þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ohio
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31-1414921
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
|
|
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14111 Scottslawn Road,
Marysville, Ohio
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43041
|
(Address of principal executive offices)
|
(Zip Code)
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Title of Each Class
|
Name of Each Exchange on Which Registered
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Common Shares, without par value
|
New York Stock Exchange
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Large accelerated filer
|
þ
|
Accelerated filer
|
¨
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Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
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ITEM 1.
|
BUSINESS
|
•
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Global Consumer
|
•
|
Scotts LawnService
®
|
________________________
|
||
1
Osmocote® is a registered trademark of Everris International B.V., a subsidiary of Israel Chemicals Ltd.
|
||
2
Roundup® is a registered trademark of Monsanto Technology LLC, a company affiliated with Monsanto Company (“Monsanto”)
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________________________
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3
OxiClean
®
is a registered trademark of Church & Dwight Co., Inc.
|
ITEM 1A.
|
RISK FACTORS
|
•
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fluctuations in currency exchange rates;
|
•
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limitations on the remittance of dividends and other payments by foreign subsidiaries;
|
•
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additional costs of compliance with local regulations;
|
•
|
historically, in certain countries, higher rates of inflation than in the United States;
|
•
|
changes in the economic conditions or consumer preferences or demand for our products in these markets;
|
•
|
restrictive actions by multi-national governing bodies, foreign governments or subdivisions thereof;
|
•
|
changes in foreign labor laws and regulations affecting our ability to hire and retain employees;
|
•
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changes in U.S. and foreign laws regarding trade and investment;
|
•
|
less robust protection of our intellectual property under foreign laws; and
|
•
|
difficulty in obtaining distribution and support for our products.
|
•
|
Diversion of management time and focus from operating our business to acquisition integration challenges.
|
•
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Failure to successfully further develop the acquired business or product lines.
|
•
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Implementation or remediation of controls, procedures, and policies at the acquired company.
|
•
|
Integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing functions.
|
•
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Transition of operations, users, and customers onto our existing platforms.
|
•
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Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval, under competition and antitrust laws which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition.
|
•
|
In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries.
|
•
|
Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employees from the businesses we acquire.
|
•
|
Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities.
|
•
|
Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former shareholders, or other third parties.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Location
|
|
Owned
|
|
Leased
|
United States
|
|
34
|
|
45
|
United Kingdom
|
|
7
|
|
7
|
Canada
|
|
5
|
|
5
|
France
|
|
2
|
|
2
|
Rest of world
(1)
|
|
—
|
|
10
|
Total
|
|
48
|
|
69
|
Name
|
|
Age
|
|
Position(s) Held
|
|
Years with
Company
|
||
James Hagedorn
|
|
59
|
|
|
Chief Executive Officer and Chairman of the Board
|
|
27
|
|
Barry W. Sanders
|
|
50
|
|
|
President and Chief Operating Officer
|
|
13
|
|
Thomas R. Coleman
|
|
45
|
|
|
Executive Vice President and Chief Financial Officer
|
|
15
|
|
Michael C. Lukemire
|
|
56
|
|
|
Executive Vice President, North American Operations
|
|
18
|
|
Ivan C. Smith
|
|
45
|
|
|
Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
|
|
11
|
|
Denise S. Stump
|
|
60
|
|
|
Executive Vice President, Global Human Resources and Chief Ethics Officer
|
|
14
|
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Sale Prices
|
||||||
|
High
|
|
Low
|
||||
FISCAL 2014
|
|
|
|
||||
First quarter
|
$
|
58.83
|
|
|
$
|
50.51
|
|
Second quarter
|
$
|
59.85
|
|
|
$
|
53.21
|
|
Third quarter
|
$
|
60.30
|
|
|
$
|
53.97
|
|
Fourth quarter
|
$
|
59.04
|
|
|
$
|
50.97
|
|
FISCAL 2013
|
|
|
|
||||
First quarter
|
$
|
44.60
|
|
|
$
|
39.64
|
|
Second quarter
|
$
|
47.60
|
|
|
$
|
42.64
|
|
Third quarter
|
$
|
50.46
|
|
|
$
|
42.01
|
|
Fourth quarter
|
$
|
55.99
|
|
|
$
|
47.87
|
|
Period
|
|
Total Number
of Common
Shares
Purchased
(1)
|
|
Average Price
Paid per
Common
Share
(2)
|
|
Total Number
of Common
Shares Purchased
as Part of Publicly
Announced Plans
or
Programs
(3)
|
|
Approximate
Dollar Value of
Common Shares
That May Yet
be Purchased
Under the Plans
or Programs
(3)
|
||||||
June 29 through July 26, 2014
|
|
1
|
|
|
$
|
54.58
|
|
|
—
|
|
|
$
|
207,363,017
|
|
July 27 through August 23, 2014
|
|
164,821
|
|
|
$
|
57.98
|
|
|
164,460
|
|
|
$
|
197,825,679
|
|
August 24 through September 30, 2014
|
|
331,766
|
|
|
$
|
57.76
|
|
|
329,517
|
|
|
$
|
178,790,098
|
|
Total
|
|
496,588
|
|
|
$
|
57.84
|
|
|
493,977
|
|
|
|
(1)
|
All of the Common Shares purchased during the quarter were purchased in open market transactions. The total number of Common Shares purchased during the quarter includes 2,610 Common Shares purchased by the trustee of the rabbi
|
(2)
|
The average price paid per Common Share is calculated on a settlement basis and includes commissions.
|
(3)
|
On August 10, 2010, Scotts Miracle-Gro announced that its Board of Directors authorized the repurchase of up to $500 million of Common Shares over a four-year period through September 30, 2014. On May 5, 2011, Scotts Miracle-Gro announced that its Board of Directors authorized the repurchase of up to an additional $200 million of Common Shares, resulting in authority to repurchase up to a total of $700 million of Common Shares through September 30, 2014. On August 11, 2014, Scotts Miracle-Gro announced that its Board of Directors authorized the repurchase of up to $500 million of Common Shares over a five-year period (starting November 1, 2014 through September 30, 2019). The dollar amounts in the “Approximate Dollar Value” column reflect the remaining amounts that were available for repurchase under the $700 million authorized repurchase program, which expired on September 30, 2014.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended September 30,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||
OPERATING RESULTS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,841.3
|
|
|
$
|
2,773.7
|
|
|
$
|
2,770.5
|
|
|
$
|
2,718.1
|
|
|
$
|
2,789.8
|
|
Gross profit
|
1,031.4
|
|
|
978.2
|
|
|
956.6
|
|
|
1,013.8
|
|
|
1,072.6
|
|
|||||
Income from operations
|
314.6
|
|
|
310.5
|
|
|
241.2
|
|
|
301.8
|
|
|
372.9
|
|
|||||
Income from continuing operations
|
165.4
|
|
|
159.4
|
|
|
111.6
|
|
|
157.5
|
|
|
206.7
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
0.8
|
|
|
1.7
|
|
|
(5.1
|
)
|
|
10.4
|
|
|
(2.6
|
)
|
|||||
Net income
|
166.2
|
|
|
161.1
|
|
|
106.5
|
|
|
167.9
|
|
|
204.1
|
|
|||||
Net income attributable to controlling interest
|
166.5
|
|
|
161.1
|
|
|
106.5
|
|
|
167.9
|
|
|
204.1
|
|
|||||
ADJUSTED OPERATING RESULTS
(2)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted income from operations
|
$
|
365.6
|
|
|
$
|
330.8
|
|
|
$
|
256.5
|
|
|
$
|
346.2
|
|
|
$
|
400.1
|
|
Adjusted income from continuing operations
|
206.0
|
|
|
172.6
|
|
|
123.3
|
|
|
187.4
|
|
|
225.0
|
|
|||||
Adjusted income attributable to controlling interest from continuing operations
|
206.3
|
|
|
172.6
|
|
|
123.3
|
|
|
187.4
|
|
|
225.0
|
|
|||||
FINANCIAL POSITION:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
(3)
|
$
|
390.3
|
|
|
$
|
371.2
|
|
|
$
|
566.4
|
|
|
$
|
523.9
|
|
|
$
|
381.3
|
|
Current ratio
(3)
|
1.7
|
|
|
1.7
|
|
|
2.3
|
|
|
2.1
|
|
|
1.3
|
|
|||||
Property, plant and equipment, net
|
$
|
437.0
|
|
|
$
|
422.3
|
|
|
$
|
427.4
|
|
|
$
|
394.7
|
|
|
$
|
381.3
|
|
Total assets
|
2,058.3
|
|
|
1,937.2
|
|
|
2,074.4
|
|
|
2,052.2
|
|
|
2,164.0
|
|
|||||
Total debt to total book capitalization
(4)
|
58.6
|
%
|
|
44.5
|
%
|
|
56.5
|
%
|
|
58.7
|
%
|
|
45.2
|
%
|
|||||
Total debt
|
$
|
784.3
|
|
|
$
|
570.5
|
|
|
$
|
782.6
|
|
|
$
|
795.0
|
|
|
$
|
631.7
|
|
Total shareholders’ equity - controlling interest
|
553.7
|
|
|
710.5
|
|
|
601.9
|
|
|
559.8
|
|
|
764.5
|
|
|||||
CASH FLOWS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operating activities
|
$
|
240.9
|
|
|
$
|
342.0
|
|
|
$
|
153.4
|
|
|
$
|
122.1
|
|
|
$
|
295.9
|
|
Investments in property, plant and equipment
|
87.6
|
|
|
60.1
|
|
|
69.4
|
|
|
72.7
|
|
|
83.4
|
|
|||||
Investments in acquired businesses, net of cash acquired and payments on sellers notes
|
114.8
|
|
|
4.0
|
|
|
7.0
|
|
|
7.9
|
|
|
0.6
|
|
|||||
Total cash dividends paid
|
230.8
|
|
|
87.8
|
|
|
75.4
|
|
|
67.9
|
|
|
42.6
|
|
|||||
Total purchases of Common Shares
|
120.0
|
|
|
—
|
|
|
17.5
|
|
|
358.7
|
|
|
25.0
|
|
|||||
PER SHARE DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
2.69
|
|
|
$
|
2.58
|
|
|
$
|
1.83
|
|
|
$
|
2.43
|
|
|
$
|
3.12
|
|
Diluted
|
2.64
|
|
|
2.55
|
|
|
1.80
|
|
|
2.38
|
|
|
3.06
|
|
|||||
Adjusted diluted
(2)
|
3.29
|
|
|
2.76
|
|
|
1.99
|
|
|
2.84
|
|
|
3.33
|
|
|||||
Dividends per common share
(5)
|
3.763
|
|
|
1.413
|
|
|
1.225
|
|
|
1.05
|
|
|
0.625
|
|
|||||
Stock price at year-end
|
55.00
|
|
|
55.03
|
|
|
43.47
|
|
|
44.60
|
|
|
51.73
|
|
|||||
Stock price range—High
|
60.03
|
|
|
55.99
|
|
|
55.95
|
|
|
60.62
|
|
|
52.56
|
|
|||||
Stock price range—Low
|
50.51
|
|
|
39.64
|
|
|
35.49
|
|
|
39.99
|
|
|
37.50
|
|
|||||
OTHER:
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
(6)
|
$
|
412.4
|
|
|
$
|
390.5
|
|
|
$
|
302.9
|
|
|
$
|
393.0
|
|
|
$
|
440.1
|
|
Leverage ratio
(6)
|
2.18
|
|
|
2.05
|
|
|
2.93
|
|
|
1.98
|
|
|
2.00
|
|
|||||
Interest coverage ratio
(6)
|
9.41
|
|
|
6.59
|
|
|
4.90
|
|
|
7.47
|
|
|
9.40
|
|
|||||
Weighted average Common Shares outstanding
|
61.6
|
|
|
61.7
|
|
|
61.0
|
|
|
64.7
|
|
|
66.3
|
|
|||||
Common shares and dilutive potential common
shares used in diluted EPS calculation
|
62.7
|
|
|
62.6
|
|
|
62.1
|
|
|
66.2
|
|
|
67.6
|
|
(1)
|
On July 8, 2009, we announced a plan to close our Smith & Hawken business. During our first quarter of fiscal 2010, all Smith & Hawken stores were closed and substantially all operational activities of Smith & Hawken were discontinued. As a result, effective in our first quarter of fiscal 2010, we classified Smith & Hawken as discontinued operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Smith & Hawken
®
is a registered trademark of Target Brands, Inc. We sold the Smith & Hawken brand and certain intellectual property rights related thereto to Target Brands, Inc. on December 30, 2009, and subsequently changed the name of the subsidiary entity formerly known as Smith & Hawken, Ltd. to Teak 2, Ltd. References in this Annual Report on Form 10-K to Smith & Hawken refer to the subsidiary entity, not the brand itself.
|
(2)
|
The Five-Year Summary includes non-GAAP financial measures, as defined in Item 10(e) of SEC Regulation S-K, of adjusted income from operations, adjusted income from continuing operations, adjusted income attributable to controlling interest from continuing operations and adjusted diluted earnings per share from continuing operations, which exclude costs or gains related to discrete projects or transactions. Items excluded during the five-year period ended September 30, 2014 consisted of charges or credits relating to refinancings, impairments, restructurings, product registration and recall matters, discontinued operations, and other unusual items such as costs or gains related to discrete projects or transactions that are apart from and not indicative of the results of the operations of the business. The comparable GAAP measures are reported income from operations, reported income from continuing operations and reported diluted earnings per share from continuing operations. Our management believes that these non-GAAP measures are the most indicative of our earnings capabilities and that disclosure of these non-GAAP financial measures therefore provides useful information to investors or other users of the financial statements, such as lenders. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is presented in the following tables:
|
|
Year Ended September 30,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(In millions, except per share data)
|
||||||||||||||||||
Income from operations
|
$
|
314.6
|
|
|
$
|
310.5
|
|
|
$
|
241.2
|
|
|
$
|
301.8
|
|
|
$
|
372.9
|
|
Impairment, restructuring and other charges
|
51.0
|
|
|
20.3
|
|
|
7.1
|
|
|
29.8
|
|
|
18.5
|
|
|||||
Product registration and recall matters
|
—
|
|
|
—
|
|
|
8.2
|
|
|
14.6
|
|
|
8.7
|
|
|||||
Adjusted income from operations
|
$
|
365.6
|
|
|
$
|
330.8
|
|
|
$
|
256.5
|
|
|
$
|
346.2
|
|
|
$
|
400.1
|
|
Income from continuing operations
|
$
|
165.4
|
|
|
$
|
159.4
|
|
|
$
|
111.6
|
|
|
$
|
157.5
|
|
|
$
|
206.7
|
|
Impairment, restructuring and other charges, net of tax
|
33.6
|
|
|
13.2
|
|
|
4.3
|
|
|
17.9
|
|
|
12.7
|
|
|||||
Costs related to refinancing, net of tax
|
7.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Product registration and recall matters, net of tax
|
—
|
|
|
—
|
|
|
7.4
|
|
|
12.0
|
|
|
5.6
|
|
|||||
Adjusted income from continuing operations
|
$
|
206.0
|
|
|
$
|
172.6
|
|
|
$
|
123.3
|
|
|
$
|
187.4
|
|
|
$
|
225.0
|
|
Loss attributable to noncontrolling interest
(7)
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjusted income attributable to controlling interest from continuing operations
|
$
|
206.3
|
|
|
$
|
172.6
|
|
|
$
|
123.3
|
|
|
$
|
187.4
|
|
|
$
|
225.0
|
|
Diluted earnings per share from continuing operations
|
$
|
2.64
|
|
|
$
|
2.55
|
|
|
$
|
1.80
|
|
|
$
|
2.38
|
|
|
$
|
3.06
|
|
Impairment, restructuring and other charges, net of tax
|
0.54
|
|
|
0.21
|
|
|
0.07
|
|
|
0.27
|
|
|
0.19
|
|
|||||
Costs related to refinancing, net of tax
|
0.11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Product registration and recall matters, net of tax
|
—
|
|
|
—
|
|
|
0.12
|
|
|
0.19
|
|
|
0.08
|
|
|||||
Adjusted diluted earnings per share from continuing operations
|
$
|
3.29
|
|
|
$
|
2.76
|
|
|
$
|
1.99
|
|
|
$
|
2.84
|
|
|
$
|
3.33
|
|
(3)
|
Working capital is calculated as current assets minus current liabilities. Current ratio is calculated as current assets divided by current liabilities.
|
(4)
|
The total debt to total book capitalization percentage is calculated by dividing total debt by total debt plus total shareholders’ equity - controlling interest.
|
(5)
|
Scotts Miracle-Gro began paying a quarterly dividend of $0.125 per Common Share in the fourth quarter of fiscal 2005. On August 10, 2010, Scotts Miracle-Gro announced that its Board of Directors had increased the quarterly cash dividend to $0.25 per Common Share, which was first paid in the fourth quarter of fiscal 2010. On August 8, 2011, Scotts Miracle-Gro announced that its Board of Directors had increased the quarterly cash dividend to $0.30 per Common Share, which was first paid in the fourth quarter of fiscal 2011. On August 9, 2012, Scotts Miracle-Gro announced that its Board of Directors had increased the quarterly cash dividend to $0.325 per Common Share, which was first paid in the fourth quarter of fiscal 2012. On August 6, 2013, Scotts Miracle-Gro announced that its Board of Directors had increased the quarterly cash dividend to $0.4375 per Common Share, which was first paid in the fourth quarter of fiscal 2013. On August 11, 2014, Scotts Miracle-Gro announced that its Board of Directors had (i) further increased the quarterly cash dividend to $0.45 per Common Share, which was paid in the fourth quarter of fiscal 2014 and (ii) a special one-time cash dividend of $2.00 per Common Share, which was paid on September 17, 2014.
|
(6)
|
We view our credit facility as material to our ability to fund operations, particularly in light of our seasonality. Please refer to “ITEM 1A. RISK FACTORS — Our indebtedness could limit our flexibility and adversely affect our financial condition” of this Annual Report on Form 10-K for a more complete discussion of the risks associated with our debt and our credit facility and the restrictive covenants therein. Our ability to generate cash flows sufficient to cover our debt service costs is essential to our ability to maintain our borrowing capacity. We believe that Adjusted EBITDA provides additional information for determining our ability to meet debt service requirements. The presentation of Adjusted EBITDA herein is intended to be consistent with the calculation of that measure as used by our credit facility to calculate a leverage ratio (maximum of
4.00
at
September 30, 2014
) and an interest coverage ratio (minimum of
3.50
for the year ended
September 30, 2014
). Leverage ratio is calculated as average total indebtedness, as described in our credit facility, relative to Adjusted EBITDA. Interest coverage ratio is calculated as Adjusted EBITDA divided by interest expense, as described in our credit facility, and excludes costs related to refinancings. Our leverage ratio was
2.18
at
September 30, 2014
and our interest coverage ratio was
9.41
for the year ended
September 30, 2014
. Please refer to “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Liquidity and Capital Resources — Borrowing Arrangements” of this Annual Report on Form 10-K for a discussion of our credit facility.
|
|
Year Ended September 30,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(In millions, except per share data)
|
||||||||||||||||||
Income from continuing operations
|
$
|
165.4
|
|
|
$
|
159.4
|
|
|
$
|
111.6
|
|
|
$
|
157.5
|
|
|
$
|
206.7
|
|
Income tax expense from continuing operations
|
91.2
|
|
|
91.9
|
|
|
67.8
|
|
|
92.1
|
|
|
123.0
|
|
|||||
Income (loss) from discontinued operations, net of tax (excluding Global Pro sale)
|
0.8
|
|
|
1.7
|
|
|
(3.4
|
)
|
|
(29.1
|
)
|
|
(2.6
|
)
|
|||||
Income tax expense (benefit) from discontinued operations
|
0.9
|
|
|
0.7
|
|
|
(1.2
|
)
|
|
(16.6
|
)
|
|
3.6
|
|
|||||
Costs related to refinancings
|
10.7
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|||||
Interest expense
|
47.3
|
|
|
59.2
|
|
|
61.8
|
|
|
51.0
|
|
|
43.2
|
|
|||||
Interest expense from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
3.7
|
|
|||||
Depreciation
|
50.6
|
|
|
54.9
|
|
|
51.5
|
|
|
50.3
|
|
|
48.5
|
|
|||||
Amortization
|
13.8
|
|
|
11.2
|
|
|
10.9
|
|
|
11.4
|
|
|
10.9
|
|
|||||
Gain on investment of unconsolidated affiliate
(8)
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on impairment and other charges
|
33.7
|
|
|
11.2
|
|
|
4.7
|
|
|
64.3
|
|
|
18.5
|
|
|||||
Product registration and recall matters, non-cash portion
|
—
|
|
|
—
|
|
|
0.2
|
|
|
8.7
|
|
|
1.0
|
|
|||||
Mark-to-market adjustments on derivatives
|
1.3
|
|
|
0.3
|
|
|
(1.0
|
)
|
|
0.5
|
|
|
—
|
|
|||||
Smith & Hawken closure process, non-cash portion
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.4
|
)
|
|||||
Adjusted EBITDA
|
$
|
412.4
|
|
|
$
|
390.5
|
|
|
$
|
302.9
|
|
|
$
|
393.0
|
|
|
$
|
440.1
|
|
(7)
|
Amount represents the earnings attributable to the noncontrolling interest of AeroGrow which was consolidated in the fourth quarter of fiscal 2014.
|
(8)
|
Amount represents a gain on our investment in AeroGrow recognized during the fourth quarter of 2014 as a result of our consolidation of the business. Excluded from this amount is $2.4 million of earnings on AeroGrow's unconsolidated results for fiscal year 2014 recorded within “Other income, net” in the Consolidated Statements of Operations.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Executive summary
|
•
|
Results of operations
|
•
|
Segment results
|
•
|
Liquidity and capital resources
|
•
|
Regulatory matters
|
•
|
Critical accounting policies and estimates
|
•
|
A special one-time cash dividend of $2.00 per Common Share that was paid on September 17, 2014;
|
•
|
A new share repurchase authorization effective November 1, 2014, which will expire on September 30, 2019, to repurchase up to $500 million of our Common Shares. This replaces the previous authorization which expired on September 30, 2014.
|
|
Year Ended September 30,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
63.7
|
|
|
64.6
|
|
|
65.5
|
|
Cost of sales—impairment, restructuring and other
|
—
|
|
|
0.1
|
|
|
—
|
|
Cost of sales—product registration and recall matters
|
—
|
|
|
—
|
|
|
—
|
|
Gross profit
|
36.3
|
|
|
35.3
|
|
|
34.5
|
|
Operating expenses:
|
|
|
|
|
|
|||
Selling, general and administrative
|
24.0
|
|
|
23.8
|
|
|
25.4
|
|
Impairment, restructuring and other
|
1.8
|
|
|
0.7
|
|
|
0.3
|
|
Product registration and recall matters
|
—
|
|
|
—
|
|
|
0.3
|
|
Other income, net
|
(0.5
|
)
|
|
(0.4
|
)
|
|
(0.1
|
)
|
Income from operations
|
11.0
|
|
|
11.2
|
|
|
8.6
|
|
Costs related to refinancing
|
0.4
|
|
|
—
|
|
|
—
|
|
Interest expense
|
1.7
|
|
|
2.1
|
|
|
2.2
|
|
Income from continuing operations before income taxes
|
8.9
|
|
|
9.1
|
|
|
6.4
|
|
Income tax expense from continuing operations
|
3.2
|
|
|
3.3
|
|
|
2.4
|
|
Income from continuing operations
|
5.7
|
|
|
5.8
|
|
|
4.0
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
0.1
|
|
|
(0.2
|
)
|
Net income
|
5.7
|
%
|
|
5.9
|
%
|
|
3.8
|
%
|
|
Year Ended September 30,
|
||||
|
2014
|
|
2013
|
||
Volume
|
(0.1
|
)%
|
|
(1.5
|
)%
|
Pricing
|
0.9
|
|
|
1.6
|
|
Foreign exchange rates
|
0.2
|
|
|
(0.2
|
)
|
Acquisitions
|
1.4
|
|
|
0.2
|
|
Change in net sales
|
2.4
|
%
|
|
0.1
|
%
|
•
|
the addition of net sales from the Tomcat
®
acquisition within our Global Consumer segment;
|
•
|
a favorable impact of increased pricing in the Global Consumer segment, primarily in the United States; and
|
•
|
a favorable impact of foreign exchange rates as a result of the slight weakening of the U.S. dollar relative to other currencies;
|
•
|
which were partially offset by a slight decline in volumes within our Global Consumer segment, driven by a decline in sales within the United States of plant fertilizers and controls products, partially offset by increased sales of mulch products in the United States and increased net sales in Europe.
|
•
|
the favorable impact of increased pricing in the Global Consumer segment, primarily in the United States; and
|
•
|
increased volume within our Scotts LawnService® segment driven by higher customer counts and a weather driven delay of sales from the fourth quarter of fiscal 2012 to the first quarter of fiscal 2013.
|
•
|
decreased volume in our Global Consumer segment, driven by a decrease in sales within the United States of fertilizers and controls partially offset by increases in sales within the United States of mulch and grass seed products;
|
•
|
a decline in net sales attributable to reimbursements associated with our Marketing Agreement with Monsanto;
|
•
|
decreased sales in Corporate and Other related to ICL supply agreements, which were entered into in connection with the sale of Global Pro in 2011; and
|
•
|
an unfavorable impact of foreign exchange rates as a result of the strengthening of the U.S. dollar relative to other currencies.
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Materials
|
$
|
1,073.5
|
|
|
$
|
1,100.0
|
|
|
$
|
1,105.9
|
|
Manufacturing labor and overhead
|
324.3
|
|
|
310.0
|
|
|
311.7
|
|
|||
Distribution and warehousing
|
349.1
|
|
|
321.3
|
|
|
316.3
|
|
|||
Roundup
®
reimbursements
|
63.0
|
|
|
62.0
|
|
|
79.6
|
|
|||
|
1,809.9
|
|
|
1,793.3
|
|
|
1,813.5
|
|
|||
Impairment, restructuring and other
|
—
|
|
|
2.2
|
|
|
—
|
|
|||
Product registration and recall matters
|
—
|
|
|
—
|
|
|
0.4
|
|
|||
|
$
|
1,809.9
|
|
|
$
|
1,795.5
|
|
|
$
|
1,813.9
|
|
|
Year Ended September 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Material costs
|
$
|
(23.2
|
)
|
|
$
|
(8.2
|
)
|
Volume and product mix
|
35.1
|
|
|
10.3
|
|
||
Roundup
®
reimbursements
|
1.0
|
|
|
(17.6
|
)
|
||
Foreign exchange rates
|
3.7
|
|
|
(4.7
|
)
|
||
|
16.6
|
|
|
(20.2
|
)
|
||
Impairment, restructuring and other
|
(2.2
|
)
|
|
2.2
|
|
||
Product registration and recall matters
|
—
|
|
|
(0.4
|
)
|
||
Change in cost of sales
|
$
|
14.4
|
|
|
$
|
(18.4
|
)
|
•
|
unfavorable product mix due to increased sales of our mulch products and higher distribution costs in our Global Consumer segment; and
|
•
|
an unfavorable impact of foreign exchange rates as a result of a weakening of the U.S. dollar relative to other currencies;
|
•
|
which were partially offset by a decline in material costs in our Global Consumer and Scotts LawnService® segments due to product cost-out initiatives including growing media material costs and packaging and decreased prices of fertilizer inputs.
|
•
|
lower reimbursements attributable to our Marketing Agreement with Monsanto;
|
•
|
a decline in our growing media material costs due to our product cost-out initiatives, partially offset by increased costs of fertilizer inputs and packaging; and
|
•
|
a favorable impact of foreign exchange rates as a result of the strengthening of the U.S. dollar relative to other currencies;
|
•
|
which were partially offset by unfavorable product mix due to increased sales of our mulch products in the United States within our Global Consumer segment.
|
|
Year Ended September 30,
|
||||
|
2014
|
|
2013
|
||
Pricing
|
0.6
|
%
|
|
1.0
|
%
|
Material costs
|
0.8
|
|
|
0.3
|
|
Product mix and volume:
|
|
|
|
||
Roundup
®
commissions and reimbursements
|
0.1
|
|
|
0.2
|
|
Corporate & Other
|
0.1
|
|
|
0.1
|
|
Scotts LawnService
®
|
0.2
|
|
|
0.1
|
|
Global Consumer mix and volume
|
(0.8
|
)
|
|
(0.8
|
)
|
|
1.0
|
|
|
0.9
|
|
Impairment, restructuring and other
|
—
|
|
|
(0.1
|
)
|
Change in gross profit rate
|
1.0
|
%
|
|
0.8
|
%
|
•
|
decreased material costs within our Global Consumer segment due to product cost-out initiatives including growing media material costs and packaging costs and decreased prices of fertilizer inputs; and
|
•
|
a favorable impact of increased pricing for the Global Consumer segment, primarily in the United States;
|
•
|
which were partially offset by unfavorable product mix within our Global Consumer segment due to increased sales of our mulch products and higher distribution costs.
|
•
|
a favorable impact of increased pricing for the Global Consumer segment, primarily in the United States;
|
•
|
decreased material costs in our Global Consumer segment due to a decline in growing media material costs resulting from product cost-out initiatives, partially offset by increased costs for fertilizer inputs; and
|
•
|
the impact of zero margin dollar reimbursements, attributable to our Marketing Agreement with Monsanto;
|
•
|
which were partially offset by decreased volume in our Global Consumer segment resulting in reduced leverage of fixed manufacturing and warehousing costs.
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions, except percentage figures)
|
||||||||||
Advertising
|
$
|
143.6
|
|
|
$
|
142.2
|
|
|
$
|
168.9
|
|
Advertising as a percentage of net sales
|
5.1
|
%
|
|
5.1
|
%
|
|
6.1
|
%
|
|||
Share-based compensation
|
11.1
|
|
|
10.3
|
|
|
12.5
|
|
|||
Research and development
|
48.4
|
|
|
46.4
|
|
|
50.8
|
|
|||
Amortization of intangibles
|
10.2
|
|
|
8.2
|
|
|
8.2
|
|
|||
Other selling, general and administrative
|
467.2
|
|
|
452.5
|
|
|
462.9
|
|
|||
|
$
|
680.5
|
|
|
$
|
659.6
|
|
|
$
|
703.3
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Restructuring and other
|
$
|
17.3
|
|
|
$
|
2.2
|
|
|
$
|
1.8
|
|
Property, plant and equipment impairments
|
—
|
|
|
—
|
|
|
2.1
|
|
|||
Goodwill and intangible asset impairments
|
33.7
|
|
|
15.9
|
|
|
3.2
|
|
|||
|
$
|
51.0
|
|
|
$
|
18.1
|
|
|
$
|
7.1
|
|
|
Year Ended September 30,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Effect of foreign operations
|
1.5
|
|
|
0.8
|
|
|
(0.5
|
)
|
State taxes, net of federal benefit
|
2.7
|
|
|
2.9
|
|
|
3.1
|
|
Domestic production activities deduction permanent difference
|
(2.7
|
)
|
|
(2.1
|
)
|
|
(1.5
|
)
|
Effect of other permanent differences
|
0.2
|
|
|
0.8
|
|
|
2.4
|
|
Research and experimentation and other federal tax credits
|
(0.8
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
Resolution of prior tax contingencies
|
0.2
|
|
|
0.2
|
|
|
(0.9
|
)
|
Other
|
(0.5
|
)
|
|
(0.7
|
)
|
|
0.3
|
|
Effective income tax rate
|
35.6
|
%
|
|
36.6
|
%
|
|
37.8
|
%
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Global Consumer
|
$
|
2,552.0
|
|
|
$
|
2,484.7
|
|
|
$
|
2,483.6
|
|
Scotts LawnService
®
|
263.0
|
|
|
257.8
|
|
|
245.8
|
|
|||
Segment total
|
2,815.0
|
|
|
2,742.5
|
|
|
2,729.4
|
|
|||
Corporate & Other
|
26.3
|
|
|
31.2
|
|
|
41.1
|
|
|||
Consolidated
|
$
|
2,841.3
|
|
|
$
|
2,773.7
|
|
|
$
|
2,770.5
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Global Consumer
|
$
|
438.8
|
|
|
$
|
403.7
|
|
|
$
|
335.9
|
|
Scotts LawnService
®
|
30.2
|
|
|
28.7
|
|
|
27.0
|
|
|||
Segment total
|
469.0
|
|
|
432.4
|
|
|
362.9
|
|
|||
Corporate & Other
|
(90.4
|
)
|
|
(91.2
|
)
|
|
(96.3
|
)
|
|||
Intangible asset amortization
|
(13.0
|
)
|
|
(10.4
|
)
|
|
(10.1
|
)
|
|||
Product registration and recall matters
|
—
|
|
|
—
|
|
|
(8.2
|
)
|
|||
Impairment, restructuring and other
|
(51.0
|
)
|
|
(20.3
|
)
|
|
(7.1
|
)
|
|||
Costs related to refinancing
|
(10.7
|
)
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
(47.3
|
)
|
|
(59.2
|
)
|
|
(61.8
|
)
|
|||
Consolidated
|
$
|
256.6
|
|
|
$
|
251.3
|
|
|
$
|
179.4
|
|
Notional Amount
(in millions)
|
|
Effective
Date (a)
|
|
Expiration
Date
|
|
Fixed
Rate
|
|||
$
|
50
|
|
|
2/14/2012
|
|
2/14/2016
|
|
3.78
|
%
|
150
|
|
(b)
|
2/7/2012
|
|
5/7/2016
|
|
2.42
|
%
|
|
150
|
|
(c)
|
11/16/2009
|
|
5/16/2016
|
|
3.26
|
%
|
|
50
|
|
(b)
|
2/16/2010
|
|
5/16/2016
|
|
3.05
|
%
|
|
100
|
|
(b)
|
2/21/2012
|
|
5/23/2016
|
|
2.40
|
%
|
|
150
|
|
(c)
|
12/20/2011
|
|
6/20/2016
|
|
2.61
|
%
|
|
50
|
|
(d)
|
12/6/2012
|
|
9/6/2017
|
|
2.96
|
%
|
|
200
|
|
|
2/7/2014
|
|
11/7/2017
|
|
1.28
|
%
|
|
150
|
|
(b)
|
2/7/2017
|
|
5/7/2019
|
|
2.12
|
%
|
|
50
|
|
(c)
|
2/7/2017
|
|
5/7/2019
|
|
2.25
|
%
|
|
200
|
|
(c)
|
12/20/2016
|
|
6/20/2019
|
|
2.12
|
%
|
(a)
|
The effective date refers to the date on which interest payments were, or will be, first hedged by the applicable swap agreement.
|
(b)
|
Interest payments made during the three-month period of each year that begins with the month and day of the effective date are hedged by the swap agreement.
|
(c)
|
Interest payments made during the six-month period of each year that begins with the month and day of the effective date are hedged by the swap agreement.
|
(d)
|
Interest payments made during the nine-month period of each year that begins with the month and day of the effective date are hedged by the swap agreement.
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
Contractual Cash Obligations
|
|
Total
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
More Than
5 Years
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Debt obligations
|
|
$
|
784.3
|
|
|
$
|
91.9
|
|
|
$
|
9.2
|
|
|
$
|
482.8
|
|
|
$
|
200.4
|
|
Interest expense on debt obligations
|
|
167.1
|
|
|
38.2
|
|
|
73.8
|
|
|
52.3
|
|
|
2.8
|
|
|||||
Operating lease obligations
|
|
173.1
|
|
|
46.4
|
|
|
62.5
|
|
|
37.2
|
|
|
27.0
|
|
|||||
Purchase obligations
|
|
208.9
|
|
|
127.1
|
|
|
69.7
|
|
|
11.6
|
|
|
0.5
|
|
|||||
Other, primarily retirement plan obligations
|
|
93.8
|
|
|
4.1
|
|
|
17.5
|
|
|
18.0
|
|
|
54.2
|
|
|||||
Total contractual cash obligations
|
|
$
|
1,427.2
|
|
|
$
|
307.7
|
|
|
$
|
232.7
|
|
|
$
|
601.9
|
|
|
$
|
284.9
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
Expected Maturity Date
|
|
Total
|
|
Fair
Value
|
||||||||||||||||||||||||||
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
After
|
|
|||||||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
200.0
|
|
|
$
|
200.0
|
|
|
$
|
212.5
|
|
Average rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.6
|
%
|
|
6.6
|
%
|
|
—
|
|
||||||||
Variable rate debt
|
|
$
|
84.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
481.8
|
|
|
$
|
—
|
|
|
$
|
565.8
|
|
|
$
|
565.8
|
|
Average rate
|
|
0.9
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
%
|
|
—
|
|
|
1.6
|
%
|
|
—
|
|
||||||||
Interest rate derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
(11.6
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
(11.5
|
)
|
|
$
|
(11.5
|
)
|
Average rate
|
|
—
|
|
|
2.9
|
%
|
|
3.0
|
%
|
|
1.3
|
%
|
|
2.1
|
%
|
|
—
|
|
|
2.1
|
%
|
|
—
|
|
|
|
Expected Maturity Date
|
|
Total
|
|
Fair
Value
|
||||||||||||||||||||||||||
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
After
|
|
|||||||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
200.0
|
|
|
$
|
200.0
|
|
|
$
|
400.0
|
|
|
$
|
523.0
|
|
Average rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.3
|
%
|
|
6.6
|
%
|
|
6.9
|
%
|
|
—
|
|
||||||||
Variable rate debt
|
|
$
|
85.3
|
|
|
$
|
—
|
|
|
$
|
73.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158.3
|
|
|
$
|
158.3
|
|
Average rate
|
|
1.0
|
%
|
|
—
|
|
|
2.4
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
%
|
|
—
|
|
||||||||
Interest rate derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(17.8
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
(16.7
|
)
|
|
$
|
(16.7
|
)
|
Average rate
|
|
—
|
|
|
—
|
|
|
3.0
|
%
|
|
3.0
|
%
|
|
2.1
|
%
|
|
—
|
|
|
2.7
|
%
|
|
—
|
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
THE SCOTTS MIRACLE-GRO COMPANY
|
||
|
|
|
|
|
By:
|
|
/s/ JAMES HAGEDORN
|
|
|
|
James Hagedorn, Chief Executive Officer and
Chairman of the Board
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ ALAN H. BARRY*
|
|
Director
|
|
November 25, 2014
|
Alan H. Barry
|
|
|
|
|
|
|
|
|
|
/s/ THOMAS RANDAL COLEMAN
|
|
Chief Financial Officer and Executive Vice President
|
|
November 25, 2014
|
Thomas Randal Coleman
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ JAMES HAGEDORN
|
|
Chief Executive Officer, Chairman of the Board and Director
|
|
November 25, 2014
|
James Hagedorn
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ ADAM HANFT*
|
|
Director
|
|
November 25, 2014
|
Adam Hanft
|
|
|
|
|
|
|
|
|
|
/s/ MICHELLE A. JOHNSON*
|
|
Director
|
|
November 25, 2014
|
Michelle A. Johnson
|
|
|
|
|
|
|
|
|
|
/s/ STEPHEN L. JOHNSON*
|
|
Director
|
|
November 25, 2014
|
Stephen L. Johnson
|
|
|
|
|
|
|
|
|
|
/s/ THOMAS N. KELLY JR.*
|
|
Director
|
|
November 25, 2014
|
Thomas N. Kelly Jr.
|
|
|
|
|
|
|
|
|
|
/s/ KATHERINE HAGEDORN LITTLEFIELD*
|
|
Director
|
|
November 25, 2014
|
Katherine Hagedorn Littlefield
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ JAMES F. MCCANN*
|
|
Director
|
|
November 25, 2014
|
James F. McCann
|
|
|
|
|
|
|
|
|
|
/s/ NANCY G. MISTRETTA*
|
|
Director
|
|
November 25, 2014
|
Nancy G. Mistretta
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL E. PORTER*
|
|
Director
|
|
November 25, 2014
|
Michael E. Porter
|
|
|
|
|
|
|
|
|
|
/s/ JOHN R. VINES*
|
|
Director
|
|
November 25, 2014
|
John R. Vines
|
|
|
|
|
*
|
The undersigned, by signing his name hereto, does hereby sign this Report on behalf of each of the directors of the Registrant identified above pursuant to Powers of Attorney executed by the directors identified above, which Powers of Attorney are filed with this Report as exhibits.
|
By:
|
/s/ THOMAS RANDAL COLEMAN
|
|
|
Thomas Randal Coleman, Attorney-in-Fact
|
|
|
Page
|
Consolidated Financial Statements of The Scotts Miracle-Gro Company and Subsidiaries:
|
|
Schedules Supporting the Consolidated Financial Statements:
|
|
/s/ JAMES HAGEDORN
|
|
/s/ THOMAS RANDAL COLEMAN
|
||
James Hagedorn
Chief Executive Officer and Chairman of the Board
|
|
Thomas Randal Coleman
Executive Vice President and Chief Financial Officer
|
||
|
|
|
|
|
Dated:
|
November 25, 2014
|
|
Dated:
|
November 25, 2014
|
/s/ DELOITTE & TOUCHE LLP
|
|
|
|
Columbus, Ohio
|
|
November 25, 2014
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net sales
|
$
|
2,841.3
|
|
|
$
|
2,773.7
|
|
|
$
|
2,770.5
|
|
Cost of sales
|
1,809.9
|
|
|
1,793.3
|
|
|
1,813.5
|
|
|||
Cost of sales—impairment, restructuring and other
|
—
|
|
|
2.2
|
|
|
—
|
|
|||
Cost of sales—product registration and recall matters
|
—
|
|
|
—
|
|
|
0.4
|
|
|||
Gross profit
|
1,031.4
|
|
|
978.2
|
|
|
956.6
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
680.5
|
|
|
659.6
|
|
|
703.3
|
|
|||
Impairment, restructuring and other
|
51.0
|
|
|
18.1
|
|
|
7.1
|
|
|||
Product registration and recall matters
|
—
|
|
|
—
|
|
|
7.8
|
|
|||
Other income, net
|
(14.7
|
)
|
|
(10.0
|
)
|
|
(2.8
|
)
|
|||
Income from operations
|
314.6
|
|
|
310.5
|
|
|
241.2
|
|
|||
Costs related to refinancing
|
10.7
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
47.3
|
|
|
59.2
|
|
|
61.8
|
|
|||
Income from continuing operations before income taxes
|
256.6
|
|
|
251.3
|
|
|
179.4
|
|
|||
Income tax expense from continuing operations
|
91.2
|
|
|
91.9
|
|
|
67.8
|
|
|||
Income from continuing operations
|
165.4
|
|
|
159.4
|
|
|
111.6
|
|
|||
Income (loss) from discontinued operations, net of tax
|
0.8
|
|
|
1.7
|
|
|
(5.1
|
)
|
|||
Net income
|
$
|
166.2
|
|
|
$
|
161.1
|
|
|
$
|
106.5
|
|
Net loss attributable to noncontrolling interest
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to controlling interest
|
$
|
166.5
|
|
|
$
|
161.1
|
|
|
$
|
106.5
|
|
|
|
|
|
|
|
||||||
Basic income per common share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
2.69
|
|
|
$
|
2.58
|
|
|
$
|
1.83
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
0.03
|
|
|
(0.08
|
)
|
|||
Basic net income per common share
|
$
|
2.70
|
|
|
$
|
2.61
|
|
|
$
|
1.75
|
|
Diluted income per common share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
2.64
|
|
|
$
|
2.55
|
|
|
$
|
1.80
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
0.02
|
|
|
(0.09
|
)
|
|||
Diluted net income per common share
|
$
|
2.65
|
|
|
$
|
2.57
|
|
|
$
|
1.71
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
166.2
|
|
|
$
|
161.1
|
|
|
$
|
106.5
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net foreign currency translation adjustment
|
(8.2
|
)
|
|
(5.2
|
)
|
|
2.3
|
|
|||
Net unrealized losses on derivative instruments, net of tax of $3.0, $2.1 and $6.2 for fiscal 2014, fiscal 2013 and fiscal 2012, respectively
|
(4.9
|
)
|
|
(3.3
|
)
|
|
(9.3
|
)
|
|||
Reclassification of net unrealized losses on derivatives to net income, net of tax of $5.9, $5.4 and $5.6 for fiscal 2014, fiscal 2013 and fiscal 2012, respectively
|
9.5
|
|
|
8.4
|
|
|
8.4
|
|
|||
Net unrealized gains (loss) in pension and other post retirement benefits, net of tax of $4.9, $2.4 and $0.4 for fiscal 2014, fiscal 2013 and fiscal 2012, respectively
|
(7.9
|
)
|
|
5.8
|
|
|
3.6
|
|
|||
Reclassification of net pension and post-retirement benefit income (loss) to net income, net of tax of $1.9, $2.3 and $2.2 for fiscal 2014, fiscal 2013 and fiscal 2012, respectively
|
3.1
|
|
|
3.8
|
|
|
(14.3
|
)
|
|||
Total other comprehensive income (loss)
|
(8.4
|
)
|
|
9.5
|
|
|
(9.3
|
)
|
|||
Comprehensive income
|
$
|
157.8
|
|
|
$
|
170.6
|
|
|
$
|
97.2
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
166.2
|
|
|
$
|
161.1
|
|
|
$
|
106.5
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Impairment, restructuring and other
|
33.7
|
|
|
16.2
|
|
|
5.3
|
|
|||
Costs related to refinancing
|
3.5
|
|
|
—
|
|
|
—
|
|
|||
Share-based compensation expense
|
11.1
|
|
|
10.3
|
|
|
12.5
|
|
|||
Depreciation
|
50.6
|
|
|
54.9
|
|
|
51.5
|
|
|||
Amortization
|
13.8
|
|
|
11.2
|
|
|
10.9
|
|
|||
Deferred taxes
|
12.1
|
|
|
24.2
|
|
|
24.2
|
|
|||
Loss (gain) on sale of long-lived assets
|
1.1
|
|
|
(2.1
|
)
|
|
0.1
|
|
|||
Gain on sale of business
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|||
(Gain) loss on investment of unconsolidated affiliate
|
(5.7
|
)
|
|
0.4
|
|
|
—
|
|
|||
Changes in assets and liabilities, net of acquired businesses:
|
|
|
|
|
|
||||||
Accounts receivable
|
(29.4
|
)
|
|
17.9
|
|
|
(6.9
|
)
|
|||
Inventories
|
(38.7
|
)
|
|
89.0
|
|
|
(23.1
|
)
|
|||
Prepaid and other assets
|
(3.2
|
)
|
|
0.3
|
|
|
17.3
|
|
|||
Accounts payable
|
52.6
|
|
|
(5.2
|
)
|
|
(6.9
|
)
|
|||
Other current liabilities
|
(22.9
|
)
|
|
5.4
|
|
|
(15.9
|
)
|
|||
Restructuring reserves
|
4.9
|
|
|
(8.1
|
)
|
|
(19.4
|
)
|
|||
Other non-current items
|
(14.6
|
)
|
|
(32.6
|
)
|
|
(9.0
|
)
|
|||
Other, net
|
7.2
|
|
|
(0.9
|
)
|
|
6.3
|
|
|||
Net cash provided by operating activities
|
240.9
|
|
|
342.0
|
|
|
153.4
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from sale of long-lived assets
|
3.7
|
|
|
3.6
|
|
|
0.7
|
|
|||
Proceeds from sale of business, net of transaction costs
|
7.2
|
|
|
—
|
|
|
—
|
|
|||
Investments in property, plant and equipment
|
(87.6
|
)
|
|
(60.1
|
)
|
|
(69.4
|
)
|
|||
Proceeds from sale and leaseback transaction
|
35.1
|
|
|
—
|
|
|
—
|
|
|||
Investment in unconsolidated affiliate
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|||
Investments in acquired businesses, net of cash acquired
|
(114.0
|
)
|
|
(3.2
|
)
|
|
(7.0
|
)
|
|||
Net cash used in investing activities
|
(155.6
|
)
|
|
(64.2
|
)
|
|
(75.7
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Borrowings under revolving and bank lines of credit and term loans
|
1,932.8
|
|
|
1,474.8
|
|
|
1,684.0
|
|
|||
Repayments under revolving and bank lines of credit and term loans
|
(1,525.3
|
)
|
|
(1,682.1
|
)
|
|
(1,694.6
|
)
|
|||
Repayment of 7.25% senior notes
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|||
Financing and issuance fees
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(230.8
|
)
|
|
(87.8
|
)
|
|
(75.4
|
)
|
|||
Purchase of Common Shares
|
(120.0
|
)
|
|
—
|
|
|
(17.5
|
)
|
|||
Payments on sellers notes
|
(0.8
|
)
|
|
(0.8
|
)
|
|
—
|
|
|||
Excess tax benefits from share-based payment arrangements
|
5.9
|
|
|
2.0
|
|
|
6.6
|
|
|||
Cash received from exercise of stock options
|
20.0
|
|
|
13.3
|
|
|
17.6
|
|
|||
Net cash used in financing activities
|
(124.3
|
)
|
|
(280.6
|
)
|
|
(79.3
|
)
|
|||
Effect of exchange rate changes on cash
|
(1.5
|
)
|
|
0.7
|
|
|
2.6
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(40.5
|
)
|
|
(2.1
|
)
|
|
1.0
|
|
|||
Cash and cash equivalents at beginning of year
|
129.8
|
|
|
131.9
|
|
|
130.9
|
|
|||
Cash and cash equivalents at end of year
|
$
|
89.3
|
|
|
$
|
129.8
|
|
|
$
|
131.9
|
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
|
||||||
Interest paid
|
$
|
(46.9
|
)
|
|
$
|
(56.6
|
)
|
|
$
|
(48.6
|
)
|
Call premium on 7.25% senior notes
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
|||
Income taxes paid
|
(55.3
|
)
|
|
(44.0
|
)
|
|
(79.6
|
)
|
|
Common Shares
|
|
Capital in Excess of Stated Value
|
|
Retained Earnings
|
|
Treasury Shares
|
|
Accumulated Other Comprehensive Income (loss)
|
|
|
|
Non-controlling Interest
|
|
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
Total
|
|
|
Total
|
||||||||||||||||||||||
Balance at September 30, 2011
|
68.1
|
|
|
$
|
0.3
|
|
|
$
|
426.8
|
|
|
$
|
599.2
|
|
|
7.5
|
|
|
$
|
(388.5
|
)
|
|
$
|
(78.0
|
)
|
|
$
|
559.8
|
|
|
$
|
—
|
|
|
$
|
559.8
|
|
Net income
|
|
|
|
|
|
|
106.5
|
|
|
|
|
|
|
|
|
106.5
|
|
|
|
|
106.5
|
|
|||||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(9.3
|
)
|
|
(9.3
|
)
|
|
|
|
(9.3
|
)
|
|||||||||||||||
Share-based compensation
|
|
|
|
|
12.5
|
|
|
|
|
|
|
|
|
|
|
12.5
|
|
|
|
|
12.5
|
|
|||||||||||||||
Dividends declared ($1.225 per share)
|
|
|
|
|
|
|
(75.4
|
)
|
|
|
|
|
|
|
|
(75.4
|
)
|
|
|
|
(75.4
|
)
|
|||||||||||||||
Treasury share purchases
|
|
|
|
|
|
|
|
|
0.4
|
|
|
(17.5
|
)
|
|
|
|
(17.5
|
)
|
|
|
|
(17.5
|
)
|
||||||||||||||
Treasury share issuances
|
|
|
|
|
(31.2
|
)
|
|
|
|
(1.1
|
)
|
|
56.4
|
|
|
|
|
25.2
|
|
|
|
|
25.2
|
|
|||||||||||||
Other
|
|
|
|
|
0.2
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
0.1
|
|
||||||||||||||
Balance at September 30, 2012
|
68.1
|
|
|
0.3
|
|
|
408.3
|
|
|
630.2
|
|
|
6.8
|
|
|
(349.6
|
)
|
|
(87.3
|
)
|
|
601.9
|
|
|
—
|
|
|
601.9
|
|
||||||||
Net income
|
|
|
|
|
|
|
161.1
|
|
|
|
|
|
|
|
|
161.1
|
|
|
|
|
161.1
|
|
|||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
9.5
|
|
|
9.5
|
|
|
|
|
9.5
|
|
|||||||||||||||
Share-based compensation
|
|
|
|
|
10.3
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
|
|
|
10.3
|
|
|||||||||||||||
Dividends declared ($1.4125 per share)
|
|
|
|
|
|
|
(87.8
|
)
|
|
|
|
|
|
|
|
(87.8
|
)
|
|
|
|
(87.8
|
)
|
|||||||||||||||
Treasury share issuances
|
|
|
|
|
(21.4
|
)
|
|
|
|
(0.7
|
)
|
|
37.0
|
|
|
|
|
15.6
|
|
|
|
|
15.6
|
|
|||||||||||||
Other
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
(0.1
|
)
|
|||||||||||||||
Balance at September 30, 2013
|
68.1
|
|
|
0.3
|
|
|
397.2
|
|
|
703.4
|
|
|
6.1
|
|
|
(312.6
|
)
|
|
(77.8
|
)
|
|
710.5
|
|
|
—
|
|
|
710.5
|
|
||||||||
Net income (loss)
|
|
|
|
|
|
|
166.5
|
|
|
|
|
|
|
|
|
166.5
|
|
|
(0.3
|
)
|
|
166.2
|
|
||||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(8.4
|
)
|
|
(8.4
|
)
|
|
|
|
(8.4
|
)
|
|||||||||||||||
Share-based compensation
|
|
|
|
|
11.1
|
|
|
|
|
|
|
|
|
|
|
11.1
|
|
|
|
|
11.1
|
|
|||||||||||||||
Dividends declared ($3.7625 per share)
|
|
|
|
|
|
|
(233.0
|
)
|
|
|
|
|
|
|
|
(233.0
|
)
|
|
|
|
(233.0
|
)
|
|||||||||||||||
Treasury share purchases
|
|
|
|
|
|
|
|
|
2.1
|
|
|
(120.0
|
)
|
|
|
|
(120.0
|
)
|
|
|
|
(120.0
|
)
|
||||||||||||||
Treasury share issuances
|
|
|
|
|
(13.3
|
)
|
|
|
|
(0.8
|
)
|
|
40.3
|
|
|
|
|
27.0
|
|
|
|
|
27.0
|
|
|||||||||||||
Investment in noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.8
|
|
|
13.8
|
|
||||||||||||||||
Balance at September 30, 2014
|
68.1
|
|
|
$
|
0.3
|
|
|
$
|
395.0
|
|
|
$
|
636.9
|
|
|
7.4
|
|
|
$
|
(392.3
|
)
|
|
$
|
(86.2
|
)
|
|
$
|
553.7
|
|
|
$
|
13.5
|
|
|
$
|
567.2
|
|
Land improvements
|
10 –25 years
|
Buildings
|
10 –40 years
|
Machinery and equipment
|
3 –15 years
|
Furniture and fixtures
|
6 –10 years
|
Software
|
3 – 8 years
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Net sales
|
$
|
18.1
|
|
|
$
|
42.8
|
|
|
$
|
82.3
|
|
Operating costs
|
17.6
|
|
|
40.4
|
|
|
85.9
|
|
|||
Impairment, restructuring and other
|
—
|
|
|
—
|
|
|
0.6
|
|
|||
Gain on sale of assets
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|||
Other (income) expense, net
|
—
|
|
|
—
|
|
|
0.3
|
|
|||
Income (loss) from discontinued operations before income taxes
|
1.7
|
|
|
2.4
|
|
|
(4.5
|
)
|
|||
Income tax expense from discontinued operations
|
0.9
|
|
|
0.7
|
|
|
0.6
|
|
|||
Income (loss) from discontinued operations, net of tax
|
$
|
0.8
|
|
|
$
|
1.7
|
|
|
$
|
(5.1
|
)
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Restructuring and other
|
$
|
17.3
|
|
|
$
|
4.4
|
|
|
$
|
1.8
|
|
Property, plant and equipment impairments
|
—
|
|
|
—
|
|
|
2.1
|
|
|||
Goodwill and intangible asset impairments
|
33.7
|
|
|
15.9
|
|
|
3.2
|
|
|||
Total impairment, restructuring and other
|
$
|
51.0
|
|
|
$
|
20.3
|
|
|
$
|
7.1
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Amounts reserved for restructuring and other at beginning of year
|
$
|
11.1
|
|
|
$
|
10.2
|
|
|
$
|
29.6
|
|
Restructuring and other charges
|
17.3
|
|
|
9.1
|
|
|
1.8
|
|
|||
Restructuring and other in discontinued operations
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Payments and other
|
(12.4
|
)
|
|
(8.2
|
)
|
|
(21.3
|
)
|
|||
Amounts reserved for restructuring and other at end of year
|
$
|
16.0
|
|
|
$
|
11.1
|
|
|
$
|
10.2
|
|
|
Global
Consumer
|
|
Scotts
LawnService
®
|
|
Corporate &
Other
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Goodwill
|
$
|
244.9
|
|
|
$
|
127.3
|
|
|
$
|
24.6
|
|
|
$
|
396.8
|
|
Accumulated impairment losses
|
(62.8
|
)
|
|
—
|
|
|
(24.6
|
)
|
|
(87.4
|
)
|
||||
Balance at September 30, 2012
|
182.1
|
|
|
127.3
|
|
|
—
|
|
|
309.4
|
|
||||
Acquisitions, net of purchase price adjustments
|
1.0
|
|
|
4.7
|
|
|
—
|
|
|
5.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
245.9
|
|
|
$
|
132.0
|
|
|
$
|
—
|
|
|
$
|
377.9
|
|
Accumulated impairment losses
|
(62.8
|
)
|
|
—
|
|
|
—
|
|
|
(62.8
|
)
|
||||
Balance at September 30, 2013
|
183.1
|
|
|
132.0
|
|
|
—
|
|
|
315.1
|
|
||||
Acquisitions, net of purchase price adjustments
|
35.8
|
|
|
—
|
|
|
—
|
|
|
35.8
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
281.7
|
|
|
$
|
132.0
|
|
|
$
|
—
|
|
|
$
|
413.7
|
|
Accumulated impairment losses
|
(62.8
|
)
|
|
—
|
|
|
—
|
|
|
(62.8
|
)
|
||||
Balance at September 30, 2014
|
$
|
218.9
|
|
|
$
|
132.0
|
|
|
$
|
—
|
|
|
$
|
350.9
|
|
|
September 30, 2014
|
|
September 30, 2013
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Technology
|
$
|
70.3
|
|
|
$
|
(56.0
|
)
|
|
$
|
14.3
|
|
|
$
|
61.8
|
|
|
$
|
(53.8
|
)
|
|
$
|
8.0
|
|
Customer accounts
|
74.2
|
|
|
(47.2
|
)
|
|
27.0
|
|
|
81.2
|
|
|
(65.0
|
)
|
|
16.2
|
|
||||||
Tradenames
|
69.0
|
|
|
(12.7
|
)
|
|
56.3
|
|
|
47.0
|
|
|
(24.8
|
)
|
|
22.2
|
|
||||||
Other
|
99.2
|
|
|
(81.4
|
)
|
|
17.8
|
|
|
103.9
|
|
|
(88.2
|
)
|
|
15.7
|
|
||||||
Total finite-lived intangible assets, net
|
|
|
|
|
115.4
|
|
|
|
|
|
|
62.1
|
|
||||||||||
Indefinite-lived tradenames
|
|
|
|
|
187.3
|
|
|
|
|
|
|
222.3
|
|
||||||||||
Total intangible assets, net
|
|
|
|
|
$
|
302.7
|
|
|
|
|
|
|
$
|
284.4
|
|
2015
|
$
|
12.5
|
|
2016
|
10.8
|
|
|
2017
|
9.7
|
|
|
2018
|
8.4
|
|
|
2019
|
7.0
|
|
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
PROPERTY, PLANT AND EQUIPMENT, NET:
|
|
|
|
||||
Land and improvements
|
$
|
87.1
|
|
|
$
|
79.6
|
|
Buildings
|
218.8
|
|
|
216.3
|
|
||
Machinery and equipment
|
536.2
|
|
|
508.7
|
|
||
Furniture and fixtures
|
40.5
|
|
|
39.7
|
|
||
Software
|
123.8
|
|
|
116.7
|
|
||
Aircraft
|
6.7
|
|
|
15.1
|
|
||
Construction in progress
|
21.1
|
|
|
19.6
|
|
||
|
1,034.2
|
|
|
995.7
|
|
||
Less: accumulated depreciation
|
(597.2
|
)
|
|
(573.4
|
)
|
||
|
$
|
437.0
|
|
|
$
|
422.3
|
|
|
September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS:
|
|
|
|
|
|
||||||
Unrecognized loss on derivatives, net of tax of $4.3, $7.1 and $10.6
|
$
|
(6.9
|
)
|
|
$
|
(11.5
|
)
|
|
$
|
(16.6
|
)
|
Pension and other postretirement liabilities, net of tax of $38.6, $31.4 and $36.1
|
(62.4
|
)
|
|
(58.0
|
)
|
|
(67.6
|
)
|
|||
Foreign currency translation adjustment
|
(16.9
|
)
|
|
(8.3
|
)
|
|
(3.1
|
)
|
|||
|
$
|
(86.2
|
)
|
|
$
|
(77.8
|
)
|
|
$
|
(87.3
|
)
|
|
Year Ended September 30
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Gross commission
|
$
|
85.2
|
|
|
$
|
81.8
|
|
|
$
|
81.3
|
|
Contribution expenses
|
(20.0
|
)
|
|
(20.0
|
)
|
|
(20.0
|
)
|
|||
Amortization of marketing fee
|
(0.8
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|||
Net commission income
|
64.4
|
|
|
61.0
|
|
|
60.5
|
|
|||
Reimbursements associated with Marketing Agreement
|
63.0
|
|
|
62.0
|
|
|
79.6
|
|
|||
Total net sales associated with Marketing Agreement
|
$
|
127.4
|
|
|
$
|
123.0
|
|
|
$
|
140.1
|
|
|
U.S. Defined
Benefit Pension Plans
|
|
International
Defined
Benefit Pension Plans
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(In millions)
|
||||||||||||||
Change in projected benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
106.7
|
|
|
$
|
118.8
|
|
|
$
|
190.7
|
|
|
$
|
188.0
|
|
Service cost
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
||||
Interest cost
|
4.5
|
|
|
3.9
|
|
|
8.3
|
|
|
7.8
|
|
||||
Actuarial loss (gain)
|
5.1
|
|
|
(8.8
|
)
|
|
17.7
|
|
|
4.5
|
|
||||
Benefits paid
|
(7.1
|
)
|
|
(7.2
|
)
|
|
(6.5
|
)
|
|
(6.1
|
)
|
||||
Curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
||||
Settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.6
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(1.3
|
)
|
||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
2.0
|
|
||||
Projected benefit obligation at end of year
|
$
|
109.2
|
|
|
$
|
106.7
|
|
|
$
|
208.3
|
|
|
$
|
190.7
|
|
Accumulated benefit obligation at end of year
|
$
|
109.2
|
|
|
$
|
106.7
|
|
|
$
|
200.8
|
|
|
$
|
184.8
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
84.3
|
|
|
$
|
85.3
|
|
|
$
|
148.8
|
|
|
$
|
139.8
|
|
Actual return on plan assets
|
9.2
|
|
|
3.4
|
|
|
16.4
|
|
|
12.1
|
|
||||
Employer contribution
|
3.4
|
|
|
2.8
|
|
|
8.9
|
|
|
8.2
|
|
||||
Benefits paid
|
(7.1
|
)
|
|
(7.2
|
)
|
|
(6.5
|
)
|
|
(6.1
|
)
|
||||
Settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.6
|
)
|
||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
0.7
|
|
||||
Other
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(1.3
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
89.8
|
|
|
$
|
84.3
|
|
|
$
|
166.3
|
|
|
$
|
148.8
|
|
Underfunded status at end of year
|
$
|
(19.4
|
)
|
|
$
|
(22.4
|
)
|
|
$
|
(42.0
|
)
|
|
$
|
(41.9
|
)
|
Information for pension plans with an accumulated benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
$
|
109.2
|
|
|
$
|
106.7
|
|
|
$
|
208.3
|
|
|
$
|
190.7
|
|
Accumulated benefit obligation
|
109.2
|
|
|
106.7
|
|
|
200.8
|
|
|
184.8
|
|
||||
Fair value of plan assets
|
89.8
|
|
|
84.3
|
|
|
166.3
|
|
|
148.8
|
|
||||
Amounts recognized in the Consolidated Balance Sheets consist of:
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
$
|
(0.2
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(1.0
|
)
|
Noncurrent liabilities
|
(19.2
|
)
|
|
(22.2
|
)
|
|
(40.9
|
)
|
|
(40.9
|
)
|
||||
Total amount accrued
|
$
|
(19.4
|
)
|
|
$
|
(22.4
|
)
|
|
$
|
(42.0
|
)
|
|
$
|
(41.9
|
)
|
Amounts recognized in accumulated other comprehensive loss consist of:
|
|
|
|
|
|
|
|
||||||||
Actuarial loss
|
$
|
34.3
|
|
|
$
|
36.9
|
|
|
$
|
64.7
|
|
|
$
|
56.1
|
|
Prior service cost
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
||||
Total amount recognized
|
$
|
34.3
|
|
|
$
|
36.9
|
|
|
$
|
65.1
|
|
|
$
|
56.5
|
|
|
U.S. Defined
Benefit Pension Plans
|
|
International
Defined
Benefit Pension Plans
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(In millions, except percentage figures)
|
||||||||||||||
Total change in other comprehensive loss attributable to:
|
|
|
|
|
|
|
|
||||||||
Pension benefit (loss) gain during the period
|
$
|
(1.1
|
)
|
|
$
|
7.1
|
|
|
$
|
(10.7
|
)
|
|
$
|
(0.3
|
)
|
Reclassification of pension benefit losses to net income
|
3.7
|
|
|
4.8
|
|
|
1.4
|
|
|
1.2
|
|
||||
Curtailment gain during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
0.7
|
|
|
(0.4
|
)
|
||||
Total change in other comprehensive loss
|
$
|
2.6
|
|
|
$
|
11.9
|
|
|
$
|
(8.6
|
)
|
|
$
|
(0.5
|
)
|
Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost in fiscal 2015 are as follows:
|
|
|
|
|
|
|
|
||||||||
Actuarial loss
|
$
|
3.3
|
|
|
|
|
$
|
1.8
|
|
|
|
||||
Prior service cost
|
—
|
|
|
|
|
—
|
|
|
|
||||||
Amount to be amortized into net periodic benefit cost
|
$
|
3.3
|
|
|
|
|
$
|
1.8
|
|
|
|
||||
Weighted average assumptions used in development of projected benefit obligation
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.81
|
%
|
|
4.32
|
%
|
|
3.73
|
%
|
|
4.32
|
%
|
||||
Rate of compensation increase
|
n/a
|
|
|
n/a
|
|
|
3.65
|
%
|
|
3.74
|
%
|
|
U.S. Defined
Benefit Pension Plans
|
|
International
Defined Benefit Pension Plans
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
(In millions, except percentage figures)
|
||||||||||||||||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
1.2
|
|
|
$
|
1.1
|
|
Interest cost
|
4.5
|
|
|
3.8
|
|
|
4.6
|
|
|
8.3
|
|
|
7.8
|
|
|
8.6
|
|
||||||
Expected return on plan assets
|
(5.2
|
)
|
|
(5.2
|
)
|
|
(5.5
|
)
|
|
(9.4
|
)
|
|
(8.7
|
)
|
|
(8.4
|
)
|
||||||
Net amortization
|
3.7
|
|
|
4.8
|
|
|
5.1
|
|
|
1.4
|
|
|
1.2
|
|
|
0.8
|
|
||||||
Net periodic benefit cost
|
3.0
|
|
|
3.4
|
|
|
4.2
|
|
|
1.5
|
|
|
1.5
|
|
|
2.1
|
|
||||||
Curtailment loss (gain)
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
||||||
Settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
||||||
Contractual termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||
Total benefit cost
|
$
|
3.0
|
|
|
$
|
3.4
|
|
|
$
|
4.4
|
|
|
$
|
1.8
|
|
|
$
|
0.5
|
|
|
$
|
2.4
|
|
Weighted average assumptions used in development of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
4.32
|
%
|
|
3.39
|
%
|
|
4.29
|
%
|
|
4.32
|
%
|
|
4.45
|
%
|
|
5.46
|
%
|
||||||
Expected return on plan assets
|
6.25
|
%
|
|
6.25
|
%
|
|
7.50
|
%
|
|
6.17
|
%
|
|
6.52
|
%
|
|
7.00
|
%
|
||||||
Rate of compensation increase
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
3.7
|
%
|
|
3.4
|
%
|
|
3.5
|
%
|
|
U.S. Defined
Benefit Pension Plans
|
|
International
Defined
Benefit Pension Plans
|
||||
|
(In millions, except percentage figures)
|
||||||
Other information:
|
|
|
|
||||
Plan asset allocations:
|
|
|
|
||||
Target for September 30, 2015:
|
|
|
|
||||
Equity securities
|
20
|
%
|
|
46
|
%
|
||
Debt securities
|
76
|
%
|
|
49
|
%
|
||
Real estate securities
|
4
|
%
|
|
—
|
%
|
||
Cash and cash equivalents
|
—
|
%
|
|
3
|
%
|
||
Insurance contracts
|
—
|
%
|
|
2
|
%
|
||
September 30, 2014:
|
|
|
|
||||
Equity securities
|
25
|
%
|
|
52
|
%
|
||
Debt securities
|
69
|
%
|
|
45
|
%
|
||
Real estate securities
|
4
|
%
|
|
—
|
%
|
||
Cash and cash equivalents
|
2
|
%
|
|
1
|
%
|
||
Insurance contracts
|
—
|
%
|
|
2
|
%
|
||
September 30, 2013:
|
|
|
|
||||
Equity securities
|
33
|
%
|
|
47
|
%
|
||
Debt securities
|
66
|
%
|
|
44
|
%
|
||
Cash and cash equivalents
|
1
|
%
|
|
—
|
%
|
||
Insurance contracts
|
—
|
%
|
|
9
|
%
|
||
Expected Company contributions in fiscal 2015
|
$
|
0.2
|
|
|
$
|
7.3
|
|
Expected future benefit payments:
|
|
|
|
||||
2015
|
$
|
7.2
|
|
|
$
|
6.4
|
|
2016
|
7.3
|
|
|
6.6
|
|
||
2017
|
7.3
|
|
|
6.9
|
|
||
2018
|
7.3
|
|
|
7.3
|
|
||
2019
|
7.3
|
|
|
7.6
|
|
||
2020 – 2025
|
36.0
|
|
|
44.5
|
|
|
September 30, 2014
|
||||||||||||||
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
U.S. Defined Benefit Pension Plan Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
Mutual funds—real estate
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
||||
Mutual funds—equities
|
—
|
|
|
22.2
|
|
|
—
|
|
|
22.2
|
|
||||
Mutual funds—fixed income
|
—
|
|
|
61.9
|
|
|
—
|
|
|
61.9
|
|
||||
Total
|
$
|
2.0
|
|
|
$
|
87.8
|
|
|
$
|
—
|
|
|
$
|
89.8
|
|
International Defined Benefit Pension Plan Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
Insurance contracts
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
||||
Mutual funds—equities
|
—
|
|
|
87.4
|
|
|
—
|
|
|
87.4
|
|
||||
Mutual funds—fixed income
|
—
|
|
|
74.2
|
|
|
—
|
|
|
74.2
|
|
||||
Total
|
$
|
1.7
|
|
|
$
|
164.6
|
|
|
$
|
—
|
|
|
$
|
166.3
|
|
|
September 30, 2013
|
||||||||||||||
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
U.S. Defined Benefit Pension Plan Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
Mutual funds—equities
|
—
|
|
|
27.5
|
|
|
—
|
|
|
27.5
|
|
||||
Mutual funds—fixed income
|
—
|
|
|
55.3
|
|
|
—
|
|
|
55.3
|
|
||||
Total
|
$
|
1.5
|
|
|
$
|
82.8
|
|
|
$
|
—
|
|
|
$
|
84.3
|
|
International Defined Benefit Pension Plan Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.6
|
|
Insurance contracts
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
||||
Mutual funds—equities
|
—
|
|
|
73.9
|
|
|
—
|
|
|
73.9
|
|
||||
Mutual funds—fixed income
|
—
|
|
|
70.0
|
|
|
—
|
|
|
70.0
|
|
||||
Total
|
$
|
1.6
|
|
|
$
|
147.2
|
|
|
$
|
—
|
|
|
$
|
148.8
|
|
|
Level 3 Assets
Insurance contracts
|
||
|
(In millions)
|
||
Balance, September 30, 2012
|
$
|
4.4
|
|
Realized gain on plan assets
|
0.3
|
|
|
Unrealized gain on plan assets
|
—
|
|
|
Foreign currency translation
|
—
|
|
|
Purchases, sales, issuances and settlements (net)
|
(4.7
|
)
|
|
Balance, September 30, 2013
|
—
|
|
|
Realized gain on plan assets
|
—
|
|
|
Unrealized gain on plan assets
|
—
|
|
|
Foreign currency translation
|
—
|
|
|
Purchases, sales, issuances and settlements (net)
|
—
|
|
|
Balance, September 30, 2014
|
$
|
—
|
|
|
2014
|
|
2013
|
||||
|
(In millions, except percentage figures)
|
||||||
Change in Accumulated Plan Benefit Obligation (APBO)
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
31.6
|
|
|
$
|
36.3
|
|
Service cost
|
0.4
|
|
|
0.5
|
|
||
Interest cost
|
1.4
|
|
|
1.3
|
|
||
Plan participants’ contributions
|
1.1
|
|
|
1.1
|
|
||
Actuarial gain (loss)
|
0.7
|
|
|
(4.4
|
)
|
||
Benefits paid (net of federal subsidy of $0.3 and $0.3)
|
(2.9
|
)
|
|
(3.2
|
)
|
||
Plan changes
|
0.1
|
|
|
—
|
|
||
Benefit obligation at end of year
|
$
|
32.4
|
|
|
$
|
31.6
|
|
Change in plan assets
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
—
|
|
|
$
|
—
|
|
Employer contribution
|
2.1
|
|
|
2.4
|
|
||
Plan participants’ contributions
|
1.1
|
|
|
1.1
|
|
||
Gross benefits paid
|
(3.2
|
)
|
|
(3.5
|
)
|
||
Fair value of plan assets at end of year
|
—
|
|
|
—
|
|
||
Unfunded status at end of year
|
$
|
(32.4
|
)
|
|
$
|
(31.6
|
)
|
Amounts recognized in the Consolidated Balance Sheets consist of:
|
|
|
|
||||
Current liabilities
|
$
|
(2.3
|
)
|
|
$
|
(2.4
|
)
|
Noncurrent liabilities
|
(30.1
|
)
|
|
(29.2
|
)
|
||
Total amount accrued
|
$
|
(32.4
|
)
|
|
$
|
(31.6
|
)
|
Amounts recognized in accumulated other comprehensive loss consist of:
|
|
|
|
||||
Actuarial loss
|
$
|
1.3
|
|
|
$
|
0.4
|
|
Unamortized prior service cost
|
0.1
|
|
|
—
|
|
||
Total amount recognized
|
$
|
1.4
|
|
|
$
|
0.4
|
|
Total change in other comprehensive loss attributable to:
|
|
|
|
||||
Benefit loss (gain) during the period
|
$
|
0.9
|
|
|
$
|
(4.3
|
)
|
Net prior service cost
|
0.1
|
|
|
—
|
|
||
Net gain amortized during the year
|
—
|
|
|
(0.2
|
)
|
||
Total change in other comprehensive loss (gain)
|
$
|
1.0
|
|
|
$
|
(4.5
|
)
|
|
|
|
|
||||
Discount rate used in development of APBO
|
4.08
|
%
|
|
4.54
|
%
|
|
2014
|
|
2013
|
|
2012
|
||||||
Components of net periodic benefit cost
|
|
|
|
|
|
||||||
Service cost
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
$
|
0.6
|
|
Interest cost
|
1.4
|
|
|
1.3
|
|
|
1.6
|
|
|||
Amortization of actuarial loss
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Total postretirement benefit cost
|
$
|
1.8
|
|
|
$
|
1.9
|
|
|
$
|
2.2
|
|
|
|
|
|
|
|
||||||
Discount rate used in development of net periodic benefit cost
|
4.54
|
%
|
|
3.66
|
%
|
|
4.66
|
%
|
|
Gross
Benefit
Payments
|
|
Retiree
Contributions
|
|
Medicare
Part D
Subsidy
|
|
Net
Company
Payments
|
||||||||
|
(In millions)
|
||||||||||||||
2015
|
$
|
4.0
|
|
|
$
|
(1.3
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
2.4
|
|
2016
|
4.2
|
|
|
(1.5
|
)
|
|
(0.4
|
)
|
|
2.3
|
|
||||
2017
|
4.4
|
|
|
(1.8
|
)
|
|
(0.4
|
)
|
|
2.2
|
|
||||
2018
|
4.7
|
|
|
(2.0
|
)
|
|
(0.4
|
)
|
|
2.3
|
|
||||
2019
|
5.1
|
|
|
(2.4
|
)
|
|
(0.5
|
)
|
|
2.2
|
|
||||
2020 – 2024
|
28.8
|
|
|
(15.8
|
)
|
|
(2.8
|
)
|
|
10.2
|
|
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Credit Facilities - Revolving loans
|
$
|
481.8
|
|
|
$
|
73.0
|
|
Senior Notes – 7.25%
|
—
|
|
|
200.0
|
|
||
Senior Notes – 6.625%
|
200.0
|
|
|
200.0
|
|
||
Master Accounts Receivable Purchase Agreement
|
84.0
|
|
|
85.3
|
|
||
Other
|
18.5
|
|
|
12.2
|
|
||
|
784.3
|
|
|
570.5
|
|
||
Less current portions
|
91.9
|
|
|
92.4
|
|
||
Long-term debt
|
$
|
692.4
|
|
|
$
|
478.1
|
|
2015
|
$
|
91.9
|
|
2016
|
1.5
|
|
|
2017
|
7.7
|
|
|
2018
|
0.5
|
|
|
2019
|
482.3
|
|
|
Thereafter
|
200.4
|
|
|
|
$
|
784.3
|
|
Notional Amount
(in millions)
|
|
Effective
Date (a)
|
|
Expiration
Date
|
|
Fixed
Rate
|
|||
$
|
50
|
|
|
2/14/2012
|
|
2/14/2016
|
|
3.78
|
%
|
150
|
|
(b)
|
2/7/2012
|
|
5/7/2016
|
|
2.42
|
%
|
|
150
|
|
(c)
|
11/16/2009
|
|
5/16/2016
|
|
3.26
|
%
|
|
50
|
|
(b)
|
2/16/2010
|
|
5/16/2016
|
|
3.05
|
%
|
|
100
|
|
(b)
|
2/21/2012
|
|
5/23/2016
|
|
2.40
|
%
|
|
150
|
|
(c)
|
12/20/2011
|
|
6/20/2016
|
|
2.61
|
%
|
|
50
|
|
(d)
|
12/6/2012
|
|
9/6/2017
|
|
2.96
|
%
|
|
200
|
|
|
2/7/2014
|
|
11/7/2017
|
|
1.28
|
%
|
|
150
|
|
(b)
|
2/7/2017
|
|
5/7/2019
|
|
2.12
|
%
|
|
50
|
|
(c)
|
2/7/2017
|
|
5/7/2019
|
|
2.25
|
%
|
|
200
|
|
(c)
|
12/20/2016
|
|
6/20/2019
|
|
2.12
|
%
|
(a)
|
The effective date refers to the date on which interest payments were, or will be, first hedged by the applicable swap agreement.
|
(b)
|
Interest payments made during the
three-month
period of each year that begins with the month and day of the effective date are hedged by the swap agreement.
|
(c)
|
Interest payments made during the
six-month
period of each year that begins with the month and day of the effective date are hedged by the swap agreement.
|
(d)
|
Interest payments made during the
nine-month
period of each year that begins with the month and day of the effective date are hedged by the swap agreement.
|
|
Year Ended September 30,
|
||||||||||||||
|
2014
|
|
2013
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
|
(In millions)
|
||||||||||||||
Revolving loans
|
$
|
481.8
|
|
|
$
|
481.8
|
|
|
$
|
73.0
|
|
|
$
|
73.0
|
|
Senior Notes – 7.25%
|
—
|
|
|
—
|
|
|
200.0
|
|
|
209.5
|
|
||||
Senior Notes – 6.625%
|
200.0
|
|
|
212.5
|
|
|
200.0
|
|
|
213.5
|
|
||||
Master Accounts Receivable Purchase Agreement
|
84.0
|
|
|
84.0
|
|
|
85.3
|
|
|
85.3
|
|
||||
Other
|
18.5
|
|
|
18.5
|
|
|
12.2
|
|
|
12.2
|
|
|
September 30,
|
||
|
2014
|
|
2013
|
|
(In millions)
|
||
Preferred shares, no par value:
|
|
|
|
Authorized
|
0.2 shares
|
|
0.2 shares
|
Issued
|
0.0 shares
|
|
0.0 shares
|
Common shares, no par value, $.01 stated value per share
|
|
|
|
Authorized
|
100.0 shares
|
|
100.0 shares
|
Issued
|
68.1 shares
|
|
68.1 shares
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Employees
|
|
|
|
|
|
||||||
Options
|
—
|
|
|
—
|
|
|
464,061
|
|
|||
Restricted stock units
|
112,315
|
|
|
178,030
|
|
|
107,373
|
|
|||
Performance units
|
161,229
|
|
|
178,321
|
|
|
110,079
|
|
|||
Board of Directors
|
|
|
|
|
|
||||||
Deferred stock units
|
38,418
|
|
|
33,253
|
|
|
30,943
|
|
|||
Options due to special $2.00 dividend
|
98,186
|
|
|
—
|
|
|
—
|
|
|||
Total share-based awards
|
311,962
|
|
|
389,604
|
|
|
712,456
|
|
|||
Aggregate fair value at grant dates (in millions)
|
$
|
17.5
|
|
|
$
|
17.5
|
|
|
$
|
17.4
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Share-based compensation
|
$
|
11.1
|
|
|
$
|
10.3
|
|
|
$
|
12.5
|
|
Tax benefit recognized
|
3.9
|
|
|
3.9
|
|
|
4.8
|
|
|
No. of
Options/SARs
|
|
WTD.
Avg.
Exercise
Price
|
|||
Beginning balance
|
2.7
|
|
|
$
|
37.60
|
|
Granted
|
0.1
|
|
|
40.89
|
|
|
Exercised
|
(0.8
|
)
|
|
30.80
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Ending balance
|
2.0
|
|
|
38.26
|
|
|
Exercisable
|
1.6
|
|
|
36.70
|
|
|
2014
|
||
Outstanding
|
$
|
33.3
|
|
Exercisable
|
29.8
|
|
|
Year Ended September 30,
|
|||
|
|
2012
|
||
Expected market price volatility
|
|
33.2
|
%
|
|
Risk-free interest rates
|
|
1.2
|
%
|
|
Expected dividend yield
|
|
2.5
|
%
|
|
Expected life of stock options in years
|
|
5.96
|
|
|
Estimated weighted-average fair value per stock option
|
|
$
|
11.50
|
|
|
No. of
Shares
|
|
WTD. Avg.
Grant Date
Fair Value
per Share
|
|||
Awards outstanding at September 30, 2011
|
696,906
|
|
|
$
|
35.22
|
|
Granted
|
138,316
|
|
|
47.53
|
|
|
Vested
|
(301,132
|
)
|
|
22.25
|
|
|
Forfeited
|
(36,891
|
)
|
|
45.28
|
|
|
Awards outstanding at September 30, 2012
|
497,199
|
|
|
45.75
|
|
|
Granted
|
211,283
|
|
|
44.80
|
|
|
Vested
|
(251,855
|
)
|
|
40.87
|
|
|
Forfeited
|
(46,976
|
)
|
|
53.54
|
|
|
Awards outstanding at September 30, 2013
|
409,651
|
|
|
47.36
|
|
|
Granted
|
150,733
|
|
|
59.35
|
|
|
Vested
|
(81,597
|
)
|
|
41.88
|
|
|
Forfeited
|
(44,895
|
)
|
|
47.43
|
|
|
Awards outstanding at September 30, 2014
|
433,892
|
|
|
52.55
|
|
|
No. of
Units
|
|
WTD. Avg.
Grant Date
Fair Value
per Unit
|
|||
Awards outstanding at September 30, 2011
|
42,300
|
|
|
$
|
51.73
|
|
Granted
|
114,279
|
|
|
47.63
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(2,670
|
)
|
|
47.66
|
|
|
Awards outstanding at September 30, 2012
|
153,909
|
|
|
45.48
|
|
|
Granted
|
178,321
|
|
|
45.06
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(70,313
|
)
|
|
46.62
|
|
|
Awards outstanding at September 30, 2013
|
261,917
|
|
|
46.81
|
|
|
Granted
|
161,229
|
|
|
59.39
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(111,897
|
)
|
|
53.24
|
|
|
Awards outstanding at September 30, 2014
|
311,249
|
|
|
51.21
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions, except per share data)
|
||||||||||
Income attributable to controlling interest from continuing operations
|
$
|
165.7
|
|
|
$
|
159.4
|
|
|
$
|
111.6
|
|
Income (loss) from discontinued operations
|
0.8
|
|
|
1.7
|
|
|
(5.1
|
)
|
|||
Net income attributable to controlling interest
|
$
|
166.5
|
|
|
$
|
161.1
|
|
|
$
|
106.5
|
|
BASIC EARNINGS PER COMMON SHARE:
|
|
|
|
|
|
||||||
Weighted-average Common Shares outstanding
during the period
|
61.6
|
|
|
61.7
|
|
|
61.0
|
|
|||
Income from continuing operations
|
$
|
2.69
|
|
|
$
|
2.58
|
|
|
$
|
1.83
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
0.03
|
|
|
(0.08
|
)
|
|||
Net income
|
$
|
2.70
|
|
|
$
|
2.61
|
|
|
$
|
1.75
|
|
DILUTED EARNINGS PER COMMON SHARE:
|
|
|
|
|
|
||||||
Weighted-average Common Shares outstanding
during the period
|
61.6
|
|
|
61.7
|
|
|
61.0
|
|
|||
Dilutive potential Common Shares
|
1.1
|
|
|
0.9
|
|
|
1.1
|
|
|||
Weighted-average number of Common Shares outstanding and dilutive potential Common Shares
|
62.7
|
|
|
62.6
|
|
|
62.1
|
|
|||
Income from continuing operations
|
$
|
2.64
|
|
|
$
|
2.55
|
|
|
$
|
1.80
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
0.02
|
|
|
(0.09
|
)
|
|||
Net income
|
$
|
2.65
|
|
|
$
|
2.57
|
|
|
$
|
1.71
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
67.0
|
|
|
$
|
55.0
|
|
|
$
|
29.2
|
|
State
|
8.6
|
|
|
7.4
|
|
|
5.6
|
|
|||
Foreign
|
3.5
|
|
|
4.4
|
|
|
7.3
|
|
|||
Total Current
|
79.1
|
|
|
66.8
|
|
|
42.1
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
10.8
|
|
|
24.0
|
|
|
24.7
|
|
|||
State
|
1.4
|
|
|
1.2
|
|
|
1.4
|
|
|||
Foreign
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|||
Total Deferred
|
12.1
|
|
|
25.1
|
|
|
25.7
|
|
|||
Provision for income taxes
|
$
|
91.2
|
|
|
$
|
91.9
|
|
|
$
|
67.8
|
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Domestic
|
$
|
231.0
|
|
|
$
|
236.5
|
|
|
$
|
163.7
|
|
Foreign
|
25.6
|
|
|
14.8
|
|
|
15.7
|
|
|||
Income from continuing operations before income taxes
|
$
|
256.6
|
|
|
$
|
251.3
|
|
|
$
|
179.4
|
|
|
Year Ended September 30,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Effect of foreign operations
|
1.5
|
|
|
0.8
|
|
|
(0.5
|
)
|
State taxes, net of federal benefit
|
2.7
|
|
|
2.9
|
|
|
3.1
|
|
Domestic Production Activities Deduction permanent difference
|
(2.7
|
)
|
|
(2.1
|
)
|
|
(1.5
|
)
|
Effect of other permanent differences
|
0.2
|
|
|
0.8
|
|
|
2.4
|
|
Research and Experimentation and other federal tax credits
|
(0.8
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
Resolution of prior tax contingencies
|
0.2
|
|
|
0.2
|
|
|
(0.9
|
)
|
Other
|
(0.5
|
)
|
|
(0.7
|
)
|
|
0.3
|
|
Effective income tax rate
|
35.6
|
%
|
|
36.6
|
%
|
|
37.8
|
%
|
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
DEFERRED TAX ASSETS
|
|
|
|
||||
Inventories
|
$
|
14.7
|
|
|
$
|
13.7
|
|
Accrued liabilities
|
59.7
|
|
|
59.2
|
|
||
Postretirement benefits
|
32.4
|
|
|
33.7
|
|
||
Accounts receivable
|
7.2
|
|
|
7.3
|
|
||
State NOL carryovers
|
1.3
|
|
|
1.1
|
|
||
Foreign NOL carryovers
|
48.2
|
|
|
51.6
|
|
||
Foreign tax credit carryovers
|
4.6
|
|
|
8.6
|
|
||
Interest rate swaps
|
4.2
|
|
|
6.3
|
|
||
Other
|
3.1
|
|
|
6.0
|
|
||
Gross deferred tax assets
|
175.4
|
|
|
187.5
|
|
||
Valuation allowance
|
(48.3
|
)
|
|
(51.5
|
)
|
||
Total deferred tax assets
|
127.1
|
|
|
136.0
|
|
||
DEFERRED TAX LIABILITIES
|
|
|
|
||||
Property, plant and equipment
|
(59.2
|
)
|
|
(62.3
|
)
|
||
Intangible assets
|
(106.6
|
)
|
|
(99.5
|
)
|
||
Other
|
(9.5
|
)
|
|
(3.3
|
)
|
||
Total deferred tax liabilities
|
(175.3
|
)
|
|
(165.1
|
)
|
||
Net deferred tax liability
|
$
|
(48.2
|
)
|
|
$
|
(29.1
|
)
|
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Net current deferred tax assets (classified with prepaid and other assets)
|
$
|
72.2
|
|
|
$
|
67.1
|
|
Net non-current deferred tax liabilities (classified with other liabilities)
|
(120.4
|
)
|
|
(96.2
|
)
|
||
Net deferred tax liability
|
$
|
(48.2
|
)
|
|
$
|
(29.1
|
)
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Balance at beginning of year
|
$
|
6.7
|
|
|
$
|
7.0
|
|
|
$
|
8.9
|
|
Additions for tax positions of the current year
|
0.2
|
|
|
0.3
|
|
|
1.0
|
|
|||
Additions for tax positions of prior years
|
7.6
|
|
|
4.3
|
|
|
2.9
|
|
|||
Reductions for tax positions of prior years
|
(2.7
|
)
|
|
(3.8
|
)
|
|
(4.1
|
)
|
|||
Settlements with tax authorities
|
—
|
|
|
(0.4
|
)
|
|
(0.5
|
)
|
|||
Expiration of statutes of limitation
|
(0.6
|
)
|
|
(0.7
|
)
|
|
(1.2
|
)
|
|||
Balance at end of year
|
$
|
11.2
|
|
|
$
|
6.7
|
|
|
$
|
7.0
|
|
|
|
Assets / (Liabilities)
|
|||||||
|
|
|
2014
|
|
2013
|
||||
Derivatives Designated As Hedging Instruments
|
|
Balance Sheet Location
|
Fair Value
|
||||||
|
|
|
(In millions)
|
||||||
Interest rate swap agreements
|
|
Other assets
|
$
|
4.0
|
|
|
$
|
3.7
|
|
|
|
Other current liabilities
|
(10.3
|
)
|
|
(8.3
|
)
|
||
|
|
Other liabilities
|
(5.2
|
)
|
|
(12.1
|
)
|
||
Commodity hedging instruments
|
|
Prepaid and other assets
|
—
|
|
|
0.1
|
|
||
|
|
Other current liabilities
|
(0.6
|
)
|
|
(2.0
|
)
|
||
Total derivatives designated as hedging instruments
|
|
|
$
|
(12.1
|
)
|
|
$
|
(18.6
|
)
|
|
|
|
|
|
|
||||
Derivatives Not Designated As Hedging Instruments
|
|
Balance Sheet Location
|
|
|
|
||||
Foreign currency forward contracts
|
|
Other current liabilities
|
$
|
(0.1
|
)
|
|
$
|
(2.1
|
)
|
Commodity hedging instruments
|
|
Other current liabilities
|
(1.3
|
)
|
|
(0.3
|
)
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
(1.4
|
)
|
|
$
|
(2.4
|
)
|
Total derivatives
|
|
|
$
|
(13.5
|
)
|
|
$
|
(21.0
|
)
|
|
|
Amount of Gain/(Loss)
Recognized in AOCI
|
||||||
Derivatives in Cash Flow Hedging Relationships
|
|
2014
|
|
2013
|
||||
|
|
(In millions)
|
||||||
Interest rate swap agreements
|
|
$
|
(6.6
|
)
|
|
$
|
(1.0
|
)
|
Commodity hedging instruments
|
|
1.7
|
|
|
(2.3
|
)
|
||
Total
|
|
$
|
(4.9
|
)
|
|
$
|
(3.3
|
)
|
|
|
Reclassified From AOCI Into
|
|
Amount of Gain/(Loss)
|
||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Statement of Operations
|
|
2014
|
|
2013
|
||||
|
|
|
|
(In millions)
|
||||||
Interest rate swap agreements
|
|
Interest expense
|
|
$
|
(10.0
|
)
|
|
$
|
(8.4
|
)
|
Commodity hedging instruments
|
|
Cost of sales
|
|
0.5
|
|
|
—
|
|
||
Total
|
|
|
|
$
|
(9.5
|
)
|
|
$
|
(8.4
|
)
|
|
|
|
|
Amount of Gain/(Loss)
|
||||||
Derivatives not Designated As Hedging Instruments
|
|
Recognized in Statement of Operations
|
|
2014
|
|
2013
|
||||
|
|
|
|
(In millions)
|
||||||
Foreign currency forward contracts
|
|
Other income, net
|
|
$
|
(0.7
|
)
|
|
$
|
6.7
|
|
Commodity hedging instruments
|
|
Cost of sales
|
|
(1.0
|
)
|
|
(0.6
|
)
|
||
Total
|
|
|
|
$
|
(1.7
|
)
|
|
$
|
6.1
|
|
|
Quoted Prices in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
32.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32.0
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
—
|
|
|
4.0
|
|
|
—
|
|
|
4.0
|
|
||||
Other
|
8.9
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
||||
Total
|
$
|
40.9
|
|
|
$
|
4.0
|
|
|
$
|
—
|
|
|
$
|
44.9
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
(15.5
|
)
|
|
$
|
—
|
|
|
$
|
(15.5
|
)
|
Foreign currency forward contracts
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||
Commodity hedging instruments
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
(1.9
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
(17.5
|
)
|
|
$
|
—
|
|
|
$
|
(17.5
|
)
|
|
Quoted Prices in Active
Markets for Identical
Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
Losses
|
||||||||
|
(In millions)
|
||||||||||||||
Ortho
®
brands and sub-brands
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92.3
|
|
|
$
|
33.7
|
|
|
Quoted Prices in Active
Markets for Identical
Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
83.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
83.9
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
||||
Commodity hedging instruments
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Other
|
7.0
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
||||
Total
|
$
|
90.9
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
94.7
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
(20.4
|
)
|
|
$
|
—
|
|
|
$
|
(20.4
|
)
|
Foreign currency forward contracts
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
(2.1
|
)
|
||||
Commodity hedging instruments
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
(24.8
|
)
|
|
$
|
—
|
|
|
$
|
(24.8
|
)
|
|
Quoted Prices in Active
Markets for Identical
Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
Losses
|
||||||||
|
(In millions)
|
||||||||||||||
Global Consumer insect repellent technology
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.3
|
|
Ortho
®
brands and sub-brands
|
—
|
|
|
—
|
|
|
126.0
|
|
|
11.6
|
|
2015
|
$
|
46.4
|
|
2016
|
36.2
|
|
|
2017
|
26.3
|
|
|
2018
|
20.1
|
|
|
2019
|
17.1
|
|
|
Thereafter
|
27.0
|
|
|
Total future minimum lease payments
|
$
|
173.1
|
|
|
Amount of
Guarantee
|
|
Lease
Termination Date
|
||
|
(In millions)
|
|
|
||
Scotts LawnService
®
vehicles
|
$
|
0.8
|
|
|
2020
|
Corporate aircraft
|
30.9
|
|
|
2016 and 2019
|
2015
|
$
|
127.1
|
|
2016
|
50.0
|
|
|
2017
|
19.7
|
|
|
2018
|
4.8
|
|
|
2019
|
6.8
|
|
|
Thereafter
|
0.5
|
|
|
|
$
|
208.9
|
|
|
Percentage of Net Sales
|
|
Percentage of Gross Accounts Receivable at September 30,
|
|||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|||||
Global Consumer segment
|
72
|
%
|
|
72
|
%
|
|
72
|
%
|
|
62
|
%
|
|
63
|
%
|
Scotts LawnService
®
segment
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
Total Concentration in United States
|
81
|
%
|
|
81
|
%
|
|
81
|
%
|
|
71
|
%
|
|
72
|
%
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Royalty income, net
|
$
|
(5.6
|
)
|
|
$
|
(4.7
|
)
|
|
$
|
(4.9
|
)
|
Franchise fees
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|||
Foreign currency losses (gains)
|
1.0
|
|
|
0.4
|
|
|
(0.7
|
)
|
|||
(Gain) loss on investment of unconsolidated affiliate
|
(5.7
|
)
|
|
0.4
|
|
|
—
|
|
|||
Other
|
(4.1
|
)
|
|
(5.8
|
)
|
|
3.1
|
|
|||
Total
|
$
|
(14.7
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
(2.8
|
)
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Net sales:
|
|
|
|
|
|
||||||
Global Consumer
|
$
|
2,552.0
|
|
|
$
|
2,484.7
|
|
|
$
|
2,483.6
|
|
Scotts LawnService
®
|
263.0
|
|
|
257.8
|
|
|
245.8
|
|
|||
Segment total
|
2,815.0
|
|
|
2,742.5
|
|
|
2,729.4
|
|
|||
Corporate & Other
|
26.3
|
|
|
31.2
|
|
|
41.1
|
|
|||
Consolidated
|
$
|
2,841.3
|
|
|
$
|
2,773.7
|
|
|
$
|
2,770.5
|
|
Income from continuing operations before income taxes:
|
|
|
|
|
|
||||||
Global Consumer
|
$
|
438.8
|
|
|
$
|
403.7
|
|
|
$
|
335.9
|
|
Scotts LawnService
®
|
30.2
|
|
|
28.7
|
|
|
27.0
|
|
|||
Segment total
|
469.0
|
|
|
432.4
|
|
|
362.9
|
|
|||
Corporate & Other
|
(90.4
|
)
|
|
(91.2
|
)
|
|
(96.3
|
)
|
|||
Intangible asset amortization
|
(13.0
|
)
|
|
(10.4
|
)
|
|
(10.1
|
)
|
|||
Product registration and recall matters
|
—
|
|
|
—
|
|
|
(8.2
|
)
|
|||
Impairment, restructuring and other
|
(51.0
|
)
|
|
(20.3
|
)
|
|
(7.1
|
)
|
|||
Costs related to refinancing
|
(10.7
|
)
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
(47.3
|
)
|
|
(59.2
|
)
|
|
(61.8
|
)
|
|||
Consolidated
|
$
|
256.6
|
|
|
$
|
251.3
|
|
|
$
|
179.4
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Global Consumer
|
$
|
48.1
|
|
|
$
|
48.7
|
|
|
$
|
44.2
|
|
Scotts LawnService
®
|
3.9
|
|
|
4.0
|
|
|
4.1
|
|
|||
Corporate & Other
|
12.4
|
|
|
13.4
|
|
|
14.1
|
|
|||
|
$
|
64.4
|
|
|
$
|
66.1
|
|
|
$
|
62.4
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Global Consumer
|
$
|
83.3
|
|
|
$
|
53.3
|
|
|
$
|
64.6
|
|
Scotts LawnService
®
|
3.2
|
|
|
3.1
|
|
|
1.9
|
|
|||
Corporate & Other
|
1.1
|
|
|
3.7
|
|
|
2.9
|
|
|||
|
$
|
87.6
|
|
|
$
|
60.1
|
|
|
$
|
69.4
|
|
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Total assets:
|
|
|
|
||||
Global Consumer
|
$
|
1,690.7
|
|
|
$
|
1,564.2
|
|
Scotts LawnService
®
|
191.3
|
|
|
189.8
|
|
||
Corporate & Other
|
176.3
|
|
|
183.2
|
|
||
|
$
|
2,058.3
|
|
|
$
|
1,937.2
|
|
|
Year Ended September 30,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Net sales:
|
|
|
|
|
|
|||
Lawn care
|
34
|
%
|
|
35
|
%
|
|
35
|
%
|
Growing media
|
36
|
|
|
35
|
|
|
33
|
|
Controls
|
15
|
|
|
14
|
|
|
14
|
|
Roundup
®
Marketing Agreement
|
5
|
|
|
5
|
|
|
6
|
|
Other, primarily gardening and landscape
|
10
|
|
|
11
|
|
|
12
|
|
Segment total product sales
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Year Ended September 30,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In millions)
|
||||||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
2,328.2
|
|
|
$
|
2,295.5
|
|
|
$
|
2,290.7
|
|
International
|
513.1
|
|
|
478.2
|
|
|
479.8
|
|
|||
|
$
|
2,841.3
|
|
|
$
|
2,773.7
|
|
|
$
|
2,770.5
|
|
Long-lived assets:
|
|
|
|
|
|
||||||
United States
|
$
|
458.8
|
|
|
$
|
419.9
|
|
|
$
|
432.0
|
|
International
|
91.1
|
|
|
64.5
|
|
|
70.2
|
|
|||
|
$
|
549.9
|
|
|
$
|
484.4
|
|
|
$
|
502.2
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full Year
|
||||||||||
|
(In millions, except per share data)
|
||||||||||||||||||
FISCAL 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
189.6
|
|
|
$
|
1,081.0
|
|
|
$
|
1,116.4
|
|
|
$
|
454.3
|
|
|
$
|
2,841.3
|
|
Gross profit
|
33.9
|
|
|
433.8
|
|
|
423.3
|
|
|
140.4
|
|
|
1,031.4
|
|
|||||
Income (loss) from continuing operations
|
(65.8
|
)
|
|
125.7
|
|
|
120.7
|
|
|
(15.2
|
)
|
|
165.4
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
0.1
|
|
|
—
|
|
|
1.0
|
|
|
(0.3
|
)
|
|
0.8
|
|
|||||
Net income (loss)
|
(65.7
|
)
|
|
125.7
|
|
|
121.7
|
|
|
(15.5
|
)
|
|
166.2
|
|
|||||
Income (loss) attributable to controlling interest
|
(65.7
|
)
|
|
125.7
|
|
|
121.7
|
|
|
(15.2
|
)
|
|
166.5
|
|
|||||
Basic income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
(1.06
|
)
|
|
$
|
2.03
|
|
|
$
|
1.97
|
|
|
$
|
(0.24
|
)
|
|
$
|
2.69
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.01
|
|
|||||
Basic net income (loss) per common share
|
$
|
(1.06
|
)
|
|
$
|
2.03
|
|
|
$
|
1.99
|
|
|
$
|
(0.24
|
)
|
|
$
|
2.70
|
|
Common shares used in basic EPS calculation
|
62.1
|
|
|
61.9
|
|
|
61.3
|
|
|
61.0
|
|
|
61.6
|
|
|||||
Diluted income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
(1.06
|
)
|
|
$
|
2.00
|
|
|
$
|
1.93
|
|
|
$
|
(0.24
|
)
|
|
$
|
2.64
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.01
|
|
|||||
Diluted net income (loss) per common share
|
$
|
(1.06
|
)
|
|
$
|
2.00
|
|
|
$
|
1.95
|
|
|
$
|
(0.24
|
)
|
|
$
|
2.65
|
|
Common shares and dilutive potential Common Shares used in diluted EPS calculation
|
62.1
|
|
|
62.9
|
|
|
62.4
|
|
|
61.0
|
|
|
62.7
|
|
|||||
FISCAL 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
195.1
|
|
|
$
|
1,007.9
|
|
|
$
|
1,137.1
|
|
|
$
|
433.6
|
|
|
$
|
2,773.7
|
|
Gross profit
|
30.6
|
|
|
377.2
|
|
|
440.3
|
|
|
130.1
|
|
|
978.2
|
|
|||||
Income (loss) from continuing operations
|
(68.2
|
)
|
|
99.1
|
|
|
147.7
|
|
|
(19.2
|
)
|
|
159.4
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
0.5
|
|
|
0.9
|
|
|
0.5
|
|
|
(0.2
|
)
|
|
1.7
|
|
|||||
Net income (loss)
|
(67.7
|
)
|
|
100.0
|
|
|
148.2
|
|
|
(19.4
|
)
|
|
161.1
|
|
|||||
Basic income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
(1.11
|
)
|
|
$
|
1.61
|
|
|
$
|
2.39
|
|
|
$
|
(0.31
|
)
|
|
$
|
2.58
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
—
|
|
|
0.03
|
|
|||||
Basic net income (loss) per common share
|
$
|
(1.10
|
)
|
|
$
|
1.62
|
|
|
$
|
2.40
|
|
|
$
|
(0.31
|
)
|
|
$
|
2.61
|
|
Common shares used in basic EPS calculation
|
61.4
|
|
|
61.6
|
|
|
61.7
|
|
|
62.0
|
|
|
61.7
|
|
|||||
Diluted income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
(1.11
|
)
|
|
$
|
1.59
|
|
|
$
|
2.36
|
|
|
$
|
(0.31
|
)
|
|
$
|
2.55
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
|||||
Diluted net income (loss) per common share
|
$
|
(1.10
|
)
|
|
$
|
1.60
|
|
|
$
|
2.37
|
|
|
$
|
(0.31
|
)
|
|
$
|
2.57
|
|
Common shares and dilutive potential Common Shares used in diluted EPS calculation
|
61.4
|
|
|
62.4
|
|
|
62.6
|
|
|
62.0
|
|
|
62.6
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,314.0
|
|
|
$
|
527.3
|
|
|
$
|
—
|
|
|
$
|
2,841.3
|
|
Cost of sales
|
—
|
|
|
1,440.5
|
|
|
369.4
|
|
|
—
|
|
|
1,809.9
|
|
|||||
Gross profit
|
—
|
|
|
873.5
|
|
|
157.9
|
|
|
—
|
|
|
1,031.4
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
532.8
|
|
|
147.7
|
|
|
—
|
|
|
680.5
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
48.2
|
|
|
2.8
|
|
|
—
|
|
|
51.0
|
|
|||||
Other income, net
|
—
|
|
|
(12.6
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
(14.7
|
)
|
|||||
Income from operations
|
—
|
|
|
305.1
|
|
|
9.5
|
|
|
—
|
|
|
314.6
|
|
|||||
Equity income in subsidiaries
|
(193.2
|
)
|
|
(8.9
|
)
|
|
—
|
|
|
202.1
|
|
|
—
|
|
|||||
Other non-operating income
|
(21.3
|
)
|
|
—
|
|
|
(22.2
|
)
|
|
43.5
|
|
|
—
|
|
|||||
Costs related to refinancing
|
10.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|||||
Interest expense
|
52.5
|
|
|
37.4
|
|
|
0.9
|
|
|
(43.5
|
)
|
|
47.3
|
|
|||||
Income from continuing operations before income taxes
|
151.3
|
|
|
276.6
|
|
|
30.8
|
|
|
(202.1
|
)
|
|
256.6
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(14.9
|
)
|
|
95.2
|
|
|
10.9
|
|
|
—
|
|
|
91.2
|
|
|||||
Income from continuing operations
|
166.2
|
|
|
181.4
|
|
|
19.9
|
|
|
(202.1
|
)
|
|
165.4
|
|
|||||
Income from discontinued operations, net of tax
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|
0.8
|
|
|||||
Net income
|
$
|
166.2
|
|
|
$
|
181.8
|
|
|
$
|
20.3
|
|
|
$
|
(202.1
|
)
|
|
$
|
166.2
|
|
Net loss attributable to noncontrolling interest
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.3
|
|
Net income attributable to controlling interest
|
$
|
166.5
|
|
|
$
|
182.1
|
|
|
$
|
20.3
|
|
|
$
|
(202.4
|
)
|
|
$
|
166.5
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
166.2
|
|
|
$
|
181.8
|
|
|
$
|
20.3
|
|
|
$
|
(202.1
|
)
|
|
$
|
166.2
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(8.2
|
)
|
|
—
|
|
|
(8.2
|
)
|
|
8.2
|
|
|
(8.2
|
)
|
|||||
Net change in derivatives
|
4.6
|
|
|
1.3
|
|
|
—
|
|
|
(1.3
|
)
|
|
4.6
|
|
|||||
Net change in pension and other post retirement benefits
|
(4.8
|
)
|
|
0.7
|
|
|
(5.5
|
)
|
|
4.8
|
|
|
(4.8
|
)
|
|||||
Total other comprehensive income (loss)
|
(8.4
|
)
|
|
2.0
|
|
|
(13.7
|
)
|
|
11.7
|
|
|
(8.4
|
)
|
|||||
Comprehensive income
|
$
|
157.8
|
|
|
$
|
183.8
|
|
|
$
|
6.6
|
|
|
$
|
(190.4
|
)
|
|
$
|
157.8
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
388.8
|
|
|
$
|
254.5
|
|
|
$
|
21.7
|
|
|
$
|
(424.1
|
)
|
|
$
|
240.9
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sale of long-lived assets
|
—
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||||
Proceeds from sale of business
|
—
|
|
|
6.6
|
|
|
0.6
|
|
|
—
|
|
|
7.2
|
|
|||||
Investments in property, plant and equipment
|
—
|
|
|
(81.0
|
)
|
|
(6.6
|
)
|
|
—
|
|
|
(87.6
|
)
|
|||||
Proceeds from sale and leaseback transaction
|
—
|
|
|
35.1
|
|
|
—
|
|
|
—
|
|
|
35.1
|
|
|||||
Investments in acquired businesses, net of cash acquired
|
—
|
|
|
(58.9
|
)
|
|
(55.1
|
)
|
|
—
|
|
|
(114.0
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(94.5
|
)
|
|
(61.1
|
)
|
|
—
|
|
|
(155.6
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under revolving and bank lines of credit and term loans
|
—
|
|
|
1,596.1
|
|
|
336.7
|
|
|
—
|
|
|
1,932.8
|
|
|||||
Repayments under revolving and bank lines of credit and term loans
|
—
|
|
|
(1,184.7
|
)
|
|
(340.6
|
)
|
|
—
|
|
|
(1,525.3
|
)
|
|||||
Repayment of 7.25% senior notes
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200.0
|
)
|
|||||
Financing and issuance fees
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|||||
Dividends paid
|
(230.8
|
)
|
|
(404.9
|
)
|
|
(19.2
|
)
|
|
424.1
|
|
|
(230.8
|
)
|
|||||
Purchase of common shares
|
(120.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120.0
|
)
|
|||||
Payments on seller notes
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
|||||
Cash received from exercise of stock options
|
20.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|||||
Intercompany financing
|
148.1
|
|
|
(151.1
|
)
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
(388.8
|
)
|
|
(139.5
|
)
|
|
(20.1
|
)
|
|
424.1
|
|
|
(124.3
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
20.5
|
|
|
(61.0
|
)
|
|
—
|
|
|
(40.5
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
|
2.6
|
|
|
127.2
|
|
|
—
|
|
|
129.8
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
|
$
|
23.1
|
|
|
$
|
66.2
|
|
|
$
|
—
|
|
|
$
|
89.3
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
23.1
|
|
|
$
|
66.2
|
|
|
$
|
—
|
|
|
$
|
89.3
|
|
Accounts receivable, net
|
—
|
|
|
124.6
|
|
|
99.4
|
|
|
—
|
|
|
224.0
|
|
|||||
Accounts receivable pledged
|
—
|
|
|
113.7
|
|
|
—
|
|
|
—
|
|
|
113.7
|
|
|||||
Inventories
|
—
|
|
|
282.1
|
|
|
103.0
|
|
|
—
|
|
|
385.1
|
|
|||||
Prepaid and other current assets
|
—
|
|
|
85.0
|
|
|
37.9
|
|
|
—
|
|
|
122.9
|
|
|||||
Total current assets
|
—
|
|
|
628.5
|
|
|
306.5
|
|
|
—
|
|
|
935.0
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
369.5
|
|
|
67.5
|
|
|
—
|
|
|
437.0
|
|
|||||
Goodwill
|
—
|
|
|
344.3
|
|
|
6.6
|
|
|
—
|
|
|
350.9
|
|
|||||
Intangible assets, net
|
—
|
|
|
256.8
|
|
|
45.9
|
|
|
—
|
|
|
302.7
|
|
|||||
Other assets
|
23.8
|
|
|
14.7
|
|
|
28.5
|
|
|
(34.3
|
)
|
|
32.7
|
|
|||||
Equity investment in subsidiaries
|
368.3
|
|
|
—
|
|
|
—
|
|
|
(368.3
|
)
|
|
—
|
|
|||||
Intercompany assets
|
878.8
|
|
|
—
|
|
|
—
|
|
|
(878.8
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,270.9
|
|
|
$
|
1,613.8
|
|
|
$
|
455.0
|
|
|
$
|
(1,281.4
|
)
|
|
$
|
2,058.3
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
85.8
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
91.9
|
|
Accounts payable
|
—
|
|
|
134.3
|
|
|
59.0
|
|
|
—
|
|
|
193.3
|
|
|||||
Other current liabilities
|
16.7
|
|
|
161.8
|
|
|
81.0
|
|
|
—
|
|
|
259.5
|
|
|||||
Total current liabilities
|
16.7
|
|
|
381.9
|
|
|
146.1
|
|
|
—
|
|
|
544.7
|
|
|||||
Long-term debt
|
681.8
|
|
|
480.0
|
|
|
12.4
|
|
|
(481.8
|
)
|
|
692.4
|
|
|||||
Other liabilities
|
5.1
|
|
|
235.7
|
|
|
47.4
|
|
|
(34.2
|
)
|
|
254.0
|
|
|||||
Equity investment in subsidiaries
|
—
|
|
|
106.5
|
|
|
—
|
|
|
(106.5
|
)
|
|
—
|
|
|||||
Intercompany liabilities
|
—
|
|
|
303.5
|
|
|
93.5
|
|
|
(397.0
|
)
|
|
—
|
|
|||||
Total liabilities
|
703.6
|
|
|
1,507.6
|
|
|
299.4
|
|
|
(1,019.5
|
)
|
|
1,491.1
|
|
|||||
Total shareholders’ equity - controlling interest
|
553.8
|
|
|
92.7
|
|
|
155.6
|
|
|
(248.4
|
)
|
|
553.7
|
|
|||||
Noncontrolling interest
|
13.5
|
|
|
13.5
|
|
|
—
|
|
|
(13.5
|
)
|
|
13.5
|
|
|||||
Total equity
|
$
|
567.3
|
|
|
$
|
106.2
|
|
|
$
|
155.6
|
|
|
$
|
(261.9
|
)
|
|
$
|
567.2
|
|
Total liabilities and shareholders’ equity
|
$
|
1,270.9
|
|
|
$
|
1,613.8
|
|
|
$
|
455.0
|
|
|
$
|
(1,281.4
|
)
|
|
$
|
2,058.3
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,280.4
|
|
|
$
|
493.3
|
|
|
$
|
—
|
|
|
$
|
2,773.7
|
|
Cost of sales
|
—
|
|
|
1,446.7
|
|
|
346.6
|
|
|
—
|
|
|
1,793.3
|
|
|||||
Cost of sales - impairment, restructuring and other
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
|||||
Gross profit
|
—
|
|
|
833.7
|
|
|
144.5
|
|
|
—
|
|
|
978.2
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
515.3
|
|
|
144.3
|
|
|
—
|
|
|
659.6
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
11.2
|
|
|
6.9
|
|
|
—
|
|
|
18.1
|
|
|||||
Other income, net
|
—
|
|
|
(6.9
|
)
|
|
(3.1
|
)
|
|
—
|
|
|
(10.0
|
)
|
|||||
Income (loss) from operations
|
—
|
|
|
314.1
|
|
|
(3.6
|
)
|
|
—
|
|
|
310.5
|
|
|||||
Equity income in subsidiaries
|
(180.9
|
)
|
|
1.3
|
|
|
—
|
|
|
179.6
|
|
|
—
|
|
|||||
Other non-operating income
|
(20.4
|
)
|
|
—
|
|
|
—
|
|
|
20.4
|
|
|
—
|
|
|||||
Interest expense
|
52.4
|
|
|
25.2
|
|
|
2.0
|
|
|
(20.4
|
)
|
|
59.2
|
|
|||||
Income (loss) from continuing operations before income taxes
|
148.9
|
|
|
287.6
|
|
|
(5.6
|
)
|
|
(179.6
|
)
|
|
251.3
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(12.2
|
)
|
|
105.8
|
|
|
(1.7
|
)
|
|
—
|
|
|
91.9
|
|
|||||
Income (loss) from continuing operations
|
161.1
|
|
|
181.8
|
|
|
(3.9
|
)
|
|
(179.6
|
)
|
|
159.4
|
|
|||||
Income from discontinued operations, net of tax
|
—
|
|
|
0.8
|
|
|
0.9
|
|
|
—
|
|
|
1.7
|
|
|||||
Net income (loss)
|
$
|
161.1
|
|
|
$
|
182.6
|
|
|
$
|
(3.0
|
)
|
|
$
|
(179.6
|
)
|
|
$
|
161.1
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
161.1
|
|
|
$
|
182.6
|
|
|
$
|
(3.0
|
)
|
|
$
|
(179.6
|
)
|
|
$
|
161.1
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
(5.2
|
)
|
|||||
Net change in derivatives
|
7.2
|
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
5.1
|
|
|||||
Net change in pension and other post retirement benefits
|
—
|
|
|
10.6
|
|
|
(1.0
|
)
|
|
—
|
|
|
9.6
|
|
|||||
Total other comprehensive income (loss)
|
7.2
|
|
|
8.5
|
|
|
(6.2
|
)
|
|
—
|
|
|
9.5
|
|
|||||
Comprehensive income (loss)
|
$
|
168.3
|
|
|
$
|
191.1
|
|
|
$
|
(9.2
|
)
|
|
$
|
(179.6
|
)
|
|
$
|
170.6
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
69.8
|
|
|
$
|
245.9
|
|
|
$
|
114.1
|
|
|
$
|
(87.8
|
)
|
|
$
|
342.0
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sale of long-lived assets
|
—
|
|
|
0.2
|
|
|
3.4
|
|
|
—
|
|
|
3.6
|
|
|||||
Investments in property, plant and equipment
|
—
|
|
|
(44.6
|
)
|
|
(15.5
|
)
|
|
—
|
|
|
(60.1
|
)
|
|||||
Investment in unconsolidated affiliate
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|||||
Investments in acquired businesses, net of cash acquired
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(52.1
|
)
|
|
(12.1
|
)
|
|
—
|
|
|
(64.2
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under revolving and bank lines of credit and term loans
|
—
|
|
|
1,130.4
|
|
|
344.4
|
|
|
—
|
|
|
1,474.8
|
|
|||||
Repayments under revolving and bank lines of credit and term loans
|
—
|
|
|
(1,078.5
|
)
|
|
(603.6
|
)
|
|
—
|
|
|
(1,682.1
|
)
|
|||||
Dividends paid
|
(87.8
|
)
|
|
(87.8
|
)
|
|
—
|
|
|
87.8
|
|
|
(87.8
|
)
|
|||||
Payments on seller notes
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|||||
Cash received from exercise of stock options
|
13.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.3
|
|
|||||
Intercompany financing
|
4.7
|
|
|
(159.1
|
)
|
|
154.4
|
|
|
—
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
(69.8
|
)
|
|
(193.8
|
)
|
|
(104.8
|
)
|
|
87.8
|
|
|
(280.6
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|||||
Net decrease in cash and cash equivalents
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
(2.1
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
|
2.6
|
|
|
129.3
|
|
|
—
|
|
|
131.9
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
127.2
|
|
|
$
|
—
|
|
|
$
|
129.8
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
127.2
|
|
|
$
|
—
|
|
|
$
|
129.8
|
|
Accounts receivable, net
|
—
|
|
|
119.7
|
|
|
86.9
|
|
|
—
|
|
|
206.6
|
|
|||||
Accounts Receivable, pledged
|
—
|
|
|
106.7
|
|
|
—
|
|
|
—
|
|
|
106.7
|
|
|||||
Inventories
|
—
|
|
|
247.2
|
|
|
77.7
|
|
|
—
|
|
|
324.9
|
|
|||||
Prepaid and other current assets
|
—
|
|
|
76.4
|
|
|
36.6
|
|
|
—
|
|
|
113.0
|
|
|||||
Total current assets
|
—
|
|
|
552.6
|
|
|
328.4
|
|
|
—
|
|
|
881.0
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
377.9
|
|
|
44.4
|
|
|
—
|
|
|
422.3
|
|
|||||
Goodwill
|
—
|
|
|
314.4
|
|
|
0.7
|
|
|
—
|
|
|
315.1
|
|
|||||
Intangible assets, net
|
—
|
|
|
244.8
|
|
|
39.6
|
|
|
—
|
|
|
284.4
|
|
|||||
Other assets
|
22.4
|
|
|
19.5
|
|
|
26.5
|
|
|
(34.0
|
)
|
|
34.4
|
|
|||||
Equity investment in subsidiaries
|
317.1
|
|
|
—
|
|
|
—
|
|
|
(317.1
|
)
|
|
—
|
|
|||||
Intercompany assets
|
871.7
|
|
|
—
|
|
|
—
|
|
|
(871.7
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,211.2
|
|
|
$
|
1,509.2
|
|
|
$
|
439.6
|
|
|
$
|
(1,222.8
|
)
|
|
$
|
1,937.2
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
87.3
|
|
|
$
|
5.1
|
|
|
$
|
—
|
|
|
$
|
92.4
|
|
Accounts payable
|
—
|
|
|
83.9
|
|
|
53.8
|
|
|
—
|
|
|
137.7
|
|
|||||
Other current liabilities
|
16.0
|
|
|
183.4
|
|
|
80.3
|
|
|
—
|
|
|
279.7
|
|
|||||
Total current liabilities
|
16.0
|
|
|
354.6
|
|
|
139.2
|
|
|
—
|
|
|
509.8
|
|
|||||
Long-term debt
|
473.0
|
|
|
67.9
|
|
|
10.2
|
|
|
(73.0
|
)
|
|
478.1
|
|
|||||
Other liabilities
|
11.7
|
|
|
213.3
|
|
|
47.8
|
|
|
(34.0
|
)
|
|
238.8
|
|
|||||
Equity investment in subsidiaries
|
—
|
|
|
173.3
|
|
|
—
|
|
|
(173.3
|
)
|
|
—
|
|
|||||
Intercompany liabilities
|
—
|
|
|
652.1
|
|
|
146.6
|
|
|
(798.7
|
)
|
|
—
|
|
|||||
Total liabilities
|
500.7
|
|
|
1,461.2
|
|
|
343.8
|
|
|
(1,079.0
|
)
|
|
1,226.7
|
|
|||||
Total shareholders’ equity
|
710.5
|
|
|
48.0
|
|
|
95.8
|
|
|
(143.8
|
)
|
|
710.5
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,211.2
|
|
|
$
|
1,509.2
|
|
|
$
|
439.6
|
|
|
$
|
(1,222.8
|
)
|
|
$
|
1,937.2
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,270.7
|
|
|
$
|
499.8
|
|
|
$
|
—
|
|
|
$
|
2,770.5
|
|
Cost of sales
|
—
|
|
|
1,464.8
|
|
|
348.7
|
|
|
—
|
|
|
1,813.5
|
|
|||||
Cost of sales — product registration and recall matters
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Gross profit
|
—
|
|
|
805.5
|
|
|
151.1
|
|
|
—
|
|
|
956.6
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
550.8
|
|
|
152.5
|
|
|
—
|
|
|
703.3
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
7.9
|
|
|
(0.8
|
)
|
|
—
|
|
|
7.1
|
|
|||||
Product registration and recall matters
|
—
|
|
|
7.8
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
|||||
Other income, net
|
—
|
|
|
(1.1
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
(2.8
|
)
|
|||||
Income from operations
|
—
|
|
|
240.1
|
|
|
1.1
|
|
|
—
|
|
|
241.2
|
|
|||||
Equity income in subsidiaries
|
(126.4
|
)
|
|
1.6
|
|
|
—
|
|
|
124.8
|
|
|
—
|
|
|||||
Other non-operating income
|
(24.5
|
)
|
|
—
|
|
|
—
|
|
|
24.5
|
|
|
—
|
|
|||||
Interest expense
|
56.5
|
|
|
25.4
|
|
|
4.4
|
|
|
(24.5
|
)
|
|
61.8
|
|
|||||
Income (loss) from continuing operations before income taxes
|
94.4
|
|
|
213.1
|
|
|
(3.3
|
)
|
|
(124.8
|
)
|
|
179.4
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(12.1
|
)
|
|
80.9
|
|
|
(1.0
|
)
|
|
—
|
|
|
67.8
|
|
|||||
Income (loss) from continuing operations
|
106.5
|
|
|
132.2
|
|
|
(2.3
|
)
|
|
(124.8
|
)
|
|
111.6
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
(5.8
|
)
|
|
0.7
|
|
|
—
|
|
|
(5.1
|
)
|
|||||
Net income (loss)
|
$
|
106.5
|
|
|
$
|
126.4
|
|
|
$
|
(1.6
|
)
|
|
$
|
(124.8
|
)
|
|
$
|
106.5
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
106.5
|
|
|
$
|
126.4
|
|
|
$
|
(1.6
|
)
|
|
$
|
(124.8
|
)
|
|
$
|
106.5
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|||||
Net change in derivatives
|
0.1
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||||
Net change in pension and other post retirement benefits
|
—
|
|
|
(1.2
|
)
|
|
(9.5
|
)
|
|
—
|
|
|
(10.7
|
)
|
|||||
Total other comprehensive income (loss)
|
0.1
|
|
|
(2.2
|
)
|
|
(7.2
|
)
|
|
—
|
|
|
(9.3
|
)
|
|||||
Comprehensive income (loss)
|
$
|
106.6
|
|
|
$
|
124.2
|
|
|
$
|
(8.8
|
)
|
|
$
|
(124.8
|
)
|
|
$
|
97.2
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
72.9
|
|
|
$
|
163.6
|
|
|
$
|
9.8
|
|
|
$
|
(92.9
|
)
|
|
$
|
153.4
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sale of long-lived assets
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Investments in property, plant and equipment
|
—
|
|
|
(61.2
|
)
|
|
(8.2
|
)
|
|
—
|
|
|
(69.4
|
)
|
|||||
Investment in acquired businesses, net of cash acquired
|
—
|
|
|
(6.7
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(7.0
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(67.2
|
)
|
|
(8.5
|
)
|
|
—
|
|
|
(75.7
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under revolving and bank lines of credit and term loans
|
—
|
|
|
853.4
|
|
|
830.6
|
|
|
—
|
|
|
1,684.0
|
|
|||||
Repayments under revolving and bank lines of credit and term loans
|
—
|
|
|
(1,016.2
|
)
|
|
(678.4
|
)
|
|
—
|
|
|
(1,694.6
|
)
|
|||||
Dividends paid
|
(75.4
|
)
|
|
(92.9
|
)
|
|
—
|
|
|
92.9
|
|
|
(75.4
|
)
|
|||||
Purchase of Common Shares
|
(17.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.5
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
6.6
|
|
|
—
|
|
|
—
|
|
|
6.6
|
|
|||||
Cash received from exercise of stock options
|
17.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.6
|
|
|||||
Intercompany financing
|
2.4
|
|
|
151.0
|
|
|
(153.4
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
(72.9
|
)
|
|
(98.1
|
)
|
|
(1.2
|
)
|
|
92.9
|
|
|
(79.3
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|||||
Net (decrease) increase in cash and cash equivalents
|
—
|
|
|
(1.7
|
)
|
|
2.7
|
|
|
—
|
|
|
1.0
|
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
|
4.3
|
|
|
126.6
|
|
|
—
|
|
|
130.9
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
129.3
|
|
|
$
|
—
|
|
|
$
|
131.9
|
|
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
||||||||||
Classification
|
Balance
at
Beginning
of Period
|
|
Reserves
Acquired
|
|
Additions
Charged
to
Expense
|
|
Deductions
Credited
and
Write-Offs
|
|
Balance
at End of
Period
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Valuation and qualifying accounts deducted from the assets to which they apply:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
9.5
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
$
|
(8.6
|
)
|
|
$
|
7.5
|
|
Income tax valuation allowance
|
51.5
|
|
|
—
|
|
|
(1.5
|
)
|
|
(1.7
|
)
|
|
48.3
|
|
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
||||||||||
Classification
|
Balance
at
Beginning
of Period
|
|
Reserves
Acquired
|
|
Additions
Charged
to
Expense
|
|
Deductions
Credited
and
Write-Offs
|
|
Balance
at End of
Period
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Valuation and qualifying accounts deducted from the assets to which they apply:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
10.5
|
|
|
$
|
—
|
|
|
$
|
5.5
|
|
|
$
|
(6.5
|
)
|
|
$
|
9.5
|
|
Income tax valuation allowance
|
48.4
|
|
|
—
|
|
|
(4.0
|
)
|
|
7.1
|
|
|
51.5
|
|
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
||||||||||
Classification
|
Balance
at
Beginning
of Period
|
|
Reserves
Acquired
|
|
Additions
Charged
to
Expense
|
|
Deductions
Credited
and
Write-Offs
|
|
Balance
at End of
Period
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Valuation and qualifying accounts deducted from the assets to which they apply:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
12.9
|
|
|
$
|
—
|
|
|
$
|
19.1
|
|
|
$
|
(21.5
|
)
|
|
$
|
10.5
|
|
Income tax valuation allowance
|
44.3
|
|
|
—
|
|
|
(0.6
|
)
|
|
4.7
|
|
|
48.4
|
|
|
||||
Exhibit
No.
|
|
Description
|
|
Location
|
3.1(a)
|
|
Initial Articles of Incorporation of The Scotts Miracle-Gro Company as filed with the Ohio Secretary of State on November 22, 2004
|
|
Incorporated herein by reference to the Current Report on Form 8-K of The Scotts Miracle-Gro Company (the “Registrant”) filed March 24, 2005 (File No. 1-11593) [Exhibit 3.1]
|
|
|
|
|
|
3.1(b)
|
|
Certificate of Amendment by Shareholders to Articles of Incorporation of The Scotts Miracle-Gro Company as filed with the Ohio Secretary of State on March 18, 2005
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed March 24, 2005 (File No. 1-11593) [Exhibit 3.2]
|
|
|
|
|
|
3.2
|
|
Code of Regulations of The Scotts Miracle-Gro Company
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed March 24, 2005 (File No. 1-11593) [Exhibit 3.3]
|
|
|
|
|
|
4.1(a)
|
|
Indenture, dated as of January 14, 2010, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed January 14, 2010 (File No. 1-11593) [Exhibit 4.1]
|
|
|
|
|
|
4.1(b)
|
|
First Supplemental Indenture, dated as of January 14, 2010, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed January 14, 2010 (File No. 1-11593) [Exhibit 4.2]
|
|
|
|
|
|
4.1(c)
|
|
Second Supplemental Indenture, dated as of September 28, 2011, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 2011 (File No. 1-11593) [Exhibit 4.1(c)]
|
|
|
|
|
|
4.1(d)
|
|
Third Supplemental Indenture, dated as of September 30, 2013, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2013 (File No. 1-11593) [Exhibit 4.1]
|
|
|
|
|
|
4.1(e)
|
|
Form of 7.25% Senior Notes due 2018
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed January 14, 2010 (File No. 1-11593) [Included in Exhibit 4.2]
|
|
|
|
|
|
4.2(a)
|
|
Indenture, dated as of December 16, 2010, by and among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed December 16, 2010 (File No. 1-11593) [Exhibit 4.1]
|
|
|
|
|
|
4.2(b)
|
|
First Supplemental Indenture, dated as of September 28, 2011, by and among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 2011 (File No. 1-11593) [Exhibit 4.2(b)]
|
|
|
|
|
|
4.2(c)
|
|
Second Supplemental Indenture, dated as of September 30, 2013, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2013 (File No. 1-11593) [Exhibit 4.2]
|
|
|
|
|
|
4.2(d)
|
|
Third Supplemental Indenture, dated as of February 25, 2014, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. 1-11593) [Exhibit 4.1]
|
|
|
|
|
|
4.2(e)
|
|
Form of 6.625% Senior Notes due 2020
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed December 16, 2010 (File No. 1-11593) [Included in Exhibit 4.1]
|
|
|
|
|
|
|
||||
4.2(f)
|
|
Registration Rights Agreement, dated as of December 16, 2010, by and among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers named therein
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed December 16, 2010 (File No. 1-11593) [Exhibit 4.3]
|
|
|
|
|
|
4.3
|
|
Agreement to furnish copies of instruments and agreements defining rights of holders of long-term debt
|
|
*
|
|
|
|
|
|
10.1(a)
|
|
Amended and Restated Agreement and Plan of Merger, dated as of May 19, 1995, among Stern’s Miracle-Gro Products, Inc., Stern’s Nurseries, Inc., Miracle-Gro Lawn Products Inc., Miracle-Gro Products Limited, Hagedorn Partnership, L.P., the general partners of Hagedorn Partnership, L.P., Horace Hagedorn, Community Funds, Inc., and John Kenlon, The Scotts Company and ZYX Corporation
|
|
Incorporated herein by reference to the Current Report on Form 8-K of The Scotts Company, a Delaware corporation, filed June 2, 1995 (File No. 0-19768) [Exhibit 2(b)]
|
|
|
|
|
|
10.1(b)
|
|
First Amendment to Amended and Restated Agreement and Plan of Merger, made and entered into as of October 1, 1999, among The Scotts Company, Scotts’ Miracle-Gro Products, Inc. (as successor to ZYX Corporation and Stern’s Miracle-Gro Products, Inc.), Miracle-Gro Lawn Products Inc., Miracle-Gro Products Limited, Hagedorn Partnership, L.P., Community Funds, Inc., Horace Hagedorn and John Kenlon, and James Hagedorn, Katherine Hagedorn Littlefield, Paul Hagedorn, Peter Hagedorn, Robert Hagedorn and Susan Hagedorn
|
|
Incorporated herein by reference to the Current Report on Form 8-K of The Scotts Company, an Ohio corporation, filed October 5, 1999 (File No. 1-13292) [Exhibit 2]
|
|
|
|
|
|
10.2
|
|
Third Amended and Restated Credit Agreement, dated as of December 20, 2013, by and among The Scotts Miracle-Gro Company as the “Borrower”; the Subsidiary Borrowers (as defined in the Third Amended and Restated Credit Agreement); JPMorgan Chase Bank, N.A., as Administrative Agent; Bank of America, N.A., as Syndication Agent; CoBank, ACB, BNP Paribas, Crédit Agricole Corporate and Investment Bank, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland,” New York Branch, Citizens Bank of Pennsylvania, and Wells Fargo Bank, N.A., as Documentation Agents; and the several other banks and other financial institutions from time to time parties to the Third Amended and Restated Credit Agreement (collectively, the “Lenders”)
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed December 26, 2013 (File No. 1-11593) [Exhibit 4.1]
|
|
|
|
|
|
10.3
|
|
Third Amended and Restated Guarantee and Collateral Agreement, dated as of December 20, 2013, made by The Scotts Miracle-Gro Company, each domestic Subsidiary Borrower under the Third Amended and Restated Credit Agreement, and certain of its and their domestic subsidiaries, in favor of JPMorgan Chase Bank, N.A., as Administrative Agent
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed December 26, 2013 (File No. 1-11593) [Exhibit 4.2]
|
|
|
|
|
|
10.4(a)†
|
|
The Scotts Miracle-Gro Company Amended and Restated 1996 Stock Option Plan (effective as of October 30, 2007)
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2007 (File No. 1-11593) [Exhibit 10(d)(4)]
|
|
|
|
|
|
10.4(b)†
|
|
Specimen form of Stock Option Agreement for Non-Qualified Stock Options granted to employees under The Scotts Company 1996 Stock Option Plan (now known as The Scotts Miracle-Gro Company Amended and Restated 1996 Stock Option Plan)
|
|
Incorporated herein by reference to the Current Report on Form 8-K of The Scotts Company, an Ohio corporation, filed November 19, 2004 (File No. 1-11593) [Exhibit 10.7]
|
|
|
|
|
|
|
||||
10.5(a)†
|
|
The Scotts Miracle-Gro Company Amended and Restated 2003 Stock Option and Incentive Equity Plan (effective as of October 30, 2007)
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2007 (File No. 1-11593) [Exhibit 10(j)(3)]
|
|
|
|
|
|
10.5(b)†
|
|
Specimen form of Award Agreement for Directors used to evidence grants of Nonqualified Stock Options made under The Scotts Miracle-Gro Company 2003 Stock Option and Incentive Equity Plan (now known as The Scotts Miracle-Gro Company Amended and Restated 2003 Stock Option and Incentive Equity Plan) [post-2003 version]
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2005 (File No. 1-11593) [Exhibit 10(v)]
|
|
|
|
|
|
10.6(a)†
|
|
The Scotts Miracle-Gro Company Long-Term Incentive Plan (reflects amendment and restatement of plan formerly known as The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan) [effective as of January 17, 2013]
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed January 24, 2013 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.6(b)†
|
|
Specimen form of Award Agreement for Nonemployee Directors used to evidence grants of Time-Based Nonqualified Stock Options made under The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan)
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed February 2, 2006 (File No. 1-11593) [Exhibit 10.3]
|
|
|
|
|
|
10.6(c)(i)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [January 23, 2009 through January 19, 2012 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2009 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.6(c)(ii)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [January 20, 2012 through January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2011 (File No. 1-11593) [Exhibit 10.4]
|
|
|
|
|
|
10.6(c)(iii)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grant of Deferred Stock Units made on January 20, 2012 to Adam Hanft under The Scotts Miracle-Gro Company Amended and Restated Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan)
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2011 (File No. 1-11593) [Exhibit 10.5]
|
|
|
|
|
|
10.6(c)(iv)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made under The Scotts Miracle-Gro Company Long-Term Incentive Plan [January 18, 2013 through January 30, 2014 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.3]
|
|
|
|
|
|
10.6(c)(v)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units which may be made under The Scotts Miracle-Gro Company Long-Term Incentive Plan [post-January 30, 2014 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2013 (File No. 1-11593) [Exhibit 10.8]
|
|
|
|
|
|
|
||||
10.6(c)(vi)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made on May 1, 2014 under The Scotts Miracle-Gro Company Long-Term Incentive Plan
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. 1-11593) [Exhibit 10.11]
|
|
|
|
|
|
10.6(d)(i)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [Deferral of Cash Retainer — January 22, 2010 through January 20, 2011 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended January 2, 2010 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.6(d)(ii)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [Deferral of Cash Retainer — January 21, 2011 through January 19, 2012 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended January 1, 2011 (File No. 1-11593) [Exhibit 10.4]
|
|
|
|
|
|
10.6(d)(iii)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [Deferral of Cash Retainer — January 20, 2012 through January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2011 (File No. 1-11593) [Exhibit 10.6]
|
|
|
|
|
|
10.6(d)(iv)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units made under The Scotts Miracle-Gro Company Long-Term Incentive Plan [Deferral of Cash Retainer — January 18, 2013 through January 30, 2014 verison]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.2]
|
|
|
|
|
|
10.6(d)(v)†
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants of Deferred Stock Units which may be made under The Scotts Miracle-Gro Company Long-Term Incentive Plan [Deferral of Cash Retainer — post-January 30, 2014 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2013 (File No. 1-11593) [Exhibit 10.9]
|
|
|
|
|
|
10.6(e)†
|
|
Specimen form of Award Agreement used to evidence grants of Restricted Stock Units, Performance Shares, Nonqualified Stock Options, Incentive Stock Options, Restricted Stock and Stock Appreciation Rights made under The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [pre-October 30, 2007 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2005 (File No. 1-11593) [Exhibit 10(b)]
|
|
|
|
|
|
|
||||
10.6(f)(i)†
|
|
Specimen form of Restricted Stock Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants of Restricted Stock Units made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [January 20, 2012 through January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2011 (File No. 1-11593) [Exhibit 10.2]
|
|
|
|
|
|
10.6(f)(ii)†
|
|
Specimen form of Restricted Stock Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants of Restricted Stock Units which may be made under The Scotts Miracle-Gro Company Long-Term Incentive Plan [post-January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.5]
|
|
|
|
|
|
10.6(f)(iii)†
|
|
Form of Restricted Stock Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grant of Restricted Stock Units made on April 1, 2013 to Lawrence A. Hilsheimer under The Scotts Miracle-Gro Company Long-Term Incentive Plan
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.6(f)(iv)†
|
|
Form of Restricted Stock Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grant of Restricted Stock Units made on December 11, 2013 to James Hagedorn under The Scotts Miracle-Gro Company Long-Term Incentive Plan
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2013 (File No. 1-11593) [Exhibit 10.10]
|
|
|
|
|
|
10.6(f)(v)†
|
|
Specimen form of Restricted Stock Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants of Restricted Stock Units made on January 31, 2014 to Barry W. Sanders and Denise S. Stump under The Scotts Miracle-Gro Company Long-Term Incentive Plan
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2013 (File No. 1-11593) [Exhibit 10.11]
|
|
|
|
|
|
10.6(g)(i)†
|
|
Specimen form of Performance Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants of Performance Units made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [January 20, 2012 through January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2011 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.6(g)(ii)†
|
|
Specimen form of Performance Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants of Performance Units which may be made under The Scotts Miracle-Gro Company Long-Term Incentive Plan [post-January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.6]
|
|
|
|
|
|
10.6(g)(iii)†
|
|
Specimen form of Performance Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants of Performance Units made on January 18, 2013 to James Hagedorn under The Scotts Miracle-Gro Company Long-Term Incentive Plan
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2013 (File No. 1-11593) [Exhibit 10.8]
|
|
|
|
|
|
10.6(h)(i)†
|
|
Specimen form of Nonqualified Stock Option Award Agreement for Employees used to evidence grants of Nonqualified Stock Options made under The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [October 30, 2007 through October 8, 2008 version]
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2007 (File No. 1-11593) [Exhibit 10(t)(3)]
|
|
|
|
|
|
|
||||
10.6(h)(ii)†
|
|
Specimen form of Nonqualified Stock Option Award Agreement for Employees used to evidence grants of Nonqualified Stock Options made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [January 20, 2010 through January 19, 2012 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended January 2, 2010 (File No. 1-11593) [Exhibit 10.4]
|
|
|
|
|
|
10.6(h)(iii)†
|
|
Specimen form of Nonqualified Stock Option Award Agreement for Employees used to evidence grants of Nonqualified Stock Options made under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) [January 20, 2012 through January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2011 (File No. 1-11593) [Exhibit 10.3]
|
|
|
|
|
|
10.6(h)(iv)†
|
|
Specimen form of Nonqualified Stock Option Award Agreement for Employees used to evidence grants of Nonqualified Stock Options which may be made under The Scotts Miracle-Gro Company Long-Term Incentive Plan [post-January 17, 2013 version]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.7]
|
|
|
|
|
|
10.7(a)†
|
|
The Scotts Company LLC Amended and Restated Executive Incentive Plan (effective as of January 30, 2014)
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed February 5, 2014 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.7(b)(i)†
|
|
Specimen form of Employee Confidentiality, Noncompetition, Nonsolicitation Agreement for employees participating in The Scotts Company Executive/Management Incentive Plan (now known as The Scotts Company LLC Amended and Restated Executive Incentive Plan) [2005 version]
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 (File No. 1-11593) [Exhibit 10.2(b)(i)]
|
|
|
|
|
|
10.7(b)(ii)†
|
|
Specimen form of Employee Confidentiality, Noncompetition, Nonsolicitation Agreement for employees participating in The Scotts Company LLC Executive/Management Incentive Plan (now known as The Scotts Company LLC Amended and Restated Executive Incentive Plan) [post-2005 version]
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended July 1, 2006 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.7(b)(iii)†
|
|
Employee Confidentiality, Noncompetition, Nonsolicitation Agreement, dated as of December 12, 2013, by and between The Scotts Company LLC, all companies controlled by, controlling or under common control with The Scotts Company LLC, and James Hagedorn
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed December 17, 2013 (File No. 1-11593) [Exhibit 10.2]
|
|
|
|
|
|
10.7(c)†
|
|
Form of Retention Award Agreement evidencing the payment of a cash bonus on April 12, 2013 and the grant of Restricted Stock Units on May 8, 2013 under The Scotts Miracle-Gro Company Amended and Restated 2006 Long-Term Incentive Plan (now known as The Scotts Miracle-Gro Company Long-Term Incentive Plan) to Thomas Coleman (executed by The Scotts Company LLC on May 14, 2013 and by Thomas Coleman on May 16, 2013)
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. 1-11593) [Exhibit 10.2]
|
|
|
|
|
|
10.7(d)†
|
|
Executive Officers of The Scotts Miracle-Gro Company who are parties to form of Employee Confidentiality, Noncompetition, Nonsolicitation Agreement for employees participating in The Scotts Company LLC Amended and Restated Executive Incentive Plan incorporated in this Annual Report on Form 10-K as Exhibit 10.7(b)(ii)
|
|
*
|
|
|
|
|
|
10.8(a)(i)†
|
|
The Scotts Company LLC Executive Retirement Plan, As Amended and Restated as of January 1, 2011 (executed December 22, 2010)
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended January 1, 2011 (File No. 1-11593) [Exhibit 10.3]
|
|
|
|
|
|
|
||||
10.8(a)(ii)†
|
|
First Amendment to The Scotts Company LLC Executive Retirement Plan, as Amended and Restated as of January 1, 2011 (effective as of January 1, 2011)
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.8]
|
|
|
|
|
|
10.8(a)(iii)†
|
|
Second Amendment to The Scotts Company LLC Executive Retirement Plan, as Amended and Restated as of January 1, 2011 (effective as of January 1, 2012)
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.9]
|
|
|
|
|
|
10.8(a)(iv)†
|
|
Third Amendment to The Scotts Company LLC Executive Retirement Plan, as Amended and Restated as of January 1, 2011 (effective as of January 1, 2013)
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2012 (File No. 1-11593) [Exhibit 10.10]
|
|
|
|
|
|
10.8(a)(v)†
|
|
Fourth Amendment to The Scotts Company LLC Executive Retirement Plan, as Amended and Restated as of January 1, 2011 (effective as of January 1, 2014)
|
|
Incorporated herein by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended December 28, 2013 (File No. 1-11593) [Exhibit 10.5]
|
|
|
|
|
|
10.8(b)†
|
|
Form of Executive Retirement Plan Retention Award Agreement between The Scotts Company LLC and each of Barry W. Sanders, Denise S. Stump and Michael C. Lukemire (entered into on November 4, 2008)
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed October 15, 2008 (File No. 1-11593) [Exhibit 10.2]
|
|
|
|
|
|
10.9†
|
|
Summary of Compensation for Nonemployee Directors of The Scotts Miracle-Gro Company (effective as of May 1, 2014)
|
|
*
|
|
|
|
|
|
10.10(a)†
|
|
Executive Severance Agreement, dated as of December 11, 2013, by and between The Scotts Company LLC and James Hagedorn
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed December 17, 2013 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.10(b)†
|
|
Consulting Agreement, dated as of February 7, 2014, between The Scotts Miracle-Gro Company and Dr. Michael Porter
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. 1-11593) [Exhibit 10.8]
|
|
|
|
|
|
10.10(c)†
|
|
Separation Agreement and Release of All Claims, by and between The Scotts Company LLC (executed on January 21, 2014) and James R. Lyski (executed on January 22, 2014)
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed January 23, 2014 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.10(d)†
|
|
Consulting Agreement, dated February 7, 2014, between The Scotts Miracle-Gro Company and Adam Hanft [expired on August 1, 2014]
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 29, 2014 (File No. 1-11593) [Exhibit 10.9]
|
|
|
|
|
|
10.10(e)†
|
|
Separation Agreement and Release of All Claims, entered into by and between The Scotts Company LLC (executed on April 15, 2014) and Lawrence A. Hilsheimer (executed on April 17, 2014)
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed April 17, 2014 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.11(a)†
|
|
The Scotts Company LLC Executive Severance Plan, adopted on May 4, 2011
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed May 10, 2011 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.11(b)†
|
|
Form of Tier 1 Participation Agreement under The Scotts Company LLC Executive Severance Plan
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed May 10, 2011 (File No. 1-11593) [Exhibit 10.2]
|
|
|
|
|
|
10.11(c)†
|
|
Executive Officers of The Scotts Miracle-Gro Company who are parties to form of Tier 1 Participation Agreement under The Scotts Company LLC Executive Severance Plan incorporated in this Annual Report on Form 10-K as Exhibit 10.11(b)
|
|
*
|
|
|
|
|
|
|
||||
10.12(a)
|
|
Amended and Restated Exclusive Agency and Marketing Agreement, effective as of September 30, 1998, between Monsanto Company and The Scotts Company LLC (as successor to The Scotts Company, an Ohio corporation)
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2005 (File No. 1-11593) [Exhibit 10(x)]
|
|
|
|
|
|
10.12(b)
|
|
Letter Agreement, dated March 10, 2005, amending the Amended and Restated Exclusive Agency and Marketing Agreement, dated as of September 30, 1998, between Monsanto Company and The Scotts Company LLC (as successor to The Scotts Company, an Ohio corporation)
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2009 (File No. 1-11593) [Exhibit 10.17(b)]
|
|
|
|
|
|
10.12(c)
|
|
Letter Agreement, dated March 28, 2008, amending the Amended and Restated Exclusive Agency and Marketing Agreement, dated as of September 30, 1998, between Monsanto Company and The Scotts Company LLC
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 (File No. 1-11593) [Exhibit 10.18(b)]
|
|
|
|
|
|
10.13
|
|
Purchase Agreement, dated December 13, 2010, among The Scotts Miracle-Gro Company, the subsidiary guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers named therein
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed December 16, 2010 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.14
|
|
Share and Business Sale Agreement, dated February 23, 2011, by and among The Scotts Company LLC, as Seller, each of the Share Sellers and Business Sellers (as defined therein), Israel Chemicals Ltd., as Purchaser, each of the Share Purchasers and Business Purchasers (as defined therein) and The Scotts Miracle-Gro Company, as Seller Guarantor
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed March 1, 2011 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.15(a)
|
|
Master Accounts Receivable Purchase Agreement, dated as of November 15, 2012, by and among The Scotts Miracle-Gro Company, The Scotts Company LLC, The Bank of Nova Scotia, Suntrust Bank, RB Receivables LLC and Mizuho Corporate Bank, Ltd., as Administrative Agent and as a Bank
|
|
Incorporated herein by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012 (File No. 1-11593) [Exhibit 10.16]
|
|
|
|
|
|
10.15(b)
|
|
First Amendment, dated as of October 25, 2013, to the Master Accounts Receivable Purchase Agreement, dated as of November 15, 2012, among The Scotts Miracle-Gro Company, The Scotts Company LLC, The Bank of Nova Scotia, Suntrust Bank, RB Receivables LLC and Mizuho Bank, Ltd., as Administrative Agent and as a Bank
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed October 31, 2013 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
10.15(c)
|
|
Second Amendment, dated as of August 29, 2014, to the Master Accounts Receivable Purchase Agreement, dated as of November 15, 2012, among The Scotts Miracle-Gro Company, The Scotts Company LLC, The Bank of Nova Scotia, Suntrust Bank, RB Receivables LLC and Mizuho Bank, Ltd., as Administrative Agent and as a Bank
|
|
Incorporated herein by reference to the Registrant’s Current Report on Form 8-K filed September 4, 2014 (File No. 1-11593) [Exhibit 10.1]
|
|
|
|
|
|
12
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
*
|
|
|
|
|
|
14
|
|
The Scotts Miracle-Gro Company Code of Business Conduct & Ethics (as revised effective January 18, 2012)
|
|
Incorporated herein by reference to the Registrant's Current Report on Form 8-K filed January 24, 2012 (File No. 1-11593) [Exhibit 14.1]
|
|
|
|
|
|
21
|
|
Subsidiaries of The Scotts Miracle-Gro Company
|
|
*
|
|
|
|
|
|
23
|
|
Consent of Independent Registered Public Accounting Firm — Deloitte & Touche LLP
|
|
*
|
|
|
|
|
|
24
|
|
Powers of Attorney of Executive Officers and Directors of The Scotts Miracle-Gro Company
|
|
*
|
|
|
|
|
|
|
||||
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certifications (Principal Executive Officer)
|
|
*
|
|
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certifications (Principal Financial Officer)
|
|
*
|
|
|
|
|
|
32
|
|
Section 1350 Certifications (Principal Executive Officer and Principal Financial Officer)
|
|
*
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
*
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
*
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
*
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
*
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
*
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
*
|
*
|
Filed or furnished herewith.
|
†
|
Management contract, compensatory plan or arrangement.
|
Re:
|
The Scotts Miracle-Gro Company – Annual Report on Form 10-K for the fiscal year ended September 30, 2014
|
|
|
|
|
|
Date of Employee Confidentiality,
|
Name and Principal Position
|
|
Noncompetition, Nonsolicitation
|
with The Scotts Miracle-Gro Company
|
|
Agreement
|
|
|
|
Barry W. Sanders, President and Chief Operating Officer
|
|
April 22, 2005
|
|
|
|
Thomas Randal Coleman, Executive Vice President and Chief Financial Officer
|
|
May 15, 2006
|
|
|
|
Michael C. Lukemire, Executive Vice President, North American Operations
|
|
June 26, 2006
|
|
|
|
Ivan C. Smith, Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
|
|
June 26, 2006
|
|
|
|
Denise S. Stump, Executive Vice President, Global Human Resources and Chief Ethics Officer
|
|
August 8, 2006
|
|
|
|
|
|
Effective Date of
|
Name and Principal Position
|
|
Tier 1 Participation
|
with The Scotts Miracle-Gro Company
|
|
Agreement
|
|
|
|
Barry W. Sanders, President and Chief Operating Officer
|
|
November 5, 2011
|
|
|
|
Denise S. Stump, Executive Vice President, Global Human Resources and Chief Ethics Officer
|
|
November 5, 2011
|
|
|
|
Michael C. Lukemire, Executive Vice President, North American Operations
|
|
April 26, 2012
|
|
|
|
Ivan C. Smith, Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
|
|
July 10, 2013
|
|
|
|
Thomas Randal Coleman, Executive Vice President and Chief Financial Officer
|
|
April 15, 2014
|
($ IN MILLIONS)
|
Fiscal Year Ended September 30,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Income from continuing operations before income taxes
|
$
|
256.6
|
|
|
$
|
251.3
|
|
|
$
|
179.4
|
|
|
$
|
249.6
|
|
|
$
|
329.7
|
|
Fixed charges
|
67.1
|
|
|
80.6
|
|
|
85.7
|
|
|
77.2
|
|
|
69.4
|
|
|||||
Other
(1)
|
(5.2
|
)
|
|
1.0
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|||||
Interest capitalized
|
(0.4
|
)
|
|
(0.8
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
(0.8
|
)
|
|||||
Total adjusted earnings available for payment of fixed charges
|
$
|
318.1
|
|
|
$
|
332.1
|
|
|
$
|
264.7
|
|
|
$
|
326.4
|
|
|
$
|
398.8
|
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
(2)
|
$
|
47.3
|
|
|
$
|
59.2
|
|
|
$
|
61.8
|
|
|
$
|
53.9
|
|
|
$
|
46.8
|
|
Interest capitalized
|
0.4
|
|
|
0.8
|
|
|
0.9
|
|
|
0.9
|
|
|
0.8
|
|
|||||
Rental expense representative of interest factor
|
19.4
|
|
|
20.6
|
|
|
23.0
|
|
|
22.4
|
|
|
21.8
|
|
|||||
Total Fixed Charges
|
$
|
67.1
|
|
|
$
|
80.6
|
|
|
$
|
85.7
|
|
|
$
|
77.2
|
|
|
$
|
69.4
|
|
Ratio of Earnings to Fixed Charges
|
4.7
|
|
|
4.1
|
|
|
3.1
|
|
|
4.2
|
|
|
5.7
|
|
(1)
|
Includes amortization of capitalized interest, adjustments for non-controlling interests in consolidated subsidiaries and distributed earnings of equity investees. Interest expense recorded on tax exposures has been recorded in income tax expense and has therefore been excluded from the calculation.
|
(2)
|
Includes amortization of deferred financing and issuance costs related to indebtedness.
|
NAME
|
|
JURISDICTION OF FORMATION
|
|
|
|
Gutwein & Co., Inc.
|
|
Indiana
|
Scotts Global Investments, Inc.
|
|
Delaware
|
Scotts Switzerland Holdings, SA
|
|
Switzerland
|
Scotts Luxembourg SARL
|
|
Luxembourg
|
OMS Investments, Inc.
|
|
Delaware
|
Scotts Temecula Operations, LLC
|
|
Delaware
|
SMG Growing Media, Inc.
|
|
Ohio
|
AeroGrow International, Inc.
1
|
|
Nevada
|
Hyponex Corporation
|
|
Delaware
|
Rod McLellan Company
|
|
California
|
The Hawthorne Gardening Company
2
|
|
Delaware
|
SMGM LLC
|
|
Ohio
|
Scotts-Sierra Investments LLC
|
|
Delaware
|
ASEF BV
|
|
Netherlands
|
Scotts Asia, Limited
|
|
Hong Kong
|
Scotts Australia Pty Limited
|
|
Australia
|
Scotts Gardening Fertilizer (Wuhan) Co., Ltd.
|
|
China
|
Scotts Benelux BVBA
3
|
|
Belgium
|
Scotts Canada Ltd.
|
|
Canada
|
Fafard & Brothers Ltd.
|
|
Canada
|
Scotts Czech s.r.o.
|
|
Czech Republic
|
Scotts de Mexico SA de CV
4
|
|
Mexico
|
Scotts France Holdings SARL
|
|
France
|
Scotts France SAS
|
|
France
|
Scotts Celaflor GmbH
|
|
Germany
|
Scotts Celaflor HGmbH
|
|
Austria
|
Scotts Holdings Limited
|
|
United Kingdom
|
Levington Group Limited
|
|
United Kingdom
|
The Scotts Company (UK) Limited
|
|
United Kingdom
|
The Scotts Company (Manufacturing) Limited
|
|
United Kingdom
|
Humax Horticulture Limited
|
|
United Kingdom
|
O M Scott International Investments Limited
|
|
United Kingdom
|
Scotts Poland Sp.z.o.o.
|
|
Poland
|
Teak 2, Ltd.
|
|
Delaware
|
Turf-Seed (Europe) Limited
|
|
Ireland
|
The Scotts Company LLC
5
|
|
Ohio
|
________________________
|
1
SMG Growing Media, Inc.'s ownership is 33.14%.
2
Also conducts business under the assumed name The Hawthorne Garden Products Company.
3
OMS Investments, Inc. owns 0.1% and Scotts-Sierra Investments LLC owns the remaining 99.9%.
4
The Scotts Company LLC owns 0.5% and Scotts-Sierra Investments LLC owns the remaining 99.5%.
5
Also conducts business under the assumed names Scotts Miracle-Gro Products, The Ortho Group, The Scotts Company, Tomcat Brands, The Scotts Company of Ohio LLC, The Scotts Company LLC of Ohio, and The Scotts Company of Ohio.
|
NAME
|
|
JURISDICTION OF FORMATION
|
|
|
|
EG Systems, Inc.
6
|
|
Indiana
|
SLS Franchise Systems LLC
|
|
Delaware
|
Sanford Scientific, Inc.
|
|
New York
|
Scotts Global Services, Inc.
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Ohio
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Scotts Manufacturing Company
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Delaware
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Miracle-Gro Lawn Products, Inc.
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New York
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Scotts Products Co.
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Ohio
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Scotts Servicios, S.A. de C.V.
7
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Mexico
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Scotts Professional Products Co.
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Ohio
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Scotts Servicios, S.A. de C.V.
7
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Mexico
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Swiss Farms Products, Inc.
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Delaware
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________________________
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6
Also conducts business under the assumed name Scotts LawnService.
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Scotts Professional Products Co. owns 50% and Scotts Products Co. owns 50%.
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/s/ ALAN H. BARRY
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/s/ JAMES HAGEDORN
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/s/ ADAM HANFT
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/s/ MICHELLE A. JOHNSON
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/s/ STEPHEN L. JOHNSON
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/s/ THOMAS N. KELLY JR.
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/s/ KATHERINE HAGEDORN LITTLEFIELD
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/s/ JAMES F. MCCANN
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/s/ NANCY G. MISTRETTA
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/s/ MICHAEL E. PORTER
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/s/ JOHN R. VINES
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/s/ THOMAS RANDAL COLEMAN
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1.
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I have reviewed this Annual Report on Form 10-K of The Scotts Miracle-Gro Company for the fiscal year ended
September 30, 2014
;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 25, 2014
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By:
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/s/ JAMES HAGEDORN
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Printed Name: James Hagedorn
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Title: Chief Executive Officer and Chairman of the Board
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1.
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I have reviewed this Annual Report on Form 10-K of The Scotts Miracle-Gro Company for the fiscal year ended
September 30, 2014
;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 25, 2014
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By:
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/s/ THOMAS RANDAL COLEMAN
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Printed Name: Thomas Randal Coleman
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Title: Executive Vice President and Chief Financial Officer
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1)
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The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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2)
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The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company and its subsidiaries.
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/s/ JAMES HAGEDORN
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/s/ THOMAS RANDAL COLEMAN
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Printed Name: James Hagedorn
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Printed Name: Thomas Randal Coleman
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Title: Chief Executive Officer and Chairman of the Board
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Title: Executive Vice President and Chief Financial Officer
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November 25, 2014
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November 25, 2014
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*
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THESE CERTIFICATIONS ARE BEING FURNISHED AS REQUIRED BY RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE ACT”) AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE, AND SHALL NOT BE DEEMED “FILED” FOR PURPOSES OF SECTION 18 OF THE EXCHANGE ACT OR OTHERWISE SUBJECT TO THE LIABILITY OF THAT SECTION. THESE CERTIFICATIONS SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THESE CERTIFICATIONS BY REFERENCE.
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