basis and reflect periods during which the Energizer businesses operated as wholly owned subsidiaries of Ralston. The financial information in these financial statements does not include certain expenses and adjustments that would have been incurred had Energizer been a separate, independent company, and may not  necessarily be indicative of results that would have occurred had Energizer been a separate, independent company during the periods presented or of future results of Energizer. On June 10, 1999, the Board of Directors of Ralston approved in principle a plan to spin off its battery business to the Ralston stock- holders. In September 1999, Energizer Holdings, Inc. (Energizer) was incorporated in Missouri as an indirect subsidiary of Ralston. Effective April 1, 2000, Energizer became an independent, publicly owned company as a result of the distribution by Ralston of Energizer’s $.01 par value common stock to the Ralston stockholders at a distribution ratio of one for three (the spin-off). Prior to the  spin-off, Energizer operated as a wholly owned subsidiary of Ralston. Ralston received a ruling from the Internal Revenue Service stating the distribution qualified as a tax-free spin-off.  Energizer’s significant accounting policies, which conform to  generally accepted accounting principles in the United States  and are applied on a consistent basis among all years presented, except as indicated, are described below.  Principles of Consolidation – These financial statements include the accounts of Energizer and its majority-owned sub- sidiaries. All significant intercompany transactions are eliminated. Investments in affiliated companies, 20% through 50% owned, are carried at equity. A one-month lag is utilized in reporting all interna- tional subsidiaries in Energizer’s consolidated financial statements. Energizer is the world’s largest publicly traded manufacturer of  primary batteries and flashlights and a global leader in the dynamic business of providing portable power. Energizer manufactures and markets a complete line of primary alkaline and carbon zinc batteries under the brands  Energizer e 2 , Energizer and  Eveready, as well as miniature and rechargeable batteries, and flashlights and other  lighting products. Energizer and its subsidiaries operate 22 manu- facturing facilities in 15 countries on four continents. Its products are marketed and sold in more than 140 countries primarily  through a direct sales force, and also through distributors, to  mass merchandisers, wholesalers and other customers. Use of Estimates – The preparation of financial statements in  conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the  reported amounts of assets and liabilities, the disclosure of contin- gent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting  period. Actual results could differ from those estimates. The Balance Sheet as of September 30, 2000 is presented on a  consolidated basis. The Statement of Earnings and Statement of  Cash Flows for the year ended September 30, 2000 include the combined results of operations of the Energizer businesses under Ralston for the six months prior to the spin-off and the consolidated results of operations of Energizer on a stand-alone basis for the  six months ended September 30, 2000. The financial statements  for all periods prior to the spin-off are presented on a combined Foreign Currency Translation – Financial statements of foreign operations where the local currency is the functional currency are translated using end-of-period exchange rates for assets and liabili- ties and average exchange rates during the period for results of operations. Related translation adjustments are reported as a  component within accumulated other comprehensive income in  the shareholders equity section of the Consolidated Balance Sheet. 25 (2) SUMMARY OF ACCOUNTING POLICIES (1) BASIS OF PRESENTATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in millions except per share data)