1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 33-47073
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
THE SCOTTS COMPANY
RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
The Scotts Company
41 South High Street
Suite 3500
Columbus, Ohio 43215
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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PAGE
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 2000 and 1999 2
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2000 and 1999 3
Notes to Financial Statements 4
3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative Committee of
The Scotts Company
Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of The Scotts Company Retirement Savings Plan (the "Plan") as of December 31,
2000 and 1999, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
April 20, 2001
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
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2000 1999
Net assets available for benefits:
Cash and cash equivalents $ - $ 77,808
Investments
Mutual funds, at fair value - 120,732,789
Common trust fund, at fair value - 12,858,898
The Scotts Company Common Shares, at fair value - 7,401,532
Loans to participants, at cost - 2,415,972
Investment in master trust 144,078,513 -
Employer contribution receivable 1,564,861 1,307,312
Employee contribution receivable 1,156,191 940,022
Receivable from broker - 63,857
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Total net assets available for benefits $146,799,565 $145,798,190
============ ============
The accompanying notes are an integral part
of the financial statements.
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5
THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
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2000 1999
Increases:
Interest and dividends $ - $ 7,194,049
Net appreciation in fair value of investments - 10,479,748
Employer contributions 8,396,112 8,572,712
Participant contributions 9,812,290 9,377,515
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Total increases 18,208,402 35,624,024
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Decreases:
Net loss from master trust 4,041,545 -
Benefits paid to participants 13,165,482 11,503,900
Administrative expenses - 16,366
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Total decreases 17,207,027 11,520,266
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Net increase in net assets available for benefits 1,001,375 24,103,758
Net assets available for benefits, beginning of year 145,798,190 121,694,432
------------ ------------
Net assets available for benefits, end of year $146,799,565 $145,798,190
============ ============
The accompanying notes are an integral part
of the financial statements.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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1. PLAN DESCRIPTION
The plan is a contributory defined contribution benefit plan sponsored by
The Scotts Company. The following brief description of The Scotts Company
(the Company) Retirement Savings Plan (the Plan) provides only general
information. Participants should refer to the Plan document for a more
complete description of Plan provisions, such as eligibility, vesting,
allocation and funding.
ELIGIBILITY
Regular domestic employees of the Company are eligible to participate in the
Plan on the first day of the month immediately following or coincident with
their date of employment. Regular employees of Scotts Lawn Service, a
subsidiary of the Company, are eligible to receive base retirement
contributions on the first day of the month after completing one year of
eligibility service and are eligible to make contributions and receive
matching contributions on the first day of the month after completing 90
days of service prior to January 1, 2001 (60 days of service after January
1, 2001). Temporary employees are eligible to participate on the January 1
or July 1 subsequent to completing one year of eligibility service and
attaining age 21.
EMPLOYEE CONTRIBUTIONS
The Plan provides for participants to make pre-tax or after-tax
contributions up to 15% of eligible wages, not to exceed the annual Internal
Revenue Service (IRS) maximum deferral amount.
EMPLOYER CONTRIBUTIONS
The Plan provides a base retirement contribution for all eligible employees.
Generally, eligible employees receive an allocation equal to 2% of monthly
compensation. This percentage increases to 4% when employees' year-to-date
compensation exceeds 50% of the social security taxable wage base. The
Company also matches participant pre-tax contributions dollar for dollar for
the first 3% of pay, and matches $0.50 on the dollar for the next 2% of
participant pre-tax contributions. Additionally, the Company remits
transition contributions to certain participants who were also participants
of certain retirement plans previously sponsored by The Scotts Company or
its subsidiaries.
VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon. Matching contributions made by the Company vest
immediately. However, base and transitional contributions made by the
Company vest after three years of service, or upon attaining age 65 prior to
terminating employment.
FORFEITURES
The nonvested portions of participant account balances are forfeitable and
used to reduce employer contributions to the Plan. Plan forfeitures totaled
$579,486 for the year ended December 31, 2000.
INVESTMENTS
All investments are participant-directed. Participants can change their
investment options on a daily basis. The following investment options are
available to participants:
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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- FIDELITY PURITAN FUND--assets are invested in high-yielding U.S. and
foreign securities, common and preferred stocks, and bonds of any
maturity.
- FIDELITY CONTRAFUND--assets are primarily invested in U.S. and foreign
common stocks that are believed to be undervalued.
- FIDELITY BLUE CHIP FUND--assets are primarily invested in common stock
of established and/or rapidly growing companies. Approximately 65% of
this fund's total assets invest in common stock of blue chip companies.
- FIDELITY WORLDWIDE FUND--assets are invested in stocks and other
securities of companies located around the world.
- FIDELITY FREEDOM INCOME FUND--assets are primarily invested in bond and
money market funds. A smaller percentage of assets are invested in
equity mutual funds.
- FIDELITY FREEDOM 2000 FUND--assets are invested in a combination of
equity, fixed income and money market mutual funds. Assets are allocated
among these funds according to an asset allocation strategy which
becomes more conservative over time.
- FIDELITY FREEDOM 2010 FUND--assets are invested in a combination of
equity, fixed income and money market mutual funds of Fidelity
Investments. The asset mix becomes more conservative as year 2010
approaches.
- FIDELITY FREEDOM 2020 FUND--assets are invested in a combination of
equity, fixed income and money market mutual funds of Fidelity
Investments. The asset mix becomes more conservative as year 2020
approaches.
- FIDELITY FREEDOM 2030 FUND--assets are invested in a combination of
equity, fixed income and money market mutual funds. The asset mix
becomes more conservative as year 2030 approaches.
- FIDELITY MANAGED INCOME PORTFOLIO--assets are invested in investment
contracts of major insurance companies and other approved financial
institutions, and in other fixed income securities. A small percentage
of assets are invested in money market funds to provide daily liquidity.
- SPARTAN U.S. EQUITY INDEX FUND--assets are invested in stocks and in
approximately the same proportions as the Standard & Poor's 500 Stock
Index.
- BARON ASSET FUND--assets are invested in stocks with prices perceived as
low relative to the related companies' profits, assets, and other value
measures.
- PIMCO TOTAL RETURN FUND--assets are invested in various types of bonds,
including U.S. government, corporate, mortgage, and foreign bonds with
an average portfolio duration of three to six years (approximately equal
to an average maturity of five to twelve years).
- THE SCOTTS COMPANY COMMON SHARES--assets consist entirely of The Scotts
Company common shares and cash equivalents.
BENEFIT PAYMENTS
Participants are eligible to receive benefit payments upon termination,
retirement, death or disability equal to the vested balance of the
participant's account as of the business day the trustee processes the
distribution. The Plan also provides for hardship and in-service
withdrawals for active employees under certain circumstances.
PARTICIPANT LOANS
Loans are available to participants from their individual accounts subject
to the terms of the Plan.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual basis
of accounting in accordance with generally accepted accounting principles.
INVESTMENTS
Excluding participant loans, investments are stated at quoted market prices.
Participants' loans are valued at cost, which approximates fair value.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation in the fair value of its investments, which
consists of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments. Gains and losses on sales of
investments are based on the average cost method.
Net appreciation in fair value for each significant class of investments for
the year ended December 31, 1999 is as follows:
1999
Mutual funds $ 9,949,037
The Scotts Company Common Shares 530,711
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Total net appreciation $10,479,748
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ADMINISTRATIVE EXPENSES
The Company pays for all administrative fees except those that are
participant specific, such as loan establishment and maintenance fees.
PAYMENTS OF BENEFITS
Benefits are recorded when paid.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires the Plan to make estimates
and assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements, changes in net assets
available for benefits during the reporting period and, when applicable,
disclosures of contingent assets and liabilities at the date of the
financial statements. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options, which are subject to
various risks, such as interest rate, market, and credit risks. Due to the
level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participant account balances and the amounts reported in the statement of
net assets available for benefits.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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RECLASSIFICATIONS
Certain reclassifications have been made to the prior year's financial
statements to conform to current year classifications.
3. MASTER TRUST
Effective January 1, 2000, a master trust was established to invest certain
assets of the Plan and certain assets of the Company's other defined
contribution plan, The Scotts Company Union Retirement Savings Plan. Each
plan's accounting is maintained separately; the respective plan's value is a
percentage of the master trust. Plan activities, such as contributions and
benefit payments, are recorded in the individual plan's accounting records.
Net earnings of the master trust are allocated between the plans based on a
weighted average of assets related to each plan. Total net earnings for the
master trust for the year ended December 31, 2000 are as follows:
NET
APPRECIATION
(DEPRECIATION)
INTEREST AND IN FAIR VALUE ADMINISTRATION
DIVIDENDS OF SECURITIES EXPENSES TOTAL
---------------- ------------------- ------------------- ----------------
Mutual funds $ 7,548,026 $ (12,332,300) $ (14,347) $(4,798,621)
Common trust fund 698,257 - (2,681) 695,576
The Scotts Company
Common Shares 31,542 (179,130) (1,451) (149,039)
Loans to participants 212,344 - - 212,344
---------------- ------------------- ------------------- ----------------
Total $ 8,490,169 $ (12,511,430) $ (18,479) $(4,039,740)
---------------- ------------------- ------------------- ----------------
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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Total assets held in the master trust at December 31, 2000 were as follows:
Cash and cash equivalents $ 439,536
Investments
Mutual funds, at fair value 119,120,168
Common trust fund, at fair value 12,901,238
The Scotts Company Common Shares, at fair value 8,538,029
Loans to participants, at cost 2,938,128
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Total investments 143,497,563
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Receivable from broker 226,447
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Total master trust net assets 144,163,546
============
The Scotts Company Retirement Savings Plan interest
in master trust net assets 99.942%
============
Accounting policies discussed in Note 1 also apply to the master trust.
Cash equivalents include short-term, investments with original term to
maturity of 90 days or less. Cost approximates fair value.
At December 31, 2000, the master trust had investments in the Company's
common shares, as follows:
2000
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FAIR MARKET
SHARES VALUE
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The Scotts Company Common Shares 231,148 $ 8,538,029
================ ===============
The Company's common shares are valued at quoted market prices, which were
$36.94 per share at December 31, 2000.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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4. INVESTMENTS IN THE SCOTTS COMPANY
At December 31, 1999, the Plan had investments in the Company's common
shares, as follows:
1999
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FAIR MARKET
SHARES VALUE
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The Scotts Company Common Shares 183,889 $7,401,532
================ ================
The Company's common shares are valued at quoted market prices, which were
$40.25 per share at December 31, 1999.
5. TAX STATUS
The Plan obtained a determination letter on January 28, 1997, in which the
Internal Revenue Service stated that the Plan was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan has been
amended since receiving the determination letter; however, the plan
administrator and the Plan's legal counsel believe that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code, and is therefore not subject to
income taxes.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to terminate the Plan or its contributions subject to the
provisions of the Employee Retirement Income Security Act of 1974. In the
event the Plan is terminated, participants will become fully vested in their
accounts.
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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7. RECONCILIATION TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999
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Net assets available for benefits per
the financial statements $ 146,799,565 $ 145,798,190
Amounts allocated to withdrawing
participants (50,607) (337,505)
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Net assets available for benefits
per Form 5500 $ 146,748,958 $ 145,460,685
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The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999
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Benefits paid to participants per
the financial statements $ 13,165,482 $ 11,503,900
Amounts allocated to withdrawing
participants at December 31, 2000 50,607 -
Amounts allocated to withdrawing
participants at December 31, 1999 (337,505) 337,505
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Benefits paid to participants per
the Form 5500 $ 12,878,584 $ 11,841,405
============ ============
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE SCOTTS COMPANY RETIREMENT
SAVINGS PLAN
Date: June 28, 2001 By: /s/ Hadia Lefavre
Printed Name: Hadia Lefavre
Title: Executive Vice President,
Human Resources Worldwide
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THE SCOTTS COMPANY RETIREMENT SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2000
INDEX TO EXHIBITS
Exhibit No. Description
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23 Consent of Independent Public Accountants