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FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS
 6 Months Ended
Mar. 31, 2018
Condensed Financial Information of Parent Subsidiary Guarantors and Subsidiary Non Guarantors [Abstract]  
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS
FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS
The 6.000% and 5.250% Senior Notes were issued on October 13, 2015 and December 15, 2016, respectively, and are guaranteed by certain of the Company’s domestic subsidiaries and, therefore, the Company reports condensed consolidating financial information in accordance with SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. The guarantees are “full and unconditional,” as those terms are used in Regulation S-X Rule 3-10, except that a subsidiary’s guarantee will be released in certain customary circumstances, such as (1) upon any sale or other disposition of all or substantially all of the assets of the subsidiary (including by way of merger or consolidation) to any person other than Scotts Miracle-Gro or any “restricted subsidiary” under the indentures governing the 6.000% and 5.250% Senior Notes; (2) if the subsidiary merges with and into Scotts Miracle-Gro, with Scotts Miracle-Gro surviving such merger; (3) if the subsidiary is designated an “unrestricted subsidiary” in accordance with the indentures governing the 6.000% and 5.250% Senior Notes or otherwise ceases to be a “restricted subsidiary” (including by way of liquidation or dissolution) in a transaction permitted by such indenture; (4) upon legal or covenant defeasance; (5) at the election of Scotts Miracle-Gro following the subsidiary’s release as a guarantor under the new credit agreement, except a release by or as a result of the repayment of the new credit agreement; or (6) if the subsidiary ceases to be a “restricted subsidiary” and the subsidiary is not otherwise required to provide a guarantee of the 6.000% and 5.250% Senior Notes pursuant to the indentures governing the 6.000% and 5.250% Senior Notes.
The following 100% directly or indirectly owned subsidiaries fully and unconditionally guarantee at March 31, 2018 the 6.000% and 5.250% Senior Notes on a joint and several basis: Gutwein & Co., Inc.; Hyponex Corporation; Miracle-Gro Lawn Products, Inc.; OMS Investments, Inc.; Rod McLellan Company; Sanford Scientific, Inc.; Scotts Temecula Operations, LLC; Scotts Manufacturing Company; Scotts Products Co.; Scotts Professional Products Co.; Scotts-Sierra Investments LLC; SMG Growing Media, Inc.; Swiss Farms Products, Inc.; SMGM LLC; The Scotts Company LLC; The Hawthorne Gardening Company; Hawthorne Hydroponics LLC; HGCI, Inc.; GenSource, Inc.; and SLS Holdings, Inc. (collectively, the “Guarantors”). Effective in the three-month period ending July 1, 2017, American Agritech, L.L.C. was merged into Hawthorne Hydroponics LLC, and has been classified as a Guarantor for all periods presented.
The following information presents Condensed Consolidating Statements of Operations for the three and six months ended March 31, 2018 and April 1, 2017, Condensed Consolidating Statements of Comprehensive Income (Loss) for the three and six months ended March 31, 2018 and April 1, 2017, Condensed Consolidating Statements of Cash Flows for the six months ended March 31, 2018 and April 1, 2017, and Condensed Consolidating Balance Sheets as of March 31, 2018, April 1, 2017 and September 30, 2017. The condensed consolidating financial information presents, in separate columns, financial information for: Scotts Miracle-Gro on a Parent-only basis, carrying its investment in subsidiaries under the equity method; Guarantors on a combined basis, carrying their investments in subsidiaries which do not guarantee the debt (collectively, the “Non-Guarantors”) under the equity method; Non-Guarantors on a combined basis; and eliminating entries. The eliminating entries primarily reflect intercompany transactions, such as interest expense, accounts receivable and payable, short and long-term debt, and the elimination of equity investments, return on investments and income in subsidiaries. Because the Parent is obligated to pay the unpaid principal amount and interest on all amounts borrowed by the Guarantors or Non-Guarantors under the credit facility (and was obligated to pay the unpaid principal amount and interest on all amounts borrowed by the Guarantors and Non-Guarantors under the previous senior secured five-year revolving loan facility), the borrowings and related interest expense for the loans outstanding of the Guarantors and Non-Guarantors are also presented in the accompanying Parent-only financial information, and are then eliminated. Included in the Parent Condensed Consolidating Statement of Cash Flows for the six months ended March 31, 2018 and April 1, 2017 are $554.0 million and $351.5 million, respectively, of dividends paid by the Guarantors and Non-Guarantors to the Parent representing return of investments and as such are classified within cash flows from investing activities. Included in the Parent Condensed Consolidating Statement of Cash Flows for the six months ended March 31, 2018 are $12.2 million of dividends paid by the Guarantors and Non-Guarantors to the Parent representing return on investments and as such are classified within cash flows from operating activities.
THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Operations
for the three months ended March 31, 2018
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net sales
$
—

 
$
951.9

 
$
61.4

 
$
—

 
$
1,013.3

Cost of sales
—

 
555.6

 
48.5

 
—

 
604.1

Gross profit
—

 
396.3

 
12.9

 
—

 
409.2

Operating expenses:
 
 
 
 
 
 
 
 
 
Selling, general and administrative
—

 
150.1

 
15.6

 
0.3

 
166.0

Impairment, restructuring and other
—

 
10.2

 
—

 
—

 
10.2

Other (income) expense, net
(0.2
)
 
0.9

 
—

 
—

 
0.7

Income (loss) from operations
0.2

 
235.1

 
(2.7
)
 
(0.3
)
 
232.3

Equity (income) loss in subsidiaries
(158.9
)
 
3.8

 
—

 
155.1

 
—

Equity in (income) loss of unconsolidated affiliates
—

 
—

 
(1.5
)
 
—

 
(1.5
)
Interest expense
20.9

 
13.1

 
1.3

 
(12.7
)
 
22.6

Other non-operating (income) expense, net
(7.9
)
 
(2.5
)
 
6.9

 
12.7

 
9.2

Income (loss) from continuing operations before income taxes
146.1

 
220.7

 
(9.4
)
 
(155.4
)
 
202.0

Income tax expense (benefit) from continuing operations
(3.1
)
 
54.7

 
(2.3
)
 
—

 
49.3

Income (loss) from continuing operations
149.2

 
166.0

 
(7.1
)
 
(155.4
)
 
152.7

Income (loss) from discontinued operations, net of tax
—

 
(3.7
)
 
—

 
—

 
(3.7
)
Net income (loss)
$
149.2

 
$
162.3

 
$
(7.1
)
 
$
(155.4
)
 
$
149.0

Net (income) loss attributable to noncontrolling interest
—

 
—

 
—

 
(0.1
)
 
(0.1
)
Net income (loss) attributable to controlling interest
$
149.2

 
$
162.3

 
$
(7.1
)
 
$
(155.5
)
 
$
148.9

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Operations
for the six months ended March 31, 2018
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net sales
$
—

 
$
1,099.5

 
$
135.4

 
$
—

 
$
1,234.9

Cost of sales
—

 
682.6

 
109.1

 
—

 
791.7

Gross profit
—

 
416.9

 
26.3

 
—

 
443.2

Operating expenses:
 
 
 
 
 
 
 
 
 
Selling, general and administrative
—

 
240.5

 
33.0

 
0.7

 
274.2

Impairment, restructuring and other
—

 
10.0

 
—

 
—

 
10.0

Other (income) expense, net
(0.4
)
 
(0.2
)
 
(0.8
)
 
—

 
(1.4
)
Income (loss) from operations
0.4

 
166.6

 
(5.9
)
 
(0.7
)
 
160.4

Equity (income) loss in subsidiaries
(157.8
)
 
5.5

 
—

 
152.3

 
—

Equity in (income) loss of unconsolidated affiliates
—

 
—

 
(2.1
)
 
—

 
(2.1
)
Interest expense
37.8

 
21.8

 
2.2

 
(21.4
)
 
40.4

Other non-operating (income) expense, net
(11.8
)
 
(5.0
)
 
2.1

 
21.4

 
6.7

Income (loss) from continuing operations before income taxes
132.2

 
144.3

 
(8.1
)
 
(153.0
)
 
115.4

Income tax expense (benefit) from continuing operations
3.8

 
(22.4
)
 
1.3

 
—

 
(17.3
)
Income (loss) from continuing operations
128.4

 
166.7

 
(9.4
)
 
(153.0
)
 
132.7

Income (loss) from discontinued operations, net of tax
—

 
(3.9
)
 
(1.0
)
 
—

 
(4.9
)
Net income (loss)
$
128.4

 
$
162.8

 
$
(10.4
)
 
$
(153.0
)
 
$
127.8

Net (income) loss attributable to noncontrolling interest
—

 
—

 
—

 
(0.1
)
 
(0.1
)
Net income (loss) attributable to controlling interest
$
128.4

 
$
162.8

 
$
(10.4
)
 
$
(153.1
)
 
$
127.7

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Comprehensive Income (Loss)
for the three months ended March 31, 2018
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net income (loss)
$
149.2

 
$
162.3

 
$
(7.1
)
 
$
(155.4
)
 
$
149.0

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Net foreign currency translation adjustment
15.8

 
—

 
15.8

 
(15.8
)
 
15.8

Net change in derivatives
0.9

 
(1.1
)
 
—

 
1.1

 
0.9

Net change in pension and other post-retirement benefits
0.3

 
0.1

 
0.2

 
(0.3
)
 
0.3

Total other comprehensive income (loss)
17.0

 
(1.0
)
 
16.0

 
(15.0
)
 
17.0

Comprehensive income (loss)
$
166.2

 
$
161.3

 
$
8.9

 
$
(170.4
)
 
$
166.0

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Comprehensive Income (Loss)
for the six months ended March 31, 2018
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net income (loss)
$
128.4

 
$
162.8

 
$
(10.4
)
 
$
(153.0
)
 
$
127.8

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Net foreign currency translation adjustment
15.7

 
—

 
15.7

 
(15.7
)
 
15.7

Net change in derivatives
1.6

 
(0.7
)
 
—

 
0.7

 
1.6

Net change in pension and other post-retirement benefits
0.6

 
0.2

 
0.4

 
(0.6
)
 
0.6

Total other comprehensive income (loss)
17.9

 
(0.5
)
 
16.1

 
(15.6
)
 
17.9

Comprehensive income (loss)
$
146.3

 
$
162.3

 
$
5.7

 
$
(168.6
)
 
$
145.7

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Cash Flows
for the six months ended March 31, 2018
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (a)
$
9.5

 
$
(503.5
)
 
$
25.2

 
$
(14.0
)
 
$
(482.8
)
 
 
 
 
 
 
 
 
 
 
INVESTING ACTIVITIES (a)
 
 
 
 
 
 
 
 
 
Proceeds from sale of long-lived assets
—

 
0.2

 
—

 
—

 
0.2

Post-closing working capital payment related to sale of International Business
—

 
(35.3
)
 
—

 
—

 
(35.3
)
Investments in property, plant and equipment
—

 
(29.8
)
 
(3.3
)
 
—

 
(33.1
)
Investments in loans receivable
—

 
(7.4
)
 
(0.3
)
 
—

 
(7.7
)
Investments in acquired businesses, net of cash acquired
—

 
(40.5
)
 
(103.7
)
 
—

 
(144.2
)
Return of investments from affiliates
554.0

 
—

 
—

 
(554.0
)
 
—

Investing cash flows from (to) affiliates
(250.2
)
 
(70.2
)
 
(80.0
)
 
400.4

 
—

Net cash provided by (used in) investing activities
303.8

 
(183.0
)
 
(187.3
)
 
(153.6
)
 
(220.1
)
 
 
 
 
 
 
 
 
 
 
FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
Borrowings under revolving and bank lines of credit and term loans
—

 
1,032.9

 
139.7

 
—

 
1,172.6

Repayments under revolving and bank lines of credit and term loans
—

 
(154.8
)
 
(88.6
)
 
—

 
(243.4
)
Dividends paid
(60.3
)
 
(554.0
)
 
(14.0
)
 
568.0

 
(60.3
)
Purchase of Common Shares
(256.8
)
 
—

 
—

 
—

 
(256.8
)
Payments on seller notes
—

 
—

 
(3.0
)
 
—

 
(3.0
)
Cash received from the exercise of stock options
3.8

 
—

 
—

 
—

 
3.8

Financing cash flows from (to) affiliates
—

 
330.2

 
70.2

 
(400.4
)
 
—

Net cash provided by (used in) financing activities
(313.3
)
 
654.3

 
104.3

 
167.6

 
612.9

Effect of exchange rate changes on cash
—

 
—

 
2.5

 
—

 
2.5

Net increase (decrease) in cash and cash equivalents
—

 
(32.2
)
 
(55.3
)
 
—

 
(87.5
)
Cash and cash equivalents at beginning of period
—

 
39.8

 
80.7

 
—

 
120.5

Cash and cash equivalents at end of period
$
—

 
$
7.6

 
$
25.4

 
$
—

 
$
33.0


(a)
Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of $554.0 million represent return of investments and are included in cash flows from investing activities. Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of $12.2 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 $1.8 million represent return on investments and are included in cash flows from operating activities.
THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Balance Sheet
As of March 31, 2018
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
7.6

 
$
25.4

 
$
—

 
$
33.0

Accounts receivable, net
—

 
533.0

 
65.0

 
—

 
598.0

Accounts receivable pledged
—

 
333.3

 
—

 
—

 
333.3

Inventories
—

 
495.5

 
101.4

 
—

 
596.9

Prepaid and other current assets
1.7

 
55.0

 
21.4

 
—

 
78.1

Total current assets
1.7

 
1,424.4

 
213.2

 
—

 
1,639.3

Investment in unconsolidated affiliates
—

 
—

 
33.2

 
—

 
33.2

Property, plant and equipment, net
—

 
399.8

 
63.8

 
—

 
463.6

Goodwill
—

 
323.0

 
132.2

 
11.6

 
466.8

Intangible assets, net
—

 
633.9

 
135.6

 
8.1

 
777.6

Other assets
8.7

 
171.1

 
15.2

 
—

 
195.0

Equity investment in subsidiaries
1,287.1

 
—

 
—

 
(1,287.1
)
 
—

Intercompany assets
1,163.1

 
304.0

 
—

 
(1,467.1
)
 
—

Total assets
$
2,460.6

 
$
3,256.2

 
$
593.2

 
$
(2,734.5
)
 
$
3,575.5

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Current portion of debt
$
15.0

 
$
317.7

 
$
18.1

 
$
(15.0
)
 
$
335.8

Accounts payable
—

 
222.6

 
30.9

 
—

 
253.5

Other current liabilities
17.2

 
265.5

 
34.1

 
—

 
316.8

Total current liabilities
32.2

 
805.8

 
83.1

 
(15.0
)
 
906.1

Long-term debt
1,936.6

 
1,166.8

 
128.8

 
(1,294.5
)
 
1,937.7

Distributions in excess of investment in unconsolidated affiliate
—

 
21.9

 
—

 
—

 
21.9

Other liabilities
1.0

 
148.1

 
59.8

 
5.0

 
213.9

Equity investment in subsidiaries
—

 
69.3

 
—

 
(69.3
)
 
—

Intercompany liabilities
—

 
—

 
134.9

 
(134.9
)
 
—

Total liabilities
1,969.8

 
2,211.9

 
406.6

 
(1,508.7
)
 
3,079.6

Total equity—controlling interest
490.8

 
1,044.3

 
186.6

 
(1,230.9
)
 
490.8

Noncontrolling interest
—

 
—

 
—

 
5.1

 
5.1

Total equity
490.8

 
1,044.3

 
186.6

 
(1,225.8
)
 
495.9

Total liabilities and equity
$
2,460.6

 
$
3,256.2

 
$
593.2

 
$
(2,734.5
)
 
$
3,575.5

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Operations
for the three months ended April 1, 2017
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net sales
$
—

 
$
998.8

 
$
85.8

 
$
—

 
$
1,084.6

Cost of sales
—

 
558.5

 
61.8

 
—

 
620.3

Gross profit
—

 
440.3

 
24.0

 
—

 
464.3

Operating expenses:


 


 


 


 


Selling, general and administrative
—

 
160.3

 
18.1

 
0.4

 
178.8

Impairment, restructuring and other
—

 
1.0

 
—

 
—

 
1.0

Other (income) expense, net
(0.2
)
 
(1.1
)
 
0.5

 
—

 
(0.8
)
Income (loss) from operations
0.2

 
280.1

 
5.4

 
(0.4
)
 
285.3

Equity (income) loss in subsidiaries
(173.8
)
 
(8.3
)
 
—

 
182.1

 
—

Other non-operating (income) loss
(7.5
)
 
—

 
(4.0
)
 
11.5

 
—

Equity in (income) loss of unconsolidated affiliates
—

 
24.0

 
0.1

 
—

 
24.1

Interest expense
20.5

 
11.4

 
1.1

 
(11.5
)
 
21.5

Income (loss) from continuing operations before income taxes
161.0

 
253.0

 
8.2

 
(182.5
)
 
239.7

Income tax expense (benefit) from continuing operations
(4.6
)
 
86.9

 
3.3

 
—

 
85.6

Income (loss) from continuing operations
165.6

 
166.1

 
4.9

 
(182.5
)
 
154.1

Income (loss) from discontinued operations, net of tax
—

 
1.1

 
10.0

 
—

 
11.1

Net income (loss)
$
165.6

 
$
167.2

 
$
14.9

 
$
(182.5
)
 
$
165.2

Net (income) loss attributable to noncontrolling interest
—

 
—

 
—

 
(0.1
)
 
(0.1
)
Net income (loss) attributable to controlling interest
$
165.6

 
$
167.2

 
$
14.9

 
$
(182.6
)
 
$
165.1

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Operations
for the six months ended April 1, 2017
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net sales
$
—

 
$
1,144.3

 
$
147.7

 
$
—

 
$
1,292.0

Cost of sales
—

 
685.0

 
105.9

 
—

 
790.9

Gross profit
—

 
459.3

 
41.8

 
—

 
501.1

Operating expenses:
 
 
 
 
 
 
 
 
 
Selling, general and administrative
—

 
247.1

 
35.1

 
0.7

 
282.9

Impairment, restructuring and other
—

 
0.8

 
—

 
—

 
0.8

Other (income) expense, net
(0.4
)
 
(6.4
)
 
0.7

 
—

 
(6.1
)
Income (loss) from operations
0.4

 
217.8

 
6.0

 
(0.7
)
 
223.5

Equity (income) loss in subsidiaries
(115.4
)
 
(7.0
)
 
—

 
122.4

 
—

Other non-operating (income) loss
(11.8
)
 
—

 
(9.9
)
 
21.7

 
—

Equity in (income) loss of unconsolidated affiliates
—

 
37.2

 
0.1

 
—

 
37.3

Interest expense
35.3

 
21.3

 
1.9

 
(21.7
)
 
36.8

Income (loss) from continuing operations before income taxes
92.3

 
166.3

 
13.9

 
(123.1
)
 
149.4

Income tax expense (benefit) from continuing operations
(8.2
)
 
56.4

 
5.2

 
—

 
53.4

Income (loss) from continuing operations
100.5

 
109.9

 
8.7

 
(123.1
)
 
96.0

Income (loss) from discontinued operations, net of tax
—

 
0.1

 
4.2

 
—

 
4.3

Net income (loss)
$
100.5

 
$
110.0

 
$
12.9

 
$
(123.1
)
 
$
100.3

Net (income) loss attributable to noncontrolling interest
—

 
—

 
—

 
(0.5
)
 
(0.5
)
Net income (loss) attributable to controlling interest
$
100.5

 
$
110.0

 
$
12.9

 
$
(123.6
)
 
$
99.8

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Comprehensive Income (Loss)
for the three months ended April 1, 2017
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net income (loss)
$
165.6

 
$
167.2

 
$
14.9

 
$
(182.5
)
 
$
165.2

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Net foreign currency translation adjustment
1.8

 
—

 
1.8

 
(1.8
)
 
1.8

Net change in derivatives
1.1

 
(0.2
)
 
—

 
0.2

 
1.1

Net change in pension and other post-retirement benefits
0.5

 
0.3

 
0.2

 
(0.5
)
 
0.5

Total other comprehensive income (loss)
3.4

 
0.1

 
2.0

 
(2.1
)
 
3.4

Comprehensive income (loss)
$
169.0

 
$
167.3

 
$
16.9

 
$
(184.6
)
 
$
168.6

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Comprehensive Income (Loss)
for the six months ended April 1, 2017
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
Net income (loss)
$
100.5

 
$
110.0

 
$
12.9

 
$
(123.1
)
 
$
100.3

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
Net foreign currency translation adjustment
(2.2
)
 
—

 
(2.2
)
 
2.2

 
(2.2
)
Net change in derivatives
4.5

 
0.8

 
—

 
(0.8
)
 
4.5

Net change in pension and other post-retirement benefits
0.9

 
0.3

 
0.6

 
(0.9
)
 
0.9

Total other comprehensive income (loss)
3.2

 
1.1

 
(1.6
)
 
0.5

 
3.2

Comprehensive income (loss)
$
103.7

 
$
111.1

 
$
11.3

 
$
(122.6
)
 
$
103.5

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Statement of Cash Flows
for the six months ended April 1, 2017
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
$
(8.2
)
 
$
(386.6
)
 
$
(94.2
)
 
$
—

 
$
(489.0
)
 
 
 
 
 
 
 
 
 
 
INVESTING ACTIVITIES (a)
 
 
 
 
 
 
 
 
 
Proceeds from sale of long-lived assets
—

 
4.8

 
—

 
—

 
4.8

Investments in property, plant and equipment
—

 
(27.8
)
 
(5.0
)
 
—

 
(32.8
)
Net (investments in) distributions from unconsolidated affiliates
—

 
—

 
(0.2
)
 
—

 
(0.2
)
Investments in acquired businesses, net of cash acquired
—

 
(1.5
)
 
(76.4
)
 
—

 
(77.9
)
Return of investments from affiliates
351.5

 
32.4

 
—

 
(383.9
)
 
—

Investing cash flows from (to) affiliates
(436.1
)
 
(276.9
)
 
—

 
713.0

 
—

Net cash provided by (used in) investing activities
(84.6
)
 
(269.0
)
 
(81.6
)
 
329.1

 
(106.1
)
 
 
 
 
 
 
 
 
 
 
FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
Borrowings under revolving and bank lines of credit and term loans
—

 
806.2

 
138.4

 
—

 
944.6

Repayments under revolving and bank lines of credit and term loans
—

 
(232.3
)
 
(162.7
)
 
—

 
(395.0
)
Proceeds from issuance of 5.250% Senior Notes
250.0

 
—

 
—

 
—

 
250.0

Financing and issuance fees
(3.8
)
 
(0.1
)
 
—

 
—

 
(3.9
)
Dividends paid
(59.9
)
 
(351.5
)
 
—

 
351.5

 
(59.9
)
Distribution paid by Aerogrow to noncontrolling interest
—

 
—

 
(40.5
)
 
32.4

 
(8.1
)
Purchase of Common Shares
(99.2
)
 
—

 
—

 
—

 
(99.2
)
Payments on seller notes
—

 
—

 
(13.2
)
 
—

 
(13.2
)
Excess tax benefits from share-based payment arrangements
4.0

 
—

 
—

 
—

 
4.0

Cash received from the exercise of stock options
1.7

 
—

 
—

 
—

 
1.7

Financing cash flows from (to) affiliates
—

 
436.1

 
276.9

 
(713.0
)
 
—

Net cash provided by (used in) financing activities
92.8

 
658.4

 
198.9

 
(329.1
)
 
621.0

Effect of exchange rate changes on cash
—

 
—

 
(1.7
)
 
—

 
(1.7
)
Net increase (decrease) in cash and cash equivalents
—

 
2.8

 
21.4

 
—

 
24.2

Cash and cash equivalents at beginning of period excluding cash classified within assets held for sale
—

 
2.7

 
25.9

 
—

 
28.6

Cash and cash equivalents at beginning of period classified within assets held for sale
—

 
—

 
21.5

 
—

 
21.5

Cash and cash equivalents at beginning of period
—

 
2.7

 
47.4

 
—

 
50.1

Cash and cash equivalents at end of period
$
—

 
$
5.5

 
$
68.8

 
$
—

 
$
74.3


(a)
Cash received by the Parent from the Guarantors and Non-Guarantors in the form of dividends in the amount of $351.5 million represent return of investments and are included in cash flows from investing activities. Cash received by the Guarantors from the Non-Guarantors in the form of distributions in the amount of $32.4 million represent return of investments and are included in cash flows from investing activities.
THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Balance Sheet
As of April 1, 2017
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
5.5

 
$
49.9

 
$
—

 
$
55.4

Accounts receivable, net
—

 
900.8

 
77.5

 
—

 
978.3

Inventories
—

 
500.7

 
95.8

 
—

 
596.5

Assets held for sale
—

 
—

 
331.5

 
—

 
331.5

Prepaid and other current assets
0.7

 
47.4

 
37.6

 
—

 
85.7

Total current assets
0.7

 
1,454.4

 
592.3

 
—

 
2,047.4

Investment in unconsolidated affiliates
—

 
59.1

 
0.8

 
—

 
59.9

Property, plant and equipment, net
—

 
385.8

 
51.3

 
—

 
437.1

Goodwill
—

 
262.9

 
126.1

 
11.6

 
400.6

Intangible assets, net
—

 
554.2

 
163.1

 
9.5

 
726.8

Other assets
10.7

 
107.8

 
2.1

 
(0.4
)
 
120.2

Equity investment in subsidiaries
938.7

 
—

 
—

 
(938.7
)
 
—

Intercompany assets
1,778.4

 
—

 
—

 
(1,778.4
)
 
—

Total assets
$
2,728.5

 
$
2,824.2

 
$
935.7

 
$
(2,696.4
)
 
$
3,792.0

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Current portion of debt
$
15.0

 
$
15.8

 
$
16.3

 
$
(15.0
)
 
$
32.1

Accounts payable
—

 
240.6

 
30.2

 
—

 
270.8

Liabilities held for sale
—

 
—

 
154.7

 
—

 
154.7

Other current liabilities
17.8

 
260.7

 
39.6

 
—

 
318.1

Total current liabilities
32.8

 
517.1

 
240.8

 
(15.0
)
 
775.7

Long-term debt
2,016.1

 
1,288.2

 
114.0

 
(1,375.4
)
 
2,042.9

Other liabilities
0.7

 
224.7

 
51.9

 
4.7

 
282.0

Equity investment in subsidiaries
—

 
31.5

 
—

 
(31.5
)
 
—

Intercompany liabilities
—

 
45.3

 
326.1

 
(371.4
)
 
—

Total liabilities
2,049.6

 
2,106.8

 
732.8

 
(1,788.6
)
 
3,100.6

Total equity—controlling interest
678.9

 
717.4

 
202.9

 
(920.3
)
 
678.9

Noncontrolling interest
—

 
—

 
—

 
12.5

 
12.5

Total equity
678.9

 
717.4

 
202.9

 
(907.8
)
 
691.4

Total liabilities and equity
$
2,728.5

 
$
2,824.2

 
$
935.7

 
$
(2,696.4
)
 
$
3,792.0

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidating Balance Sheet
As of September 30, 2017
(In millions)
(Unaudited)

 
Parent
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations/
Consolidations
 
Consolidated
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
39.8

 
$
80.7

 
$
—

 
$
120.5

Accounts receivable, net
—

 
137.6

 
60.1

 
—

 
197.7

Accounts receivable pledged
—

 
88.9

 
—

 
—

 
88.9

Inventories
—

 
314.0

 
93.5

 
—

 
407.5

Prepaid and other current assets
1.3

 
43.4

 
22.4

 
—

 
67.1

Total current assets
1.3

 
623.7

 
256.7

 
—

 
881.7

Investment in unconsolidated affiliates
—

 
—

 
31.1

 
—

 
31.1

Property, plant and equipment, net
—

 
406.4

 
61.3

 
—

 
467.7

Goodwill
—

 
320.7

 
109.3

 
11.6

 
441.6

Intangible assets, net
—

 
606.3

 
133.8

 
8.8

 
748.9

Other assets
8.1

 
158.3

 
9.6

 
—

 
176.0

Equity investment in subsidiaries
1,112.8

 
—

 
—

 
(1,112.8
)
 
—

Intercompany assets
759.7

 
—

 
—

 
(759.7
)
 
—

Total assets
$
1,881.9

 
$
2,115.4

 
$
601.8

 
$
(1,852.1
)
 
$
2,747.0

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Current portion of debt
$
15.0

 
$
97.8

 
$
45.3

 
$
(15.0
)
 
$
143.1

Accounts payable
—

 
124.9

 
28.2

 
—

 
153.1

Other current liabilities
17.1

 
191.5

 
39.7

 
—

 
248.3

Total current liabilities
32.1

 
414.2

 
113.2

 
(15.0
)
 
544.5

Long-term debt
1,200.7

 
508.6

 
108.0

 
(559.3
)
 
1,258.0

Distributions in excess of investment in unconsolidated affiliate
—

 
21.9

 
—

 
—

 
21.9

Other liabilities
0.3

 
197.4

 
58.2

 
5.0

 
260.9

Equity investment in subsidiaries
—

 
82.6

 
—

 
(82.6
)
 
—

Intercompany liabilities
—

 
17.1

 
152.7

 
(169.8
)
 
—

Total liabilities
1,233.1

 
1,241.8

 
432.1

 
(821.7
)
 
2,085.3

Total equity—controlling interest
648.8

 
873.6

 
169.7

 
(1,043.3
)
 
648.8

Noncontrolling interest
—

 
—

 
—

 
12.9

 
12.9

Total equity
648.8

 
873.6

 
169.7

 
(1,030.4
)
 
661.7

Total liabilities and equity
$
1,881.9

 
$
2,115.4

 
$
601.8

 
$
(1,852.1
)
 
$
2,747.0