. Amendment to Section 2.07. Section 2.07(f)(i) of the
Agreement is hereby amended to read as follows:
(f) Mandatory Reductions of Commitments. (i) The Commitments
shall be reduced to zero on December 30, 1999.
7. Amendment to Section 2.10. The proviso at the end of the
second sentence of Section 2.10 is hereby amended to read as
follows:
provided, however, that in the case of Diesse Revolving Loans,
the cost to the Diesse Lender of funding such Loans shall be
deemed to equal the sum of the Diesse Participants' respective
costs of funding their advances under the Italian Participation
Agreement, plus (ii) 0.175%
8. Effective Date. This Ninth Amendment will become
effective as of the date hereof upon its execution by the
Borrowers, the Guarantors and the Banks.
9. Representation. Each Borrower represents and warrants to
each Bank that, as of the effective date of this Ninth
Amendment, (a) this Ninth Amendment constitutes the legal, valid
and binding obligation of such Borrower, enforceable against it
in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or limiting creditors' rights generally
or by equitable principles generally and (b) since the date of
the most recent Form 10-K or 10-Q filed by Holdings, there has
occurred no event which has a Material Adverse Effect.
10. Continuing Effect. Except as expressly amended hereby,
the Agreement shall continue to be and shall remain in full
force and effect in accordance with its terms.
11. Reaffirmation. Holdings, Duracell US and Duraname
reaffirm their obligations under the Holdings Guaranty, the
Duracell US Guaranty and the Duraname Guaranty, respectively,
which remain in full force and effect.
12. Counterparts. This Ninth Amendment may be executed by
the parties hereto in any number of separate counterparts and
all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
13. Italian Participation Agreement. Each of the
undersigned, in their respective capacities as the Facility
Agent, a Diesse Participant or the Diesse Lender, as the case
may be, hereby consent to the terms of this Ninth Amendment and
ratify each of the amendments to the Agreement executed prior to
the date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Ninth
Amendment to be duly executed and delivered by their properly
and duly authorized officers as of the day and year first above
written.
DURACELL INTERNATIONAL INC.
By: Name: Title:
DURACELL BATTERIES LIMITED
By: Name: Title:
N.V. DURACELL BATTERIES S.A.
By: Name: Title:
S.A. DURACELL BENELUX N.V.
By: Name: Title:
DURACELL S.P.A, formerly known as Diesse S.P.A.
By: Name: Title:
BANK OF AMERICA INTERNATIONAL LIMITED, as Facility Agent
By: Name: Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Documentation Agent and
as a Bank
By: Name: Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: Name: Title:
BANKERS TRUST COMPANY
By: Name: Title:
CHEMICAL BANK
By: Name: Title:
THE CHASE MANHATTAN BANK, NATIONAL ASSOCIATION
By: Name: Title:
BANCA COMMERCIALE ITALIANA
By: Name: Title:
By: Name: Title:
BBL, BANK BRUSSELS LAMBERT
By: Name: Title:
By: Name: Title:
THE MITSUI TRUST AND BANKING COMPANY, LIMITED
By: Name: Title:
BANQUE PARIBAS
By: Name: Title:
By: Name: Title:
THE FUJI BANK, LIMITED
By: Name: Title:
CREDIT LYONNAIS NEW YORK BRANCH/CAYMAN ISLAND BRANCH
By: Name: Title:
By: Name: Title:
THE FIRST NATIONAL BANK OF BOSTON
By: Name: Title:
YASUDA TRUST AND BANKING CO., LTD.
By: Name: Title:
THE TORONTO-DOMINION BANK
By: Name: Title:
CREDIT SUISSE
By: Name: Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: Name: Title:
BAYERISCHE VEREINSBANK AG
By: Name: Title:
Acknowledged and Agreed to:
DURACELL INC.
By: Name: Title:
DURANAME CORP.
By: Name: Title:
