ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
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
|
(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)
|
Large accelerated filer
|
|
ý
|
|
Accelerated filer
|
|
o
|
Non-accelerated filer
|
|
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
o
|
|
Class
|
|
Outstanding at August 5, 2016
|
|
|
Common Shares, $0.01 stated value, no par value
|
|
60,606,902 Common Shares
|
|
THE SCOTTS MIRACLE-GRO COMPANY
INDEX
|
||
|
|
|
|
|
PAGE NO.
|
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||
Net sales
|
$
|
994.1
|
|
|
$
|
1,111.3
|
|
|
$
|
2,433.8
|
|
|
$
|
2,352.6
|
|
Cost of sales
|
636.3
|
|
|
722.1
|
|
|
1,532.6
|
|
|
1,531.8
|
|
||||
Cost of sales—impairment, restructuring and other
|
0.4
|
|
|
3.4
|
|
|
5.5
|
|
|
3.6
|
|
||||
Gross profit
|
357.4
|
|
|
385.8
|
|
|
895.7
|
|
|
817.2
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
151.9
|
|
|
155.3
|
|
|
466.1
|
|
|
449.5
|
|
||||
Impairment, restructuring and other
|
(5.8
|
)
|
|
40.9
|
|
|
(51.7
|
)
|
|
54.0
|
|
||||
Other income, net
|
(5.6
|
)
|
|
(1.8
|
)
|
|
(7.1
|
)
|
|
(2.4
|
)
|
||||
Income from operations
|
216.9
|
|
|
191.4
|
|
|
488.4
|
|
|
316.1
|
|
||||
Equity in loss of unconsolidated affiliates
|
3.5
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
||||
Costs related to refinancing
|
—
|
|
|
—
|
|
|
8.8
|
|
|
—
|
|
||||
Interest expense
|
16.9
|
|
|
14.3
|
|
|
52.3
|
|
|
39.0
|
|
||||
Income from continuing operations before income taxes
|
196.5
|
|
|
177.1
|
|
|
423.8
|
|
|
277.1
|
|
||||
Income tax expense from continuing operations
|
69.5
|
|
|
62.0
|
|
|
150.3
|
|
|
97.0
|
|
||||
Income from continuing operations
|
127.0
|
|
|
115.1
|
|
|
273.5
|
|
|
180.1
|
|
||||
Income from discontinued operations, net of tax
|
85.7
|
|
|
17.9
|
|
|
68.2
|
|
|
3.2
|
|
||||
Net income
|
$
|
212.7
|
|
|
$
|
133.0
|
|
|
$
|
341.7
|
|
|
$
|
183.3
|
|
Net loss attributable to noncontrolling interest
|
0.4
|
|
|
0.4
|
|
|
0.2
|
|
|
0.1
|
|
||||
Net income attributable to controlling interest
|
$
|
213.1
|
|
|
$
|
133.4
|
|
|
$
|
341.9
|
|
|
$
|
183.4
|
|
|
|
|
|
|
|
|
|
||||||||
Basic income per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.09
|
|
|
$
|
1.89
|
|
|
$
|
4.46
|
|
|
$
|
2.95
|
|
Income from discontinued operations
|
1.40
|
|
|
0.29
|
|
|
1.11
|
|
|
0.06
|
|
||||
Basic income per common share
|
$
|
3.49
|
|
|
$
|
2.18
|
|
|
$
|
5.57
|
|
|
$
|
3.01
|
|
Weighted-average common shares outstanding during the period
|
61.1
|
|
|
61.3
|
|
|
61.3
|
|
|
61.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted income per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.06
|
|
|
$
|
1.85
|
|
|
$
|
4.40
|
|
|
$
|
2.90
|
|
Income from discontinued operations
|
1.38
|
|
|
0.29
|
|
|
1.10
|
|
|
0.05
|
|
||||
Diluted income per common share
|
$
|
3.44
|
|
|
$
|
2.14
|
|
|
$
|
5.50
|
|
|
$
|
2.95
|
|
Weighted-average common shares outstanding during the period plus dilutive potential common shares
|
61.9
|
|
|
62.3
|
|
|
62.2
|
|
|
62.1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share
|
$
|
0.470
|
|
|
$
|
0.450
|
|
|
$
|
1.410
|
|
|
$
|
1.350
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||
Net income
|
$
|
212.7
|
|
|
$
|
133.0
|
|
|
$
|
341.7
|
|
|
$
|
183.3
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net foreign currency translation adjustment
|
(12.3
|
)
|
|
2.5
|
|
|
(14.8
|
)
|
|
(8.8
|
)
|
||||
Net unrealized (gain) loss on derivative instruments, net of tax of $0.7, $0.3, $1.7 and $2.7, respectively
|
(1.2
|
)
|
|
0.5
|
|
|
(2.8
|
)
|
|
(4.4
|
)
|
||||
Reclassification of net unrealized losses on derivatives to net income, net of tax of $1.1, $1.4, $3.3 and $3.5, respectively
|
1.7
|
|
|
2.3
|
|
|
5.3
|
|
|
5.6
|
|
||||
Reclassification of net pension and post-retirement benefit loss to net income, net of tax of $0.6, $0.5, $1.0 and $1.4, respectively
|
0.9
|
|
|
0.8
|
|
|
1.6
|
|
|
2.3
|
|
||||
Total other comprehensive income (loss)
|
(10.9
|
)
|
|
6.1
|
|
|
(10.7
|
)
|
|
(5.3
|
)
|
||||
Comprehensive income
|
$
|
201.8
|
|
|
$
|
139.1
|
|
|
$
|
331.0
|
|
|
$
|
178.0
|
|
|
NINE MONTHS ENDED
|
||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
341.7
|
|
|
$
|
183.3
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Impairment, restructuring and other
|
0.2
|
|
|
4.3
|
|
||
Costs related to refinancing
|
2.2
|
|
|
—
|
|
||
Share-based compensation expense
|
13.7
|
|
|
11.4
|
|
||
Depreciation
|
40.2
|
|
|
38.2
|
|
||
Amortization
|
14.1
|
|
|
12.3
|
|
||
(Gain) loss on sale of assets
|
(1.2
|
)
|
|
0.6
|
|
||
Gain on contribution of SLS Business
|
(142.6
|
)
|
|
—
|
|
||
Equity in loss of unconsolidated affiliates
|
3.5
|
|
|
—
|
|
||
Changes in assets and liabilities, net of acquired businesses:
|
|
|
|
||||
Accounts receivable
|
(447.8
|
)
|
|
(475.6
|
)
|
||
Inventories
|
(52.6
|
)
|
|
(21.1
|
)
|
||
Prepaid and other assets
|
(27.5
|
)
|
|
(15.7
|
)
|
||
Accounts payable
|
51.1
|
|
|
125.8
|
|
||
Other current liabilities
|
147.2
|
|
|
114.4
|
|
||
Restructuring reserves
|
(9.6
|
)
|
|
37.0
|
|
||
Other non-current items
|
44.8
|
|
|
3.2
|
|
||
Other, net
|
(6.3
|
)
|
|
6.1
|
|
||
Net cash (used in) provided by operating activities
|
(28.9
|
)
|
|
24.2
|
|
||
|
|
|
|
||||
INVESTING ACTIVITIES
|
|
|
|
||||
Proceeds from sale of long-lived assets
|
2.4
|
|
|
5.3
|
|
||
Investments in property, plant and equipment
|
(35.7
|
)
|
|
(41.2
|
)
|
||
Investments in loans receivable
|
(90.0
|
)
|
|
—
|
|
||
Net distributions from unconsolidated affiliates
|
194.1
|
|
|
—
|
|
||
Cash contributed to Joint Venture
|
(24.2
|
)
|
|
—
|
|
||
Investments in acquired businesses, net of cash acquired
|
(161.4
|
)
|
|
(179.1
|
)
|
||
Net cash used in investing activities
|
(114.8
|
)
|
|
(215.0
|
)
|
||
|
|
|
|
||||
FINANCING ACTIVITIES
|
|
|
|
||||
Borrowings under revolving and bank lines of credit and term loans
|
1,882.6
|
|
|
1,440.7
|
|
||
Repayments under revolving and bank lines of credit and term loans
|
(1,762.9
|
)
|
|
(1,175.9
|
)
|
||
Proceeds from issuance of 6.000% Senior Notes
|
400.0
|
|
|
—
|
|
||
Repayment of 6.625% Senior Notes
|
(200.0
|
)
|
|
—
|
|
||
Financing and issuance fees
|
(11.2
|
)
|
|
—
|
|
||
Dividends paid
|
(86.4
|
)
|
|
(82.4
|
)
|
||
Purchase of Common Shares
|
(81.2
|
)
|
|
(14.8
|
)
|
||
Payments on seller notes
|
(2.3
|
)
|
|
(0.8
|
)
|
||
Excess tax benefits from share-based payment arrangements
|
4.3
|
|
|
2.9
|
|
||
Cash received from the exercise of stock options
|
9.9
|
|
|
16.5
|
|
||
Net cash provided by financing activities
|
152.8
|
|
|
186.2
|
|
||
Effect of exchange rate changes on cash
|
(3.3
|
)
|
|
(4.8
|
)
|
||
Net increase in cash and cash equivalents
|
5.8
|
|
|
(9.4
|
)
|
||
Cash and cash equivalents at beginning of period
|
71.4
|
|
|
89.3
|
|
||
Cash and cash equivalents at end of period
|
$
|
77.2
|
|
|
$
|
79.9
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
||||
Interest paid
|
$
|
(48.1
|
)
|
|
$
|
(39.3
|
)
|
Call premium on 6.625% Senior Notes
|
(6.6
|
)
|
|
—
|
|
||
Income taxes paid
|
(52.3
|
)
|
|
(53.7
|
)
|
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
SEPTEMBER 30,
2015 |
||||||
ASSETS
|
|||||||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
77.2
|
|
|
$
|
79.9
|
|
|
$
|
71.4
|
|
Accounts receivable, less allowances of $10.5, $9.2 and $6.5, respectively
|
359.7
|
|
|
406.7
|
|
|
157.7
|
|
|||
Accounts receivable pledged
|
435.1
|
|
|
376.4
|
|
|
152.9
|
|
|||
Inventories
|
469.9
|
|
|
399.8
|
|
|
395.8
|
|
|||
Assets held for sale
|
—
|
|
|
223.2
|
|
|
220.3
|
|
|||
Prepaid and other current assets
|
139.2
|
|
|
125.9
|
|
|
121.1
|
|
|||
Total current assets
|
1,481.1
|
|
|
1,611.9
|
|
|
1,119.2
|
|
|||
Investment in unconsolidated affiliate
|
94.4
|
|
|
—
|
|
|
—
|
|
|||
Property, plant and equipment, net of accumulated depreciation of $623.5 $605.6 and $593.9, respectively
|
449.6
|
|
|
437.9
|
|
|
444.1
|
|
|||
Goodwill
|
346.0
|
|
|
282.1
|
|
|
283.8
|
|
|||
Intangible assets, net
|
750.6
|
|
|
661.6
|
|
|
655.1
|
|
|||
Other assets
|
138.0
|
|
|
24.6
|
|
|
25.0
|
|
|||
Total assets
|
$
|
3,259.7
|
|
|
$
|
3,018.1
|
|
|
$
|
2,527.2
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND EQUITY
|
|||||||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current portion of debt
|
$
|
382.5
|
|
|
$
|
314.0
|
|
|
$
|
132.6
|
|
Accounts payable
|
249.5
|
|
|
308.6
|
|
|
193.1
|
|
|||
Marketing and license agreement obligation
|
—
|
|
|
300.0
|
|
|
—
|
|
|||
Liabilities held for sale
|
—
|
|
|
63.4
|
|
|
41.7
|
|
|||
Other current liabilities
|
359.2
|
|
|
362.2
|
|
|
251.2
|
|
|||
Total current liabilities
|
991.2
|
|
|
1,348.2
|
|
|
618.6
|
|
|||
Long-term debt
|
1,130.3
|
|
|
734.9
|
|
|
1,025.0
|
|
|||
Other liabilities
|
306.0
|
|
|
241.6
|
|
|
250.5
|
|
|||
Total liabilities
|
2,427.5
|
|
|
2,324.7
|
|
|
1,894.1
|
|
|||
Contingencies (Note 12)
|
|
|
|
|
|
||||||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common shares and capital in excess of $.01 stated value per share; 60.8, 61.3 and 61.4 shares issued and outstanding, respectively
|
401.1
|
|
|
403.9
|
|
|
400.4
|
|
|||
Retained earnings
|
938.6
|
|
|
737.1
|
|
|
684.2
|
|
|||
Treasury shares, at cost; 7.3, 6.9 and 6.7 shares, respectively
|
(409.3
|
)
|
|
(369.5
|
)
|
|
(357.1
|
)
|
|||
Accumulated other comprehensive loss
|
(117.5
|
)
|
|
(91.5
|
)
|
|
(106.8
|
)
|
|||
Total shareholders’ equity - controlling interest
|
812.9
|
|
|
680.0
|
|
|
620.7
|
|
|||
Noncontrolling interest
|
19.3
|
|
|
13.4
|
|
|
12.4
|
|
|||
Total equity
|
832.2
|
|
|
693.4
|
|
|
633.1
|
|
|||
Total liabilities and equity
|
$
|
3,259.7
|
|
|
$
|
3,018.1
|
|
|
$
|
2,527.2
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||
|
(In millions)
|
||||||||||||||
Net sales
|
$
|
9.2
|
|
|
$
|
103.5
|
|
|
$
|
101.2
|
|
|
$
|
180.7
|
|
Operating costs
|
10.3
|
|
|
78.6
|
|
|
117.4
|
|
|
177.0
|
|
||||
Impairment, restructuring and other
|
—
|
|
|
—
|
|
|
13.6
|
|
|
1.4
|
|
||||
Other income, net
|
—
|
|
|
(1.4
|
)
|
|
(1.5
|
)
|
|
(2.6
|
)
|
||||
Gain on contribution of SLS Business
|
(142.6
|
)
|
|
—
|
|
|
(142.6
|
)
|
|
—
|
|
||||
Income from discontinued operations before income taxes
|
141.5
|
|
|
26.3
|
|
|
114.3
|
|
|
4.9
|
|
||||
Income tax expense from discontinued operations
|
55.8
|
|
|
8.4
|
|
|
46.1
|
|
|
1.7
|
|
||||
Income from discontinued operations, net of tax
|
$
|
85.7
|
|
|
$
|
17.9
|
|
|
$
|
68.2
|
|
|
$
|
3.2
|
|
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
SEPTEMBER 30,
2015 |
||||||
|
(In millions)
|
||||||||||
Accounts receivable, net
|
$
|
—
|
|
|
$
|
29.8
|
|
|
$
|
33.6
|
|
Inventories
|
—
|
|
|
16.0
|
|
|
11.8
|
|
|||
Prepaid and other assets
|
—
|
|
|
9.3
|
|
|
8.3
|
|
|||
Property, plant and equipment, net
|
—
|
|
|
10.0
|
|
|
9.6
|
|
|||
Goodwill and intangible assets, net
|
—
|
|
|
158.1
|
|
|
157.0
|
|
|||
Assets held for sale
|
$
|
—
|
|
|
$
|
223.2
|
|
|
$
|
220.3
|
|
|
|
|
|
|
|
||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
2.4
|
|
|
$
|
2.2
|
|
Accounts payable
|
—
|
|
|
7.1
|
|
|
4.8
|
|
|||
Other current liabilities
|
—
|
|
|
48.6
|
|
|
29.2
|
|
|||
Long-term debt
|
—
|
|
|
3.5
|
|
|
3.5
|
|
|||
Other liabilities
|
—
|
|
|
1.8
|
|
|
2.0
|
|
|||
Liabilities held for sale
|
$
|
—
|
|
|
$
|
63.4
|
|
|
$
|
41.7
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||
|
(In millions)
|
||||||||||||||
Restructuring and other (recoveries) charges from continuing operations
|
$
|
(5.4
|
)
|
|
$
|
44.3
|
|
|
$
|
(46.2
|
)
|
|
$
|
57.6
|
|
Restructuring and other (recoveries) charges from discontinued operations
|
—
|
|
|
—
|
|
|
13.6
|
|
|
1.4
|
|
||||
Total impairment, restructuring and other (recoveries) charges
|
$
|
(5.4
|
)
|
|
$
|
44.3
|
|
|
$
|
(32.6
|
)
|
|
$
|
59.0
|
|
Amounts reserved for restructuring and other at September 30, 2015
|
$
|
28.1
|
|
Restructuring and other charges from continuing operations
|
9.6
|
|
|
Restructuring and other charges from discontinued operations
|
13.6
|
|
|
Payments and other
|
(32.8
|
)
|
|
Amounts reserved for restructuring and other at July 2, 2016
|
$
|
18.5
|
|
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
SEPTEMBER 30,
2015 |
||||||
|
(In millions)
|
||||||||||
Finished goods
|
$
|
299.9
|
|
|
$
|
247.4
|
|
|
$
|
218.9
|
|
Work-in-process
|
46.6
|
|
|
39.3
|
|
|
48.3
|
|
|||
Raw materials
|
123.4
|
|
|
113.1
|
|
|
128.6
|
|
|||
Total inventories
|
$
|
469.9
|
|
|
$
|
399.8
|
|
|
$
|
395.8
|
|
•
|
Expands the territories in which the Company may serve as Monsanto’s exclusive agent in the consumer lawn and garden market to include all countries other than Japan and countries subject to a comprehensive U.S. trade embargo or certain other embargoes and trade restrictions.
|
•
|
Eliminates the initial and renewal terms that the original Marketing Agreement applied to European Union (“EU”) countries. As amended, the term of the Marketing Agreement will now continue indefinitely for all included markets,
|
•
|
Revises the procedures of the Marketing Agreement relating to a potential sale of the consumer Roundup
®
business to (1) require Monsanto to negotiate exclusively with the Company with respect to any potential Roundup
®
sale for 60 days after the Company receives notice from Monsanto regarding a potential Roundup
®
sale and (2) provide the Company with a right of first offer and a right of last look in connection with a potential Roundup
®
sale to a third party. In addition, if the Company makes a bid in connection with a Roundup
®
sale, the then-applicable termination fee would serve as a credit against the purchase price and the Monsanto board of directors would not be permitted to discount the value of the Company’s bid compared to a competing bid as a result of the termination fee discount.
|
•
|
Requires the Company to (1) provide notice to Monsanto of certain proposals and processes that may result in a sale of the Company and (2) conduct non-exclusive negotiations with Monsanto with respect to such a sale.
|
•
|
Increases the minimum termination fee payable under the Marketing Agreement to the greater of (1) $200.0 million or (2) four times (A) the average of the program earnings before interest or income taxes for the three trailing program years prior to the year of termination, minus (B) the 2015 program earnings before interest or income taxes.
|
•
|
Amends Monsanto’s termination rights and provides additional rights to the Company in the event of a termination, as follows:
|
◦
|
delays the effectiveness of a notice of termination given by Monsanto as a result of a change of control with respect to Monsanto or a sale of the consumer Roundup
®
business to a third party from (1) the end of the later of 12 months or the next program year to (2) the end of the fifth full program year after Monsanto gives such notice;
|
◦
|
eliminates Monsanto’s termination rights for a regional performance default, a change of significant ownership of the Company or an uncured or incurable egregious injury (as each is defined in the Marketing Agreement); and
|
◦
|
eliminates Monsanto’s termination rights in connection with a change in control of the Company or Scotts Miracle-Gro as long as the Company has determined, in its reasonable commercial opinion, that the acquirer can and will fully perform the duties and obligations of the Company under the Marketing Agreement.
|
•
|
Expands the Company’s termination rights to include termination for a brand decline event (as defined in the Marketing Agreement Amendment) occurring before program year 2023.
|
•
|
Expands the Company’s assignment rights to allow the Company to transfer its rights, interests and obligations under the Marketing Agreement with respect to (1) the North America territories and (2) one or more other included markets for up to three other assignments.
|
•
|
Amends the commission structure by (1) eliminating the commission threshold for program years 2016, 2017 and 2018, (2) setting the commission threshold for the subsequent program years at
$40 million
and (3) establishing the commission payable by Monsanto to the Company for each program year at an amount equal to 50% of the program earnings before interest and income taxes for such program year.
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||
|
(In millions)
|
||||||||||||||
Gross commission
|
$
|
37.4
|
|
|
$
|
42.2
|
|
|
$
|
92.3
|
|
|
$
|
74.8
|
|
Contribution expenses
|
(5.0
|
)
|
|
(5.0
|
)
|
|
(15.0
|
)
|
|
(15.0
|
)
|
||||
Amortization of marketing fee
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||
Net commission
|
32.2
|
|
|
37.0
|
|
|
76.7
|
|
|
59.2
|
|
||||
Reimbursements associated with Marketing Agreement
|
18.4
|
|
|
16.2
|
|
|
55.2
|
|
|
51.7
|
|
||||
Total net sales associated with Marketing Agreement
|
$
|
50.6
|
|
|
$
|
53.2
|
|
|
$
|
131.9
|
|
|
$
|
110.9
|
|
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
SEPTEMBER 30,
2015 |
||||||
|
(In millions)
|
||||||||||
Credit Facilities:
|
|
|
|
|
|
||||||
Revolving loans
|
$
|
404.9
|
|
|
$
|
525.6
|
|
|
$
|
816.3
|
|
Term loans
|
292.5
|
|
|
—
|
|
|
—
|
|
|||
Senior Notes – 6.625%
|
—
|
|
|
200.0
|
|
|
200.0
|
|
|||
Senior Notes – 6.000%
|
400.0
|
|
|
—
|
|
|
—
|
|
|||
Master Accounts Receivable Purchase Agreement
|
348.0
|
|
|
301.1
|
|
|
122.3
|
|
|||
Other
|
67.4
|
|
|
22.2
|
|
|
19.0
|
|
|||
|
1,512.8
|
|
|
1,048.9
|
|
|
1,157.6
|
|
|||
Less current portions
|
382.5
|
|
|
314.0
|
|
|
132.6
|
|
|||
Long-term debt
|
$
|
1,130.3
|
|
|
$
|
734.9
|
|
|
$
|
1,025.0
|
|
Notional Amount
(in millions)
|
|
Effective
Date (a)
|
|
Expiration
Date
|
|
Fixed
Rate
|
|||
$
|
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
|
|
(b)
|
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
|
||||||||||||||||||||||
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
||||||||||||||||||||
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
Interest cost
|
1.1
|
|
|
1.7
|
|
|
0.3
|
|
|
1.0
|
|
|
1.9
|
|
|
0.3
|
|
||||||
Expected return on plan assets
|
(1.2
|
)
|
|
(2.0
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
(2.3
|
)
|
|
—
|
|
||||||
Net amortization
|
0.4
|
|
|
0.4
|
|
|
(0.3
|
)
|
|
0.8
|
|
|
0.5
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
0.5
|
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
NINE MONTHS ENDED
|
||||||||||||||||||||||
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
||||||||||||||||||||
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
|
U.S.
Pension
|
|
International
Pension
|
|
U.S.
Medical
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
0.3
|
|
Interest cost
|
3.3
|
|
|
5.1
|
|
|
0.8
|
|
|
3.0
|
|
|
5.7
|
|
|
1.0
|
|
||||||
Expected return on plan assets
|
(3.7
|
)
|
|
(6.0
|
)
|
|
—
|
|
|
(4.0
|
)
|
|
(7.0
|
)
|
|
—
|
|
||||||
Net amortization
|
1.3
|
|
|
1.2
|
|
|
(0.8
|
)
|
|
2.5
|
|
|
1.4
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
$
|
0.9
|
|
|
$
|
1.2
|
|
|
$
|
0.3
|
|
|
$
|
1.5
|
|
|
$
|
1.1
|
|
|
$
|
1.3
|
|
|
Common Shares and Capital in Excess of Stated Value
|
|
Retained Earnings
|
|
Treasury Shares
|
|
Accumulated Other Comprehensive Loss
|
|
Total Shareholders’ Equity - Controlling Interest
|
|
Non-controlling Interest
|
|
Total Equity
|
||||||||||||||
Balance at September 30, 2014
|
$
|
395.3
|
|
|
$
|
636.9
|
|
|
$
|
(392.3
|
)
|
|
$
|
(86.2
|
)
|
|
$
|
553.7
|
|
|
$
|
13.5
|
|
|
$
|
567.2
|
|
Net income (loss)
|
—
|
|
|
183.4
|
|
|
—
|
|
|
—
|
|
|
183.4
|
|
|
(0.1
|
)
|
|
183.3
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
(5.3
|
)
|
|||||||
Share-based compensation
|
15.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.7
|
|
|
—
|
|
|
15.7
|
|
|||||||
Dividends declared ($1.3500 per share)
|
—
|
|
|
(83.2
|
)
|
|
—
|
|
|
—
|
|
|
(83.2
|
)
|
|
—
|
|
|
(83.2
|
)
|
|||||||
Treasury share purchases
|
—
|
|
|
—
|
|
|
(14.8
|
)
|
|
—
|
|
|
(14.8
|
)
|
|
—
|
|
|
(14.8
|
)
|
|||||||
Treasury share issuances
|
(7.1
|
)
|
|
—
|
|
|
37.6
|
|
|
—
|
|
|
30.5
|
|
|
—
|
|
|
30.5
|
|
|||||||
Balance at June 27, 2015
|
$
|
403.9
|
|
|
$
|
737.1
|
|
|
$
|
(369.5
|
)
|
|
$
|
(91.5
|
)
|
|
$
|
680.0
|
|
|
$
|
13.4
|
|
|
$
|
693.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at September 30, 2015
|
$
|
400.4
|
|
|
$
|
684.2
|
|
|
$
|
(357.1
|
)
|
|
$
|
(106.8
|
)
|
|
$
|
620.7
|
|
|
$
|
12.4
|
|
|
$
|
633.1
|
|
Net income (loss)
|
—
|
|
|
341.9
|
|
|
—
|
|
|
—
|
|
|
341.9
|
|
|
(0.2
|
)
|
|
341.7
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.7
|
)
|
|
(10.7
|
)
|
|
—
|
|
|
(10.7
|
)
|
|||||||
Share-based compensation
|
13.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.9
|
|
|
—
|
|
|
13.9
|
|
|||||||
Dividends declared ($1.4100 per share)
|
—
|
|
|
(87.5
|
)
|
|
—
|
|
|
—
|
|
|
(87.5
|
)
|
|
—
|
|
|
(87.5
|
)
|
|||||||
Treasury share purchases
|
—
|
|
|
—
|
|
|
(81.2
|
)
|
|
—
|
|
|
(81.2
|
)
|
|
—
|
|
|
(81.2
|
)
|
|||||||
Treasury share issuances
|
(13.2
|
)
|
|
—
|
|
|
29.0
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
|
15.8
|
|
|||||||
Investment in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|
7.1
|
|
|||||||
Balance at July 2, 2016
|
$
|
401.1
|
|
|
$
|
938.6
|
|
|
$
|
(409.3
|
)
|
|
$
|
(117.5
|
)
|
|
$
|
812.9
|
|
|
$
|
19.3
|
|
|
$
|
832.2
|
|
|
NINE MONTHS ENDED
|
||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||
Employees
|
|
|
|
||||
Stock options
|
444,890
|
|
|
440,690
|
|
||
Restricted stock units
|
74,422
|
|
|
78,463
|
|
||
Performance units
|
56,315
|
|
|
78,352
|
|
||
Board of Directors
|
|
|
|
||||
Deferred stock units
|
28,103
|
|
|
28,553
|
|
||
Total share-based awards
|
603,730
|
|
|
626,058
|
|
||
|
|
|
|
||||
Aggregate fair value at grant dates (in millions)
|
$
|
16.4
|
|
|
$
|
16.9
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2,
2016 |
|
JUNE 27, 2015
|
|
JULY 2,
2016 |
|
JUNE 27, 2015
|
||||||||
|
(In millions)
|
||||||||||||||
Share-based compensation
|
$
|
2.4
|
|
|
$
|
2.1
|
|
|
$
|
13.7
|
|
|
$
|
11.4
|
|
Tax benefit recognized
|
0.9
|
|
|
0.8
|
|
|
5.2
|
|
|
4.3
|
|
COMMODITY
|
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
|
SEPTEMBER 30, 2015
|
Urea
|
|
34,500 tons
|
|
34,500 tons
|
|
52,500 tons
|
Diesel
|
|
5,670,000 gallons
|
|
3,738,000 gallons
|
|
5,250,000 gallons
|
Heating Oil
|
|
1,386,000 gallons
|
|
3,318,000 gallons
|
|
2,772,000 gallons
|
|
|
|
|
ASSETS / (LIABILITIES)
|
||||||||||
DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS
|
|
|
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
SEPTEMBER 30,
2015 |
||||||
|
BALANCE SHEET LOCATION
|
|
FAIR VALUE
|
|||||||||||
|
|
|
|
(In millions)
|
||||||||||
Interest rate swap agreements
|
|
Other assets
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
|
Other current liabilities
|
|
(4.3
|
)
|
|
(8.8
|
)
|
|
(8.8
|
)
|
|||
|
|
Other liabilities
|
|
(4.4
|
)
|
|
(0.7
|
)
|
|
(4.6
|
)
|
|||
Commodity hedging instruments
|
|
Other current liabilities
|
|
(0.8
|
)
|
|
—
|
|
|
(1.3
|
)
|
|||
Total derivatives designated as hedging instruments
|
|
$
|
(9.5
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
(14.7
|
)
|
||
|
|
|
|
|
|
|
|
|
||||||
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
|
|
BALANCE SHEET LOCATION
|
|
|
|
|
|
|
||||||
Currency forward contracts
|
|
Prepaid and other current assets
|
|
$
|
1.2
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
|
Other current liabilities
|
|
(0.8
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||
Commodity hedging instruments
|
|
Prepaid and other current assets
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|||
|
|
Other current liabilities
|
|
(0.1
|
)
|
|
(2.2
|
)
|
|
(3.2
|
)
|
|||
Total derivatives not designated as hedging instruments
|
|
0.5
|
|
|
(1.0
|
)
|
|
(3.9
|
)
|
|||||
Total derivatives
|
|
$
|
(9.0
|
)
|
|
$
|
(10.4
|
)
|
|
$
|
(18.6
|
)
|
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS
|
|
AMOUNT OF GAIN / (LOSS) RECOGNIZED IN AOCI
|
||||||||||||||
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
|||||||||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|||||||||
|
|
(In millions)
|
||||||||||||||
Interest rate swap agreements
|
|
$
|
(1.0
|
)
|
|
$
|
0.2
|
|
|
$
|
(1.9
|
)
|
|
$
|
(4.3
|
)
|
Commodity hedging instruments
|
|
(0.2
|
)
|
|
0.3
|
|
|
(0.9
|
)
|
|
(0.1
|
)
|
||||
Total
|
|
$
|
(1.2
|
)
|
|
$
|
0.5
|
|
|
$
|
(2.8
|
)
|
|
$
|
(4.4
|
)
|
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS
|
|
RECLASSIFIED FROM AOCI INTO STATEMENT OF OPERATIONS
|
|
AMOUNT OF GAIN / (LOSS)
|
||||||||||||||
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||||||
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||
Interest rate swap agreements
|
|
Interest expense
|
|
$
|
(1.5
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(4.7
|
)
|
|
$
|
(5.7
|
)
|
Commodity hedging instruments
|
|
Cost of sales
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
0.1
|
|
||||
Total
|
|
$
|
(1.7
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(5.3
|
)
|
|
$
|
(5.6
|
)
|
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
|
|
RECOGNIZED IN
STATEMENT OF OPERATIONS
|
|
AMOUNT OF GAIN / (LOSS)
|
||||||||||||||
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||||||
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||
Currency forward contracts
|
|
Other income, net
|
|
$
|
0.7
|
|
|
$
|
1.0
|
|
|
$
|
(0.4
|
)
|
|
$
|
6.3
|
|
Commodity hedging instruments
|
|
Cost of sales
|
|
1.8
|
|
|
0.9
|
|
|
(2.5
|
)
|
|
(7.9
|
)
|
||||
Total
|
|
$
|
2.5
|
|
|
$
|
1.9
|
|
|
$
|
(2.9
|
)
|
|
$
|
(1.6
|
)
|
|
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
|
$
|
14.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14.6
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
Currency forward contracts
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||
Commodity hedging instruments
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Other
|
11.1
|
|
|
—
|
|
|
—
|
|
|
11.1
|
|
||||
Total
|
$
|
25.7
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
27.1
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
(8.7
|
)
|
|
$
|
—
|
|
|
$
|
(8.7
|
)
|
Currency forward contracts
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||
Commodity hedging instruments
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
||||
Long-term debt
|
—
|
|
|
—
|
|
|
(37.7
|
)
|
|
(37.7
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
(10.4
|
)
|
|
$
|
(37.7
|
)
|
|
$
|
(48.1
|
)
|
|
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
|
$
|
14.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14.3
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Currency forward contracts
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
||||
Other
|
10.4
|
|
|
—
|
|
|
—
|
|
|
10.4
|
|
||||
Total
|
$
|
24.7
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
26.0
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
(9.5
|
)
|
|
$
|
—
|
|
|
$
|
(9.5
|
)
|
Commodity hedging instruments
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
(2.2
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
(11.7
|
)
|
|
$
|
—
|
|
|
$
|
(11.7
|
)
|
|
Quoted Prices in Active
Markets for Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
28.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28.6
|
|
Other
|
8.9
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
||||
Total
|
$
|
37.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37.5
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
—
|
|
|
$
|
(13.4
|
)
|
|
$
|
—
|
|
|
$
|
(13.4
|
)
|
Currency forward contracts
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||
Commodity hedging instruments
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
(4.5
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
(18.6
|
)
|
|
$
|
—
|
|
|
$
|
(18.6
|
)
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||||||
|
(In millions)
|
||||||||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
U.S. Consumer
|
$
|
756.7
|
|
|
$
|
871.2
|
|
|
$
|
1,909.6
|
|
|
$
|
1,861.6
|
|
Europe Consumer
|
96.2
|
|
|
110.3
|
|
|
236.9
|
|
|
260.9
|
|
||||
Other
|
141.2
|
|
|
129.8
|
|
|
287.3
|
|
|
230.1
|
|
||||
Consolidated
|
$
|
994.1
|
|
|
$
|
1,111.3
|
|
|
$
|
2,433.8
|
|
|
$
|
2,352.6
|
|
Income from continuing operations before income taxes:
|
|
|
|
|
|
|
|
||||||||
U.S. Consumer
|
$
|
205.8
|
|
|
$
|
237.9
|
|
|
$
|
487.6
|
|
|
$
|
429.9
|
|
Europe Consumer
|
11.8
|
|
|
15.0
|
|
|
24.2
|
|
|
23.9
|
|
||||
Other
|
11.9
|
|
|
16.7
|
|
|
17.0
|
|
|
14.2
|
|
||||
Segment total
|
229.5
|
|
|
269.6
|
|
|
528.8
|
|
|
468.0
|
|
||||
Corporate
|
(13.8
|
)
|
|
(22.1
|
)
|
|
(73.9
|
)
|
|
(76.0
|
)
|
||||
Intangible asset amortization
|
(4.4
|
)
|
|
(4.4
|
)
|
|
(12.6
|
)
|
|
(10.9
|
)
|
||||
Impairment, restructuring and other
|
(11.4
|
)
|
|
(51.7
|
)
|
|
29.1
|
|
|
(65.0
|
)
|
||||
Equity in income of unconsolidated affiliates
|
13.5
|
|
|
—
|
|
|
13.5
|
|
|
—
|
|
||||
Costs related to refinancing
|
—
|
|
|
—
|
|
|
(8.8
|
)
|
|
—
|
|
||||
Interest expense
|
(16.9
|
)
|
|
(14.3
|
)
|
|
(52.3
|
)
|
|
(39.0
|
)
|
||||
Consolidated
|
$
|
196.5
|
|
|
$
|
177.1
|
|
|
$
|
423.8
|
|
|
$
|
277.1
|
|
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
|
SEPTEMBER 30,
2015 |
||||||
|
(In millions)
|
||||||||||
Total assets:
|
|
|
|
|
|
||||||
U.S. Consumer
|
$
|
2,121.1
|
|
|
$
|
1,979.6
|
|
|
$
|
1,622.5
|
|
Europe Consumer
|
264.6
|
|
|
279.2
|
|
|
217.9
|
|
|||
Other
|
570.9
|
|
|
401.9
|
|
|
324.1
|
|
|||
Corporate
|
303.1
|
|
|
134.2
|
|
|
142.4
|
|
|||
Assets held for sale
|
—
|
|
|
223.2
|
|
|
220.3
|
|
|||
Consolidated
|
$
|
3,259.7
|
|
|
$
|
3,018.1
|
|
|
$
|
2,527.2
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
786.2
|
|
|
$
|
207.9
|
|
|
$
|
—
|
|
|
$
|
994.1
|
|
Cost of sales
|
—
|
|
|
485.8
|
|
|
150.5
|
|
|
—
|
|
|
636.3
|
|
|||||
Cost of sales—impairment, restructuring and other
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Gross profit
|
—
|
|
|
300.0
|
|
|
57.4
|
|
|
—
|
|
|
357.4
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
108.5
|
|
|
43.0
|
|
|
0.4
|
|
|
151.9
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|
(5.8
|
)
|
|||||
Other (income) loss, net
|
(0.2
|
)
|
|
(5.8
|
)
|
|
0.4
|
|
|
—
|
|
|
(5.6
|
)
|
|||||
Income (loss) from operations
|
0.2
|
|
|
203.1
|
|
|
14.0
|
|
|
(0.4
|
)
|
|
216.9
|
|
|||||
Equity (income) loss in subsidiaries
|
(219.6
|
)
|
|
(5.9
|
)
|
|
—
|
|
|
225.5
|
|
|
—
|
|
|||||
Other non-operating (income) loss
|
(6.1
|
)
|
|
—
|
|
|
(5.7
|
)
|
|
11.8
|
|
|
—
|
|
|||||
Equity in (income) loss of unconsolidated affiliates
|
—
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
|||||
Interest expense
|
15.7
|
|
|
11.8
|
|
|
1.2
|
|
|
(11.8
|
)
|
|
16.9
|
|
|||||
Income (loss) from continuing operations before income taxes
|
210.2
|
|
|
193.7
|
|
|
18.5
|
|
|
(225.9
|
)
|
|
196.5
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(3.2
|
)
|
|
66.2
|
|
|
6.5
|
|
|
—
|
|
|
69.5
|
|
|||||
Income (loss) from continuing operations
|
213.4
|
|
|
127.5
|
|
|
12.0
|
|
|
(225.9
|
)
|
|
127.0
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
85.7
|
|
|
—
|
|
|
—
|
|
|
85.7
|
|
|||||
Net income (loss)
|
$
|
213.4
|
|
|
$
|
213.2
|
|
|
$
|
12.0
|
|
|
$
|
(225.9
|
)
|
|
$
|
212.7
|
|
Net (income) loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|||||
Net income (loss) attributable to controlling interest
|
$
|
213.4
|
|
|
$
|
213.2
|
|
|
$
|
12.0
|
|
|
$
|
(225.5
|
)
|
|
$
|
213.1
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,985.5
|
|
|
$
|
448.3
|
|
|
$
|
—
|
|
|
$
|
2,433.8
|
|
Cost of sales
|
—
|
|
|
1,215.7
|
|
|
316.9
|
|
|
—
|
|
|
1,532.6
|
|
|||||
Cost of sales—impairment, restructuring and other
|
—
|
|
|
5.5
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|||||
Gross profit
|
—
|
|
|
764.3
|
|
|
131.4
|
|
|
—
|
|
|
895.7
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
355.9
|
|
|
109.1
|
|
|
1.1
|
|
|
466.1
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
(52.1
|
)
|
|
0.4
|
|
|
—
|
|
|
(51.7
|
)
|
|||||
Other (income) loss, net
|
(0.2
|
)
|
|
(7.0
|
)
|
|
0.1
|
|
|
—
|
|
|
(7.1
|
)
|
|||||
Income (loss) from operations
|
0.2
|
|
|
467.5
|
|
|
21.8
|
|
|
(1.1
|
)
|
|
488.4
|
|
|||||
Equity (income) loss in subsidiaries
|
(368.4
|
)
|
|
(11.4
|
)
|
|
—
|
|
|
379.8
|
|
|
—
|
|
|||||
Other non-operating (income) loss
|
(19.4
|
)
|
|
—
|
|
|
(17.8
|
)
|
|
37.2
|
|
|
—
|
|
|||||
Equity in (income) loss of unconsolidated affiliates
|
—
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
|||||
Costs related to refinancing
|
8.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.8
|
|
|||||
Interest expense
|
49.9
|
|
|
36.4
|
|
|
3.2
|
|
|
(37.2
|
)
|
|
52.3
|
|
|||||
Income (loss) from continuing operations before income taxes
|
329.3
|
|
|
439.0
|
|
|
36.4
|
|
|
(380.9
|
)
|
|
423.8
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(13.9
|
)
|
|
151.2
|
|
|
13.0
|
|
|
—
|
|
|
150.3
|
|
|||||
Income (loss) from continuing operations
|
343.2
|
|
|
287.8
|
|
|
23.4
|
|
|
(380.9
|
)
|
|
273.5
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
68.2
|
|
|
—
|
|
|
—
|
|
|
68.2
|
|
|||||
Net income (loss)
|
$
|
343.2
|
|
|
$
|
356.0
|
|
|
$
|
23.4
|
|
|
$
|
(380.9
|
)
|
|
$
|
341.7
|
|
Net (income) loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||||
Net income (loss) attributable to controlling interest
|
$
|
343.2
|
|
|
$
|
356.0
|
|
|
$
|
23.4
|
|
|
$
|
(380.7
|
)
|
|
$
|
341.9
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
213.4
|
|
|
$
|
213.2
|
|
|
$
|
12.0
|
|
|
$
|
(225.9
|
)
|
|
$
|
212.7
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(12.3
|
)
|
|
—
|
|
|
(12.3
|
)
|
|
12.3
|
|
|
(12.3
|
)
|
|||||
Net change in derivatives
|
0.5
|
|
|
0.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
0.5
|
|
|||||
Net change in pension and other post-retirement benefits
|
0.9
|
|
|
0.4
|
|
|
0.5
|
|
|
(0.9
|
)
|
|
0.9
|
|
|||||
Total other comprehensive income (loss)
|
(10.9
|
)
|
|
0.5
|
|
|
(11.8
|
)
|
|
11.3
|
|
|
(10.9
|
)
|
|||||
Comprehensive income (loss)
|
$
|
202.5
|
|
|
$
|
213.7
|
|
|
$
|
0.2
|
|
|
$
|
(214.6
|
)
|
|
$
|
201.8
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
343.2
|
|
|
$
|
356.0
|
|
|
$
|
23.4
|
|
|
$
|
(380.9
|
)
|
|
$
|
341.7
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(14.8
|
)
|
|
—
|
|
|
(14.8
|
)
|
|
14.8
|
|
|
(14.8
|
)
|
|||||
Net change in derivatives
|
2.5
|
|
|
(0.2
|
)
|
|
—
|
|
|
0.2
|
|
|
2.5
|
|
|||||
Net change in pension and other post-retirement benefits
|
1.6
|
|
|
0.8
|
|
|
0.8
|
|
|
(1.6
|
)
|
|
1.6
|
|
|||||
Total other comprehensive income (loss)
|
(10.7
|
)
|
|
0.6
|
|
|
(14.0
|
)
|
|
13.4
|
|
|
(10.7
|
)
|
|||||
Comprehensive income (loss)
|
$
|
332.5
|
|
|
$
|
356.6
|
|
|
$
|
9.4
|
|
|
$
|
(367.5
|
)
|
|
$
|
331.0
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(a)
|
$
|
(33.4
|
)
|
|
$
|
18.6
|
|
|
$
|
(43.2
|
)
|
|
$
|
29.1
|
|
|
$
|
(28.9
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sale of long-lived assets
|
—
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|||||
Investments in property, plant and equipment
|
—
|
|
|
(29.4
|
)
|
|
(6.3
|
)
|
|
—
|
|
|
(35.7
|
)
|
|||||
Investments in loans receivable
|
—
|
|
|
(90.0
|
)
|
|
—
|
|
|
—
|
|
|
(90.0
|
)
|
|||||
Net distributions from unconsolidated affiliates
|
—
|
|
|
194.1
|
|
|
—
|
|
|
—
|
|
|
194.1
|
|
|||||
Cash contributed to Joint Venture
|
—
|
|
|
(24.2
|
)
|
|
—
|
|
|
—
|
|
|
(24.2
|
)
|
|||||
Investments in acquired businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(161.4
|
)
|
|
—
|
|
|
(161.4
|
)
|
|||||
Return of investments from affiliates
|
758.4
|
|
|
—
|
|
|
—
|
|
|
(758.4
|
)
|
|
—
|
|
|||||
Investing cash flows from (to) affiliates
|
(760.4
|
)
|
|
(29.1
|
)
|
|
—
|
|
|
789.5
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
(2.0
|
)
|
|
23.8
|
|
|
(167.7
|
)
|
|
31.1
|
|
|
(114.8
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under revolving and bank lines of credit and term loans
|
—
|
|
|
1,669.3
|
|
|
213.3
|
|
|
—
|
|
|
1,882.6
|
|
|||||
Repayments under revolving and bank lines of credit and term loans
|
—
|
|
|
(1,652.6
|
)
|
|
(110.3
|
)
|
|
—
|
|
|
(1,762.9
|
)
|
|||||
Proceeds from issuance of 6.000% Senior Notes
|
400.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400.0
|
|
|||||
Repayment of 6.625% Senior Notes
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200.0
|
)
|
|||||
Financing and issuance fees
|
(11.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.2
|
)
|
|||||
Dividends paid
|
(86.4
|
)
|
|
(747.4
|
)
|
|
(11.0
|
)
|
|
758.4
|
|
|
(86.4
|
)
|
|||||
Purchase of Common Shares
|
(81.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81.2
|
)
|
|||||
Payments on seller notes
|
—
|
|
|
(1.8
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(2.3
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
4.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|||||
Cash received from the exercise of stock options
|
9.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.9
|
|
|||||
Financing cash flows from (to) affiliates
|
—
|
|
|
689.0
|
|
|
129.6
|
|
|
(818.6
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
35.4
|
|
|
(43.5
|
)
|
|
221.1
|
|
|
(60.2
|
)
|
|
152.8
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(3.3
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(1.1
|
)
|
|
6.9
|
|
|
—
|
|
|
5.8
|
|
|||||
Cash and cash equivalents at beginning of period
|
—
|
|
|
8.2
|
|
|
63.2
|
|
|
—
|
|
|
71.4
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
$
|
7.1
|
|
|
$
|
70.1
|
|
|
$
|
—
|
|
|
$
|
77.2
|
|
(a)
|
Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of
$758.4 million
represent return of investments and are included in cash flows used in investing activities.
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
7.1
|
|
|
$
|
70.1
|
|
|
$
|
—
|
|
|
$
|
77.2
|
|
Accounts receivable, net
|
—
|
|
|
157.8
|
|
|
201.9
|
|
|
—
|
|
|
359.7
|
|
|||||
Accounts receivable pledged
|
—
|
|
|
435.1
|
|
|
—
|
|
|
—
|
|
|
435.1
|
|
|||||
Inventories
|
—
|
|
|
354.3
|
|
|
115.6
|
|
|
—
|
|
|
469.9
|
|
|||||
Prepaid and other current assets
|
0.2
|
|
|
96.2
|
|
|
42.8
|
|
|
—
|
|
|
139.2
|
|
|||||
Total current assets
|
0.2
|
|
|
1,050.5
|
|
|
430.4
|
|
|
—
|
|
|
1,481.1
|
|
|||||
Investment in unconsolidated affiliate
|
—
|
|
|
94.4
|
|
|
—
|
|
|
—
|
|
|
94.4
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
375.5
|
|
|
74.1
|
|
|
—
|
|
|
449.6
|
|
|||||
Goodwill
|
—
|
|
|
260.4
|
|
|
74.0
|
|
|
11.6
|
|
|
346.0
|
|
|||||
Intangible assets, net
|
—
|
|
|
599.2
|
|
|
140.8
|
|
|
10.6
|
|
|
750.6
|
|
|||||
Other assets
|
20.9
|
|
|
115.0
|
|
|
15.3
|
|
|
(13.2
|
)
|
|
138.0
|
|
|||||
Equity investment in subsidiaries
|
833.3
|
|
|
—
|
|
|
—
|
|
|
(833.3
|
)
|
|
—
|
|
|||||
Intercompany assets
|
1,071.5
|
|
|
—
|
|
|
—
|
|
|
(1,071.5
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,925.9
|
|
|
$
|
2,495.0
|
|
|
$
|
734.6
|
|
|
$
|
(1,895.8
|
)
|
|
$
|
3,259.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
15.0
|
|
|
$
|
364.0
|
|
|
$
|
18.5
|
|
|
$
|
(15.0
|
)
|
|
$
|
382.5
|
|
Accounts payable
|
—
|
|
|
176.9
|
|
|
72.6
|
|
|
—
|
|
|
249.5
|
|
|||||
Other current liabilities
|
11.3
|
|
|
241.6
|
|
|
106.3
|
|
|
—
|
|
|
359.2
|
|
|||||
Total current liabilities
|
26.3
|
|
|
782.5
|
|
|
197.4
|
|
|
(15.0
|
)
|
|
991.2
|
|
|||||
Long-term debt
|
1,082.4
|
|
|
501.2
|
|
|
191.5
|
|
|
(644.8
|
)
|
|
1,130.3
|
|
|||||
Other liabilities
|
4.3
|
|
|
277.9
|
|
|
30.6
|
|
|
(6.8
|
)
|
|
306.0
|
|
|||||
Equity investment in subsidiaries
|
—
|
|
|
149.7
|
|
|
—
|
|
|
(149.7
|
)
|
|
—
|
|
|||||
Intercompany liabilities
|
—
|
|
|
197.1
|
|
|
204.9
|
|
|
(402.0
|
)
|
|
—
|
|
|||||
Total liabilities
|
1,113.0
|
|
|
1,908.4
|
|
|
624.4
|
|
|
(1,218.3
|
)
|
|
2,427.5
|
|
|||||
Total shareholders’ equity - controlling interest
|
812.9
|
|
|
586.6
|
|
|
110.2
|
|
|
(696.8
|
)
|
|
812.9
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
19.3
|
|
|
19.3
|
|
|||||
Total equity
|
812.9
|
|
|
586.6
|
|
|
110.2
|
|
|
(677.5
|
)
|
|
832.2
|
|
|||||
Total liabilities and equity
|
$
|
1,925.9
|
|
|
$
|
2,495.0
|
|
|
$
|
734.6
|
|
|
$
|
(1,895.8
|
)
|
|
$
|
3,259.7
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
894.5
|
|
|
$
|
216.8
|
|
|
$
|
—
|
|
|
$
|
1,111.3
|
|
Cost of sales
|
—
|
|
|
568.9
|
|
|
153.2
|
|
|
—
|
|
|
722.1
|
|
|||||
Cost of sales—impairment, restructuring and other
|
—
|
|
|
0.3
|
|
|
3.1
|
|
|
—
|
|
|
3.4
|
|
|||||
Gross profit
|
—
|
|
|
325.3
|
|
|
60.5
|
|
|
—
|
|
|
385.8
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative
|
—
|
|
|
109.4
|
|
|
45.5
|
|
|
0.4
|
|
|
155.3
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
37.7
|
|
|
3.2
|
|
|
—
|
|
|
40.9
|
|
|||||
Other (income) loss, net
|
—
|
|
|
(1.1
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||||
Income (loss) from operations
|
—
|
|
|
179.3
|
|
|
12.5
|
|
|
(0.4
|
)
|
|
191.4
|
|
|||||
Equity (income) loss in subsidiaries
|
(138.2
|
)
|
|
(5.7
|
)
|
|
—
|
|
|
143.9
|
|
|
—
|
|
|||||
Other non-operating (income) loss
|
(8.5
|
)
|
|
—
|
|
|
(5.7
|
)
|
|
14.2
|
|
|
—
|
|
|||||
Interest expense
|
15.3
|
|
|
12.4
|
|
|
0.8
|
|
|
(14.2
|
)
|
|
14.3
|
|
|||||
Income (loss) from continuing operations before income taxes
|
131.4
|
|
|
172.6
|
|
|
17.4
|
|
|
(144.3
|
)
|
|
177.1
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(2.4
|
)
|
|
58.4
|
|
|
6.0
|
|
|
—
|
|
|
62.0
|
|
|||||
Income (loss) from continuing operations
|
133.8
|
|
|
114.2
|
|
|
11.4
|
|
|
(144.3
|
)
|
|
115.1
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
17.9
|
|
|
—
|
|
|
—
|
|
|
17.9
|
|
|||||
Net income (loss)
|
$
|
133.8
|
|
|
$
|
132.1
|
|
|
$
|
11.4
|
|
|
$
|
(144.3
|
)
|
|
$
|
133.0
|
|
Net (income) loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|||||
Net income (loss) attributable to controlling interest
|
$
|
133.8
|
|
|
$
|
132.1
|
|
|
$
|
11.4
|
|
|
$
|
(143.9
|
)
|
|
$
|
133.4
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,894.6
|
|
|
$
|
458.0
|
|
|
$
|
—
|
|
|
$
|
2,352.6
|
|
Cost of sales
|
—
|
|
|
1,206.8
|
|
|
325.0
|
|
|
—
|
|
|
1,531.8
|
|
|||||
Cost of sales—impairment, restructuring and other
|
—
|
|
|
0.3
|
|
|
3.3
|
|
|
—
|
|
|
3.6
|
|
|||||
Gross profit
|
—
|
|
|
687.5
|
|
|
129.7
|
|
|
—
|
|
|
817.2
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
—
|
|
|
335.9
|
|
|
112.3
|
|
|
1.3
|
|
|
449.5
|
|
|||||
Impairment, restructuring and other
|
—
|
|
|
47.6
|
|
|
6.4
|
|
|
—
|
|
|
54.0
|
|
|||||
Other (income) loss, net
|
—
|
|
|
(2.1
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||||
Income (loss) from operations
|
—
|
|
|
306.1
|
|
|
11.3
|
|
|
(1.3
|
)
|
|
316.1
|
|
|||||
Equity income (loss) in subsidiaries
|
(197.9
|
)
|
|
(8.3
|
)
|
|
—
|
|
|
206.2
|
|
|
—
|
|
|||||
Other non-operating income (loss)
|
(22.5
|
)
|
|
—
|
|
|
(16.9
|
)
|
|
39.4
|
|
|
—
|
|
|||||
Interest expense
|
42.8
|
|
|
34.1
|
|
|
1.5
|
|
|
(39.4
|
)
|
|
39.0
|
|
|||||
Income (loss) from continuing operations before income taxes
|
177.6
|
|
|
280.3
|
|
|
26.7
|
|
|
(207.5
|
)
|
|
277.1
|
|
|||||
Income tax (benefit) expense from continuing operations
|
(7.1
|
)
|
|
94.7
|
|
|
9.4
|
|
|
—
|
|
|
97.0
|
|
|||||
Income (loss) from continuing operations
|
184.7
|
|
|
185.6
|
|
|
17.3
|
|
|
(207.5
|
)
|
|
180.1
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||
Net income (loss)
|
$
|
184.7
|
|
|
$
|
188.8
|
|
|
$
|
17.3
|
|
|
$
|
(207.5
|
)
|
|
$
|
183.3
|
|
Net (income) loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||||
Net income (loss) attributable to controlling interest
|
$
|
184.7
|
|
|
$
|
188.8
|
|
|
$
|
17.3
|
|
|
$
|
(207.4
|
)
|
|
$
|
183.4
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
133.8
|
|
|
$
|
132.1
|
|
|
$
|
11.4
|
|
|
$
|
(144.3
|
)
|
|
$
|
133.0
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
(2.5
|
)
|
|
2.5
|
|
|||||
Net change in derivatives
|
2.8
|
|
|
0.4
|
|
|
—
|
|
|
(0.4
|
)
|
|
2.8
|
|
|||||
Net change in pension and other post-retirement benefits
|
0.8
|
|
|
0.5
|
|
|
0.3
|
|
|
(0.8
|
)
|
|
0.8
|
|
|||||
Total other comprehensive income (loss)
|
6.1
|
|
|
0.9
|
|
|
2.8
|
|
|
(3.7
|
)
|
|
6.1
|
|
|||||
Comprehensive income (loss)
|
$
|
139.9
|
|
|
$
|
133.0
|
|
|
$
|
14.2
|
|
|
$
|
(148.0
|
)
|
|
$
|
139.1
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
184.7
|
|
|
$
|
188.8
|
|
|
$
|
17.3
|
|
|
$
|
(207.5
|
)
|
|
$
|
183.3
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net foreign currency translation adjustment
|
(8.8
|
)
|
|
—
|
|
|
(8.8
|
)
|
|
8.8
|
|
|
(8.8
|
)
|
|||||
Net change in derivatives
|
1.2
|
|
|
(0.2
|
)
|
|
—
|
|
|
0.2
|
|
|
1.2
|
|
|||||
Net change in pension and other post-retirement benefits
|
2.3
|
|
|
1.5
|
|
|
0.8
|
|
|
(2.3
|
)
|
|
2.3
|
|
|||||
Total other comprehensive income (loss)
|
(5.3
|
)
|
|
1.3
|
|
|
(8.0
|
)
|
|
6.7
|
|
|
(5.3
|
)
|
|||||
Comprehensive income (loss)
|
$
|
179.4
|
|
|
$
|
190.1
|
|
|
$
|
9.3
|
|
|
$
|
(200.8
|
)
|
|
$
|
178.0
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(a)
|
$
|
206.6
|
|
|
$
|
68.0
|
|
|
$
|
(11.1
|
)
|
|
$
|
(239.3
|
)
|
|
$
|
24.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from sale of long-lived assets
|
—
|
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|||||
Investments in property, plant and equipment
|
—
|
|
|
(37.7
|
)
|
|
(3.5
|
)
|
|
—
|
|
|
(41.2
|
)
|
|||||
Investments in acquired businesses, net of cash acquired
|
—
|
|
|
(169.6
|
)
|
|
(9.5
|
)
|
|
—
|
|
|
(179.1
|
)
|
|||||
Investing cash flows from (to) affiliates
|
(128.8
|
)
|
|
—
|
|
|
—
|
|
|
128.8
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
(128.8
|
)
|
|
(202.0
|
)
|
|
(13.0
|
)
|
|
128.8
|
|
|
(215.0
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under revolving and bank lines of credit and term loans
|
—
|
|
|
1,176.1
|
|
|
264.6
|
|
|
—
|
|
|
1,440.7
|
|
|||||
Repayments under revolving and bank lines of credit and term loans
|
—
|
|
|
(1,051.8
|
)
|
|
(124.1
|
)
|
|
—
|
|
|
(1,175.9
|
)
|
|||||
Dividends paid
|
(82.4
|
)
|
|
(226.6
|
)
|
|
(12.7
|
)
|
|
239.3
|
|
|
(82.4
|
)
|
|||||
Purchase of Common Shares
|
(14.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.8
|
)
|
|||||
Payments on seller notes
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
2.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|||||
Cash received from the exercise of stock options
|
16.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
|||||
Financing cash flows from (to) affiliates
|
—
|
|
|
221.4
|
|
|
(92.6
|
)
|
|
(128.8
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
(77.8
|
)
|
|
118.3
|
|
|
35.2
|
|
|
110.5
|
|
|
186.2
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(15.7
|
)
|
|
6.3
|
|
|
—
|
|
|
(9.4
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
—
|
|
|
23.1
|
|
|
66.2
|
|
|
—
|
|
|
89.3
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
$
|
7.4
|
|
|
$
|
72.5
|
|
|
$
|
—
|
|
|
$
|
79.9
|
|
(a)
|
Cash received by the Parent from its subsidiaries in the form of dividends in the amount of
$226.6 million
represent return on investments and are included in cash flows from operating activities. Cash received by the Guarantors from the Non-Guarantors in the form of dividends in the amount of
$12.7 million
represent return on investments and are included in the cash flows from operating activities.
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
7.4
|
|
|
$
|
72.5
|
|
|
$
|
—
|
|
|
$
|
79.9
|
|
Accounts receivable, net
|
—
|
|
|
191.5
|
|
|
215.2
|
|
|
—
|
|
|
406.7
|
|
|||||
Accounts receivable pledged
|
—
|
|
|
376.4
|
|
|
—
|
|
|
—
|
|
|
376.4
|
|
|||||
Inventories
|
—
|
|
|
311.9
|
|
|
87.9
|
|
|
—
|
|
|
399.8
|
|
|||||
Assets held for sale
|
—
|
|
|
223.2
|
|
|
—
|
|
|
—
|
|
|
223.2
|
|
|||||
Prepaid and other current assets
|
—
|
|
|
87.1
|
|
|
38.8
|
|
|
—
|
|
|
125.9
|
|
|||||
Total current assets
|
—
|
|
|
1,197.5
|
|
|
414.4
|
|
|
—
|
|
|
1,611.9
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
379.5
|
|
|
58.4
|
|
|
—
|
|
|
437.9
|
|
|||||
Goodwill
|
—
|
|
|
258.2
|
|
|
12.3
|
|
|
11.6
|
|
|
282.1
|
|
|||||
Intangible assets, net
|
—
|
|
|
583.9
|
|
|
65.6
|
|
|
12.1
|
|
|
661.6
|
|
|||||
Other assets
|
15.2
|
|
|
12.6
|
|
|
21.6
|
|
|
(24.8
|
)
|
|
24.6
|
|
|||||
Equity investment in subsidiaries
|
515.9
|
|
|
—
|
|
|
—
|
|
|
(515.9
|
)
|
|
—
|
|
|||||
Intercompany assets
|
887.1
|
|
|
—
|
|
|
—
|
|
|
(887.1
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,418.2
|
|
|
$
|
2,431.7
|
|
|
$
|
572.3
|
|
|
$
|
(1,404.1
|
)
|
|
$
|
3,018.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
302.0
|
|
|
$
|
12.0
|
|
|
$
|
—
|
|
|
$
|
314.0
|
|
Accounts payable
|
—
|
|
|
234.2
|
|
|
74.4
|
|
|
—
|
|
|
308.6
|
|
|||||
Marketing and license agreement obligation
|
—
|
|
|
300.0
|
|
|
—
|
|
|
—
|
|
|
300.0
|
|
|||||
Liabilities held for sale
|
—
|
|
|
63.4
|
|
|
—
|
|
|
—
|
|
|
63.4
|
|
|||||
Other current liabilities
|
11.9
|
|
|
247.4
|
|
|
102.9
|
|
|
—
|
|
|
362.2
|
|
|||||
Total current liabilities
|
11.9
|
|
|
1,147.0
|
|
|
189.3
|
|
|
—
|
|
|
1,348.2
|
|
|||||
Long-term debt
|
725.6
|
|
|
386.3
|
|
|
148.5
|
|
|
(525.5
|
)
|
|
734.9
|
|
|||||
Other liabilities
|
0.7
|
|
|
229.0
|
|
|
31.7
|
|
|
(19.8
|
)
|
|
241.6
|
|
|||||
Equity investment in subsidiaries
|
—
|
|
|
146.1
|
|
|
—
|
|
|
(146.1
|
)
|
|
—
|
|
|||||
Intercompany liabilities
|
—
|
|
|
267.6
|
|
|
75.3
|
|
|
(342.9
|
)
|
|
—
|
|
|||||
Total liabilities
|
738.2
|
|
|
2,176.0
|
|
|
444.8
|
|
|
(1,034.3
|
)
|
|
2,324.7
|
|
|||||
Total shareholders’ equity - controlling interest
|
680.0
|
|
|
255.7
|
|
|
127.5
|
|
|
(383.2
|
)
|
|
680.0
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
13.4
|
|
|
13.4
|
|
|||||
Total equity
|
680.0
|
|
|
255.7
|
|
|
127.5
|
|
|
(369.8
|
)
|
|
693.4
|
|
|||||
Total liabilities and equity
|
$
|
1,418.2
|
|
|
$
|
2,431.7
|
|
|
$
|
572.3
|
|
|
$
|
(1,404.1
|
)
|
|
$
|
3,018.1
|
|
|
Parent
|
|
Subsidiary
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations/
Consolidations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
8.2
|
|
|
$
|
63.2
|
|
|
$
|
—
|
|
|
$
|
71.4
|
|
Accounts receivable, net
|
—
|
|
|
63.3
|
|
|
94.4
|
|
|
—
|
|
|
157.7
|
|
|||||
Accounts receivable pledged
|
—
|
|
|
152.9
|
|
|
—
|
|
|
—
|
|
|
152.9
|
|
|||||
Inventories
|
—
|
|
|
306.9
|
|
|
88.9
|
|
|
—
|
|
|
395.8
|
|
|||||
Assets held for sale
|
—
|
|
|
220.3
|
|
|
—
|
|
|
—
|
|
|
220.3
|
|
|||||
Prepaid and other current assets
|
—
|
|
|
86.4
|
|
|
34.7
|
|
|
—
|
|
|
121.1
|
|
|||||
Total current assets
|
—
|
|
|
838.0
|
|
|
281.2
|
|
|
—
|
|
|
1,119.2
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
388.0
|
|
|
56.1
|
|
|
—
|
|
|
444.1
|
|
|||||
Goodwill
|
—
|
|
|
260.2
|
|
|
12.0
|
|
|
11.6
|
|
|
283.8
|
|
|||||
Intangible assets, net
|
—
|
|
|
608.6
|
|
|
34.8
|
|
|
11.7
|
|
|
655.1
|
|
|||||
Other assets
|
16.3
|
|
|
11.0
|
|
|
15.0
|
|
|
(17.3
|
)
|
|
25.0
|
|
|||||
Equity investment in subsidiaries
|
461.3
|
|
|
—
|
|
|
—
|
|
|
(461.3
|
)
|
|
—
|
|
|||||
Intercompany assets
|
1,179.4
|
|
|
—
|
|
|
—
|
|
|
(1,179.4
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,657.0
|
|
|
$
|
2,105.8
|
|
|
$
|
399.1
|
|
|
$
|
(1,634.7
|
)
|
|
$
|
2,527.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt
|
$
|
—
|
|
|
$
|
122.9
|
|
|
$
|
9.7
|
|
|
$
|
—
|
|
|
$
|
132.6
|
|
Accounts payable
|
—
|
|
|
136.7
|
|
|
56.4
|
|
|
—
|
|
|
193.1
|
|
|||||
Liabilities held for sale
|
—
|
|
|
41.7
|
|
|
—
|
|
|
—
|
|
|
41.7
|
|
|||||
Other current liabilities
|
15.5
|
|
|
162.7
|
|
|
73.0
|
|
|
—
|
|
|
251.2
|
|
|||||
Total current liabilities
|
15.5
|
|
|
464.0
|
|
|
139.1
|
|
|
—
|
|
|
618.6
|
|
|||||
Long-term debt
|
1,016.3
|
|
|
724.9
|
|
|
100.1
|
|
|
(816.3
|
)
|
|
1,025.0
|
|
|||||
Other liabilities
|
4.5
|
|
|
226.0
|
|
|
32.3
|
|
|
(12.3
|
)
|
|
250.5
|
|
|||||
Equity investment in subsidiaries
|
—
|
|
|
156.2
|
|
|
—
|
|
|
(156.2
|
)
|
|
—
|
|
|||||
Intercompany liabilities
|
—
|
|
|
296.5
|
|
|
47.6
|
|
|
(344.1
|
)
|
|
—
|
|
|||||
Total liabilities
|
1,036.3
|
|
|
1,867.6
|
|
|
319.1
|
|
|
(1,328.9
|
)
|
|
1,894.1
|
|
|||||
Total shareholders’ equity - controlling interest
|
620.7
|
|
|
238.2
|
|
|
80.0
|
|
|
(318.2
|
)
|
|
620.7
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
12.4
|
|
|
12.4
|
|
|||||
Total equity
|
620.7
|
|
|
238.2
|
|
|
80.0
|
|
|
(305.8
|
)
|
|
633.1
|
|
|||||
Total liabilities and equity
|
$
|
1,657.0
|
|
|
$
|
2,105.8
|
|
|
$
|
399.1
|
|
|
$
|
(1,634.7
|
)
|
|
$
|
2,527.2
|
|
•
|
Executive summary
|
•
|
Results of operations
|
•
|
Segment results
|
•
|
Liquidity and capital resources
|
•
|
Regulatory matters
|
•
|
Critical accounting policies and estimates
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||
|
JULY 2,
2016 |
|
JUNE 27, 2015
|
|
JULY 2,
2016 |
|
JUNE 27,
2015 |
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
64.0
|
|
|
65.0
|
|
|
63.0
|
|
|
65.1
|
|
Cost of sales—impairment, restructuring and other
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
0.2
|
|
Gross profit
|
36.0
|
|
|
34.7
|
|
|
36.8
|
|
|
34.7
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
15.4
|
|
|
14.0
|
|
|
19.1
|
|
|
19.1
|
|
Impairment, restructuring and other
|
(0.6
|
)
|
|
3.7
|
|
|
(2.1
|
)
|
|
2.3
|
|
Other income, net
|
(0.6
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(0.1
|
)
|
Income from operations
|
21.8
|
|
|
17.2
|
|
|
20.1
|
|
|
13.4
|
|
Equity in loss of unconsolidated affiliates
|
0.4
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Costs related to refinancing
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
Interest expense
|
1.6
|
|
|
1.3
|
|
|
2.2
|
|
|
1.6
|
|
Income from continuing operations before income taxes
|
19.8
|
|
|
15.9
|
|
|
17.4
|
|
|
11.8
|
|
Income tax expense from continuing operations
|
7.0
|
|
|
5.5
|
|
|
6.2
|
|
|
4.1
|
|
Income from continuing operations
|
12.8
|
|
|
10.4
|
|
|
11.2
|
|
|
7.7
|
|
Income from discontinued operations, net of tax
|
8.6
|
|
|
1.6
|
|
|
2.8
|
|
|
0.1
|
|
Net income
|
21.4
|
%
|
|
12.0
|
%
|
|
14.0
|
%
|
|
7.8
|
%
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||
|
JULY 2, 2016
|
|
JULY 2, 2016
|
||
Volume
|
(11.8
|
)%
|
|
2.3
|
%
|
Acquisitions
|
1.2
|
|
|
2.0
|
|
Pricing
|
0.8
|
|
|
0.1
|
|
Foreign exchange rates
|
(0.7
|
)
|
|
(0.9
|
)
|
Change in net sales
|
(10.5
|
)%
|
|
3.5
|
%
|
•
|
decreased sales in our U.S. Consumer and Europe Consumer segments, driven by the impact of the calendar shift whereby our third quarter of fiscal 2016 began six days later than our third quarter of fiscal 2015 and these six days occurred during our peak selling season, resulting in a decrease in net sales of approximately
$90 million
, as well as the prior year exit from the U.K. Solus business resulting in a decrease in net sales of $7.7 million; and
|
•
|
the unfavorable impact of foreign exchange rates as a result of the strengthening of the U.S. dollar relative to other currencies including the Canadian dollar, euro and British pound;
|
•
|
partially offset by increased sales volume in our Other segment, driven by increased sales of hydroponic gardening products;
|
•
|
the addition of net sales from acquisitions within our Other segment, primarily from Gavita and a Canadian growing media operation; and
|
•
|
a favorable impact of increased pricing in the U.S. Consumer segment.
|
•
|
increased sales in our U.S. Consumer segment, driven by the impact of the calendar shift whereby the
nine months ended
July 2, 2016
had six additional days compared to the
nine months ended
June 27, 2015
, resulting in an increase in net sales of approximately
$32.0 million
, as well as the impact of our amended Marketing Agreement for consumer Roundup
®
;
|
•
|
increased sales volume in our Other segment, driven by increased sales of hydroponic gardening products;
|
•
|
the addition of net sales from acquisitions within our Other segment, primarily from General Hydroponics, Vermicrop, Gavita and a Canadian growing media operation; and
|
•
|
a favorable impact of increased pricing in the U.S. Consumer segment;
|
•
|
partially 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 the Canadian dollar, euro and British pound; and
|
•
|
the prior year exit from the U.K. Solus business resulting in a decrease in net sales of $14.0 million in our Europe Consumer segment.
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
||||||||
|
(In millions)
|
||||||||||||||
Materials
|
$
|
367.4
|
|
|
$
|
431.2
|
|
|
$
|
880.7
|
|
|
$
|
892.8
|
|
Distribution and warehousing
|
114.8
|
|
|
138.5
|
|
|
287.5
|
|
|
305.4
|
|
||||
Manufacturing labor and overhead
|
135.7
|
|
|
136.2
|
|
|
309.2
|
|
|
281.9
|
|
||||
Roundup
®
reimbursements
|
18.4
|
|
|
16.2
|
|
|
55.2
|
|
|
51.7
|
|
||||
|
636.3
|
|
|
722.1
|
|
|
1,532.6
|
|
|
1,531.8
|
|
||||
Impairment, restructuring and other
|
0.4
|
|
|
3.4
|
|
|
5.5
|
|
|
3.6
|
|
||||
|
$
|
636.7
|
|
|
$
|
725.5
|
|
|
$
|
1,538.1
|
|
|
$
|
1,535.4
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||
|
JULY 2, 2016
|
|
JULY 2, 2016
|
||||
|
(In millions)
|
||||||
Volume and product mix
|
$
|
(73.8
|
)
|
|
$
|
35.3
|
|
Roundup
®
reimbursements
|
2.2
|
|
|
3.5
|
|
||
Material costs
|
(6.3
|
)
|
|
(16.2
|
)
|
||
Foreign exchange rates
|
(7.9
|
)
|
|
(21.8
|
)
|
||
|
(85.8
|
)
|
|
0.8
|
|
||
Impairment, restructuring and other
|
(3.0
|
)
|
|
1.9
|
|
||
Change in cost of sales
|
$
|
(88.8
|
)
|
|
$
|
2.7
|
|
•
|
decreased sales in our U.S. Consumer and Europe Consumer segments;
|
•
|
lower distribution costs within our U.S. Consumer segment due to savings from lower fuel prices and reduced costs from efficiencies in our growing media business;
|
•
|
the favorable impact of foreign exchange rates as a result of a strengthening of the U.S. dollar relative to other currencies including the Canadian dollar, euro and British pound;
|
•
|
lower material costs in our U.S. Consumer segment driven by lower commodity costs primarily related to fertilizer inputs; and
|
•
|
a decrease in restructuring and other charges of
$3.0 million
related to addressing the consumer complaints regarding our reformulated Bonus
®
S product sold during fiscal 2015;
|
•
|
partially offset by costs related to sales from acquisitions within our Other segment of $8.4 million, primarily from Gavita and a Canadian growing media operation; and
|
•
|
an increase in net sales attributable to reimbursements under our Marketing Agreement for consumer Roundup
®
and our Services Agreement with Bonnie.
|
•
|
costs related to increased sales in our U.S. Consumer and Other segments;
|
•
|
costs related to sales from acquisitions within our Other segment of $29.1 million, primarily from General Hydroponics, Vermicrop, Gavita and a Canadian growing media operation;
|
•
|
an increase in net sales attributable to reimbursements under our Marketing Agreement for consumer Roundup
®
and our Services Agreement with Bonnie; and
|
•
|
an increase in restructuring and other charges of
$1.9 million
related to addressing the consumer complaints regarding our reformulated Bonus
®
S product sold during fiscal 2015;
|
•
|
partially offset by lower material costs in our U.S. Consumer segment driven by lower commodity costs primarily related to fertilizer inputs;
|
•
|
lower distribution costs within our U.S. Consumer segment due to savings from lower fuel prices and reduced costs from efficiencies in our growing media business; and
|
•
|
the favorable impact of foreign exchange rates as a result of a strengthening of the U.S. dollar relative to other currencies including the Canadian dollar, euro and British pound.
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||
|
JULY 2, 2016
|
|
JULY 2, 2016
|
||
Product mix and volume
|
0.3
|
%
|
|
0.8
|
%
|
Acquisitions
|
0.2
|
|
|
0.3
|
|
Roundup
®
commissions and reimbursements
|
(0.4
|
)
|
|
0.4
|
|
Material costs
|
0.6
|
|
|
0.7
|
|
Pricing
|
0.6
|
|
|
0.1
|
|
|
1.3
|
%
|
|
2.3
|
%
|
Impairment, restructuring and other
|
—
|
|
|
(0.2
|
)
|
Change in gross profit rate
|
1.3
|
%
|
|
2.1
|
%
|
•
|
lower material costs in our U.S. Consumer segment driven by commodities primarily related to fertilizer inputs;
|
•
|
a favorable impact of increased pricing in the U.S. Consumer segment; and
|
•
|
lower distribution costs within our U.S. Consumer segment due to savings from lower fuel prices and reduced costs from efficiencies in our growing media business;
|
•
|
partially offset by a decrease in net sales attributable to our Marketing Agreement for consumer Roundup
®
; and
|
•
|
unfavorable product mix within our U.S. Consumer segment due to increased sales of mulch products and decreased sales of fertilizer products.
|
•
|
lower distribution costs within our U.S. Consumer segment due to savings from lower fuel prices and reduced costs from efficiencies in our growing media business;
|
•
|
lower material costs in our U.S. Consumer segment driven by commodities primarily related to fertilizer inputs;
|
•
|
a favorable impact of increased pricing in the U.S. Consumer segment; and
|
•
|
an increase in net sales attributable to our Marketing Agreement for consumer Roundup
®
;
|
•
|
partially offset by unfavorable product mix within our U.S. Consumer segment due to increased sales of mulch products and decreased sales of fertilizer products; and
|
•
|
an increase in restructuring and other charges of
$1.9 million
related to addressing the consumer complaints regarding our reformulated Bonus
®
S product sold during fiscal 2015.
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
||||||||
|
(In millions)
|
||||||||||||||
Advertising
|
$
|
43.5
|
|
|
$
|
45.6
|
|
|
$
|
115.6
|
|
|
$
|
115.6
|
|
Research and development
|
12.5
|
|
|
11.6
|
|
|
33.3
|
|
|
31.3
|
|
||||
Share-based compensation
|
2.4
|
|
|
2.1
|
|
|
13.7
|
|
|
11.4
|
|
||||
Amortization of intangibles
|
4.2
|
|
|
3.8
|
|
|
11.4
|
|
|
9.3
|
|
||||
Other selling, general and administrative
|
89.3
|
|
|
92.2
|
|
|
292.1
|
|
|
281.9
|
|
||||
|
$
|
151.9
|
|
|
$
|
155.3
|
|
|
$
|
466.1
|
|
|
$
|
449.5
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
||||||||
|
(In millions)
|
||||||||||||||
U.S. Consumer
|
$
|
756.7
|
|
|
$
|
871.2
|
|
|
$
|
1,909.6
|
|
|
$
|
1,861.6
|
|
Europe Consumer
|
96.2
|
|
|
110.3
|
|
|
236.9
|
|
|
260.9
|
|
||||
Other
|
141.2
|
|
|
129.8
|
|
|
287.3
|
|
|
230.1
|
|
||||
Consolidated
|
$
|
994.1
|
|
|
$
|
1,111.3
|
|
|
$
|
2,433.8
|
|
|
$
|
2,352.6
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
|
JULY 2, 2016
|
|
JUNE 27, 2015
|
||||||||
|
(In millions)
|
||||||||||||||
U.S. Consumer
|
$
|
205.8
|
|
|
$
|
237.9
|
|
|
$
|
487.6
|
|
|
$
|
429.9
|
|
Europe Consumer
|
11.8
|
|
|
15.0
|
|
|
24.2
|
|
|
23.9
|
|
||||
Other
|
11.9
|
|
|
16.7
|
|
|
17.0
|
|
|
14.2
|
|
||||
Segment Total
|
229.5
|
|
|
269.6
|
|
|
528.8
|
|
|
468.0
|
|
||||
Corporate
|
(13.8
|
)
|
|
(22.1
|
)
|
|
(73.9
|
)
|
|
(76.0
|
)
|
||||
Intangible asset amortization
|
(4.4
|
)
|
|
(4.4
|
)
|
|
(12.6
|
)
|
|
(10.9
|
)
|
||||
Impairment, restructuring and other
|
(11.4
|
)
|
|
(51.7
|
)
|
|
29.1
|
|
|
(65.0
|
)
|
||||
Equity in income of unconsolidated affiliates
|
13.5
|
|
|
—
|
|
|
13.5
|
|
|
—
|
|
||||
Costs related to refinancing
|
—
|
|
|
—
|
|
|
(8.8
|
)
|
|
—
|
|
||||
Interest expense
|
(16.9
|
)
|
|
(14.3
|
)
|
|
(52.3
|
)
|
|
(39.0
|
)
|
||||
Consolidated
|
$
|
196.5
|
|
|
$
|
177.1
|
|
|
$
|
423.8
|
|
|
$
|
277.1
|
|
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)
|
||||||
April 3 through April 30
|
111,350
|
|
|
$
|
72.04
|
|
|
109,876
|
|
|
$
|
434,478,631
|
|
May 1 through May 28
|
279,584
|
|
|
$
|
67.89
|
|
|
278,055
|
|
|
$
|
415,602,029
|
|
May 29 through July 2
|
171,560
|
|
|
$
|
68.48
|
|
|
169,431
|
|
|
$
|
403,998,621
|
|
Total
|
562,494
|
|
|
$
|
68.89
|
|
|
557,362
|
|
|
|
(1)
|
All of the Common Shares purchased during the quarter were purchased in open market transactions. The total number of Common Shares purchased during the quarter includes 5,132 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)
|
On August 11, 2014, Scotts Miracle-Gro announced that its Board of Directors authorized the repurchase of up to $500.0 million of Common Shares over a five-year period (starting November 1, 2014 through September 30, 2019). The dollar amounts in the “Approximate Dollar Value of Common Shares That May Yet be Purchased Under the Plans or Programs” column reflect the remaining amounts that were available for repurchase under the $500.0 million authorized repurchase program. On August 3, 2016, Scotts Miracle-Gro announced that its Board of Directors authorized a $500.0 million increase to the share repurchase authorization through September 30, 2019.
|
|
|
|
|
|
THE SCOTTS MIRACLE-GRO COMPANY
|
|
|
|
Date: August 10, 2016
|
|
/s/ THOMAS RANDAL COLEMAN
|
|
|
Printed Name: Thomas Randal Coleman
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
LOCATION
|
|
|
|
|
|
4
|
|
First Supplemental Indenture, dated May 26, 2016, among The Scotts Miracle-Gro Company, the Guarantors (as defined therein) and U.S. Bank National Association, as trustee
|
|
*
|
|
|
|
|
|
10
|
|
Amendment No. 1, dated July 29, 2016 to Fourth Amended and Restated Guarantee and Collateral Agreement, made by The Scotts Miracle-Gro Company, each domestic Subsidiary Borrower under the Fourth Amended and Restated Credit Agreement, and certain of its and their domestic subsidiaries, in favor of JPMorgan Chase Bank, N.A., as Administrative Agent
|
|
*
|
|
|
|
|
|
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
|
|
*
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
*
|
|
|
|
|
|
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 GUARANTOR:
|
|
SLS HOLDINGS, INC.
By:_ /s/ JAMES A. SCHROEDER ___________ |
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
|
EXISTING GUARANTORS:
|
|
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.
SMGM LLC
THE SCOTTS COMPANY LLC
By:_ /s/ THOMAS RANDAL COLEMAN _____ |
Name: Thomas Randal Coleman
|
Title: Executive Vice President and Chief Financial Officer
|
|
|
HAWTHORNE HYDROPONICS LLC
THE HAWTHORNE GARDENING COMPANY
HGCI, INC.
By:_ /s/ CHRISTOPHER J. HAGEDORN _____ |
Name: Christopher J. Hagedorn
|
Title: President
|
|
|
OMS INVESTMENTS, INC.
SWISS FARMS PRODUCTS, INC.
SCOTTS-SIERRA INVESTMENTS LLC
By:_ /s/ AIMEE M. DELUCA _______________ |
Name: Aimee M. DeLuca
|
Title: President and Chief Executive Officer
|
|
|
GENSOURCE, INC.
By:_ /s/ JAMES A. SCHROEDER ___________ |
Name: James A. Schroeder
|
Title: Treasurer
|
|
|
TRUSTEE:
|
|
U.S. BANK NATIONAL ASSOCIATION
By:_ /s/ KATHERINE ESBER ______________ |
Name: Katherine Esber
|
Title: Vice President
|
|
|
GRANTORS
:
|
|
|
THE SCOTTS MIRACLE-GRO COMPANY
By:_ /s/ JAMES A. SCHROEDER ______________ |
Name: James A. Schroeder
|
Title: Vice President and Corporate Treasurer
|
|
|
THE SCOTTS COMPANY LLC
By:_ /s/ JAMES A. SCHROEDER ______________ |
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
|
GUTWEIN & CO., INC.
By:_ /s/ JAMES A. SCHROEDER ______________ |
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
|
HYPONEX CORPORATION
By:_ /s/ JAMES A. SCHROEDER ______________ |
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
|
SCOTTS MANUFACTURING COMPANY
By:_ /s/ JAMES A. SCHROEDER ______________ |
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
|
SCOTTS TEMECULA OPERATIONS, LLC
By:_ /s/ JAMES A. SCHROEDER ______________ |
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
|
SMG GROWING MEDIA, INC.
By:_ /s/ JAMES A. SCHROEDER ______________ |
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
MIRACLE-GRO LAWN PRODUCTS, INC.
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
OMS INVESTMENTS, INC.
|
By: _
/s/ AIMEE M. DELUCA
_________________
|
Name: Aimee M. DeLuca
|
Title: President and CEO
|
|
|
SCOTTS PRODUCTS CO.
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
SCOTTS PROFESSIONAL PRODUCTS CO.
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
SCOTTS-SIERRA INVESTMENTS LLC
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
SWISS FARMS PRODUCTS, INC.
|
By: _
/s/ AIMEE M. DELUCA
_________________
|
Name: Aimee M. DeLuca
|
Title: President and CEO
|
|
|
SANFORD SCIENTIFIC, INC.
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
ROD MCLELLAN COMPANY
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
SMGM LLC
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
|
GENSOURCE, INC.
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Treasurer
|
|
HAWTHORNE HYDROPONICS LLC
|
By: _
/s/ ALBERT J. MESSINA
________________
|
Name: Albert J. Messina
|
Title: Vice President and Treasurer
|
|
|
HGCI, INC.
|
By: _
/s/ AIMEE M. DELUCA
_________________
|
Name: Aimee M. DeLuca
|
Title: Vice President
|
|
|
THE HAWTHORNE GARDENING COMPANY
|
By: _
/s/ ALBERT J. MESSINA
________________
|
Name: Albert J. Messina
|
Title: Vice President and Treasurer
|
|
|
SLS HOLDINGS, INC.
|
By:_
/s/ JAMES A. SCHROEDER
______________
|
Name: James A. Schroeder
|
Title: Vice President and Treasurer
|
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By:_
/s/ TONY YUNG
______________________
Name: Tony Yung
Title: Executive Director
|
NAME
|
|
JURISDICTION OF FORMATION
|
|
|
|
GenSource, Inc.
|
|
Ohio
|
Gutwein & Co., Inc.
|
|
Indiana
|
OMS Investments, Inc.
|
|
Delaware
|
Scotts Temecula Operations, LLC
|
|
Delaware
|
Sanford Scientific, Inc.
|
|
New York
|
Scotts Global Investments, Inc.
|
|
Delaware
|
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
|
SLS Holdings, Inc.
|
|
Delaware
|
Outdoor Home Services Holdings LLC
2
|
|
Delaware
|
SMG Growing Media, Inc.
|
|
Ohio
|
AeroGrow International, Inc.
3
|
|
Nevada
|
Hyponex Corporation
|
|
Delaware
|
Rod McLellan Company
|
|
California
|
The Hawthorne Gardening Company
|
|
Delaware
|
Hawthorne Hydroponics LLC
|
|
Delaware
|
Hawthorne Holdings B.V.
|
|
Netherlands
|
Hawthorne Gardening B.V.
|
|
Netherlands
|
Gavita Partners B.V.
4
|
|
Netherlands
|
Gavita International B.V.
|
|
Netherlands
|
Gavita Holdings B.V.
|
|
Netherlands
|
Gavita Holland B.V.
|
|
Netherlands
|
Gavita Nederland B.V.
|
|
Netherlands
|
Gavita Holland 2 B.V.
|
|
Netherlands
|
Gavita Worldwide B.V.
|
|
Netherlands
|
Gavita USA, LLC
|
|
California
|
Gavita Nederland 2 B.V.
|
|
Netherlands
|
Gavita Canada Inc.
|
|
Canada
|
Gavita AS
|
|
Norway
|
________________________
|
1
Scotts Professional Products Co. owns 50% and Scotts Products Co. owns 50%.
2
SLS Holdings, Inc.'s ownership is 29.9%.
3
SMG Growing Media, Inc.’s ownership is 45.0%.
4
Hawthorne Gardening B.V.'s ownership is 95%.
|
HGCI, Inc.
|
|
Nevada
|
SMGM LLC
|
|
Ohio
|
Scotts-Sierra Investments LLC
|
|
Delaware
|
ASEF B.V.
|
|
Netherlands
|
Scotts Asia, Limited
|
|
Hong Kong
|
Scotts Australia Pty Limited
|
|
Australia
|
Scotts Gardening Fertilizer (Wuhan) Co., Ltd.
|
|
China
|
Scotts Benelux BVBA
5
|
|
Belgium
|
Scotts Canada Ltd.
|
|
Canada
|
Laketon Peat Moss Inc.
6
|
|
Canada
|
Scotts Czech s.r.o.
|
|
Czech Republic
|
Scotts de Mexico SA de CV
7
|
|
Mexico
|
Scotts France Holdings SARL
|
|
France
|
Scotts France SAS
|
|
France
|
Scotts Celaflor GmbH
|
|
Germany
|
Scotts Celaflor HGmbH
|
|
Austria
|
Scotts Holdings Limited
|
|
United Kingdom
|
Levington Group Limited
|
|
United Kingdom
|
The Scotts Company (UK) Limited
|
|
United Kingdom
|
The Scotts Company (Manufacturing) Limited
|
|
United Kingdom
|
Humax Horticulture Limited
|
|
United Kingdom
|
O M Scott International Investments Limited
|
|
United Kingdom
|
Scotts Poland Sp.z.o.o.
|
|
Poland
|
Teak 2, Ltd.
|
|
Delaware
|
Turf-Seed (Europe) Limited
|
|
Ireland
|
Swiss Farms Products, Inc.
|
|
Delaware
|
The Scotts Company LLC
|
|
Ohio
|
iConservo Incorporated
8
|
|
California
|
The Scotts Miracle-Gro Foundation
|
|
Ohio
|
________________________
|
5
OMS Investments, Inc. owns 0.1% and Scotts-Sierra Investments LLC owns the remaining 99.9%.
6
Scotts Canada Ltd.'s ownership is 50.0%.
7
The Scotts Company LLC owns 0.5% and Scotts-Sierra Investments LLC owns the remaining 99.5%.
8
The Scotts Company LLC’s ownership is 20%.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The Scotts Miracle-Gro Company for the fiscal quarter ended
July 2, 2016
;
|
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: August 10, 2016
|
|
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 fiscal quarter ended
July 2, 2016
;
|
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: August 10, 2016
|
|
By:
|
|
/s/ THOMAS RANDAL COLEMAN
|
|
|
|
|
Printed Name: Thomas Randal Coleman
|
|
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2)
|
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.
|
|
/s/ JAMES HAGEDORN
|
|
|
/s/ THOMAS RANDAL COLEMAN
|
|
Printed Name: James Hagedorn
|
|
|
Printed Name: Thomas Randal Coleman
|
|
Title: Chief Executive Officer and Chairman of the Board
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
August 10, 2016
|
|
|
August 10, 2016
|
*
|
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.
|