MANAGEMENT’S DISCUSSION AND  ANALYSIS OF RESULTS OF OPERATIONS  AND FINANCIAL CONDITION primarily 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 manufacturing facilities in 15 countries on four continents. Its prod- ucts 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.  There has been a continuing shift within primary battery products  from carbon zinc batteries to alkaline batteries. As such, Energizer  has recorded provisions related to restructuring its worldwide battery production capacity and certain administrative functions in 1998  and 1999. Alkaline batteries are now the dominant primary battery  in all world areas with the exception of Asia and Africa. Energizer continues to review its battery production capacity and its business structure in light of pervasive global trends, including the evolution of technology. The following discussion is a summary of the key factors manage- ment considers necessary in reviewing Energizer Holdings Inc.’s (Energizer) historical basis results of operations, operating segment results, liquidity and capital resources. This discussion should be read in conjunction with the Consolidated Financial Statements  and related notes. Prior to April 1, 2000, Energizer was a wholly owned subsidiary  of Ralston Purina Company (Ralston). On that date, Ralston  distributed the common stock of Energizer to its shareholders  in a tax-free spin-off.  Energizer’s operations are managed via four major geographic  areas – North America (including the United States and Canada), Asia Pacific, Europe and South and Central America (including Mexico). Segment profit and sales are concentrated in the North America and Asia Pacific areas which together account for 97%  and 79%, respectively, of 2000 segment profit and sales. 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 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. See Pro Forma Statement of Earnings for the years ended September 30, 2000 and 1999 in  Note 23 to the Consolidated Financial Statements. The battery business is highly competitive, both in the United States and on a global basis, as a number of large battery manufacturers compete for consumer acceptance and limited retail shelf space. According to A.C. Nielsen, Energizer’s dollar share of the U.S.  alkaline battery market was 34.0% in 1998, 31.2% in 1999 and 32.9% in 2000. The primary battery category experienced unprecedented growth  levels in the first quarter of fiscal 2000, particularly in the North America and Asia Pacific regions, related to increased demand  from retail customers and consumers in anticipation of potential  disruptions related to the date change on January 1, 2000. According to A. C. Nielsen, the alkaline dollar sales for October through December in the United States increased 28% over the same quarter last year, compared to historical growth trends in the high single digits. As the category returns to normal growth trends, consumer take away will likely decline in the first quarter of fiscal 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 BUSINESS OVERVIEW  BASIS OF PRESENTATION ENERGIZER 2000 ANNUAL REPOR T 10 (Dollars in millions except per share and percentage data)