SCOTTS MIRACLE-GRO CO

Previous wording

On April 8, 2026, we completed the sale of the Hawthorne business in North America to Vireo in exchange for 213.0 million common shares of Vireo, which represented approximately 14% of Vireo’s total outstanding common shares as of the closing date, and a warrant with a five year term to acquire 80.0 million additional common shares of Vireo at a strike price of $0.85 per share. On the closing date, the Hawthorne business held cash and cash equivalents of $35.0 that was transferred to Vireo as part of the sale. Additionally, in connection with the transaction, we entered into a contract manufacturing agreement and agreed to provide Vireo with $20.0 of manufacturing services over a two-year period for no cost. The completion of the divestiture during the third quarter of fiscal 2026 resulted in an ordinary taxable loss that will allow the realization of deferred tax assets to reduce cash taxes paid over the next several fiscal years.

Current wording

During the three months ended December 27, 2025, we determined that the Hawthorne business met the criteria to be classified as held for sale, and classified the related assets and liabilities as held for sale in the Condensed Consolidated Balance Sheets for all periods presented. We determined this represented a strategic shift, and therefore, effective in the first quarter of fiscal 2026, we classified our results of operations for all periods presented to reflect the Hawthorne business as a discontinued operation. On April 8, 2026, we completed the sale of the Hawthorne business in North America to Vireo in exchange for 213.0 million common shares of Vireo, which represented approximately 14% of Vireo’s total outstanding common shares as of the closing date, and a warrant with a five-year term to acquire 80.0 million additional common shares of Vireo at a strike price of $0.85 per share. On the closing date, the Hawthorne business held cash and cash equivalents of $35.0 that was transferred to Vireo as part of the sale. Additionally, in connection with the transaction, we entered into a contract manufacturing agreement and agreed to provide Vireo with up to $20.0 of manufacturing services over a two-year period for no cost. For the nine months ended June 27, 2026, we recorded a loss of $101.8 related to the sale of the Hawthorne business in North America. The completion of the divestiture during the three months ended June 27, 2026 resulted in an ordinary taxable loss that will allow the realization of deferred tax assets to reduce cash taxes paid over the next several fiscal years.

Previous wording

The following table sets forth the components of earnings as a percentage of net sales for the six months ended March 28, 2026 and March 29, 2025:

Current wording

The following table sets forth the components of earnings as a percentage of net sales for the nine months ended June 27, 2026 and June 28, 2025:

Previous wording

Net sales for the three months ended March 28, 2026 were $1,459.5, an increase of 5.0% from net sales of $1,389.7 for the three months ended March 29, 2025. Net sales for the six months ended March 28, 2026 were $1,814.0, an increase of 3.3% from net sales of $1,756.3 for the six months ended March 29, 2025. Factors contributing to the change in net sales are outlined in the following table:

Current wording

Net sales for the three months ended June 27, 2026 were $1,172.1, an increase of 1.1% from net sales of $1,159.3 for the three months ended June 28, 2025. Net sales for the nine months ended June 27, 2026 were $2,986.1, an increase of 2.4% from net sales of $2,915.7 for the nine months ended June 28, 2025. Factors contributing to the change in net sales are outlined in the following table:

Previous wording

•partially offset by higher sales volume in our U.S. Consumer segment;

Current wording

•favorable mix in our U.S. Consumer segment driven by higher sales of branded products, partially offset by lower sales of mulch products;

Previous wording

•higher sales volume in our U.S. Consumer segment;

Current wording

•higher sales volume in our Other segment; and

Previous wording

•higher net sales associated with the Roundup® marketing agreement; and

Current wording

•higher net sales associated with the Roundup® marketing agreement.

Previous wording

•higher sales volume in our U.S. Consumer segment driven by soils, grass seed and fertilizer products, partially offset by lower sales of mulch products;

Current wording

•favorable mix in our U.S. Consumer segment driven by higher sales of branded products including soils, grass seed, controls and fertilizer products, partially offset by lower sales of mulch products;

Previous wording

•increased pricing in our U.S. Consumer segment.

Current wording

•increased pricing in our U.S. Consumer and Other segments.

Previous wording

As a percentage of net sales, our gross margin rate was 41.8% and 39.0% for the three months ended March 28, 2026 and March 29, 2025, respectively, and was 38.5% and 35.9% for the six months ended March 28, 2026 and March 29, 2025, respectively. Factors contributing to the change in gross margin rate are outlined in the following table:

Current wording

As a percentage of net sales, our gross margin rate was 31.2% and 32.1% for the three months ended June 27, 2026 and June 28, 2025, respectively, and was 35.7% and 34.4% for the nine months ended June 27, 2026 and June 28, 2025, respectively. Factors contributing to the change in gross margin rate are outlined in the following table:

Previous wording

The decrease in cost of sales for the six months ended March 28, 2026 as compared to the six months ended March 29, 2025 was primarily driven by:

Current wording

The decrease in gross margin rate for the three months ended June 27, 2026 as compared to the three months ended June 28, 2025 was primarily driven by:

Previous wording

SG&A increased $13.8, or 4.7%, during the six months ended March 28, 2026 compared to the six months ended March 29, 2025. Advertising expense increased $23.0, or 29.0%, due to higher media spending in our U.S. Consumer segment. Other SG&A decreased $11.9, or 6.9%, driven by lower short-term variable cash incentive compensation expense partially offset by higher marketing spend.

Current wording

SG&A increased $14.5, or 3.3%, during the nine months ended June 27, 2026 compared to the nine months ended June 28, 2025. Advertising expense increased $20.0, or 15.5%, and other marketing expense increased $6.2, or 14.9%, driven by planned higher spending in our U.S. Consumer segment. Other SG&A decreased $16.4, or 7.9%, driven by lower short-term variable cash incentive compensation expense.

Previous wording

During the three and six months ended March 29, 2025, we incurred a non-cash loss of $0.0 and $7.0, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to the exchange of our convertible debt investment in RIV Capital for an investment in FLUENT.

Current wording

During the three and nine months ended June 28, 2025, we recorded a non-cash loss of $0.0 and $7.0, respectively, in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations related to the exchange of our convertible debt investment in RIV Capital for an investment in FLUENT.

Previous wording

During fiscal 2022, we began implementing a series of Company-wide organizational changes and initiatives intended to create operational and management-level efficiencies. As part of this restructuring initiative, we reduced the size of our supply chain network, reduced staffing levels and implemented other cost-reduction initiatives. During the three and six months ended March 29, 2025, we incurred costs of $2.3 and $3.7, respectively, in our U.S. Consumer segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with this restructuring initiative.

Current wording

During fiscal 2022, we began implementing a series of Company-wide organizational changes and initiatives intended to create operational and management-level efficiencies. As part of this restructuring initiative, we reduced the size of our supply chain network, reduced staffing levels and implemented other cost-reduction initiatives. During the three months ended June 28, 2025, costs associated with this restructuring initiative were not material. During the nine months ended June 28, 2025, we recorded costs of $3.6 in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations associated with this restructuring initiative.

Previous wording

Other expense is comprised of activities such as the discount on sales of accounts receivable under the Master Receivables Purchase Agreement, royalty income from the licensing of certain of our brand names and foreign exchange transaction gains and losses. Other expense was $7.3 and $4.2 for the three months ended March 28, 2026 and March 29, 2025, respectively; and was $10.2 and $8.4 for the six months ended March 28, 2026 and March 29, 2025, respectively.

Current wording

Other expense is comprised of activities such as the discount on sales of accounts receivable under the Master Receivables Purchase Agreement, royalty income from the licensing of certain of our brand names and foreign exchange transaction gains and losses. Other expense was $3.7 and $7.1 for the three months ended June 27, 2026 and June 28, 2025, respectively; and was $13.7 and $15.5 for the nine months ended June 27, 2026 and June 28, 2025, respectively.

Previous wording

Income from operations was $401.8 for the three months ended March 28, 2026, an increase of 14.9% compared to $349.7 for the three months ended March 29, 2025; and was $380.0 for the six months ended March 28, 2026, an increase of 25.0% compared to $303.9 for the six months ended March 29, 2025. For the three and six months ended March 28, 2026, the increase was primarily driven by higher net sales, a higher gross margin rate and lower impairment, restructuring and other charges, partially offset by higher SG&A.

Current wording

Income from operations was $169.6 for the three months ended June 27, 2026, a decrease of 23.5% compared to $221.8 for the three months ended June 28, 2025; and was $549.7 for the nine months ended June 27, 2026, an increase of 4.6% compared to $525.7 for the nine months ended June 28, 2025. For the three months ended June 27, 2026, the decrease was primarily driven by higher impairment, restructuring and other charges and a lower gross margin rate, partially offset by higher net sales. For the nine months ended June 27, 2026, the increase was primarily driven by higher net sales and a higher gross margin rate, partially offset by higher SG&A and higher impairment, restructuring and other charges.

Previous wording

Equity in loss of unconsolidated affiliates was $4.5 and $5.9 for the three months ended March 28, 2026 and March 29, 2025, respectively; and was $17.6 and $15.8 for the six months ended March 28, 2026 and March 29, 2025, respectively. Equity in loss of unconsolidated affiliates associated with Bonnie Plants, LLC was $4.5 and $15.1 for the three and six months ended March 28, 2026, respectively, compared to $5.9 and $15.8 for the three and six months ended March 29, 2025, respectively. We anticipated a net loss for Bonnie Plants, LLC in the second quarter due to the seasonal nature of its business, in which sales are heavily weighted to the spring and summer selling periods during our third fiscal quarter. During the three months ended December 27, 2025, our investment balance in FLUENT was reduced to zero, and we discontinued equity method recognition of our proportionate share of FLUENT losses.

Current wording

Equity in income of unconsolidated affiliates was $29.2 and $25.3 for the three months ended June 27, 2026 and June 28, 2025, respectively; and was $11.6 and $9.5 for the nine months ended June 27, 2026 and June 28, 2025, respectively. Equity in income of unconsolidated affiliates associated with Bonnie Plants, LLC was $29.2 and $27.2 for the three months ended June 27, 2026 and June 28, 2025, respectively; and was $14.2 and $11.4 for the nine months ended June 27, 2026 and June 28, 2025, respectively. During the three months ended December 27, 2025, our investment balance in FLUENT was reduced to zero, and we discontinued equity method recognition of our proportionate share of FLUENT losses.

Previous wording

Interest expense was $31.3 for the three months ended March 28, 2026, a decrease of 14.5% compared to $36.6 for the three months ended March 29, 2025; and was $58.5 for the six months ended March 28, 2026, a decrease of 17.0% compared to $70.5 for the six months ended March 29, 2025. For the three months ended March 28, 2026, the decrease was driven by lower average borrowings of $162.1 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 50 basis points. For the six months ended March 28, 2026, the decrease was driven by lower average borrowings of $166.9 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 60 basis points. The decrease in average borrowings was driven by our focus on using available cash flow to reduce our debt. The decrease in our weighted average interest rate was primarily driven by lower borrowing rates under the Seventh A&R Credit Agreement.

Current wording

Interest expense was $28.0 for the three months ended June 27, 2026, a decrease of 11.9% compared to $31.8 for the three months ended June 28, 2025; and was $86.5 for the nine months ended June 27, 2026, a decrease of 15.4% compared to $102.2 for the nine months ended June 28, 2025. For the three months ended June 27, 2026, the decrease was driven by lower average borrowings of $113.3 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 40 basis points. For the nine months ended June 27, 2026, the decrease was driven by lower average borrowings of $149.0 and a decrease in our weighted average interest rate, net of the impact of interest rate swaps, of 50 basis points. The decrease in average borrowings was driven by our focus on using available cash flow to reduce our debt. The decrease in our weighted average interest rate was primarily driven by lower borrowing rates under the Seventh A&R Credit Agreement.

Previous wording

The effective tax rates related to continuing operations for the six months ended March 28, 2026 and March 29, 2025 were 28.5% and 28.1%, respectively. The effective tax rate used for interim purposes is based on our best estimate of factors impacting the effective tax rate for the full fiscal year. Factors affecting the estimated effective tax rate include assumptions as to income by jurisdiction (domestic and foreign), the availability and utilization of tax credits and the existence of elements of income and expense that may not be taxable or deductible. The estimated effective tax rate is subject to revision in later interim periods and at fiscal year-end as facts and circumstances change during the course of the fiscal year. There can be no assurance that the effective tax rate estimated for interim financial reporting purposes will approximate the effective tax rate determined at fiscal year-end.

Current wording

The effective tax rates related to continuing operations for the nine months ended June 27, 2026 and June 28, 2025 were 30.2% and 27.9%, respectively. The effective tax rate used for interim purposes is based on our best estimate of factors impacting the effective tax rate for the full fiscal year. Factors affecting the estimated effective tax rate include assumptions as to income by jurisdiction (domestic and foreign), the availability and utilization of tax credits and the existence of elements of income and expense that may not be taxable or deductible. The estimated effective tax rate is subject to revision in later interim periods and at fiscal year-end as facts and circumstances change during the course of the fiscal year. There can be no assurance that the effective tax rate estimated for interim financial reporting purposes will approximate the effective tax rate determined at fiscal year-end.

Previous wording

Net income from continuing operations was $215.6, or $3.65 per diluted share, for the six months ended March 28, 2026 compared to $154.7, or $2.64 per diluted share, for the six months ended March 29, 2025. The increase was driven by higher net sales, a higher gross margin rate, lower impairment, restructuring and other charges and lower interest expense, partially offset by higher SG&A and higher income tax expense.

Current wording

Net income from continuing operations was $103.6, or $1.75 per diluted share, for the three months ended June 27, 2026 compared to $154.7, or $2.64 per diluted share, for the three months ended June 28, 2025. The decrease was driven by higher impairment, restructuring and other charges, higher other non-operating expense and a lower gross margin rate, partially offset by higher net sales, higher equity in income of unconsolidated affiliates, lower interest expense and lower income tax expense.

Previous wording

Diluted average common shares used in the diluted net income per common share from continuing operations calculation for the three months ended March 28, 2026 and March 29, 2025 were 59.1 million and 58.4 million, respectively, which included potential common shares of 1.0 million and 0.8 million, respectively. The increase in diluted average common shares was primarily the result of the exercise and issuance of share-based compensation awards.

Current wording

Diluted average common shares used in the diluted net income per common share from continuing operations calculation for the three months ended June 27, 2026 and June 28, 2025 were 59.2 million and 58.6 million, respectively, which included potential common shares of 1.0 million and 0.9 million, respectively. The increase in diluted average common shares was primarily the result of the exercise and issuance of share-based compensation awards.

Previous wording

Net income from continuing operations was $263.3, or $4.46 per diluted share, for the three months ended March 28, 2026 compared to $220.7, or $3.78 per diluted share, for the three months ended March 29, 2025. The increase was driven by higher net sales, a higher gross margin rate, lower impairment, restructuring and other charges and lower interest expense, partially offset by higher SG&A and higher income tax expense.

Current wording

Net income from continuing operations was $319.1, or $5.40 per diluted share, for the nine months ended June 27, 2026 compared to $309.4, or $5.28 per diluted share, for the nine months ended June 28, 2025. The increase was driven by higher net sales, a higher gross margin rate and lower interest expense, partially offset by higher impairment, restructuring and other charges, higher other non-operating expense, higher income tax expense and higher SG&A.

Previous wording

Diluted average common shares used in the diluted net income per common share from continuing operations calculation for the six months ended March 28, 2026 and March 29, 2025 were 59.0 million and 58.6 million, respectively, which included potential common shares of 1.0 million and 1.1 million, respectively. The increase in diluted average common shares was primarily the result of the exercise and issuance of share-based compensation awards.

Current wording

Diluted average common shares used in the diluted net income per common share from continuing operations calculation for the nine months ended June 27, 2026 and June 28, 2025 were 59.1 million and 58.6 million, respectively, which included potential common shares of 1.0 million and 1.1 million, respectively. The increase in diluted average common shares was primarily the result of the exercise and issuance of share-based compensation awards.

Previous wording

As a result of the classification of the Hawthorne business as a discontinued operation, our reportable segments for the three and six months ended March 28, 2026 differ from prior periods. The prior period amounts have been reclassified to reflect the removal of Hawthorne as a reportable segment. Segment performance is evaluated based on several factors, including income (loss) from continuing operations before income taxes, amortization, impairment, restructuring and other charges (“Segment Profit (Loss)”), which is a non-GAAP financial measure. We believe this measure is indicative of performance trends and the overall earnings potential of each segment.

Current wording

As a result of the classification of the Hawthorne business as a discontinued operation, our reportable segments for the three and nine months ended June 27, 2026 differ from prior periods. The prior period amounts have been reclassified to reflect the removal of Hawthorne as a reportable segment. Segment performance is evaluated based on several factors, including income (loss) from continuing operations before income taxes, amortization, impairment, restructuring and other charges (“Segment Profit (Loss)”), which is a non-GAAP financial measure. We believe this measure is indicative of performance trends and the overall earnings potential of each segment.

Previous wording

U.S. Consumer Segment Profit was $437.3 in the second quarter of fiscal 2026, an increase of 11.5% from second quarter of fiscal 2025 Segment Profit of $392.1; and was $446.3 for the first six months of fiscal 2026, an increase of 11.0% from the first six months of fiscal 2025 Segment Profit of $402.0. For the three and six months ended March 28, 2026, the increase was primarily due to higher net sales and a higher gross margin rate, partially offset by higher SG&A.

Current wording

U.S. Consumer Segment Profit was $229.8 in the third quarter of fiscal 2026, a decrease of 2.3% from third quarter of fiscal 2025 Segment Profit of $235.2; and was $676.1 for the first nine months of fiscal 2026, an increase of 6.1% from the first nine months of fiscal 2025 Segment Profit of $637.2. For the three months ended June 27, 2026, the decrease was primarily due to a lower gross margin rate. For the nine months ended June 27, 2026, the increase was primarily due to higher net sales and a higher gross margin rate, partially offset by higher SG&A.

Previous wording

Other Segment Profit was $12.1 in the second quarter of fiscal 2026, an increase of 34.4% from second quarter of fiscal 2025 Segment Profit of $9.0; and was $10.2 for the first six months of fiscal 2026, an increase of 70.0% from the first six months of fiscal 2025 Segment Profit of $6.0. For the three and six months ended March 28, 2026, the increase was driven by higher net sales and a higher gross margin rate.

Current wording

Other Segment Profit was $18.6 in the third quarter of fiscal 2026, an increase of 10.1% from third quarter of fiscal 2025 Segment Profit of $16.9; and was $29.0 for the first nine months of fiscal 2026, an increase of 27.2% from the first nine months of fiscal 2025 Segment Profit of $22.8. For the three and nine months ended June 27, 2026, the increase was driven by higher net sales and a higher gross margin rate.

Previous wording

Cash used in operating activities totaled $150.4 for the six months ended March 28, 2026 compared to $257.2 for the six months ended March 29, 2025. The decrease was driven by higher sales and the timing of inventory production, partially offset by higher short-term variable cash incentive compensation payments and higher SG&A.

Current wording

Cash provided by operating activities totaled $195.2 for the nine months ended June 27, 2026 compared to $197.2 for the nine months ended June 28, 2025. The decrease was driven by lower accounts receivable sales under the Master Receivables Purchase Agreement, higher SG&A and higher short-term variable cash incentive compensation payments, partially offset by accounts payable timing, higher gross margin and the timing of inventory production.

Previous wording

Cash used in investing activities totaled $45.4 for the six months ended March 28, 2026 compared to $34.7 for the six months ended March 29, 2025. Cash used for investments in property, plant and equipment during the first six months of fiscal 2026 and 2025 was $38.6 and $37.6, respectively. During the six months ended March 28, 2026 and March 29, 2025, we had net other investing cash (outflows) inflows of $(6.8) and $2.9, respectively.

Current wording

Cash used in investing activities totaled $102.1 for the nine months ended June 27, 2026 compared to $60.0 for the nine months ended June 28, 2025. Cash used for investments in property, plant and equipment during the first nine months of fiscal 2026 and 2025 was $63.1 and $54.5, respectively. On April 8, 2026, we completed the sale of our Hawthorne business in North America to Vireo in exchange for non-cash consideration. On the closing date, the Hawthorne business held cash and cash equivalents of $35.0 that was transferred to Vireo as part of the sale, which was classified as an investing activity in the “Net cash disposed of on sale of business” line in the Condensed Consolidated Statements of Cash Flows. During the nine months ended June 27, 2026 and June 28, 2025, we had net other investing cash outflows of $4.0 and $5.5, respectively.

Previous wording

Cash provided by financing activities totaled $168.2 for the six months ended March 28, 2026 compared to $237.9 for the six months ended March 29, 2025. During the six months ended March 28, 2026, we had net borrowings on our debt instruments of $241.0 due to our seasonal working capital build. We also paid dividends of $77.8, financing and issuance fees of $8.7 and received cash from the exercise of stock options of $3.3 (which also includes amounts received from employee purchases under the employee stock purchase plan). During the six months ended March 29, 2025, we had net borrowings on our debt instruments of $321.2, paid dividends of $78.0 and received cash from the exercise of stock options of $10.0 (which also includes amounts received from employee purchases under the employee stock purchase plan). During the six months ended March 28, 2026 and March 29, 2025, we repurchased Common Shares for $11.6 and $18.3, respectively (which includes cash paid to tax authorities to satisfy statutory income tax withholding obligations related to share-based compensation). In addition, during the six months ended March 28, 2026 and March 29, 2025, we had other financing cash inflows of $22.0 and $3.0, respectively, primarily related to collections of previously sold accounts receivable not yet submitted to the buyer.

Current wording

Cash used in financing activities totaled $101.8 for the nine months ended June 27, 2026 compared to $158.2 for the nine months ended June 28, 2025. During the nine months ended June 27, 2026, we had net borrowings on our debt instruments of $5.7. We also paid dividends of $116.3, financing and issuance fees of $8.9 and received cash from the exercise of stock options of $3.9 (which also includes amounts received from employee purchases under the employee stock purchase plan). During the nine months ended June 28, 2025, we had net repayments on our debt instruments of $39.3, paid dividends of $116.2 and received cash from the exercise of stock options of $11.2 (which also includes amounts received from employee purchases under the employee stock purchase plan). During the nine months ended June 27, 2026 and June 28, 2025, we repurchased Common Shares for $12.1 and $18.4, respectively (which includes cash paid to tax authorities to satisfy statutory income tax withholding obligations related to share-based compensation). In addition, during the nine months ended June 27, 2026 and June 28, 2025, we had other financing cash inflows of $25.9 and $4.5, respectively, primarily related to collections of previously sold accounts receivable not yet submitted to the buyer.

Previous wording

We are party to a Master Receivables Purchase Agreement, which is uncommitted and expires on September 1, 2026, under which we may sell up to $750.0 of available and eligible outstanding customer accounts receivable generated by sales to five specified customers. Transactions under the Master Receivables Purchase Agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheets at the time of the sales transaction. Proceeds received from the sales of accounts receivable are classified as operating cash flows and collections of previously sold accounts receivable not yet submitted to the buyer are classified as financing cash flows in the Condensed Consolidated Statements of Cash Flows. We record the discount on sales in the “Other expense, net” line in the Condensed Consolidated Statements of Operations. At March 28, 2026, March 29, 2025 and September 30, 2025, net receivables derecognized were $654.1, $598.2 and $163.3, respectively. During the three months ended March 28, 2026 and March 29, 2025, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $813.8 and $748.2, respectively, and the total discount recorded on sales was $8.5 and $7.9, respectively. During the six months ended March 28, 2026 and March 29, 2025, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $1,068.5 and $1,022.2, respectively, and the total discount recorded on sales was $11.4 and $11.2, respectively.

Current wording

We are party to a Master Receivables Purchase Agreement, which is uncommitted and expires on September 1, 2026, under which we may sell up to $750.0 of available and eligible outstanding customer accounts receivable generated by sales to five specified customers. Transactions under the Master Receivables Purchase Agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the Condensed Consolidated Balance Sheets at the time of the sales transaction. Proceeds received from the sales of accounts receivable are classified as operating cash flows and collections of previously sold accounts receivable not yet submitted to the buyer are classified as financing cash flows in the Condensed Consolidated Statements of Cash Flows. We record the discount on sales in the “Other expense, net” line in the Condensed Consolidated Statements of Operations. At June 27, 2026, June 28, 2025 and September 30, 2025, net receivables derecognized were $312.1, $418.8 and $163.3, respectively. During the three months ended June 27, 2026 and June 28, 2025, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $592.9 and $686.7, respectively, and the total discount recorded on sales was $5.2 and $7.3, respectively. During the nine months ended June 27, 2026 and June 28, 2025, proceeds from the sale of receivables under the Master Receivables Purchase Agreement totaled $1,661.4 and $1,708.9, respectively, and the total discount recorded on sales was $16.5 and $18.5, respectively.

Previous wording

We have an agreement to provide a supplier finance program which facilitates participating suppliers’ ability to finance our payment obligations with a designated third-party financial institution. Participating suppliers may, at their sole discretion, elect to finance our payment obligations prior to their scheduled due dates at a discounted price to the participating financial institution. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under this arrangement. The payment terms that we negotiate with our suppliers are consistent, regardless of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $42.9, $32.1 and $13.9 at March 28, 2026, March 29, 2025 and September 30, 2025, respectively, and are recorded within accounts payable in the Condensed Consolidated Balance Sheets. The associated payments were $154.7 and $153.1 for the six months ended March 28, 2026 and March 29, 2025, respectively, and are classified as operating activities in the Condensed Consolidated Statements of Cash Flows.

Current wording

We maintain a supplier finance program which facilitates participating suppliers’ ability to finance our payment obligations with a designated third-party financial institution. Participating suppliers may, at their sole discretion, elect to finance our payment obligations prior to their scheduled due dates at a discounted price to the participating financial institution. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under this arrangement. The payment terms that we negotiate with our suppliers are consistent, regardless of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $23.7, $18.8 and $13.9 at June 27, 2026, June 28, 2025 and September 30, 2025, respectively, and are recorded within accounts payable in the Condensed Consolidated Balance Sheets. The associated payments were $239.9 and $208.9 for the nine months ended June 27, 2026 and June 28, 2025, respectively, and are classified as operating activities in the Condensed Consolidated Statements of Cash Flows.

Previous wording

Our cash and cash equivalents were held in cash depository accounts with major financial institutions around the world or invested in high-quality, short-term liquid investments having original maturities of three months or less. The cash and cash equivalents balances, including cash and cash equivalents classified within current assets held for sale, of $9.1, $16.9 and $36.6 as of March 28, 2026, March 29, 2025 and September 30, 2025, respectively, included $4.8, $9.4 and $4.2, respectively, held by controlled foreign corporations. As of March 28, 2026, we maintain our assertion of indefinite reinvestment of the earnings of all material foreign subsidiaries.

Current wording

Our cash and cash equivalents were held in cash depository accounts with major financial institutions around the world or invested in high-quality, short-term liquid investments having original maturities of three months or less. The cash and cash equivalents balances, including cash and cash equivalents classified within current assets held for sale, of $27.7, $51.1 and $36.6 as of June 27, 2026, June 28, 2025 and September 30, 2025, respectively, included $18.0, $20.1 and $4.2, respectively, held by controlled foreign corporations. As of June 27, 2026, we maintain our assertion of indefinite reinvestment of the earnings of all material foreign subsidiaries.

Previous wording

Our primary sources of liquidity are cash generated by operations and borrowings under our credit facilities, which are guaranteed by substantially all of Scotts Miracle-Gro’s domestic subsidiaries. On November 21, 2025, we entered into the Seventh A&R Credit Agreement, providing the Company and certain of its subsidiaries with five-year senior secured loan facilities in the aggregate principal amount of $2,000.0, comprised of a revolving credit facility of $1,500.0 and a term loan in the original principal amount of $500.0. The Seventh A&R Credit Agreement also provides us with the right to seek additional committed credit under the agreement in an aggregate amount of up to $500.0 plus an unlimited additional amount, subject to certain specified financial and other conditions. The Seventh A&R Credit Agreement will be available for issuance of letters of credit up to $100.0 and will terminate on November 21, 2030. The terms of the Seventh A&R Credit Agreement include customary representations and warranties, affirmative and negative covenants, financial covenants and events of default.

Current wording

Our primary sources of liquidity are cash generated by operations and borrowings under our credit facilities, which are guaranteed by substantially all of Scotts Miracle-Gro’s domestic subsidiaries. On November 21, 2025, we entered into the Seventh A&R Credit Agreement, providing the Company and certain of its subsidiaries with five-year senior secured loan facilities in the aggregate principal amount of $2,000.0, comprised of a revolving credit facility of $1,500.0 and a term loan in the original principal amount of $500.0. The Seventh A&R Credit Agreement also provides us with the right to seek additional committed credit under the agreement in an aggregate amount of up to $500.0 plus an unlimited additional amount, subject to certain specified financial and other conditions. The Seventh A&R Credit Agreement provides for the issuance of letters of credit up to $100.0 and will terminate on November 21, 2030. The terms of the Seventh A&R Credit Agreement include customary representations and warranties, affirmative and negative covenants, financial covenants and events of default.

Previous wording

At March 28, 2026, we had letters of credit outstanding in the aggregate principal amount of $93.2, and had $1,155.6 of borrowing availability under the Seventh A&R Credit Agreement. The weighted average interest rates on average borrowings under the credit facilities, excluding the impact of interest rate swaps, were 6.4% and 7.8% for the six months ended March 28, 2026 and March 29, 2025, respectively.

Current wording

At June 27, 2026, we had letters of credit outstanding in the aggregate principal amount of $93.2, and had $1,381.8 of borrowing availability under the Seventh A&R Credit Agreement. The weighted average interest rates on average borrowings under the credit facilities, excluding the impact of interest rate swaps, were 6.4% and 7.7% for the nine months ended June 27, 2026 and June 28, 2025, respectively.

Previous wording

The Seventh A&R Credit Agreement contains, among other obligations, an affirmative covenant regarding our leverage ratio determined as of the end of each of our fiscal quarters, calculated as average total indebtedness divided by our Adjusted EBITDA. The maximum permitted leverage ratio is 5.00. Our leverage ratio was 3.71 at March 28, 2026. The Seventh A&R Credit Agreement also contains an affirmative covenant regarding our interest coverage ratio determined as of the end of each of our fiscal quarters, calculated as Adjusted EBITDA divided by interest expense, as described in the Seventh A&R Credit Agreement. The minimum required interest coverage ratio is (i) 3.00 for each of the fiscal quarters within fiscal 2026, (ii) 3.25 for each of the fiscal quarters within fiscal 2027 and (iii) 3.50 for fiscal quarters thereafter. Our interest coverage ratio was 5.62 at March 28, 2026.

Current wording

The Seventh A&R Credit Agreement contains, among other obligations, an affirmative covenant regarding our leverage ratio determined as of the end of each of our fiscal quarters, calculated as average total indebtedness divided by our Adjusted EBITDA. The maximum permitted leverage ratio is 5.00. Our leverage ratio was 3.78 at June 27, 2026. The Seventh A&R Credit Agreement also contains an affirmative covenant regarding our interest coverage ratio determined as of the end of each of our fiscal quarters, calculated as Adjusted EBITDA divided by interest expense, as described in the Seventh A&R Credit Agreement. The minimum required interest coverage ratio is (i) 3.00 for each of the fiscal quarters within fiscal 2026, (ii) 3.25 for each of the fiscal quarters within fiscal 2027 and (iii) 3.50 for fiscal quarters thereafter. Our interest coverage ratio was 5.67 at June 27, 2026.

Previous wording

The following tables present summarized financial information on a combined basis for Scotts Miracle-Gro and the Guarantors. Transactions between Scotts Miracle-Gro and the Guarantors have been eliminated and the summarized financial information does not reflect investments of the Scotts Miracle-Gro and the Guarantors in the Non-Guarantor subsidiaries.

Current wording

The following tables present summarized financial information on a combined basis for Scotts Miracle-Gro and the Guarantors. Transactions between Scotts Miracle-Gro and the Guarantors have been eliminated and the summarized financial information does not reflect investments by Scotts Miracle-Gro and the Guarantors in the Non-Guarantor subsidiaries.

Previous wording

(a)Includes amounts due from Non-Guarantor subsidiaries of $92.3 and $11.4, respectively.

Current wording

(a)Includes amounts due from Non-Guarantor subsidiaries of $54.4 and $11.4, respectively.

Previous wording

(a)Includes intercompany income from Non-Guarantor subsidiaries of $2.9 and $5.9, respectively.

Current wording

(a)Includes intercompany income from Non-Guarantor subsidiaries of $9.9 and $5.9, respectively.