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EQUITY | 3 Months Ended
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Dec. 31, 2022
Equity [Abstract] |
EQUITY | EQUITY The following tables provide a summary of the changes in equity for each of the periods indicated:
| Common Shares and Capital in Excess of Stated Value |  | Retained Earnings |  | Treasury Shares |  | Accumulated Other Comprehensive Loss |  |  |  |  |  | Total Equity
Balance at September 30, 2022 | $ | 364.0 |  |  | $ | 1,020.1 |  |  | $ | (1,091.8) |  |  | $ | (144.6) |  |  |  |  |  |  | $ | 147.7 |
Net income (loss) | — |  |  | (64.7) |  |  | — |  |  | — |  |  |  |  |  |  | (64.7) |
Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | (24.6) |  |  |  |  |  |  | (24.6) |
Share-based compensation | 20.8 |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 20.8 |
Dividends declared ($0.66 per share) | — |  |  | (37.5) |  |  | — |  |  | — |  |  |  |  |  |  | (37.5) |
Treasury share purchases | — |  |  | — |  |  | (0.8) |  |  | — |  |  |  |  |  |  | (0.8) |
Treasury share issuances | (17.2) |  |  | — |  |  | 35.9 |  |  | — |  |  |  |  |  |  | 18.7 |
Balance at December 31, 2022 | $ | 367.6 |  |  | $ | 917.9 |  |  | $ | (1,056.7) |  |  | $ | (169.3) |  |  |  |  |  |  | $ | 59.5 |
The sum of the components may not equal due to rounding.
| Common Shares and Capital in Excess of Stated Value |  | Retained Earnings |  | Treasury Shares |  | Accumulated Other Comprehensive Loss |  |  |  |  |  | Total Equity
Balance at September 30, 2021 | $ | 477.0 |  |  | $ | 1,605.1 |  |  | $ | (1,002.4) |  |  | $ | (66.4) |  |  |  |  |  |  | $ | 1,013.3 |
Net income (loss) | — |  |  | (50.0) |  |  | — |  |  | — |  |  |  |  |  |  | (50.0) |
Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | 5.7 |  |  |  |  |  |  | 5.7 |
Share-based compensation | 7.3 |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  | 7.3 |
Dividends declared ($0.66 per share) | — |  |  | (37.3) |  |  | — |  |  | — |  |  |  |  |  |  | (37.3) |
Treasury share purchases | — |  |  | — |  |  | (129.5) |  |  | — |  |  |  |  |  |  | (129.5) |
Treasury share issuances | 2.6 |  |  | — |  |  | 19.5 |  |  | — |  |  |  |  |  |  | 22.1 |
Balance at January 1, 2022 | $ | 486.9 |  |  | $ | 1,517.8 |  |  | $ | (1,112.4) |  |  | $ | (60.7) |  |  |  |  |  |  | $ | 831.6 |
The sum of the components may not equal due to rounding. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss (“AOCL”) by component were as follows for each of the periods indicated:
|  | Three Months Ended
|  | Foreign Currency Translation Adjustments |  | Net Unrealized Gain (Loss) On Derivative Instruments |  | Net Unrealized Gain (Loss) On Securities |  | Pension and Other Post-Retirement Benefit Adjustments |  | Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2022 |  | $ | (28.9) |  |  | $ | 33.3 |  |  | $ | (79.7) |  |  | $ | (69.3) |  |  | $ | (144.6) |
Other comprehensive income (loss) before reclassifications |  | 7.2 |  |  | (6.4) |  |  | (26.8) |  |  | — |  |  | (26.0) |
Amounts reclassified from accumulated other comprehensive net income (loss) |  | — |  |  | (5.0) |  |  | — |  |  | (3.9) |  |  | (8.9) |
Income tax benefit (expense) |  | — |  |  | 2.9 |  |  | 6.4 |  |  | 1.0 |  |  | 10.3 |
Net current period other comprehensive income (loss) |  | 7.2 |  |  | (8.5) |  |  | (20.4) |  |  | (2.9) |  |  | (24.6) |
Balance at December 31, 2022 |  | $ | (21.7) |  |  | $ | 24.8 |  |  | $ | (100.2) |  |  | $ | (72.2) |  |  | $ | (169.3) |
Balance at September 30, 2021 |  | $ | (1.7) |  |  | $ | 10.2 |  |  | $ | (2.3) |  |  | $ | (72.5) |  |  | $ | (66.4) |
Other comprehensive income (loss) before reclassifications |  | (4.3) |  |  | 13.0 |  |  | 0.1 |  |  | — |  |  | 8.8 |
Amounts reclassified from accumulated other comprehensive net income (loss) |  | — |  |  | (0.3) |  |  | — |  |  | 0.7 |  |  | 0.4 |
Income tax benefit (expense) |  | — |  |  | (3.3) |  |  | — |  |  | (0.2) |  |  | (3.5) |
Net current period other comprehensive income (loss) |  | (4.3) |  |  | 9.4 |  |  | 0.1 |  |  | 0.5 |  |  | 5.7 |
Balance at January 1, 2022 |  | $ | (6.0) |  |  | $ | 19.5 |  |  | $ | (2.2) |  |  | $ | (72.1) |  |  | $ | (60.7) |
The sum of the components may not equal due to rounding. Share Repurchases On February 6, 2020, Scotts Miracle-Gro announced that its Board of Directors authorized the repurchase of up to $750.0 of Common Shares from April 30, 2020 through March 25, 2023. The share repurchase authorization may be suspended or discontinued by the Board of Directors at any time, and there can be no guarantee as to the timing or amount of any repurchases. During the three months ended December 31, 2022 and January 1, 2022, Scotts Miracle-Gro rep urchased 0.0 million and 0.8 million Common Shares under this share repurchase authorization for $0.0 and $125.0, respectively. Treasury share purchases also include cash paid to tax authorities to satisfy statutory income tax withholding obligations related to share-based compensation of $0.8 and $4.5 for the three months ended December 31, 2022 and January 1, 2022, respectively. Share-Based Awards Total share-based compensation was as follows for each of the periods indicated:
| Three Months Ended |  |
| December 31, 2022 |  | January 1, 2022 |  |  |  |
Share-based compensation | $ | 20.9 |  |  | $ | 7.3 |  |  |  |  |
Related tax benefit recognized | 4.7 |  |  | 1.8 |  |  |  |  |
Stock Options Details of the Company’s stock option activities are summarized below:
| No. of Options |  | Wtd. Avg. Exercise Price |  | Wtd. Avg. Remaining Life |  | Aggregate Intrinsic Value
Awards outstanding at September 30, 2022 | 528,471 |  |  | $ | 110.86 |  |  | 4.4 years |  |
Granted | 632,457 |  |  | 50.40 |  |  |  |  |
Forfeited | (6,947) |  |  | 171.41 |  |  |  |  |
Awards outstanding at December 31, 2022 | 1,153,981 |  |  | 77.36 |  |  | 7.3 years |  | $ | — |
Exercisable | 385,375 |  |  | 65.37 |  |  | 2.7 years |  | — |
The weighted-average fair value per share of each option granted during the three months ended December 31, 2022 was $13.67. No options were granted during the three months ended January 1, 2022. As of December 31, 2022, there was $3.5 of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options that is expected to be recognized over a weighted-average period of 2.3 years. Cash received from the exercise of stock options, including amounts received from employee purchases under the employee stock purchase plan, was $0.6 and $0.9 for the three months ended December 31, 2022 and January 1, 2022, respectively. The grant date fair value of stock option awards is estimated using a binomial model. Expected market price volatility is based on implied volatilities from traded options on Common Shares and historical volatility specific to the Common Shares. Historical data, including demographic factors impacting historical exercise behavior, is used to estimate stock option exercises and employee terminations within the valuation model. The risk-free rate for periods within the contractual life of the stock option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life of stock options is based on historical experience and expectations for grants outstanding. The weighted average assumptions for awards granted in fiscal 2023 are as follows:
Expected volatility | 36.8 | %
Risk-free interest rate | 4.3 | %
Expected dividend yield | 3.9 | %
Expected life | 6.1 years
Restricted stock-based awards Restricted stock-based awards granted to employees and non-employee directors (including restricted stock units and deferred stock units) during the three months ended December 31, 2022 were as follows:
| No. of Units |  | Wtd. Avg. Grant Date Fair Value per Unit
Awards outstanding at September 30, 2022 | 320,575 |  |  | $ | 143.19 |
Granted | 301,522 |  |  | 50.59 |
Vested | (2,319) |  |  | 109.88 |
Forfeited | (13,345) |  |  | 103.63 |
Awards outstanding at December 31, 2022 | 606,433 |  |  | 98.15 |
The weighted-average grant-date fair value of restricted stock-based awards granted was $50.59 and $154.34 per share for the three months ended December 31, 2022 and January 1, 2022, respectively. As of December 31, 2022, there was $20.8 of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted stock-based awards that is expected to be recognized over a weighted-average period of 1.8 years. Performance-based awards Performance-based award activity during the three months ended December 31, 2022 was as follows (based on target award amounts):
| No. of Units |  | Wtd. Avg. Grant Date Fair Value per Unit
Awards outstanding at September 30, 2022 | 113,256 |  |  | $ | 130.94 |
Granted | 591,309 |  |  | 63.61 |
Vested (a) | (124,261) |  |  | 63.91 |
Forfeited | (3,806) |  |  | 131.44 |
Awards outstanding at December 31, 2022 | 576,498 |  |  | 76.32 |
(a) Vested at a weighted average of 100% of the target performance share units granted. The weighted-average grant-date fair value of performance-based awards granted was $63.61 per share for the three months ended December 31, 2022. No performance-based awards were granted during the three months ended January 1, 2022. As of December 31, 2022, there was $30.8 of total unrecognized pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance-based awards that is expected to be recognized over a weighted-average period of 0.8 years. The total fair value of performance-based units vested was $6.0 for the three months ended December 31, 2022. Restricted shares issued to vendor During the three months ended December 31, 2022, the Company issued 0.4 million restricted shares, with a grant date fair value of $51.43 per share, out of its treasury shares to a vendor in exchange for advertising services. As of December 31, 2022, there was $17.9 of total unrecognized pre-tax compensation cost related to these restricted shares that is expected to be recognized over the remainder of fiscal 2023.

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