UNITED STATES
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, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ___________
Commission file number 333-35942
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The Scotts Company
Union 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
14111 Scottslawn Road
Marysville, Ohio 43041
REQUIRED INFORMATION
The following financial statements for The Scotts Company Union
Retirement Savings Plan are being filed herewith:
Audited Financial Statements:
Report of Independent Registered Public Accounting Firm
Financial Statements:
Statements of Net Assets in Liquidation Available
for Benefits as of December 31, 2003 and 2002
Statements of Changes in Net Assets in Liquidation Available for
Benefits for the Years Ended December 31, 2003 and 2002
Notes to Financial Statements - December 31, 2003 and 2002
The following exhibits are being filed herewith:
Exhibit No. Description
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1 Consent of Independent Registered Public Accounting Firm
-2-
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 UNION
RETIREMENT SAVINGS PLAN
Date: June 25, 2004 By: /s/ George A. Murphy
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Printed Name: George A. Murphy
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Title: Vice President
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THE SCOTTS COMPANY UNION RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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PAGE
Report of Independent Registered Public Accounting Firm 1
Financial Statements:
Statements of Net Assets in Liquidation Available for Benefits
as of December 31, 2003 and 2002 2
Statements of Changes in Net Assets in Liquidation Available for
Benefits for the Years Ended December 31, 2003 and 2002 3
Notes to Financial Statements 4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of
The Scotts Company Union Retirement Savings Plan
In our opinion, the accompanying statements of net assets in liquidation
available for benefits and the related statement of changes in net assets in
liquidation available for benefits present fairly, in all material respects, the
net assets in liquidation available for benefits of The Scotts Company Union
Retirement Savings Plan (the "Plan") at December 31, 2003 and 2002, and the
changes in net assets in liquidation 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 the standards of the Public Company Accounting
Oversight Board (United States) and auditing standards generally accepted in the
United States of America. Those standards 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.
As further discussed in Note 1 to the financial statements, The Scotts Company,
the Plan's sponsor, notified participants of its intent to terminate the Plan in
2002. The liquidation process was completed during 2003 and all assets of the
Plan have been distributed to participants.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
June 18, 2004
1
THE SCOTTS COMPANY UNION RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS IN LIQUIDATION AVAILABLE FOR BENEFITS (NOTE 1)
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
2003 2002
NET ASSETS AVAILABLE FOR BENEFITS
Investment in master trust $ - $ 123,532
Participant loans - 2,918
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Total net assets available for benefits $ - $ 126,450
========= ==========
The accompanying notes are an integral part of the financial statements.
2
THE SCOTTS COMPANY UNION RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION AVAILABLE FOR BENEFITS
(NOTE 1)
YEARS ENDED DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
2003 2002
INCREASES
Employer contributions $ - $ 24,767
Participant contributions - 43,769
Net gain from master trust 10,723 -
Interest on participant loans - 322
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Total increases 10,723 68,858
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DECREASES
Net loss from master trust - 20,381
Benefits paid to participants 137,173 100,235
--------- ----------
Total decreases 137,173 120,616
--------- ----------
Net decrease in net assets available
for benefits (126,450) (51,758)
Net assets available for benefits,
beginning of year 126,450 178,208
--------- ----------
Net assets available for benefits,
end of year $ - $ 126,450
========= ==========
The accompanying notes are an integral part of the financial statements.
3
THE SCOTTS COMPANY UNION RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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1. PLAN TERMINATION AND BASIS OF ACCOUNTING
In conjunction with the restructuring that took place in its fiscal year
ended September 30, 2001, The Scotts Company (the "Company"), sponsor of
The Scotts Company Union Retirement Savings Plan (the "Plan"), made the
decision to close the Sierra Horticultural Products facility in Milpitas,
California. During the plan year ended December 31, 2002, the Company
decided to terminate the Plan as all participants were employees at the
Milpitas facility. As a result, the Plan adopted the liquidation basis of
accounting during 2002 whereby assets were valued at fair market value and
liabilities were stated at their settlement amount. Adoption of the
liquidation basis of accounting had no effect on the valuation of the
Plan's assets or liabilities. The liquidation process was completed during
2003 and all assets of the Plan have been distributed to participants.
The accompanying financial statements of the Plan as of and for the periods
ended December 31, 2003 and 2002 have been prepared using the liquidation
basis of accounting.
2. PLAN DESCRIPTION
The Plan, a contributory defined contribution plan, was established by the
Company effective January 1, 2000 and subsequently terminated and
liquidated as described in Note 1 above. The following brief description of
the Plan provides only general information as to its provisions prior to
termination and liquidation. Participants should refer to the Plan document
for a more complete description of Plan provisions, such as eligibility,
vesting, allocation and funding.
ELIGIBILITY
Certain regular domestic Union employees of the Company were eligible to
participate in the Plan on the first day of the month immediately following
their date of employment. Certain temporary domestic Union employees were
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 provided for a participant to make pre-tax or after-tax
contributions up to 75% of eligible wages, not to exceed the annual
Internal Revenue Service ("IRS") maximum deferral amount.
EMPLOYER CONTRIBUTIONS
The Plan provided a base retirement contribution for all eligible
employees. Generally, eligible employees received an allocation equal to 2%
of monthly compensation. The Company also matched participant contributions
$0.50 on the dollar for the first 2% of participant contributions.
VESTING
Participants were immediately vested in their contributions plus actual
earnings thereon. Matching contributions made by the Company vested
immediately. Until August 1, 2002, base contributions made by the Company
vested after three years of service or upon attainment of age 65 prior to
terminating employment. On August 1, 2002, active employees became
immediately vested in base contributions as a result of the Plan
termination.
FORFEITURES
The nonvested portions of participant account balances were forfeitable and
used to reduce employer contributions to the Plan. There were no Plan
forfeitures for the year ended December 31, 2003. Plan forfeitures totaled
$1,141 for the year ended December 31, 2002.
4
THE SCOTTS COMPANY UNION RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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INVESTMENTS
All investments were participant-directed. Participants could change their
investment options on a daily basis.
BENEFIT PAYMENTS
Participants were 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 processed the
distribution. The Plan also provided for hardship and in-service
withdrawals for active employees under certain circumstances.
PARTICIPANT LOANS
Loans were available to participants from their individual accounts subject
to the terms of the Plan.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Excluding participant loans, investments are stated at quoted market
prices. Participants' loans are valued at cost, which approximates fair
value.
ADMINISTRATIVE EXPENSES
The Company paid 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.
4. MASTER TRUST
Effective January 1, 2000, a master trust was established to commingle
certain assets of the Plan and certain assets of the Company's other
defined contribution plan, The Scotts Company Retirement Savings Plan. Each
plan's accounting is maintained separately. The Plan's proportionate share
of master trust investments and gains and losses is displayed on the
accompanying financial statements. Plan activities, such as contributions
and benefit payments, are recorded in the individual plan's accounting
records.
5
THE SCOTTS COMPANY UNION RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
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, 2003 and 2002, are as follows:
2003
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NET APPRECIATION
INTEREST AND IN FAIR VALUE ADMINISTRATION
DIVIDENDS OF SECURITIES EXPENSES TOTAL
Mutual funds $ 2,189,222 $ 23,614,605 $ (16,698) $ 25,787,129
Common trust fund 872,067 - (7,655) 864,412
The Scotts Stock
Fund - 1,364,621 (2,617) 1,362,004
------------ ------------ ------------ ------------
Total $ 3,061,289 $ 24,979,226 $ (26,970) $ 28,013,545
============ ============ ============ ============
2002
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NET APPRECIATION
(DEPRECIATION)
INTEREST AND IN FAIR VALUE ADMINISTRATION
DIVIDENDS OF SECURITIES EXPENSES TOTAL
Mutual funds $ 1,757,539 $(19,955,817) $ (15,319) $(18,213,597)
Common trust fund 895,172 - (4,684) 890,488
The Scotts Stock
Fund - 636,447 (1,626) 634,821
------------ ------------ ------------ ------------
Total $ 2,652,711 $(19,319,370) $ (21,629) $(16,688,288)
============ ============ ============ ============
The net assets of the Plan were liquidated during 2003. Therefore, the Plan
had no interest in the assets of the master trust at December 31, 2003.
Total assets held in the master trust at December 31, 2002, were as
follows:
2002
CASH AND CASH EQUIVALENTS $ 517,001
INVESTMENTS
Mutual funds, at fair value 94,709,701
Common trust fund, at fair value 21,081,383
The Scotts Company Common Shares, at fair value 7,015,025
-----------
Total investments 122,806,109
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Receivable from broker 303,773
Payable to broker (236,220)
-----------
Total master trust net assets 123,390,663
===========
The Scotts Company Union Retirement Savings Plan
interest in master trust net assets 0.10%
===========
Accounting policies discussed in Note 3 also apply to the master trust.
6
THE SCOTTS COMPANY UNION RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
Cash equivalents included short-term, highly liquid investments with
original term to maturity of 90 days or less. Cost approximates fair value.
At December 31, 2002, the master trust held certain investments in mutual
funds managed by the Trustee. Purchases and sales of these mutual funds are
open market transactions at fair value. Consequently, such transactions are
permitted under the provisions of the Plan and exempt from prohibition of
party-in-interest transactions under the IRS Code and ERISA.
5. INVESTMENTS IN THE SCOTTS COMPANY
The net assets of the Plan were liquidated during 2003. Therefore, the Plan
had no interest in the assets of the master trust at December 31, 2003. At
December 31, 2002, the master trust had investments in The Scotts Stock
Fund, which invests in the common stock of the Company, as follows:
2002
----------------------------
FAIR MARKET
UNITS VALUE
522,078 $ 7,015,025
======= ============
6. TAX STATUS
The Plan obtained a determination letter dated September 24, 2003, in which
the Internal Revenue Service stated that the Plan, as amended through
February 4, 2002, was in compliance with the applicable requirements of the
Internal Revenue Code ("IRC"). The plan administrator, the Company, and the
Plan's legal counsel believe that the Plan was designed and was operated in
compliance with the applicable requirements of the IRC, and is therefore
not subject to income taxes.
7. RECONCILIATION TO FORM 5500
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
2003 2002
Benefits paid to participants per the financial statements $ 137,173 $ 100,235
Amounts allocated to withdrawing participants at
December 31, 2001 - (1)
----------- -----------
Benefits paid to participants per the Form 5500 $ 137,173 $ 100,234
=========== ===========
7
THE SCOTTS COMPANY
UNION RETIREMENT SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2003
INDEX TO EXHIBITS
Exhibit No. Description
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1 Consent of Independent Registered Public Accounting Firm