ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
|
|
to
|
OHIO
|
|
31-1414921
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
14111 SCOTTSLAWN ROAD,
MARYSVILLE, OHIO
|
|
43041
|
(Address of principal executive offices)
|
|
(Zip Code)
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Large accelerated filer
|
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ý
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|
Accelerated filer
|
|
o
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Non-accelerated filer
|
|
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
o
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|
Class
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|
Outstanding at May 5, 2015
|
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Common Shares, $0.01 stated value, no par value
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61,257,187 Common Shares
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THE SCOTTS MIRACLE-GRO COMPANY
INDEX
|
||
|
|
|
|
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PAGE NO.
|
|
||
|
|
|
|
||
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Condensed Consolidated Statements of Operations — Three
and six months ended March 28, 2015 and March 29, 2014
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and six months ended March 28, 2015 and March 29, 2014
|
|
|
Condensed Consolidated Statements of Cash Flows —
Six months ended March 28, 2015 and March 29, 2014
|
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Condensed Consolidated Balance Sheets —
March 28, 2015, March 29, 2014 and September 30, 2014
|
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||
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||
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THREE MONTHS ENDED
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|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||
Net sales
|
$
|
1,102.3
|
|
|
$
|
1,081.0
|
|
|
$
|
1,318.5
|
|
|
$
|
1,270.6
|
|
Cost of sales
|
668.8
|
|
|
647.2
|
|
|
855.7
|
|
|
802.9
|
|
||||
Cost of sales—impairment, restructuring and other
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Gross profit
|
433.3
|
|
|
433.8
|
|
|
462.6
|
|
|
467.7
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
219.7
|
|
|
212.2
|
|
|
346.6
|
|
|
336.6
|
|
||||
Impairment, restructuring and other
|
4.9
|
|
|
6.1
|
|
|
14.5
|
|
|
6.4
|
|
||||
Other income, net
|
(0.6
|
)
|
|
(1.6
|
)
|
|
(1.8
|
)
|
|
(2.7
|
)
|
||||
Income from operations
|
209.3
|
|
|
217.1
|
|
|
103.3
|
|
|
127.4
|
|
||||
Costs related to refinancing
|
—
|
|
|
10.7
|
|
|
—
|
|
|
10.7
|
|
||||
Interest expense
|
15.0
|
|
|
12.0
|
|
|
24.7
|
|
|
25.9
|
|
||||
Income from continuing operations before income taxes
|
194.3
|
|
|
194.4
|
|
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78.6
|
|
|
90.8
|
|
||||
Income tax expense from continuing operations
|
70.0
|
|
|
68.7
|
|
|
28.3
|
|
|
30.9
|
|
||||
Income from continuing operations
|
124.3
|
|
|
125.7
|
|
|
50.3
|
|
|
59.9
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Net income
|
$
|
124.3
|
|
|
$
|
125.7
|
|
|
$
|
50.3
|
|
|
$
|
60.0
|
|
Net loss (income) attributable to noncontrolling interest
|
0.3
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
||||
Net income attributable to controlling interest
|
$
|
124.6
|
|
|
$
|
125.7
|
|
|
$
|
50.0
|
|
|
$
|
60.0
|
|
Basic income per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.05
|
|
|
$
|
2.03
|
|
|
$
|
0.82
|
|
|
$
|
0.97
|
|
Income from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Basic income per common share
|
$
|
2.05
|
|
|
$
|
2.03
|
|
|
$
|
0.82
|
|
|
$
|
0.97
|
|
Weighted-average common shares outstanding during the period
|
60.9
|
|
|
61.9
|
|
|
60.9
|
|
|
62.0
|
|
||||
Diluted income per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.01
|
|
|
$
|
2.00
|
|
|
$
|
0.81
|
|
|
$
|
0.95
|
|
Income from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted income per common share
|
$
|
2.01
|
|
|
$
|
2.00
|
|
|
$
|
0.81
|
|
|
$
|
0.95
|
|
Weighted-average common shares outstanding during the period plus dilutive potential common shares
|
62.1
|
|
|
62.9
|
|
|
62.0
|
|
|
63.1
|
|
||||
Dividends declared per common share
|
$
|
0.450
|
|
|
$
|
0.438
|
|
|
$
|
0.900
|
|
|
$
|
0.875
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||
Net income
|
$
|
124.3
|
|
|
$
|
125.7
|
|
|
$
|
50.3
|
|
|
$
|
60.0
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Net foreign currency translation adjustment
|
(8.1
|
)
|
|
(2.7
|
)
|
|
(11.1
|
)
|
|
(4.1
|
)
|
||||
Net unrealized loss on derivative instruments, net of tax of $2.5 and $2.0, $3.1, and $1.8 respectively
|
(4.0
|
)
|
|
(3.3
|
)
|
|
(5.1
|
)
|
|
(2.9
|
)
|
||||
Reclassification of net unrealized loss on derivatives to net income, net of tax of $1.5, $2.4, $2.1, and $4.3, respectively
|
2.4
|
|
|
3.9
|
|
|
3.4
|
|
|
7.0
|
|
||||
Net unrealized loss in pension and other post-retirement benefits, net of tax of $0.0, $0.0, $0.0 and $0.2, respectively
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
||||
Reclassification of net pension and post-retirement benefit loss to net income, net of tax of $0.5, $0.5, $1.0, and $1.0, respectively
|
0.8
|
|
|
0.7
|
|
|
1.6
|
|
|
1.5
|
|
||||
Total other comprehensive (loss) income
|
(8.9
|
)
|
|
(1.4
|
)
|
|
(11.2
|
)
|
|
1.2
|
|
||||
Comprehensive income
|
$
|
115.4
|
|
|
$
|
124.3
|
|
|
$
|
39.1
|
|
|
$
|
61.2
|
|
|
SIX MONTHS ENDED
|
||||||
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
50.3
|
|
|
$
|
60.0
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
||||
Impairment, restructuring and other
|
4.3
|
|
|
—
|
|
||
Costs related to refinancing
|
—
|
|
|
3.5
|
|
||
Share-based compensation expense
|
9.3
|
|
|
6.4
|
|
||
Depreciation
|
24.9
|
|
|
25.7
|
|
||
Amortization
|
7.1
|
|
|
6.4
|
|
||
(Gain) loss on sale of assets
|
(0.6
|
)
|
|
0.2
|
|
||
Gain on sale of business
|
—
|
|
|
(0.2
|
)
|
||
Equity in net loss of unconsolidated affiliates
|
—
|
|
|
(0.1
|
)
|
||
Changes in assets and liabilities, net of acquired businesses:
|
|
|
|
||||
Accounts receivable
|
(734.7
|
)
|
|
(775.3
|
)
|
||
Inventories
|
(215.8
|
)
|
|
(222.7
|
)
|
||
Prepaid and other assets
|
(37.8
|
)
|
|
(39.5
|
)
|
||
Accounts payable
|
117.7
|
|
|
208.8
|
|
||
Other current liabilities
|
113.0
|
|
|
116.9
|
|
||
Restructuring reserves
|
2.8
|
|
|
(0.9
|
)
|
||
Other non-current items
|
3.5
|
|
|
(2.9
|
)
|
||
Other, net
|
7.3
|
|
|
(0.9
|
)
|
||
Net cash used in operating activities
|
(648.7
|
)
|
|
(614.6
|
)
|
||
|
|
|
|
||||
INVESTING ACTIVITIES
|
|
|
|
||||
Proceeds from sale of long-lived assets
|
5.2
|
|
|
—
|
|
||
Proceeds from sale of business, net of transaction costs
|
—
|
|
|
4.1
|
|
||
Investments in property, plant and equipment
|
(28.0
|
)
|
|
(53.0
|
)
|
||
Investments in acquired businesses, net of cash acquired
|
(50.5
|
)
|
|
(60.0
|
)
|
||
Net cash used in investing activities
|
(73.3
|
)
|
|
(108.9
|
)
|
||
|
|
|
|
||||
FINANCING ACTIVITIES
|
|
|
|
||||
Borrowings under revolving and bank lines of credit
|
1,195.5
|
|
|
1,715.5
|
|
||
Repayments under revolving and bank lines of credit
|
(450.5
|
)
|
|
(661.3
|
)
|
||
Repayment of 7.25% Senior Notes
|
—
|
|
|
(200.0
|
)
|
||
Financing and issuance fees
|
—
|
|
|
(6.1
|
)
|
||
Dividends paid
|
(54.8
|
)
|
|
(54.5
|
)
|
||
Purchase of common shares
|
(14.8
|
)
|
|
(59.6
|
)
|
||
Payments on seller notes
|
(0.8
|
)
|
|
(0.8
|
)
|
||
Excess tax benefits from share-based payment arrangements
|
2.8
|
|
|
3.8
|
|
||
Cash received from the exercise of stock options
|
16.2
|
|
|
7.9
|
|
||
Net cash provided by financing activities
|
693.6
|
|
|
744.9
|
|
||
Effect of exchange rate changes on cash
|
(6.1
|
)
|
|
1.5
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(34.5
|
)
|
|
22.9
|
|
||
Cash and cash equivalents, beginning of period
|
89.3
|
|
|
129.8
|
|
||
Cash and cash equivalents, end of period
|
$
|
54.8
|
|
|
$
|
152.7
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
||||
Interest paid
|
$
|
(20.6
|
)
|
|
$
|
(24.6
|
)
|
Call premium on 7.25% Senior Notes
|
—
|
|
|
(7.3
|
)
|
||
Income taxes (paid) refunded
|
(10.3
|
)
|
|
13.2
|
|
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
SEPTEMBER 30,
2014 |
||||||
ASSETS
|
|||||||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
54.8
|
|
|
$
|
152.7
|
|
|
$
|
89.3
|
|
Accounts receivable, less allowances of $12.8, $17.7 and $7.5, respectively
|
682.1
|
|
|
746.9
|
|
|
224.0
|
|
|||
Accounts receivable pledged
|
376.7
|
|
|
341.9
|
|
|
113.7
|
|
|||
Inventories
|
596.1
|
|
|
546.2
|
|
|
385.1
|
|
|||
Prepaid and other current assets
|
153.8
|
|
|
149.9
|
|
|
122.9
|
|
|||
Total current assets
|
1,863.5
|
|
|
1,937.6
|
|
|
935.0
|
|
|||
Property, plant and equipment, net of accumulated depreciation of $609.6, $593.8 and $597.2, respectively
|
437.0
|
|
|
443.6
|
|
|
437.0
|
|
|||
Goodwill
|
371.5
|
|
|
333.3
|
|
|
350.9
|
|
|||
Intangible assets, net
|
308.6
|
|
|
318.5
|
|
|
302.7
|
|
|||
Other assets
|
29.2
|
|
|
38.2
|
|
|
32.7
|
|
|||
Total assets
|
$
|
3,009.8
|
|
|
$
|
3,071.2
|
|
|
$
|
2,058.3
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current portion of debt
|
$
|
318.1
|
|
|
$
|
278.6
|
|
|
$
|
91.9
|
|
Accounts payable
|
300.4
|
|
|
342.5
|
|
|
193.3
|
|
|||
Other current liabilities
|
366.7
|
|
|
397.0
|
|
|
259.5
|
|
|||
Total current liabilities
|
985.2
|
|
|
1,018.1
|
|
|
544.7
|
|
|||
Long term debt
|
1,211.1
|
|
|
1,145.3
|
|
|
692.4
|
|
|||
Other liabilities
|
243.6
|
|
|
232.1
|
|
|
254.0
|
|
|||
Total liabilities
|
2,439.9
|
|
|
2,395.5
|
|
|
1,491.1
|
|
|||
Contingencies (note 11)
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common shares and capital in excess of $.01 stated value per share; 61.1
,
61.5 and 60.7 shares issued and outstanding, respectively
|
399.4
|
|
|
395.0
|
|
|
395.3
|
|
|||
Retained earnings
|
632.4
|
|
|
708.5
|
|
|
636.9
|
|
|||
Treasury shares, at co
st; 7.0, 6.7
and 7.4 shares, respectively
|
(378.3
|
)
|
|
(351.2
|
)
|
|
(392.3
|
)
|
|||
Accumulated other comprehensive loss
|
(97.4
|
)
|
|
(76.6
|
)
|
|
(86.2
|
)
|
|||
Total shareholders’ equity - controlling interest
|
556.1
|
|
|
675.7
|
|
|
553.7
|
|
|||
Noncontrolling interest
|
13.8
|
|
|
—
|
|
|
13.5
|
|
|||
Total equity
|
569.9
|
|
|
675.7
|
|
|
567.2
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
3,009.8
|
|
|
$
|
3,071.2
|
|
|
$
|
2,058.3
|
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||
|
|
(In millions)
|
||||||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
11.2
|
|
|
$
|
—
|
|
|
$
|
18.0
|
|
Operating costs
|
|
—
|
|
|
11.0
|
|
|
—
|
|
|
17.6
|
|
||||
Gain on sale of assets
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||
Income from discontinued operations before income taxes
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.6
|
|
||||
Income tax expense from discontinued operations
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.5
|
|
||||
Income from discontinued operations, net of tax
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||
|
(In millions)
|
||||||||||||||
Restructuring and other
|
$
|
5.1
|
|
|
$
|
6.1
|
|
|
$
|
14.7
|
|
|
$
|
6.4
|
|
Total impairment, restructuring and other
|
$
|
5.1
|
|
|
$
|
6.1
|
|
|
$
|
14.7
|
|
|
$
|
6.4
|
|
Amounts reserved for restructuring and other charges at September 30, 2014
|
$
|
16.0
|
|
Restructuring and other charges
|
14.7
|
|
|
Payments and other
|
(11.9
|
)
|
|
Amounts reserved for restructuring and other charges at March 28, 2015
|
$
|
18.8
|
|
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
SEPTEMBER 30,
2014 |
||||||
|
(In millions)
|
||||||||||
Finished goods
|
$
|
396.9
|
|
|
$
|
376.8
|
|
|
$
|
217.5
|
|
Work-in-process
|
49.0
|
|
|
43.7
|
|
|
46.2
|
|
|||
Raw materials
|
150.2
|
|
|
125.7
|
|
|
121.4
|
|
|||
Total inventories
|
$
|
596.1
|
|
|
$
|
546.2
|
|
|
$
|
385.1
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||
|
(In millions)
|
||||||||||||||
Gross commission
|
$
|
32.5
|
|
|
$
|
33.1
|
|
|
$
|
32.5
|
|
|
$
|
33.1
|
|
Contribution expenses
|
(5.0
|
)
|
|
(5.0
|
)
|
|
(10.0
|
)
|
|
(10.0
|
)
|
||||
Amortization of marketing fee
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
||||
Net commission income
|
27.3
|
|
|
27.9
|
|
|
22.1
|
|
|
22.7
|
|
||||
Reimbursements associated with Marketing Agreement
|
18.2
|
|
|
18.7
|
|
|
35.5
|
|
|
33.8
|
|
||||
Total net sales associated with Marketing Agreement
|
$
|
45.5
|
|
|
$
|
46.6
|
|
|
$
|
57.6
|
|
|
$
|
56.5
|
|
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
SEPTEMBER 30,
2014 |
||||||
|
(In millions)
|
||||||||||
Credit facility – Revolving loans
|
$
|
998.9
|
|
|
$
|
941.3
|
|
|
$
|
481.8
|
|
Senior Notes – 6.625%
|
200.0
|
|
|
200.0
|
|
|
200.0
|
|
|||
Master Accounts Receivable Purchase Agreement
|
301.3
|
|
|
273.5
|
|
|
84.0
|
|
|||
Other
|
29.0
|
|
|
9.1
|
|
|
18.5
|
|
|||
|
1,529.2
|
|
|
1,423.9
|
|
|
784.3
|
|
|||
Less current portions
|
318.1
|
|
|
278.6
|
|
|
91.9
|
|
|||
Total long-term debt
|
$
|
1,211.1
|
|
|
$
|
1,145.3
|
|
|
$
|
692.4
|
|
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.
|
|
THREE MONTHS ENDED
|
||||||||||||||||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||||||||||||||||||
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
Interest cost
|
1.0
|
|
|
1.9
|
|
|
0.3
|
|
|
1.1
|
|
|
1.9
|
|
|
0.4
|
|
||||||
Expected return on plan assets
|
(1.4
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
(2.2
|
)
|
|
—
|
|
||||||
Net amortization
|
0.8
|
|
|
0.4
|
|
|
—
|
|
|
0.9
|
|
|
0.3
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
0.7
|
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
SIX MONTHS ENDED
|
||||||||||||||||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||||||||||||||||||
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
0.2
|
|
Interest cost
|
2.0
|
|
|
3.8
|
|
|
0.6
|
|
|
2.2
|
|
|
5.1
|
|
|
0.7
|
|
||||||
Expected return on plan assets
|
(2.7
|
)
|
|
(4.7
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
(5.8
|
)
|
|
—
|
|
||||||
Net amortization
|
1.6
|
|
|
0.9
|
|
|
—
|
|
|
1.9
|
|
|
0.8
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
0.9
|
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
|
$
|
1.5
|
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
|
SIX MONTHS ENDED
|
||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||
Employees
|
|
|
|
||||
Stock options
|
420,047
|
|
|
—
|
|
||
Restricted stock units
|
52,091
|
|
|
105,365
|
|
||
Performance units
|
78,352
|
|
|
161,229
|
|
||
Board of Directors
|
|
|
|
||||
Deferred stock units
|
27,282
|
|
|
20,894
|
|
||
Total share-based awards
|
577,772
|
|
|
287,488
|
|
||
|
|
|
|
||||
Aggregate fair value at grant dates (in millions)
|
$
|
14.8
|
|
|
$
|
17.1
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||||||
|
(In millions)
|
||||||||||||||
Share-based compensation
|
$
|
7.2
|
|
|
$
|
4.6
|
|
|
$
|
9.3
|
|
|
$
|
6.4
|
|
Tax benefit recognized
|
2.7
|
|
|
1.8
|
|
|
3.5
|
|
|
2.4
|
|
|
No. of
Options/SARs
|
|
WTD. Avg.
Exercise Price
|
|||
Awards outstanding at September 30, 2014
|
2.0
|
|
|
$
|
38.26
|
|
Granted
|
0.4
|
|
|
63.43
|
|
|
Exercised
|
(0.4
|
)
|
|
40.18
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Awards outstanding at March 28, 2015
|
2.0
|
|
|
43.14
|
|
|
Exercisable
|
1.6
|
|
|
37.73
|
|
|
|
Awards Outstanding
|
|
Awards Exercisable
|
||||||||||||||
Range of
Exercise Price
|
|
No. of
Options/
SARs
|
|
WTD.
Avg.
Remaining
Life
|
|
WTD.
Avg.
Exercise
Price
|
|
No. of
Options/
SARs
|
|
WTD.
Avg.
Remaining
Life
|
|
WTD.
Avg.
Exercise
Price
|
||||||
$20.59 – $27.31
|
|
0.3
|
|
|
3.52
|
|
$
|
20.59
|
|
|
0.3
|
|
|
3.52
|
|
$
|
20.59
|
|
$29.30 – $36.86
|
|
0.6
|
|
|
1.59
|
|
35.61
|
|
|
0.6
|
|
|
1.59
|
|
35.61
|
|
||
$38.81 – $49.19
|
|
0.7
|
|
|
5.61
|
|
45.16
|
|
|
0.7
|
|
|
5.61
|
|
45.16
|
|
||
$63.43 – $63.43
|
|
0.4
|
|
|
8.84
|
|
63.43
|
|
|
—
|
|
|
0.00
|
|
—
|
|
||
|
|
2.0
|
|
|
4.78
|
|
$
|
43.14
|
|
|
1.6
|
|
|
3.69
|
|
$
|
37.73
|
|
|
(In millions)
|
||
Outstanding
|
$
|
45.0
|
|
Exercisable
|
44.0
|
|
Expected market price volatility
|
|
26.6
|
%
|
Risk-free interest rates
|
|
1.3
|
%
|
Expected dividend yield
|
|
2.8
|
%
|
Expected life of stock options in years
|
|
6.00
|
|
Estimated weighted-average fair value per stock option
|
|
$11.51
|
|
No. of
Shares
|
|
WTD. Avg.
Grant Date
Fair Value
per Share
|
|||
Awards outstanding at September 30, 2014
|
433,892
|
|
|
$
|
52.55
|
|
Granted
|
79,373
|
|
|
63.42
|
|
|
Vested
|
(126,172
|
)
|
|
47.15
|
|
|
Forfeited
|
(21,314
|
)
|
|
59.40
|
|
|
Awards outstanding at March 28, 2015
|
365,779
|
|
|
56.37
|
|
|
No. of
Units
|
|
WTD. Avg.
Grant Date
Fair Value
per Unit
|
|||
Awards outstanding at September 30, 2014
|
311,249
|
|
|
$
|
51.21
|
|
Granted
|
78,352
|
|
|
63.43
|
|
|
Vested
|
(49,467
|
)
|
|
—
|
|
|
Forfeited
|
(910
|
)
|
|
47.66
|
|
|
Awards outstanding at March 28, 2015
|
339,224
|
|
|
54.88
|
|
|
|
|
|
ASSETS / (LIABILITIES)
|
||||||||||
DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS
|
|
|
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
SEPTEMBER 30,
2014 |
||||||
|
BALANCE SHEET LOCATION
|
|
FAIR VALUE
|
|||||||||||
|
|
|
|
(In millions)
|
||||||||||
Interest rate swap agreements
|
|
Other assets
|
|
$
|
0.1
|
|
|
$
|
5.1
|
|
|
$
|
4.0
|
|
|
|
Other current liabilities
|
|
(9.9
|
)
|
|
(10.6
|
)
|
|
(10.3
|
)
|
|||
|
|
Other liabilities
|
|
(5.0
|
)
|
|
(9.4
|
)
|
|
(5.2
|
)
|
|||
Commodity hedging instruments
|
|
Prepaid and other current assets
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|||
|
|
Other current liabilities
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||
Total derivatives designated as hedging instruments
|
|
$
|
(15.4
|
)
|
|
$
|
(14.4
|
)
|
|
$
|
(12.1
|
)
|
||
|
|
|
|
|
|
|
|
|
||||||
DERIVATIVES NOT DESIGNATED AS
HEDGING INSTRUMENTS
|
|
BALANCE SHEET LOCATION
|
|
|
|
|
|
|
||||||
Currency forward contracts
|
|
Prepaid and other current assets
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
|
Other current liabilities
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|||
Commodity hedging instruments
|
|
Prepaid and other current assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
Other current liabilities
|
|
(7.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
|||
Total derivatives not designated as hedging instruments
|
|
$
|
(7.5
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(1.4
|
)
|
||
Total derivatives
|
|
|
|
$
|
(22.9
|
)
|
|
$
|
(14.6
|
)
|
|
$
|
(13.5
|
)
|
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS
|
|
AMOUNT OF GAIN / (LOSS) RECOGNIZED IN AOCI
|
||||||||||||||
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
|||||||||||||
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|||||||||
|
|
(In millions)
|
||||||||||||||
Interest rate swap agreements
|
|
$
|
(3.0
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
(4.7
|
)
|
|
$
|
(4.8
|
)
|
Commodity hedging instruments
|
|
(1.0
|
)
|
|
0.7
|
|
|
(0.4
|
)
|
|
1.9
|
|
||||
Total
|
|
$
|
(4.0
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(5.1
|
)
|
|
$
|
(2.9
|
)
|
DERIVATIVES IN CASH FLOW
HEDGING RELATIONSHIPS
|
|
RECLASSIFIED FROM AOCI INTO STATEMENT OF OPERATIONS
|
|
AMOUNT OF GAIN / (LOSS)
|
||||||||||||||
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||||||
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||
Interest rate swap agreements
|
|
Interest expense
|
|
$
|
(2.5
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(7.1
|
)
|
Commodity hedging instruments
|
|
Cost of sales
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Total
|
|
|
|
$
|
(2.4
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
(7.0
|
)
|
DERIVATIVES NOT DESIGNATED
AS HEDGING INSTRUMENTS
|
|
RECOGNIZED IN
STATEMENT OF OPERATIONS
|
|
AMOUNT OF GAIN / (LOSS)
|
||||||||||||||
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||||||
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||
Currency forward contracts
|
|
Other income, net
|
|
$
|
2.1
|
|
|
$
|
(1.1
|
)
|
|
$
|
5.2
|
|
|
$
|
(2.4
|
)
|
Commodity hedging instruments
|
|
Cost of sales
|
|
(1.6
|
)
|
|
(0.3
|
)
|
|
(9.9
|
)
|
|
0.3
|
|
||||
Total
|
|
|
|
$
|
0.5
|
|
|
$
|
(1.4
|
)
|
|
$
|
(4.7
|
)
|
|
$
|
(2.1
|
)
|
|
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
|
$
|
17.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.8
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Other
|
10.5
|
|
|
—
|
|
|
—
|
|
|
10.5
|
|
||||
Total
|
$
|
28.3
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
28.4
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
(14.9
|
)
|
|
$
|
—
|
|
|
$
|
(14.9
|
)
|
Currency forward contracts
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||
Commodity hedging instruments
|
—
|
|
|
(7.9
|
)
|
|
—
|
|
|
(7.9
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
(23.0
|
)
|
|
$
|
—
|
|
|
$
|
(23.0
|
)
|
|
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
|
$
|
86.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86.3
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
—
|
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
||||
Currency forward contracts
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Commodity hedging instruments
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Other
|
8.3
|
|
|
—
|
|
|
—
|
|
|
8.3
|
|
||||
Total
|
$
|
94.6
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
100.5
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
(20.0
|
)
|
|
$
|
—
|
|
|
$
|
(20.0
|
)
|
Currency forward contracts
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
(20.5
|
)
|
|
$
|
—
|
|
|
$
|
(20.5
|
)
|
|
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
|
)
|
|
|||||||||||||||
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
||||||||
|
(In millions)
|
||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Global Consumer
|
$
|
1,064.3
|
|
|
$
|
1,046.0
|
|
|
$
|
1,227.9
|
|
|
$
|
1,184.4
|
|
Scotts LawnService
®
|
30.4
|
|
|
28.9
|
|
|
77.1
|
|
|
75.2
|
|
||||
Segment total
|
1,094.7
|
|
|
1,074.9
|
|
|
1,305.0
|
|
|
1,259.6
|
|
||||
Corporate & Other
|
7.6
|
|
|
6.1
|
|
|
13.5
|
|
|
11.0
|
|
||||
Consolidated
|
$
|
1,102.3
|
|
|
$
|
1,081.0
|
|
|
$
|
1,318.5
|
|
|
$
|
1,270.6
|
|
Income (loss) from continuing operations before income taxes:
|
|
|
|
|
|
|
|
||||||||
Global Consumer
|
$
|
272.0
|
|
|
$
|
269.5
|
|
|
$
|
197.8
|
|
|
$
|
202.1
|
|
Scotts LawnService
®
|
(22.6
|
)
|
|
(20.3
|
)
|
|
(21.1
|
)
|
|
(17.7
|
)
|
||||
Segment total
|
249.4
|
|
|
249.2
|
|
|
176.7
|
|
|
184.4
|
|
||||
Corporate & Other
|
(31.8
|
)
|
|
(23.0
|
)
|
|
(52.0
|
)
|
|
(44.7
|
)
|
||||
Intangible asset amortization
|
(3.2
|
)
|
|
(3.0
|
)
|
|
(6.7
|
)
|
|
(5.9
|
)
|
||||
Impairment, restructuring and other
|
(5.1
|
)
|
|
(6.1
|
)
|
|
(14.7
|
)
|
|
(6.4
|
)
|
||||
Costs related to refinancing
|
—
|
|
|
(10.7
|
)
|
|
—
|
|
|
(10.7
|
)
|
||||
Interest expense
|
(15.0
|
)
|
|
(12.0
|
)
|
|
(24.7
|
)
|
|
(25.9
|
)
|
||||
Consolidated
|
$
|
194.3
|
|
|
$
|
194.4
|
|
|
$
|
78.6
|
|
|
$
|
90.8
|
|
|
MARCH 28,
2015 |
|
MARCH 29,
2014 |
|
SEPTEMBER 30,
2014 |
||||||
|
(In millions)
|
||||||||||
Total assets:
|
|
|
|
|
|
||||||
Global Consumer
|
$
|
2,627.0
|
|
|
$
|
2,721.6
|
|
|
$
|
1,690.7
|
|
Scotts LawnService
®
|
207.9
|
|
|
181.0
|
|
|
191.3
|
|
|||
Corporate & Other
|
174.9
|
|
|
168.6
|
|
|
176.3
|
|
|||
Consolidated
|
$
|
3,009.8
|
|
|
$
|
3,071.2
|
|
|
$
|
2,058.3
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
930.9
|
|
|
$
|
171.4
|
|
|
$
|
—
|
|
|
$
|
1,102.3
|
|
Cost of sales
|
—
|
|
|
553.3
|
|
|
115.5
|
|
|
—
|
|
|
668.8
|
|
|||||
Cost of sales—impairment, restructuring and other
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||
Gross profit
|
—
|
|
|
377.6
|
|
|
55.7
|
|
|
—
|
|
|
433.3
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
183.3
|
|
|
36.0
|
|
|
0.4
|
|
|
219.7
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
2.4
|
|
|
2.5
|
|
|
—
|
|
|
4.9
|
|
|||||
Other income, net
|
—
|
|
|
(0.8
|
)
|
|
0.2
|
|
|
—
|
|
|
(0.6
|
)
|
|||||
Income from operations
|
—
|
|
|
192.7
|
|
|
17.0
|
|
|
(0.4
|
)
|
|
209.3
|
|
|||||
Equity income in subsidiaries
|
(128.9
|
)
|
|
(6.4
|
)
|
|
—
|
|
|
135.3
|
|
|
—
|
|
|||||
Other non-operating income
|
(9.5
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
15.1
|
|
|
—
|
|
|||||
Interest expense
|
16.3
|
|
|
13.4
|
|
|
0.4
|
|
|
(15.1
|
)
|
|
15.0
|
|
|||||
Income from continuing operations before income taxes
|
122.1
|
|
|
185.7
|
|
|
22.2
|
|
|
(135.7
|
)
|
|
194.3
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(2.5
|
)
|
|
64.5
|
|
|
8.0
|
|
|
—
|
|
|
70.0
|
|
|||||
Income from continuing operations
|
124.6
|
|
|
121.2
|
|
|
14.2
|
|
|
(135.7
|
)
|
|
124.3
|
|
|||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
$
|
124.6
|
|
|
$
|
121.2
|
|
|
$
|
14.2
|
|
|
$
|
(135.7
|
)
|
|
$
|
124.3
|
|
Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|||||
Net income attributable to controlling interest
|
$
|
124.6
|
|
|
$
|
121.2
|
|
|
$
|
14.2
|
|
|
$
|
(135.4
|
)
|
|
$
|
124.6
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,077.3
|
|
|
$
|
241.2
|
|
|
$
|
—
|
|
|
$
|
1,318.5
|
|
Cost of sales
|
—
|
|
|
683.9
|
|
|
171.8
|
|
|
—
|
|
|
855.7
|
|
|||||
Cost of sales—impairment, restructuring and other
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||
Gross profit
|
—
|
|
|
393.4
|
|
|
69.2
|
|
|
—
|
|
|
462.6
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
279.0
|
|
|
66.7
|
|
|
0.9
|
|
|
346.6
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
11.3
|
|
|
3.2
|
|
|
—
|
|
|
14.5
|
|
|||||
Other income, net
|
—
|
|
|
(2.1
|
)
|
|
0.3
|
|
|
—
|
|
|
(1.8
|
)
|
|||||
Income (loss) from operations
|
—
|
|
|
105.2
|
|
|
(1.0
|
)
|
|
(0.9
|
)
|
|
103.3
|
|
|||||
Equity income in subsidiaries
|
(58.6
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
60.7
|
|
|
—
|
|
|||||
Other non-operating income
|
(14.0
|
)
|
|
—
|
|
|
(11.2
|
)
|
|
25.2
|
|
|
—
|
|
|||||
Interest expense
|
27.5
|
|
|
21.7
|
|
|
0.7
|
|
|
(25.2
|
)
|
|
24.7
|
|
|||||
Income from continuing operations before income taxes
|
45.1
|
|
|
85.6
|
|
|
9.5
|
|
|
(61.6
|
)
|
|
78.6
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(4.9
|
)
|
|
29.8
|
|
|
3.4
|
|
|
—
|
|
|
28.3
|
|
|||||
Income from continuing operations
|
50.0
|
|
|
55.8
|
|
|
6.1
|
|
|
(61.6
|
)
|
|
50.3
|
|
|||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
$
|
50.0
|
|
|
$
|
55.8
|
|
|
$
|
6.1
|
|
|
$
|
(61.6
|
)
|
|
$
|
50.3
|
|
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|||||
Net income attributable to controlling interest
|
$
|
50.0
|
|
|
$
|
55.8
|
|
|
$
|
6.1
|
|
|
$
|
(61.9
|
)
|
|
$
|
50.0
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
124.6
|
|
|
$
|
121.2
|
|
|
$
|
14.2
|
|
|
$
|
(135.7
|
)
|
|
$
|
124.3
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(8.1
|
)
|
|
—
|
|
|
(8.1
|
)
|
|
8.1
|
|
|
(8.1
|
)
|
|||||
Net change in derivatives
|
(1.6
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
1.1
|
|
|
(1.6
|
)
|
|||||
Net change in pension and other post-retirement benefits
|
0.8
|
|
|
0.5
|
|
|
0.3
|
|
|
(0.8
|
)
|
|
0.8
|
|
|||||
Total other comprehensive (loss) income
|
(8.9
|
)
|
|
(0.6
|
)
|
|
(7.8
|
)
|
|
8.4
|
|
|
(8.9
|
)
|
|||||
Comprehensive income
|
$
|
115.7
|
|
|
$
|
120.6
|
|
|
$
|
6.4
|
|
|
$
|
(127.3
|
)
|
|
$
|
115.4
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
50.0
|
|
|
$
|
55.8
|
|
|
$
|
6.1
|
|
|
$
|
(61.6
|
)
|
|
$
|
50.3
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(11.1
|
)
|
|
—
|
|
|
(11.1
|
)
|
|
11.1
|
|
|
(11.1
|
)
|
|||||
Net change in derivatives
|
(1.7
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
0.5
|
|
|
(1.7
|
)
|
|||||
Net change in pension and other post-retirement benefits
|
1.6
|
|
|
1.0
|
|
|
0.6
|
|
|
(1.6
|
)
|
|
1.6
|
|
|||||
Total other comprehensive (loss) income
|
(11.2
|
)
|
|
0.5
|
|
|
(10.5
|
)
|
|
10.0
|
|
|
(11.2
|
)
|
|||||
Comprehensive (loss) income
|
$
|
38.8
|
|
|
$
|
56.3
|
|
|
$
|
(4.4
|
)
|
|
$
|
(51.6
|
)
|
|
$
|
39.1
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(a)
|
$
|
48.7
|
|
|
$
|
(432.4
|
)
|
|
$
|
(99.9
|
)
|
|
$
|
(165.1
|
)
|
|
$
|
(648.7
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sale of long-lived assets
|
—
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|||||
Investments in property, plant and equipment
|
—
|
|
|
(25.2
|
)
|
|
(2.8
|
)
|
|
—
|
|
|
(28.0
|
)
|
|||||
Investment in acquired businesses, net of cash acquired
|
—
|
|
|
(50.5
|
)
|
|
—
|
|
|
—
|
|
|
(50.5
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(70.5
|
)
|
|
(2.8
|
)
|
|
—
|
|
|
(73.3
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under revolving and bank lines of credit
|
—
|
|
|
1,034.5
|
|
|
161.0
|
|
|
—
|
|
|
1,195.5
|
|
|||||
Repayments under revolving and bank lines of credit
|
—
|
|
|
(388.7
|
)
|
|
(61.8
|
)
|
|
—
|
|
|
(450.5
|
)
|
|||||
Dividends paid
|
(54.8
|
)
|
|
(76.3
|
)
|
|
(3.7
|
)
|
|
80.0
|
|
|
(54.8
|
)
|
|||||
Purchase of common shares
|
(14.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.8
|
)
|
|||||
Payments on seller notes
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|||||
Cash received from the exercise of stock options
|
16.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.2
|
|
|||||
Intercompany financing
|
4.7
|
|
|
(87.6
|
)
|
|
(2.2
|
)
|
|
85.1
|
|
|
—
|
|
|||||
Net cash (used in) provided by financing activities
|
(48.7
|
)
|
|
483.9
|
|
|
93.3
|
|
|
165.1
|
|
|
693.6
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
|
(6.1
|
)
|
|||||
Net decrease in cash and cash equivalents
|
—
|
|
|
(19.0
|
)
|
|
(15.5
|
)
|
|
—
|
|
|
(34.5
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
23.1
|
|
|
66.2
|
|
|
—
|
|
|
89.3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
4.1
|
|
|
$
|
50.7
|
|
|
$
|
—
|
|
|
$
|
54.8
|
|
(a)
|
Cash received by the Parent from its subsidiaries in the form of dividends in the amount of
$76.3 million
represent return on investments and are included in cash flows from operating activities.
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
4.1
|
|
|
$
|
50.7
|
|
|
$
|
—
|
|
|
$
|
54.8
|
|
Accounts receivable, net
|
—
|
|
|
455.3
|
|
|
226.8
|
|
|
—
|
|
|
682.1
|
|
|||||
Accounts receivable pledged
|
—
|
|
|
376.7
|
|
|
—
|
|
|
—
|
|
|
376.7
|
|
|||||
Inventories
|
—
|
|
|
472.3
|
|
|
123.8
|
|
|
—
|
|
|
596.1
|
|
|||||
Prepaid and other current assets
|
—
|
|
|
115.3
|
|
|
38.5
|
|
|
—
|
|
|
153.8
|
|
|||||
Total current assets
|
—
|
|
|
1,423.7
|
|
|
439.8
|
|
|
—
|
|
|
1,863.5
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
380.1
|
|
|
56.9
|
|
|
—
|
|
|
437.0
|
|
|||||
Goodwill
|
—
|
|
|
352.8
|
|
|
7.1
|
|
|
11.6
|
|
|
371.5
|
|
|||||
Intangible assets, net
|
—
|
|
|
259.1
|
|
|
36.9
|
|
|
12.6
|
|
|
308.6
|
|
|||||
Other assets
|
18.0
|
|
|
16.5
|
|
|
20.5
|
|
|
(25.8
|
)
|
|
29.2
|
|
|||||
Equity investment in subsidiaries
|
387.3
|
|
|
—
|
|
|
—
|
|
|
(387.3
|
)
|
|
—
|
|
|||||
Intercompany assets
|
1,370.5
|
|
|
—
|
|
|
—
|
|
|
(1,370.5
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,775.8
|
|
|
$
|
2,432.2
|
|
|
$
|
561.2
|
|
|
$
|
(1,759.4
|
)
|
|
$
|
3,009.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
305.0
|
|
|
$
|
13.1
|
|
|
$
|
—
|
|
|
$
|
318.1
|
|
Accounts payable
|
—
|
|
|
229.3
|
|
|
71.1
|
|
|
—
|
|
|
300.4
|
|
|||||
Other current liabilities
|
16.0
|
|
|
267.8
|
|
|
82.9
|
|
|
—
|
|
|
366.7
|
|
|||||
Total current liabilities
|
16.0
|
|
|
802.1
|
|
|
167.1
|
|
|
—
|
|
|
985.2
|
|
|||||
Long term debt
|
1,198.9
|
|
|
910.4
|
|
|
100.7
|
|
|
(998.9
|
)
|
|
1,211.1
|
|
|||||
Other liabilities
|
4.8
|
|
|
226.7
|
|
|
32.8
|
|
|
(20.7
|
)
|
|
243.6
|
|
|||||
Equity investment in subsidiaries
|
—
|
|
|
114.6
|
|
|
—
|
|
|
(114.6
|
)
|
|
—
|
|
|||||
Intercompany liabilities
|
—
|
|
|
248.8
|
|
|
104.1
|
|
|
(352.9
|
)
|
|
—
|
|
|||||
Total liabilities
|
1,219.7
|
|
|
2,302.6
|
|
|
404.7
|
|
|
(1,487.1
|
)
|
|
2,439.9
|
|
|||||
Total shareholders' equity - controlling interest
|
556.1
|
|
|
129.6
|
|
|
156.5
|
|
|
(286.1
|
)
|
|
556.1
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
13.8
|
|
|
13.8
|
|
|||||
Total equity
|
556.1
|
|
|
129.6
|
|
|
156.5
|
|
|
(272.3
|
)
|
|
569.9
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,775.8
|
|
|
$
|
2,432.2
|
|
|
$
|
561.2
|
|
|
$
|
(1,759.4
|
)
|
|
$
|
3,009.8
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
899.0
|
|
|
$
|
182.0
|
|
|
$
|
—
|
|
|
$
|
1,081.0
|
|
Cost of sales
|
—
|
|
|
527.0
|
|
|
120.2
|
|
|
—
|
|
|
647.2
|
|
|||||
Gross profit
|
—
|
|
|
372.0
|
|
|
61.8
|
|
|
—
|
|
|
433.8
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative
|
—
|
|
|
170.5
|
|
|
41.7
|
|
|
—
|
|
|
212.2
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
5.9
|
|
|
0.2
|
|
|
—
|
|
|
6.1
|
|
|||||
Other income, net
|
—
|
|
|
(1.0
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||||
Income from operations
|
—
|
|
|
196.6
|
|
|
20.5
|
|
|
—
|
|
|
217.1
|
|
|||||
Equity income in subsidiaries
|
(143.5
|
)
|
|
(7.4
|
)
|
|
—
|
|
|
150.9
|
|
|
—
|
|
|||||
Other non-operating income
|
(5.1
|
)
|
|
—
|
|
|
(5.7
|
)
|
|
10.8
|
|
|
—
|
|
|||||
Costs related to refinancing
|
10.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|||||
Interest expense
|
12.5
|
|
|
9.9
|
|
|
0.4
|
|
|
(10.8
|
)
|
|
12.0
|
|
|||||
Income from continuing operations before income taxes
|
125.4
|
|
|
194.1
|
|
|
25.8
|
|
|
(150.9
|
)
|
|
194.4
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(0.3
|
)
|
|
59.9
|
|
|
9.1
|
|
|
—
|
|
|
68.7
|
|
|||||
Income from continuing operations
|
125.7
|
|
|
134.2
|
|
|
16.7
|
|
|
(150.9
|
)
|
|
125.7
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
$
|
125.7
|
|
|
$
|
134.0
|
|
|
$
|
16.9
|
|
|
$
|
(150.9
|
)
|
|
$
|
125.7
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,043.6
|
|
|
$
|
227.0
|
|
|
$
|
—
|
|
|
$
|
1,270.6
|
|
Cost of sales
|
—
|
|
|
645.1
|
|
|
157.8
|
|
|
—
|
|
|
802.9
|
|
|||||
Gross profit
|
—
|
|
|
398.5
|
|
|
69.2
|
|
|
—
|
|
|
467.7
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
268.4
|
|
|
68.2
|
|
|
—
|
|
|
336.6
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
5.9
|
|
|
0.5
|
|
|
—
|
|
|
6.4
|
|
|||||
Other income, net
|
—
|
|
|
(2.1
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(2.7
|
)
|
|||||
Income from operations
|
—
|
|
|
126.3
|
|
|
1.1
|
|
|
—
|
|
|
127.4
|
|
|||||
Equity income in subsidiaries
|
(87.6
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
91.1
|
|
|
—
|
|
|||||
Other non-operating income
|
(9.5
|
)
|
|
—
|
|
|
(11.0
|
)
|
|
20.5
|
|
|
—
|
|
|||||
Costs related to refinancing
|
10.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
|||||
Interest expense
|
26.6
|
|
|
19.4
|
|
|
0.4
|
|
|
(20.5
|
)
|
|
25.9
|
|
|||||
Income from continuing operations before income taxes
|
59.8
|
|
|
110.4
|
|
|
11.7
|
|
|
(91.1
|
)
|
|
90.8
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(0.2
|
)
|
|
27.1
|
|
|
4.0
|
|
|
—
|
|
|
30.9
|
|
|||||
Income from continuing operations
|
60.0
|
|
|
83.3
|
|
|
7.7
|
|
|
(91.1
|
)
|
|
59.9
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
(0.3
|
)
|
|
0.4
|
|
|
—
|
|
|
0.1
|
|
|||||
Net income
|
$
|
60.0
|
|
|
$
|
83.0
|
|
|
$
|
8.1
|
|
|
$
|
(91.1
|
)
|
|
$
|
60.0
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
125.7
|
|
|
$
|
134.0
|
|
|
$
|
16.9
|
|
|
$
|
(150.9
|
)
|
|
$
|
125.7
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(2.7
|
)
|
|
—
|
|
|
(2.7
|
)
|
|
2.7
|
|
|
(2.7
|
)
|
|||||
Net change in derivatives
|
0.6
|
|
|
(0.6
|
)
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|||||
Net change in pension and other post-retirement benefits
|
0.7
|
|
|
0.5
|
|
|
0.2
|
|
|
(0.7
|
)
|
|
0.7
|
|
|||||
Total other comprehensive loss
|
(1.4
|
)
|
|
(0.1
|
)
|
|
(2.5
|
)
|
|
2.6
|
|
|
(1.4
|
)
|
|||||
Comprehensive income
|
$
|
124.3
|
|
|
$
|
133.9
|
|
|
$
|
14.4
|
|
|
$
|
(148.3
|
)
|
|
$
|
124.3
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
Net income
|
$
|
60.0
|
|
|
$
|
83.0
|
|
|
$
|
8.1
|
|
|
$
|
(91.1
|
)
|
|
$
|
60.0
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(4.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
|
4.1
|
|
|
(4.1
|
)
|
|||||
Net change in derivatives
|
4.1
|
|
|
1.8
|
|
|
—
|
|
|
(1.8
|
)
|
|
4.1
|
|
|||||
Net change in pension and other post-retirement benefits
|
1.2
|
|
|
1.1
|
|
|
0.1
|
|
|
(1.2
|
)
|
|
1.2
|
|
|||||
Total other comprehensive income (loss)
|
1.2
|
|
|
2.9
|
|
|
(4.0
|
)
|
|
1.1
|
|
|
1.2
|
|
|||||
Comprehensive income
|
$
|
61.2
|
|
|
$
|
85.9
|
|
|
$
|
4.1
|
|
|
$
|
(90.0
|
)
|
|
$
|
61.2
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(a)
|
$
|
110.3
|
|
|
$
|
(474.1
|
)
|
|
$
|
(122.2
|
)
|
|
$
|
(128.6
|
)
|
|
$
|
(614.6
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sale of business, net of transaction costs
|
—
|
|
|
3.1
|
|
|
1.0
|
|
|
—
|
|
|
4.1
|
|
|||||
Investments in property, plant and equipment
|
—
|
|
|
(50.1
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(53.0
|
)
|
|||||
Investment in acquired businesses, net of cash acquired
|
—
|
|
|
(60.0
|
)
|
|
—
|
|
|
—
|
|
|
(60.0
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(107.0
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
(108.9
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under revolving and bank lines of credit
|
—
|
|
|
1,482.4
|
|
|
233.1
|
|
|
—
|
|
|
1,715.5
|
|
|||||
Repayments under revolving and bank lines of credit
|
—
|
|
|
(448.4
|
)
|
|
(212.9
|
)
|
|
—
|
|
|
(661.3
|
)
|
|||||
Repayment of Senior Notes
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200.0
|
)
|
|||||
Financing and issuance fees
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|||||
Dividends paid
|
(54.5
|
)
|
|
(128.6
|
)
|
|
—
|
|
|
128.6
|
|
|
(54.5
|
)
|
|||||
Purchase of common shares
|
(59.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59.6
|
)
|
|||||
Payment on seller notes
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
|||||
Cash received from the exercise of stock options
|
7.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
|||||
Intercompany financing
|
202.0
|
|
|
(326.8
|
)
|
|
124.8
|
|
|
—
|
|
|
—
|
|
|||||
Net cash (used in) provided by financing activities
|
(110.3
|
)
|
|
581.6
|
|
|
145.0
|
|
|
128.6
|
|
|
744.9
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|||||
Net increase in cash and cash equivalents
|
—
|
|
|
0.5
|
|
|
22.4
|
|
|
—
|
|
|
22.9
|
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
2.6
|
|
|
127.2
|
|
|
—
|
|
|
129.8
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
149.6
|
|
|
$
|
—
|
|
|
$
|
152.7
|
|
(a)
|
Cash received by the Parent from its subsidiaries in the form of dividends in the amount of
$128.6 million
represent return on investments and are included in cash flows from operating activities.
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
149.6
|
|
|
$
|
—
|
|
|
$
|
152.7
|
|
Accounts receivable, net
|
—
|
|
|
516.4
|
|
|
230.5
|
|
|
—
|
|
|
746.9
|
|
|||||
Accounts receivable pledged
|
—
|
|
|
341.9
|
|
|
—
|
|
|
—
|
|
|
341.9
|
|
|||||
Inventories
|
—
|
|
|
433.0
|
|
|
113.2
|
|
|
—
|
|
|
546.2
|
|
|||||
Prepaid and other current assets
|
—
|
|
|
113.7
|
|
|
36.2
|
|
|
—
|
|
|
149.9
|
|
|||||
Total current assets
|
—
|
|
|
1,408.1
|
|
|
529.5
|
|
|
—
|
|
|
1,937.6
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
400.8
|
|
|
42.8
|
|
|
—
|
|
|
443.6
|
|
|||||
Goodwill
|
—
|
|
|
332.7
|
|
|
0.6
|
|
|
—
|
|
|
333.3
|
|
|||||
Intangible assets, net
|
—
|
|
|
280.8
|
|
|
37.7
|
|
|
—
|
|
|
318.5
|
|
|||||
Other assets
|
28.2
|
|
|
17.5
|
|
|
26.6
|
|
|
(34.1
|
)
|
|
38.2
|
|
|||||
Equity investment in subsidiaries
|
417.1
|
|
|
—
|
|
|
—
|
|
|
(417.1
|
)
|
|
—
|
|
|||||
Intercompany assets
|
1,398.1
|
|
|
—
|
|
|
—
|
|
|
(1,398.1
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,843.4
|
|
|
$
|
2,439.9
|
|
|
$
|
637.2
|
|
|
$
|
(1,849.3
|
)
|
|
$
|
3,071.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
275.2
|
|
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
278.6
|
|
Accounts payable
|
—
|
|
|
263.4
|
|
|
79.1
|
|
|
—
|
|
|
342.5
|
|
|||||
Other current liabilities
|
16.9
|
|
|
279.2
|
|
|
100.9
|
|
|
—
|
|
|
397.0
|
|
|||||
Total current liabilities
|
16.9
|
|
|
817.8
|
|
|
183.4
|
|
|
—
|
|
|
1,018.1
|
|
|||||
Long term debt
|
1,141.3
|
|
|
913.2
|
|
|
32.2
|
|
|
(941.4
|
)
|
|
1,145.3
|
|
|||||
Other liabilities
|
9.5
|
|
|
212.5
|
|
|
44.2
|
|
|
(34.1
|
)
|
|
232.1
|
|
|||||
Equity investment in subsidiaries
|
—
|
|
|
171.7
|
|
|
—
|
|
|
(171.7
|
)
|
|
—
|
|
|||||
Intercompany liabilities
|
—
|
|
|
178.9
|
|
|
277.8
|
|
|
(456.7
|
)
|
|
—
|
|
|||||
Total liabilities
|
1,167.7
|
|
|
2,294.1
|
|
|
537.6
|
|
|
(1,603.9
|
)
|
|
2,395.5
|
|
|||||
Shareholders' equity
|
675.7
|
|
|
145.8
|
|
|
99.6
|
|
|
(245.4
|
)
|
|
675.7
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,843.4
|
|
|
$
|
2,439.9
|
|
|
$
|
637.2
|
|
|
$
|
(1,849.3
|
)
|
|
$
|
3,071.2
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/Consolidations
|
|
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
|
—
|
|
|
85.2
|
|
|
37.7
|
|
|
—
|
|
|
122.9
|
|
|||||
Total current assets
|
—
|
|
|
628.7
|
|
|
306.3
|
|
|
—
|
|
|
935.0
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
371.3
|
|
|
65.7
|
|
|
—
|
|
|
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
|
|
|
$
|
1,615.8
|
|
|
$
|
453.0
|
|
|
$
|
(1,281.4
|
)
|
|
$
|
2,058.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
85.8
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
91.9
|
|
Accounts payable
|
—
|
|
|
134.4
|
|
|
58.9
|
|
|
—
|
|
|
193.3
|
|
|||||
Other current liabilities
|
16.7
|
|
|
161.9
|
|
|
80.9
|
|
|
—
|
|
|
259.5
|
|
|||||
Total current liabilities
|
16.7
|
|
|
382.1
|
|
|
145.9
|
|
|
—
|
|
|
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
|
—
|
|
|
305.2
|
|
|
91.8
|
|
|
(397.0
|
)
|
|
—
|
|
|||||
Total liabilities
|
703.6
|
|
|
1,509.5
|
|
|
297.5
|
|
|
(1,019.5
|
)
|
|
1,491.1
|
|
|||||
Total shareholders' equity - controlling interest
|
553.8
|
|
|
92.8
|
|
|
155.5
|
|
|
(248.4
|
)
|
|
553.7
|
|
|||||
Noncontrolling interest
|
13.5
|
|
|
13.5
|
|
|
—
|
|
|
(13.5
|
)
|
|
13.5
|
|
|||||
Total equity
|
567.3
|
|
|
106.3
|
|
|
155.5
|
|
|
(261.9
|
)
|
|
567.2
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,270.9
|
|
|
$
|
1,615.8
|
|
|
$
|
453.0
|
|
|
$
|
(1,281.4
|
)
|
|
$
|
2,058.3
|
|
•
|
Executive summary
|
•
|
Results of operations
|
•
|
Segment results
|
•
|
Liquidity and capital resources
|
•
|
Regulatory matters
|
•
|
Critical accounting policies and estimates
|
|
Percent of Net Sales from
Continuing Operations by Quarter
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
First Quarter
|
6.7
|
%
|
|
7.0
|
%
|
|
6.7
|
%
|
Second Quarter
|
38.0
|
%
|
|
36.4
|
%
|
|
41.7
|
%
|
Third Quarter
|
39.3
|
%
|
|
41.0
|
%
|
|
37.5
|
%
|
Fourth Quarter
|
16.0
|
%
|
|
15.6
|
%
|
|
14.1
|
%
|
•
|
a special one-time cash dividend of $2.00 per Common Share that was paid on September 17, 2014;
|
•
|
an increase in our quarterly cash dividend from $0.4375 to $0.45 per Common Share; and
|
•
|
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.
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
60.7
|
|
|
59.9
|
|
|
64.9
|
|
|
63.2
|
|
Cost of sales—impairment, restructuring and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Gross profit
|
39.3
|
|
|
40.1
|
|
|
35.1
|
|
|
36.8
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
19.9
|
|
|
19.6
|
|
|
26.3
|
|
|
26.5
|
|
Impairment, restructuring and other
|
0.4
|
|
|
0.6
|
|
|
1.1
|
|
|
0.5
|
|
Other income, net
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
Income from operations
|
19.1
|
|
|
20.0
|
|
|
7.8
|
|
|
10.0
|
|
Costs related to refinancing
|
—
|
|
|
1.0
|
|
|
—
|
|
|
0.8
|
|
Interest expense
|
1.4
|
|
|
1.1
|
|
|
1.9
|
|
|
2.0
|
|
Income from continuing operations before income taxes
|
17.7
|
|
|
17.9
|
|
|
5.9
|
|
|
7.2
|
|
Income tax expense from continuing operations
|
6.4
|
|
|
6.3
|
|
|
2.1
|
|
|
2.4
|
|
Income from continuing operations
|
11.3
|
|
|
11.6
|
|
|
3.8
|
|
|
4.8
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net Income
|
11.3
|
%
|
|
11.6
|
%
|
|
3.8
|
%
|
|
4.8
|
%
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||
|
MARCH 28, 2015
|
|
MARCH 28, 2015
|
||
Acquisitions
|
1.6
|
%
|
|
3.3
|
%
|
Volume
|
2.8
|
|
|
3.0
|
|
Pricing
|
0.1
|
|
|
—
|
|
Foreign exchange rates
|
(2.5
|
)
|
|
(2.5
|
)
|
Change in net sales
|
2.0
|
%
|
|
3.8
|
%
|
•
|
sales from acquisitions within our Global Consumer segment from AeroGrow, Fafard, and Solus and within our Scotts LawnService
®
segment from Action Pest; and
|
•
|
increased volume in our Global Consumer segment, driven by increased sales within the U.S. of fertilizer, mulch, and cleaners products, and
|
•
|
partial offset by the unfavorable impact of foreign exchange rates as a result of the strengthening of the U.S. dollar relative to other currencies including Canadian dollar, Euro, and British pound.
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||||||
|
(In millions)
|
||||||||||||||
Materials
|
$
|
404.4
|
|
|
$
|
394.1
|
|
|
$
|
496.3
|
|
|
$
|
474.9
|
|
Distribution and warehousing
|
118.5
|
|
|
116.7
|
|
|
167.2
|
|
|
152.3
|
|
||||
Manufacturing labor and overhead
|
127.7
|
|
|
117.7
|
|
|
156.7
|
|
|
141.9
|
|
||||
Roundup
®
reimbursements
|
18.2
|
|
|
18.7
|
|
|
35.5
|
|
|
33.8
|
|
||||
|
$
|
668.8
|
|
|
$
|
647.2
|
|
|
$
|
855.7
|
|
|
$
|
802.9
|
|
Impairment, restructuring and other
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
|
$
|
669.0
|
|
|
$
|
647.2
|
|
|
$
|
855.9
|
|
|
$
|
802.9
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||
|
MARCH 28, 2015
|
|
MARCH 28, 2015
|
||||
|
(In millions)
|
||||||
Material costs
|
$
|
3.5
|
|
|
$
|
3.1
|
|
Volume and product mix
|
36.7
|
|
|
69.6
|
|
||
Roundup
®
reimbursements
|
(0.5
|
)
|
|
1.7
|
|
||
Foreign exchange rates
|
(18.1
|
)
|
|
(21.6
|
)
|
||
|
$
|
21.6
|
|
|
$
|
52.8
|
|
Impairment, restructuring and other
|
0.2
|
|
|
0.2
|
|
||
Change in cost of sales
|
$
|
21.8
|
|
|
$
|
53.0
|
|
•
|
costs related to sales from acquisitions within our Global Consumer segment from AeroGrow, Fafard, and Solus and within our Scotts LawnService
®
segment from Action Pest;
|
•
|
higher distribution costs within our Global Consumer segment due to the recognition of negative mark-to-market adjustments associated with our fuel hedges of $1.6 million and $8.8 million for the three and six months ended March 28, 2015. These mark-to-market adjustments have been partially offset by savings from fuel purchases within the first six months of the current fiscal year and we expect to offset the remainder of the adjustments during the third and fourth quarters of fiscal 2015;
|
•
|
increased sales volume in our Global Consumer segment; and
|
•
|
an increase in net sales for the six months ended March 28, 2015 attributable to reimbursements under our Roundup
®
Marketing Agreement;
|
•
|
partially offset by the favorable impact of foreign exchange rates as a result of a strengthening of the U.S. dollar relative to other currencies including Canadian dollar, Euro, and British pound.
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||
|
MARCH 28, 2015
|
|
MARCH 28, 2015
|
||
Pricing
|
—
|
%
|
|
—
|
%
|
Material costs
|
(0.3
|
)
|
|
(0.2
|
)
|
Product mix and volume:
|
|
|
|
||
Roundup
®
commissions and reimbursements
|
—
|
|
|
—
|
|
Acquisitions
|
(0.4
|
)
|
|
(0.6
|
)
|
Corporate & Other
|
(0.1
|
)
|
|
—
|
|
Scotts LawnService
®
|
—
|
|
|
—
|
|
Global Consumer mix and volume
|
—
|
|
|
(0.9
|
)
|
Change in gross profit rate
|
(0.8
|
)%
|
|
(1.7
|
)%
|
•
|
net impact of the Solus and Fafard acquisitions, within our Global Consumer segment, decreasing gross profit rate, while AeroGrow within our Global Consumer segment and Action Pest within our Scotts LawnService
®
segment increased the gross profit rate; and
|
•
|
increased material costs within our Global Consumer segment for our grass seed and soils products.
|
•
|
higher distribution costs within our Global Consumer segment due to the recognition of negative mark-to-market adjustments associated with our fuel hedges of $8.8 million for the six months ended March 28, 2015. These mark-to-market adjustments have been partially offset by savings from fuel purchases within the first six months of the current fiscal year and we expect to offset the remainder of the adjustments during the third and fourth quarters of fiscal 2015;
|
•
|
negative product mix within our Global Consumer segment due to increased sales of mulch products;
|
•
|
net impact of the Solus and Fafard acquisitions, within our Global Consumer segment, decreasing gross profit rate, while AeroGrow within our Global Consumer segment and Action Pest within our Scotts LawnService
®
segment increased the gross profit rate; and
|
•
|
increased material costs within our Global Consumer segment for our grass seed and soils products.
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||||||
|
(In millions)
|
||||||||||||||
Advertising
|
$
|
63.2
|
|
|
$
|
62.5
|
|
|
$
|
72.7
|
|
|
$
|
70.0
|
|
Share-based compensation
|
7.2
|
|
|
4.6
|
|
|
9.3
|
|
|
6.4
|
|
||||
Research and development
|
10.8
|
|
|
11.1
|
|
|
21.0
|
|
|
22.1
|
|
||||
Amortization of intangibles
|
2.7
|
|
|
2.5
|
|
|
5.7
|
|
|
4.9
|
|
||||
Other selling, general and administrative
|
135.8
|
|
|
131.5
|
|
|
237.9
|
|
|
233.2
|
|
||||
|
$
|
219.7
|
|
|
$
|
212.2
|
|
|
$
|
346.6
|
|
|
$
|
336.6
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||||||
|
(In millions)
|
||||||||||||||
Global Consumer
|
$
|
1,064.3
|
|
|
$
|
1,046.0
|
|
|
$
|
1,227.9
|
|
|
$
|
1,184.4
|
|
Scotts LawnService
®
|
30.4
|
|
|
28.9
|
|
|
77.1
|
|
|
75.2
|
|
||||
Segment total
|
1,094.7
|
|
|
1,074.9
|
|
|
1,305.0
|
|
|
1,259.6
|
|
||||
Corporate & Other
|
7.6
|
|
|
6.1
|
|
|
13.5
|
|
|
11.0
|
|
||||
Consolidated
|
$
|
1,102.3
|
|
|
$
|
1,081.0
|
|
|
$
|
1,318.5
|
|
|
$
|
1,270.6
|
|
|
THREE MONTHS ENDED
|
|
SIX MONTHS ENDED
|
||||||||||||
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
|
MARCH 28, 2015
|
|
MARCH 29, 2014
|
||||||||
|
(In millions)
|
||||||||||||||
Global Consumer
|
$
|
272.0
|
|
|
$
|
269.5
|
|
|
$
|
197.8
|
|
|
$
|
202.1
|
|
Scotts LawnService
®
|
(22.6
|
)
|
|
(20.3
|
)
|
|
(21.1
|
)
|
|
(17.7
|
)
|
||||
Segment total
|
249.4
|
|
|
249.2
|
|
|
176.7
|
|
|
184.4
|
|
||||
Corporate & Other
|
(31.8
|
)
|
|
(23.0
|
)
|
|
(52.0
|
)
|
|
(44.7
|
)
|
||||
Intangible asset amortization
|
(3.2
|
)
|
|
(3.0
|
)
|
|
(6.7
|
)
|
|
(5.9
|
)
|
||||
Impairment, restructuring and other
|
(5.1
|
)
|
|
(6.1
|
)
|
|
(14.7
|
)
|
|
(6.4
|
)
|
||||
Costs related to refinancing
|
—
|
|
|
(10.7
|
)
|
|
—
|
|
|
(10.7
|
)
|
||||
Interest expense
|
(15.0
|
)
|
|
(12.0
|
)
|
|
(24.7
|
)
|
|
(25.9
|
)
|
||||
Consolidated
|
$
|
194.3
|
|
|
$
|
194.4
|
|
|
$
|
78.6
|
|
|
$
|
90.8
|
|
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)
|
||||||
December 28, 2014, through January 24, 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
485,186,044
|
|
January 25, through February 21, 2015
|
1,346
|
|
|
$
|
64.12
|
|
|
—
|
|
|
$
|
485,186,044
|
|
February 22, through March 28, 2015
|
5,320
|
|
|
$
|
66.06
|
|
|
—
|
|
|
$
|
485,186,044
|
|
Total
|
6,666
|
|
|
$
|
65.67
|
|
|
—
|
|
|
|
(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 were 6,666 Common Shares purchased by the trustee of the rabbi trust established by the Company as permitted pursuant to the terms of The Scotts Company LLC Executive Retirement Plan (the “ERP”). The ERP is an unfunded, non-qualified deferred compensation plan which, among other things, provides eligible employees the opportunity to defer compensation above specified statutory limits applicable to The Scotts Company LLC Retirement Savings Plan and with respect to any Executive Management Incentive Pay (as defined in the ERP), Performance Award (as defined in the ERP) or other bonus awarded to such eligible employees. Pursuant to the terms of the ERP, each eligible employee has the right to elect an investment fund, including a fund consisting of Common Shares (the “Scotts Miracle-Gro Common Stock Fund”), against which amounts allocated to such employee's account under the ERP, including employer contributions, will be benchmarked (all ERP accounts are bookkeeping accounts only and do not represent a claim against specific assets of the Company). Amounts allocated to employee accounts under the ERP represent deferred compensation obligations of the Company. The Company established the rabbi trust in order to assist the Company in discharging such deferred compensation obligations. When an eligible employee elects to benchmark some or all of the amounts allocated to such employee's account against the Scotts Miracle-Gro Common Stock Fund, the trustee of the rabbi trust purchases the number of Common Shares equivalent to the amount so benchmarked. All Common Shares purchased by the trustee are purchased on the open market and are held in the rabbi trust until such time as they are distributed pursuant to the terms of the ERP. All assets of the rabbi trust, including any Common Shares purchased by the trustee, remain, at all times, assets of the Company, subject to the claims of its creditors. The terms of the ERP do not provide for a specified limit on the number of Common Shares that may be purchased by the trustee of the rabbi trust.
|
|
|
(2)
|
The average price paid per Common Share is calculated on a settlement basis and includes commissions.
|
|
|
(3)
|
In August 2014, the Scotts Miracle-Gro Board of Directors authorized the repurchase of up to $500 million of the 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 of shares that were available for repurchase under the $500 million authorized repurchase program.
|
|
|
|
|
|
THE SCOTTS MIRACLE-GRO COMPANY
|
|
|
|
Date: May 7, 2015
|
|
/s/ THOMAS RANDAL COLEMAN
|
|
|
Printed Name: Thomas Randal Coleman
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
LOCATION
|
|
|
|
|
|
4
|
|
Fourth Supplemental Indenture, dated March 27, 2015, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association
|
|
*
|
|
|
|
|
|
10.1
|
|
The Scotts Company LLC Executive Retirement Plan, as Amended and Restated as of January 1, 2015 (executed December 31, 2014)
|
|
Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended December 27, 2014 filed February 5, 2015 [Exhibit 10.2]
|
|
|
|
|
|
10.2
|
|
Consulting Agreement, dated March 6, 2015, between The Scotts Company LLC and Hanft Projects LLC
|
|
*
|
|
|
|
|
|
10.3
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors (with Related Dividend Equivalents) used to evidence grants under the Long-Term Incentive Plan
|
|
*
|
|
|
|
|
|
10.4
|
|
Specimen form of Deferred Stock Unit Award Agreement for Nonemployee Directors Retainer Deferrals (with Related Dividend Equivalents) used to evidence grants which may be made under the Long-Term Incentive Plan
|
|
*
|
|
|
|
|
|
10.5
|
|
Specimen form of Restricted Stock Unit Award Agreement for Third Party Service-Providers (with Related Dividend Equivalents) used to evidence grants which may be made under under the Long-Term Incentive Plan
|
|
*
|
|
|
|
|
|
10.6
|
|
Specimen form of Performance Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants which may be made under under the Long-Term Incentive Plan
|
|
*
|
|
|
|
|
|
10.7
|
|
Specimen form of Nonqualified Stock Option Award Agreement for Employees used to evidence grants which may be made under under the Long-Term Incentive Plan
|
|
*
|
|
|
|
|
|
10.8
|
|
Specimen form of Restricted Stock Unit Award Agreement for Employees (with Related Dividend Equivalents) used to evidence grants which may be made under under the Long-Term Incentive Plan
|
|
*
|
|
|
|
|
|
21
|
|
Subsidiaries 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
|
|
*
|
|
|
|
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|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
*
|
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|
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|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
*
|
*
|
Filed or furnished herewith
|
|
|
COMPANY:
THE SCOTTS MIRACLE-GRO COMPANY
By:
/s/ THOMAS RANDAL COLEMAN
Name:Thomas Randal Coleman
Title:Executive Vice President and Chief Financial Officer
|
NEW GUARANTORS:
HAWTHORNE HYDROPONICS LLC
THE HAWTHORNE GARDENING COMPANY
By:
/s/ MARK J. WEAVER
Name:Mark J. Weaver
Title:Vice President and Treasurer
|
EXISTING GUARANTORS:
EG SYSTEMS, INC., DBA SCOTTS LAWNSERVICE
GUTWEIN & CO., INC.
HYPONEX CORPORATION
MIRACLE-GRO LAWN PRODUCTS, INC.
ROD MCLELLAN COMPANY
SANFORD SCIENTIFIC, INC.
SCOTTS TEMECULA OPERATIONS, LLC
SCOTTS MANUFACTURING COMPANY
SCOTTS PRODUCTS CO.
SCOTTS PROFESSIONAL PRODUCTS CO.
SMG GROWING MEDIA, INC.
THE SCOTTS COMPANY LLC
By:
/s/ THOMAS RANDAL COLEMAN
Name:Thomas Randal Coleman
Title:Executive Vice President and Chief Financial Officer
|
SLS FRANCHISE SYSTEMS LLC
By:
/s/ ROBERT WALTER
Name:Robert Walter
Title: Vice President and Treasurer
|
OMS INVESTMENTS, INC.
SWISS FARMS PRODUCTS, INC.
SCOTTS-SIERRA INVESTMENTS, LLC
SMGM LLC
By:
/s/ AIMEE M. DELUCA
Name:Aimee M. DeLuca
Title:President and Chief Executive Officer
|
TRUSTEE:
U.S. BANK NATIONAL ASSOCIATION
By:
/s/ KATHERINE ESBER
Name:Katherine Esber
Title:Vice President
|
The Scotts Company LLC
|
|
|
|
I.
|
Scope of Services
|
1.
|
Contractor agrees to provide consulting services to Scotts in the area of Marketing so as to advise the Company on marketing strategies concerning a variety of areas including, but not limited to, brand and creative efforts, partnerships with outside services, work processes and staffing/personnel assessments.
|
2.
|
In providing consulting services in the Areas of Expertise, it is anticipated that Contractor will generally undertake the following work and activities pursuant to this Agreement:
|
•
|
Provide insights and expertise to help inspire and develop a culture of creativity, with emphasis on: Shaping the overall marketing strategy in conjunction with the CEO and COO; inspiring innovation; building Scotts’ brands and consumer loyalty; and mentoring and coaching key marketing and business executives as requested.
|
•
|
Consult with and provide recommendations to Jim Hagedorn on an as needed basis on issues of marketing strategy.
|
•
|
Periodically participate in marketing meetings to support the successful execution of the anticipated marketing initiatives of the Company.
|
•
|
Participate in discussions of and otherwise support other marketing issues as required.
|
Mr. Adam Hanft
Chief Executive Officer
Hanft Projects LLC
|
-
2
-
|
March 6, 2015
|
3.
|
In providing consulting services to Scotts under this Agreement, Contractor will be an independent contractor and will not be an employee, agent, partner, or joint venturer of Scotts or of any of Scotts’ affiliates, or of any of its or their respective officers, directors or employees. Except as provided as a member of the Board, if applicable, and except as otherwise expressly stated herein including in paragraph 1(b), Mr. Hanft and any other designee or employee of Contractor will not participate in or receive benefits under any of Scotts’ employee fringe benefit programs or receive any other fringe benefits from Scotts, including, without limitation, the health, disability, life insurance, retirement, equity awards, pension and profit sharing benefits on account of the consulting services provided to Scotts under this Agreement.
|
II.
|
Length of Agreement
|
III.
|
Authority
|
IV.
|
Consulting Fees and Expenses
|
1.
|
In exchange for providing the consulting services hereunder, during the term of this Agreement, Scotts shall pay Contractor a consulting fee consisting of a combination of cash and restricted stock units, as follows:
|
a.
|
A monthly cash payment of $75,000 for each month during the term irrespective of whether Scotts requests that Contractor provides consulting serviceshereunder. Contractor shall be required to submit monthly invoices including days/hours worked with brief descriptions of the services provided. Scotts shall pay Contractor within 30 days of its receipt of Contractor’s invoices.
|
b.
|
Subject to Contractor providing consulting services required by this Agreement throughout the complete term of this Agreement, the Company will provide Contractor a one-time grant of restricted stock units (“RSUs”) with a grant date value of $400,000. The RSUs shall be issued in the name of Adam Hanft individually. The number of RSUs will be determined by dividing the intended grant date value by the closing price of a share on the grant date, rounded up to the next whole share. Except where Scotts terminates this Agreement without Cause, the RSUs and any related dividend equivalents will vest on January 31, 2016, provided that this Agreement has not otherwise been terminated or notified for termination on that date, and provided that Contractor has fulfilled
|
Mr. Adam Hanft
Chief Executive Officer
Hanft Projects LLC
|
-
3
-
|
March 6, 2015
|
i.
|
With the exception of the vesting provisions described above, the award of RSUs and related dividend equivalents shall be subject to the terms of The Scotts Miracle-Gro Company Long Term Incentive Plan, effective as of January 17, 2013 (the “Plan”), and the standard terms and conditions of the applicable award agreement. In the event of any conflicts or ambiguity between this Agreement and the terms of the Plan and/or the award agreement, the Plan and/or award agreement will be controlling.
|
2.
|
Scotts also will pay or reimburse Contractor for all reasonable expenses incurred by Contractor in connection with providing consulting services to Scotts as contemplated herein, including, without limitation, all reasonable (a) telephone and fax expenses, and (b) travel expenses, including, without limitation, transportation, food and lodging, incurred in connection with attending Scotts approved meetings pursuant to this consulting agreement. Contractor must incur and account for expenses in accordance with the policies and procedures established by Scotts as a precondition to Scotts’ obligation to pay or reimburse Contractor for such expenses pursuant to the terms of the preceding sentence. This includes describing expenses in reasonable detail on invoices. Scotts will provide private transportation when practical and economically reasonable.
|
3.
|
Contractor agrees to provide, at its own expense, all equipment necessary to provide the consulting services contemplated herein and to be responsible for its own overhead costs and expenses except for those expenses that Scotts has expressly agreed to pay pursuant to the terms of the preceding paragraph.
|
V.
|
Termination
|
1.
|
Scotts shall be permitted to terminate this Agreement and its consulting relationship with Contractor under any of the following circumstances: (a) upon Scotts’ 60 days advance written notice to Contractor, (b) Mr. Hanft’s death or disability, or Contractor ceasing operations, (c) Contractor’s material breach of its obligations to Scotts if such breach is not cured within 30 days after receiving notice thereof, (d) Contractor’s and/or Mr. Hanft’s indictment for a felony or serious misdemeanor, (e) Contractor’s and/or Mr. Hanft’s commission of an act of fraud or bad faith toward Scotts, or (f) Contractor’s and/or Mr. Hanft’s misappropriation of any funds, property or rights of Scotts. If Scotts terminates this Agreement under Section V.1(a), Contractor will receive the consulting fees and expenses as provided by and subject to the terms of Section IV during the 60-day period following written notice of termination. Contractor shall be permitted to terminate this Agreement and its consulting relationship with Scotts upon Contractor’s 30 day advance written notice to Scotts.
|
2.
|
The termination of this Agreement and Contractor’s consulting relationship with Scotts shall not affect Scotts’ obligation to pay Contractor for the amounts Contractor has earned prior to the date of such termination or reimburse Contractor for the expenses Contractor has incurred pursuant to the terms of this Agreement prior to the date of such termination.
|
Mr. Adam Hanft
Chief Executive Officer
Hanft Projects LLC
|
-
4
-
|
March 6, 2015
|
VI.
|
Confidential Information
|
1.
|
In providing the consulting services contemplated herein, Contractor will receive
|
2.
|
Contractor agrees to not at any time hereafter, without the prior written consent of Scotts, disclose, directly or indirectly, any Confidential Information or use any Confidential Information for any purpose other than providing consulting services to Scotts as contemplated herein.
|
3.
|
Contractor agrees to promptly return to Scotts, upon Scotts’ request, all electronic or tangible documents that contain any Confidential Information and to retain no copies.
|
4.
|
These confidentiality obligations are in addition to, and not in place of, any and all confidentiality obligations arising as a result of Mr. Hanft’s membership on the Board and applicable Board Committees.
|
VII.
|
Other
|
1.
|
Contractor understands and agrees that this Agreement does not obligate Scotts to utilize Contractor’s consulting services, but it is intended to set forth the terms pursuant to which Scotts may utilize Contractor’s consulting services in Scotts’ discretion.
|
2.
|
Contractor is not permitted to assign, sell or otherwise transfer any of its rights or obligations hereunder.
|
3.
|
Contractor acknowledges that neither Scotts nor any representatives of Scotts have made any representations or promises about the tax implications of this Agreement. Nothing in this Agreement may be construed as tax advice from Scotts to Contractor. Contractor has been encouraged to discuss the tax implications of this Agreement with his own tax and financial counsel.
|
Mr. Adam Hanft
Chief Executive Officer
Hanft Projects LLC
|
-
5
-
|
March 6, 2015
|
|
|
THE SCOTTS COMPANY LLC
|
|
|
By:
/s/ JAMES HAGEDORN
James Hagedorn
Chairman of the Board & Chief Executive Officer
|
ACKNOWLEDGED AND AGREED:
/s/ ADAM HANFT
|
|
|
Adam Hanft, Chief Executive Officer
Hanft Projects LLC
|
|
|
2.
|
INCORPORATION OF PLAN AND DEFINITIONS.
|
(a)
|
This Award Agreement and your DSUs and dividend equivalents are granted pursuant to and in accordance with the terms of The Scotts Miracle-Gro Company Long-Term Incentive Plan as amended and restated January 17, 2013 (the “Plan”). All provisions of the Plan are incorporated herein by reference, and your DSUs and dividend equivalents are subject to the terms of the Plan and this Award Agreement. To the extent there is a conflict between this Award Agreement and the Plan, the Plan will govern.
|
(b)
|
Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.
|
3.
|
VESTING.
The DSUs described in this Award Agreement will vest as follows:
|
(a)
|
General Vesting.
If your Board services continue from the Grant Date until the earlier of
[Date]
or
[Date]
(the “Vesting Date”), your DSUs described in this Award Agreement will become 100% vested on the Vesting Date, including any DSUs credited pursuant to Section 5 on or prior to the Vesting Date. Any DSUs received pursuant to Section 5 following the Vesting Date will be 100% vested on the date they are credited to you; or
|
(b)
|
[Accelerated Vesting.
Your DSUs described in this Award Agreement, including any DSUs credited pursuant to Section 5, will become 100% vested as of the date you Terminate because of your death or because you become Disabled. For purposes of this Award Agreement, “Disabled” means that you have been determined to be totally disabled by the Social Security Administration.]
|
(c)
|
[If you Terminate for a reason other than Cause after completing at least five full years of continuous service and are at least age 50, all DSUs will become 100% vested as of the date of such event.]
|
(a)
|
Subject to the terms of the Plan and this Award Agreement, your vested DSUs, including any DSUs credited pursuant to Section 5, shall be settled in a lump sum as soon as administratively practicable, but no later than
[Number]
days following the earliest date to occur of: (i) your Termination; or (ii) the
[Number]
anniversary of the Grant Date (the “Settlement Date”). Your whole DSUs shall be settled in full Shares, and any fractional DSU shall be settled in cash, determined based upon the Fair Market Value of a Share on the Settlement Date.
|
(b)
|
Except as provided in Section 5 below, you will have none of the rights of a shareholder with respect to Shares underlying the DSUs unless and until you become the record holder of such Shares.
|
(c)
|
Normally, your DSUs will vest and be settled only under the circumstances described above. However, if there is a Change in Control, your DSUs, including any DSUs credited pursuant to Section 5, will become 100% vested on the date of the Change in Control and will be settled as described in the Plan. See the Plan for further details.
|
(a)
|
If a cash dividend is declared and paid on the Shares underlying the DSUs, you will be credited with an additional number of DSUs equal to the quotient of:
|
(i)
|
The product of (I) the number of DSUs granted under this Award Agreement (including additional DSUs previously credited in accordance with this Section 5) that have not been settled as of the dividend payment date, multiplied by (II) the amount of the cash dividend paid per Share; divided by
|
(ii)
|
The Fair Market Value (which shall be equal to the closing price) of a Share on the date such cash dividend is paid.
|
(b)
|
If a Share dividend is declared and paid on the Shares underlying the DSUs, you will be credited with an additional number of DSUs equal to the product of:
|
(i)
|
The number of DSUs granted under this Award Agreement (including additional DSUs previously credited in accordance with this Section 5) that have not been settled as of the dividend payment date, multiplied by
|
(ii)
|
The number of Shares paid as a dividend per Share.
|
(c)
|
Any additional DSUs credited pursuant to this Section 5 shall be subject to the same terms and conditions as the DSUs granted pursuant to Section 1 above.
|
(d)
|
Any fractional number of DSUs resulting from the calculations under this Section 5 shall be rounded to the nearest whole Share.
|
(c)
|
You will consent (on your own behalf and on behalf of your beneficiaries and transferees and without any further consideration) to any necessary change to your Award or this Award Agreement to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those changes affect the terms of your Award and reduce its value or potential value; and
|
(d)
|
You must return a signed copy of this Award Agreement to the address given above before
[Date]
.
|
[
Director’s Name
]
By: ______________________________
Date signed: ________________________
|
THE SCOTTS MIRACLE-GRO COMPANY
By: ___________________________________
[Name of Company Representative]
[Title of Company Representative]
Date signed: ____________________________
|
Conversion Date
|
Amount Deferred
|
Applicable Share Price
|
Number of Deferred Stock Units
|
[Date]
|
$[
amount
]
|
$[
price
]
|
[# TBD]
|
[Date]
|
$[
amount
]
|
$[
price
]
|
[# TBD]
|
[Date]
|
$[
amount
]
|
$[
price
]
|
[# TBD]
|
[Date]
|
$[
amount
]
|
$[
price
]
|
[# TBD]
|
2.
|
INCORPORATION OF PLAN AND DEFINITIONS.
|
(a)
|
This Award Agreement and your RSUs are granted pursuant to and in accordance with The Scotts Miracle-Gro Company Long-Term Incentive Plan as amended and restated January 17, 2013 (the “Plan”). All provisions of the Plan are incorporated herein by reference, and your RSUs and related dividend equivalents are subject to the terms of the Plan and this Award Agreement. To the extent there is a conflict between this Award Agreement and the Plan, the Plan will govern.
|
(b)
|
Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.
|
(a)
|
General Vesting.
If your service continues from the Grant Date until
[Vesting Date]
(the “Vesting Date”), your RSUs described in this Award Agreement will become 100% vested on the Vesting Date; or
|
(b)
|
Accelerated Vesting.
Under the following circumstances, your RSUs described in this Award Agreement will become pro rata vested earlier than the Vesting Date:
|
(i)
|
If you Terminate because of your death or because you become Disabled (as defined below), your RSUs described in this Award Agreement will become pro rata vested as of the date of such event and will be settled in accordance with Section 4 of this Award Agreement. For purposes of this Award Agreement, “Disabled” means (A) you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (B) you are, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of your employer, or (C) you are determined to be totally disabled by the Social Security Administration or Railroad Retirement Board; or
|
(ii)
|
If you Terminate due to an involuntary Termination by the Company without Cause before the Vesting Date, the RSUs described in this Award Agreement will become pro rata vested as of the Vesting Date.
|
(iii)
|
The number of RSUs that become pro rata vested in this subsection (b) will be calculated by multiplying the number of RSUs granted under this Agreement by a fraction. The numerator of the fraction will equal the number of days that elapsed beginning with the Grant Date and ending with the date of your Termination. The denominator of the fraction will be 365. Any fractional RSUs will be rounded up to the nearest whole number.
|
(c)
|
Cause.
For purposes of this Award Agreement, “Cause” means that Grantee has:
|
(i)
|
willfully and materially breached the terms of any consulting or other service provider agreement between the Grantee and the Company;
|
(ii)
|
engaged in willful misconduct that has materially injured the business of the Company or any Subsidiary or Affiliate;
|
(iii)
|
willfully committed a material act of fraud or material breach of the Grantee’s duty of loyalty to the Company or any Subsidiary or Affiliate;
|
(iv)
|
willfully and continually failed to attempt in good faith to perform the Grantee’s duties hereunder (other than any such failure resulting from the Grantee’s incapacity due to physical or mental illness), after written notice has been delivered to the Grantee by the Company, which notice specifically identifies the manner in which the Grantee has not attempted in good faith to perform his duties; or
|
(v)
|
been convicted, or plead guilty or nolo contendere for the commission of an act or acts constituting a felony under the laws of the United States or any state thereof.
|
(a)
|
Subject to the terms of the Plan and this Award Agreement, your vested RSUs, minus any shares that are withheld for taxes as provided under Section 4(c), shall be settled in a lump sum as soon as administratively practicable, but no later than 90 days following the earliest date to occur of: (i) your Termination due to your death or Disability; or (ii) the Vesting Date (the “Settlement Date”). Your whole RSUs shall be settled in full Shares, and any fractional RSU shall be settled in cash, determined based upon the Fair Market Value of a Share on the Settlement Date.
|
(b)
|
Except as provided in Section 5 of this Award Agreement, you will have none of the rights of a shareholder with respect to Shares underlying the RSUs unless and until you become the record holder of such Shares.
|
(c)
|
You may use one of the following methods to pay the required withholding taxes related to the vesting of your RSUs. You will decide on the method at the time prescribed by the Company. If you do not elect one of these methods, the Company will apply the Net Settlement method described below:
|
(i)
|
CASH PAYMENT: If you elect this alternative, you will be responsible for paying the Company through the Third Party Administrator cash equal to the minimum statutory withholding requirements applicable on your RSUs.
|
(ii)
|
NET SETTLEMENT: If you elect this alternative, the Company will retain the number of shares with a Fair Market Value equal to the minimum statutory withholding requirements applicable on your RSUs.
|
(d)
|
Normally, your RSUs will vest and be settled only under the circumstances described above. However, if there is a Change in Control, your RSUs will become 100% vested on the date of the Change in Control and will be settled as described in the Plan. See the Plan for further details.
|
(a)
|
Except as otherwise provided in Section 3 or Section 4(d) of this Award Agreement, you will forfeit your unvested RSUs if you Terminate prior to the Vesting Date.
|
(b)
|
If you engage in “Conduct That Is Harmful To The Company” (as described below), you will forfeit your RSUs and related dividend equivalents and must return to the Company all Shares and other amounts you have received through the Plan or this Award Agreement if, without the Company’s written consent, you do any of the following within [Number] days before and [Number] days after you Terminate:
|
(i)
|
You breach any confidentiality, nondisclosure, and/or noncompetition obligations under any agreement or plan with the Company or any Affiliate or Subsidiary;
|
(ii)
|
You fail or refuse to consult with, supply information to or otherwise cooperate with the Company or any Affiliate or Subsidiary after having been requested to do so;
|
(iii)
|
You deliberately engage in any action that the Company concludes has caused substantial harm to the interests of the Company or any Affiliate or Subsidiary;
|
(iv)
|
You fail to return all property (other than personal property), including vehicles, computer or other equipment or electronic devices, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data, formulae or any other tangible property or document and any and all copies, duplicates or reproductions that you have produced or received or have otherwise been provided to you in the course of your employment with the Company or any Affiliate or Subsidiary; or
|
(v)
|
You engaged in conduct that the Committee reasonably concludes would have given rise to a Termination for Cause had it been discovered before you Terminated.
|
(c)
|
You will consent (on your own behalf and on behalf of your beneficiaries and transferees and without any further consideration) to any necessary change to your Award or this Award Agreement to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those changes affect the terms of your Award and reduce its value or potential value; and
|
(d)
|
You must return a signed copy of this Award Agreement to the address given above before [
Date
].
|
[Grantee’s Name]
By: ______________________________
Date signed: ________________________
|
THE SCOTTS MIRACLE-GRO COMPANY
By: ___________________________________
[Name of Company Representative]
[Title of Company Representative]
Date signed: ____________________________
|
1.
|
DESCRIPTION OF YOUR PERFORMANCE UNITS.
You have received a grant of [
Number
] Performance Units (“Performance Units”), based on a target level of performance, and an equal number of related dividend equivalents. If the minimum performance is achieved (and if all other service and vesting requirements are met), the Performance Units and related dividend equivalents that will actually be awarded to you may be more or less than the number of Performance Units granted. See Sections 3, 6 and Exhibit A for more details.
|
2.
|
INCORPORATION OF PLAN AND DEFINITIONS.
|
(a)
|
This Award Agreement and your Performance Units are granted pursuant to the terms and conditions of The Scotts Miracle-Gro Company Long-Term Incentive Plan as amended and restated January 17, 2013 (the “Plan”) and this Award Agreement. All provisions of the Plan are incorporated herein by reference, and your Performance Units and related dividend equivalents are subject to the terms of the Plan. To the extent there is a conflict between this Award Agreement and the Plan, the Plan will govern.
|
(b)
|
Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.
|
(a)
|
General Vesting.
If your employment continues from the Grant Date until [
Date
] (the “Vesting Date”) the number of Performance Units Achieved shall become 100% vested on the Vesting Date; or
|
(b)
|
Accelerated Vesting.
Under the following circumstances, the Performance Units Achieved will be deemed to become 100% vested, even if you Terminate prior to the Vesting Date (subject to the performance criteria as described in Section 3 and Exhibit A):
|
(i)
|
If you Terminate because of your death or because you become Disabled (as defined below), the number of Performance Units Achieved, as described in this Award Agreement, will be deemed to become 100% vested as of the Vesting Date. For purposes of this Award Agreement, “Disabled” means (A) you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (B) you are, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of your employer, or (C) you are determined to be totally disabled by the Social Security Administration or Railroad Retirement Board; or
|
(ii)
|
If you Terminate for a reason other than Cause after reaching age [
Number
] and completing at least [
Number
] years of employment with the Company, its Affiliates and/or its Subsidiaries, the number of Performance Units Achieved, as described in this Award Agreement, will be deemed to become 100% vested as of the Vesting Date.
|
[(iii)
|
If you Terminate due to an involuntary Termination by the Company without Cause no earlier than [
Number
] days before the Vesting Date, your Termination will be deemed to have occurred on the Vesting Date such that the number of Performance Units Achieved, as described in this Award Agreement, will be deemed to become 100% vested as of the Vesting Date.
|
(c)
|
Cause.
For purposes of this Award Agreement, “Cause” means that Grantee has:
|
(i)
|
willfully and materially breached the terms of any employment agreement between the Grantee and the Company;
|
(ii)
|
engaged in willful misconduct that has materially injured the business of the Company or any Subsidiary or Affiliate;
|
(iii)
|
willfully committed a material act of fraud or material breach of the Grantee’s duty of loyalty to the Company or any Subsidiary or Affiliate;
|
(iv)
|
willfully and continually failed to attempt in good faith to perform the Grantee’s duties hereunder (other than any such failure resulting from the Grantee’s incapacity due to physical or mental illness), after written notice has been delivered to the Grantee by the Company, which notice specifically identifies the manner in which the Grantee has not attempted in good faith to perform his duties; or
|
(v)
|
been convicted, or plead guilty or nolo contendere for the commission of an act or acts constituting a felony under the laws of the United States or any state thereof.
|
5.
|
SETTLEMENT.
|
(a)
|
Subject to the terms of the Plan and this Award Agreement, the number of vested Performance Units Achieved, minus any shares that are withheld for taxes as provided under Section 5(c), shall be settled in a lump sum as soon as administratively practicable, but no later than 90 days following the Vesting Date (the “Settlement Date”). Your whole Performance Units Achieved shall be settled in full Shares, and any fractional Performance Unit Achieved shall be settled in cash, determined based upon the Fair Market Value of a Share on the Settlement Date.
|
(b)
|
Except as provided in Section 6 of this Award Agreement, you will have none of the rights of a shareholder with respect to Shares underlying the Performance Units unless and until you become the record holder of such Shares.
|
(c)
|
You may use one of the following methods to pay the required withholding taxes related to the settlement of your Performance Units Achieved. You will decide on the method at the time prescribed by the Company. If you do not elect one of these methods, the Company will apply the Net Settlement method described below:
|
(i)
|
CASH PAYMENT: If you elect this alternative, you will be responsible for paying the Company through the Third Party Administrator cash equal to the minimum statutory withholding requirements applicable on your Performance Units.
|
(ii)
|
NET SETTLEMENT: If you elect this alternative, the Company will retain the number of shares with a Fair Market Value equal to the minimum statutory withholding requirements applicable on your Performance Units.
|
(d)
|
Normally, the number of Performance Units Achieved will vest and be settled only under the circumstances described above. However, if there is a Change in Control, your Performance Units will become 100% vested on the date of the Change in Control and will be settled as described in the Plan. See the Plan for further details.
|
(a)
|
Except as otherwise provided in Section 4 or Section 5(d) of this Award Agreement, you will forfeit your unvested Performance Units if you Terminate prior to the Vesting Date, whether the performance criteria are achieved or not.
|
(b)
|
If you engage in “Conduct That Is Harmful To The Company” (as described below), you will forfeit your Performance Units and related dividend equivalents and must return to the Company all Shares and other amounts you have received through the Plan or this Award Agreement if, without the Company’s written consent, you do any of the following within [
Number
] days before and [
Number
] days after you Terminate:
|
(i)
|
You breach any confidentiality, nondisclosure, and/or noncompetition obligations under any agreement or plan with the Company or any Affiliate or Subsidiary;
|
(ii)
|
You fail or refuse to consult with, supply information to or otherwise cooperate with the Company or any Affiliate or Subsidiary after having been requested to do so;
|
(iii)
|
You deliberately engage in any action that the Company concludes has caused substantial harm to the interests of the Company or any Affiliate or Subsidiary;
|
(iv)
|
You fail to return all property (other than personal property), including vehicles, computer or other equipment or electronic devices, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data, formulae or any other tangible property or document and any and all copies, duplicates or reproductions that you have produced or received or have otherwise been provided to you in the course of your employment with the Company or any Affiliate or Subsidiary; or
|
(v)
|
You engaged in conduct that the Committee reasonably concludes would have given rise to a Termination for Cause had it been discovered before you Terminated.
|
(c)
|
You will consent (on your own behalf and on behalf of your beneficiaries and transferees and without any further consideration) to any necessary change to your Award or this Award Agreement to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those changes affect the terms of your Award and reduce its value or potential value; and
|
(d)
|
You must return a signed copy of this Award Agreement to the address given above before [
Date
].
|
[
Grantee’s Name
]
By: ______________________________
Date signed: ________________________
|
THE SCOTTS MIRACLE-GRO COMPANY
By: ___________________________________
[Name of Company Representative]
[Title of Company Representative]
Date signed: ____________________________
|
2.
|
INCORPORATION OF PLAN AND DEFINITIONS.
|
(a)
|
This Award Agreement and your NSO are granted pursuant to and in accordance with The Scotts Miracle-Gro Company Long-Term Incentive Plan as amended and restated January 17, 2013
(the “Plan”). All provisions of the Plan are incorporated herein by reference, and your NSO is subject to the terms of the Plan. To the extent there is a conflict between this Award Agreement and the Plan, the Plan will govern.
|
(b)
|
Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.
|
(a)
|
General Vesting.
If your employment continues from the Grant Date until the [__] anniversary of the Grant Date, in this case
[Date]
(the “Vesting Date”), your NSO
|
(b)
|
Accelerated Vesting.
Under the following circumstances, the NSO described in this Award Agreement will vest earlier than the Vesting Date:
|
(i)
|
If you Terminate because of your death or because you become Disabled (as defined below), your NSO described in this Award Agreement will become fully vested and expire on the Expiration Date. For purposes of this Award Agreement, “Disabled” means (A) you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (B) you are, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of your employer, or (C) you are determined to be totally disabled by the Social Security Administration or Railroad Retirement Board;
|
(ii)
|
If you Terminate for a reason other than Cause after reaching age [
Number
] and completing at least [
Number
] years of employment with the Company, its Affiliates and/or its Subsidiaries, your NSO described in this Award Agreement will become fully vested and expire on the Expiration Date;
|
(iii)
|
If you Terminate due to an involuntary Termination by the Company without Cause no earlier than [
Number
] days before the Vesting Date, your Termination will be deemed to have occurred on the Vesting Date such that your NSO described in this Award Agreement will be deemed to become 100% vested and expire on the Expiration Date.
|
(iv)
|
If there is a Change in Control, your NSO may vest earlier. See the Plan for further details.
|
(c)
|
Cause.
For purposes of this Award Agreement, “Cause” means that Grantee has:
|
(i)
|
willfully and materially breached the terms of any employment agreement between the Grantee and the Company;
|
(ii)
|
engaged in willful misconduct that has materially injured the business of the Company or any Subsidiary or Affiliate;
|
(iii)
|
willfully committed a material act of fraud or material breach of the Grantee’s duty of loyalty to the Company or any Subsidiary or Affiliate;
|
(iv)
|
willfully and continually failed to attempt in good faith to perform the Grantee’s duties hereunder (other than any such failure resulting from the Grantee’s incapacity due to physical or mental illness), after written notice has been delivered to the Grantee by the Company, which notice specifically identifies the manner in which the Grantee has not attempted in good faith to perform his duties; or
|
(v)
|
been convicted, or plead guilty or nolo contendere for the commission of an act or acts constituting a felony under the laws of the United States or any state thereof.
|
5.
|
EXERCISING YOUR NSO.
|
(a)
|
After your NSO vests, you may exercise the NSO at any time prior to the Expiration Date. To exercise the NSO you must complete an Exercise Notice on the form provided by the Company, which is available from Third Party Administrator. At any one time, you must exercise your NSO to buy no fewer than [
Number
] Shares, or, you must exercise the balance of your NSO if the value is less than [
Number
] Shares.
|
(b)
|
You may use one of the following three methods to exercise your NSO and to pay any taxes related to that exercise. You will decide on the method at the time of exercise. If you do not elect one of these methods, the Company will apply the Broker-Assisted Cashless Exercise and Sell method described below:
|
(i)
|
BROKER-ASSISTED CASHLESS EXERCISE AND SELL: If you elect this alternative, you will be deemed to have simultaneously exercised the NSO and to have sold the Shares underlying the portion of the NSO you exercised. When the transaction is complete, you will receive cash (but no Shares) from the broker equal to the difference between the aggregate Fair Market Value of the Shares deemed to have been acquired through the exercise minus the aggregate Exercise Price and related taxes.
|
(ii)
|
COMBINATION EXERCISE: If you elect this alternative, you will be deemed to have simultaneously exercised the NSO and to have sold a number of those Shares with a Fair Market Value equal to the aggregate Exercise Price and for taxes that are required to be withheld on account of the exercise. When the transaction is complete, the balance of the Shares subject to the portion of the NSO you exercised will be transferred to you.
|
(iii)
|
EXERCISE AND HOLD: If you elect this alternative, you must pay the full Exercise Price plus related taxes (in cash, a cash equivalent or in Shares having a Fair Market Value equal to the Exercise Price and which you have owned for at least six months before the exercise date). When the transaction is complete, you will receive the number of Shares purchased.
|
(c)
|
You may never exercise your NSO to purchase a fractional Share. Any fractional Share shall be redeemed for cash equal to the Fair Market Value of such fractional Share.
|
(a)
|
General Expiration Rules.
In general, your NSO will expire on the Expiration Date.
|
(b)
|
Forfeiture Rules.
In the following instances, your NSO will expire and you will forfeit your NSO prior to the Expiration Date:
|
(i)
|
If you Terminate before the Vesting Date, except as provided in Section 3 above, you will forfeit your NSO in its entirety;
|
(ii)
|
If you engage in “Conduct That Is Harmful To The Company” (as described below), you will forfeit your NSO and must return to the Company all Shares and other amounts you have received through the Plan or this Award Agreement if, without the Company’s written consent, you do any of the following within [Number] days before and [Number] days after you Terminate:
|
1)
|
You breach any confidentiality, nondisclosure, and/or noncompetition obligations under any agreement or plan with the Company or any Affiliate or Subsidiary;
|
2)
|
You fail or refuse to consult with, supply information to or otherwise cooperate with the Company or any Affiliate or Subsidiary after having been requested to do so;
|
3)
|
You deliberately engage in any action that the Company concludes has caused substantial harm to the interests of the Company or any Affiliate or Subsidiary;
|
4)
|
You fail to return all property (other than personal property), including vehicles, computer or other equipment or electronic devices, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data, formulae or any other tangible property or document and any and all copies, duplicates or reproductions that you have produced or received or have otherwise been provided to you in the course of your employment with the Company or any Affiliate or Subsidiary; or
|
5)
|
You engaged in conduct that the Committee reasonably concludes would have given rise to a Termination for Cause had it been discovered before you Terminated.
|
(iii)
|
If you Terminate for Cause after the Vesting Date, the portion of your NSO that has not been exercised will be forfeited (whether or not then vested) on the date you Terminate; or
|
(iv)
|
If you Terminate for any other reason after the Vesting Date, the portion of your NSO that is vested but has not been exercised will expire on the earlier of the Expiration Date or [
Number
] days after you Terminate.
|
(c)
|
You will consent (on your own behalf and on behalf of your beneficiaries and transferees and without any further consideration) to any necessary change to your NSO or this Award Agreement to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those changes affect the terms of your NSO and reduce its value or potential value; and
|
(d)
|
You must return a signed copy of this Award Agreement to the address given above before [
Date
].
|
[
Grantee’s Name
]
|
THE SCOTTS MIRACLE-GRO COMPANY
|
|
|
BY:__________________________________
|
BY:__________________________________
|
Date signed: ________________________
|
[Name of Company representative]
|
|
[Title of Company representative]
|
|
Date signed:______________________
|
2.
|
INCORPORATION OF PLAN AND DEFINITIONS.
|
(a)
|
This Award Agreement and your RSUs are granted pursuant to and in accordance with The Scotts Miracle-Gro Company Long-Term Incentive Plan as amended and restated January 17, 2013 (the “Plan”). All provisions of the Plan are incorporated herein by reference, and your RSUs and related dividend equivalents are subject to the terms of the Plan and this Award Agreement. To the extent there is a conflict between this Award Agreement and the Plan, the Plan will govern.
|
(b)
|
Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.
|
(a)
|
General Vesting.
If your employment continues from the Grant Date until the [
Number
] anniversary of the Grant Date, in this case
[Date]
(the “Vesting Date”), your RSUs described in this Award Agreement will become 100% vested on the Vesting Date; or
|
(b)
|
Accelerated Vesting.
Under the following circumstances, your RSUs described in this Award Agreement will become 100% vested earlier than the Vesting Date:
|
(i)
|
If you Terminate because of your death or because you become Disabled (as defined below), your RSUs described in this Award Agreement will become 100% vested as of the date of such event and will be settled in accordance with Section 4 of this Award Agreement. For purposes of this Award Agreement, “Disabled” means (A) you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (B) you are, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of your employer, or (C) you are determined to be totally disabled by the Social Security Administration or Railroad Retirement Board; or
|
(ii)
|
If you Terminate for a reason other than Cause after reaching age [
Number
] and completing at least [
Number
] years of employment with the Company, its Affiliates and/or its Subsidiaries, your RSUs described in this Award Agreement will become 100% vested as of the date of such event and will be settled in accordance with Section 4 of this Award Agreement.
|
[(iii)
|
If you Terminate due to an involuntary Termination by the Company without Cause no earlier than [
Number
] days before the Vesting Date, your Termination will be deemed to have occurred on the Vesting Date such that the RSUs described in this Award Agreement will be deemed to become 100% vested as of the [Vesting Date][date of such termination and will be settled in accordance with Section 4 of this Award Agreement].]
|
[(c)
|
Cause.
For purposes of this Award Agreement, “Cause” means that Grantee has:
|
(i)
|
willfully and materially breached the terms of any employment agreement between the Grantee and the Company;
|
(ii)
|
engaged in willful misconduct that has materially injured the business of the Company or any Subsidiary or Affiliate;
|
(iii)
|
willfully committed a material act of fraud or material breach of the Grantee’s duty of loyalty to the Company or any Subsidiary or Affiliate;
|
(iv)
|
willfully and continually failed to attempt in good faith to perform the Grantee’s duties hereunder (other than any such failure resulting from the Grantee’s incapacity due to physical or mental illness), after written notice has been delivered to the Grantee by the Company, which notice specifically identifies the manner in which the Grantee has not attempted in good faith to perform his duties; or
|
(v)
|
been convicted, or plead guilty or nolo contendere for the commission of an act or acts constituting a felony under the laws of the United States or any state thereof.
|
(a)
|
Subject to the terms of the Plan and this Award Agreement, your vested RSUs, minus any shares that are withheld for taxes as provided under Section 4(c), shall be settled in a lump sum as soon as administratively practicable, but no later than 90 days following the earliest date to occur of: (i) your Termination due to your death or Disability; or (ii) the third anniversary of the Grant Date (the “Settlement Date”). Your whole RSUs shall be settled in full Shares, and any fractional RSU shall be settled in cash, determined based upon the Fair Market Value of a Share on the Settlement Date.
|
(b)
|
Except as provided in Section 5 of this Award Agreement, you will have none of the rights of a shareholder with respect to Shares underlying the RSUs unless and until you become the record holder of such Shares.
|
(c)
|
You may use one of the following methods to pay the required withholding taxes related to the vesting of your RSUs. You will decide on the method at the time prescribed by the Company. If you do not elect one of these methods, the Company will apply the Net Settlement method described below:
|
(i)
|
CASH PAYMENT: If you elect this alternative, you will be responsible for paying the Company through the Third Party Administrator cash equal to the minimum statutory withholding requirements applicable on your RSUs.
|
(ii)
|
NET SETTLEMENT: If you elect this alternative, the Company will retain the number of shares with a Fair Market Value equal to the minimum statutory withholding requirements applicable on your RSUs.
|
(d)
|
Normally, your RSUs will vest and be settled only under the circumstances described above. However, if there is a Change in Control, your RSUs will become 100% vested on the date of the Change in Control and will be settled as described in the Plan. See the Plan for further details.
|
(a)
|
Except as otherwise provided in Section 3 or Section 4(d) of this Award Agreement, you will forfeit your unvested RSUs if you Terminate prior to the Vesting Date.
|
(b)
|
If you engage in “Conduct That Is Harmful To The Company” (as described below), you will forfeit your RSUs and related dividend equivalents and must return to the Company all Shares and other amounts you have received through the Plan or this Award Agreement if, without the Company’s written consent, you do any of the following within [
Number
] days before and [
Number
] days after you Terminate:
|
(i)
|
You breach
[or threaten to breach]
any confidentiality, nondisclosure, and/or noncompetition obligations under any agreement or plan with the Company or any Affiliate or Subsidiary;
|
(ii)
|
You fail or refuse to consult with, supply information to or otherwise cooperate with the Company or any Affiliate or Subsidiary after having been requested to do so;
|
(iii)
|
You deliberately engage in any action that the Company concludes has caused substantial harm to the interests of the Company or any Affiliate or Subsidiary;
|
(iv)
|
You fail to return all property (other than personal property), including vehicles, computer or other equipment or electronic devices, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data, formulae or any other tangible property or document and any and all copies, duplicates
|
(v)
|
You engaged in conduct that the Committee reasonably concludes would have given rise to a Termination for Cause had it been discovered before you Terminated.
|
(c)
|
You will consent (on your own behalf and on behalf of your beneficiaries and transferees and without any further consideration) to any necessary change to your Award or this Award Agreement to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those changes affect the terms of your Award and reduce its value or potential value; and
|
(d)
|
You must return a signed copy of this Award Agreement to the address given above before [
Date
].
|
[Grantee’s Name]
By: ______________________________
Date signed: ________________________
|
THE SCOTTS MIRACLE-GRO COMPANY
By: ___________________________________
[Name of Company Representative]
[Title of Company Representative]
Date signed: ____________________________
|
NAME
|
|
JURISDICTION OF FORMATION
|
|
|
|
EG Systems, Inc.
|
|
Indiana
|
SLS Franchise Systems LLC
|
|
Delaware
|
Gutwein & Co., Inc.
|
|
Indiana
|
OMS Investments, Inc.
|
|
Delaware
|
Scotts Temecula Operations, LLC
|
|
Delaware
|
Sanford Scientific, Inc.
|
|
New York
|
Scotts Global Investments, Inc.
|
|
Delaware
|
Scotts Switzerland Holdings, SA
|
|
Switzerland
|
Scotts Global Services, Inc.
|
|
Ohio
|
Scotts Luxembourg SARL
|
|
Luxembourg
|
Scotts Manufacturing Company
|
|
Delaware
|
Miracle-Gro Lawn Products, Inc.
|
|
New York
|
Scotts Products Co.
|
|
Ohio
|
Scotts Servicios, S.A. de C.V.
1
|
|
Mexico
|
Scotts Professional Products Co.
|
|
Ohio
|
Scotts Servicios, S.A. de C.V.
1
|
|
Mexico
|
SMG Growing Media, Inc.
|
|
Ohio
|
AeroGrow International, Inc.
2
|
|
Nevada
|
Hyponex Corporation
|
|
Delaware
|
Rod McLellan Company
|
|
California
|
The Hawthorne Gardening Company
|
|
Delaware
|
Hawthorne Hydroponics LLC
|
|
Delaware
|
HGCI, Inc.
|
|
Nevada
|
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
|
Scotts Czech s.r.o.
|
|
Czech Republic
|
Scotts de Mexico SA de CV
4
|
|
Mexico
|
________________________
|
1
Scotts Professional Products Co. owns 50% and Scotts Products Co. owns 50%.
2
SMG Growing Media, Inc.’s ownership is 33.14%.
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%.
|
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
|
Swiss Farms Products, Inc.
|
|
Delaware
|
The Scotts Company LLC
|
|
Ohio
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The Scotts Miracle-Gro Company for the quarterly period ended
March 28, 2015
;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
Date: May 7, 2015
|
|
By:
|
|
/s/ JAMES HAGEDORN
|
|
|
|
|
Printed Name: James Hagedorn
|
|
|
|
|
Title: Chief Executive Officer and Chairman of the Board
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The Scotts Miracle-Gro Company for the quarterly period ended
March 28, 2015
;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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: May 7, 2015
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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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May 7, 2015
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May 7, 2015
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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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