

	December 29, 2019			December 30, 2018
ABL facility	$	92.8		$	123.1
Term loan facility	441.8			446.2
Total gross long-term debt	534.6			569.3
Less: unamortized debt issuance costs and discounts on debt	(9.7		)	(11.1		)
Total debt	$	524.9		$	558.2
Less: current portion	(4.5		)	(4.5		)
Total long-term debt	$	520.4		$	553.7

SiteOne Landscape Supply Holding, LLC (“Landscape Holding”) and SiteOne Landscape Supply, LLC (“Landscape,” and together with Landscape Holding, the “Borrowers”), each an indirect wholly-owned subsidiary of the Company, are parties to the credit agreement dated December 23, 2013 (as amended by the First Amendment to the Credit Agreement, dated June 13, 2014, the Second Amendment to the Credit Agreement, dated January 26, 2015, the Third Amendment to the Credit Agreement, dated February 13, 2015, the Fourth Amendment to the Credit Agreement, dated October 20, 2015, the Omnibus Amendment to the Credit Agreement, dated May 24, 2017, and the Sixth Amendment to the Credit Agreement, dated February 1, 2019, the “ABL Credit Agreement”) providing for an asset-based credit facility (the “ABL Facility”) of up to $375.0 million, subject to borrowing base availability. The ABL Facility is secured by a first lien on the inventory and receivables of the Borrowers. The ABL Facility is guaranteed by SiteOne Landscape Supply Bidco, Inc. (“Bidco”), an indirect wholly-owned subsidiary of the Company, and each direct and indirect wholly-owned U.S. restricted subsidiary of Landscape. The availability under the ABL Facility was $263.4 million and $197.5 million as of December 29, 2019 and December 30, 2018, respectively. Availability is determined using borrowing base calculations of eligible inventory and receivable balances less the current outstanding ABL Facility and letters of credit balances.

The interest rate on the ABL Facility is LIBOR plus an applicable margin ranging from 1.25% to 1.75% or an alternate base rate for U.S. denominated borrowings plus an applicable margin ranging from 0.25% to 0.75%. The interest rates on outstanding balances were 3.21% and 4.10% as of December 29, 2019 and December 30, 2018, respectively. Additionally, the Borrowers paid a commitment fee of 0.25% and 0.25% on the unfunded amount as of December 29, 2019 and December 30, 2018, respectively.

The ABL Facility is subject to mandatory prepayments if the outstanding loans and letters of credit exceed either the aggregate revolving commitments or the current borrowing base, in an amount equal to such excess. Additionally, the ABL Facility is subject to various covenants requiring minimum financial ratios and additional borrowings may be limited by these financial ratios. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs, the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interest in collateral pledged under the agreement, or restrict the Borrowers’ ability to obtain additional borrowings under these agreements.

The ABL Facility contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants consist of the following: fundamental changes, dividends and distributions, acquisitions, collateral, payments and modifications of restricted indebtedness, negative pledge clauses, changes in line of business, currency, commodity and other hedging transactions, transactions with affiliates, investments, limitations on indebtedness and liens. The negative covenants are subject to the customary exceptions and also permit the payment of dividends and distributions, investments, permitted acquisitions and payments or redemptions of junior indebtedness upon satisfaction of a payment condition. As of December 29, 2019, the Company is in compliance with all of the ABL Facility covenants.

The Borrowers entered into a syndicated senior term loan facility dated April 29, 2016, which was amended on November 23, 2016, May 24, 2017, December 12, 2017 and August 14, 2018 (the “Term Loan Facility”). The Term Loan Facility is guaranteed by Bidco and each direct and indirect wholly-owned U.S. restricted subsidiary of Landscape. The Term Loan Facility has a first lien on Property and equipment, Intangibles, and equity interests of Landscape, and a second lien on ABL Facility assets. In connection with the amendment on August 14, 2018, the final maturity date of the Term Loan Facility was extended to October 29, 2024.

On August 14, 2018, the Company amended the Term Loan Facility (the “Fourth Amendment”) to, among other things, (i) add an additional credit facility under the Term Loan Facility consisting of additional term loans (the “Tranche E Term Loans”) in an aggregate principal amount of $347.4 million and (ii) increase the aggregate principal amount of Tranche E Term Loans under the Term Loan Facility to $447.4 million. Proceeds of the Tranche E Term Loans were used to, among other things, (i) repay in full the Tranche D Term Loans and (ii) repay approximately $96.8 million of borrowings outstanding under the ABL Facility.

The Tranche E Term Loans bear interest, at Landscape Holding’s option, at either (i) an adjusted LIBOR rate (as defined in the Term Loan Facility) plus an applicable margin equal to 2.75% or (ii) an alternative base rate plus an applicable margin equal to 1.75%. The other terms of the Tranche E Term Loans are generally the same as the terms applicable to the previously existing term loans under the Term Loan Facility, provided that certain terms of the Term Loan Facility were modified by the Fourth Amendment. The interest rate on the outstanding balance was 4.46% as of December 29, 2019.

The Term Loan Facility contains customary representations and warranties and customary affirmative and negative covenants, which fully restrict retained earnings of the Borrowers. The negative covenants are limited to the following: limitations on indebtedness, restricted payments, restrictive agreements, sales of assets and subsidiary stock, transactions with affiliates, liens, fundamental changes, amendments, lines of business and limitations on certain actions of the parent borrower. The negative covenants are subject to the customary exceptions.

The Term Loan Facility is payable in consecutive quarterly installments equal to 0.25% of the aggregate initial principal amount of the Tranche E Term Loans until the maturity date. In addition, the Term Loan Facility is subject to annual mandatory prepayments in an amount equal to 50% of excess cash flow, as defined in the Term Loan Credit Agreement for the applicable fiscal year if 50% of excess cash flow exceeds $10.0 million and the secured leverage ratio is greater than 3.00 to 1.00. As of December 29, 2019, the Company is in compliance with all of the Term Loan Facility covenants.

During the years ended December 29, 2019, December 30, 2018 and December 31, 2017, the Company incurred total interest expenses of $33.4 million, $32.1 million, and $25.2 million, respectively, of which $30.1 million, $27.1 million, and $21.8 million, respectively, related to interest on the ABL Facility and the Term Loan Facility. The debt issuance costs and discounts are amortized as interest expense over the life of the debt. As a result of the refinancing and amendments of the Term Loan Facility and ABL Facility, unamortized debt

issuance costs and discounts in the amount of $0.4 million, $0.7 million, and $0.1 million, were written off to expense, and new discounts and debt issuance costs of $0.9 million, $2.4 million, and $2.2 million, were capitalized during the years ended December 29, 2019, December 30, 2018 and December 31, 2017, respectively. Amortization expense related to debt issuance costs and discounts was $2.0 million, $3.1 million, and $3.0 million for the years ended December 29, 2019, December 30, 2018 and December 31, 2017, respectively. The remaining $0.9 million, $1.2 million, and $0.3 million of interest is primarily related to finance leases for the years ended December 29, 2019, December 30, 2018 and December 31, 2017, respectively.

The Company is subject to interest rate risk with regard to existing and future issuances of debt. The Company utilizes interest rate swap contracts to reduce its exposure to fluctuations in variable interest rates for future interest payments on existing debt. The Company is party to various forward-starting interest rate swap contracts to convert the variable interest rate to a fixed interest rate on portions of the borrowings under the Term Loan Facility. The following table provides additional details related to the swap contracts:

Derivatives designated as hedging instruments

Inception Date

Effective Date

Maturity Date

Notional Amount
(in millions)

Fixed Interest Rate

Type of Hedge

Forward-starting interest rate swap 1

June 30, 2017

March 11, 2019

June 11, 2021

58.0

2.1345

Cash flow

Forward-starting interest rate swap 2

June 30, 2017

March 11, 2019

June 11, 2021

116.0

2.1510

Cash flow

Forward-starting interest rate swap 3

December 17, 2018

July 14, 2020

January 14, 2024

34.0

2.9345

Cash flow

Forward-starting interest rate swap 4

December 24, 2018

January 14, 2019

January 14, 2023

50.0

2.7471

Cash flow

Forward-starting interest rate swap 5

December 26, 2018

January 14, 2019

January 14, 2023

90.0

2.7250

Cash flow

Forward-starting interest rate swap 6

May 30, 2019

July 15, 2019

January 14, 2023

70.0

2.1560

Cash flow

The Company recognizes the unrealized gains or unrealized losses as either assets or liabilities at fair value on its Consolidated Balance Sheets. The forward-starting interest rate swap contracts are subject to master netting arrangements. The Company has elected not to offset the fair value of assets with the fair value of liabilities related to these contracts. The following table summarizes the fair value of the derivative instruments and the respective lines in which they were recorded in the Consolidated Balance Sheets as of December 29, 2019 and December 30, 2018 (in millions):



	Derivative Assets						Derivative Liabilities
	December 29, 2019			December 30, 2018			December 29, 2019			December 30, 2018
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Interest rate contracts	Prepaid expenses and other current assets	$	—	Prepaid expenses and other current assets	$	0.7	Accrued liabilities	$	2.1	Accrued liabilities	$	—
	Other assets	—		Other assets	1.1		Other long-term liabilities	5.3		Other long-term liabilities	0.7
Total derivatives		$	—		$	1.8		$	7.4		$	0.7

For determining the fair value of the interest rate swap contracts, the Company uses significant observable market data or assumptions (Level 2 inputs) that market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk. The fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves.

The Company recognizes any differences between the variable interest rate payments and the fixed interest rate settlements with the swap counterparties as an adjustment to interest expense over the life of the swaps. The Company has designated these swaps as cash flow hedges and records the estimated fair value of the swaps to Accumulated other comprehensive income (loss) (“AOCI”) on its Consolidated Balance Sheets. As of December 29, 2019, the fair value of the interest rate swaps in the amount of $(5.5) million, net of taxes, was recorded in Accumulated other comprehensive loss. To the extent the interest rate swaps are determined to be ineffective, the Company recognizes the changes in the estimated fair value of the swaps in earnings. For the year ended December 29, 2019, there was no ineffectiveness recognized in earnings. The after-tax amount of unrealized loss on derivative instruments included in Accumulated other comprehensive loss related to the interest rate swap contracts maturing and expected to be reclassified to earnings during the next twelve months was $1.5 million as of December 29, 2019. The ultimate amount recognized will vary based on fluctuations of interest rates through the maturity dates.



	December 29, 2019							December 30, 2018
	Gain (Loss) Recorded in OCI			Classification of Gain (Loss) Reclassified from AOCI into Income	Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from AOCI into Income	Gain (Loss) Reclassified from AOCI into Income
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts	$	(8.5	)	Interest and other non-operating expenses, net	$	(0.1	)	$	0.5	Interest and other non-operating expenses, net	$	—