UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 10-Q

__________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30,~~December 31, 2019

☐ 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: 1-35305

Post Holdings, Inc.

(Exact name of registrant as specified in its charter)



Missouri		45-3355106
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2503 S. Hanley Road

St. Louis, Missouri 63144

(Address of principal executive offices) (Zip Code)

(314) 644-7600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, ~~$.01~~$0.01 par value	POST	New York Stock Exchange

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, a 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). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common ~~stock,~~Stock, $0.01 ~~Par Value~~par value – ~~73,066,741~~69,906,711 shares as of ~~July 31, 2019~~February 3, 2020

Table of Contents

POST HOLDINGS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS



		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited).	1

	Condensed Consolidated Statements of Operations (Unaudited).	1

	Condensed Consolidated Statements of Comprehensive ~~(Loss)~~ Income (Unaudited).	2

	Condensed Consolidated Balance Sheets (Unaudited).	3

	Condensed Consolidated Statements of Cash Flows (Unaudited).	4

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited).	5

	Notes to Condensed Consolidated Financial Statements (Unaudited).	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3127

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	4336

Item 4.	Controls and Procedures.	4437

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings.	4437

Item 1A.	Risk Factors.	4538

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	4638

Item 6.	Exhibits.	4740

	~~SIGNATURES~~SIGNATURES..	4842

Table of Contents

PART I. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED).

POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except per share data)


	Three Months Ended June 30,						Nine Months Ended June 30,						Three Months Ended December 31,
	2019			2018			2019			2018			2019			2018
Net Sales	$	1,439.2		$	1,608.1		$	4,238.3		$	4,627.3		$	1,456.8		$	1,411.3
Cost of goods sold	977.1			1,149.9			2,898.4			3,248.2			985.3			984.8
Gross Profit	462.1			458.2			1,339.9			1,379.1			471.5			426.5
Selling, general and administrative expenses	223.2			225.9			666.1			736.5			235.3			217.1
Amortization of intangible assets	40.3			47.2			121.0			135.1			40.1			40.3
Gain on sale of business	—			—			(127.3		)	—			—			(124.7		)
Other operating expenses, net	0.4			0.8			1.7			1.5
Other operating expenses (income), net													0.1			(0.1		)
Operating Profit	198.2			184.3			678.4			506.0			196.0			293.9
Interest expense, net	85.6			98.9			230.5			288.2			102.9			59.4
(Gain) loss on extinguishment of debt, net	—			(6.1		)	6.1			31.5
Expense (income) on swaps, net	86.2			(17.2		)	200.9			(70.4		)
Loss on extinguishment of debt, net													12.9			6.1
(Income) expense on swaps, net													(61.4		)	51.7
Other income, net	(3.7		)	(3.5		)	(11.1		)	(10.6		)	(3.2		)	(3.7		)
Earnings before Income Taxes and Equity Method Loss	30.1			112.2			252.0			267.3			144.8			180.4
Income tax expense (benefit)	7.4			15.4			39.6			(216.5		)
Income tax expense													30.4			43.8
Equity method loss, net of tax	6.2			—			25.7			—			7.3			10.7
Net Earnings Including Noncontrolling Interest	16.5			96.8			186.7			483.8
Less: Net earnings attributable to noncontrolling interest	0.3			0.3			0.9			0.9
Net Earnings Including Noncontrolling Interests													107.1			125.9
Less: Net earnings attributable to noncontrolling interests													7.9			0.3
Net Earnings	16.2			96.5			185.8			482.9			99.2			125.6
Less: Preferred stock dividends	—			2.0			3.0			8.0			—			2.0
Net Earnings Available to Common Shareholders	$	16.2		$	94.5		$	182.8		$	474.9		$	99.2		$	123.6

Earnings per Common Share:
Basic	$	0.22		$	1.41		$	2.61		$	7.13		$	1.40		$	1.85
Diluted	$	0.21		$	1.29		$	2.47		$	6.34		$	1.38		$	1.67

Weighted-Average Common Shares Outstanding:
Basic	73.3			67.0			70.1			66.6			70.7			66.7
Diluted	75.4			75.0			75.3			76.2			72.1			75.1

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME (Unaudited)

(in millions)


	Three Months Ended June 30,						Nine Months Ended June 30,						Three Months Ended December 31,
	2019			2018			2019			2018			2019			2018
Net Earnings Including Noncontrolling Interest	$	16.5		$	96.8		$	186.7		$	483.8
Net Earnings Including Noncontrolling Interests													$	107.1		$	125.9
Pension and postretirement benefits adjustments:
Reclassifications to net earnings	(1.2		)	(0.8		)	(3.5		)	(2.4		)	(0.5		)	(1.2		)
Hedging adjustments:
Unrealized net gain on derivatives	13.6			53.0			26.1			56.9
Unrealized net (loss) gain on derivatives													(33.3		)	24.4
Reclassifications to net earnings	(0.4		)	(1.1		)	(30.9		)	(2.6		)	7.2			(30.1		)
Other reclassifications	—			—			—			(0.5		)
Foreign currency translation adjustments:
Unrealized foreign currency translation adjustments	(41.0		)	(111.3		)	(43.5		)	(27.4		)	115.1			(40.2		)
Reclassifications to net earnings (see Note 4)													—			42.1
Tax benefit (expense) on other comprehensive income:
Pension and postretirement benefits adjustments:
Reclassifications to net earnings	—			—			42.1			—			0.1			0.3
Tax benefit (expense) on other comprehensive income:
Pension and postretirement benefits	0.3			0.3			0.8			1.7
Hedging	(2.7		)	(13.1		)	9.9			(15.9		)
Total Other Comprehensive (Loss) Income	(31.4		)	(73.0		)	1.0			9.8
Less: Comprehensive income attributable to noncontrolling interest	0.2			0.3			1.1			0.9
Total Comprehensive (Loss) Income	$	(15.1	)	$	23.5		$	186.6		$	492.7
Hedging adjustments:
Unrealized gain/loss on derivatives													8.5			(6.0		)
Reclassifications to net earnings													(1.6		)	7.4
Total Other Comprehensive Income (Loss) Including Noncontrolling Interests													95.5			(3.3		)
Less: Comprehensive income attributable to noncontrolling interests													8.4			0.3
Total Comprehensive Income													$	194.2		$	122.3

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

POST HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)


	June 30, 2019			September 30, 2018			December 31, 2019			September 30, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	364.7		$	989.7		$	812.6		$	1,050.7
Restricted cash	1.8			4.8			2.5			3.8
Receivables, net	473.4			462.3			451.8			445.1
Inventories	560.6			484.2			588.2			579.8
Current assets held for sale	—			195.0
Prepaid expenses and other current assets	42.5			64.3			66.1			46.9
Total Current Assets	1,443.0			2,200.3			1,921.2			2,126.3
Property, net	1,722.0			1,709.7			1,764.2			1,736.0
Goodwill	4,476.0			4,499.6			4,460.7			4,399.8
Other intangible assets, net	3,406.9			3,539.3			3,328.3			3,338.5
Equity method investments	157.1			5.2			138.5			145.5
Other assets held for sale	—			856.6
Other assets	192.9			246.8			330.6			205.5
Total Assets	$	11,397.9		$	13,057.5		$	11,943.5		$	11,951.6

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt	$	10.1		$	22.1		$	156.5		$	13.5
Accounts payable	325.4			365.1			332.1			395.6
Current liabilities held for sale	—			65.6
Other current liabilities	380.2			339.3			394.5			393.8
Total Current Liabilities	715.7			792.1			883.1			802.9
Long-term debt	6,324.5			7,232.1			6,382.6			7,066.0
Deferred income taxes	723.9			778.4			842.4			688.5
Other liabilities held for sale	—			695.1
Other liabilities	416.5			499.3			523.8			456.9
Total Liabilities	8,180.6			9,997.0			8,631.9			9,014.3

Shareholders’ Equity
Preferred stock	—			—			—			—
Common stock	0.8			0.8			0.8			0.8
Additional paid-in capital	3,653.4			3,590.9			4,195.6			3,734.8
Retained earnings	268.9			88.0			307.0			207.8
Accumulated other comprehensive loss	(38.4		)	(39.4		)	(1.8		)	(96.8		)
Treasury stock, at cost	(678.6		)	(589.9		)	(1,143.8		)	(920.7		)
Total Shareholders’ Equity Excluding Noncontrolling Interest	3,206.1			3,050.4
Noncontrolling interest	11.2			10.1
Total Shareholders’ Equity Excluding Noncontrolling Interests							3,357.8			2,925.9
Noncontrolling interests							(46.2		)	11.4
Total Shareholders’ Equity	3,217.3			3,060.5			3,311.6			2,937.3
Total Liabilities and Shareholders’ Equity	$	11,397.9		$	13,057.5		$	11,943.5		$	11,951.6

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in millions)


	Nine Months Ended June 30,						Three Months Ended December 31,
	2019			2018			2019			2018
Cash Flows from Operating Activities
Net Earnings Including Noncontrolling Interest	$	186.7		$	483.8
Adjustments to reconcile net earnings including noncontrolling interest to net cash flow provided by operating activities:
Net Earnings Including Noncontrolling Interests							$	107.1		$	125.9
Adjustments to reconcile net earnings including noncontrolling interests to net cash flow provided by operating activities:
Depreciation and amortization	288.1			300.8			90.3			93.6
Unrealized loss (gain) on interest rate swaps	200.5			(71.4		)
Unrealized (gain) loss on interest rate swaps							(73.3		)	51.5
Gain on sale of business	(127.3		)	—			—			(124.7		)
Loss on extinguishment of debt, net	6.1			31.5			12.9			6.1
Non-cash stock-based compensation expense	28.4			23.2			11.4			8.7
Equity method loss, net of tax	25.7			—			7.3			10.7
Deferred income taxes	(39.7		)	(241.1		)	19.0			8.1
Other, net	3.4			10.5			3.2			0.6
Other changes in operating assets and liabilities, net of business acquisitions:
Other changes in operating assets and liabilities:
(Increase) decrease in receivables, net	(8.1		)	5.7			(6.7		)	30.8
(Increase) decrease in inventories	(77.4		)	20.5
Decrease in prepaid expenses and other current assets	14.3			0.2
Decrease (increase) in other assets	1.4			(22.4		)
Increase in inventories							(6.1		)	(16.1		)
Increase in prepaid expenses and other current assets							(20.0		)	(0.5		)
Decrease in other assets							2.6			0.9
(Decrease) increase in accounts payable and other current liabilities	(1.1		)	60.2			(41.3		)	46.7
Increase (decrease) in non-current liabilities	3.8			(10.4		)	2.0			(3.6		)
Net Cash Provided by Operating Activities	504.8			591.1			108.4			238.7
Cash Flows from Investing Activities
Business acquisitions, net of cash acquired	—			(1,454.0		)
Additions to property	(202.7		)	(142.1		)	(77.3		)	(78.8		)
Proceeds from sale of property and assets held for sale	2.1			0.3			0.1			2.0
Proceeds from sale of business	266.8			—			—			250.0
Cross-currency swap cash settlements	30.5			—			1.4			28.3
Other, net	—			(1.2		)
Net Cash Provided by (Used in) Investing Activities	96.7			(1,597.0		)
Net Cash (Used in) Provided by Investing Activities							(75.8		)	201.5
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt	—			1,000.0			2,031.0			—
Repayments of long-term debt	(919.1		)	(900.5		)	(2,574.5		)	(919.0		)
Payments to appraisal rights holders	(253.6		)	—			(3.8		)	(253.6		)
Purchases of treasury stock	(84.7		)	(218.7		)	(231.8		)	(25.3		)
Payments of preferred stock dividends	(4.0		)	(8.8		)	—			(2.0		)
Payments of debt issuance and modification costs	(8.7		)	(10.5		)
Proceeds from initial public offering							524.4			—
Payments of debt issuance costs and deferred financing fees							(28.2		)	(0.3		)
Refund of debt issuance costs	7.8			—			15.3			7.8
Payment of debt extinguishment costs	—			(33.7		)
Proceeds from exercises of stock awards	41.5			4.0			2.8			—
Other, net	(7.5		)	(5.7		)	(10.1		)	(7.2		)
Net Cash Used in Financing Activities	(1,228.3		)	(173.9		)	(274.9		)	(1,199.6		)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(1.2		)	(1.7		)	2.9			(1.6		)
Net Decrease in Cash, Cash Equivalents and Restricted Cash	(628.0		)	(1,181.5		)	(239.4		)	(761.0		)
Cash, Cash Equivalents and Restricted Cash, Beginning of Year	994.5			1,530.1			1,054.5			994.5
Cash, Cash Equivalents and Restricted Cash, End of Period	$	366.5		$	348.6		$	815.1		$	233.5

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(in millions)


	As Of and For The Three Months Ended June 30,						As Of and For The Nine Months Ended June 30,						As Of and For The Three Months Ended December 31,
	2019			2018			2019			2018			2019			2018
Preferred Stock
Beginning and end of period	$	—		$	—		$	—		$	—		$	—		$	—
Common Stock
Beginning of period	0.8			0.8			0.8			0.7
Preferred stock conversion	—			—			—			0.1
End of period	0.8			0.8			0.8			0.8
Beginning and end of period													0.8			0.8
Additional Paid-in Capital
Beginning of period	3,643.1			3,574.0			3,590.9			3,566.5			3,734.8			3,590.9
Preferred stock dividends declared	—			—			—			(6.8		)
Activity under stock and deferred compensation plans	—			—			34.2			(1.5		)	(7.3		)	(7.2		)
Stock-based compensation expense	10.3			7.4			28.4			23.2
Preferred stock conversion	—			—			(0.1		)	—
Non-cash stock-based compensation expense													11.1			8.7
Initial public offering, net of tax													457.0			—
End of period	3,653.4			3,581.4			3,653.4			3,581.4			4,195.6			3,592.4
Retained Earnings (Accumulated Deficit)
Retained Earnings
Beginning of period	252.7			11.8			88.0			(376.0		)	207.8			88.0
Net earnings	16.2			96.5			185.8			482.9			99.2			125.6
Adoption of Accounting Standards Updates	—			—			(0.9		)	1.4
Adoption of accounting standards update													—			(0.9		)
Preferred stock dividends declared	—			(2.0		)	(4.0		)	(2.0		)	—			(2.0		)
End of period	268.9			106.3			268.9			106.3			307.0			210.7
Accumulated Other Comprehensive Loss
Retirement Benefit Adjustments, net of tax
Beginning of period	36.1			34.9			37.9			35.1			26.6			37.9
Net change in retirement benefits, net of tax	(0.9		)	(0.5		)	(2.7		)	(0.7		)	(0.4		)	(0.9		)
End of period	35.2			34.4			35.2			34.4			26.2			37.0
Hedging Adjustments, net of tax
Beginning of period	32.0			(12.0		)	37.4			(11.1		)	44.5			37.4
Net change in hedges, net of tax	10.5			38.8			5.1			37.9			(19.4		)	(4.3		)
End of period	42.5			26.8			42.5			26.8			25.1			33.1
Foreign Currency Translation Adjustments
Beginning of period	(75.1		)	19.9			(114.7		)	(64.0		)	(167.9		)	(114.7		)
Foreign currency translation adjustments	(41.0		)	(111.3		)	(1.4		)	(27.4		)	114.8			1.9
End of period	(116.1		)	(91.4		)	(116.1		)	(91.4		)	(53.1		)	(112.8		)
Treasury Stock
Beginning of period	(655.7		)	(510.0		)	(589.9		)	(371.2		)	(920.7		)	(589.9		)
Purchases of treasury stock	(22.9		)	(79.9		)	(88.7		)	(218.7		)	(223.1		)	(25.3		)
End of period	(678.6		)	(589.9		)	(678.6		)	(589.9		)	(1,143.8		)	(615.2		)
Total Shareholders’ Equity Excluding Noncontrolling Interest	3,206.1			3,068.4			3,206.1			3,068.4
Noncontrolling Interest
Total Shareholders’ Equity Excluding Noncontrolling Interests													3,357.8			3,146.0
Noncontrolling Interests
Beginning of period	11.0			10.3			10.1			9.7			11.4			10.1
Net earnings attributable to noncontrolling interest	0.3			0.3			0.9			0.9
Initial public offering													(66.3		)	—
Net earnings attributable to noncontrolling interests													7.9			0.3
Non-cash stock-based compensation expense													0.3			—
Net change in hedges, net of tax													0.2			—
Foreign currency translation adjustments	(0.1		)	—			0.2			—			0.3			—
End of period	11.2			10.6			11.2			10.6			(46.2		)	10.4
Total Shareholders’ Equity	$	3,217.3		$	3,079.0		$	3,217.3		$	3,079.0		$	3,311.6		$	3,156.4

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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POST HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in millions, except per share information and where indicated otherwise)

NOTE 1 — BASIS OF PRESENTATION

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), and on a basis substantially consistent with the audited consolidated financial statements of Post Holdings, Inc. (herein referred to as “Post,” “the Company,” “us,” “our” or ~~“we”)~~“we,” and unless otherwise stated or context otherwise indicates, all such references herein mean Post Holdings, Inc. and its consolidated subsidiaries) as of and for the fiscal year ended September 30, ~~2018.~~2019. These unaudited condensed consolidated financial statements should be read in conjunction with such audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2018,~~2019, filed with the SEC on November ~~16, 2018.~~22, 2019.

These unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair statement of the Company’s results of operations, comprehensive income, financial condition, cash flows and shareholders’ equity for the interim periods presented. Interim results are not necessarily indicative of the results for any other interim period or for the entire fiscal year. ~~Certain prior year amounts have been reclassified~~

On October 21, 2019, BellRing Brands, Inc. (“BellRing”), a subsidiary of the Company, closed its initial public offering (the “IPO”) of 39.4 shares of its Class A common stock, $0.01 par value per share (the “Class A Common Stock”), which number of shares included the underwriters’ exercise in full of their option to ~~conform~~purchase up to an additional 5.1 shares of Class A Common Stock. The IPO was completed at an offering price of $14.00 per share and BellRing received net proceeds from the IPO of $524.4, after deducting underwriting discounts and commissions. As a result of the IPO and certain other transactions completed in connection with the ~~fiscal 2019 presentation. These reclassifications had~~IPO (the “formation transactions”), BellRing is a publicly-traded company whose Class A Common Stock is traded on the New York Stock Exchange under the ticker symbol “BRBR”. BellRing is a holding company of BellRing Brands, LLC, a Delaware limited liability company (“BellRing LLC”), owning 28.8% of its non-voting membership units (the “BellRing LLC units”). Post owns 71.2% of the BellRing LLC units and one share of BellRing’s Class B common stock, $0.01 par value per share (the “Class B Common Stock” and, collectively with the Class A Common Stock, the “BellRing Common Stock”). The Class B Common Stock has voting rights but no ~~impact on net earnings~~rights to dividends or ~~shareholders’ equity~~other economic rights. For so long as ~~previously reported.~~

~~On October 1, 2018,~~ Post or its affiliates (other than BellRing and ~~affiliates~~its subsidiaries) directly own more than 50% of ~~Thomas H. Lee Partners, L.P. (collectively, “THL”) separately capitalized 8th Avenue Food & Provisions, Inc. (“8th Avenue,” and such transactions,~~ the ~~“8th Avenue Transactions”), and 8th Avenue became~~BellRing LLC units, the Class B Common Stock represents 67% of the combined voting power of the BellRing Common Stock. BellRing LLC is the holding company for Post’s historical ~~private brands business. Post received gross proceeds~~active nutrition business, reported herein as the BellRing Brands segment and reported historically as the Active Nutrition segment. In connection with the IPO, the Company incurred transaction-related expenses of ~~$875.0,~~$2.1 and $1.2 during the three months ended December 31, 2019 and 2018, respectively. These expenses generally included third party costs for due diligence, advisory services and government filing fees and were recorded as ~~well~~“Selling, general and administrative expenses” in the Condensed Consolidated Statements of Operations.

Effective October 21, 2019, the financial results of BellRing and its subsidiaries were consolidated within Post’s financial results and 28.8% of the consolidated net income and net assets of BellRing and its subsidiaries, representing the percentage of economic interest in BellRing LLC held by BellRing (and therefore indirectly held by the public stockholders of BellRing through their ownership of the Class A Common Stock), is allocated to noncontrolling interest (“NCI”) (see Note 5). The term “BellRing” as ~~$16.8~~ used herein generally refers to BellRing Brands, Inc.; however, in discussions related to ~~final working capital adjustments,~~ ~~from~~debt facilities, the ~~8th Avenue Transactions, and the Company retained shares of common stock equal~~term “BellRing” refers to 60.5% of the common equity in 8th Avenue. Effective October 1, 2018, 8th Avenue was no longer consolidated in the Company's financial statements and the 60.5% common equity retained interest in 8th Avenue is accounted for using the equity method. 8th Avenue is reported historically herein as Post’s PrivateBellRing Brands, ~~segment. For additional information, see Notes 4, 6, 9 and 17.~~LLC.

NOTE 2 — RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS

The Company has considered all new accounting pronouncements and has concluded there are no new pronouncements (other than the ones described below) that had or will have ana material impact on the Company’s results of operations, comprehensive income, financial condition, cash flows, or shareholders’ equity or disclosures based on current information.

~~Recently Issued~~

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” This ASU requires a company to recognize right-of-use (“ROU”) assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for lessees, lessors and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements.” This ASU provides an additional transition method by allowing entities to initially apply the new lease standard at the date of adoption with a cumulative effect adjustment to the opening ~~balances~~balance of retained earnings in the period of adoption. This ASU also gives lessors the option of electing, as a practical expedient by class of underlying asset, not to separate the lease and non-lease components of a contract when those lease contracts meet certain criteria. These ASUs are effective for annual periods beginning after December 15, 2018 and interim periods therein (i.e., Post’s financial statements for the year ending September 30, 2020), with early adoption permitted. The Company will adopt these ASUs on October 1, 2019 and expects to use the modified retrospective method of adoption. The Company has selected a software vendor and is in the process of assessing its lease agreements to identify those that fall within the scope of this guidance. These ASUs will result in a material increase in both assets and liabilities; however, the Company is unable to quantify the impact at this time. In addition, the Company expects to provide expanded disclosures upon adoption to present additional information related to its leasing arrangements.

~~Recently Adopted~~

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” This ASU largely aligns the guidance for recognizing implementation costs incurred in a cloud computing arrangement that is a service contract with that for recognizing implementation costs incurred to develop or obtain internal-use software, including hosting arrangements that include an internal-use software license. The Company adopted this ASU on October 1, 2018 on a prospective basis, as permitted by the ASU. The adoption of this ASU did not have a material impact on the Company’s financial statements.

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In June 2018, the FASB issued ASU 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” This ASU largely aligns the accounting for share-based payment awards issued to employees and nonemployees, whereby the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectivelycomponents of a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services, and the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards.contract when those lease contracts meet certain criteria. The Company adopted ~~this ASU~~these ASUs on October 1, 2018 on a prospective basis, as permitted by the ASU. In accordance with this ASU, historical share-based payment awards that were granted to employees of 8th Avenue are accounted for as nonemployee compensation. The adoption of this ASU did not have an impact on the Company’s financial statements.

In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU requires an entity to report the service cost component of periodic net benefit cost as an operating expense in the same line item or items as other compensation costs arising from services rendered by employees during the period. Other components of net benefit cost are to be presented outside of income from operations in the statement of operations separately from the service cost component. This ASU also allows only the service cost component to be eligible for capitalization when applicable. The Company adopted this ASU on October 1, 2018 and used the retrospective method of adoption,2019, as required by the ~~ASU. The~~ASUs, and utilized the cumulative effect adjustment approach. At adoption, the Company recognized ROU assets and lease liabilities of ~~this ASU resulted in an increase in “Cost of goods sold”~~$158.1 and ~~“Selling, general and administrative expenses” of $3.2 and $0.3,~~$168.2, respectively, and a corresponding increase in “Other income, net” of $3.5, for the three months ended June 30, 2018, and an increase in “Cost of goods sold” and “Selling, general and administrative expenses” of $9.7 and $0.9, respectively, and a corresponding increase in “Other income, net” of $10.6, for the nine months ended June 30, 2018, to reflect the exclusion of all components of benefit cost, with the exception of service cost, from operating profit. For additional disclosures about pension and other postretirement benefits, refer to Note 18.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” This ASU requires that a statement of cash flows explain the change in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents, and therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of year cash balance to the end of year cash balance as shown on the ~~statement of cash flows. The Company adopted this ASU on~~balance sheet at October 1, ~~2018 and used the retrospective method of adoption, as required by the ASU.~~2019. The ~~adoption of this ASU resulted in a decrease in net cash used in investing activities of $1.8 for the nine months ended June 30, 2018.~~

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which superseded all previously existing revenue recognition guidance under GAAP. This ASU’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU also calls for additional disclosures around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this ASU on October 1, 2018, as required by the ASU, and used the modified retrospective transition method of adoption. The adoption of this ASUnew standard did not ~~have a material~~materially impact ~~on the Company’s financial statements as the impact of this ASU was limited to recognition timing and classification changes of immaterial amounts within~~ the statements of operations ~~and on~~or cash flows. In addition, the ~~balance sheet.~~Company provides expanded disclosures related to its leasing arrangements in accordance with theses ASUs. For additional information, refer to Note 3.14.

NOTE 3 — ~~REVENUE FROM CONTRACTS WITH CUSTOMERS~~RESTRUCTURING

In ~~conjunction with~~February 2018, the ~~adoption~~Company announced its plan to close its ready-to-eat (“RTE”) cereal manufacturing facility in Clinton, Massachusetts, which manufactured certain Weetabix products distributed in North America. The transfer of ~~ASU 2014-09~~production capabilities to other Post Consumer Brands facilities and the closure of the facility was completed at September 30, 2019. Final cash payments for employee-related costs were made in the first quarter of fiscal 2020. No additional restructuring costs have been or are expected to be incurred in fiscal 2020. For additional information on assets held for sale related to the closure, see Note 4.

Restructuring charges and the related liabilities are shown in the following table. Employee-related costs were included in “Selling, general and administrative expenses” and accelerated depreciation expense was included in “Cost of goods sold” in the Condensed Consolidated Statement of Operations for the three months ended December 31, 2018. These expenses are not included in the measure of segment performance (see Note 2), the Company updated its policy for recognizing revenue. The Company utilized a comprehensive approach to assess the impact of this ASU by reviewing its customer contract portfolio and existing accounting policies and procedures in order to identify potential differences that would result from applying the new requirements of Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.” A summary of the updated policy is included below.18).

~~Revenue Recognition Policy~~



	Employee-Related Costs			Accelerated Depreciation			Total
Balance, September 30, 2018	$	2.7		$	—		$	2.7
Charge to expense	0.7			1.8			2.5
Non-cash charges	—			(1.8		)	(1.8		)
Balance, December 31, 2018	$	3.4		$	—		$	3.4

Balance, September 30, 2019	$	0.1		$	—		$	0.1
Cash payments	(0.1		)	—			(0.1		)
Balance, December 31, 2019	$	—		$	—		$	—

Total expected restructuring charge	$	4.9		$	9.9		$	14.8
Cumulative restructuring charges incurred to date	4.9			9.9			14.8
Remaining expected restructuring charge	$	—		$	—		$	—

The Company recognizes revenue when performance obligations have been satisfied by transferring control of the goods to customers. Control is generally transferred upon delivery of the goods to the customer. At the time of delivery, the customer is invoiced using previously agreed-upon credit terms. Shipping and/or handling costs that occur before the customer obtains control of the goods are deemed fulfillment activities and are accounted for as fulfillment costs. The Company’s contracts with customers generally contain one performance obligation.

Many of the Company’s contracts with customers include some form of variable consideration. The most common forms of variable consideration are trade promotions, rebates and discounts. Variable consideration is treated as a reduction of revenue at the time product revenue is recognized. Depending on the nature of the variable consideration, the Company uses either the “expected value” or the “most likely amount” method to determine variable consideration. The Company does not believe that there will be significant changes to its estimates of variable consideration when any uncertainties are resolved with customers.

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The Company reviews and updates estimates of variable consideration quarterly. Uncertainties related to the estimates of variable consideration are resolved in a short time frame and do not require any additional constraint on variable consideration.

The Company’s products are sold with no right of return, except in the case of goods which do not meet product specifications or are damaged. No services beyond this assurance-type warranty are provided to customers. Customer remedies include either a cash refund or an exchange of the product. As a result, the right of return and related refund liability is estimated and recorded as a reduction of revenue based on historical sales return experience.

~~Impacts of Adoption~~

The Company used the modified retrospective transition method of adoption and, accordingly, recorded an adjustment to retained earnings to reflect the application of its updated revenue recognition policy, which resulted in changes to the timing of when variable consideration payments are recognized. The cumulative adjustment resulted in a reduction of retained earnings and deferred income taxes of $0.9 and $0.3, respectively, and a corresponding increase in other current liabilities of $1.2 at October 1, 2018.

~~The Company elected the following practical expedients in accordance with ASC Topic 606:~~


•	~~Significant financing component~~ — The Company elected not to adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less.


•	~~Shipping and handling costs~~ — The Company elected to account for shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities (i.e., an expense), rather than as promised services.


•	~~Measurement of transaction price~~ — The Company elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer for sales taxes.

The following tables summarize the impact of the Company’s adoption of ASC Topic 606 on a modified retrospective basis in the Company’s Condensed Consolidated Statements of Operations. As a result of the adoption, certain payments to customers totaling ~~$6.9and$19.2~~ in the three and nine months ended June 30, 2019, respectively, previously classified in “Selling, general, and administrative expenses” were classified as “Net Sales” in the Condensed Consolidated Statements of Operations. These payments to customers relate to trade advertisements that support the Company’s sales to customers. In accordance with ASC Topic 606, these payments were determined not to be distinct within the customer contracts and, as such, require classification within net sales. Additionally, in the three and nine months ended June 30, 2019, the Company has recognized revenue of ~~$0.4and$1.1~~, respectively, that was deferred upon the adoption of ASC Topic 606 in accordance with the satisfaction of the related performance obligation. The recognition of unearned revenue is included in “Net Sales” in the Company’s Condensed Consolidated Statements of Operations. No material changes to the balance sheet were required by the adoption of ASC Topic 606.

Three Months Ended June 30, 2019
As Reported Under Topic 606 As Reported Under Prior Guidance Impact of Adoption
Net Sales $ 1,439.2
$ 1,445.7
$ (6.5 )
Cost of goods sold 977.1
977.1
—
Gross Profit 462.1
468.6
(6.5 )
Selling, general and administrative expenses 223.2
230.1
(6.9 )
Amortization of intangible assets 40.3
40.3
—
Other operating expenses, net 0.4
0.4
—
Operating Profit $ 198.2
$ 197.8
$ 0.4

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Nine Months Ended June 30, 2019
As Reported Under Topic 606 As Reported Under Prior Guidance Impact of Adoption
Net Sales $ 4,238.3
$ 4,256.4
$ (18.1 )
Cost of goods sold 2,898.4
2,898.4
—
Gross Profit 1,339.9
1,358.0
(18.1 )
Selling, general and administrative expenses 666.1
685.3
(19.2 )
Amortization of intangible assets 121.0
121.0
—
Gain on sale of business (127.3 ) (127.3 ) —
Other operating expenses, net 1.7
1.7
—
Operating Profit $ 678.4
$ 677.3
$ 1.1

~~Disaggregated Revenues~~

The following table presents net sales by product. The amounts for the three and nine months ended June 30, 2019 are presented under ASC Topic 606, “Revenue from Contracts with Customers,” and the amounts for the three and nine months ended June 30, 2018 are presented under ASC Topic 605, “Revenue Recognition.”

Three Months Ended
June 30, Nine Months Ended
June 30,
2019 2018 2019 2018
Cereal and granola $ 582.5
$ 597.0
$ 1,701.9
$ 1,747.8
Egg and egg products 399.1
391.4
1,174.9
1,152.7
Side dishes 124.3
114.8
393.4
282.9
Cheese and dairy 51.4
59.0
175.4
190.3
Sausage 32.9
31.3
113.2
60.0
Protein-based products and supplements 237.6
216.4
639.9
607.6
Nut butters and dried fruit and nut —
123.1
—
355.7
Pasta —
59.8
—
196.2
Other 12.0
17.3
41.1
38.5
Eliminations (0.6 ) (2.0 ) (1.5 ) (4.4 )
Net Sales $ 1,439.2
$ 1,608.1
$ 4,238.3
$ 4,627.3

NOTE 4 — ~~BUSINESS COMBINATIONS~~DIVESTITURES AND ~~DIVESTITURES~~AMOUNTS HELD FOR SALE

The Company accounts for business combinations using the acquisition method of accounting, whereby the results of operations are included in the financial statements from the date of acquisition. The purchase price is allocated to acquired assets and assumed liabilities based on their estimated fair values at the date of acquisition, and any excess is allocated to goodwill. Goodwill represents the value the Company expects to achieve through the implementation of operational synergies and the expansion of the business into new or growing segments of the industry. The Company includes results of operations for business divestitures from the date of acquisition through the date of sale.Divestiture

On October 1, 2018, ~~the Company completed the~~ 8th Avenue ~~Transactions in which Post and THL~~Food & Provisions, Inc. (“8th Avenue”) was separately capitalized ~~8th~~through a series of transactions (the “8th Avenue Transactions”), and 8th Avenue became the holding company for Post’s historical private brands business. Post received total gross proceeds of $875.0, ~~from the 8th Avenue Transactions,~~ as well as~~$16.8~~ $16.8 received in the second quarter of fiscal 2019 related to final working capital adjustments, ~~retaining shares of common stock equal to 60.5% of~~from the ~~common equity in~~ 8th ~~Avenue.~~Avenue Transactions. Post’s gross proceeds consisted of (i) $250.0 from ~~THL~~a third party and (ii) $625.0 from a committed senior increasing rate bridge loan (the ~~“Bridge~~“2018 Bridge Loan”), which was funded in fiscal 2018 prior to the closing of the 8th Avenue Transactions (see Note ~~17)~~15). THL received 2.5 shares of 8th Avenue preferred stock with an 11% cumulative, quarterly compounding dividend and a $100.00 per share liquidation value and shares of common stock equal to 39.5% of the common equity in 8th Avenue. During the ~~nine~~three months ended ~~June 30, 2019,~~December 31, 2018, the Company recorded a gain of ~~$127.3~~$124.7 (adjusted to $126.6 during the year ended September 30, 2019) related to the 8th Avenue Transactions, which was reported as “Gain on sale of business” in the Condensed Consolidated Statement of Operations. The gain included foreign exchange losses previously recorded in accumulated other comprehensive ~~income~~loss (“OCI”) of ~~$42.1. Effective October 1, 2018, 8th Avenue was no longer consolidated in the Company's financial statements and the 60.5% common equity~~

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~~retained interest in 8th Avenue is accounted for using the equity method. For additional information regarding the Company’s equity method investment in 8th Avenue, refer to Note 9.~~

$42.1. In ~~order to calculate the total recorded gain related to~~connection with the 8th Avenue Transactions, of ~~$127.3~~, management was required to estimate the fair value of the Company’s equity method investment in 8th Avenue. In making this estimate, management used an approach combining the estimated implied value from the 8th Avenue Transactions, an income approach and a market approach, in which the greatest value was placed on the implied value from the 8th Avenue Transactions. In order to calculate the fair value implied by the 8th Avenue Transactions, management was required to estimate the value of the 8th Avenue equity. In making this estimate, management used a lattice model, which required significant assumptions, including estimates for the term, credit spread, yield volatility and risk free rates associated with 8th Avenue’s preferred stock. The income approach was based on discounted future cash flows and required significant assumptions, including estimates regarding future revenue, profitability and capital requirements. The market approach was based on a market multiple (revenue and EBITDA, which stands for earnings before interest, income taxes, depreciation and amortization) and required an estimate of appropriate multiples based on the market data.

~~On January 12, 2018,~~ the Company ~~completed its acquisition~~incurred transaction-related expenses of ~~Bob Evans Farms, Inc. (“Bob Evans”), resulting in~~$9.1 during the Company owning all of the outstanding shares of Bob Evans common stock. At closing, the Company paid each holder of shares of Bob Evans common stock, other than holders who demanded appraisal of their shares under Delaware law and had not withdrawn their demands as of the closing date, $77.00 per share, resulting in a payment at closing of $1,381.2 (which, in addition to the amounts paid to Bob Evans stockholders, includes amounts paid to retire certain debt and other obligations of Bob Evans). Any shares of Bob Evans common stock subject to appraisal as of the closing date were canceled and no longer outstanding after closing. The closing payment did not include any amounts due to former holders of approximately 4.35 shares of Bob Evans common stock who demanded appraisal under Delaware law and had not withdrawn their demands as of the closing date. At September 30, 2018, former holders of 3.3 shares of Bob Evans common stock had not withdrawn their appraisal demands and had not been paid for their shares of Bob Evans common stock. Related to these shares, the Company accrued $267.0 at September 30, 2018, which was the number of shares of Bob Evans common stock for which former Bob Evans stockholders demanded appraisal and had not withdrawn their demands multiplied by the $77.00 per share merger consideration, plus accrued interest at the Federal Reserve Discount Rate plus a spread of 5.00%. In December 2018, the Company made payments of $257.6 to the former holders of Bob Evans common stock who had demanded appraisal and had not been paid for their shares. The payments constitute a settlement with one former stockholder as well as prepayments of the $77.00 per share merger consideration to the remaining former stockholders. At June 30, 2019, the Company had a remaining accrual of $14.0, which represents the accrued interest at the Federal Reserve Discount Rate plus a spread of 5.00% related to 2.5 shares for which the $77.00 per share merger consideration was paid. Additional payments related to these 2.5 shares could be made in the future. The liabilities were reported in “Other current liabilities” and “Other liabilities” on the Condensed Consolidated Balance Sheets at June 30, 2019 and September 30, 2018, respectively. For additional information regarding the proceedings brought by former holders of Bob Evans common stock who demanded appraisal of their shares under Delaware law, refer to Note 16.

Bob Evans is a producer of refrigerated potato and pasta side dishes, pork sausage and a variety of refrigerated and frozen convenience food items. The acquisition strengthened the Company’s position in the foodservice and refrigerated retail channels. Bob Evans is reported in two reportable segments. The results of Bob Evans’s foodservice operations are reported in the Foodservice segment and the results of Bob Evans’s retail operations are reported in the Refrigerated Retail segment (see Note 20). Based upon the purchase price allocation, the Company recorded $376.0 of customer relationships to be amortized over a weighted-average period of 18 years, $6.0 of definite-lived trademarks to be amortized over a weighted-average period of 10 years and $400.0 of indefinite-lived trademarks.

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The goodwill generated by the Company’s acquisition of Bob Evans is not deductible for U.S. federal income tax purposes; however, $13.8 of goodwill generated by business combinations completed by Bob Evans in periods prior to its acquisition was transferred to Post and is tax deductible.

The following table provides the final allocation of the purchase price related to the fiscal 2018 acquisition of Bob Evans based upon the fair value of assets and liabilities assumed, including the provisional amounts recognized related to the acquisition as of September 30, 2018, as well as measurement period adjustments made during fiscal 2019. The allocation of purchase price was finalized as ofthree months ended December 31, ~~2018, and no additional adjustments have been or will be made.~~

Acquisition Date Amounts Recognized as of September 30, 2018 (a) Adjustments During Fiscal 2019 Acquisition Date Amounts Recognized (as Adjusted)
Cash and cash equivalents $ 15.6
$ —
$ 15.6
Receivables 58.5
—
58.5
Inventories 27.1
—
27.1
Prepaid expenses and other current assets 34.3
—
34.3
Property 184.3
—
184.3
Goodwill 898.3
(0.7 ) 897.6
Other intangible assets 782.0
—
782.0
Other assets 0.4
—
0.4
Accounts payable (18.2 ) —
(18.2 )
Other current liabilities (58.5 ) —
(58.5 )
Deferred tax liability - long-term (194.9 ) 0.7
(194.2 )
Other liabilities (5.3 ) —
(5.3 )
Total acquisition cost (b)
$ 1,723.6
$ —
$ 1,723.6


~~(a)~~	~~As previously reported in Post’s Annual Report on Form 10-K for fiscal 2018 filed with the SEC on November 16,~~ 2018.


~~(b)~~	Total acquisition cost is comprised of $1,381.2 paid at closing and additional payments of $342.4, which includes payments to former holders of shares of Bob Evans common stock who exercised appraisal rights, payments in connection with Bob Evans deferred compensation plans and payments to compensate Bob Evans employees due to the cancellation of their outstanding employee stock awards.

~~Transaction-related Expenses~~

~~The Company incurs transaction-related expenses in connection with both completed and contemplated acquisitions, divestitures and mergers.~~ These expenses generally ~~include~~included third party costs for ~~due diligence,~~ advisory services and transaction success ~~fees. Transaction-related expenses of $3.8~~fees, and $18.3 were incurred during the three and nine months ended June 30, 2019, respectively, and $2.5 and $26.5 were incurred during the three and nine months ended June 30, 2018, respectively. These expenses were recorded as “Selling, general and administrative expenses” in the Condensed Consolidated ~~Statements~~Statement of Operations. ~~Transaction-related~~No such gain or loss or transaction-related expenses ~~included costs attributable to~~were recorded during the ~~8th Avenue Transactions of $9.9 for the nine~~three months ended ~~June 30, 2019, and $1.9 and $3.9 for the three and nine months ended June 30, 2018, respectively.~~

~~Pro Forma Information~~

The following unaudited pro forma information presents a summary of the results of operations of the Company combined with the results of Bob Evans for the periods presented as if the fiscal 2018 acquisition had occurred on October 1, 2016, along with certain pro forma adjustments. Additionally, the impact of the 8th Avenue Transactions is presented in this unaudited pro forma information as if the transactions had occurred on October 1, 2017. These pro forma adjustments give effect to the amortization of certain definite-lived intangible assets, adjusted depreciation based upon the fair value of assets acquired, interest expense related to the financing of the business combinations, inventory revaluation adjustments on acquired businesses, transaction and extinguished debt costs and related income taxes. Additionally, the gain of ~~$127.3~~ in the nine months ended June 30, 2019, related to the 8th Avenue Transactions was adjusted out of the current year results. The following unaudited pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations as they would have been had the transactions occurred on the assumed dates, nor is it necessarily an indication of future operating results.

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Three Months Ended
June 30, Nine Months Ended
June 30,
2019 2018 2019 2018
Pro forma net sales $ 1,439.2
$ 1,403.0
$ 4,238.3
$ 4,174.4
Pro forma net earnings available to common shareholders $ 16.7
$ 88.9
$ 101.0
$ 464.1
Pro forma basic earnings per common share $ 0.23
$ 1.33
$ 1.44
$ 6.97
Pro forma diluted earnings per common share $ 0.22
$ 1.21
$ 1.38
$ 6.20

~~NOTE 5 — RESTRUCTURING~~

In February 2018, the Company announced its plan to close its cereal manufacturing facility in Clinton, Massachusetts, which manufactures certain Weetabix products distributed in North America. The transfer of production capabilities to other Post Consumer Brands facilities and the closure of the facility is expected to be completed by SeptemberDecember 31, 2019.

~~Restructuring charges and the related liabilities are shown in the following table.~~Amounts Held For Sale

Employee-Related Costs Accelerated Depreciation Total
Balance, September 30, 2017 $ —
$ —
$ —
Charge to expense 2.1
1.5
3.6
Cash payments —
—
—
Non-cash charges —
(1.5 ) (1.5 )
Balance, June 30, 2018 $ 2.1
$ —
$ 2.1

Balance, September 30, 2018 $ 2.7
$ —
$ 2.7
Charge to expense 2.7
7.8
10.5
Cash payments (1.4 ) —
(1.4 )
Non-cash charges —
(7.8 ) (7.8 )
Balance, June 30, 2019 $ 4.0
$ —
$ 4.0

Total expected restructuring charge $ 5.4
$ 10.3
$ 15.7
Cumulative restructuring charges incurred to date 5.4
10.3
15.7
Remaining expected restructuring charge $ —
$ —
$ —

~~The Company incurred total restructuring charges of~~ ~~$4.7~~ and $10.5 in the three and nine months ended June 30, 2019, respectively, and $1.8 and $3.6 in the three and nine months ended June 30, 2018, respectively. Employee-related costs were included in “Selling, general and administrative expenses” and accelerated depreciation expense was included in “Cost of goods sold” in the Condensed Consolidated Statements of Operations. These expenses are not included in the measure of segment performance (see Note 20).

~~NOTE 6 — ASSETS AND LIABILITIES HELD FOR SALE~~

The major classes of assets and liabilities comprising “Current assets held for sale,” “Other assets held for sale,” “Current liabilities held for sale” and “Other liabilities held for sale” on the Condensed Consolidated Balance Sheet as of September 30, 2018 are shown in the following table. There were no assets or liabilities held for sale at June 30, 2019.

~~Table of Contents~~

September 30, 2018
Current assets held for sale
Restricted cash $ 0.7
Receivables, net 79.8
Inventories 111.6
Prepaid expenses and other current assets 1.5
Property, net (a) 1.4
$ 195.0
Other assets held for sale
Property, net (a) $ 165.1
Goodwill 417.1
Other intangible assets, net 270.4
Other assets 4.0
$ 856.6
Current liabilities held for sale
Accounts payable $ 37.4
Other current liabilities 28.2
$ 65.6
Other liabilities held for sale
Long-term debt (b) $ 614.6
Deferred income taxes 79.9
Other liabilities 0.6
$ 695.1


~~(a)~~	In accordance with ASC Topic 360, “Property, Plant, and Equipment,” the building classified as held for sale related to the closure of the Company’s Post Consumer Brands cereal warehouse in Clinton, Massachusetts and the 8th Avenue properties held for sale are classified as current and noncurrent, respectively, on the Condensed Consolidated Balance Sheet.


~~(b)~~	In connection with the 8th Avenue Transactions, the Company classified its Bridge Loan and associated debt issuance costs as held for sale at September 30, 2018. See Note 17 for information about the Bridge Loan.

In connection with the 8th Avenue Transactions, the Company had assets and liabilities held for sale at September 30, 2018. On October 1, 2018, the Company completed the 8th Avenue Transactions, and effective on that date, 8th Avenue was no longer consolidated in the Company's financial statements (see Notes 4 and 9). Additionally, at September 30, 2018, the Company had a building classified as held for sale related to the closure of the Company’s Post Consumer Brands RTE cereal ~~warehouse~~manufacturing facility in Clinton, ~~Massachusetts. The~~Massachusetts (see Note 3), the Company had a manufacturing plant (the “Clinton Plant”) held for sale with a book value of $8.4 at both December 31, 2019 and September 30, 2019. Additionally, the Company had land and a building ~~was sold~~with a combined book value of $1.5 classified as held for sale at its Post Consumer Brands RTE cereal manufacturing facility in ~~November 2018.~~Asheboro, North Carolina (the “Asheboro Facility”) at both December 31, 2019 and September 30, 2019. In accordance with Accounting Standards Codification (“ASC”) Topic 360, “Property, Plant, and Equipment,” these assets held for sale were classified as current, and were reported as “Prepaid expenses and other current assets” on the Condensed Consolidated Balance Sheets.

~~In connection with~~There were 0 held for sale gains or losses recorded in the ~~8th Avenue Transactions,~~three months ended December 31, 2019. During the three months ended December 31, 2018, the Company recorded a held for sale gain of ~~$127.3~~ in$124.7 (adjusted to $126.6 during the ~~nine months~~year ended ~~June~~September 30, ~~2019,~~2019), which was reported as “Gain on sale of ~~business”~~business,” and a held for sale loss of $2.6, which was included in “Loss on extinguishment of debt, net,” in the Condensed Consolidated Statement of Operations ~~as well as a loss of~~ ~~$2.6~~ inrelated to the nine months ended June 30, 2019, which was included in “(Gain) loss on extinguishment of debt, net” in the Condensed Consolidated Statement of Operations. During the nine months ended June 30, 2019, a8th Avenue Transactions. A gain of $0.6 was recorded related to the sale of the Company’s Post Consumer Brands RTE cereal warehouse in Clinton, Massachusetts and was included in “Other operating ~~expense,~~expenses (income), net” in the Condensed Consolidated Statement of Operations. ~~There were no held for sale gains or losses recorded in the three or nine months ended June 30, 2018.~~

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NOTE ~~7 — GOODWILL~~

The changes in the carrying amount of goodwill by segment are noted in the following table. Goodwill for the historical Private Brands segment was classified as held for sale at September 30, 2018 (see Note 6).

On October 1, 2018, the Company completed the reorganization of its refrigerated foods businesses, which resulted in the assignment of the foodservice and retail components previously included in the historical Refrigerated Food segment to its Foodservice and Refrigerated Retail segments. In connection with the reorganization, the Company assigned goodwill previously reported within the historical Refrigerated Food segment to reporting units within the Foodservice and Refrigerated Retail segments. The historical Refrigerated Food segment contained two reporting units: refrigerated food and cheese and dairy. The Company’s cheese and dairy reporting unit was not impacted by the reorganization and is now reported within the Refrigerated Retail segment. The remaining goodwill balance within the refrigerated food reporting unit was allocated between the Foodservice and Refrigerated Retail segments based on the relative fair value of the businesses. The fair values of the foodservice and refrigerated retail businesses were determined using methodologies consistent with the Company’s annual goodwill impairment assessment.

Post Consumer Brands Weetabix Foodservice Refrigerated Retail Active Nutrition Total
Balance, September 30, 2018
Goodwill (gross) $ 2,012.0
$ 900.9
$ 1,336.1
$ 793.8
$ 180.7
$ 5,223.5
Accumulated impairment losses (609.1 ) —
—
—
(114.8 ) (723.9 )
Goodwill (net) $ 1,402.9
$ 900.9
$ 1,336.1
$ 793.8
$ 65.9
$ 4,499.6
Acquisition related adjustment —
—
(0.5 ) (0.2 ) —
(0.7 )
Currency translation adjustment (0.1 ) (22.8 ) —
—
—
(22.9 )
Balance, June 30, 2019
Goodwill (gross) $ 2,011.9
$ 878.1
$ 1,335.6
$ 793.6
$ 180.7
$ 5,199.9
Accumulated impairment losses (609.1 ) —
—
—
(114.8 ) (723.9 )
Goodwill (net) $ 1,402.8
$ 878.1
$ 1,335.6
$ 793.6
$ 65.9
$ 4,476.0

~~NOTE 8 — INTANGIBLE ASSETS, NET~~

~~Total intangible assets are as follows:~~

June 30, 2019 September 30, 2018
Carrying
Amount
Accumulated
Amortization
Net
Amount Carrying
Amount
Accumulated
Amortization
Net
Amount
Subject to amortization:
Customer relationships $ 2,302.5
$ (533.1 ) $ 1,769.4
$ 2,307.0
$ (444.4 ) $ 1,862.6
Trademarks and brands 814.5
(220.0 ) 594.5
768.5
(188.2 ) 580.3
Other intangible assets 3.1
(3.1 ) —
3.1
(3.1 ) —
3,120.1
(756.2 ) 2,363.9
3,078.6
(635.7 ) 2,442.9
Not subject to amortization:
Trademarks and brands 1,043.0
—
1,043.0
1,096.4
—
1,096.4
$ 4,163.1
$ (756.2 ) $ 3,406.9
$ 4,175.0
$ (635.7 ) $ 3,539.3

~~NOTE 9~~5 — EQUITY INTERESTS AND RELATED PARTY TRANSACTIONS

BellRing

As a result of the IPO on October 21, 2019 (see Note 1), the Company (other than BellRing and its subsidiaries) owned 71.2% of the BellRing LLC units and one share of Class B Common Stock. The Class B Common Stock has voting rights but no rights to dividends or other economic rights. For so long as the Company (other than BellRing and its subsidiaries) directly owns more than 50% of the BellRing LLC units, the Class B Common Stock represents 67% of the combined voting power of the BellRing Common Stock, which provides the Company control over BellRing’s Board of Directors and results in the full consolidation of BellRing and its subsidiaries into the Company’s financial statements. The remaining interest in BellRing’s consolidated net income and net assets will be allocated to NCI. The BellRing LLC units held by the Company include a redemption feature that allows the Company to, at BellRing LLC’s option (as determined by its Board of Managers), redeem BellRing LLC units for either (i) Class A Common Stock of BellRing or (ii) cash equal to the market value of the BellRing Class A Common Stock at the time of redemption.

In the event the Company (other than BellRing and its subsidiaries) holds 50% or less of the BellRing LLC units, the holder of the share of Class B Common Stock will be entitled to a number of votes equal to the number of BellRing LLC units held by all persons other than BellRing and its subsidiaries. In such situation, the Company, as the holder of the share of Class B Common Stock, will only be entitled to cast a number of votes equal to the number of BellRing LLC units held by the Company (other than BellRing and its subsidiaries). Also, in such situation, if any BellRing LLC units are held by persons other than the Company, then the Company, as the holder of the share of Class B Common Stock, will cast the remainder of votes to which the share of Class B Common Stock is entitled only in accordance with the instructions and directions from such other holders of the BellRing LLC units.

As of December 31, 2019, the Company owned 71.2% of the BellRing LLC units and the net income and net assets of BellRing and its subsidiaries were consolidated within the Company’s financial statements, and the remaining 28.8% of the consolidated net income and net assets of BellRing and its subsidiaries, representing the percentage of economic interest in BellRing LLC held by BellRing (and therefore indirectly held by the public stockholders of BellRing through their ownership of the Class A Common Stock), were allocated to NCI.

The following table summarizes the effects of changes in ownership of BellRing on the Company’s equity:



	Three Months Ended December 31, 2019
Increase in additional paid-in capital related to net proceeds from IPO	$	524.4
Increase in additional paid-in capital related to establishment of noncontrolling interest	66.3
Decrease in additional paid-in capital related to tax effects of IPO	(133.7		)
Net transfers from noncontrolling interest	$	457.0

8th Avenue

~~In connection with the 8th Avenue Transactions, the~~The Company has a 60.5% common equity ~~retained~~ interest in 8th Avenue that is accounted for using the equity method. In determining the accounting treatment of the ~~retained~~common equity interest, management concluded that 8th Avenue was not a variable interest entity as defined by ASC Topic 810, “Consolidation” and, as such, was evaluated under the voting interest model. Based on the terms of 8th Avenue’s governing documents, management determined that the Company does not have a controlling voting interest in 8th Avenue due to substantive participating rights held by ~~THL~~third parties associated with the governance of 8th Avenue. However, Post does retain significant influence, and therefore, the use of the equity method of accounting is required.

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The following table presents the calculation of the Company’s equity method loss attributable to 8th Avenue:


							Three Months Ended December 31,
	Three Months Ended June 30, 2019			Nine Months Ended June 30, 2019			2019			2018
8th Avenue’s net loss available to 8th Avenue’s common shareholders	$	(7.3	)	$	(30.1	)	$	(8.7	)	$	(11.5	)
	60.5		%	60.5		%	60.5		%	60.5		%
Equity method loss available to Post	$	(4.4	)	$	(18.2	)	$	(5.3	)	$	(7.0	)
Less: Amortization of basis difference, net of tax (a)	1.8			7.2			1.7			3.6
Equity method loss, net of tax	$	(6.2	)	$	(25.4	)	$	(7.0	)	$	(10.6	)

(a)

The Company adjusted the historical basis of 8th Avenue’s assets and liabilities to fair value and recognized a ~~total~~ basis difference of ~~$70.3~~.$70.3. The basis difference related to inventory of ~~$2.0~~,$2.0, net of tax, was included in equity method loss in the ~~nine~~three months ended ~~June 30, 2019.~~December 31, 2018. The basis difference related to property, plant and equipment and other intangible assets is being amortized over the weighted average useful lives of the assets. At ~~June~~December 31, 2019 and September 30, 2019, the remaining basis difference to be amortized was ~~$63.1~~.

$59.8 and $61.5, respectively.

Summarized financial information of 8th Avenue is presented in the following table.


							Three Months Ended December 31,
	Three Months Ended June 30, 2019			Nine Months Ended June 30, 2019			2019			2018
Net sales	$	202.7		$	630.5		$	218.4		$	214.1
Gross profit	$	35.2		$	104.4		$	38.4		$	33.7

Net earnings (loss)	$	—		$	(8.7	)
Net loss							$	(0.9	)	$	(4.5	)
Less: Preferred stock dividend	7.3			21.4			7.8			7.0
Net Loss Available to 8th Avenue Common Shareholders	$	(7.3	)	$	(30.1	)	$	(8.7	)	$	(11.5	)

Prior to the 8th Avenue Transactions, Post’s historical private brands business used certain functions and services performed by the Company. These functions and services included information systems, sales and marketing, procurement, accounting shared services, legal, tax, human resources, payroll and cash management. After the completion of the 8th Avenue Transactions, theThe Company ~~continues to provide many of these~~provides services to 8th Avenue under a master services agreement ~~(“MSA”~~(the “MSA”)~~. In addition, Post and THL both provide~~, as well as certain advisory services ~~to 8th Avenue~~ for a fee. ~~During the three and nine months ended June 30, 2019, the~~The Company recorded MSA and advisory income of $1.0 during the three months ended December 31, 2019 and ~~$3.1~~,2018, respectively, which ~~were~~was recorded in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Operations. ~~No such income was recorded in the three and nine months ended June 30, 2018.~~

During the three ~~and nine~~ months ended ~~June 30,~~December 31, 2019 and 2018, the Company had net sales to 8th Avenue of ~~$1.3~~$1.6 and ~~$3.3~~,$1.1, respectively, and purchases from and royalties paid to 8th Avenue of ~~$1.9~~$2.8 and ~~$7.0~~,$2.3, respectively. Sales and purchases between the Company and 8th Avenue were all made at arm’s-length. The investment in 8th Avenue was ~~$152.1~~$133.5 and $140.5 at ~~June~~December 31, 2019 and September 30, 2019, respectively, and was included in “Equity method investments” on the Condensed Consolidated Balance ~~Sheet.~~Sheets. The Company had current receivables, current payables and ~~payables~~a long-term liability with 8th Avenue of ~~$3.0~~$3.6, $0.5 and ~~$0.4~~,$0.7, respectively, at ~~June~~December 31, 2019 and current receivables, current payables and a long-term liability of $5.1, $0.6 and $0.7, respectively, at September 30, ~~2019,~~2019. The current receivables, current payables and long-term liability related to the separation of 8th Avenue from the Company, the closing of the 8th Avenue Transactions, MSA fees, pass through charges owed by 8th Avenue to the Company and related party sales and ~~purchases. The receivables and payables~~purchases were included in “Receivables, ~~net”~~net,” “Accounts payable” and ~~“Accounts payable,~~“Other liabilities,” respectively, on the Condensed Consolidated Balance ~~Sheet.~~Sheets.

Alpen and Weetabix East Africa

The Company holds an equity interest in ~~two~~2 legal entities, Alpen Food Company South Africa ~~(Proprietary)~~(Pty) Limited (“Alpen”) and Weetabix East Africa Limited (“Weetabix East Africa”)~~, whose assets are reported in the Weetabix segment (see Note 20)~~.

Alpen is a South African-based company that produces ~~ready-to-eat (“RTE”)~~RTE cereal and muesli. The Company owns 50% of Alpen’s common stock with no other indicators of control, and accordingly, the Company accounts for its investment in Alpen using the equity method. The investment in Alpen was ~~$5.0~~$5.0 and ~~$5.2~~$5.0 at ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, respectively, and was included in “Equity method investments” on the Condensed Consolidated Balance Sheets. The Company had a note receivable balance with Alpen of $0.6 and $~~1.1~~0.5 ~~and $1.0~~ at ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, respectively, which was included in “Other assets” on the Condensed Consolidated Balance Sheets.

Weetabix East Africa is a Kenyan-based company that produces RTE cereal and muesli. The Company owns 50.1% of Weetabix East Africa and holds a controlling voting and financial interest through its appointment of management and representation on

~~Table of Contents~~

Weetabix East Africa’s Board of Directors. Accordingly, Weetabix East Africa is fully consolidated into the Company’s financial ~~statements.~~

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~~NOTE 10 — INCOME TAXES~~

~~The effective income tax rate was~~ ~~24.6%~~

statements and ~~15.7%~~ during the three and nine months ended June 30, 2019, respectively, and 13.7% and (81.0)% for the three and nine months ended June 30, 2018, respectively. In accordance with ASC Topic 740, “Income Taxes,” the Company records income tax expense (benefit) for interim periods using the estimated annual effective income tax rate for the full fiscal year adjusted for the impact of discrete items occurring during the interim periods.

In the nine months ended June 30, 2019, the effective income tax rate differed significantly from the statutory rate primarily as a result of $18.5 of discrete tax benefit items related to excess tax benefits for share-based payments.

In the three and nine months ended June 30, 2018, the effective income tax rate was impacted by the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted on December 22, 2017. The Tax Act resulted in significant impacts to the Company’s accounting for income taxes with the most significant of these impacts resulting from the reduction of the U.S. federal corporate income tax rate, a one-time transition tax on unrepatriated foreign earnings and full expensing of certain qualified depreciable assets placed in service after September 27, 2017 and before January 1, 2023. The Tax Act enacted a new U.S. federal corporate income tax rate of 21% that went into effect for the Company’s 2019 tax year and was prorated with the pre-December 22, 2017 U.S. federal corporate income tax rate of 35% for the Company’s 2018 tax year. This proration resulted in a blended U.S. federal corporate income tax rate of 24.5% for fiscal 2018. During the nine months ended June 30, 2018, the Company (i) remeasured its ~~existing deferred tax~~ assets and liabilities considering both the 2018 fiscal year blended rate and the 21% rate for periods beyond fiscal 2018 and recorded a provisional tax benefit of $283.1 (adjusted to $281.2 during the year ended September 30, 2018) and (ii) calculated the one-time transition tax and recorded provisional tax expense of $7.1 (adjusted to $10.3 during the year ended September 30, 2018). Full expensing of certain depreciable assets resulted in temporary differences, which were analyzed throughout fiscal 2018 as assets were placed in service. Included in (i) aboveresults from operations are ~~tax benefit adjustments of $10.7 and $12.4, recorded~~reported in the ~~three and nine months ended June 30, 2018, respectively, to further refine the remeasurement made~~Weetabix segment (see Note 18). The remaining interest in the ~~first quarter~~consolidated net income and net assets of fiscal 2018 of the Company’s existing deferred tax assets and liabilities considering both the 2018 fiscal year blended rate and the 21% rate for periods beyond fiscal 2018. The impacts of the Tax Act have been finalized, and no additional adjustments were or will be recorded in fiscal 2019.Weeatbix East Africa is allocated to NCI.

NOTE 116 — EARNINGS PER SHARE

Basic earnings per share is based on the average number of common shares outstanding during the period. Diluted earnings per share is based on the average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options, stock appreciation rights and restricted stock equivalents using the “treasury stock” method. The impact of potentially dilutive convertible preferred stock iswas calculated using the “if-converted” method. In addition, diluted earnings per share has been adjusted for the ~~second quarter~~effect of ~~fiscal 2019, the Company completed the redemption~~BellRing stock awards issued to employees of BellRing and its 2.5% Series C Cumulative Perpetual Convertible Preferred Stock (“Series C Preferred”). Substantially all of the 3.2 shares of Series C Preferred outstanding as of January 10, 2019, the date the Series C Preferred redemption was announced, were converted into 5.9 shares of the Company’s common stock pursuantsubsidiaries, to the conversion rights applicable to the Series C Preferred, and the remaining shares of Series C Preferred were redeemed. In the second quarter of fiscal 2018, the Company completed the redemption of its 3.75% Series B Cumulative Perpetual Convertible Preferred Stock (“Series B Preferred”). Substantially all of the 1.5 shares of Series B Preferred outstanding as of January 10, 2018, the date the Series B Preferred redemption was announced, were converted into 3.1 shares of the Company’s common stock pursuant to the conversion rights applicable to the Series B Preferred, and the remaining shares of Series B Preferred were redeemed. For additional information regarding the Series B Preferred and Series C Preferred redemptions, refer to Note 19.extent they are dilutive.

The following table sets forth the computation of basic and diluted earnings per share.

~~Table of Contents~~


	Three Months Ended June 30,				Nine Months Ended June 30,				Three Months Ended December 31,
	2019		2018		2019		2018		2019		2018
Net earnings for basic earnings per share	$	16.2	$	94.5	$	182.8	$	474.9	$	99.2	$	123.6
Dilutive preferred stock dividends	—		2.0		3.0		8.0		—		2.0
Net earnings for diluted earnings per share	$	16.2	$	96.5	$	185.8	$	482.9	$	99.2	$	125.6

Weighted-average shares for basic earnings per share	73.3		67.0		70.1		66.6		70.7		66.7
Effect of dilutive securities:
Stock options	1.5		1.7		1.8		1.7		0.7		2.0
Stock appreciation rights	0.1		0.1		0.1		0.1		0.1		0.1
Restricted stock units	0.5		0.3		0.5		0.4		0.5		0.4
Performance-based restricted stock awards									0.1		—
Preferred shares conversion to common	—		5.9		2.8		7.4		—		5.9
Total dilutive securities	2.1		8.0		5.2		9.6		1.4		8.4
Weighted-average shares for diluted earnings per share	75.4		75.0		75.3		76.2		72.1		75.1

Basic earnings per common share	$	0.22	$	1.41	$	2.61	$	7.13	$	1.40	$	1.85
Diluted earnings per common share	$	0.21	$	1.29	$	2.47	$	6.34	$	1.38	$	1.67

The following table details the securities that have been excluded from the calculation of weighted-average shares for diluted earnings per share as they were anti-dilutive.


	Three Months Ended June 30,		Nine Months Ended June 30,		Three Months Ended December 31,
	2019	2018	2019	2018	2019	2018
Stock options	0.1	0.6	0.1	0.6	0.1	0.3
Restricted stock units	—	0.1	—	0.1	0.1	0.2
Performance-based restricted stock awards					0.1	0.1

NOTE 127 — INVENTORIES


	June 30, 2019		September 30, 2018		December 31, 2019		September 30, 2019
Raw materials and supplies	$	95.2	$	107.8	$	105.7	$	99.4
Work in process	17.5		17.8		20.0		19.4
Finished products	412.6		324.1		429.3		425.4
Flocks	35.3		34.5		33.2		35.6
	$	560.6	$	484.2	$	588.2	$	579.8

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NOTE 138 — PROPERTY, NET


	June 30, 2019			September 30, 2018			December 31, 2019			September 30, 2019
Property, at cost	$	2,700.6		$	2,543.0		$	2,818.5		$	2,736.9
Accumulated depreciation	(978.6		)	(833.3		)	(1,054.3		)	(1,000.9		)
	$	1,722.0		$	1,709.7		$	1,764.2		$	1,736.0

NOTE 149 — GOODWILL

The changes in the carrying amount of goodwill by segment are noted in the following table.



	Post Consumer Brands			Weetabix		Foodservice		Refrigerated Retail			BellRing Brands			Total
Balance, September 30, 2019
Goodwill (gross)	$	2,011.8		$	850.7	$	1,335.6	$	793.6		$	180.7		$	5,172.4
Accumulated impairment losses	(609.1		)	—		—		(48.7		)	(114.8		)	(772.6		)
Goodwill (net)	$	1,402.7		$	850.7	$	1,335.6	$	744.9		$	65.9		$	4,399.8
Currency translation adjustment	0.1			60.8		—		—			—			60.9
Balance, December 31, 2019
Goodwill (gross)	$	2,011.9		$	911.5	$	1,335.6	$	793.6		$	180.7		$	5,233.3
Accumulated impairment losses	(609.1		)	—		—		(48.7		)	(114.8		)	(772.6		)
Goodwill (net)	$	1,402.8		$	911.5	$	1,335.6	$	744.9		$	65.9		$	4,460.7

NOTE 10 — INTANGIBLE ASSETS, NET

Total intangible assets are as follows:



	December 31, 2019							September 30, 2019
	Carrying Amount		Accumulated Amortization			Net Amount		Carrying Amount		Accumulated Amortization			Net Amount
Subject to amortization:
Customer relationships	$	2,309.0	$	(593.3	)	$	1,715.7	$	2,297.2	$	(562.2	)	$	1,735.0
Trademarks and brands	795.7		(235.9		)	559.8		793.7		(225.2		)	568.5
Other intangible assets	3.1		(3.1		)	—		3.1		(3.1		)	—
	3,107.8		(832.3		)	2,275.5		3,094.0		(790.5		)	2,303.5
Not subject to amortization:
Trademarks and brands	1,052.8		—			1,052.8		1,035.0		—			1,035.0
	$	4,160.6	$	(832.3	)	$	3,328.3	$	4,129.0	$	(790.5	)	$	3,338.5

NOTE 11 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

In the ordinary course of business, the Company is exposed to commodity price risks relating to the ~~acquisition~~purchases of raw materials and supplies, interest rate risks relating to ~~floating~~variable rate debt and foreign currency exchange rate risks. The Company utilizes derivative financial instruments, including (but not limited to) futures contracts, option contracts, forward contracts and swaps, to manage certain of these exposures by hedging when it is practical to do so. The Company does not hold or issue financial instruments for speculative or trading purposes.

~~Table of Contents~~

At ~~June 30,~~December 31, 2019, the Company’s derivative instruments consisted of:

Not designated as hedging instruments under ASC Topic 815

Commodity and energy futures and option contracts, which relate to inputs that generally will be utilized within the next year;

~~foreign currency forward contracts maturing within the next year that have the effect of hedging currency fluctuations between the Euro and the U.S. Dollar;~~

a pay-fixed, receive-variable interest rate ~~swap~~swaps maturing in May 2021 and May 2024 that ~~requires~~require monthly settlements and ~~has~~have the effect of hedging interest payments on debt expected to be issued but not yet priced; and

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rate-lock interest rate swaps that require ~~seven~~six lump sum settlements with the first settlement occurring in ~~December 2019~~July 2020 and the last in July 2023 and have the effect of hedging interest payments on debt expected to be issued but not yet priced.

Designated as hedging instruments under ASC Topic 815

Pay-fixed, receive-fixed cross-currency swaps ~~with maturities~~maturing in July 2022 that require quarterly cash settlements and are used as net investment hedges of the Company’s investment in Weetabix, which is denominated in Pounds Sterling; and

a pay-fixed, receive-variable interest rate ~~swap~~swaps maturing in ~~May 2024~~December 2022 that ~~requires~~require monthly settlements beginning in January 2020 and isare used as a cash flow ~~hedge~~hedges of forecasted interest payments on ~~the Company’s~~BellRing’s variable rate debt.

In the first quarter of fiscal 2020, contemporaneously with the repayment of its term ~~loan.~~loan, the Company changed the designation of one of its interest rate swap contracts from a cash flow hedge to a non-designated hedging instrument. In connection with the de-designation, the Company reclassified losses previously recorded in accumulated OCI of $7.2 to “Interest expense, net” in the Condensed Consolidated Statement of Operations for the three months ended December 31, 2019.

In the first quarter of fiscal 2019, the Company terminated $800.0 and $214.2 notional value of its interest rate swap and cross-currency swap contracts, respectively, that were designated as hedging instruments. In connection with the interest rate swap terminations, the Company received cash proceeds of $29.8, and reclassified previously recorded gains from accumulated OCI to “Interest expense, net” in the Condensed Consolidated Statement of Operations for the ~~nine~~three months ended ~~June 30, 2019.~~December 31, 2018. In connection with the cross-currency swap terminations, the Company received cash proceeds of $26.2, which were recorded to accumulated OCI. Reclassification of amounts recorded in accumulated OCI into earnings will only occur in the event all United Kingdom-based operations are liquidated.

In the second quarter of fiscal 2018, the Company changed the designation of its foreign currency forward contracts from a cash flow hedge to a non-designated hedging instrument. In connection with the new designation, the Company reclassified gains previously recorded in accumulated OCI of $1.8, of which $1.3 was reclassified to “Selling, general and administrative expenses” in the Condensed Consolidated Statement of Operations for the nine months ended June 30, 2018.

The following table shows the notional amounts of derivative instruments held.


	June 30, 2019		September 30, 2018		December 31, 2019		September 30, 2019
Not designated as hedging instruments under ASC Topic 815:
Commodity contracts	$	38.9	$	64.3	$	63.8	$	47.1
Energy contracts	46.8		20.8		38.5		39.8
Foreign exchange contracts - Forward contracts	2.7		9.3
Interest rate swap	73.5		74.6
Interest rate swaps					272.8		73.1
Interest rate swaps - Rate-lock swaps	1,649.3		1,649.3		1,399.3		1,531.0
Designated as hedging instruments under ASC Topic 815:
Foreign exchange contracts - Cross-currency swaps	448.7		662.9		448.7		448.7
Interest rate swap	200.0		1,000.0
Interest rate swaps					350.0		200.0

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The following table presents the balance sheet location and fair value of the Company’s derivative instruments, along with the portion designated as hedging instruments under ASC Topic 815. The Company does not offset derivative assets and liabilities within the Condensed Consolidated Balance Sheets.


		Fair Value				Portion Designated as Hedging Instruments					Fair Value				Portion Designated as Hedging Instruments
	Balance Sheet Location	June 30, 2019		September 30, 2018		June 30, 2019		September 30, 2018		Balance Sheet Location	December 31, 2019		September 30, 2019		December 31, 2019		September 30, 2019
Asset Derivatives:
Commodity contracts	Prepaid expenses and other current assets	$	6.0	$	1.9	$	—	$	—	Prepaid expenses and other current assets	$	2.8	$	1.9	$	—	$	—
Energy contracts	Prepaid expenses and other current assets	2.6		4.9		—		—		Prepaid expenses and other current assets	2.6		0.7		—		—
Commodity contracts	Other assets	0.9		0.2		—		—		Other assets	—		0.1		—		—
Energy contracts	Other assets	—		0.3		—		—
Foreign exchange contracts	Prepaid expenses and other current assets	0.3		1.2		0.3		1.1		Prepaid expenses and other current assets	—		1.3		—		1.3
Foreign exchange contracts	Other assets	4.9		17.6		4.9		17.6		Other assets	—		19.2		—		19.2
Interest rate swaps	Prepaid expenses and other current assets	—		6.4		—		6.4		Prepaid expenses and other current assets	0.4		—		0.4		—
Interest rate swaps	Other assets	—		33.9		—		30.6		Other assets	0.2		—		0.2		—
		$	14.7	$	66.4	$	5.2	$	55.7		$	6.0	$	23.2	$	0.6	$	20.5

Liability Derivatives:
Commodity contracts	Other current liabilities	$	0.1	$	2.2	$	—	$	—	Other current liabilities	$	0.9	$	1.0	$	—	$	—
Energy contracts	Other current liabilities	1.4		0.4		—		—		Other current liabilities	1.4		1.5		—		—
Energy contracts	Other liabilities	0.1		—		—		—		Other liabilities	—		0.1		—		—
Foreign exchange contracts	Other current liabilities	—		1.5		—		1.4		Other current liabilities	1.0		—		1.0		—
Foreign exchange contracts	Other liabilities	—		19.4		—		19.4		Other liabilities	14.5		—		14.5		—
Interest rate swaps	Other current liabilities	25.4		23.6		1.1		—		Other current liabilities	58.8		85.1		—		1.6
Interest rate swaps	Other liabilities	295.3		94.3		4.5		—		Other liabilities	275.6		330.4		—		6.2
		$	322.3	$	141.4	$	5.6	$	20.8		$	352.2	$	418.1	$	15.5	$	7.8

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The following tables present the effects of the Company’s derivative instruments on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income for the three months ended ~~June 30,~~December 31, 2019 and 2018.

Derivatives Not Designated as Hedging Instruments Statement of Operations Location (Gain) Loss Recognized in Statement of Operations
2019 2018
Commodity contracts Cost of goods sold $ (5.7 ) $ 5.0
Energy contracts Cost of goods sold 2.6
(2.6 )
Foreign exchange contracts Selling, general and administrative expenses —
1.1
Interest rate swaps Expense (income) on swaps, net 86.2
(17.2 )

Derivatives Designated as Hedging Instruments Loss (Gain) Recognized in OCI Gain Reclassified from Accumulated OCI into Earnings Statement of Operations Location
2019 2018 2019 2018
Interest rate swaps 4.6
(7.5 ) (0.4 ) (1.1 ) Interest expense, net
Cross-currency swaps (18.2 ) (45.5 ) —
—
Expense (income) on swaps, net



Derivatives Not Designated as Hedging Instruments	Statement of Operations Location	(Gain) Loss Recognized in Statement of Operations
Derivatives Not Designated as Hedging Instruments	Statement of Operations Location	2019			2018
Commodity contracts	Cost of goods sold	$	(1.9	)	$	(0.2	)
Energy contracts	Cost of goods sold	(2.5		)	8.3
Interest rate swaps (a)	(Income) expense on swaps, net	(61.4		)	51.7


(a)	For the three months ended December 31, 2019 and 2018, “(Income) expense on swaps, net” related to our interest rate swaps not designated as hedging instruments included cash settlements paid of $19.1 and $0.2, respectively.

~~The following tables present the effects~~

Table of the Company’s derivative instruments on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income for the nine months ended June 30, 2019 and 2018.Contents

Derivatives Not Designated as Hedging Instruments Statement of Operations Location (Gain) Loss Recognized in Statement of Operations
2019 2018
Commodity contracts Cost of goods sold $ (2.7 ) $ 0.3
Energy contracts Cost of goods sold 2.6
(5.5 )
Foreign exchange contracts Selling, general and administrative expenses —
1.3
Interest rate swaps Expense (income) on swaps, net 200.9
(70.4 )


Derivatives Designated as Hedging Instruments	Loss (Gain) Recognized in OCI						Gain Reclassified from Accumulated OCI into Earnings						Statement of Operations Location	(Gain) Loss Recognized in OCI including NCI						Loss (Gain) Reclassified from Accumulated OCI including NCI into Earnings					Statement of Operations Location
Derivatives Designated as Hedging Instruments	2019			2018			2019			2018			Statement of Operations Location	2019			2018			2019		2018			Statement of Operations Location
Foreign exchange contracts	$	—		$	(0.2	)	$	—		$	(1.3	)	Selling, general and administrative expenses
Interest rate swaps	11.7			(37.1		)	(30.9		)	(1.3		)	Interest expense, net	$	(1.3	)	$	4.6		$	7.2	$	(30.1	)	Interest expense, net
Cross-currency swaps	(37.8		)	(19.6		)	—			—			Expense (income) on swaps, net	34.6			(29.0		)	—		—			(Income) expense on swaps, net

Accumulated OCI, including amounts reported as NCI, included a ~~$45.2~~$33.4 net gain on hedging instruments before taxes ($~~42.5~~25.3 after taxes) at ~~June 30,~~December 31, 2019, compared to a ~~$50.0~~$59.5 net gain before taxes ($~~37.4~~44.5 after taxes) at September 30, ~~2018.~~2019. Approximately ~~$1.1~~$0.4 of the net hedging ~~losses~~gain reported in accumulated OCI at ~~June 30,~~December 31, 2019 ~~are~~is expected to be reclassified into earnings within the next 12 months. For gains or losses associated with interest rate swaps, the reclassification will occur over the term of the related debt. Reclassification of gains and losses reported in accumulated OCI into earnings related to the cross-currency swaps will only occur in the event all United Kingdom-based operations are liquidated. Accumulated OCI included settlements of cross-currency swaps of ~~$35.3~~$37.9 and ~~$4.8~~$36.5 at ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, respectively. In connection with the settlements of cross-currency swaps, the Company recognized gains in accumulated OCI of ~~$0.9~~$1.4 and ~~$30.5~~$28.3 during the three ~~and nine~~ months ended ~~June 30,~~December 31, 2019 ~~respectively,~~ and ~~$1.2 and $2.7 during the three and nine months ended June 30,~~ 2018, respectively.

At ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, the Company had pledged collateral of ~~$1.5~~$2.4 and ~~$4.5,~~$3.7, respectively, related to its commodity and energy contracts. These amounts are classified as “Restricted cash” on the Condensed Consolidated Balance Sheets.

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NOTE 1512 — FAIR VALUE MEASUREMENTS

The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis and the basis for that measurement according to the levels in the fair value hierarchy in ASC Topic 820.


	June 30, 2019						September 30, 2018						December 31, 2019						September 30, 2019
	Total		Level 1		Level 2		Total		Level 1		Level 2		Total		Level 1		Level 2		Total		Level 1		Level 2
Assets:
Deferred compensation investments	$	10.9	$	10.9	$	—	$	43.6	$	43.6	$	—	$	13.0	$	13.0	$	—	$	11.2	$	11.2	$	—
Derivative assets	14.7		—		14.7		66.4		—		66.4		6.0		—		6.0		23.2		—		23.2
	$	25.6	$	10.9	$	14.7	$	110.0	$	43.6	$	66.4	$	19.0	$	13.0	$	6.0	$	34.4	$	11.2	$	23.2
Liabilities:
Deferred compensation liabilities	$	30.0	$	—	$	30.0	$	52.2	$	—	$	52.2	$	33.6	$	—	$	33.6	$	31.0	$	—	$	31.0
Derivative liabilities	322.3		—		322.3		141.4		—		141.4		352.2		—		352.2		418.1		—		418.1
	$	352.3	$	—	$	352.3	$	193.6	$	—	$	193.6	$	385.8	$	—	$	385.8	$	449.1	$	—	$	449.1

The deferred compensation investments are primarily invested in mutual funds, and the fair value is measured using the market approach. These investments are in the same funds, and are purchased in substantially the same amounts, as the participants’ selected investment options (excluding Post common stock equivalents), which represent the underlying liabilities to participants in the Company’s deferred compensation plans. Deferred compensation liabilities are recorded at amounts due to participants in cash, based on the fair value of participants’ selected investment options (excluding certain Post common stock equivalents to be distributed in shares) using the market approach. In connection with the acquisition of Bob Evans (see Note 4), the Company had current deferred compensation investments of $24.3 and current deferred compensation liabilities of $24.1 at September 30, 2018. The Bob Evans deferred compensation plans have been terminated, the investments have been liquidated and amounts previously accrued by the Company were paid in January 2019.

The Company utilizes the income approach to measure fair value for its commodity and energy derivatives. The income approach uses pricing models that rely on market observable inputs such as yield curves and forward prices. Foreign exchange contracts are valued using the spot rate less the forward rate multiplied by the notional amount. The Company’s calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve. Refer to Note 1411 for the classification of changes in fair value of derivative assets and liabilities measured at fair value on a recurring basis within the Condensed Consolidated Statements of Operations.

The Company’s financial assets and liabilities also include cash and cash equivalents, receivables and accounts payable for which the carrying value approximates fair value due to their short maturities (less than 12 months). The Company does not record its current portion of long-term debt and long-term debt at fair value on the Condensed Consolidated Balance Sheets. The fair value of the outstanding borrowings under BellRing’s Revolving Credit Facility (as defined in Note 15) as of December 31, 2019 approximated its carrying value. Based on current market rates, the fair value of the Company’s debt, excluding outstanding borrowings under BellRing’s Revolving Credit Facility, (Level 2) was ~~$6,502.0~~$6,899.0 and ~~$7,790.9~~$7,412.0 as of ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, respectively. ~~At September 30, 2018, the fair value~~

Table of ~~the Company’s debt included amounts classified as held for sale.~~Contents

Certain assets and liabilities, including property, plant and equipment, goodwill ~~intangibles~~and other intangible assets and assets held for sale, are measured at fair value on a non-recurring basis.

~~As stated previously (see Note 6),~~At both December 31, 2019 and September 30, 2019, the Company had $9.9 of land and buildings classified as assets held for sale related to the closures of the Company’s Clinton Plant and Asheboro Facility, both of which are reported in the Post Consumer Brands segment. For additional information on assets and liabilities held for sale, at September 30, 2018 related to (i) the 8th Avenue Transactions and (ii) the closure of the Company’s Post Consumer Brands cereal warehouse in Clinton, Massachusetts. On October 1, 2018, the Company completed the 8th Avenue Transactions, and effective as of that date, 8th Avenue was no longer consolidated in the Company's financial statements and the 60.5% common equity retained interest in 8th Avenue is accounted for using the equity method. The Post Consumer Brands cereal warehouse was sold in November 2018.see Note 4. The fair value of assets ~~and liabilities~~ held for sale ~~were~~was measured on a ~~nonrecurring~~non-recurring basis based on the lower of book value or third party valuations. When applicable, the fair value is adjusted to reflect an offer to purchase the assets. In the three months ended December 31, 2019, the book values of the land and buildings related to the closures of the Clinton Plant and Asheboro Facility were both lower than fair value; therefore, no fair value adjustment was recorded to the assets ~~and liabilities.~~that were classified as held for sale. The fair value measurement was categorized as Level 3, as the fair values utilize significant unobservable inputs. ~~The following table summarizes the Level 3 activity.~~

Balance, September 30, 2018 $ 290.9
Gains related to assets and liabilities held for sale 125.3
Proceeds from the sale of assets and liabilities held for sale (276.6 )
Investment in 8th Avenue, working capital and other adjustments (139.6 )
Balance, June 30, 2019 $ —

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NOTE 1613 — COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Antitrust claims

In late 2008 and early 2009, approximately 22 class action lawsuits were filed in various federal courts against Michael Foods, Inc. (“MFI”), a ~~wholly owned~~wholly-owned subsidiary of the Company, and approximately 20 other defendants (producers of shell eggs and egg products and egg industry organizations), alleging violations of federal and state antitrust laws in connection with the production and sale of shell eggs and egg products, and seeking unspecified damages. All cases were transferred to the Eastern District of Pennsylvania for coordinated and/or consolidated pretrial proceedings.

The ~~case~~cases involved ~~three~~3 plaintiff groups: (i) a nationwide class of direct purchasers of shell eggs (the “direct purchaser class”); (ii) individual companies (primarily large grocery chains and food companies that purchase considerable quantities of eggs) that opted out of various settlements and filed their own complaints related to their purchases of shell eggs and egg products (“opt-out plaintiffs”); and (iii) indirect purchasers of shell eggs (“indirect purchaser plaintiffs”).

Resolution of claims: To date, MFI has resolved the following claims, including all class claims: (i) in December 2016, MFI settled all claims asserted against it by the direct purchaser class for a payment of $75.0, which was approved by the district court in December 2017; (ii) in January 2017, MFI settled all claims asserted against it by opt-out plaintiffs related to shell egg purchases on confidential terms; (iii) in June 2018, MFI settled all claims asserted against it by indirect purchaser plaintiffs on confidential terms; and (iv) inbetween June 2019 and September 2019, MFI individually settled ~~all~~on confidential terms egg ~~products~~product opt-out claims asserted against it by ~~one~~four separate opt-out ~~plaintiff on confidential terms; and (v) in July 2019, MFI settled all egg products claims asserted against it by a second opt-out plaintiff on confidential terms.~~plaintiffs. MFI has at all times denied liability in this matter, and no settlement contains any admission of liability by MFI.

Remaining portion of the ~~case:~~cases: MFI remains a defendant only with respect to claims that seek damages based on purchases of egg products by ~~four~~three opt-out plaintiffs. The district court had granted summary judgment precluding any claims for egg products purchases by such opt-out plaintiffs, but the Third Circuit Court of Appeals reversed and remanded these claims for further pre-trial proceedings. Defendants filed a second motion for summary judgment seeking dismissal of the claims, which was denied in June 2019. ~~MFI currently is scheduled to begin trial against one opt-out plaintiff in October 2019.~~ The remaining opt-out plaintiffs have not yet been assigned trial dates.

Although the likelihood of a material adverse outcome in the egg antitrust litigation has been significantly reduced as a result of the MFI settlements described above, the remaining portion of the ~~case~~cases could still result in a material adverse outcome.

Related to these settlements, the Company expensed $0.3 and $2.3 in the three and nine months ended June 30, 2018, which was included in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Operations. No expense was recorded related to these matters in the three ~~or nine~~ months ended ~~June 30, 2019.~~December 31, 2019 or 2018. At ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, the Company had ~~$4.2~~$3.5 and ~~$6.0,~~$6.2, respectively, accrued for this matter, which was included in “Other current liabilities” on the Condensed Consolidated Balance Sheets. The Company records reserves for litigation losses in accordance with ASC Topic 450, “Contingencies.” Under ASC Topic 450, a loss contingency is recorded if a loss is probable and can be reasonably estimated. The Company records probable loss contingencies based on the best estimate of the loss. If a range of loss can be reasonably estimated, but no single amount within the range appears to be a better estimate than any other amount within the range, the minimum amount in the range is accrued. These estimates are often initially developed earlier than when the ultimate loss is known, and the estimates are adjusted if additional information becomes known. Although the Company believes its accruals for this matter are appropriate, the final amounts required to resolve such matter could differ materially from recorded estimates and the Company’s financial condition, results of operations and cash flows could be materially affected.

Under current law, any settlement paid, including the settlements with the direct purchaser ~~plaintiffs,~~class, the opt-out plaintiffs and the indirect purchaser plaintiffs, is deductible for federal income tax purposes.

Bob Evans Appraisal Proceedings

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of the acquisition, several such former stockholders filed petitions in the Delaware Court of Chancery (Arbitrage Fund v. Bob Evans Farms, Inc. filed on January 23, 2018; Blue Mountain Credit Alternatives Master Fund L.P., et al. v. Bob Evans Farms, Inc. filed on April 30, 2018; and 2017 Clarendon LLC, et al. v. Bob Evans Farms, Inc. filed on April 30, 2018) seeking appraisal of their shares of Bob Evans common stock pursuant to Section 262 of the Delaware General Corporation Law (“Section 262”). The lawsuits ~~seek~~sought appraisal for such shares, plus statutory interest, as well as the costs of the proceedings and such other relief as appropriate. Under Section 262, persons who were stockholders at the time of the closing ~~are~~were entitled to have their shares appraised by the Delaware Court of Chancery and receive payment of the “fair value” of such shares (plus statutory interest) as determined by the Delaware Court of Chancery. In May 2018, the court consolidated the lawsuits into one action.

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In December 2018, the Company settled with one petitioner, Arbitrage Fund, and Arbitrage Fund was dismissed with prejudice from the consolidated action. In addition, in December 2018, the Company pre-paid the $77.00 per share merger consideration to the Blue Mountain and 2017 Clarendon petitioners, effectively stopping the continued accrual of statutory interest on that amount. The Company made total payments of $257.6, inclusive of the aforementioned prepayment of $77.00 per share merger consideration, related to these matters in ~~December 2018. However,~~fiscal 2019. In September 2019, the ~~consolidated action remains active~~Company reached settlement terms on a confidential basis with ~~respect to~~ the ~~determination~~remaining petitioners regarding their outstanding appraisal claims. The settlement was finalized and paid in October 2019, and the remaining portion of the ~~fair value~~case was dismissed on October 3, 2019. All former Bob Evans stockholders who demanded appraisal of ~~the shares formerly held by the two remaining petitioners.~~

~~Approximately 2.5~~their shares of Bob Evans common stock are before the court for appraisal in the consolidated action. As of completion of the acquisition, former Bob Evans stockholders can no longer submit new demands for appraisal. All other former stockholders have beenwere paid for their shares. ~~The~~

During the three months ended December 31, 2018, the Company ~~intends~~expensed $4.3 related to ~~vigorously defend~~these matters, which was included in “Interest expense, net” in the ~~consolidated action.~~

Condensed Consolidated Statement of Operations. At September 30, 2018, former holders of 3.3 shares of Bob Evans common stock had not withdrawn their appraisal demands and had not been paid for their shares of Bob Evans common stock. Related to these shares, the Company accrued $267.0 at September 30, 2018, which was the number of shares of Bob Evans common stock for which former Bob Evans stockholders demanded appraisal and had not withdrawn their demands multiplied by the $77.00 per share merger consideration, plus accrued interest at the Federal Reserve Discount Rate plus a spread of 5.00%. At June 30, 2019, ~~former holders of 2.5 shares of Bob Evans common stock had not withdrawn their appraisal demands, and~~ the Company had ~~a remaining~~an accrual of ~~$14.0,~~$19.1, which ~~represents the accrued interest related to the 2.5 shares for which the $77.00 per share merger consideration~~ was ~~paid. Additional payments related to these 2.5 shares could be made in the future. The liabilities were~~ reported in “Other current ~~liabilities” and “Other~~ liabilities” on the Condensed Consolidated Balance ~~Sheets at June 30,~~Sheet. All remaining cash payments related to this matter were made in October 2019 and ~~September 30, 2018, respectively.~~

~~While~~there was no accrual reported on the ~~Company believes its accrual for~~Condensed Consolidated Balance Sheet as of December 31, 2019. In addition, 0 expense was recorded in the Condensed Consolidated Statement of Operations related to these matters ~~is appropriate,~~for the final amounts required to resolve such matters could differ materially and the Company’s financial condition, results of operations and cash flows could be materially affected. Accordingly, the Company cannot predict what impact, if any, these matters and any results from such matters could have on the Company’s future financial condition, results of operations or cash flows.three months ended December 31, 2019.

Weetabix Limited Environmental Matter

In March 2019, Weetabix Limited, one of the Company’s wholly-owned subsidiaries, received notification from the United Kingdom Environment Agency (the “Environment Agency”) that the Environment Agency intended to charge Weetabix Limited in relation to a spill of diesel fuel into the ground at Weetabix Limited’s Burton Latimer site in the United Kingdom that occurred in November 2016, prior to the Company’s acquisition of the Weetabix business. Upon discovery of the spill, Weetabix Limited informed the Environment Agency and took all necessary steps to address the spill, including putting in place monitoring and improvement measures. Weetabix Limited has fully cooperated with the Environment Agency at all times regarding the containment and assessment of the incident. ~~A first court hearing was held in the Northampton Magistrates Court on July 4, 2019, and the~~The matter was allocated to the Northampton Crown Court and ~~listed for~~was heard on November 20, 2019, during which Weetabix Limited pleaded guilty to the offense under the Environmental Permitting Regulations 2010 and the Court imposed a ~~hearing on September 13, 2019. The Company does not expect this matter will have a material effect on its financial condition, results~~fine of ~~operations or cash flows.~~$0.1, plus costs.

Other

The Company is subject to various other legal proceedings and actions arising in the normal course of business. In the opinion of management, based upon the information presently known, the ultimate liability, if any, arising from such pending legal proceedings, as well as from asserted legal claims and known potential legal claims which are likely to be asserted, taking into account established accruals for estimated liabilities (if any), are not expected to be material individually or in the aggregate to the financial condition, results of operations or cash flows of the Company. In addition, although it is difficult to estimate the potential financial impact of actions regarding expenditures for compliance with regulatory matters, in the opinion of management, based upon the information currently available, the ultimate liability arising from such compliance matters is not expected to be material to the financial condition, results of operations or cash flows of the Company.

~~Leases~~

~~Historically, Bob Evans guaranteed certain payment and performance obligations associated~~NOTE 14 — LEASES

In conjunction with the leases for 143 properties (the “Guarantee”) leased by the restaurant business formerly owned by Bob Evans (the “Bob Evans Restaurant Business”). The Guarantee remained in effect following the Company’s acquisitionadoption of ~~Bob Evans. In the event the Bob Evans Restaurant Business fails to meet its payment~~ASUs 2016-02 and ~~performance obligations under these leases,~~2018-11 (see Note 2), the Company ~~may be required to make rent~~updated its policy for recognizing leases under ASC Topic 842. The Company assessed the impact of these ASUs by reviewing its lease portfolio, implementing lease accounting software, developing related business processes and ~~other payments to the landlord under the requirements~~implementing internal controls. A summary of the ~~Guarantee. Should~~updated policy is included below. Prior to October 1, 2019, the Company ~~as guarantor of the~~accounted for leases under ASC Topic 840, “Leases.”

Lease Portfolio

The Company leases office space, certain warehouses and equipment primarily through operating lease ~~obligations, be required~~agreements. The Company has no material finance lease agreements. Leases have remaining terms which range from 1 to ~~make all lease payments due for the remaining term of the~~57 years and most leases ~~subsequent to June 30, 2019, the maximum amount~~provide the Company may be required to pay is equal to the annual rent amount for the remainder of the lease terms. The current annual rent on these leases is $13.5 and will increase up to 1.5% annually based on indexed inflation. The lease terms extend for approximately 17 years from June 30, 2019, and the Guarantee would remain in effect in the event the leases are extended for a renewal period. In the event the Company is obligated to make payments under the Guarantee, the Company believes its exposure is limited due to protections and recourse available in the leases associated with the ~~leased properties, including a requirement of the landlord~~option to ~~mitigate damages by re-letting the properties in default. The Bob Evans Restaurant Business continues to meet its~~exercise one or more renewal terms.

2317

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~~obligations under these leases,~~Lease Policy

The Company determines if an arrangement is a lease at its inception. When the arrangements include lease and ~~there have been no events that would indicate the obligations will not continue to be met. As such,~~non-lease components, the Company ~~believes~~accounts for them as a single lease component. Leases with an initial term of less than 12 months are not reported on the ~~fair value of~~balance sheet, but rather recognized as lease expense on a straight-line basis over the ~~Guarantee is immaterial as of June 30, 2019.~~

~~NOTE 17 — LONG-TERM DEBT~~

~~Long-term debt as of~~lease term. Arrangements may include options to extend or terminate the ~~dates indicated consists of the following:~~

June 30,
2019 September 30, 2018
5.625% Senior Notes maturing January 2028 $ 940.9
$ 960.9
5.50% Senior Notes maturing March 2025 1,000.0
1,000.0
5.75% Senior Notes maturing March 2027 1,299.3
1,326.3
5.00% Senior Notes maturing August 2026 1,697.3
1,710.3
8.00% Senior Notes maturing July 2025 122.2
122.2
Term Loan 1,309.5
2,172.5
Bridge Loan (a) —
—
Capital lease 0.1
0.2
$ 6,369.3
$ 7,292.4
Less: Current portion of long-term debt (10.1 ) (22.1 )
Debt issuance costs, net (a)
(64.6 ) (71.2 )
Plus: Unamortized premium 29.9
33.0
Total long-term debt $ 6,324.5
$ 7,232.1


~~(a)~~	In connection with the 8th Avenue Transactions, the Company classified its Bridge Loan and associated debt issuance costs as held for sale at September 30, 2018. See below for more information about the Bridge Loan. See Note 6 for information about assets and liabilities held for sale.

~~Senior Notes~~

On February 8, 2019, the Company received consents (the “Requisite Consents”) from holders of a majority of the outstanding aggregate principal amount of its outstanding 5.00% Senior Notes due August 2026 (the “Notes”) to approve proposed amendments to the indenture relating to the Notes (the “Indenture”). Following receipt of the Requisite Consents, the Company, its subsidiary guarantors and the trustee for the Indenture executed a supplemental indenture documenting the amendments, which more closely aligns certain provisions of the Indenture with the comparable provisionslease arrangement. These options are included in the ~~indentures for~~lease term used to establish ROU assets and lease liabilities when it is reasonably certain they will be exercised. The Company will reassess expected lease terms based on changes in circumstances that indicate options may be more or less likely to be exercised.

The Company has certain lease arrangements that include variable rental payments. The future variability of these payments and adjustments are unknown and therefore are not included in minimum rental payments used to determine ROU assets and lease liabilities. The Company has lease arrangements where it makes separate payments to the lessor based on the lessor's common area maintenance expenses, property and casualty insurance costs, property taxes assessed on the property and other variable expenses. As the Company has elected the practical expedient not to separate lease and non-lease components, these variable amounts are captured in operating lease expense in the period in which they are incurred. Variable rental payments are recognized in the period in which their associated obligation is incurred.

As most of the Company’s ~~other senior notes, specifically to (i) add~~lease arrangements do not provide an ~~exception to~~implicit interest rate, an incremental borrowing rate (“IBR”) is applied in determining the ~~restricted payments covenant in~~present value of future payments. The Company’s IBR is selected based upon information available at the ~~Indenture~~lease commencement date.

ROU assets are recorded as “Other assets,” and ~~(ii) revise~~lease liabilities are recorded as “Other current liabilities” and “Other liabilities” on the “Permitted Investments” definition in the Indenture to add an additional category of Permitted Investments under the Indenture. In connection with the consents, the Company incurred $8.4 of debt modification costs, which were deferred and will be amortized to interestCondensed Consolidated Balance Sheet. Operating lease expense is recognized on a straight-line basis over the ~~remaining~~lease term ~~of the Notes,~~ and ~~recorded expense of $1.3 in the nine months ended June 30, 2019, which~~ is included in either “Cost of goods sold” or “Selling, general and administrative expenses” in the Condensed Consolidated Statement of Operations. Costs associated with finance leases and lease income do not have a material impact on the Company’s financial statements.

Impact of Adoption

The Company utilized the cumulative effect adjustment method of adoption and, accordingly, recorded ROU assets and lease liabilities of $158.1 and $168.2, respectively, on the balance sheet at October 1, 2019. The Company elected the following practical expedients in accordance with ASC Topic 842:

•

Reassessment elections — The Company elected the package of practical expedients, and did not reassess whether any existing contracts are or contain a lease, provided a lease analysis was conducted under ASC Topic 840. To the extent leases were identified under ASC Topic 840, the Company did not reassess the classification of those leases. Additionally, to the extent initial direct costs were capitalized under ASC Topic 840 and are not amortized as a result of the implementation of ASC Topic 842, they were not reassessed.

•

Short-term lease election — ASC Topic 842 allows lessees an option to not recognize ROU assets and lease liabilities arising from short-term leases. A short-term lease is defined as a lease with an initial term of 12 months or less. The Company elected to not recognize short-term leases as ROU assets and lease liabilities on the balance sheet. All short-term leases which are not included on the Company’s balance sheet will be recognized within lease expense. Leases that have an initial term of 12 months or less with an option for renewal will need to be assessed in order to determine if the lease qualifies for the short-term lease exception. If the option is reasonably certain to be exercised, the lease does not qualify as a short-term lease.


•	Lease vs non-lease components — The Company elected to combine lease and non-lease components as a single component and the total consideration for the arrangements were accounted for as a lease.

The following table presents the balance sheet location of the Company’s operating leases.



	December 31, 2019
ROU assets:
Other assets	$	128.8

Lease liabilities:
Other current liabilities	$	23.4
Other liabilities	116.1
Total lease liabilities	$	139.5

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The following table presents maturities of the Company’s operating lease liabilities as of December 31, 2019, presented under ASC Topic 842.



	December 31, 2019
Remaining fiscal 2020	$	21.8
Fiscal 2021	27.2
Fiscal 2022	26.3
Fiscal 2023	23.3
Fiscal 2024	17.2
Thereafter	51.1
Total future minimum payments	$	166.9
Less: Implied interest	27.4
Total lease liabilities	$	139.5

The following table presents future minimum rental payments under the Company’s noncancelable operating lease agreements as of September 30, 2019, presented under ASC Topic 840.



	September 30, 2019
Fiscal 2020	$	28.3
Fiscal 2021	29.0
Fiscal 2022	28.1
Fiscal 2023	25.4
Fiscal 2024	19.2
Thereafter	77.3
Total future minimum payments (a)	$	207.3


(a)	Future minimum payments as of September 30, 2019 included $36.0 related to a real estate lease, consisting of land and a building, that was purchased by the Company in December 2019. As of December 31, 2019, the Company de-recognized both a ROU asset and lease liability of $23.1 and recognized the assets as property on the Condensed Consolidated Balance Sheet.

As reported under ASC Topic 842, operating lease expense for the three months ended December 31, 2019 was $11.0, of which $1.2 and $2.0 related to variable lease costs and short-term lease costs, respectively. As reported under ASC Topic 840, rent expense during the three months ended December 31, 2018 was $9.9. Operating cash flows for amounts included in the measurement of the Company’s operating lease liabilities for the three months ended December 31, 2019 were $7.4. ROU assets obtained in exchange for operating lease liabilities during the three months ended December 31, 2019 were $0.1. The weighted average remaining lease term of the Company’s operating leases as of December 31, 2019 was approximately seven years and the weighted average incremental borrowing rate was 4.40% as of December 31, 2019.

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NOTE 15 — LONG-TERM DEBT

Long-term debt as of the dates indicated consisted of the following:



	December 31, 2019			September 30, 2019
5.50% Senior Notes maturing December 2029	$	750.0		$	750.0
5.625% Senior Notes maturing January 2028	940.9			940.9
5.50% Senior Notes maturing March 2025	1,000.0			1,000.0
5.75% Senior Notes maturing March 2027	1,299.3			1,299.3
5.00% Senior Notes maturing August 2026	1,697.3			1,697.3
8.00% Senior Notes maturing July 2025	122.2			122.2
Term Loan	—			1,309.5
BellRing Term B Facility	700.0			—
BellRing Revolving Credit Facility	80.0			—
Capital lease	—			0.1
	$	6,589.7		$	7,119.3
Less: Current portion of long-term debt	(156.5		)	(13.5		)
Debt issuance costs, net	(65.6		)	(69.0		)
Plus: Unamortized premium and discount, net	15.0			29.2
Total long-term debt	$	6,382.6		$	7,066.0

Senior Notes

On December 18, 2019, the Company provided notice that it elected to redeem all of its remaining outstanding 8.00% senior notes, which had an aggregate outstanding principal amount of $122.2. On January 8, 2020, subsequent to the end of the period, the Company completed the previously announced redemption of the 8.00% senior notes and made a payment of $135.5, which included accrued and unpaid interest and a tender premium, using cash on hand. As of December 31, 2019, the Company reclassified the outstanding principal balance of $122.2 and associated debt issuance costs of $0.7 to “Current portion of long-term debt” on the Condensed Consolidated Balance Sheet. In connection with the January 8, 2020 repayment, the Company will record a write-off of the associated debt issuance costs and a tender premium payment of $9.3, which will be reported as loss on extinguishment of debt.

Credit Agreement

On March 28, 2017, the Company entered into an amended and restated credit agreement (as further amended, the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $800.0 (the “Revolving Credit Facility”), with the commitments thereunder to be made available to the Company in U.S. Dollars, Canadian Dollars, Euros and Pounds Sterling. The issuance of letters of credit is available under the Credit Agreement in an aggregate amount of up to $50.0. The Revolving Credit Facility has outstanding letters of credit of ~~$19.9,~~$22.0, which reduced the available borrowing capacity under the Credit Agreement to ~~$780.1~~$778.0 at ~~June 30,~~December 31, 2019.

The Credit Agreement also provides for potential incremental revolving and term facilities at the request of the Company and at the discretion of the lenders, in each case on terms to be determined, and permits the Company, subject to certain conditions, to incur incremental equivalent debt, in an aggregate maximum amount (for incremental revolving and term facilities and incremental equivalent debt combined) not to exceed the greater of (i) $700.0 and (ii) the maximum amount at which (a) the Company’s pro forma consolidated leverage ratio (as defined in the Credit Agreement) would not exceed 6.50 to 1.00 and (b) the Company’s pro forma senior secured leverage ratio (as defined in the Credit Agreement) would not exceed 3.00 to 1.00 as of the date such indebtedness is incurred. The outstanding amounts under the Revolving Credit Facility must be repaid on or before March 28, 2022.

~~Table of Contents~~

The Credit Agreement permits the Company to designate certain of its subsidiaries as unrestricted subsidiaries and once so designated, permits the disposition of (and authorizes the release of liens on) the assets of, and the equity interests in, such unrestricted subsidiaries and permits the release of such unrestricted subsidiaries as guarantors under the Credit Agreement.

Borrowings under the Revolving Credit Facility will bear interest, at the option of the Company, at an annual rate equal to either the Base Rate, Eurodollar Rate or CDOR Rate (as such terms are defined in the Credit Agreement) plus an applicable margin ranging from 1.75% to 2.25% for Eurodollar Rate-based loans and CDOR Rate-based loans and from 0.75% to 1.25% for Base Rate-based loans, depending in each case on the Company’s senior secured leverage ratio. Commitment fees on the daily unused

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amount of commitments under the Revolving Credit Facility will accrue at rates ranging from 0.25% to 0.375%, also depending on the Company’s senior secured leverage ratio.

The Credit Agreement provides for customary events of default, including material breach of representations and warranties, failure to make required payments, failure to comply with certain agreements or covenants, failure to pay, or default under, indebtedness in excess of $75.0, certain events of bankruptcy and insolvency, inability to pay debts, the occurrence of one or more unstayed or undischarged judgments in excess of $75.0, attachments issued against a material part of the Company’s property, change in control, the invalidity of any loan document, the failure of the collateral documents to create a valid and perfected first priority lien and certain events under the Employee Retirement Income Security Act of 1974. Upon the occurrence of an event of default, the maturity of the loans under the Credit Agreement may be accelerated and the agent and lenders under the Credit Agreement may exercise other rights and remedies available at law or under the loan documents, including with respect to the collateral and guarantees for the Company’s obligations under the Credit Agreement.

~~Term~~2020 Bridge Loan

InOn October 11, 2019, in connection with the ~~first quarter of fiscal 2019,~~IPO and the formation transactions, the Company ~~utilized~~entered into a $1,225.0 Bridge Facility Agreement (the “2020 Bridge Loan Facility”) and borrowed $1,225.0 under the 2020 Bridge Loan Facility (the “2020 Bridge Loan”). On October 21, 2019, BellRing entered into a Borrower Assignment and Assumption Agreement with the Company and the administrative agent under the 2020 Bridge Loan Facility, under which BellRing became the borrower under the 2020 Bridge Loan and assumed all interest of $2.2 thereunder, and the Company and its subsidiary guarantors (other than BellRing and its domestic subsidiaries) were released from all material obligations thereunder. The Company retained the net cash proceeds of the 2020 Bridge Loan, and following the assumption by BellRing of the 2020 Bridge Loan Facility, used the cash proceeds of the 2020 Bridge Loan to repay a portion of the ~~net proceeds from~~$1,309.5 outstanding balance of its term loan. The domestic subsidiaries of BellRing continued to guarantee the 2020 Bridge Loan, and BellRing’s obligations under the 2020 Bridge Loan became secured by a first priority security interest in substantially all of the assets (other than real estate) of BellRing and in substantially all of the assets of its subsidiary guarantors. On October 21, 2019, the 2020 Bridge Loan was repaid in full by BellRing. In connection with the 2020 Bridge Loan Facility, the Company incurred issuance costs of $19.1, of which $15.3 were refunded to the Company at the closing of the IPO on October 21, 2019, and the remaining $3.8 of issuance costs were written off and included in “Loss on extinguishment of debt, net” in the Condensed Consolidated Statement of Operations for the three months ended December 31, 2019.

2018 Bridge Loan

On September 24, 2018, in connection with the 8th Avenue Transactions, ~~(see Note 4)~~the Company entered into a $625.0 bridge facility agreement (the “2018 Bridge Loan Facility”) and borrowed $625.0 under the 2018 Bridge Loan. In connection with the 2018 Bridge Loan Facility, the Company incurred issuance costs of $10.4, of which $7.8 were refunded to the Company at the closing of the 8th Avenue Transactions on October 1, 2018, and the remaining $2.6 of issuance costs were written off and included in “Loss on extinguishment of debt, net” in the Condensed Consolidated Statement of Operations for the three months ended December 31, 2018. Upon the closing of the 8th Avenue Transactions on October 1, 2018, the 2018 Bridge Loan was assumed by 8th Avenue and the Company was released from its repayment obligations thereunder while retaining the proceeds from the 2018 Bridge Loan.

Term Loan

As discussed above, the Company used the cash proceeds from the 2020 Bridge Loan to repay ~~$863.0~~a portion of the $1,309.5 outstanding principal ~~value~~balance of its term ~~loan, as required by~~loan. Subsequent to this repayment, the ~~Credit Agreement. As~~Company used cash on hand to repay the remaining outstanding principal balance of its term loan. In connection with these repayments, the Company recorded a ~~result~~write-off of debt issuance costs of $9.1, which was included in “Loss on extinguishment of debt, net” in the ~~prepayment, quarterly principal installment payments on~~Condensed Consolidated Statement of Operations for the ~~term loan are not required until~~three months ended December 31, 2019. Beginning on December 31, 2019, the term loan will require quarterly principal installment payments of $3.35, compared to the previously required quarterly principal installment payments of $5.5, which began on September 30, 2017. The term loan ~~bears~~bore interest at an annual rate equal to either the Base Rate or Eurodollar Rate plus an applicable margin of 2.00% for Eurodollar Rate-based loans and 1.00% for Base Rate-based loans. The interest rate on the term loan was ~~4.41% and 4.22%~~4.04% at ~~June 30, 2019 and~~ September 30, ~~2018, respectively. The maturity date~~2019.

BellRing’s Credit Agreement and Senior Debt Facilities

On October 21, 2019, BellRing entered into a credit agreement (the “BellRing Credit Agreement”) by and among BellRing, the institutions from time to time party thereto as lenders (the “Lenders”), Credit Suisse Loan Funding LLC, BofA Securities, Inc., Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Citibank, N.A., Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners, and BMO Capital Markets Corp., Coöperatieve Rabobank U.A., New York Branch, Nomura Securities International, Inc., Suntrust Robinson Humphrey, Inc., UBS Securities LLC and Wells Fargo Securities, LLC, as co-managers, and Credit Suisse AG, Cayman Islands Branch, as administrative agent for the Lenders (in such capacity, the “Agent”).

The BellRing Credit Agreement provides for a term B loan ~~is May 24,~~facility in an aggregate principal amount of $700.0 (the “BellRing Term B Facility”) and a revolving credit facility in an aggregate principal amount of $200.0 (the “BellRing Revolving Credit Facility”), with the commitments under the BellRing Revolving Credit Facility to be made available to BellRing in U.S. Dollars, Euros and Pounds Sterling. Letters of credit are available under the BellRing Credit Agreement in an aggregate amount of up to

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$20.0.The outstanding amounts under the BellRing Revolving Credit Facility and BellRing Term B Facility must be repaid on or before October 21, 2024.

~~Bridge Loan~~

On ~~September 24, 2018,~~October 21, 2019, BellRing borrowed the full amount under the BellRing Term B Facility and $100.0 under the BellRing Revolving Credit Facility. The BellRing Term B Facility was issued at 98.0% of par and BellRing received $776.4 from the BellRing Term B Facility and BellRing Revolving Credit Facility after accounting for the original issue discount of $14.0 and paying investment banking and other fees of $9.6, which were deferred and will be amortized to interest expense over the terms of the loans. BellRing used the proceeds, together with the net proceeds of the IPO that were contributed to it by BellRing Brands, Inc., (i) to repay in full the $1,225.0 of borrowings under the 2020 Bridge Loan and all interest thereunder and related costs and expenses, (ii) to pay directly, or reimburse the Company for, as applicable, all fees and expenses incurred by BellRing Brands, Inc., BellRing or the Company in connection with the ~~8th Avenue Transactions (see Note 4),~~IPO and the formation transactions, (iii) to reimburse the Company ~~entered into a $625.0 bridge facility agreement (the “Bridge Loan Facility”)~~for the amount of cash on BellRing’s balance sheet immediately prior to the completion of the IPO and ~~borrowed $625.0~~(iv) for general corporate and working capital purposes, as well as to repay $20.0 of outstanding borrowings under the ~~Bridge Loan~~BellRing Revolving Credit Facility.

During the three months ended December 31, 2019, BellRing borrowed $120.0 and repaid $40.0 on the BellRing Revolving Credit Facility. The available borrowing capacity under the BellRing Revolving Credit Facility ~~(the Bridge Loan, as~~was $120.0 at December 31, 2019, and there were 0 outstanding letters of credit at December 31, 2019.

Borrowings under the BellRing Term B Facility bear interest, at the option of BellRing, at an annual rate equal to either (a) the Eurodollar Rate or (b) the Base Rate (as such terms are defined in ~~Note 4). In connection~~the BellRing Credit Agreement) determined by reference to the greatest of (i) the Prime Rate (as defined in the BellRing Credit Agreement), (ii) the Federal Funds Effective Rate (as defined in the BellRing Credit Agreement) plus 0.50% per annum and (iii) the one-month Eurodollar Rate plus 1.00% per annum, in each case plus an applicable margin of 5.00% for Eurodollar Rate-based loans and 4.00% for Base Rate-based loans. The BellRing Term B Facility requires quarterly scheduled amortization payments of $8.75 beginning on March 31, 2020, with the ~~Bridge Loan~~balance to be paid at maturity on October 21, 2024. The BellRing Term B Facility contains customary mandatory prepayment provisions, including provisions for mandatory prepayment (a) from the ~~Company incurred issuance costs~~net cash proceeds of ~~$10.4~~certain asset sales and (b) beginning with the fiscal year ending September 30, 2020, of 75% of Consolidated Excess Cash Flow (as defined in the BellRing Credit Agreement) (which percentage will be reduced to 50% if the secured net leverage ratio (as defined in the BellRing Credit Agreement) is less than or equal to 3.35:1.00 as of a fiscal ~~2018,~~year end). The BellRing Term B Facility may be optionally prepaid at 101% of ~~which $7.8 were refunded to~~ the ~~Company~~principal amount prepaid at any time during the first 12 months following the closing of the ~~8th Avenue Transactions~~BellRing Term B Facility, and without premium or penalty thereafter.

Borrowings under the BellRing Revolving Credit Facility bear interest, at the option of BellRing, at an annual rate equal to either the Eurodollar Rate or the Base Rate (determined as described above) plus a margin, which initially will be 4.25% for Eurodollar Rate-based loans and 3.25% for Base Rate-based loans, and thereafter, will be determined by reference to the secured net leverage ratio, with the applicable margin for Eurodollar Rate-based loans and Base Rate-based loans being (i) 4.25% and 3.25%, respectively, if the secured net leverage ratio is greater than or equal to 3.50:1.00, (ii) 4.00% and 3.00%, respectively, if the secured net leverage ratio is less than 3.50:1.00 and greater than or equal to 2.50:1.00 or (iii) 3.75% and 2.75%, respectively, if the secured net leverage ratio is less than 2.50:1.00. Facility fees on ~~October 1, 2018.~~the daily unused amount of commitments under the BellRing Revolving Credit Facility will initially accrue at the rate of 0.50% per annum and thereafter, depending on BellRing’s secured net leverage ratio, will accrue at rates ranging from 0.25% to 0.50% per annum.

The BellRing Credit Agreement provides for incremental revolving and term facilities, and also permits other secured or unsecured debt, if, among other conditions, certain financial ratios are met, as defined and specified in the BellRing Credit Agreement.

The BellRing Credit Agreement provides for customary events of default, including material breach of representations and warranties, failure to make required payments, failure to comply with certain agreements or covenants, failure to pay or default under certain other material indebtedness, certain events of bankruptcy and insolvency, inability to pay debts, the occurrence of one or more unstayed or undischarged judgments in excess of$65.0, certain events under the Employee Retirement Income Security Act of 1974, the invalidity of any loan document, a change in control and the failure of the collateral documents to create a valid and perfected first priority lien. Upon the ~~closing~~occurrence and during the continuance of an event of default, the maturity of the ~~8th Avenue Transactions on October 1, 2018,~~loans under the ~~Bridge Loan was assumed by 8th Avenue~~BellRing Credit Agreement may accelerate and the Agent and Lenders under the BellRing Credit Agreement may exercise other rights and remedies available at law or under the loan documents, including with respect to the collateral and guarantees of BellRing’s obligations under the BellRing Credit Agreement.

Obligations under the BellRing Credit Agreement are guaranteed by the existing and subsequently acquired or organized domestic subsidiaries of BellRing LLC (other than immaterial subsidiaries and certain excluded subsidiaries) and are secured by security interests in substantially all of the assets of BellRing LLC and the assets of its subsidiary guarantors (other than real estate), subject to limited exceptions. The Company ~~was released from~~and its ~~repayment obligations thereunder while retaining~~subsidiaries (other than BellRing LLC and certain of its subsidiaries) are not obligors or guarantors under the ~~proceeds from the Bridge Loan.~~BellRing debt facilities.

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Repayments of Long-Term Debt

The following tables show the Company’s repayments of long-term debt and associated gain or loss included in ~~“(Gain) loss~~“Loss on extinguishment of debt, net” in the Condensed Consolidated Statements of Operations.


	Repayments of Long-Term Debt			(Gain) Loss on Extinguishment of Debt, net										Repayments of Long-Term Debt			Loss on Extinguishment of Debt, net
Three Months Ended June 30,	Issuance or Borrowing	Principal Amount Repaid		Debt Repurchased at a Discount			Premium and Debt Extinguishment Costs Paid		Write-off of Debt Issuance Costs		Write-off of Unamortized Premium
Three Months Ended December 31,														Issuance or Borrowing	Principal Amount Repaid		Debt Repurchased at a Discount			Write-off of Debt Issuance Costs		Write-off of Unamortized Premium
														Term Loan	$	1,309.5	$	—		$	9.1	$	—
														2020 Bridge Loan	1,225.0		—			3.8		—
														BellRing Revolving Credit Facility	40.0		$	—		—		$	—
2019														Total	$	2,574.5	$	—		$	12.9	$	—

	5.75% Senior Notes	$	75.7	$	(1.8	)	$	—	$	0.7	$	(1.9	)	Term Loan	$	863.0	$	—		$	7.6	$	—
	5.625% Senior Notes	36.6		(1.9		)	—		0.4		—			5.75% Senior Notes	27.0		(1.5		)	0.3		(0.7		)
	5.00% Senior Notes	35.7		(2.3		)	—		0.5		—			5.625% Senior Notes	20.0		(1.3		)	0.2		—
	8.00% Senior Notes	1.3		—			0.2		—		—			5.00% Senior Notes	13.0		(1.2		)	0.1		—
	Term Loan	5.5		—			—		—		—			2018 Bridge Loan	—		—			2.6		—
2018	Total	$	154.8	$	(6.0	)	$	0.2	$	1.6	$	(1.9	)	Total	$	923.0	$	(4.0	)	$	10.8	$	(0.7	)

Debt Covenants

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Repayments of Long-Term Debt (Gain) Loss on Extinguishment of Debt, net
Nine Months Ended
June 30, Issuance or Borrowing Principal Amount Repaid Debt Repurchased at a Discount Premium and Debt Extinguishment Costs Paid Write-off of Debt Issuance Costs Write-off of Unamortized Premium
Term Loan $ 863.0
$ —
$ —
$ 7.6
$ —
5.75% Senior Notes 27.0
(1.5 ) —
0.3
(0.7 )
5.625% Senior Notes 20.0
(1.3 ) —
0.2
—
5.00% Senior Notes 13.0
(1.2 ) —
0.1
—
Capital lease 0.1
—
—
—
—
Bridge Loan (a) —
—
—
2.6
—
2019 Total $ 923.1
$ (4.0 ) $ —
$ 10.8
$ (0.7 )

6.00% Senior Notes $ 630.0
$ —
$ 30.8
$ 6.5
$ —
5.75% Senior Notes 173.7
(3.1 ) —
1.8
(4.6 )
5.625% Senior Notes 36.6
(1.9 ) —
0.4
—
5.00% Senior Notes 35.7
(2.3 ) —
0.5
—

8.00% Senior Notes

15.3
—
2.0
0.1
—
Term Loan (b) 16.5
—
0.9
0.4
—
2018 Total $ 907.8
$ (7.3 ) $ 33.7
$ 9.7
$ (4.6 )


~~(a)~~	In connection with the assumption of the Bridge Loan by 8th Avenue discussed above, the Company recorded a write-off of debt issuance costs during the nine months ended June 30, 2019 for costs that were not refunded at closing of the 8th Avenue Transactions.


~~(b)~~	~~In connection with an amendment to the~~ Credit Agreement ~~entered into on March 8, 2018, the Company paid debt extinguishment costs and recorded a write-off of debt issuance costs.~~

~~Debt Covenants~~

Under the terms of the Credit Agreement, the Company is required to comply with a financial covenant consisting of a ratio for quarterly maximum senior secured leverage (as defined in the Credit Agreement) not to exceed 4.25 to 1.00, measured as of the last day of any fiscal quarter, if, as of the last day of such fiscal quarter, the aggregate outstanding amount of all revolving credit loans, swing line loans and letter of credit obligations (subject to certain exceptions specified in the Credit Agreement) exceeds 30% of the Company’s revolving credit commitments. As of ~~June 30,~~December 31, 2019, the Company was not required to comply with such financial covenant as the aggregate amount of the aforementioned obligations did not exceed 30%.

The Credit Agreement permits the Company to incur additional unsecured debt if, among other conditions, the pro forma consolidated interest coverage ratio, calculated as provided in the Credit Agreement, would be greater than or equal to 2.00 to 1.00 after giving effect to such new debt. As of ~~June 30,~~December 31, 2019, the pro forma consolidated interest coverage ratio exceeded this threshold.

BellRing Credit Agreement

Under the terms of the BellRing Credit Agreement, BellRing is required to comply with a financial covenant requiring BellRing to maintain a total net leverage ratio (as defined in the BellRing Credit Agreement) not to exceed 6.00 to 1.00, measured as of the last day of each fiscal quarter, beginning with the quarter ending March 31, 2020. The total net leverage ratio of BellRing would not have exceeded this threshold had BellRing been required to comply with the financial covenant as of December 31, 2019.

NOTE 1816 — PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company maintains qualified defined benefit plans in the United States, the United Kingdom and Canada for certain employees primarily within its Post Consumer Brands and Weetabix segments. Certain of the Company’s employees are eligible to participate in the Company’s postretirement benefit plans (partially subsidized retiree health and life insurance). Amounts for the Canadian plans are included in the North America disclosures and are not disclosed separately because they do not constitute a significant portion of the combined amounts. ~~On October 1, 2018, the Company adopted ASU 2017-07 (see Note 2).~~

The following tables provide the components of net periodic benefit cost (gain) for the pension plans.

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	North America												North America
	Three Months Ended June 30,						Nine Months Ended June 30,						Three Months Ended December 31,
	2019			2018			2019			2018			2019			2018
Service cost	$	0.9		$	1.1		$	2.8		$	3.2		$	1.1		$	1.0
Interest cost	1.1			0.9			3.1			2.7			0.9			1.0
Expected return on plan assets	(1.6		)	(1.1		)	(4.8		)	(3.3		)	(1.6		)	(1.6		)
Recognized net actuarial loss	—			0.3			—			0.9			0.5			—
Recognized prior service cost	—			—			0.1			—
Net periodic benefit cost	$	0.4		$	1.2		$	1.2		$	3.5		$	0.9		$	0.4


	Other International												Other International
	Three Months Ended June 30,						Nine Months Ended June 30,						Three Months Ended December 31,
	2019			2018			2019			2018			2019			2018
Service cost	$	1.4		$	1.7		$	4.3		$	5.1		$	—		$	1.4
Interest cost	4.7			5.0			14.3			14.9			3.7			4.8
Expected return on plan assets	(7.2		)	(8.1		)	(21.8		)	(24.1		)	(6.2		)	(7.3		)
Net periodic benefit gain	$	(1.1	)	$	(1.4	)	$	(3.2	)	$	(4.1	)	$	(2.5	)	$	(1.1	)

The following table provides the components of net periodic benefit gain for the North American other postretirement benefit plans.


	Three Months Ended June 30,						Nine Months Ended June 30,						Three Months Ended December 31,
	2019			2018			2019			2018			2019			2018
Service cost	$	0.2		$	0.1		$	0.4		$	0.4		$	0.1		$	0.1
Interest cost	0.5			0.6			1.6			1.6			0.5			0.6
Recognized net actuarial loss	—			0.1			—			0.2			0.2			—
Recognized prior service credit	(1.2		)	(1.2		)	(3.6		)	(3.5		)	(1.2		)	(1.2		)
Net periodic benefit gain	$	(0.5	)	$	(0.4	)	$	(1.6	)	$	(1.3	)	$	(0.4	)	$	(0.5	)

NOTE 1917 — SHAREHOLDERS’ EQUITY

~~Common Stock Repurchases~~

During the three months ended ~~June 30,~~December 31, 2019, the Company repurchased ~~0.2~~2.2 shares of its common stock at an average share price of ~~$103.85~~$102.99 per share for a total cost of ~~$22.9~~,$223.1, including broker’s commissions. ~~Of the~~ ~~$22.9~~ ~~total cost, $4.0 was not settled until July 2019 and was included~~Purchases of treasury stock in ~~“Other current liabilities” on~~ the Condensed Consolidated ~~Balance Sheet at June 30, 2019. In~~Statement of Cash Flows for the ~~nine~~three months ended ~~June~~December 31, 2019 included $8.7 of repurchases of common stock that were accrued at September 30, 2019 and did not settle until fiscal 2020. During the three months ended December 31, 2018, the Company repurchased ~~0.9~~0.3 shares of its common stock at an average share price of ~~$96.18~~$88.14 per share for a total cost of ~~$88.7, including broker’s commissions.~~

During the three months ended June 30, 2018, the Company repurchased 1.1 shares of its common stock at an average share price of $77.30 per share for a total cost of $79.9, including broker’s commissions. During the nine months ended June 30, 2018, the Company repurchased 2.9 shares of its common stock at an average share price of $76.21 per share for a total cost of $218.7,$25.3, including broker’s commissions.

~~2.5% Series C Cumulative Perpetual Convertible Preferred Stock Conversion and Redemption~~

In the second quarter of fiscal 2019, the Company completed the redemption of its Series C Preferred. Substantially all of the 3.2 shares of Series C Preferred outstanding as of January 10, 2019, the date the Series C Preferred redemption was announced, were converted into 5.9 shares of the Company’s common stock pursuant to the conversion rights applicable to the Series C Preferred. The remaining shares of Series C Preferred were redeemed.

~~3.75% Series B Cumulative Perpetual Convertible Preferred Stock Conversion and Redemption~~

In the second quarter of fiscal 2018, the Company completed the redemption of its Series B Preferred. Substantially all of the 1.5 shares of Series B Preferred outstanding as of January 10, 2018, the date the Series B Preferred redemption was announced,

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~~were converted into 3.1 shares of the Company’s common stock pursuant to the conversion rights applicable to the Series B Preferred. The remaining shares of Series B Preferred were redeemed.~~

~~Exercises of Stock Options~~

In the nine months ended June 30, 2019, the Company had 1.3 stock options exercised at a weighted average exercise price per share of $32.71. In connection with the exercises, the Company received proceeds of $41.5. In the nine months ended June 30, 2018, the Company had 0.1 stock options exercised at weighted average exercise price per share of $40.30. In connection with the exercises, the Company received proceeds of $4.0.

NOTE 2018 — SEGMENTS

~~During the first quarter of fiscal 2019, the Company reorganized its reportable segments in accordance with ASC Topic 280, “Segment Reporting.”~~ At ~~June 30,~~December 31, 2019, the Company’s reportable segments were as follows:

Post Consumer Brands: North American RTE cereal business;

Weetabix: ~~the international (primarily~~primarily United ~~Kingdom)~~Kingdom RTE cereal and ~~branded~~ muesli business;

Foodservice: primarily egg and potato products;

Refrigerated Retail: refrigerated retail products, inclusive of side dishes and egg, cheese and sausage products; and

~~Active Nutrition:~~BellRing Brands: ready-to-drink (“RTD”) protein shakes, ~~and~~ other ~~ready-to-drink~~RTD beverages, powders and nutrition bars.

Due to the level of integration between the Foodservice and Refrigerated Retail segments, it is impracticable to present total assets separately for each segment. ~~Where practicable, all fiscal 2018 segment results reported herein have~~An allocation has been ~~reclassified to conform with~~made between the June 30, 2019 presentation. Additionally, effective October 1, 2018, 8th Avenue was no longer consolidated in the Company's financial statements and the 60.5% common equity retained interest in 8th Avenue is accountedtwo segments for ~~using the equity method. All historical segment results of 8th Avenue are reported herein as Post’s historical Private Brands segment.~~depreciation based on inventory costing.

Management evaluates each segment’s performance based on its segment profit, which is its earnings before income taxes and equity method earnings/loss before impairment of property, goodwill and other intangible assets, facility closure related costs, restructuring expenses, gain/loss on assets and liabilities held for sale, gain/loss on sale of businesses and facilities, interest expense ~~net~~

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and other unallocated corporate income and expenses. The following tables present information about the Company’s reportable segments.



			Three Months Ended December 31,
			2019			2018
Net Sales
	Post Consumer Brands		$	441.2		$	455.3
	Weetabix		101.5			100.9
	Foodservice		420.6			408.1
	Refrigerated Retail		249.9			261.6
	BellRing Brands		244.0			185.8
	Eliminations		(0.4		)	(0.4		)
		Total	$	1,456.8		$	1,411.3
Segment Profit
	Post Consumer Brands		$	80.6		$	84.0
	Weetabix		23.7			18.9
	Foodservice		47.0			52.7
	Refrigerated Retail		26.0			30.5
	BellRing Brands		49.3			35.2
		Total segment profit	226.6			221.3
General corporate expenses and other			27.4			48.4
Gain on sale of business			—			(124.7		)
Interest expense, net			102.9			59.4
Loss on extinguishment of debt, net			12.9			6.1
(Income) expense on swaps, net			(61.4		)	51.7
Earnings before income taxes and equity method loss			$	144.8		$	180.4
Net sales by product
	Cereal and granola		$	542.5		$	556.2
	Eggs and egg products		395.3			394.7
	Side dishes		148.5			145.7
	Cheese and dairy		67.6			70.3
	Sausage		45.9			43.6
	Protein-based products and supplements		244.1			185.8
	Other		13.2			15.4
	Eliminations		(0.3		)	(0.4		)
		Total	$	1,456.8		$	1,411.3
Depreciation and amortization
	Post Consumer Brands		$	27.9		$	29.5
	Weetabix		8.7			8.7
	Foodservice		29.0			27.0
	Refrigerated Retail		17.4			18.0
	BellRing Brands		6.4			6.4
		Total segment depreciation and amortization	89.4			89.6
	Corporate and accelerated depreciation		0.9			4.0
		Total	$	90.3		$	93.6

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Three Months Ended
June 30, Nine Months Ended
June 30,
2019 2018 2019 2018
Net Sales
Post Consumer Brands $ 474.1
$ 466.4
$ 1,388.5
$ 1,360.7
Weetabix 108.4
107.1
313.4
315.8
Foodservice 412.6
399.3
1,209.8
1,148.4
Refrigerated Retail 207.1
214.5
688.2
576.0
Active Nutrition 237.6
216.4
639.9
607.6
Private Brands —
209.1
—
628.1
Eliminations (0.6 ) (4.7 ) (1.5 ) (9.3 )
Total $ 1,439.2
$ 1,608.1
$ 4,238.3
$ 4,627.3
Segment Profit
Post Consumer Brands $ 82.7
$ 83.3
$ 249.9
$ 244.6
Weetabix 26.8
26.1
69.3
58.6
Foodservice 58.5
30.8
158.6
119.6
Refrigerated Retail 15.8
25.7
72.8
68.7
Active Nutrition 55.6
40.2
134.8
86.1
Private Brands —
12.7
—
43.8
Total segment profit 239.4
218.8
685.4
621.4
General corporate expenses and other 37.5
31.0
123.2
104.8
Gain on sale of business —
—
(127.3 ) —
Interest expense, net 85.6
98.9
230.5
288.2
(Gain) loss on extinguishment of debt, net —
(6.1 ) 6.1
31.5
Expense (income) on swaps, net 86.2
(17.2 ) 200.9
(70.4 )
Earnings before income taxes and equity method loss $ 30.1
$ 112.2
$ 252.0
$ 267.3
Depreciation and amortization
Post Consumer Brands $ 29.7
$ 31.3
$ 89.1
$ 93.1
Weetabix 9.2
9.5
26.7
29.3
Foodservice 28.3
27.0
83.0
76.9
Refrigerated Retail 17.7
17.5
55.4
40.3
Active Nutrition 6.3
6.5
19.0
19.4
Private Brands —
11.8
—
36.9
Total segment depreciation and amortization 91.2
103.6
273.2
295.9
Corporate and accelerated depreciation 5.5
2.1
14.9
4.9
Total $ 96.7
$ 105.7
$ 288.1
$ 300.8

Assets June 30,
2019 September 30,
2018
Post Consumer Brands $ 3,343.9
$ 3,391.7
Weetabix 1,817.8
1,853.3
Foodservice and Refrigerated Retail 5,097.0
5,132.4
Active Nutrition 596.9
559.3
Private Brands —
1,055.3
Corporate 542.3
1,065.5
Total $ 11,397.9
$ 13,057.5



Assets			December 31, 2019		September 30, 2019
	Post Consumer Brands		$	3,340.4	$	3,296.3
	Weetabix		1,908.8		1,779.1
	Foodservice and Refrigerated Retail		5,063.9		5,033.8
	BellRing Brands		670.9		594.0
	Corporate		959.5		1,248.4
		Total	$	11,943.5	$	11,951.6

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~~NOTE 21 — SUBSEQUENT EVENT~~

On July 3, 2019, the Company issued $750.0 principal value of 5.50% senior notes due in December 2029. The 5.50% senior notes were issued at par and the Company received $743.0 after incurring investment banking and other fees and expenses of $7.0, which will be deferred and amortized to interest expense over the term of the notes. Interest payments on the 5.50% senior notes will be due semi-annually each June 15 and December 15. The Company intends to use the net proceeds of this offering for general corporate purposes, which could include, among other things, financing acquisitions and repayment of indebtedness.

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ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of Post Holdings, Inc. and its consolidated subsidiaries. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included herein, our audited Annual Report on Form 10-K for the fiscal year ended September 30, ~~2018~~2019 and the “Cautionary Statement ~~Regarding~~on Forward-Looking Statements” section included below. The terms “our,” “we,” “us,” “Company” and “Post” as used herein refer to Post Holdings, Inc. and its consolidated subsidiaries.

OVERVIEW

We are a consumer packaged goods holding company operating in five reportable segments: Post Consumer Brands, Weetabix, Foodservice, Refrigerated Retail and ~~Active Nutrition.~~BellRing Brands. Our products are sold through a variety of channels ~~such as~~including grocery, club and drug stores, mass merchandisers, foodservice, food ingredient and eCommerce.

~~Segment Reorganization~~

~~During the first quarter of fiscal 2019, we reorganized our reportable segments in accordance with Accounting Standards Codification (“ASC”) Topic 280, “Segment Reporting.”~~ At ~~June 30,~~December 31, 2019, our reportable segments were as follows:

Post Consumer Brands: North American ready-to-eat (“RTE”) cereal business;

Weetabix: ~~the international (primarily~~primarily United ~~Kingdom)~~Kingdom RTE cereal and branded muesli business;

Foodservice: primarily egg and potato products;

Refrigerated Retail: refrigerated retail products, inclusive of side dishes and egg, cheese and sausage products; and

~~Active Nutrition:~~BellRing Brands: ready-to-drink (“RTD”) protein shakes, ~~and~~ other ~~ready-to-drink (“RTD”)~~RTD beverages, powders and nutrition bars.

~~Where practicable, all segment results~~Transactions

On October 21, 2019, BellRing Brands, Inc. (“BellRing”), our subsidiary, closed its initial public offering (the “IPO”) of 39.4 million shares of its Class A common stock, $0.01 par value per share (the “Class A Common Stock”), which number of shares included the underwriters’ exercise in full of their option to purchase up to an additional 5.1 million shares of Class A Common Stock. The IPO was completed at an offering price of $14.00 per share and BellRing received net proceeds from the IPO of $524.4 million, after deducting underwriting discounts and commissions. As a result of the IPO and certain other transactions completed in connection with the IPO (the “formation transactions”), BellRing is a publicly-traded company whose Class A Common Stock is traded on the New York Stock Exchange under the ticker symbol “BRBR”. BellRing is a holding company of BellRing Brands, LLC, a Delaware limited liability company (“BellRing LLC”), owning 28.8% of its non-voting membership units (the “BellRing LLC units”). We own 71.2% of the BellRing LLC units and one share of BellRing’s Class B common stock, $0.01 par value per share (the “Class B Common Stock” and, collectively with the Class A Common Stock, the “BellRing Common Stock”). The Class B Common Stock has voting rights but no rights to dividends or other economic rights. For so long as we (other than BellRing and its subsidiaries) directly own more than 50% of the BellRing LLC units, the Class B Common Stock represents 67% of the combined voting power of the BellRing Common Stock. BellRing LLC is the holding company for our historical active nutrition business, reported herein ~~have been reclassified~~as the BellRing Brands segment and reported historically as the Active Nutrition segment.

Effective October 21, 2019, the financial results of BellRing and its subsidiaries were consolidated within our financial results and 28.8% of the consolidated net income and net assets of BellRing and its subsidiaries, representing the percentage of economic interest in BellRing LLC held by BellRing (and therefore indirectly held by the public stockholders of BellRing through their ownership of the Class A Common Stock), is allocated to ~~conform with~~noncontrolling interest. The term “BellRing” as used herein generally refers to BellRing Brands, Inc.; however, in discussions related to debt facilities, the ~~June 30, 2019 presentation.~~term “BellRing” refers to BellRing Brands, LLC. For additional information, see Notes 1 and 5 within “Notes to Condensed Consolidated Financial Statements.”

~~Transactions~~

On October 1, 2018, ~~Post and affiliates of Thomas H. Lee Partners, L.P. (collectively, “THL”) separately capitalized~~ 8th Avenue Food & Provisions, Inc. (“8th ~~Avenue,” and such~~Avenue”) was separately capitalized through a series of transactions ~~the~~(the “8th Avenue Transactions”), and 8th Avenue became the holding company for our historical private brands business. We ~~received gross proceeds of $875.0 million, as well as$16.8 million~~ ~~related to final working capital adjustments,~~ ~~from the 8th Avenue Transactions, and~~retained shares of common stock equal to 60.5% of the common equity in 8th Avenue. ~~Effective October 1, 2018,~~ 8th Avenue ~~was~~is no longer consolidated in our financial statements and the 60.5% common equity retained interest in 8th Avenue is accounted for using the equity method. ~~8th Avenue is reported historically herein as our Private Brands segment.~~ For additional information, see Notes 4 ~~6, 9~~ and 175 within “Notes to Condensed Consolidated Financial Statements.”

Lease Accounting

On ~~April 8,~~October 1, 2019, we ~~announced that one~~adopted Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements.” At adoption, we recognized right-of-use assets and lease liabilities of ~~our subsidiaries had confidentially submitted a draft registration statement~~$158.1 million and $168.2 million, respectively, on ~~Form S-1~~the balance sheet at October 1, 2019. For additional information regarding the ASUs, refer to ~~the Securities~~Notes 2 and ~~Exchange Commission (the “SEC”) related~~15 within “Notes to the proposed initial public offering of our active nutrition business. There can be no assurance that the confidential submission of a draft registration statement on Form S-1 will result in any transaction or other action by us.

~~Acquisition and Integration Activity~~

We acquired Bob Evans Farms, Inc. (“Bob Evans”) on January 12, 2018, and it is reported in both the Foodservice and Refrigerated Retail segments. In connection with the acquisition of Bob Evans and the segment reorganization in the first quarter of fiscal 2019, our legacy Refrigerated Food segment, which included the results of Bob Evans and our legacy egg, potato and cheese businesses in fiscal 2018, was split into two segments. Our foodservice and food ingredient businesses are now reported in our Foodservice segment, and our retail businesses are now reported in our Refrigerated Retail segment. Due to the level of integration within existing businesses, certain discrete financial data for Bob Evans and our legacy foodservice and refrigerated retail businesses is not available for the three and nine months ended June 30, 2019 and 2018.Condensed Consolidated Financial Statements.”

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~~Revenue from Contracts with Customers~~

On October 1, 2018, we adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606),” which superseded all previously existing revenue recognition guidance under accounting principles generally accepted in the United States of America (“GAAP”). Upon adoption, we reclassified certain payments to customers from “Selling, general, and administrative expenses” to “Net Sales” and recognized revenue that was previously deferred in “Net Sales” in the Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2019. For additional information regarding ASU 2014-09, refer to Notes 2 and 3 within “Notes to Condensed Consolidated Financial Statements.” The following table presents the impact on net sales resulting from the adoption of ASU 2014-09 by segment.

dollars in millions Three Months Ended
June 30, 2019 Nine Months Ended
June 30, 2019
Post Consumer Brands $ (1.6 ) $ (6.0 )
Weetabix —
—
Foodservice (1.5 ) (4.2 )
Refrigerated Retail (0.7 ) (2.6 )
Active Nutrition (2.7 ) (5.3 )
$ (6.5 ) $ (18.1 )

RESULTS OF OPERATIONS


	Three Months Ended June 30,											Nine Months Ended June 30,											Three Months Ended December 31,
							favorable/(unfavorable)											favorable/(unfavorable)											favorable/(unfavorable)
dollars in millions	2019			2018			$ Change			% Change		2019			2018			$ Change			% Change		2019			2018			$ Change			% Change
Net Sales	$	1,439.2		$	1,608.1		$	(168.9	)	(11	)%	$	4,238.3		$	4,627.3		$	(389.0	)	(8	)%	$	1,456.8		$	1,411.3		$	45.5		3	%

Operating Profit	$	198.2		$	184.3		$	13.9		8	%	$	678.4		$	506.0		$	172.4		34	%	$	196.0		$	293.9		$	(97.9	)	(33	)%
Interest expense, net	85.6			98.9			13.3			13	%	230.5			288.2			57.7			20	%	102.9			59.4			(43.5		)	(73	)%
(Gain) loss on extinguishment of debt, net	—			(6.1		)	(6.1		)	(100	)%	6.1			31.5			25.4			81	%
Expense (income) on swaps, net	86.2			(17.2		)	(103.4		)	(601	)%	200.9			(70.4		)	(271.3		)	(385	)%
Loss on extinguishment of debt, net																							12.9			6.1			(6.8		)	(111	)%
(Income) expense on swaps, net																							(61.4		)	51.7			113.1			219	%
Other income, net	(3.7		)	(3.5		)	0.2			6	%	(11.1		)	(10.6		)	0.5			5	%	(3.2		)	(3.7		)	(0.5		)	(14	)%
Income tax expense (benefit)	7.4			15.4			8.0			52	%	39.6			(216.5		)	(256.1		)	(118	)%
Income tax expense																							30.4			43.8			13.4			31	%
Equity method loss, net of tax	6.2			—			(6.2		)	n/a		25.7			—			(25.7		)	n/a		7.3			10.7			3.4			32	%
Less: Net earnings attributable to noncontrolling interest	0.3			0.3			—			—	%	0.9			0.9			—			—	%
Less: Net earnings attributable to noncontrolling interests																							7.9			0.3			(7.6		)	(2,533	)%
Net Earnings	$	16.2		$	96.5		$	(80.3	)	(83	)%	$	185.8		$	482.9		$	(297.1	)	(62	)%	$	99.2		$	125.6		$	(26.4	)	(21	)%

Net Sales

Net sales ~~decreased $168.9~~increased $45.5 million, or ~~11%~~3%, during the three months ended ~~June 30,~~December 31, 2019, compared to the corresponding period in the prior year. This ~~decrease~~increase was primarily due to ~~the absence of net sales in the current year period attributable to our historical Private Brands segment ($209.1 million in the three months ended June 30, 2018), which is no longer consolidated~~growth in our ~~financial results~~BellRing Brands and ~~is accounted for using the equity method as a result of the 8th Avenue Transactions,~~Foodservice segments, partially offset by ~~organic growth~~declines in our ~~Active Nutrition, Foodservice,~~ Post Consumer Brands and ~~Weetabix segments. Net sales in our~~ Refrigerated Retail ~~segment decreased during the three months ended June 30, 2019, compared to the corresponding prior year period.~~

Net sales decreased $389.0 million, or 8%, during the nine months ended June 30, 2019, compared to the corresponding period in the prior year. This decrease was primarily due to the absence of net sales in the current year period attributable to our historical Private Brands segment ($628.1 million in the nine months ended June 30, 2018), which is no longer consolidated in our financial results and is accounted for using the equity method as a result of the 8th Avenue Transactions, partially offset by the inclusion of incremental net sales from our prior year acquisition of Bob Evans on January 12, 2018. Additionally, net sales grew in our Foodservice, Active Nutrition and Post Consumer Brands segments for the nine months ended June 30, 2019, compared to the

~~Table of Contents~~

~~corresponding prior year period. Net sales in our Weetabix segment decreased during the nine months ended June 30, 2019, compared to the corresponding prior year period.~~

segments. For further discussion, refer to “Segment Results” within this section.

Operating Profit

Operating profit ~~increased $13.9~~decreased $97.9 million, or 8%33%, during the three months ended June 30, 2019, compared to the corresponding period in the prior year, primarily due to increased segment profit within our Foodservice, Active Nutrition and Weetabix segments. These positive impacts were partially offset by the absence of segment profit in the current year period attributable to our historical Private Brands segment ($12.7 million in the three months ended June 30, 2018), which is no longer consolidated in our financial results and is accounted for using the equity method as a result of the 8th Avenue Transactions, as well as decreased segment profit within our Post Consumer Brands and Refrigerated Retail segments. General corporate expenses increased in the three months ended June 30, 2019, as compared to the prior year period.

~~Operating profit increased $172.4 million, or 34%, during the nine months ended June 30,~~December 31, 2019, compared to the corresponding period in the prior year. In the ~~nine~~three months ended ~~June 30, 2019,~~December 31, 2018, operating profit was impacted by gains of ~~$127.9~~$125.3 million related to the 8th Avenue Transactions and the sale of the Post Consumer Brands cereal warehouse in Clinton, Massachusetts. Excluding ~~this impact,~~these impacts, operating profit increased ~~$44.5~~$27.4 million, or 9%16%, ~~in the nine months ended June 30, 2019. This increase was~~ primarily due to ~~the inclusion of incremental segment profit contribution from our prior year acquisition of Bob Evans,~~decreased general corporate expenses, as well as ~~organic growth~~increased segment profit within our ~~Active Nutrition,~~BellRing Brands and Weetabix segments, partially offset by lower segment profit within our Foodservice, ~~Weetabix~~Refrigerated Retail and Post Consumer Brands segments. These positive impacts were partially offset by the absence of segment profit in the current year period attributable to our historical Private Brands segment ($43.8 million in the nine months ended June 30, 2018), which is no longer consolidated in our financial results and is accounted for using the equity method as a result of the 8th Avenue Transactions. General corporate expenses increased in the nine months ended June 30, 2019, as compared to the prior year period.

For further discussion, refer to “Segment Results” within this section.

Interest Expense, Net

Interest expense, net ~~decreased $13.3~~increased $43.5 million, or ~~13%~~73%, during the three months ended ~~June 30,~~December 31, 2019, compared to the corresponding period in the prior ~~year. The decrease was primarily due~~year, driven by increased reclassifications of losses (compared to ~~a reduction~~gains in the ~~principal balance~~prior year period) of $37.3 million from accumulated other comprehensive loss to interest expense related to our interest rate swap contracts that were previously designated as hedging instruments. Additionally, interest expense was negatively impacted by debt ~~outstanding due to repayments and repurchases of certain debt~~entered into in ~~fiscal~~connection with the IPO on October 21, 2019, ~~and 2018,~~ partially offset by ~~an increase in~~reduced interest expense of $11.3 million as a result of the repayment of our ~~weighted-average interest rate resulting from a change in debt mix.~~term loan. Our weighted-average interest rate on our total outstanding debt was ~~5.3%~~5.6% and ~~5.0%~~5.2% for the three months ended ~~June 30,~~December 31, 2019 and 2018, respectively. ~~Additionally, with respect~~During the three months ended December 31, 2018, we recorded $4.3 million of interest expense related to amounts owed to former holders of shares of Bob Evans Farms, Inc. (“Bob Evans”) common stock who demanded appraisal of their shares under Delaware law and had not withdrawn their ~~demands, we recorded $4.7 million of interest expense during the three months ended June 30, 2018.~~

Interest expense, net decreased $57.7 million, or 20%, during the nine months ended June 30, 2019, compared to the corresponding period in the prior year. The decrease was primarily due to an increase in reclassifications of gains totaling $29.6 million from accumulated other comprehensive income (“OCI”) to interest expense, largely related to the termination of a portion of our interest rate swap contracts that were designated as hedging instruments. Additionally, interest expense was positively impacted by a decrease in the principal balance of debt outstanding due to repayments and repurchases of certain debt in fiscal 2019 and 2018, partially offset by an increase in our weighted-average interest rate resulting from a change in debt mix. Our weighted-average interest rate on our total outstanding debt was 5.3% and 5.0% for the nine months ended June 30, 2019 and 2018, respectively. Additionally, with respect to amounts owed to former holders of shares of Bob Evans common stock who demanded appraisal of their shares under Delaware law and had not withdrawn their demands, we recorded $4.7 million and $8.5 million of interest expense during the nine months ended June 30, 2019 and 2018, respectively.demands.

For additional information on our interest rate swaps designated as hedging instruments, refer to Note 1411 within “Notes to Condensed Consolidated Financial Statements.” For additional information on former holders of Bob Evans common stock who demanded appraisal of their shares, refer to ~~Notes 4 and 16~~Note 13 within “Notes to Condensed Consolidated Financial Statements.” For additional information on our debt, refer to Note 1715 within “Notes to Condensed Consolidated Financial Statements” and “Quantitative and Qualitative Disclosures About Market Risk” within Item 3.

Loss on Extinguishment of Debt, Net

Fiscal 2019

During the three months ended December 31, 2019, we recognized a loss of $12.9 million related to the write-offs of debt issuance costs associated with the repayments of the outstanding principal balances of our 2020 bridge loan and our term loan.

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~~(Gain) Loss on Extinguishment of Debt, Net~~

Fiscal ~~2019~~2018

During the ~~nine~~three months ended ~~June 30, 2019,~~December 31, 2018, we recognized a net loss of $6.1 million related to the repayment of a portion of our term loan, the assumption of our 2018 bridge loan by 8th Avenue in connection with the 8th Avenue Transactions and the repurchase and retirement of portions of the principal balances of our 5.625% senior notes, 5.75% senior notes ~~due in March 2027, 5.625% senior notes due in January 2028~~ and 5.00% senior ~~notes due in August 2026.~~notes. The net loss included write-offs of debt issuance costs of $10.8 million, partially offset by gains realized on debt repurchased at a discount of $4.0 million and the write-off of an unamortized debt premium of $0.7 million.

~~Fiscal 2018~~

~~During the three months ended June 30, 2018,~~ ~~we recognized a net gain of$6.1 million~~ related to the extinguishment of portions of the principal balances of our 5.75% senior notes due in March 2027, 5.625% senior notes due in January 2028, 5.00% senior notes due in August 2026 and 8.00% senior notes due in July 2025. The gain included amounts realized o~~n debt repurchased at a discount of $6.0 million and write-offs of unamortized debt premium of $1.9 million, partially offset by debt issuance costs write-offs of $1.6 million and payments of premiums of $0.2 million.~~

During the nine months ended June 30, 2018, we recognized a net loss of $31.5 million related to the extinguishment of the principal balance of our 6.00% senior notes due in December 2022, portions of the principal balances of our 5.75% senior notes due in March 2027, 5.625% senior notes due in January 2028, 5.00% senior notes due in August 2026 and 8.00% senior notes due in July 2025 and the amendment of our term loan. The loss included payments of premiums and debt extinguishment costs of ~~$33.7 million~~ ~~and debt issuance costs write-offs of~~ ~~$9.7 million, partially offset by gains realized on debt repurchased at a discount of~~ ~~$7.3 million~~ ~~and the write-off of an unamortized debt premium of $4.6 million.~~

For additional information on our debt, refer to Note 1716 within “Notes to Condensed Consolidated Financial Statements.”

(Income) Expense ~~(Income)~~ on Swaps, Net

Fiscal 2019

During the three ~~and nine~~ months ended ~~June 30,~~December 31, 2019, we recognized ~~losses~~net gains of ~~$86.2~~$61.4 million ~~and $200.9 million, respectively,~~ on our interest rate swaps that are not designated as hedging instruments. During the three months ended ~~June 30,~~December 31, 2019, the ~~losses~~net gains included non-cash mark-to-market ~~losses~~gains of ~~$86.1~~$80.5 million, ~~and cash~~partially offset by settlements paid of ~~$0.1 million. During the nine months ended June 30, 2019, the losses included non-cash mark-to-market losses of $200.5 million and cash settlements paid of $0.4~~$19.1 million.

Fiscal 2018

During the three ~~and nine~~ months ended ~~June 30,~~December 31, 2018, we recognized ~~net gains~~losses of ~~$17.2~~$51.7 million ~~and $70.4 million, respectively,~~ on our interest rate swaps that are not designated as hedging instruments. ~~During~~Of the total losses recognized in the three months ended ~~June 30,~~December 31, 2018, ~~the net gains included~~$51.5 million related to non-cash ~~mark-to-market gains of $17.4~~adjustments and $0.2 million ~~which were partially offset by~~related to cash settlements paid of $0.2 million. During the nine months ended June 30, 2018, the net gains included non-cash mark-to-market gains of $71.4 million, which were partially offset by cash settlements paid of $1.0 million.paid.

For additional information on our interest rate ~~and cross-currency~~ swap contracts, refer to Note 1411 within “Notes to Condensed Consolidated Financial Statements” and “Quantitative and Qualitative Disclosures About Market Risk” within Item 3.

Income ~~Taxes~~Tax Expense

Our effective income tax rate was ~~24.6%~~21.0% and ~~15.7% during the three and nine months ended June 30, 2019, respectively, and 13.7% and (81.0)%~~24.3% for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2019 and 2018, respectively. In accordance with ~~ASC~~Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes,” we record income tax expense ~~(benefit)~~ for interim periods using the estimated annual effective income tax rate for the full fiscal year adjusted for the impact of discrete items occurring during the interim periods.

In the nine months ended June 30, 2019, our effective income tax rate differed significantly from the statutory rate primarily resulting from $18.5 million of discrete tax benefit items related to excess tax benefits for share-based payments.

In the three and nine months ended June 30, 2018, our effective income tax rate was impacted by the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted on December 22, 2017. The Tax Act resulted in significant impacts to our accounting for income taxes with the most significant of these impacts relating to the reduction of the U.S. federal corporate income tax rate, a one-time transition tax on unrepatriated foreign earnings and full expensing of certain qualified depreciable assets placed in service after September 27, 2017 and before January 1, 2023. The Tax Act enacted a new U.S. federal corporate income tax rate of 21% that went into effect for our 2019 tax year and was prorated with the pre-December 22, 2017 U.S. federal corporate income tax rate of 35% for our 2018 tax year. This proration resulted in a blended U.S. federal corporate income tax rate of 24.5% for fiscal 2018. During the nine months ended June 30, 2018, we (i) remeasured our existing deferred tax assets and liabilities considering both the 2018 fiscal year blended rate and the 21% rate for periods beyond fiscal 2018 and recorded a provisional tax benefit of $283.1

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million (adjusted to $281.2 million during the year ended September 30, 2018) and (ii) calculated the one-time transition tax and recorded provisional tax expense of $7.1 million (adjusted to $10.3 million during the year ended September 30, 2018). Full expensing of certain depreciable assets resulted in temporary differences, which were analyzed throughout fiscal 2018 as assets were placed in service. Included in (i) above are tax benefit adjustments of $10.7 million and $12.4 million, recorded in the three and nine months ended June 30, 2018, respectively, to further refine the remeasurement made in the first quarter of fiscal 2018 of our existing deferred tax assets and liabilities considering both the 2018 fiscal year blended rate and the 21% rate for periods beyond fiscal 2018. We finalized the impacts of the Tax Act, and no additional adjustments were or will be recorded in fiscal 2019.

SEGMENT RESULTS

We evaluate each segment’s performance based on its segment profit, which is its earnings before income taxes and equity method earnings/loss before impairment of property, goodwill and other intangible assets, facility closure related costs, restructuring expenses, gain/loss on assets and liabilities held for sale, gain/loss on sale of businesses and facilities, interest expense ~~net~~ and other unallocated corporate income and expenses.

Post Consumer Brands


	Three Months Ended June 30,											Nine Months Ended June 30,										Three Months Ended December 31,
							favorable/(unfavorable)											favorable/(unfavorable)										favorable/(unfavorable)
dollars in millions	2019			2018			$ Change			% Change		2019			2018			$ Change		% Change		2019			2018			$ Change			% Change
Net Sales	$	474.1		$	466.4		$	7.7		2	%	$	1,388.5		$	1,360.7		$	27.8	2	%	$	441.2		$	455.3		$	(14.1	)	(3	)%
Segment Profit	$	82.7		$	83.3		$	(0.6	)	(1	)%	$	249.9		$	244.6		$	5.3	2	%	$	80.6		$	84.0		$	(3.4	)	(4	)%
Segment Profit Margin	17		%	18		%						18		%	18		%					18		%	18		%

Net sales for the Post Consumer Brands segment ~~increased $7.7~~decreased $14.1 million, or 2%3%, for the three months ended ~~June 30,~~December 31, 2019, when compared to the prior year period, primarily driven by ~~higher average~~3% lower volume. This decrease in volume was largely due to losses in Honey Bunches of Oats, natural and organic cereals, adult classic brands, licensed products, Great Grains and Malt-O-Meal bag cereal. These declines were partially offset by increases in private label cereal volume. Average net selling prices increased when compared to the prior year period resulting from targeted price increases that went fully into effect in the second quarter of fiscal 2019, partially offset by an unfavorable product mix. ~~Volume increased slightly, primarily due to an increase in private label cereal, driven by increased distribution and new product introductions, and~~ ~~Honey Bunches of Oats.~~ ~~These increases were partially offset by declines in licensed products,~~ ~~Malt-O-Meal~~ ~~bag cereal,~~ ~~Great Grains~~ ~~andgovernmental bid business.~~

Net sales for the Post Consumer Brands segment increased $27.8 million, or 2%, for the nine months ended June 30, 2019, when compared to the prior year period, primarily driven by higher average net selling prices resulting from targeted price increases. Volume increased slightly, primarily due to an increase in private label cereal and licensed products, both of which were driven by increased distribution and new product introductions, as well as increases in kid classic brands. These increases were partially offset by declines in ~~Malt-O-Meal~~ ~~bag cereal,~~ ~~Great Grains~~, ~~Honey Bunches of Oats~~ ~~and governmental bid business~~.

Segment profit for the three months ended ~~June 30,~~December 31, 2019 decreased ~~$0.6~~$3.4 million, or 1%4%, when compared to the prior year period, primarily driven by lower net sales, as previously discussed, increased advertising and consumer spending of $1.9 million, incremental third party consulting costs of $1.9 million, higher warehousing costs of $1.5 million and increased integration expense of $1.1 million. These negative impacts were partially offset by lower manufacturing costs of $4.9 million and reduced freight costs of $4.5 million.

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Weetabix



	Three Months Ended December 31,
							favorable/(unfavorable)
dollars in millions	2019			2018			$ Change		% Change
Net Sales	$	101.5		$	100.9		$	0.6	1	%
Segment Profit	$	23.7		$	18.9		$	4.8	25	%
Segment Profit Margin	23		%	19		%

Net sales for the Weetabix segment increased $0.6 million, or 1%, for the three months ended December 31, 2019, when compared to the prior year period, due to improved average net selling prices, partially offset by lower volume. Average net selling prices increased primarily due to targeted price increases that occurred in the third quarter of fiscal 2019, reduced promotional activity and a favorable product mix. Volume was down 8%, primarily driven by declines in non-biscuit cereal products, Weetabix On the Go drink products and exports, partially offset by increases in biscuit cereal products.

Segment profit for the three months ended December 31, 2019 increased $4.8 million, or 25%, when compared to the prior year period. This increase was driven by favorable manufacturing costs of $2.9 million, lower employee-related expenses and higher net sales, as previously discussed, partially offset by higher advertising and consumer spending of ~~$3.6~~$1.5 million.

Foodservice



	Three Months Ended December 31,
							favorable/(unfavorable)
dollars in millions	2019			2018			$ Change			% Change
Net Sales	$	420.6		$	408.1		$	12.5		3	%
Segment Profit	$	47.0		$	52.7		$	(5.7	)	(11	)%
Segment Profit Margin	11		%	13		%

Net sales for the Foodservice segment increased $12.5 million, or 3%, for the three months ended December 31, 2019, when compared to the prior year period, primarily due to increased volume of 3%. Egg product sales were up $9.6 million, or 3%, with volume up 2%, due to volume gains in the foodservice and food ingredient channels. Sales of side dishes were up $5.0 million, or 11%, with volume up 9%. Sausage sales were down $0.7 million, or 13%, with volume down 15%. Other product sales were down $1.4 million, or 22%, with volume down 21%.

Segment profit for the three months ended December 31, 2019 decreased $5.7 million, or 11%, when compared to the prior year period, primarily due to unfavorable manufacturing costs of $8.2 million, which were driven by unplanned downtime at certain facilities that is not expected to be recurring and start-up costs of $2.7 million related to our new precooked egg facility in Norwalk, Iowa, increased warehousing expense of $1.2 million and higher freight costs of $0.9 million. These negative impacts were partially offset by higher volume, as previously discussed, lower raw material costs of $2.8 million and decreased employee-related costs.

Refrigerated Retail



	Three Months Ended December 31,
							favorable/(unfavorable)
dollars in millions	2019			2018			$ Change			% Change
Net Sales	$	249.9		$	261.6		$	(11.7	)	(4	)%
Segment Profit	$	26.0		$	30.5		$	(4.5	)	(15	)%
Segment Profit Margin	10		%	12		%

Net sales for the Refrigerated Retail segment decreased $11.7 million, or 4%, for the three months ended December 31, 2019, when compared to the prior year period, primarily due to lower volume of 7%. Sales of side dishes decreased $2.5 million, or 2%, with volume down 5%, driven by lower breakfast sides volume. Egg product sales were down $8.7 million, or 19%, with volume down 10%, due to losses in branded egg product volume and lower average net selling prices resulting from lower market-based egg prices. Cheese and other dairy case product sales were down $2.1 million, or 3%, with volume down 9%, primarily due to branded and deli cheese distribution losses. Sales of other products were down $1.3 million, or 13%, with volume down 16%. Sausage sales increased $2.9 million, or 8%, with volume down 3%. Average net selling prices increased compared to the prior year period due to reduced trade spending.

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Segment profit decreased $4.5 million, or 15%, for the three months ended December 31, 2019, when compared to the prior year period. This decrease was primarily due to lower volume, as previously discussed, higher ~~outside professional service~~net raw material costs of ~~$2.1~~$4.7 million (due to higher cheese input costs of $5.5 million, partially offset by lower sow costs of $0.8 million), higher third party consulting costs of $1.1 million and increased integration costs of ~~$1.9~~$0.9 million. These negative impacts were partially offset by higher average net selling prices, as previously discussed, and favorable manufacturing costs of $5.5 million. During the three months ended June 30, 2018, manufacturing costs were negatively impacted by higher than expected conversion costs associated with new product introductions, as well as unplanned downtime at two of our facilities.discussed.

Segment profit for the nine months ended June 30, 2019 increased $5.3 million, or 2%, when compared to the prior year period, primarily driven by higher average net selling prices, as previously discussed, as well as lower advertising and consumer spending of $7.9 million and decreased integration costs of $3.9 million. These positive impacts were partially offset by higher freight costs of $11.8 million (excluding volume-driven impacts), higher raw material costs of $10.3 million, unfavorable manufacturing costs of $3.0 million and increased employee-related expenses.

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~~Weetabix~~BellRing Brands


	Three Months Ended June 30,										Nine Months Ended June 30,											Three Months Ended December 31,
							favorable/(unfavorable)										favorable/(unfavorable)											favorable/(unfavorable)
dollars in millions	2019			2018			$ Change		% Change		2019			2018			$ Change			% Change		2019			2018			$ Change		% Change
Net Sales	$	108.4		$	107.1		$	1.3	1	%	$	313.4		$	315.8		$	(2.4	)	(1	)%	$	244.0		$	185.8		$	58.2	31	%
Segment Profit	$	26.8		$	26.1		$	0.7	3	%	$	69.3		$	58.6		$	10.7		18	%	$	49.3		$	35.2		$	14.1	40	%
Segment Profit Margin	25		%	24		%					22		%	19		%						20		%	19		%

Net sales for the ~~Weetabix~~BellRing Brands segment increased ~~$1.3~~$58.2 million, or 1%31%, for the three months ended June 30, 2019, when compared to the prior year period, primarily due to improved average net selling prices, partially offset by lower volume and unfavorable foreign exchange rates. Volume was down 3%, driven by declines in exports and non-biscuit cereal products, partially offset by increases in branded and private label biscuits and bars. Average net selling prices increased primarily due to targeted price increases and lower promotional spending.

Net sales for the Weetabix segment decreased $2.4 million, or 1%, for the nine months ended June 30, 2019, when compared to the prior year period, primarily due to unfavorable foreign exchange rates. Excluding this impact, net sales increased, driven by improved average net selling prices, partially offset by lower volume. Volume was down 4%, driven by declines in branded RTE cereal, non-biscuit cereal products, exports and ~~Weetabix On the Go~~ ~~drink products, partially offset by increases in private label biscuits and bars. Average net selling prices increased primarily due to targeted price increases and lower promotional spending.~~

Segment profit for the three months ended June 30, 2019 increased $0.7 million, or 3%, when compared to the prior year period. This increase was driven by improved average net selling prices, as previously discussed, partially offset by unfavorable raw material and manufacturing costs of $4.8 million, higher advertising and consumer spending of $3.9 million and unfavorable foreign exchange rates, as compared to the prior year period.

Segment profit for the nine months ended June 30, 2019 increased $10.7 million, or 18%, when compared to the prior year period. This increase was driven by improved average net selling prices, as previously discussed, partially offset by unfavorable raw material and manufacturing costs of $5.1 million, increased advertising and consumer spending of $5.2 million, higher employee-related expenses and unfavorable foreign exchange rates, as compared to the prior year period.

~~Foodservice~~

Three Months Ended June 30, Nine Months Ended June 30,
favorable/(unfavorable) favorable/(unfavorable)
dollars in millions 2019 2018 $ Change % Change 2019 2018 $ Change % Change
Net Sales $ 412.6
$ 399.3
$ 13.3
3 % $ 1,209.8
$ 1,148.4
$ 61.4
5 %
Segment Profit $ 58.5
$ 30.8
$ 27.7
90 % $ 158.6
$ 119.6
$ 39.0
33 %
Segment Profit Margin 14 % 8 % 13 % 10 %

Net sales for the Foodservice segment increased $13.3 million, or 3%, for the three months ended June 30, 2019, when compared to the prior year period, primarily due to increased volume of 3%. Average net selling prices increased slightly resulting from a favorable product mix. Egg product sales were up $14.0 million, or 4%, with volume up 3%, due to gains in both the foodservice and food ingredient channels. Sales of side dishes were up $1.9 million, or 5%, with volume up 5%. Sausage sales were down $0.5 million, or 9%, with volume down 13%. Other product sales were down $2.1 million, or 29%, with volume down 33%.

Net sales for the Foodservice segment increased $61.4 million, or 5%, for the nine months ended June 30, 2019, when compared to the prior year period, partially due to the inclusion of incremental net sales attributable to our prior year acquisition of Bob Evans. Excluding sales attributable to Bob Evans in both periods, net sales increased $40.5 million, or 4%, primarily due to increased volume and improved average net selling prices resulting from a favorable product mix. Egg product sales were up $34.5 million, or 3%, with volume up 3%. Volume increases were attributable to gains in the foodservice channel, partially offset by declines in the food ingredient channel. Sales of side dishes were up $6.8 million, or 7%, with volume up 7%. Other product sales were down $0.8 million, or 12%, with volume down 17%.

Segment profit for the three months ended June 30, 2019 increased $27.7 million, or 90%, when compared to the prior year period, primarily due to lower raw material costs of $23.1 million, including increased gains (compared to losses in the prior year period) related to unrealized mark-to-market adjustments on commodity hedges of $9.9 million, a gain on a legal settlement of $3.4 million in the current year period and higher net sales, as previously discussed. These favorable impacts were partially offset by

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~~unfavorable manufacturing costs of $3.1 million, increased storage and warehousing costs of $2.0 million and higher freight costs of $0.7 million (excluding volume-driven impacts).~~

Segment profit for the nine months ended June 30, 2019 increased $39.0 million, or 33%, when compared to the prior year period. Segment profit includes profit of $4.5 million and $1.7 million in the nine months ended June 30, 2019 and 2018, respectively, attributable to our prior year acquisition of Bob Evans. Excluding these amounts, segment profit increased $36.2 million, or 31%, primarily due to lower raw material costs of $17.9 million, including increased gains (compared to losses in the prior year period) related to unrealized mark-to-market adjustments on commodity hedges of $8.2 million, higher net sales, as previously discussed, lower employee-related expenses and lower integration costs of $0.7 million. These favorable impacts were partially offset by increased warehousing costs of $5.7 million, unfavorable manufacturing costs of $4.7 million and higher freight costs of $3.9 million (excluding volume-driven impacts). Additionally, segment profit was impacted in the nine months ended June 30, 2019 by a gain on a legal settlement of $3.4 million and in the nine months ended June 30, 2018 by a provision for legal settlement of $2.3 million.

~~Refrigerated Retail~~

Three Months Ended June 30, Nine Months Ended June 30,
favorable/(unfavorable) favorable/(unfavorable)
dollars in millions 2019 2018 $ Change % Change 2019 2018 $ Change % Change
Net Sales $ 207.1
$ 214.5
$ (7.4 ) (3 )% $ 688.2
$ 576.0
$ 112.2
19 %
Segment Profit $ 15.8
$ 25.7
$ (9.9 ) (39 )% $ 72.8
$ 68.7
$ 4.1
6 %
Segment Profit Margin 8 % 12 % 11 % 12 %

Net sales for the Refrigerated Retail segment decreased $7.4 million, or 3%, for the three months ended June 30, 2019, when compared to the prior year period, primarily driven by lower average net selling prices resulting from an unfavorable product mix, partially offset by slightly higher volume. Egg product sales were down $5.7 million, or 13%, driven by reduced average net selling prices resulting from lower market-based egg prices and an unfavorable product mix, and 2% lower volumes. Cheese and other dairy case product sales were down $7.4 million, or 13%, with volume down 11%, primarily due to branded cheese distribution losses. Sales of side dishes increased $5.8 million, or 8%, with volume up 8%, driven by distribution gains. Sausage sales increased $1.6 million, or 6%, due to higher average net selling prices resulting from targeted price increases, partially offset by slightly lower volumes. Sales of other products were down $1.7 million, or 18%, with volume down 18%.

Net sales for the Refrigerated Retail segment increased $112.2 million, or 19%, for the nine months ended June 30, 2019 when compared to the prior year period, with volume increasing 24%. Volume and net sales were impacted in the current and prior year periods by the inclusion of results from our January 2018 acquisition of Bob Evans. When compared to the prior year (partially pre-acquisition) period, overall volumes for the segment increased 2%. This increase was due to higher side dish volume of 7%, partially offset by lower volumes of 5% in cheese and other dairy case products, 4% in sausage and 1% in egg products. Excluding the impact of the acquisition, volume for our legacy refrigerated retail businesses decreased 2%. Compared to the same period in the prior year (partially pre-acquisition) period, Bob Evans total retail volume increased 5%, driven by an 11% increase in side dish volumes.

~~Segment profit decreased $9.9 million, or 39%, for the three months ended June 30,~~December 31, 2019, when compared to the prior year period. ~~This decrease was primarily due to unfavorable manufacturing costs~~Sales of ~~$3.5 million, lower net sales, as previously discussed, increased integration costs of $2.2 million, higher freight costs of $1.3 million and costs associated with the discontinuation of~~Premier Protein products ~~of $1.1 million.~~

~~Segment profit increased $4.1~~were up $63.2 million, or 6%45%, ~~for~~with volume up 38%. Volume increases were driven by higher RTD protein shake product volumes, which primarily related to distribution gains, new product introductions and lapping short-term capacity constraints in the ~~nine months ended June 30, 2019, when compared to the prior year period, primarily due to the inclusion~~first quarter of ~~an additional three months of results from our prior year acquisition of Bob Evans and lower integration costs of $6.3 million, partially offset by decreased volumes~~2019. Average net selling prices increased in our legacy refrigerated retail business, as previously discussed. In the nine months ended June 30, 2018, the results of our Bob Evans retail business were negatively impacted by the recognition of an acquisition accounting-related inventory valuation adjustment of $4.1 million and acquisition-related costs of $2.5 million.

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~~Active Nutrition~~

Three Months Ended June 30, Nine Months Ended June 30,
favorable/(unfavorable) favorable/(unfavorable)
dollars in millions 2019 2018 $ Change % Change 2019 2018 $ Change % Change
Net Sales $ 237.6
$ 216.4
$ 21.2
10 % $ 639.9
$ 607.6
$ 32.3
5 %
Segment Profit $ 55.6
$ 40.2
$ 15.4
38 % $ 134.8
$ 86.1
$ 48.7
57 %
Segment Profit Margin 23 % 19 % 21 % 14 %

~~Net sales for the Active Nutrition segment increased $21.2 million, or 10%, for~~ the three months ended ~~June 30,~~December 31, 2019 ~~when compared to~~resulting from targeted price increases that occurred in the ~~prior year period, primarily due to higher average net selling prices and higher volume.~~second quarter of fiscal 2019. Sales of ~~RTD protein shakes and other RTD beverages~~Dymatize products were ~~up $30.9~~down $3.0 million, or 19%, due to 14% volume growth and higher average net selling prices as a result of targeted price increases. Sales of nutrition bars were down $6.4 million, or 29%, with volume down 37%, driven by distribution losses and strategic sales reductions of low-performing products within our North American portfolio. Sales of powders were down $2.5 million, or 8%10%, with volume down 4%, primarily due to ~~declines~~higher club volumes in the ~~specialty channel and lower average net selling prices, partially offset by organic growth in the eCommerce channel.~~prior year associated with promotional activity that did not recur. Sales of ~~all other~~PowerBar products ~~decreased $0.8~~were down $1.2 million, or ~~27%~~12%, with volume down ~~16%.~~

Net sales for the Active Nutrition segment increased $32.3 million, or 5%, for the nine months ended June 30, 2019, when compared to the prior year period, primarily due to higher volume and higher average net selling prices, partially offset by an unfavorable product mix. Sales of RTD protein shakes and other RTD beverages were up $54.6 million, or 12%, due to 8% volume growth and higher net selling prices resulting from targeted price increases. Growth for RTD protein shakes in the nine months ended June 30, 2019 was unfavorably impacted by a temporary reduction in available flavors due to low inventory levels at September 30, 2018. To increase inventory and minimize the overall impact to customers and consumers, the number of available RTD protein shake flavors was temporarily reduced from seven to two in the first quarter of fiscal 2019. During the second quarter of fiscal 2019, all flavors were reintroduced. Sales for powders were up $2.5 million, or 3%, with volume up 4%, primarily due to distribution gains in the club and mass channels and organic growth in the eCommerce channel. Sales for nutrition bars were down $23.4 million, or 32%, with volume down 32%28%, driven by ~~distribution losses and~~ strategic sales reductions of ~~low-performing~~low performing products within ~~our~~BellRing Brands’ North American portfolio. Sales of all other products ~~decreased $1.4 million, or 17%, with volume~~were down ~~7%.~~$0.8 million.

Segment profit increased ~~$15.4~~$14.1 million, or ~~38%~~40%, for the three months ended ~~June 30,~~December 31, 2019, when compared to the prior year period. This increase was primarily driven by higher net sales, as previously discussed, ~~lower~~partially offset by higher net product costs of ~~$3.2~~$1.7 million, as ~~favorable~~unfavorable raw materials ~~and freight~~ costs were partially offset by increased manufacturing costs, and reduced advertising and consumer spending of $0.9 million. These positive impacts were partially offset by increased brokerage and warehousing costs of $1.0 million and higher employee-related expenses.

Segment profit increased $48.7 million, or 57%, for the nine months ended June 30, 2019, when compared to the prior year period. Segment profit in the nine months ended June 30, 2018 was impacted by a litigation settlement accrual of $9.0 million. Excluding this impact, segment profit increased $39.7 million, or 42%. This increase was primarily driven by higher net sales, as previously discussed, lower ~~net product costs of $16.0 million, as favorable raw materials and~~ freight ~~costs were partially offset by increased manufacturing costs, and reduced advertising and consumer spending of $7.4 million.~~costs. These positive impacts were partially offset by higher employee-related ~~expenses.~~expenses (including stock-based compensation expense of $1.4 million), higher warehousing costs of $1.9 million, transaction costs of $1.5 million, increased advertising and consumer spending of $1.8 million and incremental public company costs of $1.8 million.

Other Items

General Corporate Expenses and Other


	Three Months Ended June 30,									Nine Months Ended June 30,									Three Months Ended December 31,
					favorable/(unfavorable)									favorable/(unfavorable)									favorable/(unfavorable)
dollars in millions	2019		2018		$ Change			% Change		2019		2018		$ Change			% Change		2019		2018		$ Change		% Change
General corporate expenses and other	$	37.5	$	31.0	$	(6.5	)	(21	)%	$	123.2	$	104.8	$	(18.4	)	(18	)%	$	27.4	$	48.4	$	21.0	43	%

General corporate expenses and other ~~increased $6.5~~decreased $21.0 million, or ~~21%~~43%, ~~during~~for the three months ended ~~June 30,~~December 31, 2019, when compared to the prior year period, primarily driven by increased restructuring and plant closure costs of $5.0 million (including increased accelerated depreciation of $3.4 million), higher stock compensation of $1.3 million, higher third party transaction costs of $1.3 million and increased employee-related expenses. These negative impacts were partially offset by lower mark-to-market adjustments on deferred compensation of $1.8 million and master services agreement (“MSA”) and advisory income of $0.9 million. Additionally, prior year general corporate expenses were impacted by costs related to the integration planning for the acquisition of Bob Evans of $0.5 million.

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General corporate expenses and other increased $18.4 million, or 18%, during the nine months ended June 30, 2019, when compared to the prior year period, primarily driven by increased restructuring and plant closure costs of $14.9 million (including increased accelerated depreciation of $10.7 million), increased lossesgains (compared to ~~gains~~losses in the prior year period) related to mark-to-market adjustments on commodity ~~and foreign currency~~ hedges of ~~$9.2~~$12.9 million, ~~higher stock compensation of $4.1 million and increased employee-related expenses. These negative impacts were partially offset by~~ lower third party transaction costs of ~~$5.8~~$7.2 million ~~MSA~~ and ~~advisory income~~decreased restructuring and plant closure costs of ~~$2.6~~$4.2 million ~~and~~(including lower accelerated depreciation of $3.3 million). These positive impacts were partially offset by higher stock compensation of $1.6 million. Prior year general corporate expenses were positively impacted by a gain on assets held for sale of $0.6 million ~~in the current year period~~ related to ~~the~~our Post Consumer Brands segment. ~~Prior year general corporate expenses were impacted by costs related to the integration planning for the acquisition of Bob Evans of $6.1 million.~~

Restructuring and Facility Closure

The table below shows the amount of restructuring and facility closure costs, including accelerated depreciation, attributable to each segment. These amounts are excluded from the measure of segment profit and are included in general corporate expenses and other. For additional information on restructuring costs, refer to Note 53 within “Notes to Condensed Consolidated Financial Statements.”

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															Three Months Ended December 31,
	Three Months Ended June 30,							Nine Months Ended June 30,												favorable/(unfavorable)
dollars in millions	2019		2018		$ Change			2019		2018		$ Change			2019			2018		$ Change
Post Consumer Brands	$	6.0	$	2.1	$	(3.9	)	$	13.6	$	4.0	$	(9.6	)	$	0.6		$	3.3	$	2.7
Weetabix	1.1		—		(1.1		)	5.3		—		(5.3		)	(0.1		)	1.4		1.5
	$	7.1	$	2.1	$	(5.0	)	$	18.9	$	4.0	$	(14.9	)	$	0.5		$	4.7	$	4.2

Gain on Sale of Business

During the ~~nine~~three months ended ~~June 30, 2019,~~December 31, 2018, we recorded ~~gains~~a gain of ~~$127.3~~$124.7 million (adjusted to $126.6 million during the year ended September 30, 2019) related to the 8th Avenue Transactions. Gains recorded in the ~~nine~~three months ended ~~June 30, 2019~~December 31, 2018 included foreign exchange losses previously recorded in accumulated ~~OCI~~other comprehensive loss of ~~$42.1 million~~.$42.1 million.

LIQUIDITY AND CAPITAL RESOURCES

In connection with completing ~~divestitures~~the BellRing formation transactions and managing our capital structure, we completed the following ~~transactions~~activities during the three months ended December 31, 2019 (for additional information, see Notes 4,1, 15 and 17 ~~19 and 21~~ within “Notes to Condensed Consolidated Financial Statements”):

$~~625.0~~524.4 million ~~principal value bridge loan assumed~~net proceeds received by ~~8th Avenue in connection with the 8th Avenue Transactions, releasing us from any obligations thereunder while we retained the proceeds~~BellRing from the ~~bridge loan;~~IPO, after deducting underwriting discounts and commissions;

$~~250.0~~1,225.0 million ~~received from THL as part of the 8th Avenue Transactions;~~borrowed under our 2020 bridge facility agreement (the “2020 Bridge Loan”);

$863.0 million principal value paid on our existing term loan using the $875.0 million of proceeds received from the 8th Avenue Transactions, net of debt issuance costs paid related to the bridge loan and other transaction costs;

~~$60.0~~1,225.0 million outstanding principal value ~~repurchased~~repaid by BellRing on the 2020 Bridge Loan;

BellRing entered into a credit agreement (the “BellRing Credit Agreement”) providing for debt facilities consisting of a $700.0 million term B loan facility (the “BellRing Term B Facility”) and ~~retired of~~a $200.0 million revolving credit facility (the “BellRing Revolving Credit Facility”);

$700.0 million borrowed by BellRing under the BellRing Term B Facility;

$1,309.5 million outstanding principal value repaid on our ~~5.625% senior notes due in January 2028, 5.75% senior notes due in March 2027~~term loan;

$120.0 million borrowed by BellRing under the BellRing Revolving Credit Facility;

$40.0 million outstanding principal value repaid by BellRing on the BellRing Revolving Credit Facility; and ~~5.00% senior notes due in August 2026;~~

~~0.9~~2.2 million shares of our common stock repurchased at an average share price of ~~$96.18~~$102.99 per share for a total cost of ~~$88.7~~$223.1 million, including broker’s ~~commissions,~~commissions.

Additionally, on January 8, 2020, subsequent to the end of ~~which $84.7~~the reporting period, we repurchased and retired the remaining $122.2 million ~~was cash settled during the period;~~

~~$253.6 million of payments made to former holders of Bob Evans common stock who had demanded appraisal of their shares under Delaware law and had not yet been paid for their shares; and~~

~~$750.0 million~~outstanding principal value of ~~5.50%~~our 8.00% senior ~~notes due in December 2029 issued in July 2019.~~

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notes.

The following table shows select cash flow data, which is discussed below.


	Nine Months Ended June 30,						Three Months Ended December 31,
dollars in millions	2019			2018			2019			2018
Cash provided by (used in):
Operating activities	$	504.8		$	591.1		$	108.4		$	238.7
Investing activities	96.7			(1,597.0		)	(75.8		)	201.5
Financing activities	(1,228.3		)	(173.9		)	(274.9		)	(1,199.6		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1.2		)	(1.7		)	2.9			(1.6		)
Net decrease in cash, cash equivalents and restricted cash	$	(628.0	)	$	(1,181.5	)	$	(239.4	)	$	(761.0	)

Historically, we have generated and expect to continue to generate positive cash flows from operations. We believe our cash on hand, cash flows from operations and current and possible future credit facilities will be sufficient to satisfy our future working capital requirements, interest payments, research and development activities, capital expenditures, pension contributions and other financing requirements for the foreseeable future. Our ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures and other business risk factors. If we are unable to generate sufficient cash flows from operations, or otherwise to comply with the terms of our credit facilities, we may be required to seek additional financing alternatives, which may require waivers under our amended and restated credit agreement (as further amended, our “Credit Agreement”) and indentures governing our senior notes, in order to generate additional cash. There can be no assurance that we would be able to

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obtain additional financing or any such waivers on terms acceptable to us or at all. For additional information on our debt, refer to Note 1715 within “Notes to Condensed Consolidated Financial Statements.”

Short-term financing needs primarily consist of working capital requirements and principal and interest payments on our long-term debt. Long-term financing needs will depend largely on potential growth opportunities, including acquisition activity and repayment or refinancing of our long-term debt obligations. We may, from time to time, seek to retire or purchase our outstanding debt through cash purchases in open market transactions, privately negotiated transactions or otherwise. Additionally, we may seek to repurchase shares of our common stock. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Obligations under the BellRing Credit Agreement are guaranteed by the existing and subsequently acquired or organized domestic subsidiaries of BellRing LLC (other than immaterial subsidiaries and certain excluded subsidiaries) and are secured by security interests in substantially all of the assets of BellRing LLC and the assets of its subsidiary guarantors (other than real estate), subject to limited exceptions. We and our subsidiaries (other than BellRing LLC and certain of its subsidiaries) are not obligors or guarantors under the BellRing debt facilities.

Operating Activities

Cash provided by operating activities for the ~~nine~~three months ended ~~June 30,~~December 31, 2019 decreased ~~$86.3~~$130.3 million compared to the prior year period, primarily driven by an increase in cash settlements paid (compared to cash settlements received in the prior year period) of $49.0 million related to our interest rate swaps, higher interest payments of $30.1 million resulting from debt entered into in connection with the IPO and interest paid related to amounts owed to former holders of shares of Bob Evans common stock who demanded appraisal of their shares under Delaware law and had not withdrawn their demands, higher tax payments (net of refunds) of $43.5 million, increased ~~investment~~payments of employee incentives and unfavorable changes in working capital, primarily related to ~~build inventory levels~~fluctuations in the timing of sales and collections of trade receivables within our ~~Active Nutrition, Foodservice,~~BellRing Brands segment and the timing of payments of trade accounts payables within our Post Consumer Brands and ~~Weetabix segments and~~Foodservice segments.

Investing Activities

Three months ended December 31, 2019

Cash used in investing activities for the ~~absence~~three months ended December 31, 2019 was $75.8 million, primarily consisting of ~~cash flows~~capital expenditures of $77.3 million. The most significant capital expenditure project in the current year from our historical Private Brands segment, as well as higher income tax payments of $34.1 million and $10.8 million of legal settlements paid during the nine months ended June 30, 2019. These negative impacts were partially offset by increased cash proceeds received of $29.6 million, primarilyperiod related to the ~~termination~~purchase of $800.0 million notional value of our interest rate swaps that were designated as hedging instruments and incremental cash flows from our prior year acquisition of Bob Evans. Additionally, we made lower interest payments of $12.9 million, primarily due to a ~~decrease~~previously leased manufacturing plant in ~~the principal balance of debt outstanding from debt repaid and repurchased and retired during fiscal 2019 and 2018.~~Sulphur Springs, Texas.

~~Investing Activities~~Three months ended December 31, 2018

Cash provided by investing activities for the ~~nine~~three months ended ~~June 30, 2019~~December 31, 2018 was ~~$96.7~~$201.5 million, ~~compared to cash used in the prior year period of $1,597.0 million. The cash inflow during the nine months ended June 30, 2019 was~~ driven by proceeds received of ~~$266.8~~$250.0 million related to the 8th Avenue Transactions and proceeds received of ~~$30.5~~$28.3 million largely resulting from the termination of $214.2 million notional value of our cross-currency swaps that were designated as hedging instruments. ~~The cash outflow during the nine months ended June 30, 2018 was primarily due to cash payments of $1,454.0 million related to our prior year acquisition of Bob Evans. Additionally,~~These positive impacts were partially offset by capital expenditures ~~increased $60.6 million during~~of $78.8 million. The most significant capital expenditure project in the ~~nine months ended June 30, 2019, when compared to the prior year~~ period ~~primarily due~~related to the construction of a new precooked egg facility in Norwalk, Iowa.

Financing Activities

Three months ended December 31, 2019

Cash used in financing activities for the three months ended December 31, 2019 was $274.9 million. BellRing Brands, Inc. received $524.4 million net proceeds from the IPO, after deducting underwriting discounts and commissions. We borrowed $1,225.0 million under the 2020 Bridge Loan, BellRing borrowed $700.0 million under the BellRing Term B Facility, at a discount of $14.0 million, and BellRing borrowed $120.0 million under the BellRing Revolving Credit Facility, which resulted in total proceeds from the issuance of long-term debt of $2,031.0 million. In connection with these borrowings, we paid $28.2 million in debt issuance costs and deferred financing fees. BellRing repaid the outstanding principal balance on the 2020 Bridge Loan and we repaid the outstanding principal balance on our term loan, and BellRing repaid $40.0 million outstanding principal borrowings on the BellRing Revolving Credit Facility, which resulted in total repayments of long-term debt of $2,574.5 million. In connection with the IPO, we were refunded $15.3 million of debt issuance costs paid in connection with the 2020 Bridge Loan. We paid $231.8 million, including broker’s commissions, for the repurchase of shares of our common stock, which included repurchases of common stock that were accrued at September 30, 2019 and did not settle until fiscal 2020.

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~~Financing Activities~~

~~Nine~~Three months ended ~~June 30, 2019~~December 31, 2018

Cash used in financing activities for the ~~nine~~three months ended ~~June 30, 2019~~December 31, 2018 was ~~$1,228.3~~$1,199.6 million. ~~For~~In the ~~nine~~three months ended ~~June 30, 2019,~~December 31, 2018, we repaid $863.0 million outstanding principal value of our term loan,and repurchased and retired $60.0 million principal value of our 5.625% senior notes, ~~due in January 2028,~~ 5.75% senior notes ~~due in March 2027~~ and 5.00% senior notes, ~~due in August 2026,~~ at a discount of $4.0 million, ~~discount. These repayments and repurchases, combined with payments related to our capital lease,~~which resulted in total net payments of ~~$919.1~~$919.0 million. Additionally, payments of $253.6 million, excluding interest, were made to former holders of Bob Evans common stock who had demanded appraisal and, who at the time, had not yet been paid for their shares. WeIn connection with the 8th Avenue Transactions, we were refunded $7.8 million of debt issuance costs we paid $84.7 million, including broker’s commissions, for the repurchase of shares for our common stock during the nine months ended June 30, 2019, and we also received proceeds from the exercises of stock awards of $41.5 million.

~~Nine months ended June 30,~~in fiscal 2018

Cash used in financing activities for the nine months ended June 30, 2018 was $173.9 million. In the nine months ended June 30, 2018, we received proceeds from the issuance of long-term debt of $1,000.0 million related to the ~~issuance of our 5.625% senior notes due in January 2028. In connection with this senior notes issuance, combined with payments on prior year senior notes issuances, we~~2018 bridge loan. We also paid $10.5 million in debt issuance costs. In addition, we repaid the outstanding principal balance of our 6.00% senior notes due in December 2022, a portion of the outstanding balances of our 5.625% senior notes due in January 2028, 5.75% senior notes due in March 2027, 5.00% senior notes due in August 2026 and 8.00% senior notes due in July 2025 and made quarterly payments on our term loan, which resulted in total principal payments of $900.5 million. We paid premiums and other expenses of $33.7 million related to the early extinguishment of the senior notes and costs associated with the amendment of our Credit Agreement. Additionally, we paid $218.7$25.3 million, including broker’s commissions, for the repurchase of shares of our common ~~stock during the nine months ended June 30, 2018.~~stock.

Debt Covenants

Credit Agreement

Under the terms of our Credit Agreement, we are required to comply with a financial covenant consisting of a ratio for quarterly maximum senior secured leverage (as defined in the Credit Agreement) not to exceed 4.25 to 1.00, measured as of the last day of any fiscal quarter, if, as of the last day of such fiscal quarter, the aggregate outstanding amount of all revolving credit loans, swing line loans and letter of credit obligations (subject to certain exceptions specified in the Credit Agreement) exceeds 30% of our revolving credit commitments. As of ~~June 30,~~December 31, 2019, we were not required to comply with such financial covenant as the aggregate amount of the aforementioned obligations did not exceed 30%. We do not believe non-compliance is reasonably likely in the foreseeable future.

Our Credit Agreement also permits us to incur additional unsecured debt if, among other conditions, our pro forma consolidated interest coverage ratio (as defined in the Credit Agreement) would be greater than or equal to 2.00 to 1.00 after giving effect to such new debt. As of ~~June 30,~~December 31, 2019, our pro forma consolidated interest coverage ratio exceeded this threshold.

BellRing Credit Agreement

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

On October 1, ~~2018,~~2019, we adopted ASU ~~2014-09, “Revenue from Contracts with Customers~~2016-02, “Leases (Topic ~~606).~~842)” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements.” For additional information, refer to Notes 2 and 314 within “Notes to Condensed Consolidated Financial Statements.”

Our critical accounting policies and estimates are more fully described in our Annual Report on Form 10-K for the year ended September 30, ~~2018,~~2019, as filed with the ~~SEC~~Securities and Exchange Commission ( the “SEC”) on November ~~16, 2018.~~22, 2019. Except as noted above, there have been no significant changes to our critical accounting policies and estimates since September 30, ~~2018.~~2019.

RECENTLY ISSUED ACCOUNTING STANDARDS

See Note 2 within “Notes to Condensed Consolidated Financial Statements” for a discussion regarding recently issued accounting standards.

CAUTIONARY STATEMENT ~~REGARDING~~ON FORWARD-LOOKING STATEMENTS

Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are made throughout this report. These forward-looking statements are sometimes identified from the use of forward-looking words such as “believe,” “should,” “could,” “potential,” “continue,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “aim,” “intend,” “plan,” “forecast,” “target,” “is likely,” “will,” “can,” “may,” “would” or the negative of these terms or similar expressions elsewhere in this report. Our financial condition, results of operations ~~financial condition~~ and cash flows may differ materially from those in the forward-looking statements. Such statements are based

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on management’s current views and assumptions and involve risks and uncertainties that could affect expected results. Those risks and uncertainties include, but are not limited to, the following:

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our high leverage, our ability to obtain additional financing (including both secured and unsecured debt) and our ability to service our outstanding debt (including covenants that restrict the operation of our business);

our ability to continue to compete in our product categories and our ability to retain our market position and favorable perceptions of our brands;

our ability to anticipate and respond to changes in consumer and customer preferences and trends and introduce new products;

the possibility that we may not be able to consummate the initial public offering of our Active Nutrition business on the expected timeline or at all, that we may not be able to create value in our Active Nutrition business through such transaction or that the pursuit of such transaction could be disruptive to us and our Active Nutrition business;

~~the ability and timing to close the proposed acquisition of the private label RTE cereal business of TreeHouse Foods, Inc.;~~

our ability to identify, complete and integrate acquisitions and manage our growth;

our ability to promptly and effectively realize the strategic and financial benefits expected as a result of the IPO of a minority interest in our BellRing Brands business, which consists of our historical active nutrition business, and certain other transactions completed in connection with the IPO;

our ability to promptly and effectively realize the expected synergies of our acquisition of Bob Evans within the expected timeframe or at all;

higher freight costs, significant volatility in the costs or availability of certain commodities (including raw materials ~~commodities or~~and packaging used to manufacture our ~~products~~products) or higher energy costs;

impairment in the carrying value of goodwill or other intangibles;

our ability to successfully implement business strategies to reduce costs;

allegations that our products cause injury or illness, product recalls and withdrawals and product liability claims and other litigation;

legal and regulatory factors, such as compliance with existing laws and regulations and changes to, and new, laws and regulations affecting our business, including current and future laws and regulations regarding food safety, advertising and labeling and animal feeding and housing operations;

the loss of, a significant reduction of purchases by or the bankruptcy of a major customer;

consolidations in the retail and foodservice distribution channels;

~~losses incurred in the appraisal proceedings brought in connection with our acquisition of Bob Evans by former Bob Evans stockholders who demanded appraisal of their shares;~~

the ultimate impact litigation or other regulatory matters may have on us;

disruptions or inefficiencies in the supply chain, including as a result of our reliance on third party suppliers or manufacturers for ~~certain~~the manufacturing of many of our ~~products;~~

products, changes in weather conditions, natural disasters, agricultural diseases and pests and other events beyond our control;

our ability to successfully collaborate with ~~the private equity firm Thomas H. Lee Partners, L.P., whose affiliates~~third parties that have invested with us in 8th Avenue;

costs associated with Bob Evans’s obligations in connection with the sale and separation of its ~~restaurant~~restaurants business in April 2017, which occurred prior to our acquisition of Bob Evans, including certain indemnification obligations under the restaurants sale agreement and Bob Evans’s payment and performance obligations as a guarantor for certain leases;

the ability of our and our customers’, and 8th Avenue’s and its customers’, private brand products to compete with nationally branded products;

~~our ability to successfully operate~~risks associated with our international ~~operations in compliance with applicable laws and regulations;~~business;

changes in economic conditions, disruptions in the United States and global capital and credit markets, changes in interest rates and fluctuations in foreign currency exchange rates;

the impact of the United Kingdom’s exit from the European Union (commonly known as “Brexit”) on us and our operations;

~~changes in estimates in critical accounting judgments;~~

~~loss of key employees, labor strikes, work stoppages or unionization efforts;~~

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~~losses or increased funding and expenses related to our qualified pension or other postretirement plans;~~

costs, business disruptions and reputational damage associated with information technology failures, cybersecurity incidents or information security breaches;

changes in estimates in critical accounting judgments;

our ability to protect our intellectual property and other assets;

loss of key employees, labor strikes, work stoppages or unionization efforts;

losses or increased funding and expenses related to our qualified pension or other postretirement plans;

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significant differences in our, ~~and~~ 8th Avenue’s and BellRing’s actual operating results from our guidance regarding our and 8th Avenue’s future performance and BellRing’s guidance regarding its future performance;

our ability to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002; and

other risks and uncertainties included under “Risk Factors” in this report and in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2018,~~2019, filed with the SEC on November ~~16, 2018.~~22, 2019.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Commodity Price Risk

In the ordinary course of business, the Company is exposed to commodity price risks relating to the acquisition of raw materials, energy and fuels. The Company may use futures contracts and options to manage certain of these exposures when it is practical to do so. A hypothetical 10% adverse change in the market price of the Company’s principal hedged commodities, including natural gas, heating oil, soybean oil, corn, wheat and dairy, would have decreased the fair value of the Company’s commodity-related derivatives portfolio by approximately $10 million ~~at both June 30,~~and $8 million as of December 31, 2019 and September 30, ~~2018.~~2019, respectively. This volatility analysis ignores changes in the exposures inherent in the underlying hedged transactions. Because the Company does not hold or trade derivatives for speculation or profit, all changes in derivative values are effectively offset by corresponding changes in the underlying exposures.

For more information regarding the Company’s commodity derivative contracts, refer to Note 1411 within “Notes to Condensed Consolidated Financial Statements.”

Foreign Currency Risk

Related to its foreign subsidiaries, the Company is exposed to risks of fluctuations in future cash flows and earnings due to changes in exchange rates. To mitigate these risks, the Company uses a combination of foreign exchange contracts, which may consist of options, forward contracts and currency swaps. As of ~~June~~December 31, 2019 and September 30, 2019, ~~a hypothetical 10% adverse change in the expected Euro-USD exchange rates and~~ a hypothetical 10% adverse change in the expected GBP-USD exchange rates would have reduced the fair value of the Company’s foreign currency-related derivatives portfolio by ~~less than $1~~approximately $55 million and ~~approximately $54~~$51 million respectively. As of September 30, 2018, a hypothetical 10% adverse change in the expected Euro-USD exchange rates and a hypothetical 10% adverse change in the expected GBP-USD exchange rates would have reduced the fair value of the Company’s foreign currency-related derivatives portfolio by approximately $1 million and $79 million,, respectively.

For additional information regarding the Company’s foreign currency derivative contracts, refer to Note 1411 within “Notes to Condensed Consolidated Financial Statements.”

Interest Rate Risk

Long-term debt

As of ~~June 30,~~December 31, 2019, the Company had outstanding principal value of indebtedness of ~~$6,369.3~~$6,589.7 million related to its senior notes, term loan and ~~capital lease and an undrawn $800.0 million~~ revolving credit ~~facility.~~facilities with a combined available borrowing capacity of $898.0 million. Of the total ~~$6,369.3~~$6,589.7 million of outstanding indebtedness, ~~$5,059.8~~$5,809.7 million bears interest at a weighted-average fixed interest rate of 5.5%. As of September 30, ~~2018,~~2019, the Company had principal value of indebtedness of ~~$7,917.4~~$7,119.3 million, ~~including amounts classified as held for sale,~~ related to its senior notes, term loan ~~bridge loan~~ and capital lease. Of the total ~~$7,917.4~~$7,119.3 million of outstanding indebtedness, ~~$5,119.9~~$5,809.8 million bore interest at a weighted-average fixed interest rate of 5.5%.

As of ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, the fair value of the Company’s total debt, ~~including debt classified as held for sale,~~excluding outstanding borrowings under BellRing’s Revolving Credit Facility, was ~~$6,502.0~~$6,899.0 million and ~~$7,790.9~~$7,412.0 million, respectively. Changes in interest rates impact fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas a change in the interest rates on variable rate debt will impact interest expense and cash flows. A hypothetical 10% decrease in interest rates would have increased the fair value of the fixed rate debt by approximately ~~$46~~$23 million a~~nd $97~~and $30 million as of ~~June 30,~~December 31, 2019 and September ~~30, 2018,~~

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respectively. Including the impact of interest rate swaps, a hypothetical 10% increase in interest rates would have increased both interest expense and interest paid on variable rate debt by approximately $1 million and $2 million during the three and nine months ended June 30, 2019, respectively. Including the impact of interest rate swaps, a hypothetical 10% increase in interest rates would have increased both interest expense and interest paid on variable rate debt by ~~approximately $1 million during~~an immaterial amount for both the three ~~and nine~~ months ended ~~June 30,~~December 31, 2019 and 2018.

For additional information regarding the Company’s debt, refer to Note 1715 within “Notes to Condensed Consolidated Financial Statements.”

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Interest rate swaps

As of ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, the Company had interest rate swaps with a notional value of ~~$1,922.8~~$2,022.1 million and ~~$2,723.9~~$1,804.1 million, respectively. A hypothetical 10% adverse change in interest rates would have decreased the fair value of the interest rate swaps by approximately ~~$43~~$39 million and ~~$66~~$36 million as of ~~June 30,~~December 31, 2019 and September 30, ~~2018,~~2019, respectively.

For additional information regarding the Company’s interest rate swap contracts, refer to Note 1411 within “Notes to Condensed Consolidated Financial Statements.”

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

~~Our management,~~Management, with the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the Company, has evaluated the effectiveness of ~~our~~the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange ~~Act)~~Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, ~~our~~the Company’s CEO and CFO concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to provide reasonable assurance of achieving the desired control objectives.

Changes in Internal Control Over Financial Reporting

In connection with the Company’s acquisition of Bob Evans in fiscal 2018, management is in the process of analyzing, evaluating and, where necessary, implementing changes in controls and procedures. This process may result in additions or changes to the Company’s internal control over financial reporting.

~~Except as noted above, there~~There were no significant changes in the Company’s internal control over financial reporting during the quarter ended ~~June 30,~~December 31, 2019 that ~~may~~ have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.


PART II.	OTHER INFORMATION.


ITEM 1.	LEGAL PROCEEDINGS.

Antitrust claims

The ~~case~~cases involved three plaintiff groups: (i) a nationwide class of direct purchasers of shell eggs (the “direct purchaser class”); (ii) individual companies (primarily large grocery chains and food companies that purchase considerable quantities of eggs) that opted out of various settlements and filed their own complaints related to their purchases of shell eggs and egg products (“opt-out plaintiffs”); and (iii) indirect purchasers of shell eggs (“indirect purchaser plaintiffs”).

Resolution of claims: To date, MFI has resolved the following claims, including all class claims: (i) in December 2016, MFI settled all claims asserted against it by the direct purchaser class for a payment of $75.0 million, which was approved by the district court in December 2017; (ii) in January 2017, MFI settled all claims asserted against it by opt-out plaintiffs related to shell egg purchases on confidential terms; (iii) in June 2018, MFI settled all claims asserted against it by indirect purchaser plaintiffs on confidential terms; and (iv) inbetween June 2019 and September 2019, MFI individually settled ~~all~~on confidential terms egg ~~products~~product opt-out claims asserted against it by ~~one~~four separate opt-out ~~plaintiff on confidential terms; and (v) in July 2019, MFI settled all egg products claims asserted against it by a second opt-out plaintiff on confidential terms.~~plaintiffs. MFI has at all times denied liability in this matter, and no settlement contains any admission of liability by MFI.

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purchases by such opt-out plaintiffs, but the Third Circuit Court of Appeals reversed and remanded these claims for further pre-trial proceedings. Defendants filed a second motion for summary judgment seeking dismissal of the claims, which was denied in June 2019. ~~MFI currently is scheduled to begin trial against one opt-out plaintiff in October 2019.~~ The remaining opt-out plaintiffs have not yet been assigned trial dates.

Bob Evans Appraisal Proceedings

Prior to completion of the Company’s acquisition of Bob Evans Farms, Inc. (“Bob Evans”) on January 12, 2018, Bob Evans received demands from certain stockholders demanding appraisal of their shares of Bob Evans common stock. After the completion of the acquisition, several such former stockholders filed petitions in the Delaware Court of Chancery (Arbitrage Fund v. Bob

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Evans Farms, Inc. filed on January 23, 2018; Blue Mountain Credit Alternatives Master Fund L.P., et al. v. Bob Evans Farms, Inc. filed on April 30, 2018; and 2017 Clarendon LLC, et al. v. Bob Evans Farms, Inc. filed on April 30, 2018) seeking appraisal of their shares of Bob Evans common stock pursuant to Section 262 of the Delaware General Corporation Law (“Section 262”). The lawsuits ~~seek~~sought appraisal for such shares, plus statutory interest, as well as the costs of the proceedings and such other relief as appropriate. Under Section 262, persons who were stockholders at the time of the closing ~~are~~were entitled to have their shares appraised by the Delaware Court of Chancery and receive payment of the “fair value” of such shares (plus statutory interest) as determined by the Delaware Court of Chancery. In May 2018, the court consolidated the lawsuits into one action.

In December 2018, the Company settled with one petitioner, Arbitrage Fund, and Arbitrage Fund was dismissed with prejudice from the consolidated action. In addition, in December 2018, the Company pre-paid the $77.00 per share merger consideration to the Blue Mountain and 2017 Clarendon petitioners, effectively stopping the continued accrual of statutory interest on that amount. The Company made total payments of $257.6 million, inclusive of the aforementioned prepayment of $77.00 per share merger consideration, related to these matters in ~~December 2018. However,~~fiscal 2019. In September 2019, the ~~consolidated action remains active~~Company reached settlement terms on a confidential basis with ~~respect to~~ the ~~determination~~remaining petitioners regarding their outstanding appraisal claims. The settlement was finalized and paid in October 2019, and the remaining portion of the ~~fair value~~case was dismissed on October 3, 2019. All former Bob Evans stockholders who demanded appraisal of ~~the shares formerly held by the two remaining petitioners.~~

~~Approximately 2.5 million~~their shares of Bob Evans common stock are before the court for appraisal in the consolidated action. As of completion of the acquisition, former Bob Evans stockholders can no longer submit new demands for appraisal. All other former stockholders have beenwere paid for their shares. ~~The Company intends to vigorously defend the consolidated action.~~

While the Company believes its accrual for these matters is appropriate, the final amounts required to resolve such matters could differ materially and the Company’s financial condition, results of operations and cash flows could be materially affected.

Weetabix Limited Environmental Matter

Other


ITEM 1A.	RISK FACTORS.

In addition to the information set forth elsewhere in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors we previously disclosed in our Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission on November ~~16, 2018,~~22, 2019, as of and for the year ended September 30, ~~2018.~~2019. These risks could materially and adversely affect our business, financial condition, results of operations and cash flows. The enumerated risks are not the only risks we face.

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Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows.


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table sets forth information with respect to shares of our common stock that we purchased during the three months ended ~~June 30,~~December 31, 2019:

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Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b) (c)
April 1, 2019 - April 30, 2019 —
—
—

$242,261,559
May 1, 2019 - May 31, 2019 500

$105.00
500

$242,209,059
June 1, 2019 - June 30, 2019 219,774

$103.82
219,774

$219,391,572
Total 220,274

$103.83
220,274

$219,391,572



Period	Total Number of Shares Purchased	Average Price Paid per Share (a)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (a) (b)
October 1, 2019 - October 31, 2019	1,425,660	$101.45		1,425,660		$193,879,849
November 1, 2019 - November 30, 2019	257,186		$105.03	257,186		$166,866,527
December 1, 2019 - December 31, 2019	483,418		$106.36	483,418		$367,861,503
Total	2,166,264		$102.97	2,166,264		$367,861,503


(a)	~~The total number of shares purchased includes: (i) shares purchased on the open market and (ii) shares purchased pursuant to a Rule 10b5-1 plan.~~


~~(b)~~	Does not include broker’s commissions.

~~(c)~~(b)

On ~~May 2, 2018,~~September 4, 2019, our Board of Directors authorized the Company to repurchase up to ~~$350,000,000~~$400,000,000 of shares of our common stock to begin on ~~May 7, 2018.~~September 4, 2019 (the “Prior Authorization”). The Prior Authorization had an expiration date of September 4, 2021. However, on December 5, 2019, our Board of Directors terminated the Prior Authorization effective December 5, 2019 and approved a new authorization to repurchase up to $400,000,000 of shares of our common stock effective December 5, 2019 (the “New Authorization”). The New Authorization expires on ~~May 7, 2020.~~December 5, 2021. As of December 5, 2019, the approximate dollar value of shares that could yet be purchased under the Prior Authorization was $147,590,259. The Company began repurchasing shares under the New Authorization on December 6, 2019. The table discloses the approximate dollar value of shares that may yet be purchased under the New Authorization as of December 31, 2019. Repurchases may be made from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic purchase transactions, or otherwise.

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ITEM 6.	EXHIBITS.

The following exhibits are either provided with this Form 10-Q or are incorporated herein by reference.



Exhibit No.		Description

3.1		Amended and Restated Articles of Incorporation of Post Holdings, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q filed on February 2, 2018)

3.2		Amendment of Amended and Restated Articles of Incorporation of Post Holdings, Inc. (Incorporated by reference to Exhibit 3.2 to the Company’s Form 10-Q filed on February 2, 2018)

3.3		Amended and Restated Bylaws of Post Holdings, Inc. (Incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed on January 31, 2018)

4.1		Indenture (2025 Notes), dated as of August 18, 2015, by and among Post Holdings, Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K/A filed on August 21, 2015)

4.2		Indenture (2026 Notes), dated as of August 3, 2016, by and among Post Holdings, Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on August 3, 2016)

4.3		Indenture (2025 Notes), dated as of February 14, 2017, by and among Post Holdings, Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on February 14, 2017)

4.4		Indenture (2027 Notes), dated as of February 14, 2017, by and among Post Holdings, Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed on February 14, 2017)

4.5		Third Supplemental Indenture (2025 Notes), dated as of May 19, 2017, by and among Post Holdings, Inc., the Guarantors (as defined therein), and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed on May 22, 2017)

4.6		Indenture (2028 Notes), dated as of December 1, 2017, by and among Post Holdings, Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on December 4, 2017)

4.7		Fourth Supplemental Indenture (2026 Notes), dated as of February 8, 2019, by and among Post Holdings, Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on February 12, 2019)

4.8		Indenture (2029 Notes), dated as of July 3, 2019, by and among Post Holdings, Inc., the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on July 3, 2019)

†10.55		Amendment to the Amended and Restated Post Holdings, Inc. Deferred Compensation Plan for Key Employees, effective October 1, 2019

10.56		Master Transaction Agreement, dated October 7, 2019, by and among Post Holdings, Inc., BellRing Brands, Inc. and BellRing Brands, LLC (Incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the Registration Statement on Form S-1 filed by BellRing Brands, Inc. on October 11, 2019 (File No. 333-233867))

10.57		Bridge Facility Agreement, dated as of October 11, 2019, by and among Post Holdings, Inc., certain subsidiaries of Post Holdings, Inc., as guarantors, the institutions from time to time party thereto as lenders, Morgan Stanley Senior Funding, Inc., BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Loan Funding LLC, Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint physical bookrunners, and Morgan Stanley Senior Funding, Inc., as administrative agent (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 11, 2019)

10.58		Guarantee and Collateral Agreement, dated as of October 11, 2019, by and among Post Holdings, Inc., certain of its subsidiaries and Morgan Stanley Senior Funding, Inc., as administrative agent (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on October 11, 2019)

10.59		Tax Receivable Agreement, dated October 21, 2019, by and among BellRing Brands, Inc., BellRing Brands, LLC and Post Holdings, Inc. (Incorporated by reference to Exhibit 10.5 to the Form 8-K filed by BellRing Brands, Inc. on October 21, 2019 (File No. 001-39093))

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Exhibit No.		Description
10.60		Borrower Assignment and Assumption Agreement, dated as of October 21, 2019, by and among Post Holdings, Inc., BellRing Brands, LLC and Morgan Stanley Senior Funding, Inc., as administrative agent (Incorporated by reference to Exhibit 10.8 to the Form 8-K filed by BellRing Brands, Inc. on October 21, 2019 (File No. 001-39093))

10.61		Credit Agreement, dated as of October 21, 2019, by and among BellRing Brands, LLC, the institutions from time to time party thereto as lenders, Credit Suisse Loan Funding LLC, BofA Securities, Inc., Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Citibank, N.A., Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners, and BMO Capital Markets Corp., Coöperatieve Rabobank U.A., New York Branch, Nomura Securities International, Inc., Suntrust Robinson Humphrey, Inc., UBS Securities LLC and Wells Fargo Securities, LLC, as co-managers, and Credit Suisse AG, Cayman Islands Branch, as administrative agent (Incorporated by reference to Exhibit 10.9 to the Form 8-K filed by BellRing Brands, Inc. on October 21, 2019 (File No. 001-39093))

†10.62		Form of Performance-Based, Stock Settled Restricted Stock Unit Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 15, 2019)

31.1		Certification of Robert V. Vitale pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated ~~August 2, 2019~~February 7, 2020

31.2		Certification of Jeff A. Zadoks pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated ~~August 2, 2019~~February 7, 2020

32.1		Certification of Robert V. Vitale and Jeff A. Zadoks, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated ~~August 2, 2019~~February 7, 2020

101		Interactive Data File (Form 10-Q for the quarterly period ended ~~June 30,~~December 31, 2019 filed in iXBRL (Inline eXtensible Business Reporting Language)). The financial information contained in the iXBRL-related documents is “unaudited” and “unreviewed.”

104		The cover page from the Company’s Form 10-Q for the quarterly period ended ~~June 30,~~December 31, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101

† These exhibits constitute management contracts, compensatory plans and arrangements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Post Holdings, Inc. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		POST HOLDINGS, INC.
Date:	~~August 2, 2019~~February 7, 2020	By:	/s/ Jeff A. Zadoks
			Jeff A. Zadoks
			EVP and Chief Financial Officer (Principal Financial Officer)

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	Three Months Ended June 30, 2019
	As Reported Under Topic 606		As Reported Under Prior Guidance		Impact of Adoption
Net Sales	$	1,439.2	$	1,445.7	$	(6.5	)
Cost of goods sold	977.1		977.1		—
Gross Profit	462.1		468.6		(6.5		)
Selling, general and administrative expenses	223.2		230.1		(6.9		)
Amortization of intangible assets	40.3		40.3		—
Other operating expenses, net	0.4		0.4		—
Operating Profit	$	198.2	$	197.8	$	0.4



	Nine Months Ended June 30, 2019
	As Reported Under Topic 606			As Reported Under Prior Guidance			Impact of Adoption
Net Sales	$	4,238.3		$	4,256.4		$	(18.1	)
Cost of goods sold	2,898.4			2,898.4			—
Gross Profit	1,339.9			1,358.0			(18.1		)
Selling, general and administrative expenses	666.1			685.3			(19.2		)
Amortization of intangible assets	121.0			121.0			—
Gain on sale of business	(127.3		)	(127.3		)	—
Other operating expenses, net	1.7			1.7			—
Operating Profit	$	678.4		$	677.3		$	1.1



	Acquisition Date Amounts Recognized as of September 30, 2018 (a)			Adjustments During Fiscal 2019			Acquisition Date Amounts Recognized (as Adjusted)
Cash and cash equivalents	$	15.6		$	—		$	15.6
Receivables	58.5			—			58.5
Inventories	27.1			—			27.1
Prepaid expenses and other current assets	34.3			—			34.3
Property	184.3			—			184.3
Goodwill	898.3			(0.7		)	897.6
Other intangible assets	782.0			—			782.0
Other assets	0.4			—			0.4
Accounts payable	(18.2		)	—			(18.2		)
Other current liabilities	(58.5		)	—			(58.5		)
Deferred tax liability - long-term	(194.9		)	0.7			(194.2		)
Other liabilities	(5.3		)	—			(5.3		)
Total acquisition cost (b)	$	1,723.6		$	—		$	1,723.6



Balance, September 30, 2018	$	290.9
Gains related to assets and liabilities held for sale	125.3
Proceeds from the sale of assets and liabilities held for sale	(276.6		)
Investment in 8th Avenue, working capital and other adjustments	(139.6		)
Balance, June 30, 2019	$	—



Period	Total Number of Shares Purchased (a)	Average Price Paid per Share (b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b) (c)
April 1, 2019 - April 30, 2019	—	—		—		$242,261,559
May 1, 2019 - May 31, 2019	500		$105.00	500		$242,209,059
June 1, 2019 - June 30, 2019	219,774		$103.82	219,774		$219,391,572
Total	220,274		$103.83	220,274		$219,391,572