Good morning. My name is Cole, and I will be your conference operator today. At this time, I would like to welcome everyone to Energizer's Fourth Quarter Fiscal 2018 Conference Call. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to Jackie Burwitz, Vice President, Investor Relations. Please begin your conference.

Good morning and thank you for joining us. During the call, we will discuss our results for the fourth quarter and fiscal year 2018, our outlook for fiscal 2019, and then update you on our acquisition of Spectrum Brands Battery and Portable Lighting Business and our newly announced acquisition of Spectrum’s auto care business. This morning we have also posted supplemental slides on our website www.energizerholdings.com under the investors and events and presentations tab. With me this morning are Alan Hoskins, Chief Executive Officer; Mark LaVigne, Chief Operating Officer; and Tim Gorman, Chief Financial Officer. This call is being recorded and will be available for replay via our website, energizerholdings.com. Turning to Slide 2. During the call, we may make statements about our expectations for future plans and financial and operating performance. Any such statements are forward-looking statements, which reflect our current views with respect to future events. We also refer to non-GAAP financial measures. A reconciliation of non-GAAP financial measures to comparable GAAP measures is shown in the press release issued earlier today, which is available in the Investor Relations section of our website, energizerholdings.com. During our prepared remarks, we will refer to the acquisition of Spectrum's Global Battery and Portable Lighting products business as the Spectrum Battery acquisition and the acquisition of the Spectrum’s auto care business as Spectrum Auto Care. Information concerning our category and market share discussed on this call relates to markets where we compete and are based on estimates using Energizer's internal data, data from industry analysis, and adjustments that we believe to be reasonable. Investors should review the risk factors in our Form 10-K, 10-Q, and other SEC filings for a description of the key factors affecting our business. These risks may cause actual results to differ materially from our forward-looking statements. We do not undertake to update these forward-looking statements. Moving to Slide 3. During today’s call, Alan will briefly cover financial highlights for the quarter and fiscal year and our outlook for fiscal 2019. He will also provide details on the amended battery transaction, as well as details on the newly announced acquisition of Spectrum’s auto care business. Tim will provide financial details on both transactions and he will provide a more depth review of the results for the quarter and outlook for the upcoming fiscal year. With that, I'd like to turn the call over to Alan.

Thanks, Jackie, and good morning, everyone. During my 36 years with Energizer, this was one of the most exciting and dynamic times I have experienced. We just reported our third consecutive year of solid organic sales and profit growth. Our quarter is strong and our team is executing well. The battery acquisition, we’re expanding and strengthening our core business by adding complementary brands from the position of strength. In addition, we are requiring a leading iconic auto care brand Armor All, and building a second platform in the auto care segment from which we can drive future growth and expansion. The newly announced agreement to acquire Spectrum’s auto business is a cash and stock transaction valued at approximately $1.25 billion. We believe both of these transactions are compelling strategic operational and financial opportunities for Energizer and will drive long-term value for all of our stake holders. Turning to Slide 4. Now, I would like to cover the results for the quarter. Operationally, we finished fiscal 2018 with a strong fourth quarter. Our team has now delivered three consecutive years of solid growth in both organic top line sales and segment profitability. We continue to execute on our strategic priorities of leading with innovation, operating with excellence, and driving productivity and fiscal 2018 saw the benefits of our investments and brand building and our continuous improvement initiatives. Adjusted diluted earnings per share for the fourth quarter was $0.83 and $3.37 for fiscal year 2018, up 54% and 13%, respectively. We plan to build on this momentum in fiscal 2019 with an adjusted earnings per share outlook of $3.40 to $3.50, excluding the impact of acquisitions. Tim will discuss these results and our outlook for fiscal 2019 in more detail. Moving to Slide 5. Now, I would like to discuss our two…

Thanks Alan. Moving to Slide 9, I will start by providing financial details on the amended battery deal in the auto care acquisition. As Alan discussed earlier, we believe both acquisitions provide compelling financial benefits and create long-term value for Energizer’s stakeholders. The newly announced auto acquisition squarely meets our acquisition criteria including a similar financial profile, the ability to drive synergies through scaled operations and enhanced distribution, a defensible business model, and a strong degree of market channel and customer overlap. Turning to Slide 10. Our original battery deal reflected a purchase price of $2 billion for Spectrum’s battery business, which had sales of $866 million, and adjusted EBITDA of $169 million in fiscal year 2017. As we anticipated, the business faced headwinds, while we saw regulatory approval and work to close the transaction, and is expected to deliver adjusted EBITDA of approximately $140 million to $150 million in fiscal year 2018. The extended approval process and decline in performance compelled us to explore select alternatives in Europe, including the proposed remedy to close our transaction, as quickly as possible. This should enable us to make a meaningful change in the trajectory of Spectrum’s battery business and more specifically the business that we will ultimately operate after the proposed divestiture. Our leadership team is excited by the expanded opportunities the Rayovac and VARTA brands will provide us in North America, Latin America, and Asia Pacific. We are confident we can recapture the momentum that has been lost since Spectrum’s battery business in fiscal year 2018. In our original agreement, after taking into account the tax benefit and full run rate synergies, the multiple paid was 7.4x, which we believe represented a very attractive deal. Based on our amended agreement, the net sales and adjusted EBITDA of the retained business…

Thanks, Tim. I know we provided a lot of information to everyone today, but I would like to reiterate how excited the organization is about the progress we are making on our strategic plan and the results we are achieving. Fiscal 2018 was Energizer's third consecutive year of strong top and bottom-line growth. Adjusted earnings per share for fiscal 2018 increased 13% to $3.37. And as I stated earlier, this performance is a result of our colleagues continued focus on our strategic priorities of leading with innovation, operating with excellence, and driving productivity. We are building on this momentum with an outlook for continued top and bottom line growth in fiscal 2019. In addition, the two attractive businesses we are working towards acquiring from Spectrum will diversify our product portfolio, expand our manufacturing capabilities, broaden our commercial relationships, drive operational enhancements across the organization, and create significant scale for our global platform. This news is a direct reflection of the hard work and ongoing commitment to excellence that is displayed by our colleagues each and every day. We look forward to working alongside our Spectrum colleagues as we grow these well-established businesses, and continue to accelerate our ability to innovate and effectively serve our customers around the world, all while driving long-term value for our shareholders, our customers and our consumers. One final item before opening up the call to questions. As many of you know, and have seen on Monday, Pat Mulcahy, he will be stepping down as our Chairman of the Board and Pat Moore will be assuming that role. I’d like to personally Pat Mulcahy for his leadership throughout the years and especially since our spin in 2015. He has been a tremendous chairman and we look forward to his continuing involvement with the company as an independent board member. We are also excited and look forward to having Pat Moore take on the Chairman position. His skill and knowledge have been invaluable to management and board and we're fortunate to have him accepting these additional responsibilities. Operator, we can now open it up for Q&A.

[Operator Instructions] And the first question comes from Wendy Nicholson with Citi. Please go ahead with your question.

Hi. My head is spinning with all this information, but if I could just start…

Good morning, Wendy.

Good morning. If I can start with a question on the core business, it looks like the core battery business is doing well, your market share activity or your market share gains are really impressive and all of that. So, congratulations, but can you comment on just the core battery business, what you are seeing from a competitive perspective, what you are seeing from a promotional perspective and your market share gains, particularly online, what do you think is driving that, just so we can get comfortable sort of with the sustainability of the momentum in the core battery business?

Hi Wendy. Absolutely. It’s Alan, good morning. So, let me kind of break that down a little bit for you. as we look at the category, as Tim shared, I think I had referenced in a number of different calls and a lot of our one-on-ones that we were going to continue to look at the outlook for the category. And as you can see, we revised our outlook to be more positive to flat to slightly up, driven by all the trends that we have talked about over a number of months now. That’s kind of point one. Point two, I think that the Energizer team and our colleagues have really done a terrific job of bringing focus to our core business and discipline in the way we operate. If you were to ask me what differentiates us from our previous parent company or some of the peers that we compete with? That is something we do exceptionally well. That deliberate focus on three clear strategies and operating with excellence is really critical to our success and we believe why we’ve been able to fulfill distribution, expand our space in stores, strengthen our brands, and build the equity of our brands, all those things combined are working exceptionally well for Energizer. I want to be clear as we go forward. With the announced acquisitions that we're doing, our core will remain at our center. We're going to continue to make sure that we bring innovation there. We continue to focus there and we continue to bring really good solutions to our retail partners to meet our collective consumer’s needs. So, all in from that perspective I’m very pleased. I like the trends that we’re currently seeing in the category in both volume and value, it’s a little bit different regionally around the world, but all-in we’ve seen that improvement collectively in many of the markets that we’re going to. Our team has done a really good job of driving productivity over the course of the last year and we’ve done a lot of work to go in and look at how we can continue to drive efficiencies and that’s helped us offset a lot of what we saw both in the unfavorable movement of foreign currency and commodity inflation and I’ll pause for a minute and maybe let Mark talk a little bit about the e-commerce space.

Yes. Wendy, online we continue to have great success. The category grew 24% over the latest three months in e-commerce, over that same time period Energizer grew 67% and AmazonBasics grew 42%. The resulting value share as it currently stands as we mentioned in our script, stands at a 25% share basics of that a 30% with Duracell and Spectrum at a 13% and 3.5%, respectively.

Okay. And driving that, I mean it's from a competitive pricing perspective, I mean it sounds like your trends online are great, but again, sort of sustainability, visibility of the continuation of that et cetera, et cetera.

We would expect the growth to continue. Obviously, our goal is to outpace category growth and continue to drive conversion online just like we do in store. You’ve heard us say it before it just comes down to the basics of visibility and content and search and it’s something our team has done exceptionally well. They're going to continue to drive it. We're going to continue to drive battery. We're going to continue to focus on the fundamentals, we're going to continue to expand categories in which we participate as well. You see pricing dynamics online roughly in line and similar to what you see in the store.

And Wendy to your latter part of the question around stability around pricing and promotion the category, the short answer is we continue to see in the U.S. in those current quarter continued stability and promotions. So, if you're seeing the percent of batteries sold on promotion relatively flat and in-line with prior quarters and we're seeing the percent of price decrease on any batteries sold down and the average unit prices continue to improve. The gap between the price brand and private label and the premium brand is actually closed in the last quarter, as we've seen pricing actions on some of the private label brands and price brands that are in the market.

Got it, that sounds terrific. Can I just ask one question following up regarding the Varta on sale? Just to be clear, I mean that's a big change to the original transaction that had been contemplated, if you were not doing the auto care transaction and you were just looking at Spectrum batteries, is it fair to say that the Varta divestiture, you know you would proceed with the acquisition of the Spectrum business in the rest of the world even if you had to divest Varta or would that have been a deal breaker ex auto care?

No, Wendy, I would say, we absolutely view them both independently and we evaluated them independently. The battery deal as Tim mentioned during the prepared remarks, is still a solid deal for Energizer. It's obviously not the full deal that we wanted in aspire to get when we announced this in January, but we're still really excited about getting the brands and the colleagues that we're getting in the rest of the world, but we just felt like this was the right step to take in the process at this time.

Got it. Thank you very much. Congratulations.

Thanks, Wendy.

And our next question comes from Bill Chappell with SunTrust. Please go ahead with your question.

Hi, good morning. Actually, this is Grant on for Bill. Just had a first question on the auto care acquisition. I guess looking back at some of the results from the air freshener business, sales have been a little choppy. So, I guess we just wanted to hear more on your confidence generally in the auto care segment kind of growth prospects looking forward and kind of what gives you confidence to make this big investment in that space?

Yes. So, it's Alan, I'll start and then I'm going to turn it over to Mark. We are very confident in this space, we have learned a lot from the acquisition of HandStands as you know, we also acquired the Nu Finish and Scratch Doctor brands. We're in the process of integrating that, applying those lessons learned. It's going extremely smooth. The reason we really love this is, we have talked about – as part of our M&A strategy, one of the core tenants was to expanding the categories in the household space. This automotive acquisition buying the leading brand obviously catapults Energizer to a leadership position, and gives us that platform that we were looking for in automotive to continue to build off of the future. So, we're very, very excited about that and we're confident in our ability to both execute and integrate that acquisition as we go forward. And then Mark?

Yes, I mean, so admittedly the sales have been choppy and you see them in the share numbers that you see. Ultimately, this is a very long selling cycle business. So, when you see what you're going to see next spring is going to be the result for the line reviews that have just been completed, and we're very, very positive about the messages we've been hearing from our retailers coming out of this year's line review. This was really the first year, where we were able to have our complete fingerprints all over the business. And as a result, this year and the line review results were more indicative of what we feel we're going to be able to do with the air freshener business going forward. Obviously, adding an iconic brand like Armor All to the mix catapults us into the leadership position and makes us a category steward much like we are in batteries. And as a result, we think we can drive even more incremental value across our portfolio and with our retailers across the board.

And I wouldn't underestimate the importance and value that the category captainships bring both from Spectrum's global auto business and Energizer's and fragments combined that really gives us the ability to partner with our retailers to shape and drive growth in the category going forward, similar to what we've demonstrated in battery over the course of the last three years, since we separated from Edgewell.

Got it. And I guess just a follow-up on the operational issues in the Spectrum Auto Care business. So, what's the line of site of that improvement, is there any risk that kind of while you're integrating this business and trying to improve the underlying operations that it could take maybe a little bit longer than you guys are expecting?

We looked into that quite a bit in connection with our diligence. And we've had a lot of open and honest dialog with Spectrum and they've been a tremendous deal partner, really playing a lot of the cards on the table and letting us know what the operational issues were that they've spoken about in some of their previous conference calls. We’re confident with the work that's been done. To remedy the situation, we believe that they had worked their way out of it, there is still work to be done. We are going to attack at the same way they have in recent months. We're going to make sure that business is stable, we're going to be making sure that we're taking care of the customers and we're very confident on our ability to continue to drive effectiveness and efficiency in those operations. It just may take a little bit longer.

Got it. Thank you. I will pass along.

Thank you.

And our next question comes from Faiza Alwy with Deutsche Bank. Please go ahead with your question.

Yes. Thanks. Good morning.

Good morning.

So, my question is just – I just wanted to clarify exactly what you're sort of divesting from the battery business. So, are you keeping the hearing aid batteries, are you keeping the manufacturing facilities that are in the UK, for example. So, just more color around that would be helpful? And also, like what is the EBITDA of the business that you're divesting?

Faiza, this is Mark. I'll start and as we've talked before, I'll give you what I can. The one sensitive point I want to make sure we cover is, we're still in the middle of discussions with the commission. And so, anything that we have proposed is going to still be subject to their review and approval. So, I don't want to front-run their process, we're having great discussions with them. It has been a very collaborative effort over the last couple of months. So, I think the ultimate scope of the remedy is still open, I don't want to speak for the commission at this point because they ultimately have approval. But what we can tell you is that based on the proposal that we've made, it’s the Varta Europe-based business and ultimately, we believe that the EBITDA that would be divested is in the $50 million to $60 million range. And the EBITDA that we would hold on to will be in the $80 million to $90 million range ultimately. Now how the Commission wants to frame the market and the ultimate divestiture is still open to discussions, but that's a rough guide in terms of divested assets versus acquired assets.

Okay. So, are you keeping, are the hearing aid batteries part of the divestiture?

So, nothing is final yet. Based on our proposal, we would propose retaining substantially all of the hearing aid business, but that is still open to discussion with the commission. So, I don't want to front-run that process.

Okay, understood. And then just a follow up on the Auto Care business, you've alluded to this, but the EBITDA in that business has gone from $150 million to under $120 million and I know all about the operational issues. But there are a lot of it seems other issues in that business too as it relates to input cost inflation sort of some of the private label contracts, just new competition that's coming on to the market. So, what is your outlook, are you expecting that EBITDA to go back to the $150 million range or are you just expecting that the business sort of stabilizes at the current level?

So, I think first and foremost, the priority needs to be to operate that business with excellence, the way they had previously and the way we operate our current businesses. Once you operate a business effectively and you are taking care of your customers, you can have more meaningful conversations about input costs and you can have more meaningful conversations about how you can drive the business forward. They've been in the position over the last 12 months, where they've been unable to do that. So, I would say right now it’s at a stable baseline EBITDA. Obviously, aspirationally, our goal would be to get it back to where it was, but I think we would be unrealistic to say that that's going to happen in the next year or two. It is going to require a lot of work and a lot of investment in that business, which we intend to provide and ultimately, we intend to grow that business if not back to where it was and certainly before, but that will take an extended period of time and we have not modeled necessarily that it would get back to that level in the near future.

Yes, and Faiza I think as we talk about those operational issues and in the prepared remarks, we talked about the progress that's been made thus far and having a clear roadmap on the direction going forward that we review during the due diligence process. So, in executing those plans, we'll see operational efficiencies and therefore reduce costs associated with the plans that are being executed at right now. It is not going to be an immediate as Mark indicated, it’s not going to be an immediate impact, but we do expect it to occur over the next several years.

Thank you.

Thank you.

And our next question comes from Nik Modi with RBC Capital Markets. Please go ahead with your question.

Thanks. Good morning, everyone, and congrats on the deal. So, just two quick questions from my end. Just the first is, I mean, obviously, we’ve seen what's happened across CPG generally speaking around recent deals. And I know you guys have had a great track record obviously the spin was pretty messy in itself. But are you doing anything different organizationally wise to make sure that the company can really handle all of this change coming up in the next 12 months? That's the first question. And then the second question just on this whole Internet of Things strategy, Alan, maybe can talk a little bit about the innovation pipeline and how it's aligned to kind of this trend and maybe give us some examples of products that you're actually looking to launch or have launched along this sector? Thanks.

So, I'll cover the first question Nik, and then I'll turn it over to Alan for the second. We are very confident in our ability to execute these transactions and part of what I would have may recall everyone's attention to is, we're buying both of these businesses from the same seller and as a result that lessen some of the complexity of what we were trying to do two acquisitions from two different sellers. It's the same people providing transition services, it's the same systems, it's the same processes. So, there's some efficiency that's there that might not otherwise be evident when you're thinking about it in two transactions. But we're also going to be able to close these and relatively close proximity to each other, which is going to drive efficiencies and how we interact with the organization and how we drive it. We're going to make sure that we provide adequate resources. I would think from a separation, I will acknowledge it was a messy process, all right, I think our execution was exceptional in the separation, neither business saw operational downtime latency interruption and that's really to me the testament of the separation where both businesses really, at least hit the ground operationally running and there wasn't any interruption. That is going to be the primary concern for us on both of these integrations will be absolute business continuity for our customers and we'll work backwards from there and make sure that we don't disrupt the business as we integrate and drive synergies.

Yes. And I think further Nik as we mentioned, since January, when we announced the battery deal, we've been working on closing in an integration planning beyond day one. And Spectrum has been a great partner in doing that. So, I think you take some comfort in, the spectrum team we're familiar with each other, we have a great working relationship and we believe we get up the learning curve pretty quickly on auto care as we move into those integration plans.

And Nik one, the last feel I'd give you on that is, keep in mind, we got a pretty experienced season team that has, you'll remember project transformers all the way through to what we're doing now, it is actually management group that has worked through all of that. So, they have a really good understanding of the business and with the acquisitions how that will fit into the way we operate are going to change management to the integration plans that Mark talked about. To your second question around some of the emerging trends that we're seeing in the business most of those really deal with the device trends that are occurring that Tim talked about in his prepared remarks. So, the Internet of Things, more specifically smart home and smart health are areas that are very attractive to Energizer, if you think about smart home and you don't think about that in terms of motion, sensors, key-less entry those types of applications, they typically are devices that require a higher performing product and smaller cell sizes to operate. Both of which are in our real products. We're doing a lot of work right now both in B2B standpoint, as well as our retail partners to make sure that we're capitalizing on those opportunities both before it gets to the store and in store. Our cycle plan, which as we've referenced formally looks 5 years out. We have that innovation lined out or Internet of Things across our cycle plan. So, everything from what we're doing in performance for the ultimate lithium product, what we're doing in premium, what we're doing in our brown cell lithium coin. There is innovation, a steady stream of that, that will be coming over the next several years, but it goes beyond that we're doing that same type level of innovation and bringing new marketing concepts and news to our customers and consumers in lighting products, auto fragrance and auto appearance chemicals as well. So, as we think about this acquisition, we love the fact that we're going to be able to take all these great brands and products and really leverage our global distribution network and footprint that we have, as well as our marketing prowess combined with the great products and the know-how that the colleagues from Spectrum will bring into our organization. So, we expect that to continue to help drive growth in our business the way we've been demonstrating over the course of the last three years.

Great, thanks so much.

Thanks, Nik.

And our next question comes from Kevin Grundy with Jefferies. Please go ahead with your question.

Thanks. Good morning, everyone. I wanted to come back to the global auto care acquisition and just simplistically asked sort of why now with this given the integration risk with batteries. So, maybe a little bit of background, obviously it's the same seller, how the deal came about, how the board decided that this was the right asset at the right point and time? And then sort of building maybe a little bit financially, what do you plan on doing anything differently, are there any revenue synergies here, what sort of the one plus one equals to three in terms of the value creation maybe touch a little bit on the cost synergies, which at 3% of sales look low by industry benchmarks, is there potentially some upside there? And then lastly, just on valuation the 10.5x multiple seems fair kind of close to the multiple that Spectrum paid for the business going back two, three years ago or so. Maybe talk a bit about the consideration how you got comfortable and why a roughly sort of similar multiple is right given what seems to be greater near-term uncertainty with this business, given some of the supply chain issue? So, thanks for all that.

Yes, Kevin, It's Mark. I'll start there's a lot in there and then Tim and Alan can. The way the deal came about obviously with the battery deal we've been in very close contact with the Spectrum team over the last year. We’ve worked with them very closely, we've made no secret about our interest in continuing to acquire in the auto care category. Obviously, they had a great business that we thought very highly of. These discussions obviously come up from time-to-time as you meet with peer companies and why they ultimately decided to be willing to sell it. I'll leave that to the Spectrum team to provide, but ultimately, they said it was something they might be interested in, we work together and as we have throughout the entire battery process and reached the deal that we think is really a win-win for both sides. It's a business that we feel like we can help, accelerate some of the operational improvements, we feel like we can drive some of the growth on the international platform that we have. We can help rejuvenate some of the brands they have in their portfolio and really help driving in concert with the battery deal. As we looked at it, we thought long and hard, do we want to make – do we want to bring another business on in connection with the battery, and we really looked into it. And it's really not two integrations, it's greater than one, but it's not two. And as a result, we got comfortable that this is something we can do and we can do well. And frankly, if you're going to do it, it's probably now, they've better time to do it than to maybe have this discussion 12 months from now. So, we saw an opportunity, it became available and we think we were the – we absolutely should have jumped on it and did it. In terms of the discussions with the Board, I mean, obviously, this is something the Board would have to approve, they were intimately involved, but we take their counsel on all sorts of things like just including the M&A, but I don't want to get into those discussions, rather than to say that the Board was very enthusiastically supportive of this acquisition and thought it was a great opportunity for the shareholders.

Yes. And Kevin, regarding synergies, we're looking at that similar to the battery transaction. We've provided our best estimate, you do get some, just given we are competitors some limited information. So, as we close in and get greater detail, I believe there is opportunity to exceed what we laid out, but we'll come back with that when we know more. I think on the revenue synergy's side, obviously, as Alan had indicated, we have a light belief combining these – their portfolio with ours will drive growth in our existing auto care portfolio as well as theirs. And as Alan mentioned, a great leadership team coming over, have gone through the challenges that, that business has experienced and continued to maintain category leadership. So, we're very excited about that. I think Alan had indicated it also provides a platform for driving future growth and expansion. So, we look forward to that as well.

And as you think about, part of the why, Kevin. So, one, these are growing segments that are appealing. As you think about Energizer today, we only play in some sub-segments within auto, this is going to position Energizer with the Armor brand, as well as our Nu Finish and Refresh Your Car!, Eagle One brands in appearance chemicals. It's STP in performance chemicals, A/C PRO in refrigerants, and then certainly, our Refresh Your Car! and Cal Scents and air fresheners. So, the beauty of this is not only does it put us into a number one position in the category, it's going to allow us to play in all segments of the category. And that's going to be very important in terms of bringing scale in category to know how a consumer insight is for the trade.

Okay. Thanks, guys. Just one follow-up on the synergies. The cost synergies for both, as you sit here today, given input cost inflation and freight and currency et cetera. What is the expectation on the flow-through to earnings, both on the $55 million to $65 million of the battery deal, the $15 million from Global Auto Care as it stands today? Is it expected to flow through your earnings or it will be some level of reinvestment and offset input cost inflation et cetera? Thank you.

Yes, Kevin, we do expect that to flow through the earnings.

Good, thank you, Good luck.

Thank you.

And our next question comes from Olivia Tong with Bank of America Merrill Lynch. Please go ahead with your question.

Hi, thanks very much. This is Chris on for Olivia. So, I guess just on the model to start, what are you envisioning for pro forma debt and share count for the company, because, I guess, underlining the question is your expectation for year one, back at envelope math would suggests it's dilutive and less creative over time?

Yes, at closing we'd expect to get to leverage 5x and then, de-lever down to 3x. Indicated that Spectrum is having an equity ownership of 8% to 9% of outstanding shares and then, we indicated we may issue equity in the future. So, we have the financing in place, but we would look to given market conditions add additional equity in the future.

Okay. And then, I guess, on the battery side, still very much in your wheelhousing, but auto and I guess, not to believe the challenges in the Global Auto Care business because I think it's been well articulated on the call. But what are your views are on that overall category, right? And specifically, how you view risk of private label and maybe specifically in the A/C Pro business to shift to DIFM from DIY because certainly, I think, beyond just the integration challenges that the business has seen, there is a broader category dynamic at play and specifically at retailers like Walmart. And then intertwined in that, I wonder if you could just share some perspective on your experience with HandStands and maybe how that's informed what you think you can do with this business?

So, I'll start, its Alan. Our outlook for the category both appearance and fragrances positive low single digits. We think there's opportunity for that to improve as the car park continues to enlarge. As you think about the opportunities in these both of these segments is really around two things, one bringing innovation, and again, one of the lessons learned here the latter part of your question from HandStands is the timing at which we bring that to our retail partners when we understand that much better. The other thing that I would say is execution in store is going to be critical, making sure you get the right merchandising, the right locations in the store very similar to what we understood when we acquired the fragrance and appearance businesses from both HandStands and Nu Finish. The private label threat not as great as you might see in perhaps under the hood type auto categories, both the air freshener and then the appearance piece there is significantly less while there is high fragmentation of brands, our opportunity to innovate and leverage the number one position of a Global Auto Care businesses from Spectrum will certainly work to our advantage and we plan to leverage that. On the A/C Pro piece there's certainly regulation that we've taken into account and have built into our model. We'll continue to monitor that going forward, understanding that there is a tail to that and managing that with the aging part is something that we'll continue to do. And then I might just real quick turn to it Mark to talk about some of our lessons learned from both HandStands and candidly the team has done a great job on Nu Finish as we bring that into our fold.

So, I'll just build on that. I think first and foremost to this level set. I think one thing to keep in mind is we have participated in the auto channel for a number of years with our core products with batteries and lights. This isn't a new channel for us to be participating in. I think second as you look at the auto care category, it’s a category where brands matter. I mean, you're dealing with people's prized possessions or at least certainly in some instances the most expensive possession they have. The brands are going to continue to matter to consumers in that category and so that's something that obviously as we participate in the channel, we're experts at driving brand strength and connecting with consumers with that brand strength. It really is in our wheelhouse to execute. HandStands really solidified that as we bought that business and integrated it and then we followed on with Nu Finish. This acquisition takes that part of our business to a new level with the iconic Armor All brand. So, I think it is one of those instances where I think someone previously said, one plus one equals three and we would expect that out of this business. It's in our wheelhouse, it's things we do exceptionally well and we intend to it with the Spectrum business.

And one last add is keep in mind, we're bringing a significant level of talent over from the Global Auto Care business that understands this category exceptionally well.

Thank you.

Welcome.

And our next question comes from Steve Strycula with UBS. Please go ahead with your question.

Hi, good morning. First part would be more of a strategy and update question on the Spectrum battery piece, the part you are in fact onboarding. How do we think about how that EBITDA contribution of $80 million to $90 million has kind of changed over the last 12 months, given the prolonged closing of the deal? Have you seen any real impact to the baseline profitability of that business as a consequence of the longer closing period? And then I have a follow up. Thank you.

That's a great question. I think any time you hold a business out for sale for this length of time, you're going to see disruption and erosion in the business. So, in the $80 million to $90 million it has eroded a bit. I think it was $164 million, $168 million...

$169 million.

$169 million, when we first announced the deal and obviously with the revised ranges, we're taking that down a little bit from the erosion. We would expect and that's part of the rationale for trying to accelerate the process and move to resolution more quickly as we still feel really good about our ability to stabilize and grow that business in the businesses that we're able to acquire.

Yes. And so, from that original $169 million, when we announced the deal given some of the challenges that's kind of in the range of approximately $145 million as we stand here right now. So, there has – but what we do see and that's why we're looking to close, as quickly as possible, so our teams can kind of take over the brands and helped the Spectrum team to drive growth from where we're at right now.

Okay, that's helpful. And then just a few modeling questions given that there's a lot of numbers being thrown out today. Just want to confirm that on pro forma debt – total debt would be about $3 billion for the total entity? And then I didn't hear you say any or might have missed it, but accretion guidance for kind of like year one through year three trajectory in the past, I think you said like close to 30% EPS accretion for the prior deal. How do we stack up by year three at the end of this deal and what does that assume for amortization of intangibles Alan from both these transactions on a combined basis? Thank you.

Yes, I think with the equity that's being offered there is a slight dilution in year one from the deals. In terms of amortization and with the auto care deal, we're expecting roughly in the $30 million range in terms of annual amortization on that and the battery deal I think will come out with that once we have kind of the final resolution of what's being divested. But there's still going to be amortization slightly below what we had communicated below, but we'll provide more details in the near future.

And the total debt was – is about $3.2 billion to $3.3 billion, once all said and done?

Yes, all said and done, that's correct.

Alright. Thank you.

And the next question comes from Carla Casella with JP Morgan. Please go ahead with your question.

Hi, on a similar question, before you mentioned that you're selling $50 million to $60 million of the battery business, what's the revenue of the piece of business that you're selling? if the key thing is $510 million to $520 million?

I think it would been around $300 million to $400 million – $350 million to $400 million, sorry.

Okay. And then, on the financing, do you have a sense whether you plan to do the debt portion of it, and bank debt versus bonds? And would you need to refinance the bank lines that you've already put in place for existing would you just refinance that full line into a bigger line? I guess that's I'm wondering.

No, we wouldn't anticipate doing that. We've got the financing in place for the battery acquisition as we've move forward, we’ve got the committed facilities to close the Auto Care transaction and then we would look to issue debt and – or bonds. And then also potential for equity to be offered at the appropriate time given market conditions. And given the timing of this will probably be early 2019 as we indicate in the prepared remarks.

Okay. And then just understanding on the purchase price. So, will you still be purchasing it for the $1.9 billion for and then selling the piece of it to hopefully end up with the net price of the $1.45 billion that you announced today, is that how it would work?

Yes, So, as proposed right now, we would acquire the entire business for the purchase price of $2 billion and then we would reduce that by the net proceeds receive for the battery divestiture and that's how you get into the $1.4 billion to $1.5 billion.

Great, Okay. Thank you.

And this concludes our question-and-answer session. Now, I would like to turn the conference back over to Alan Hoskins for any closing remarks.

Yes, thank you for joining us on the call today and for your continued interest in Energizer.