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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________
FORM 10-Q
_________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 27, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File Number: 001-11593
____________________________________ 
The Scotts Miracle-Gro Company

(Exact name of registrant as specified in its charter)
____________________________________________
Ohio31-1414921
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
14111 Scottslawn Road, Marysville, Ohio 43041
(Address of principal executive offices) (Zip Code)
(937) 644-0011
(Registrant’s telephone number, including area code)
_____________________________________________ 
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, $0.01 stated valueSMGNYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No   
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  Accelerated filer
Non-accelerated filer  Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
YesNo
As of July 31, 2020, there were 55,768,819 Common Shares outstanding.
1

Table of Contents

THE SCOTTS MIRACLE-GRO COMPANY
INDEX
  PAGE NO.

2

Table of Contents
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidated Statements of Operations
(In millions, except per share data)
(Unaudited)
 
 THREE MONTHS ENDEDNINE MONTHS ENDED
 JUNE 27,
2020
JUNE 29,
2019
JUNE 27,
2020
JUNE 29,
2019
Net sales$1,492.7  $1,170.3  $3,241.3  $2,658.3  
Cost of sales954.3  747.0  2,094.9  1,724.8  
Cost of sales—impairment, restructuring and other 11.7  (0.1) 15.3  3.4  
Gross profit526.7  423.4  1,131.1  930.1  
Operating expenses:
Selling, general and administrative237.7  166.4  553.1  462.4  
Impairment, restructuring and other4.2  0.6  2.0  4.3  
Other (income) expense, net0.3  (1.8) 0.4  (0.1) 
Income from operations284.5  258.2  575.6  463.5  
Equity in income of unconsolidated affiliates      (3.3) 
Costs related to refinancing    15.1    
Interest expense20.3  25.9  63.0  80.0  
Other non-operating income, net(1.9) (5.1) (7.3) (268.2) 
Income from continuing operations before income taxes266.1  237.4  504.8  655.0  
Income tax expense from continuing operations61.8  59.4  122.0  162.7  
Income from continuing operations204.3  178.0  382.8  492.3  
Income (loss) from discontinued operations, net of tax(1.0) 23.6  1.6  26.1  
Net income$203.3  $201.6  $384.4  $518.4  
Net (income) loss attributable to noncontrolling interest(0.5) 0.1  (0.9) 0.2  
Net income attributable to controlling interest$202.8  $201.7  $383.5  $518.6  
Basic income (loss) per common share:
Income from continuing operations$3.67  $3.21  $6.86  $8.89  
Income (loss) from discontinued operations(0.02) 0.42  0.03  0.47  
Basic net income per common share$3.65  $3.63  $6.89  $9.36  
Weighted-average common shares outstanding during the period55.6  55.5  55.7  55.4  
Diluted income (loss) per common share:
Income from continuing operations$3.57  $3.15  $6.74  $8.78  
Income (loss) from discontinued operations(0.02) 0.41  0.02  0.46  
Diluted net income per common share$3.55  $3.56  $6.76  $9.24  
Weighted-average common shares outstanding during the period plus dilutive potential common shares57.1  56.6  56.7  56.1  
See Notes to Condensed Consolidated Financial Statements.
3

Contents
THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In millions)
(Unaudited)

 THREE MONTHS ENDEDNINE MONTHS ENDED
 JUNE 27,
2020
JUNE 29,
2019
JUNE 27,
2020
JUNE 29,
2019
Net income$203.3  $201.6  $384.4  $518.4  
Other comprehensive income (loss):
Net foreign currency translation adjustment, including reclassifications to net income of zero, zero, zero and $2.5, respectively5.3  3.1    (1.5) 
Net unrealized loss on derivative instruments, net of tax of $(1.0), $(1.1), $(5.4) and $(4.7), respectively(3.0) (3.1) (15.5) (13.4) 
Reclassification of net unrealized (gains) losses on derivative instruments to net income, net of tax of $1.1, zero, $2.0 and $(0.7), respectively3.1  (0.1) 5.8  (2.1) 
Reclassification of net pension and other post-retirement benefit (gains) losses to net income, net of tax of $0.1, $0.2, $0.5 and $0.5, respectively0.3  0.7  1.4  1.3  
Total other comprehensive income (loss)5.7  0.6  (8.3) (15.7) 
Comprehensive income209.0  202.2  376.1  502.7  
Comprehensive (income) loss attributable to noncontrolling interest(0.5) 0.1  (0.9) 0.2  
Comprehensive income attributable to controlling interest$208.5  $202.3  $375.2  $502.9  
See Notes to Condensed Consolidated Financial Statements.

4

Contents
THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidated Statements of Cash Flows
(In millions) (Unaudited)
 NINE MONTHS ENDED
 JUNE 27,
2020
JUNE 29,
2019
OPERATING ACTIVITIES
Net income$384.4  $518.4  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Impairment, restructuring and other  0.5  
Costs related to refinancing15.1    
Share-based compensation expense41.8  28.4  
Depreciation45.4  41.8  
Amortization23.6  25.2  
Deferred taxes(4.8) (31.8) 
(Gain) loss on long-lived assets(0.2) 1.2  
(Gain) loss on sale of business / unconsolidated affiliate  (262.6) 
Recognition of accumulated foreign currency translation loss  2.5  
Equity in income and distributions from unconsolidated affiliates  1.6  
Changes in assets and liabilities, net of acquired businesses:
Accounts receivable(840.0) (436.0) 
Inventories46.1  (53.4) 
Prepaid and other assets(28.5) (24.4) 
Accounts payable115.3  79.7  
Other current liabilities262.1  130.6  
Restructuring and other(5.5) (83.6) 
Other non-current items(12.3) (16.2) 
Other, net  0.4  
Net cash provided by (used in) operating activities42.5  (77.7) 
INVESTING ACTIVITIES
Proceeds from sale of long-lived assets0.2  0.2  
Investments in property, plant and equipment(41.7) (28.8) 
Proceeds from (investments in) loans receivable(2.5) 20.8  
Proceeds from sale of brand extension assets115.5    
Proceeds from sale of investment in unconsolidated affiliates  274.3  
Investments in acquired businesses, net of cash acquired  (6.6) 
Other investing, net2.9  3.6  
Net cash provided by investing activities74.4  263.5  
FINANCING ACTIVITIES
Borrowings under revolving and bank lines of credit and term loans1,134.3  938.8  
Repayments under revolving and bank lines of credit and term loans(1,118.6) (1,029.0) 
Proceeds from issuance of 4.500% Senior Notes450.0    
Repayment of 6.000% Senior Notes(400.0)   
Financing and issuance fees(18.7)   
Dividends paid(97.8) (92.1) 
Purchase of Common Shares(53.1) (3.0) 
Payments on seller notes(0.5) (0.8) 
Cash received from exercise of stock options17.0  3.2  
Net cash used in financing activities(87.4) (182.9) 
Effect of exchange rate changes on cash  (0.4) 
Net increase in cash and cash equivalents29.5  2.5  
Cash and cash equivalents at beginning of period18.8  33.9  
Cash and cash equivalents at end of period$48.3  $36.4  
See Notes to Condensed Consolidated Financial Statements.
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THE SCOTTS MIRACLE-GRO COMPANY
Condensed Consolidated Balance Sheets
(In millions, except stated value per share)
(Unaudited)
 
JUNE 27,
2020
JUNE 29,
2019
SEPTEMBER 30,
2019
ASSETS
Current assets:
Cash and cash equivalents$48.3  $36.4  $18.8  
Accounts receivable, less allowances of $13.3, $7.6 and $4.2, respectively970.1  395.8  223.9  
Accounts receivable pledged177.8  351.1  84.5  
Inventories493.1  533.7  540.3  
Prepaid and other current assets89.5  72.9  174.2  
Total current assets1,778.8  1,389.9  1,041.7  
Property, plant and equipment, net of accumulated depreciation of $671.1, $649.9 and $628.0, respectively533.2  506.7  546.0  
Goodwill540.0  541.9  538.7  
Intangible assets, net685.3  831.1  707.5  
Other assets339.5  197.8  194.8  
Total assets$3,876.8  $3,467.4  $3,028.7  
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt$206.4  $363.2  $128.1  
Accounts payable310.5  222.6  214.2  
Other current liabilities589.8  369.6  278.2  
Total current liabilities1,106.7  955.4  620.5  
Long-term debt1,516.0  1,563.5  1,523.5  
Other liabilities250.2  143.3  161.5  
Total liabilities2,872.9  2,662.2  2,305.5  
Commitments and contingencies (Note 10)
Equity:
Common shares and capital in excess of $.01 stated value per share; shares outstanding of 55.8, 55.4 and 55.8, respectively465.8  437.0  442.2  
Retained earnings1,557.0  1,369.3  1,274.7  
Treasury shares, at cost; 12.4, 12.7 and 12.4 shares, respectively(922.1) (927.3) (904.3) 
Accumulated other comprehensive loss(102.2) (78.6) (93.9) 
Total equity—controlling interest998.5  800.4  718.7  
Noncontrolling interest5.4  4.8  4.5  
Total equity1,003.9  805.2  723.2  
Total liabilities and equity$3,876.8  $3,467.4  $3,028.7  
See Notes to Condensed Consolidated Financial Statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The Scotts Miracle-Gro Company (“Scotts Miracle-Gro” or “Parent”) and its subsidiaries (collectively, together with Scotts Miracle-Gro, the “Company”) are engaged in the manufacturing, marketing and sale of products for lawn and garden care and indoor, urban and hydroponic gardening. The Company’s products are sold in North America, Europe and Asia.
Due to the seasonal nature of the consumer lawn and garden business, the majority of the Company’s sales to customers occur in the Company’s second and third fiscal quarters. On a combined basis, net sales for the second and third quarters of the last three fiscal years represented approximately 75% of the Company’s annual net sales.
Organization and Basis of Presentation
The Company’s unaudited condensed consolidated financial statements for the three and nine months ended June 27, 2020 and June 29, 2019 are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of Scotts Miracle-Gro and its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s consolidation criteria are based on majority ownership (as evidenced by a majority voting interest in the entity) and an objective evaluation and determination of effective management control. AeroGrow International, Inc. (“AeroGrow”), in which the Company has a controlling interest, is consolidated, with the equity owned by other shareholders shown as noncontrolling interest in the Condensed Consolidated Balance Sheets, and the other shareholders’ portion of net earnings and other comprehensive income shown as net (income) loss or comprehensive (income) loss attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income (Loss), respectively. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of each acquisition or up to the date of disposal, respectively. In the opinion of management, interim results reflect all normal and recurring adjustments and are not necessarily indicative of results for a full year.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with Scotts Miracle-Gro’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019 (the “2019 Annual Report”), which includes a complete set of footnote disclosures, including the Company’s significant accounting policies.
The Company’s Condensed Consolidated Balance Sheet at September 30, 2019 has been derived from the Company’s audited Consolidated Balance Sheet at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.
Long-Lived Assets
The Company had non-cash investing activities of $3.2 million and $1.8 million during the nine months ended June 27, 2020 and June 29, 2019, respectively, representing unpaid liabilities to acquire property, plant and equipment.
Statements of Cash Flows
Supplemental cash flow information was as follows:
NINE MONTHS ENDED
JUNE 27,
2020
JUNE 29,
2019
(In millions)
Interest paid$68.2  $82.8  
Income tax payments16.6  126.4  
During the nine months ended June 29, 2019, the Company paid a post-closing net working capital adjustment obligation of $6.6 million related to the fiscal 2018 acquisition of Sunlight Supply, Inc., Sunlight Garden Supply, Inc., Sunlight Garden Supply, ULC, and IP Holdings, LLC, and all of the issued and outstanding equity interests of Columbia River Industrial Holdings, LLC (collectively “Sunlight Supply”), which was classified as an investing activity in the “Investments in acquired businesses, net of cash acquired” line in the Condensed Consolidated Statements of Cash Flows.
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Inventories
Inventories are stated at the lower of cost or net realizable value and include the cost of raw materials, labor, manufacturing overhead and freight and inbound handling costs incurred to pre-position goods in the Company’s warehouse network. The Company makes provisions for obsolete or slow-moving inventories as necessary to properly reflect inventory at the lower of cost or net realizable value. Inventories are determined by the first in, first out method of accounting. Inventories acquired through the acquisition of or subsequently produced by Sunlight Supply were initially recorded at fair value at the date of the acquisition and subsequently were measured using the average costing method of inventory valuation. During the three months ended December 28, 2019, the Company determined it was preferable to use the first in, first out inventory valuation method and adopted this method for the remaining Sunlight Supply inventories not subject to the first in, first out method. This change in accounting principle resulted in an increase in inventories of $0.2 million as of December 28, 2019, with a corresponding decrease in cost of goods sold for the three months ended December 28, 2019. The change in accounting principle was not material to prior periods so it was not retrospectively applied.
Leases
Effective October 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 842, “Leases” (“ASC 842”). Under this guidance, the Company determines whether an arrangement contains a lease at inception by determining if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration and other facts and circumstances. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are calculated based on the lease liability adjusted for any lease payments paid to the lessor at or before the commencement date and initial direct costs incurred by the Company and excludes any lease incentives received from the lessor. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. As the Company’s leases typically do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability using its incremental borrowing rate at the lease commencement date based on the lease term. The Company considers its credit rating and the current economic environment in determining this collateralized rate. Variable lease payments are the portion of lease payments that are not fixed over the lease term. Variable lease payments are expensed as incurred and include certain non-lease components, such as maintenance and other services provided by the lessor, and other charges included in the lease, as applicable. The Company elected to exclude short-term leases, defined as leases with initial terms of 12 months or less, from its Condensed Consolidated Balance Sheet.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
In February 2016, the Financial Accounting Standards Board (“FASB”) issued its final standard on lease accounting, ASC 842. This guidance requires lessees to recognize a lease liability for the obligation to make lease payments and a ROU asset for the right to use the underlying asset for the lease term. The Company elected the optional transition method and adopted the new guidance on October 1, 2019 on a modified retrospective basis with no restatement of prior period amounts. Fiscal 2019 balances and related disclosures supporting those comparative period balances continue to be presented under ASC 840, “Leases.” As allowed under the new accounting standard, the Company elected to apply practical expedients to carry forward the original lease determinations, lease classifications and accounting of initial direct costs for all asset classes at the time of adoption. The Company also elected to exclude short-term leases from its Condensed Consolidated Balance Sheet. The Company’s adoption of the new standard resulted in the recognition of ROU assets of $129.6 million in the “Other assets” line in the Condensed Consolidated Balance Sheet, liabilities of $45.4 million in the “Other current liabilities” line in the Condensed Consolidated Balance Sheet and liabilities of $88.8 million in the “Other liabilities” line in the Condensed Consolidated Balance Sheet as of the October 1, 2019 adoption date. Adoption of the new standard did not result in a material cumulative effect adjustment to equity as of the date of adoption and did not have a material impact on the Company’s Condensed Consolidated Statements of Operations or Cash Flows. In connection with the adoption of this guidance, as required, the Company reclassified certain restructuring reserves (refer to “NOTE 4. IMPAIRMENT, RESTRUCTURING AND OTHER” for more information) and deferred rent liabilities as reductions to the ROU asset. Refer to “NOTE 13. LEASES AND OTHER COMMITMENTS” for more information.
On March 2, 2020, the SEC issued a final rule that amends the financial disclosure requirements related to certain registered securities under SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” These amendments are generally effective for registration statements filed pursuant to the Securities Act of 1933, as amended, or the Securities Exchange of Act of 1934, as amended (the “Exchange Act”), on or after January 4, 2021 and periodic reports filed pursuant to the Exchange Act for fiscal periods beginning after January 4, 2021. However, voluntary compliance in advance of these effective dates is permitted. The amendments permit the omission from the applicable filings of separate financial statements for each issuer of a registered security that is guaranteed and each guarantor
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of a registered security that would be required of a registrant under Regulation S-X if, subject to additional conditions, the parent company of such issuers and/or guarantors provides supplemental financial and non-financial disclosures about the subsidiary issuers and/or guarantors and the guarantees. Under the amended Rule 3-10, in lieu of separate financial statements, a parent company of the subsidiary issuers and/or guarantors may provide summarized financial information of the issuers and guarantors, as well as other qualitative disclosures about the guarantees and the issuers and guarantors, in the parent company’s Management’s Discussion and Analysis (“MD&A”) or its consolidated financial statements. As permitted under these amendments, the Company elected to begin providing the summarized financial information and qualitative disclosures permitted under the amended Rule 3-10 during the second quarter of fiscal 2020 and has provided such information and disclosures within the “Liquidity and Capital Resources” section of the MD&A.
On March 12, 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The Company may elect to apply the contract modification provisions as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 up until December 31, 2022. The hedge accounting expedients may be applied, on an individual hedging relationship basis, to eligible hedge accounting relationships that existed as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020; however, those expedients generally cannot be applied to hedging relationships evaluated for periods after December 31, 2022. The Company adopted certain optional hedge accounting expedients provided by ASU 2020-04 during fiscal 2020. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows. The Company is continuing to assess other optional expedients and exceptions available within the amended guidance.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held.  The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020.  The Company is continuing to assess the impact of the amended guidance.
In August 2018, the FASB issued ASU No. 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans,” which removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures related to defined benefit pension and other postretirement plans. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020.  The Company is continuing to assess the impact of the amended guidance.
In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2020.  The Company is continuing to assess the impact of the amended guidance.
In December 2019, the FASB issued ASU No. 2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The provisions are effective for the Company’s financial statements no later than the fiscal year beginning October 1, 2021.  The Company is continuing to assess the impact of the amended guidance.
NOTE 2. DISCONTINUED OPERATIONS
Wild Bird Food
During fiscal 2014, the Company completed the sale of its U.S. and Canadian wild bird food business. As a result, effective in fiscal 2014, the Company classified its results of operations for all periods presented to reflect the wild bird food business as a discontinued operation. At each of June 27, 2020, June 29, 2019 and September 30, 2019, zero, $20.0 million and zero, respectively, was accrued for a probable loss related to the previously disclosed legal matter In re Morning Song Bird Food Litigation in the “Other current liabilities” line in the Condensed Consolidated Balance Sheet. This matter relates to a class-action lawsuit filed in 2012 in connection with the sale of wild bird food products that were the subject of a voluntary recall in 2008 by the Company’s previously sold wild bird food business. The Company recognized insurance recoveries related
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to this matter of zero and $1.5 million during the three and nine months ended June 27, 2020, respectively, and recognized insurance recoveries of $8.4 million and $13.4 million during the three and nine months ended June 29, 2019, respectively. In addition, during the three and nine months ended June 29, 2019, the Company recognized a favorable adjustment of $22.5 million as a result of the final resolution of the previously disclosed settlement agreement related to this matter.
        The following table summarizes the results of discontinued operations described above and reflected within discontinued operations in the Company’s condensed consolidated financial statements for each of the periods presented:
THREE MONTHS ENDEDNINE MONTHS ENDED
JUNE 27,
2020
JUNE 29,
2019
JUNE 27,
2020
JUNE 29,
2019
(In millions)
Operating and exit costs$2.0  $  $1.5  $0.1  
Impairment, restructuring and other charges (recoveries), net  (30.9) (3.1) (35.8) 
Income (loss) from discontinued operations before income taxes(2.0) 30.9  1.6  35.7  
Income tax expense (benefit) from discontinued operations(1.0) 7.3    9.6  
Income (loss) from discontinued operations, net of tax$(1.0) $23.6  $1.6  $26.1  
The Condensed Consolidated Statements of Cash Flows do not present the cash flows from discontinued operations separately from cash flows from continuing operations. Cash provided by (used in) operating activities related to discontinued operations was $3.6 million and $(24.5) million for the nine months ended June 27, 2020 and June 29, 2019, respectively. Cash (used in) provided by investing activities related to discontinued operations was zero for the nine months ended June 27, 2020 and June 29, 2019.
NOTE 3. INVESTMENT IN UNCONSOLIDATED AFFILIATES
On March 19, 2019, the Company entered into an agreement under which it sold, to TruGreen Companies L.L.C., a subsidiary of TruGreen Holding Corporation, all of its approximately 30% equity interest in Outdoor Home Services Holdings LLC, a lawn services joint venture between the Company and TruGreen Holding Corporation (the “TruGreen Joint Venture”). Prior to this transaction, the Company’s net investment and advances with respect to the TruGreen Joint Venture had been reduced to a liability which resulted in an amount recorded in the “Distributions in excess of investment in unconsolidated affiliate” line in the Condensed Consolidated Balance Sheets. In connection with this transaction, the Company received cash proceeds of $234.2 million related to the sale of its equity interest in the TruGreen Joint Venture and $18.4 million related to the payoff of second lien term loan financing by the TruGreen Joint Venture. During the nine months ended June 29, 2019, the Company also received a distribution from the TruGreen Joint Venture intended to cover certain required tax payments of $3.5 million, which was classified as an investing activity in the Condensed Consolidated Statements of Cash Flows. During the three and nine months ended June 29, 2019, the Company recognized a pre-tax gain of zero and $259.8 million, respectively, related to this sale in the “Other non-operating income, net” line in the Condensed Consolidated Statements of Operations.
On April 1, 2019, the Company sold all of its noncontrolling equity interest in an unconsolidated affiliate whose products support the professional U.S. industrial, turf and ornamental market (the “IT&O Joint Venture”) for cash proceeds of $36.6 million. During the three and nine months ended June 29, 2019, the Company recognized a pre-tax gain of $2.9 million related to this sale in the “Other non-operating (income) expense, net” line in the Condensed Consolidated Statements of Operations. During the nine months ended June 29, 2019, the Company received a distribution of net earnings from the IT&O Joint Venture of $4.9 million, which was classified as an operating activity in the Condensed Consolidated Statements of Cash Flows.
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NOTE 4. IMPAIRMENT, RESTRUCTURING AND OTHER
Activity described herein is classified within the “Cost of sales—impairment, restructuring and other,” “Impairment, restructuring and other” and “Income (loss) from discontinued operations, net of tax” lines in the Condensed Consolidated Statements of Operations. The following table details impairment, restructuring and other charges (recoveries) for each of the periods presented:
THREE MONTHS ENDEDNINE MONTHS ENDED
JUNE 27,
2020
JUNE 29,
2019
JUNE 27,
2020
JUNE 29,
2019
(In millions)
Cost of sales—impairment, restructuring and other:
COVID-19 related costs$12.2  $  $15.3  $  
Restructuring and other charges (recoveries)(0.5) (0.1)   2.9  
Property, plant and equipment impairments      0.5  
Operating expenses:
COVID-19 related costs4.3    5.0    
Restructuring and other charges, net(0.1) 0.6  (3.0) 4.3  
Impairment, restructuring and other charges from continuing operations15.9  0.5  17.3  7.7  
Restructuring and other charges (recoveries), net, from discontinued operations  (30.9) (3.1) (35.8) 
Total impairment, restructuring and other charges (recoveries)$15.9  $(30.4) $14.2  $(28.1) 
        The following table summarizes the activity related to liabilities associated with restructuring and other, excluding insurance reimbursement recoveries, during the nine months ended June 27, 2020 (in millions):
Amounts accrued for restructuring and other at September 30, 2019$