Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-32504 | |
Entity Registrant Name | TreeHouse Foods, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2311383 | |
Entity Address, Address Line One | 2021 Spring Road, Suite 600Oak Brook IL | |
Entity Address, City or Town | Oak Brook | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60523 | |
City Area Code | 708 | |
Local Phone Number | 483-1300 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | THS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 56,220,707 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001320695 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 48.8 | $ 364.6 |
Receivables, net | 241 | 308.8 |
Inventories | 653 | 598.6 |
Prepaid expenses and other current assets | 101.6 | 86.1 |
Assets of discontinued operations | 74.5 | 70.7 |
Total current assets | 1,118.9 | 1,428.8 |
Property, plant, and equipment, net | 1,053.1 | 1,070 |
Operating lease right-of-use assets | 155.2 | 160.7 |
Goodwill | 2,179.9 | 2,178.7 |
Intangible assets, net | 600.4 | 615 |
Other assets, net | 35 | 32.5 |
Total assets | 5,142.5 | 5,485.7 |
Current liabilities: | ||
Accounts payable | 610.1 | 627.7 |
Accrued expenses | 295.5 | 340.6 |
Current portion of long-term debt | 15.9 | 15.7 |
Liabilities of discontinued operations | 5.9 | 6.7 |
Total current liabilities | 927.4 | 990.7 |
Long-term debt | 1,929.8 | 2,199 |
Operating lease liabilities | 137.1 | 144.5 |
Deferred income taxes | 158.4 | 158.3 |
Other long-term liabilities | 125.3 | 128.2 |
Total liabilities | 3,278 | 3,620.7 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.01 per share, 10.0 shares authorized, none issued | 0 | 0 |
Common stock, par value $0.01 per share, 90.0 shares authorized, 56.2 and 55.9 shares outstanding, respectively | 0.6 | 0.6 |
Treasury stock | (108.3) | (108.3) |
Additional paid-in capital | 2,176.9 | 2,179.9 |
Accumulated deficit | (141.7) | (143.2) |
Accumulated other comprehensive loss | (63) | (64) |
Total stockholders' equity | 1,864.5 | 1,865 |
Total liabilities and stockholders' equity | $ 5,142.5 | $ 5,485.7 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, shares outstanding (in shares) | 56,200,000 | 55,900,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Income Statement [Abstract] | |||
Net sales | $ 1,057.3 | $ 1,084.9 | |
Cost of sales | 876.2 | 890 | |
Gross profit | 181.1 | 194.9 | |
Operating expenses: | |||
Selling and distribution | 68.7 | 65.1 | |
General and administrative | 63.3 | 63.6 | |
Amortization expense | 18.4 | 17.5 | |
Other operating expense, net | 19.7 | 18.5 | |
Total operating expenses | 170.1 | 164.7 | |
Operating income | 11 | 30.2 | |
Other expense: | |||
Interest expense | 25.1 | 24.8 | |
Loss on extinguishment of debt | 14.4 | 0 | |
(Gain) loss on foreign currency exchange | (1.3) | 14.4 | |
Other (income) expense, net | (27.4) | 64 | |
Total other expense | 10.8 | 103.2 | |
Income (loss) before income taxes | 0.2 | (73) | |
Income tax benefit | (0.2) | (40.2) | |
Net income (loss) from continuing operations | 0.4 | (32.8) | |
Net income from discontinued operations | 1.1 | 1.6 | |
Net income (loss) | $ 1.5 | $ (31.2) | |
Earnings (loss) per common share - basic: | |||
Continuing operations (in usd per share) | $ 0.01 | $ (0.58) | |
Discontinued operations (in usd per share) | 0.02 | 0.03 | |
Earnings (loss) per share basic (in usd per share) | [1] | 0.03 | (0.55) |
Earnings (loss) per common share - diluted: | |||
Continuing operations (in usd per share) | 0.01 | (0.58) | |
Discontinued operations (in usd per share) | 0.02 | 0.03 | |
Earnings (loss) per share diluted (in usd per share) | [1] | $ 0.03 | $ (0.55) |
Weighted average common shares: | |||
Basic (in shares) | 56 | 56.3 | |
Diluted (in shares) | 56.5 | 56.3 | |
[1] | The sum of the individual per share amounts may not add due to rounding. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 1.5 | $ (31.2) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 0.9 | (15.9) |
Pension and postretirement reclassification adjustment | 0.1 | 0.1 |
Other comprehensive income (loss) | 1 | (15.8) |
Comprehensive income (loss) | $ 2.5 | $ (47) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Treasury Stock | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2019 | 58 | (1.8) | ||||
Beginning balance at Dec. 31, 2019 | $ 1,830.9 | $ 0.6 | $ 2,154.6 | $ (157) | $ (83.3) | $ (84) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (31.2) | (31.2) | ||||
Other comprehensive income (loss) | (15.8) | (15.8) | ||||
Exercise of stock options and issuance of other stock awards (in shares) | 0.2 | |||||
Exercise of stock options and issuance of other stock awards | (3.9) | (3.9) | ||||
Stock-based compensation | 8.1 | 8.1 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 58.2 | (1.8) | ||||
Ending balance at Mar. 31, 2020 | 1,788.1 | $ 0.6 | 2,158.8 | (188.2) | $ (83.3) | (99.8) |
Beginning balance (in shares) at Dec. 31, 2020 | 58.3 | (2.4) | ||||
Beginning balance at Dec. 31, 2020 | 1,865 | $ 0.6 | 2,179.9 | (143.2) | $ (108.3) | (64) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 1.5 | 1.5 | ||||
Other comprehensive income (loss) | 1 | 1 | ||||
Exercise of stock options and issuance of other stock awards (in shares) | 0.3 | |||||
Exercise of stock options and issuance of other stock awards | (7.9) | (7.9) | ||||
Stock-based compensation | 4.9 | 4.9 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 58.6 | (2.4) | ||||
Ending balance at Mar. 31, 2021 | $ 1,864.5 | $ 0.6 | $ 2,176.9 | $ (141.7) | $ (108.3) | $ (63) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1.5 | $ (31.2) |
Net income from discontinued operations | 1.1 | 1.6 |
Net income (loss) from continuing operations | 0.4 | (32.8) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 53.5 | 49.8 |
Stock-based compensation | 4.9 | 7.9 |
Loss on extinguishment of debt | 14.4 | 0 |
Unrealized (gain) loss on derivative contracts | (21.7) | 64.1 |
Deferred income taxes | 2.2 | 15 |
Other | (1.2) | 19.2 |
Changes in operating assets and liabilities, net of acquisitions and divestitures: | ||
Receivables | 67.8 | (24) |
Inventories | (58.4) | 1.1 |
Prepaid expenses and other assets | (28.3) | (60.4) |
Accounts payable | (7.2) | 39.7 |
Accrued expenses and other liabilities | (31.9) | (11.1) |
Net cash (used in) provided by operating activities - continuing operations | (5.5) | 68.5 |
Net cash used in operating activities - discontinued operations | (3.1) | (6) |
Net cash (used in) provided by operating activities | (8.6) | 62.5 |
Cash flows from investing activities: | ||
Additions to property, plant, and equipment | (28) | (27.3) |
Additions to intangible assets | (3.3) | (3.8) |
Proceeds from sale of fixed assets | 0.9 | 5.1 |
Proceeds from sale of investments | 17.2 | 0 |
Net cash used in investing activities - continuing operations | (13.2) | (26) |
Net cash used in investing activities - discontinued operations | (0.4) | (0.3) |
Net cash used in investing activities | (13.6) | (26.3) |
Cash flows from financing activities: | ||
Borrowings under Revolving Credit Facility | 30 | 100 |
Payments on financing lease obligations | (0.5) | (0.4) |
Payment of deferred financing costs | (7) | 0 |
Payments on Term Loans | (1,126) | (3.5) |
Proceeds from refinanced Term Loans | 1,430 | 0 |
Repurchase of 2024 Notes | (602.9) | 0 |
Payment of debt premium for extinguishment of debt | (9) | 0 |
Payments related to stock-based award activities | (7.9) | (3.8) |
Net cash (used in) provided by financing activities - continuing operations | (293.3) | 92.3 |
Net cash (used in) provided by financing activities - discontinued operations | 0 | 0 |
Net cash (used in) provided by financing activities | (293.3) | 92.3 |
Effect of exchange rate changes on cash and cash equivalents | (0.3) | (0.4) |
Net (decrease) increase in cash and cash equivalents | (315.8) | 128.1 |
Cash and cash equivalents, beginning of period | 364.6 | 202.3 |
Cash and cash equivalents, end of period | 48.8 | 330.4 |
Supplemental cash flow disclosures: | ||
Interest paid | 36.4 | 37.8 |
Net income taxes (refunded) paid | (0.2) | 5 |
Non-cash investing and financing activities: | ||
Accrued purchase of property and equipment | 27.5 | 21.1 |
Accrued other intangible assets | 3.9 | 2.9 |
Right-of-use assets and operating lease obligations recognized | 0.9 | 1.7 |
Accrued deferred financing costs | $ 1.5 | $ 0 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION The unaudited Condensed Consolidated Financial Statements included herein have been prepared by TreeHouse Foods, Inc. and its consolidated subsidiaries (the "Company," "TreeHouse," "we," "us," or "our"), pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to quarterly reporting on Form 10-Q. In our opinion, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted as permitted by such rules and regulations. The Condensed Consolidated Financial Statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Results of operations for interim periods are not necessarily indicative of annual results. The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires us to use our judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from these estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 2. RECENT ACCOUNTING PRONOUNCEMENTS Not yet adopted In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. ASU 2020-04 was further amended in January 2021 by ASU 2021-01, Reference Rate Reform (Topic 848): Scope. |
Growth, Reinvestment, and Restr
Growth, Reinvestment, and Restructuring Programs | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Growth, Reinvestment, and Restructuring Programs | 3. GROWTH, REINVESTMENT, AND RESTRUCTURING PROGRAMS The Company’s growth, reinvestment, and restructuring activities are part of an enterprise-wide transformation to build long-term sustainable growth and improve profitability for the Company. These activities are aggregated into the following categories: (1) Strategic Growth Initiatives (expected completion in 2023) – a growth and reinvestment strategy (2) Structure to Win (completed in 2020) – an operating expense improvement program, (3) TreeHouse 2020 (completed in 2020) – a long-term growth and margin improvement strategy, and (4) other (collectively the "Growth, Reinvestment, and Restructuring Programs"). Below is a description of each of the Growth, Reinvestment, and Restructuring Programs: (1) Strategic Growth Initiatives In the first quarter of 2021, the Company began executing on its growth and reinvestment initiatives designed to invest in our commercial organization, adapt the supply chain to better support long-term growth opportunities, and further enable the Company to build greater depth in growth categories. These initiatives are intended to better position the Company to accelerate future revenue and earnings growth, and improve the execution of our strategy to be our customer's preferred manufacturing and distribution partner. This reinvestment will occur through 2023, and the Company currently expects the total costs will be up to $130.0 million, comprised of consulting and professional fees, employee-related costs, and investment in information technology. Consulting and professional fees are expected to include building marketing competencies, furthering our e-commerce strategy and digital capabilities, and advancing automation and value engineering in our supply chain network. Employee-related costs primarily consist of dedicated employee costs. (2) Structure to Win In the first quarter of 2018, the Company announced an operating expenses improvement restructuring program ("Structure to Win") designed to align our organizational structure with strategic priorities. The program was intended to drive operational effectiveness, cost reduction, and position the Company for growth with a focus on a lean customer-centric go-to-market team, centralized supply chain, and streamlined administrative functions. This program was completed in 2020. Total costs within this program were $92.7 million, comprised primarily of consulting and professional fees, severance, dedicated employee costs, and Corporate office closing costs. (3) TreeHouse 2020 In the third quarter of 2017, the Company announced TreeHouse 2020, a program intended to accelerate long-term growth through optimization of our manufacturing network, transformation of our mixing centers and warehouse footprint, and leveraging of systems and processes to drive performance. The Company’s workstreams related to these activities and selling, general, and administrative cost reductions were intended to increase our capacity utilization, expand operating margins, and streamline our plant structure to optimize our supply chain. This program was completed in 2020. Total costs within this program were $299.8 million, comprised primarily of consulting and professional fees, severance, dedicated employee costs, and accelerated depreciation for plant and other office closures. (4) Other Other costs include restructuring costs incurred for costs to exit facilities, information technology system implementation, and other administrative costs. The costs by activity for the Growth, Reinvestment, and Restructuring Programs are outlined below: Three Months Ended 2021 2020 (In millions) Strategic growth initiatives $ 16.1 $ — Structure to Win — 7.8 TreeHouse 2020 — 12.1 Other 3.5 — Total $ 19.6 $ 19.9 As part of our growth, reinvestment, and restructuring programs, we generally incur expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee separation costs and other exit costs. Severance and employee separation costs primarily relate to cash severance, non-cash severance, including accelerated equity award compensation expense, pension, and other termination benefits. Other exit costs typically relate to lease and contract terminations. We also incur expenses that are an integral component of, and directly attributable to, our growth, reinvestment, and restructuring activities, which do not qualify as exit and disposal costs under U.S. GAAP. These include asset-related costs and other costs. Asset-related costs primarily relate to accelerated depreciation and certain long-lived asset impairments. Other costs primarily relate to start-up costs of new facilities, consulting and professional fees, information technology implementation, asset relocation costs, and costs to exit facilities. Expenses associated with these programs are recorded in Cost of sales, General and administrative, and Other operating expense, net in the Condensed Consolidated Statements of Operations. The Company does not allocate costs associated with Growth, Reinvestment, and Restructuring Programs to reportable segments when evaluating the performance of its segments. As a result, costs associated with Growth, Reinvestment, and Restructuring Programs are not presented by reportable segment. Refer to Note 16 for additional information. Below is a summary of costs by line item for the Growth, Reinvestment, and Restructuring Programs: Three Months Ended 2021 2020 (In millions) Cost of sales $ — $ 0.7 General and administrative — 0.7 Other operating expense, net 19.6 18.5 Total $ 19.6 $ 19.9 Below is a summary of costs by type associated with the Growth, Reinvestment, and Restructuring Programs: Three Months Ended 2021 2020 (In millions) Employee-related $ 4.9 $ 4.8 Other costs 14.7 15.1 Total $ 19.6 $ 19.9 For the three months ended March 31, 2021 and 2020, employee-related costs primarily consisted of dedicated project employee cost, severance, and retention; and other costs primarily consisted of consulting services. Employee-related and other costs are primarily recognized in Other operating expense, net of the Condensed Consolidated Statements of Operations. The table below presents the exit cost liability activity for the Growth, Reinvestment, and Restructuring Programs as of March 31, 2021: Severance (In millions) Balance as of December 31, 2020 $ 4.9 Expenses recognized 0.7 Cash payments (2.5) Balance as of March 31, 2021 $ 3.1 |
Receivables Sales Program
Receivables Sales Program | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Receivables Sales Program | 4. RECEIVABLES SALES PROGRAM In December 2017 and June 2019, the Company entered into agreements to sell certain trade accounts receivable to two unrelated, third-party financial institutions (collectively, "the Receivables Sales Program"). The agreements can be terminated by either party with 60 days' notice. The Company has no retained interest in the receivables sold under the Receivables Sales Program; however, under the agreements the Company does have collection and administrative responsibilities for the sold receivables. Under the Receivables Sales Program, the maximum amount of receivables that may be sold at any time is $300.0 million. The following table includes the outstanding amount of accounts receivable sold under the Receivables Sales Program and the amount collected but not yet remitted to the financial institutions: March 31, 2021 December 31, 2020 (In millions) Outstanding accounts receivable sold $ 246.7 $ 284.3 Collections not remitted to financial institutions 128.8 202.8 Receivables sold under the Receivables Sales Program are de-recognized from the Company's Condensed Consolidated Balance Sheet at the time of the sale and the proceeds from such sales are reflected as a component of the change in receivables in the operating activities section of the Condensed Consolidated Statements of Cash Flows. The amount collected but not yet remitted to the financial institutions is included in Accounts payable in the Condensed Consolidated Balance Sheets. The loss on sale of receivables was $0.5 million and $0.9 million for the three months ended March 31, 2021 and 2020, respectively, and is included in Other (income) expense, net in the Condensed Consolidated Statements of Operations. The Company has not recognized any servicing assets or liabilities as of March 31, 2021 or December 31, 2020, as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. INVENTORIES March 31, 2021 December 31, 2020 (In millions) Raw materials and supplies $ 234.8 $ 231.0 Finished goods 418.2 367.6 Total inventories $ 653.0 $ 598.6 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | 6. ACQUISITIONS AND DIVESTITURES Acquisitions Pasta Acquisition On December 11, 2020, the Company completed the acquisition of the majority of the U.S. branded pasta portfolio as well as a manufacturing facility in St. Louis, Missouri of Riviana Foods, Inc. ("Riviana Foods"), a subsidiary of Ebro Foods, S.A. ("Ebro Foods") for a purchase price of approximately $239.2 million in cash. Ebro Foods is a Spanish-based multinational food group operating primarily in the pasta and rice sectors. The acquisition includes the following brands: Skinner, No Yolks, American Beauty, Creamette, San Giorgio, Prince, Light ‘n Fluffy, Mrs. Weiss’, Wacky Mac, P&R Procino-Rossi, and New Mill. Additionally, the Company and Riviana Foods have a mutual put or call right to acquire or sell, respectively, the equipment utilized in the Riviana Foods Fresno, California facility for $5.0 million by December 31, 2021. The acquisition is expected to strengthen the Company's portfolio and expand its scale to better serve its national and regional customers. The acquisition was funded from the Company’s existing cash resources. The pasta acquisition was accounted for under the acquisition method of accounting and the results of operations were included in our Consolidated Financial Statements from the date of acquisition in the Meal Preparation segment. The following table summarizes the preliminary purchase price allocation of the fair value of net tangible and intangible assets acquired and liabilities assumed: (In millions) Inventories $ 20.0 Property, plant, and equipment, net 48.2 Customer relationships 68.0 Trade names 43.0 Formulas/recipes 2.3 Goodwill 57.8 Operating lease right-of-use assets 0.1 Assets acquired 239.4 Assumed liabilities (0.2) Total purchase price $ 239.2 The Company allocated the intangible assets acquired to the Meal Preparation segment which included $68.0 million of customer relationships with an estimated life of 20 years, $43.0 million of trade names with an estimated life of 20 years, and $2.3 million of formulas/recipes with estimated life of 5 years. The aforementioned intangible assets will be amortized over their estimated useful lives. The Company increased the cost of acquired inventories by approximately $3.1 million as of December 31, 2020 and expensed $1.0 million as a component of Cost of sales during the three months ended March 31, 2021. The Company has allocated $57.8 million of goodwill to the Meal Preparation segment. Goodwill arises principally as a result of expansion opportunities of its scale to better serve its regional and national customers and plant operation synergies across its legacy Pasta category. The goodwill resulting from this acquisition is tax deductible. The purchase price allocation in the table above is preliminary and subject to the finalization of the Company’s valuation analysis and the option to exercise its right to acquire the $5.0 million equipment utilized in the Fresno, California facility. The fair values for customer relationships at the acquisition date were determined using the excess earnings method under the income approach. Trade name fair values were determined using the relief from royalty method, while the fair value of formulas/recipes was determined using the cost approach. Real property and personal property fair values were determined using the cost approach. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates, and royalty rates. The following unaudited pro forma information shows the results of operations for the Company as if its pasta acquisition had been completed as of January 1, 2019. Adjustments have been made for the pro forma effects of depreciation and amortization of tangible and intangible assets recognized as part of the business combination and related income taxes. The pro forma results may not necessarily reflect actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations. Three Months Ended 2020 (Unaudited, in millions) Pro forma net sales from continuing operations $ 1,129.0 Pro forma net loss from continuing operations (29.1) Discontinued Operations Ready-to-eat Cereal On May 1, 2019, the Company entered into a definitive agreement to sell its Ready-to-eat ("RTE") Cereal business to Post Holdings, Inc. ("Post"), which until that time had been a component of the Meal Preparation reporting segment. The sale of this business is part of the Company's portfolio optimization strategy. On December 19, 2019, the Federal Trade Commission objected to the sale to Post. On January 13, 2020, the sale to Post was terminated and the Company announced its intention to pursue a sale of the RTE Cereal business to an alternative buyer. The Company continues to market the business and is committed to a plan of sale to dispose of the business. The RTE Cereal business continues to be classified as a discontinued operation as of March 31, 2021. Expected disposal losses of $0.3 million were recognized as an asset impairment charge during both the three months ended March 31, 2021 and 2020 within Net income from discontinued operations. The expected disposal loss for the RTE Cereal business is remeasured each period at the lower of carrying value or estimated fair value less costs to sell and is included in the valuation allowance in the balance sheet. Completion of the sale may be for amounts that could be significantly different from the current fair value estimate. The Company's estimate of fair value will be evaluated and recognized each reporting period until the divestiture is complete. The Company has reflected the RTE Cereal business as a discontinued operation for all periods presented. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate to the Company's continuing operations. Results of discontinued operations are as follows: Three Months Ended 2021 2020 (In millions) Net sales $ 47.5 $ 56.8 Cost of sales 41.4 47.9 Selling, general, administrative and other operating expenses 4.2 4.9 Other operating expense, net — 0.5 Operating income from discontinued operations 1.9 3.5 Interest and other expense 0.4 1.3 Income tax expense 0.4 0.6 Net income from discontinued operations $ 1.1 $ 1.6 Assets and liabilities of discontinued operations presented in the Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 include the following: March 31, 2021 December 31, 2020 (In millions) Inventories $ 37.9 $ 33.3 Property, plant, and equipment, net 66.3 65.9 Operating lease right-of-use assets 4.2 5.1 Goodwill 53.5 53.5 Intangible assets, net 38.6 38.6 Valuation allowance (126.0) (125.7) Total assets of discontinued operations $ 74.5 $ 70.7 Accrued expenses and other liabilities $ 1.0 $ 1.1 Operating lease liabilities 4.9 5.6 Total liabilities of discontinued operations $ 5.9 $ 6.7 Other Divestitures In-Store Bakery Facilities |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill for the three months ended March 31, 2021 are as follows: Meal Preparation Snacking & Beverages Total (In millions) Balance at December 31, 2020, before accumulated impairment losses $ 1,334.7 $ 888.5 $ 2,223.2 Accumulated impairment losses (11.5) (33.0) (44.5) Balance at December 31, 2020 1,323.2 855.5 2,178.7 Foreign currency exchange adjustments 0.7 0.5 1.2 Balance at March 31, 2021 $ 1,323.9 $ 856.0 $ 2,179.9 Intangible Assets The gross carrying amounts and accumulated amortization of intangible assets as of March 31, 2021 and December 31, 2020 are as follows: March 31, 2021 December 31, 2020 Weighted Average Life Remaining (yrs.) Gross Accumulated Net Gross Accumulated Net (In millions) Intangible assets with finite lives: Customer-related 9.7 $ 849.4 $ (420.0) $ 429.4 $ 848.5 $ (406.4) $ 442.1 Contractual agreements — 0.5 (0.5) — 0.5 (0.5) — Trademarks 14.8 96.2 (33.2) 63.0 96.2 (31.7) 64.5 Formulas/recipes 4.5 25.3 (22.5) 2.8 25.3 (22.1) 3.2 Computer software 6.9 197.8 (115.2) 82.6 194.8 (112.0) 82.8 Total finite lived intangibles 9.8 1,169.2 (591.4) 577.8 1,165.3 (572.7) 592.6 Intangible assets with indefinite lives: Trademarks 22.6 — 22.6 22.4 — 22.4 Total intangible assets $ 1,191.8 $ (591.4) $ 600.4 $ 1,187.7 $ (572.7) $ 615.0 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES Income taxes were recognized at effective rates of (100.0)% and 55.1% for the three months ended March 31, 2021 and 2020, respectively. The change in the Company's effective tax rate for the three months ended March 31, 2021 compared to 2020 is primarily the result of benefits recognized in 2020 due to the enactment of the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act), a change in the amount of valuation allowance recorded against certain deferred tax assets, and an increase in the amount of tax deductible stock based compensation in 2021. Our effective tax rate may change from period to period based on recurring and non-recurring factors, including the jurisdictional mix of earnings, enacted tax legislation, state income taxes, settlement of tax audits, and the expiration of the statute of limitations in relation to unrecognized tax benefits. Management estimates that it is reasonably possible that the total amount of unrecognized tax benefits could decrease by as much as $5.3 million within the next 12 months, primarily as a result of the resolution of audits currently in progress and the lapsing of statutes of limitations. As much as $2.0 million of the $5.3 million could affect net income when settled. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 9. LONG-TERM DEBT March 31, 2021 December 31, 2020 (In millions) Revolving Credit Facility $ 30.0 $ — Term Loan A 500.0 453.4 Term Loan A-1 930.0 672.6 2024 Notes — 602.9 2028 Notes 500.0 500.0 Finance leases 4.0 4.1 Total outstanding debt 1,964.0 2,233.0 Deferred financing costs (18.3) (18.3) Less current portion (15.9) (15.7) Total long-term debt $ 1,929.8 $ 2,199.0 The scheduled maturities of outstanding debt, excluding deferred financing costs, at March 31, 2021 are as follows (in millions): Remainder of 2021 $ 12.0 2022 15.5 2023 15.0 2024 14.9 2025 14.5 Thereafter 1,892.1 Total outstanding debt $ 1,964.0 Credit Agreement On March 26, 2021, the Company entered into Amendment No. 3 (the “Amendment”) to the Second Amended and Restated Credit Agreement, dated as of December 1, 2017 (the "Credit Agreement") among the Company, the other loan parties thereto, the lenders from time to time party thereto and Bank of America N.A., as administrative agent, swing line lender and L/C issuer. Under the Amendment, among other things, the parties have agreed to: (i) amend and extend the maturity date of the Revolving Credit Facility and Tranche A-1 Term Loans until March 26, 2026 and the maturity date of the Term A Loans until March 26, 2028 (each as defined in the Credit Agreement), (ii) refinance and increase the existing Term Loan amounts by $304.0 million, and (iii) include customary provisions under the Amendment providing for the replacement of LIBOR with any successor rate. The material terms and conditions under the Credit Agreement are otherwise substantially consistent with those contained in the Credit Agreement prior to the Amendment. The Company’s average interest rate on debt outstanding under its Credit Agreement for the three months ended March 31, 2021 was 1.74%. Including the impact of interest rate swap agreements in effect as of March 31, 2021, the average rate increased to 2.20%. Revolving Credit Facility — During the three months ended March 31, 2021, the Company drew $30.0 million from its $750.0 million Revolving Credit Facility. As of March 31, 2021, the Company had remaining availability of $697.3 million under the Revolving Credit Facility, and there were $22.7 million in letters of credit under the Revolving Credit Facility that were issued but undrawn, which have been included as a reduction to the calculation of available credit. 2024 Notes — The Company previously issued 6.000% notes in the aggregate principal amount of $775 million due on February 15, 2024 (the "2024 Notes"). On February 16, 2021 the Company, through Wells Fargo Bank, National Association, as trustee (the "Trustee"), completed a partial redemption of $200.0 million of its 2024 Notes, and on March 31, 2021, the Company completed the full redemption of the remaining $402.9 million outstanding principal of its 2024 Notes at a price of 101.50% of the principal amount, plus accrued and unpaid interest to, but not including, each redemption date (the "2024 Notes Redemption"). 2028 Notes — On September 9, 2020, the Company completed its public offering of $500 million aggregate principal amount of its 4.000% senior notes due September 1, 2028 (the "2028 Notes"). Loss on Extinguishment of Debt — For the three months ended March 31, 2021, the Company incurred a loss on extinguishment of debt totaling $14.4 million, which included a premium of $9.0 million and a write off of deferred financing costs of $5.4 million. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. EARNINGS PER SHARE The following table summarizes the effect of the share-based compensation awards on the weighted average number of shares outstanding used in calculating diluted earnings (loss) per share: Three Months Ended 2021 2020 (In millions, except per share data) Weighted average common shares outstanding 56.0 56.3 Assumed exercise/vesting of equity awards (1) 0.5 — Weighted average diluted common shares outstanding 56.5 56.3 (1) For the three months ended March 31, 2020, the weighted average common shares outstanding is the same for the computations of both basic and diluted shares outstanding because the Company had a net loss for the period. Equity awards, excluded from our computation of diluted earnings per share because they were anti-dilutive, were 1.4 million and 2.1 million for the three months ended March 31, 2021 and 2020, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 11. STOCK-BASED COMPENSATION The Board of Directors adopted, and the Company's stockholders approved, the "TreeHouse Foods, Inc. Equity and Incentive Plan" (the "Plan"). Under the Plan, the Compensation Committee may grant awards of various types of compensation, including stock options, restricted stock, restricted stock units, performance shares, performance units, other types of stock-based awards, and other cash-based compensation. The maximum number of shares available to be awarded under the Plan is approximately 17.5 million, of which approximately 3.4 million remained available at March 31, 2021. Total compensation expense related to stock-based payments and the related income tax benefit recognized in Net income (loss) from continuing operations are as follows: Three Months Ended 2021 2020 (In millions) Compensation expense related to stock-based payments $ 4.9 $ 7.9 Related income tax benefit 1.4 2.1 All amounts below include continuing and discontinued operations. Restricted Stock Units — Employee restricted stock unit awards generally vest based on the passage of time in approximately three equal installments on each of the first three anniversaries of the grant date. Director restricted stock units generally vest on the first anniversary of the grant date. Certain directors have elected to defer receipt of their awards until either their departure from the Board of Directors or a specified date beyond the first anniversary of the grant date. The following table summarizes the restricted stock unit activity during the three months ended March 31, 2021: Employee Weighted Director Weighted (In thousands) (In thousands) Outstanding, at December 31, 2020 707 $ 47.92 125 $ 54.67 Granted 335 52.18 1 53.84 Vested (307) 46.64 — — Forfeited (37) 52.48 — — Outstanding, at March 31, 2021 698 50.33 126 54.66 Vested and deferred, at March 31, 2021 91 55.88 Three Months Ended 2021 2020 (In millions) Fair value of vested restricted stock units $ 16.4 $ 8.4 Tax benefit recognized from vested restricted stock units 2.3 1.4 Future compensation costs related to restricted stock units are approximately $34.8 million as of March 31, 2021 and will be recognized on a weighted average basis over the next 2.3 years. The grant date fair value of the awards is equal to the Company’s closing stock price on the grant date. Performance Units — Performance unit awards are granted to certain members of management. These awards contain both service and performance conditions. For awards granted in years prior to 2020, for each year of the three-year performance period, one-third of the units will accrue, multiplied by a predefined percentage generally between 0% and 200%, depending on the achievement of certain operating performance measures. Accrued shares are not earned until the end of the full three-year performance period. For performance unit awards granted in 2020 and 2021, performance goals are set and measured annually with one-quarter of the units eligible to accrue for each year in the three-year performance period. Accrued shares are earned at the end of the three-year performance period. Additionally, for the cumulative three-year performance period, one-quarter of the units will accrue. In 2021, certain executive members of management received awards that had a market condition as described below. For both the annual and cumulative shares, the earned shares are equal to the number of units granted multiplied by a predefined percentage generally between 0% and 200%, depending on the achievement of certain operating performance measures. Accrued units will be converted to stock or cash, at the discretion of the Compensation Committee, generally, on the third anniversary of the grant date. The Company intends to settle these awards in stock and has the shares available to do so. In 2021, the Compensation Committee of the Board approved performance unit awards granted to certain executive members of management that include a relative total shareholder return market condition that is measured over a three-year performance period in addition to the existing operating performance measures. The units will accrue, multiplied by a predefined percentage generally between 0% and 200% for the operating performance measures and 0% and 150% for the relative total shareholder return measure, depending on the achievement attained for each performance measure. The fair value of the portion of the award earned based on relative total shareholder return was valued using a Monte Carlo simulation model with a grant-date fair value of $59.16 on approximately 23,200 units granted. These awards will be converted to stock or cash, at the discretion of the Compensation Committee, generally, on the third anniversary of the grant date. The Company intends to settle these awards in stock and has the shares available to do so. The assumptions used in the Monte Carlo simulation were as follows: Three Months Ended 2021 Dividend yield 0 % Risk-free rate 0.14 % Expected volatility 35.65 % Expected term (in years) 2.75 The following table summarizes the performance unit activity during the three months ended March 31, 2021: Performance Weighted (In thousands) Unvested, at December 31, 2020 541 $ 52.38 Granted 166 52.80 Vested (105) 45.79 Forfeited (47) 58.14 Unvested, at March 31, 2021 555 54.07 Three Months Ended 2021 2020 (In millions) Fair value of vested performance units $ 5.6 $ 3.3 Tax benefit recognized from performance units vested 0.3 0.6 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 12. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss consists of the following components, all of which are net of tax: Foreign Unrecognized Accumulated (In millions) Balance at December 31, 2019 $ (79.4) $ (4.6) $ (84.0) Other comprehensive loss before reclassifications (15.9) — (15.9) Reclassifications from accumulated other comprehensive loss (2) — 0.1 0.1 Other comprehensive (loss) income (15.9) 0.1 (15.8) Balance at March 31, 2020 $ (95.3) $ (4.5) $ (99.8) Balance at December 31, 2020 $ (67.3) $ 3.3 $ (64.0) Other comprehensive income before reclassifications 0.9 — 0.9 Reclassifications from accumulated other comprehensive loss (2) — 0.1 0.1 Other comprehensive income 0.9 0.1 1.0 Balance at March 31, 2021 $ (66.4) $ 3.4 $ (63.0) (1) The tax impact of the foreign currency translation adjustment and the unrecognized pension and postretirement benefits reclassification was insignificant for the three months ended March 31, 2021 and 2020. |
Employee Retirement and Postret
Employee Retirement and Postretirement Benefits | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Retirement and Postretirement Benefits | 13. EMPLOYEE RETIREMENT AND POSTRETIREMENT BENEFITS Pension, Profit Sharing, and Postretirement Benefits — Certain employees and retirees participate in pension and other postretirement benefit plans. Employee benefit plan obligations and expenses included in the Condensed Consolidated Financial Statements are determined based on plan assumptions, employee demographic data, including years of service and compensation, benefits and claims paid, and employer contributions. The information below includes the activities of the Company's continuing and discontinued operations. Components of net periodic pension benefit are as follows: Three Months Ended 2021 2020 (In millions) Service cost $ 0.2 $ 0.4 Interest cost 2.2 2.7 Expected return on plan assets (3.5) (3.6) Amortization of unrecognized net loss 0.1 0.1 Net periodic pension benefit $ (1.0) $ (0.4) Components of net periodic postretirement cost are as follows: Three Months Ended 2021 2020 (In millions) Interest cost $ 0.2 $ 0.2 Net periodic postretirement cost $ 0.2 $ 0.2 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. COMMITMENTS AND CONTINGENCIES Litigation, Investigations, and Audits - On November 16, 2016, a purported TreeHouse shareholder filed a class action captioned Tarara v. TreeHouse Foods, Inc., et al. , Case No. 1:16-cv-10632, in the United States District Court for the Northern District of Illinois against TreeHouse and certain of its officers. The complaint, amended on March 24, 2017, is purportedly brought on behalf of all purchasers of TreeHouse common stock from January 20, 2016 through and including November 2, 2016. It asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seeks, among other things, damages and costs and expenses. On December 22, 2016, another purported TreeHouse shareholder filed an action captioned Wells v. Reed, et al. , Case No. 2016-CH-16359, in the Circuit Court of Cook County, Illinois, against TreeHouse and certain of its officers. This complaint, purportedly brought derivatively on behalf of TreeHouse, asserts state law claims against certain officers for breach of fiduciary duty, unjust enrichment, and corporate waste. On February 7, 2017, another purported TreeHouse shareholder filed an action captioned Lavin v. Reed, et al. , Case No. 17-cv-01014, in the Northern District of Illinois, against TreeHouse and certain of its officers. This complaint is also purportedly brought derivatively on behalf of TreeHouse, and it asserts state law claims against certain officers for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and corporate waste. On February 8, 2019, another purported TreeHouse shareholder filed an action captioned Bartelt v. Reed, et al. , Case No. 1:19-cv-00835, in the United States District Court for the Northern District of Illinois. This complaint is purportedly brought derivatively on behalf of TreeHouse and asserts state law claims against certain officers for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and corporate waste, in addition to asserting violations of Section 14 of the Securities Exchange Act of 1934. Finally, on June 3, 2019, another purported TreeHouse shareholder filed an action captioned City of Ann Arbor Employees’ Retirement System v. Reed, et al. , Case No. 2019-CH-06753, in the Circuit Court of Cook County, Illinois, against TreeHouse and certain of its officers. Like Wells , Lavin , and Bartelt , this complaint is purportedly brought derivatively on behalf of TreeHouse and asserts claims for contribution and indemnification, breach of fiduciary duty, and aiding and abetting breaches of fiduciary duty. All five complaints make substantially similar allegations (though the amended complaint in Tarara now contains additional detail). Essentially, the complaints allege that TreeHouse, under the authority and control of the individual defendants: (i) made certain false and misleading statements regarding the Company’s business, operations, and future prospects; and (ii) failed to disclose that (a) the Company’s private label business was underperforming; (b) the Company’s Flagstone business was underperforming; (c) the Company’s acquisition strategy was underperforming; (d) the Company had overstated its full-year 2016 guidance; and (e) TreeHouse’s statements lacked reasonable basis. The complaints allege that these actions artificially inflated the market price of TreeHouse common stock during the class period, thus purportedly harming investors. The Bartelt action also includes substantially similar allegations concerning events in 2017, and the Ann Arbor complaint also seeks contribution from the individual defendants for losses incurred by the company in these litigations. We believe that these claims are without merit and intend to defend against them vigorously, but note that, as described below, an agreement in principle has been reached to resolve the federal securities class action. Due to the similarity of the complaints, the parties in Wells and Lavin entered stipulations deferring the litigation until the earlier of (i) the court in Public Employees’ entering an order resolving defendants’ anticipated motion to dismiss therein or (ii) plaintiffs’ counsel receiving notification of a settlement of Public Employees’ or until otherwise agreed to by the parties. On September 27, 2018, the parties in Wells and Lavin filed joint motions for entry of agreed orders further deferring the matters in light of the Public Employees’ Court’s denial of the motion to dismiss in February 2018. The Wells and Lavin Courts entered the agreed orders further deferring the matters on September 27, 2018 and October 10, 2018, respectively. On June 25, 2019, the parties jointly moved to consolidate the Bartelt matter with Lavin , so that it would be subject to the Lavin deferral order. This motion was granted on June 27, 2019, and Bartelt is now consolidated with Lavin and deferred. The parties filed a status report on April 13, 2021. Similarly, Ann Arbor was consolidated with Wells on August 13, 2019, and is now deferred. On February 8, 2021, the plaintiffs in Wells moved to modify the deferral order to lift the stay, and defendants thereafter opposed the motion. On April 15, 2021, the court denied the motion and set a status hearing for July 15, 2021. Since its initial docketing, the Tarara matter has been re-captioned as Public Employees’ Retirement Systems of Mississippi v. TreeHouse Foods, Inc., et al. , in accordance with the Court’s order appointing Public Employees’ Retirement Systems of Mississippi as the lead plaintiff. On May 26, 2017, the Public Employees’ defendants filed a motion to dismiss, which the court denied on February 12, 2018. On April 12, 2018, the Public Employees’ defendants filed their answer to the amended complaint. On April 23, 2018, the parties filed a joint status report with the Court, which set forth a proposed discovery and briefing schedule for the Court’s consideration. On July 13, 2018, lead plaintiff filed a motion to certify the class, and defendants filed their response in opposition to the motion to certify the class on October 8, 2018. On November 12, 2018, the parties filed an agreed motion to stay proceedings to allow them to explore mediation. The motion was granted on November 19. The parties thereafter engaged in mediation but failed to resolve the dispute. On March 29, 2019, the parties resumed litigation by filing an agreed motion for extension of time, which was granted on April 9. Under that schedule, lead plaintiff filed its reply class certification brief on May 17, 2019. On February 26, 2020, the court granted lead plaintiff’s motion for class certification. Defendants then filed a petition for permissive appeal of the class certification order in the United States Court of Appeals for the Seventh Circuit on March 11, 2020. After ordering lead plaintiff to file a response, the court denied the petition on May 4, 2020. On December 16, 2019, the parties agreed to extend the case schedule 90 days. This agreed motion was granted on December 25, 2019. At a status conference on March 10, 2020, the parties informed the court that they intended to engage in a second mediation and the court extended then-upcoming deadlines under the case schedule, pending a further status report from the parties regarding the extent of the stay needed to facilitate mediation. The court subsequently issued multiple general orders as a result of the COVID-19 outbreak, which together postponed all case deadlines for a total of 77 days. On June 9, 2020, the parties filed a joint status report informing the court that mediation had been scheduled for July 9, 2020. The next day, the court stayed the case pending the outcome of mediation. Any in-person mediation was thereafter postponed due to ongoing COVID-19 concerns, and the parties proceeded to mediate remotely. On April 19, 2021, the parties advised the Court that they have reached an agreement in principle to resolve the matter, subject to various conditions, definitive documentation, and Court approval. The agreement contemplates a cash payment of $27.0 million (funded by D&O insurance) in exchange for dismissal with prejudice of the class claims and full releases. As a result of these developments, the Company has recorded a $27.0 million liability and a corresponding insurance receivable within Accrued expenses and Prepaid expenses and other current assets, respectively, in the Condensed Consolidated Balance Sheets as of March 31, 2021. The Company is party to matters challenging its wage and hour practices. These matters include a number of class actions consolidated under the caption Negrete v. Ralcorp Holdings, Inc ., et al, pending in the U.S. District Court for the Central District of California, in which plaintiffs allege a pattern of violations of California and/or federal law at three former Company manufacturing facilities in California. The Company has notified the Court that it has reached a preliminary settlement understanding with the Negrete plaintiffs that would resolve all associated matters for a payment by the Company of $9.0 million. The preliminary understanding reached with the Negrete plaintiffs involves procedural requirements and Court approval which may continue through 2021. As a result of these developments, the Company has an accrual for a $9.0 million liability within Accrued expenses in the Condensed Consolidated Balance Sheets as of March 31, 2021. In addition, the Company is party in the ordinary course of business to certain claims, litigation, audits, and investigations. The Company will record an accrual for a loss contingency when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable that may be incurred in connection with any such currently pending or threatened matter, none of which are significant. In the Company’s opinion, the settlement of any such currently pending or threatened matter is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 15. DERIVATIVE INSTRUMENTS The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by derivative instruments include interest rate risk, foreign currency risk, commodity price risk, and risk associated with the unfunded portion of the Company's deferred compensation liability. Derivative contracts are entered into for periods consistent with the related underlying exposure and do not constitute positions independent of those exposures. The Company does not enter into derivative instruments for trading or speculative purposes. Interest Rate Swap Agreements - The Company manages its exposure to changes in interest rates by optimizing the use of variable-rate and fixed-rate debt and by utilizing interest rate swaps to hedge our exposure to changes in interest rates, to reduce the volatility of our financing costs, and to achieve a desired proportion of fixed versus floating-rate debt, based on current and projected market conditions. As of March 31, 2021, the Company had entered into $875.0 million of long-term interest rate swap agreements to lock into a fixed LIBOR interest rate base. Under the terms of the agreements, $875.0 million in variable-rate debt was swapped for a weighted average fixed interest rate base of approximately 2.68% in 2020 and 2.91% from 2021 through 2025. These instruments are not accounted for under hedge accounting and the changes in their fair value are recognized in the Condensed Consolidated Statements of Operations. Foreign Currency Contracts - Due to the Company’s foreign operations, it is exposed to foreign currency risk. The Company enters into foreign currency contracts to manage the risk associated with foreign currency cash flows. This includes, but is not limited to, using foreign currency contracts to establish a fixed foreign currency exchange rate for the net cash flow requirements for purchases of inventory, sales of finished goods, and future settlement of foreign-denominated assets and liabilities. These contracts do not qualify for hedge accounting and changes in their fair value are recognized in the Condensed Consolidated Statements of Operations. As of March 31, 2021, the Company had $7.8 million of foreign currency contracts outstanding, expiring throughout 2021 and 2022. Commodity Contracts - Certain commodities the Company uses in the production and distribution of its products are exposed to market price risk. The Company utilizes derivative contracts to manage this risk. The majority of commodity forward contracts are not derivatives, and those that are generally qualify for the normal purchases and normal sales scope exception under the guidance for derivative instruments and hedging activities and, therefore, are not subject to its provisions. For derivative commodity contracts that do not qualify for the normal purchases and normal sales scope exception, the Company records their fair value on the Condensed Consolidated Balance Sheets, with changes in value being recognized in the Condensed Consolidated Statements of Operations. The Company’s derivative commodity contracts may include contracts for diesel, oil, plastics, natural gas, electricity, resin, corn, coffee, flour, and other commodity contracts that do not meet the requirements for the normal purchases and normal sales scope exception. Diesel contracts are used to manage the Company’s risk associated with the underlying cost of diesel fuel used to deliver products. Contracts for oil, plastics, and resin are used to manage the Company’s risk associated with the underlying commodity cost of a significant component used in packaging materials. Contracts for natural gas and electricity are used to manage the Company’s risk associated with the utility costs of its manufacturing facilities, and other commodity contracts that are derivatives that do not meet the normal purchases and normal sales scope exception are used to manage the price risk associated with raw material costs. As of March 31, 2021, the Company had outstanding contracts for the purchase of 0.1 million megawatts of electricity, expiring throughout 2021 and 2022; 12.0 million gallons of diesel, expiring throughout 2021; 5.5 million dekatherms of natural gas, expiring throughout 2021 and 2022; 1.5 million pounds of coffee, expiring throughout 2021; 17.5 million pounds of resin, expiring throughout 2021, and 2.2 million bushels of flour, expiring throughout 2021. Total Return Swap Contract - In March 2021, the Company entered into an economic hedge program that uses a total return swap contract to hedge the market risk associated with the unfunded portion of the Company's deferred compensation liability. The total return swap contract trades generally have a duration of one month and are rebalanced and re-hedged at the end of each monthly term. While the total return swap contract is treated as an economic hedge, the Company has not designated it as a hedge for accounting purposes. The total return swap contract is measured at fair value and recognized in the Condensed Consolidated Balance Sheets, with changes in value being recognized in the Condensed Consolidated Statements of Operations. As of March 31, 2021, the notional value of the total return swap contract was $10.3 million. The following table identifies the fair value of each derivative instrument: March 31, 2021 December 31, 2020 (In millions) Asset derivatives Commodity contracts $ 14.4 $ 12.6 Total return swap contract 0.1 — $ 14.5 $ 12.6 Liability derivatives Commodity contracts $ 0.3 $ 0.7 Foreign currency contracts 0.3 — Interest rate swap agreements 77.7 97.4 $ 78.3 $ 98.1 Asset derivatives are included within Prepaid expenses and other current assets and liability derivatives are included within Accrued expenses in the Condensed Consolidated Balance Sheets. The fair values of the commodity contracts, foreign currency contracts, interest rate swap agreements, and the total return swap contract are determined using Level 2 inputs. Level 2 inputs are inputs other than quoted market prices that are observable for an asset or liability, either directly or indirectly. The fair values of the commodity contracts, foreign currency contracts, interest rate swap agreements, and total return swap contract are based on an analysis comparing the contract rates to the market rates at the balance sheet date. We recognized the following gains and losses on our derivative contracts in the Condensed Consolidated Statements of Operations: Location of Gain (Loss) Three Months Ended Recognized in Net Income (Loss) 2021 2020 (In millions) Mark-to-market unrealized gain (loss) Commodity contracts Other (income) expense, net $ 2.2 $ (12.6) Foreign currency contracts Other (income) expense, net (0.3) 0.5 Interest rate swap agreements Other (income) expense, net 19.7 (52.0) Total return swap contract General and administrative 0.1 — Total unrealized gain (loss) $ 21.7 $ (64.1) Realized gain (loss) Commodity contracts Manufacturing related to Cost of sales and transportation related to Selling and distribution $ 7.6 $ (1.5) Foreign currency contracts Cost of sales — 0.1 Interest rate swap agreements Interest expense (6.1) (0.8) Total realized gain (loss) $ 1.5 $ (2.2) Total gain (loss) $ 23.2 $ (66.3) |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 16. SEGMENT INFORMATION The Company manages operations on a company-wide basis, thereby making determinations as to the allocation of resources in total rather than on a segment-level basis. The Company has designated reportable segments based on how management views its business. The Company does not segregate assets between segments for internal reporting. Therefore, asset-related information has not been presented. The reportable segments, as presented below, are consistent with the manner in which the Company reports its results to the Chief Operating Decision Maker. The principal products that comprise each segment are as follows: Meal Preparation – Our Meal Preparation segment sells aseptic cheese & pudding; baking and mix powders; hot cereals; jams, preserves, and jellies; liquid and powdered non-dairy creamer; macaroni and cheese; mayonnaise; Mexican, barbeque, and other sauces; pasta; pickles and related products; powdered soups and gravies; refrigerated and shelf stable dressings and sauces; refrigerated dough; single serve hot beverages; skillet dinners; and table and flavored syrups. Snacking & Beverages – Our Snacking & Beverages segment sells bars; broths; candy; cookies; crackers; in-store bakery products; pita chips; powdered drinks; pretzels; ready-to-drink coffee; retail griddle waffles, pancakes, and French toast; specialty teas; and sweeteners. The Company evaluates the performance of its segments based on net sales dollars and direct operating income. Direct operating income is defined as gross profit less freight out, sales commissions, and direct selling, general, and administrative expenses. The amounts in the following tables are obtained from reports used by senior management and do not include income taxes. Other expenses not allocated include unallocated selling, general, and administrative expenses, unallocated costs of sales, and unallocated corporate expenses (amortization expense, other operating expense, and asset impairment). The accounting policies of the Company’s segments are the same as those described in the summary of significant accounting policies set forth in Note 1 to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020. Financial information relating to the Company’s reportable segments on a continuing operations basis is as follows: Three Months Ended 2021 2020 (In millions) Net sales to external customers: Meal Preparation $ 678.5 $ 673.6 Snacking & Beverages 378.8 411.3 Total $ 1,057.3 $ 1,084.9 Direct operating income: Meal Preparation $ 80.5 $ 86.3 Snacking & Beverages 41.7 48.1 Total 122.2 134.4 Unallocated selling, general, and administrative expenses (69.0) (71.4) Unallocated cost of sales (1) (4.1) 3.2 Unallocated corporate expense and other (1) (38.1) (36.0) Operating income $ 11.0 $ 30.2 (1) Includes charges related to growth, reinvestment, and restructuring programs and other costs managed at corporate. Other costs include incremental expenses directly attributable to our response to the COVID-19 pandemic, which included supplemental pay to our front-line personnel, additional protective equipment for employees, and additional sanitation measures. Disaggregation of Revenue Segment revenue disaggregated by product category groups are as follows: Three Months Ended 2021 2020 (In millions) Center store grocery $ 414.1 $ 432.0 Main course 264.4 241.6 Total Meal Preparation 678.5 673.6 Sweet & savory snacks 273.0 305.0 Beverages & drink mixes 105.8 106.3 Total Snacking & Beverages 378.8 411.3 Total net sales $ 1,057.3 $ 1,084.9 Segment revenue disaggregated by sales channel are as follows: Three Months Ended 2021 2020 (In millions) Retail grocery $ 852.1 $ 885.5 Food-away-from-home 65.2 74.0 Industrial, co-manufacturing, and other 140.0 125.4 Total net sales $ 1,057.3 $ 1,084.9 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Not yet adopted In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. ASU 2020-04 was further amended in January 2021 by ASU 2021-01, Reference Rate Reform (Topic 848): Scope. |
Growth, Reinvestment, and Res_2
Growth, Reinvestment, and Restructuring Programs (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |
Aggregate Expenses Incurred Associated with Facility Closure | Below is a summary of costs by line item for the Growth, Reinvestment, and Restructuring Programs: Three Months Ended 2021 2020 (In millions) Cost of sales $ — $ 0.7 General and administrative — 0.7 Other operating expense, net 19.6 18.5 Total $ 19.6 $ 19.9 Below is a summary of costs by type associated with the Growth, Reinvestment, and Restructuring Programs: Three Months Ended 2021 2020 (In millions) Employee-related $ 4.9 $ 4.8 Other costs 14.7 15.1 Total $ 19.6 $ 19.9 |
Activity of Restructuring Program Liabilities | The table below presents the exit cost liability activity for the Growth, Reinvestment, and Restructuring Programs as of March 31, 2021: Severance (In millions) Balance as of December 31, 2020 $ 4.9 Expenses recognized 0.7 Cash payments (2.5) Balance as of March 31, 2021 $ 3.1 |
Restructuring and Margin Improvement Activities Categories | |
Restructuring Cost and Reserve [Line Items] | |
Aggregate Expenses Incurred Associated with Facility Closure | The costs by activity for the Growth, Reinvestment, and Restructuring Programs are outlined below: Three Months Ended 2021 2020 (In millions) Strategic growth initiatives $ 16.1 $ — Structure to Win — 7.8 TreeHouse 2020 — 12.1 Other 3.5 — Total $ 19.6 $ 19.9 |
Receivable Sales Program (Table
Receivable Sales Program (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Receivable Sales Program | The following table includes the outstanding amount of accounts receivable sold under the Receivables Sales Program and the amount collected but not yet remitted to the financial institutions: March 31, 2021 December 31, 2020 (In millions) Outstanding accounts receivable sold $ 246.7 $ 284.3 Collections not remitted to financial institutions 128.8 202.8 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | March 31, 2021 December 31, 2020 (In millions) Raw materials and supplies $ 234.8 $ 231.0 Finished goods 418.2 367.6 Total inventories $ 653.0 $ 598.6 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Purchase Price Allocation to Net Tangible and Intangible Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary purchase price allocation of the fair value of net tangible and intangible assets acquired and liabilities assumed: (In millions) Inventories $ 20.0 Property, plant, and equipment, net 48.2 Customer relationships 68.0 Trade names 43.0 Formulas/recipes 2.3 Goodwill 57.8 Operating lease right-of-use assets 0.1 Assets acquired 239.4 Assumed liabilities (0.2) Total purchase price $ 239.2 |
Business Acquisition, Pro Forma Information | The pro forma results may not necessarily reflect actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations. Three Months Ended 2020 (Unaudited, in millions) Pro forma net sales from continuing operations $ 1,129.0 Pro forma net loss from continuing operations (29.1) |
Disposal Groups, Including Discontinued Operations | Results of discontinued operations are as follows: Three Months Ended 2021 2020 (In millions) Net sales $ 47.5 $ 56.8 Cost of sales 41.4 47.9 Selling, general, administrative and other operating expenses 4.2 4.9 Other operating expense, net — 0.5 Operating income from discontinued operations 1.9 3.5 Interest and other expense 0.4 1.3 Income tax expense 0.4 0.6 Net income from discontinued operations $ 1.1 $ 1.6 Assets and liabilities of discontinued operations presented in the Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 include the following: March 31, 2021 December 31, 2020 (In millions) Inventories $ 37.9 $ 33.3 Property, plant, and equipment, net 66.3 65.9 Operating lease right-of-use assets 4.2 5.1 Goodwill 53.5 53.5 Intangible assets, net 38.6 38.6 Valuation allowance (126.0) (125.7) Total assets of discontinued operations $ 74.5 $ 70.7 Accrued expenses and other liabilities $ 1.0 $ 1.1 Operating lease liabilities 4.9 5.6 Total liabilities of discontinued operations $ 5.9 $ 6.7 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill for the three months ended March 31, 2021 are as follows: Meal Preparation Snacking & Beverages Total (In millions) Balance at December 31, 2020, before accumulated impairment losses $ 1,334.7 $ 888.5 $ 2,223.2 Accumulated impairment losses (11.5) (33.0) (44.5) Balance at December 31, 2020 1,323.2 855.5 2,178.7 Foreign currency exchange adjustments 0.7 0.5 1.2 Balance at March 31, 2021 $ 1,323.9 $ 856.0 $ 2,179.9 |
Gross Carrying Amounts and Accumulated Amortization of Intangible Assets, with Finite Lives | The gross carrying amounts and accumulated amortization of intangible assets as of March 31, 2021 and December 31, 2020 are as follows: March 31, 2021 December 31, 2020 Weighted Average Life Remaining (yrs.) Gross Accumulated Net Gross Accumulated Net (In millions) Intangible assets with finite lives: Customer-related 9.7 $ 849.4 $ (420.0) $ 429.4 $ 848.5 $ (406.4) $ 442.1 Contractual agreements — 0.5 (0.5) — 0.5 (0.5) — Trademarks 14.8 96.2 (33.2) 63.0 96.2 (31.7) 64.5 Formulas/recipes 4.5 25.3 (22.5) 2.8 25.3 (22.1) 3.2 Computer software 6.9 197.8 (115.2) 82.6 194.8 (112.0) 82.8 Total finite lived intangibles 9.8 1,169.2 (591.4) 577.8 1,165.3 (572.7) 592.6 Intangible assets with indefinite lives: Trademarks 22.6 — 22.6 22.4 — 22.4 Total intangible assets $ 1,191.8 $ (591.4) $ 600.4 $ 1,187.7 $ (572.7) $ 615.0 |
Gross Carrying Amounts of Intangible Assets, with Indefinite Lives | The gross carrying amounts and accumulated amortization of intangible assets as of March 31, 2021 and December 31, 2020 are as follows: March 31, 2021 December 31, 2020 Weighted Average Life Remaining (yrs.) Gross Accumulated Net Gross Accumulated Net (In millions) Intangible assets with finite lives: Customer-related 9.7 $ 849.4 $ (420.0) $ 429.4 $ 848.5 $ (406.4) $ 442.1 Contractual agreements — 0.5 (0.5) — 0.5 (0.5) — Trademarks 14.8 96.2 (33.2) 63.0 96.2 (31.7) 64.5 Formulas/recipes 4.5 25.3 (22.5) 2.8 25.3 (22.1) 3.2 Computer software 6.9 197.8 (115.2) 82.6 194.8 (112.0) 82.8 Total finite lived intangibles 9.8 1,169.2 (591.4) 577.8 1,165.3 (572.7) 592.6 Intangible assets with indefinite lives: Trademarks 22.6 — 22.6 22.4 — 22.4 Total intangible assets $ 1,191.8 $ (591.4) $ 600.4 $ 1,187.7 $ (572.7) $ 615.0 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | March 31, 2021 December 31, 2020 (In millions) Revolving Credit Facility $ 30.0 $ — Term Loan A 500.0 453.4 Term Loan A-1 930.0 672.6 2024 Notes — 602.9 2028 Notes 500.0 500.0 Finance leases 4.0 4.1 Total outstanding debt 1,964.0 2,233.0 Deferred financing costs (18.3) (18.3) Less current portion (15.9) (15.7) Total long-term debt $ 1,929.8 $ 2,199.0 |
Schedule of Maturities of Outstanding Debt, Excluding Deferred Financing Costs | The scheduled maturities of outstanding debt, excluding deferred financing costs, at March 31, 2021 are as follows (in millions): Remainder of 2021 $ 12.0 2022 15.5 2023 15.0 2024 14.9 2025 14.5 Thereafter 1,892.1 Total outstanding debt $ 1,964.0 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Effect of Share-Based Compensation Awards on Weighted Average Number of Shares Outstanding Used in Calculating Diluted Earnings Per Share | The following table summarizes the effect of the share-based compensation awards on the weighted average number of shares outstanding used in calculating diluted earnings (loss) per share: Three Months Ended 2021 2020 (In millions, except per share data) Weighted average common shares outstanding 56.0 56.3 Assumed exercise/vesting of equity awards (1) 0.5 — Weighted average diluted common shares outstanding 56.5 56.3 (1) For the three months ended March 31, 2020, the weighted average common shares outstanding is the same for the computations of both basic and diluted shares outstanding because the Company had a net loss for the period. Equity awards, excluded from our computation of diluted earnings per share because they were anti-dilutive, were 1.4 million and 2.1 million for the three months ended March 31, 2021 and 2020, respectively. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Total Compensation Expense | Total compensation expense related to stock-based payments and the related income tax benefit recognized in Net income (loss) from continuing operations are as follows: Three Months Ended 2021 2020 (In millions) Compensation expense related to stock-based payments $ 4.9 $ 7.9 Related income tax benefit 1.4 2.1 |
Summary of Restricted Stock Unit Activity | The following table summarizes the restricted stock unit activity during the three months ended March 31, 2021: Employee Weighted Director Weighted (In thousands) (In thousands) Outstanding, at December 31, 2020 707 $ 47.92 125 $ 54.67 Granted 335 52.18 1 53.84 Vested (307) 46.64 — — Forfeited (37) 52.48 — — Outstanding, at March 31, 2021 698 50.33 126 54.66 Vested and deferred, at March 31, 2021 91 55.88 |
Highlight of Restricted Stock Unit Activity | Three Months Ended 2021 2020 (In millions) Fair value of vested restricted stock units $ 16.4 $ 8.4 Tax benefit recognized from vested restricted stock units 2.3 1.4 |
Schedule of Assumptions Used in the Monte Carlo Simulation | The assumptions used in the Monte Carlo simulation were as follows: Three Months Ended 2021 Dividend yield 0 % Risk-free rate 0.14 % Expected volatility 35.65 % Expected term (in years) 2.75 |
Summary of Performance Unit Activity | The following table summarizes the performance unit activity during the three months ended March 31, 2021: Performance Weighted (In thousands) Unvested, at December 31, 2020 541 $ 52.38 Granted 166 52.80 Vested (105) 45.79 Forfeited (47) 58.14 Unvested, at March 31, 2021 555 54.07 |
Highlight of Performance Unit Activity | Three Months Ended 2021 2020 (In millions) Fair value of vested performance units $ 5.6 $ 3.3 Tax benefit recognized from performance units vested 0.3 0.6 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss Net of Tax | Accumulated other comprehensive loss consists of the following components, all of which are net of tax: Foreign Unrecognized Accumulated (In millions) Balance at December 31, 2019 $ (79.4) $ (4.6) $ (84.0) Other comprehensive loss before reclassifications (15.9) — (15.9) Reclassifications from accumulated other comprehensive loss (2) — 0.1 0.1 Other comprehensive (loss) income (15.9) 0.1 (15.8) Balance at March 31, 2020 $ (95.3) $ (4.5) $ (99.8) Balance at December 31, 2020 $ (67.3) $ 3.3 $ (64.0) Other comprehensive income before reclassifications 0.9 — 0.9 Reclassifications from accumulated other comprehensive loss (2) — 0.1 0.1 Other comprehensive income 0.9 0.1 1.0 Balance at March 31, 2021 $ (66.4) $ 3.4 $ (63.0) (1) The tax impact of the foreign currency translation adjustment and the unrecognized pension and postretirement benefits reclassification was insignificant for the three months ended March 31, 2021 and 2020. |
Employee Retirement and Postr_2
Employee Retirement and Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Summary of Net Periodic Cost (Benefit) of Pension and Postretirement Benefit Plans | Components of net periodic pension benefit are as follows: Three Months Ended 2021 2020 (In millions) Service cost $ 0.2 $ 0.4 Interest cost 2.2 2.7 Expected return on plan assets (3.5) (3.6) Amortization of unrecognized net loss 0.1 0.1 Net periodic pension benefit $ (1.0) $ (0.4) Components of net periodic postretirement cost are as follows: Three Months Ended 2021 2020 (In millions) Interest cost $ 0.2 $ 0.2 Net periodic postretirement cost $ 0.2 $ 0.2 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative, Fair Value, and Location on Condensed Consolidated Balance Sheet | The following table identifies the fair value of each derivative instrument: March 31, 2021 December 31, 2020 (In millions) Asset derivatives Commodity contracts $ 14.4 $ 12.6 Total return swap contract 0.1 — $ 14.5 $ 12.6 Liability derivatives Commodity contracts $ 0.3 $ 0.7 Foreign currency contracts 0.3 — Interest rate swap agreements 77.7 97.4 $ 78.3 $ 98.1 |
Gains and Losses on Derivative Contracts | We recognized the following gains and losses on our derivative contracts in the Condensed Consolidated Statements of Operations: Location of Gain (Loss) Three Months Ended Recognized in Net Income (Loss) 2021 2020 (In millions) Mark-to-market unrealized gain (loss) Commodity contracts Other (income) expense, net $ 2.2 $ (12.6) Foreign currency contracts Other (income) expense, net (0.3) 0.5 Interest rate swap agreements Other (income) expense, net 19.7 (52.0) Total return swap contract General and administrative 0.1 — Total unrealized gain (loss) $ 21.7 $ (64.1) Realized gain (loss) Commodity contracts Manufacturing related to Cost of sales and transportation related to Selling and distribution $ 7.6 $ (1.5) Foreign currency contracts Cost of sales — 0.1 Interest rate swap agreements Interest expense (6.1) (0.8) Total realized gain (loss) $ 1.5 $ (2.2) Total gain (loss) $ 23.2 $ (66.3) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Financial Information Relating to Reportable Segments | Financial information relating to the Company’s reportable segments on a continuing operations basis is as follows: Three Months Ended 2021 2020 (In millions) Net sales to external customers: Meal Preparation $ 678.5 $ 673.6 Snacking & Beverages 378.8 411.3 Total $ 1,057.3 $ 1,084.9 Direct operating income: Meal Preparation $ 80.5 $ 86.3 Snacking & Beverages 41.7 48.1 Total 122.2 134.4 Unallocated selling, general, and administrative expenses (69.0) (71.4) Unallocated cost of sales (1) (4.1) 3.2 Unallocated corporate expense and other (1) (38.1) (36.0) Operating income $ 11.0 $ 30.2 |
Schedule of Segment Revenue Disaggregated by Product Category | Segment revenue disaggregated by product category groups are as follows: Three Months Ended 2021 2020 (In millions) Center store grocery $ 414.1 $ 432.0 Main course 264.4 241.6 Total Meal Preparation 678.5 673.6 Sweet & savory snacks 273.0 305.0 Beverages & drink mixes 105.8 106.3 Total Snacking & Beverages 378.8 411.3 Total net sales $ 1,057.3 $ 1,084.9 Segment revenue disaggregated by sales channel are as follows: Three Months Ended 2021 2020 (In millions) Retail grocery $ 852.1 $ 885.5 Food-away-from-home 65.2 74.0 Industrial, co-manufacturing, and other 140.0 125.4 Total net sales $ 1,057.3 $ 1,084.9 |
Growth, Reinvestment, and Res_3
Growth, Reinvestment, and Restructuring Programs - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Mar. 31, 2018 | Sep. 30, 2017 |
Strategic growth initiatives | |||
Restructuring Cost and Reserve [Line Items] | |||
Total cost to close facilities | $ 130 | ||
Structure to Win | |||
Restructuring Cost and Reserve [Line Items] | |||
Total cost to close facilities | $ 92.7 | ||
TreeHouse 2020 | |||
Restructuring Cost and Reserve [Line Items] | |||
Total cost to close facilities | $ 299.8 |
Growth, Reinvestment, and Res_4
Growth, Reinvestment, and Restructuring Programs - Aggregate Expenses Incurred Associated with Facility Closure (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 19.6 | $ 19.9 |
Cost of sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 0.7 |
General and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 0.7 |
Other operating expense, net | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 19.6 | 18.5 |
Restructuring and Margin Improvement Activities Categories | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 19.6 | 19.9 |
Restructuring and Margin Improvement Activities Categories | Strategic growth initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 16.1 | 0 |
Restructuring and Margin Improvement Activities Categories | Structure to Win | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 7.8 |
Restructuring and Margin Improvement Activities Categories | TreeHouse 2020 | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 12.1 |
Restructuring and Margin Improvement Activities Categories | Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 3.5 | 0 |
Employee-related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 4.9 | 4.8 |
Other costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 14.7 | $ 15.1 |
Growth, Reinvestment, and Res_5
Growth, Reinvestment, and Restructuring Programs - Activity of Restructuring Program Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Expenses recognized | $ 19.6 | $ 19.9 |
Restructuring Plans Other Than TreeHouse 2020 | Severance | ||
Restructuring Reserve [Roll Forward] | ||
Balance as of December 31, 2020 | 4.9 | |
Cash payments | (2.5) | |
Balance as of March 31, 2021 | 3.1 | |
Restructuring Plans Other Than TreeHouse 2020 | Severance | Expenses recognized | ||
Restructuring Reserve [Roll Forward] | ||
Expenses recognized | $ 0.7 |
Receivables Sales Program - Add
Receivables Sales Program - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2021USD ($)agreement | Mar. 31, 2020USD ($) | |
Receivables Sales Agreement [Line Items] | ||
Number of agreements | agreement | 2 | |
Termination period | 60 days | |
Retained interest | $ 0 | |
Loss on sale of receivables | 500,000 | $ 900,000 |
Maximum | ||
Receivables Sales Agreement [Line Items] | ||
Proceeds from receivables sales | $ 300,000,000 |
Receivables Sales Program - Acc
Receivables Sales Program - Accounts Receivable Sold the Receivable Sales Program (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Outstanding accounts receivable sold | $ 246.7 | $ 284.3 |
Collections not remitted to financial institutions | $ 128.8 | $ 202.8 |
Inventories - Components (Detai
Inventories - Components (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 234.8 | $ 231 |
Finished goods | 418.2 | 367.6 |
Total inventories | $ 653 | $ 598.6 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Details) $ in Millions | Dec. 11, 2020USD ($) | Jan. 10, 2020facility | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Apr. 17, 2020USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Useful life | 9 years 9 months 18 days | |||||
Goodwill | $ 2,179.9 | $ 2,178.7 | ||||
Snacking & Beverages | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Goodwill | 856 | 855.5 | ||||
Held-for-sale | RTE Cereal | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Long-lived asset impairment losses | $ 0.3 | $ 0.3 | ||||
Held-for-sale | Snacking & Beverages | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of facilities to be disposed | facility | 2 | |||||
Held-for-sale | In-Store Bakery Facilities | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of facilities to be disposed | facility | 2 | |||||
Discontinued Operations | Snacks | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash consideration | $ 26.9 | |||||
Formulas/recipes | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Useful life | 4 years 6 months | |||||
Riviana Foods | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Purchase price | $ 239.2 | |||||
Business combination, put or call option to sell equipment | 5 | |||||
Increase in cost of inventories | $ 3.1 | |||||
Goodwill | 57.8 | |||||
Riviana Foods | Cost of sales | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Increase in cost of inventories | $ 1 | |||||
Riviana Foods | Customer Relationships | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Intangible asset | $ 68 | |||||
Useful life | 20 years | |||||
Riviana Foods | Trade Names | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Intangible asset | $ 43 | |||||
Useful life | 20 years | |||||
Riviana Foods | Formulas/recipes | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Intangible asset | $ 2.3 | |||||
Useful life | 5 years |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Purchase Price Allocation to Net Tangible and Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 11, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,179.9 | $ 2,178.7 | |
Riviana Foods | |||
Business Acquisition [Line Items] | |||
Inventories | $ 20 | ||
Property, plant, and equipment, net | 48.2 | ||
Goodwill | 57.8 | ||
Operating lease right-of-use assets | 0.1 | ||
Assets acquired | 239.4 | ||
Assumed liabilities | (0.2) | ||
Total purchase price | 239.2 | ||
Riviana Foods | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible asset | 68 | ||
Riviana Foods | Trade names | |||
Business Acquisition [Line Items] | |||
Intangible asset | 43 | ||
Riviana Foods | Formulas/recipes | |||
Business Acquisition [Line Items] | |||
Intangible asset | $ 2.3 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Pro Forma Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Business Combinations [Abstract] | |
Pro forma net sales from continuing operations | $ 1,129 |
Pro forma net loss from continuing operations | $ (29.1) |
Acquisitions and Divestitures_4
Acquisitions and Divestitures - Results of Discontinued Operations on Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Business Combinations [Abstract] | ||
Net sales | $ 47.5 | $ 56.8 |
Cost of sales | 41.4 | 47.9 |
Selling, general, administrative and other operating expenses | 4.2 | 4.9 |
Other operating expense, net | 0 | 0.5 |
Operating income from discontinued operations | 1.9 | 3.5 |
Interest and other expense | 0.4 | 1.3 |
Income tax expense | 0.4 | 0.6 |
Net income from discontinued operations | $ 1.1 | $ 1.6 |
Acquisitions and Divestitures_5
Acquisitions and Divestitures - Results of Discontinued Operations on Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Business Combinations [Abstract] | ||
Inventories | $ 37.9 | $ 33.3 |
Property, plant, and equipment, net | 66.3 | 65.9 |
Operating lease right-of-use assets | 4.2 | 5.1 |
Goodwill | 53.5 | 53.5 |
Intangible assets, net | 38.6 | 38.6 |
Valuation allowance | (126) | (125.7) |
Total assets of discontinued operations | 74.5 | 70.7 |
Accrued expenses and other liabilities | 1 | 1.1 |
Operating lease liabilities | 4.9 | 5.6 |
Total liabilities of discontinued operations | $ 5.9 | $ 6.7 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Balance at December 31, 2020, before accumulated impairment losses | $ 2,223.2 | |
Accumulated impairment losses | (44.5) | |
Balance at December 31, 2020 | $ 2,178.7 | |
Foreign currency exchange adjustments | 1.2 | |
Balance at March 31, 2021 | 2,179.9 | |
Meal Preparation | ||
Goodwill [Roll Forward] | ||
Balance at December 31, 2020, before accumulated impairment losses | 1,334.7 | |
Accumulated impairment losses | (11.5) | |
Balance at December 31, 2020 | 1,323.2 | |
Foreign currency exchange adjustments | 0.7 | |
Balance at March 31, 2021 | 1,323.9 | |
Snacking & Beverages | ||
Goodwill [Roll Forward] | ||
Balance at December 31, 2020, before accumulated impairment losses | 888.5 | |
Accumulated impairment losses | $ (33) | |
Balance at December 31, 2020 | 855.5 | |
Foreign currency exchange adjustments | 0.5 | |
Balance at March 31, 2021 | $ 856 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Gross Carrying Amounts and Accumulated Amortization of Intangible Assets, with Finite Lives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life Remaining (yrs.) | 9 years 9 months 18 days | |
Gross Carrying Amount | $ 1,169.2 | $ 1,165.3 |
Accumulated Amortization | (591.4) | (572.7) |
Net Carrying Amount | 577.8 | 592.6 |
Gross Carrying Amount | 1,191.8 | 1,187.7 |
Net Carrying Amount | 600.4 | 615 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with indefinite lives | $ 22.6 | 22.4 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life Remaining (yrs.) | 9 years 8 months 12 days | |
Gross Carrying Amount | $ 849.4 | 848.5 |
Accumulated Amortization | (420) | (406.4) |
Net Carrying Amount | 429.4 | 442.1 |
Contractual agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 0.5 | 0.5 |
Accumulated Amortization | (0.5) | (0.5) |
Net Carrying Amount | $ 0 | 0 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life Remaining (yrs.) | 14 years 9 months 18 days | |
Gross Carrying Amount | $ 96.2 | 96.2 |
Accumulated Amortization | (33.2) | (31.7) |
Net Carrying Amount | $ 63 | 64.5 |
Formulas/recipes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life Remaining (yrs.) | 4 years 6 months | |
Gross Carrying Amount | $ 25.3 | 25.3 |
Accumulated Amortization | (22.5) | (22.1) |
Net Carrying Amount | $ 2.8 | 3.2 |
Computer software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life Remaining (yrs.) | 6 years 10 months 24 days | |
Gross Carrying Amount | $ 197.8 | 194.8 |
Accumulated Amortization | (115.2) | (112) |
Net Carrying Amount | $ 82.6 | $ 82.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (100.00%) | 55.10% |
Decrease in total amount of unrecognized tax benefits within the next 12 months | $ 5.3 | |
Decrease in unrecognized tax benefits is reasonably possible | $ 2 |
Long-Term Debt - Components (De
Long-Term Debt - Components (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Finance leases | $ 4 | $ 4.1 |
Total outstanding debt | 1,964 | 2,233 |
Deferred financing costs | (18.3) | (18.3) |
Less current portion | (15.9) | (15.7) |
Total long-term debt | 1,929.8 | 2,199 |
2024 Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | 0 | 602.9 |
2028 Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | 500 | 500 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility | 30 | 0 |
Term Loan A | ||
Debt Instrument [Line Items] | ||
Term loan | 500 | 453.4 |
Term Loan A-1 | ||
Debt Instrument [Line Items] | ||
Term loan | $ 930 | $ 672.6 |
Long-Term Debt - Scheduled Matu
Long-Term Debt - Scheduled Maturities of Outstanding Debt, Excluding Deferred Financing Costs (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Remainder of 2021 | $ 12 | |
2022 | 15.5 | |
2023 | 15 | |
2024 | 14.9 | |
2025 | 14.5 | |
Thereafter | 1,892.1 | |
Total outstanding debt | $ 1,964 | $ 2,233 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | Mar. 31, 2021 | Feb. 16, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 26, 2021 | Dec. 31, 2020 | Sep. 09, 2020 |
Debt Instrument [Line Items] | |||||||
Average interest rate on debt outstanding | 1.74% | ||||||
Amount drawn on line of credit | $ 30,000,000 | $ 100,000,000 | |||||
Debt instrument, redemption price | 602,900,000 | 0 | |||||
Loss on extinguishment of debt | 14,400,000 | $ 0 | |||||
Long-term debt, fair value | $ 1,963,800,000 | 1,963,800,000 | $ 2,250,400,000 | ||||
Long-term debt, carrying value | 1,960,000,000 | 1,960,000,000 | $ 2,228,900,000 | ||||
2024 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 775,000,000 | $ 775,000,000 | |||||
Stated debt interest rate | 6.00% | 6.00% | |||||
Debt instrument, redemption price | $ 402,900,000 | $ 200,000,000 | |||||
Redemption price, percentage | 101.50% | ||||||
Loss on extinguishment of debt | $ 14,400,000 | ||||||
Debt instrument premium | 9,000,000 | 9,000,000 | |||||
Write off of deferred financing costs | $ 5,400,000 | ||||||
2028 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 500,000,000 | ||||||
Stated debt interest rate | 4.00% | ||||||
Interest rate swap agreements | |||||||
Debt Instrument [Line Items] | |||||||
Average interest rate on debt outstanding | 2.20% | ||||||
Term Loan A-1 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 304,000,000 | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Amount drawn on line of credit | $ 30,000,000 | ||||||
Revolving credit facility -maximum borrowing capacity | 750,000,000 | 750,000,000 | |||||
Revolving credit facility available | 697,300,000 | 697,300,000 | |||||
Letters of credit facility issued but undrawn | $ 22,700,000 | $ 22,700,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Weighted average common shares outstanding (in shares) | 56 | 56.3 |
Assumed exercise/vesting of equity awards (in shares) | 0.5 | 0 |
Weighted average diluted common shares outstanding (in shares) | 56.5 | 56.3 |
Equity awards, excluded from computation of diluted earnings (in shares) | 1.4 | 2.1 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($)installment$ / sharesshares | |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting, number of equal installments | installment | 3 |
Award vesting period | 3 years |
Compensation costs, unrecognized | $ | $ 34.8 |
Compensation costs, recognition weighted average remaining period (in years) | 2 years 3 months 18 days |
Performance Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation costs, unrecognized | $ | $ 18 |
Compensation costs, recognition weighted average remaining period (in years) | 1 year 10 months 24 days |
Accrual of units (as a percent) | 33.33% |
Performance based compensation period | 3 years |
Performance Units | Executive Members | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance based compensation period | 3 years |
Grant-date fair value (in usd per share) | $ / shares | $ 59.16 |
Units granted | 23,200 |
Performance Units | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Predefined percentage for calculation of performance unit awards | 0.00% |
Performance Units | Minimum | Executive Members | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Predefined percentage for calculation of performance unit awards | 0.00% |
Predefined percentage for calculation of performance achievement unit awards | 0.00% |
Performance Units | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Predefined percentage for calculation of performance unit awards | 200.00% |
Performance Units | Maximum | Executive Members | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Predefined percentage for calculation of performance unit awards | 200.00% |
Predefined percentage for calculation of performance achievement unit awards | 150.00% |
TreeHouse Foods, Inc. Equity and Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available to be awarded (in shares) | 17,500,000 |
Shares available (in shares) | 3,400,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Total Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Compensation expense related to stock-based payments | $ 4.9 | $ 7.9 |
Related income tax benefit | $ 1.4 | $ 2.1 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Restricted Stock and Restricted Stock Unit Activity (Details) - Restricted Stock Units shares in Thousands | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Employee | |
Restricted Stock Units | |
Stock units, outstanding, beginning balance (in shares) | shares | 707 |
Stock units, granted (in shares) | shares | 335 |
Stock units, vested (in shares) | shares | (307) |
Stock units, forfeited (in shares) | shares | (37) |
Stock units, outstanding, ending balance (in shares) | shares | 698 |
Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, outstanding, beginning balance (in usd per share) | $ / shares | $ 47.92 |
Weighted average grant date fair value, granted (in usd per share) | $ / shares | 52.18 |
Weighted average grant date fair value, vested (in usd per share) | $ / shares | 46.64 |
Weighted average grant date fair value, forfeited (in usd per share) | $ / shares | 52.48 |
Weighted average grant date fair value, outstanding, ending balance (in usd per share) | $ / shares | $ 50.33 |
Director | |
Restricted Stock Units | |
Stock units, outstanding, beginning balance (in shares) | shares | 125 |
Stock units, granted (in shares) | shares | 1 |
Stock units, vested (in shares) | shares | 0 |
Stock units, forfeited (in shares) | shares | 0 |
Stock units, outstanding, ending balance (in shares) | shares | 126 |
Stock units, vested and deferred (in shares) | shares | 91,000 |
Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, outstanding, beginning balance (in usd per share) | $ / shares | $ 54.67 |
Weighted average grant date fair value, granted (in usd per share) | $ / shares | 53.84 |
Weighted average grant date fair value, vested (in usd per share) | $ / shares | 0 |
Weighted average grant date fair value, forfeited (in usd per share) | $ / shares | 0 |
Weighted average grant date fair value, outstanding, ending balance (in usd per share) | $ / shares | 54.66 |
Weighted average grant date fair value, vested and deferred (in usd per share) | $ / shares | $ 55.88 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Employee and Director Restricted Stock and Restricted Stock Highlights (Details) - Restricted Stock Units - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested restricted stock units | $ 16.4 | $ 8.4 |
Tax benefit recognized from vested restricted stock units | $ 2.3 | $ 1.4 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Shareholder Return Market Condition and Assumptions (Details) - Performance Units | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Risk-free rate | 0.14% |
Expected volatility | 35.65% |
Expected term (in years) | 2 years 9 months |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Performance Unit Activity (Details) - Performance Units shares in Thousands | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Performance Units | |
Stock units, outstanding, beginning balance (in shares) | shares | 541 |
Stock units, granted (in shares) | shares | 166 |
Stock units, vested (in shares) | shares | (105) |
Stock units, forfeited (in shares) | shares | (47) |
Stock units, outstanding, ending balance (in shares) | shares | 555 |
Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, outstanding, beginning balance (in usd per share) | $ / shares | $ 52.38 |
Weighted average grant date fair value, granted (in usd per share) | $ / shares | 52.80 |
Weighted average grant date fair value, vested (in usd per share) | $ / shares | 45.79 |
Weighted average grant date fair value, forfeited (in usd per share) | $ / shares | 58.14 |
Weighted average grant date fair value, outstanding, ending balance (in usd per share) | $ / shares | $ 54.07 |
Stock-Based Compensation - Su_5
Stock-Based Compensation - Summary of Performance Unit Highlights (Details) - Performance Units - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of vested performance units | $ 5.6 | $ 3.3 |
Tax benefit recognized from performance units vested | $ 0.3 | $ 0.6 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 1,865 | $ 1,830.9 |
Other comprehensive income (loss) before reclassification | 0.9 | (15.9) |
Reclassifications from accumulated other comprehensive loss | 0.1 | 0.1 |
Other comprehensive income (loss) | 1 | (15.8) |
Ending balance | 1,864.5 | 1,788.1 |
Foreign Currency Translation | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (67.3) | (79.4) |
Other comprehensive income (loss) before reclassification | 0.9 | (15.9) |
Reclassifications from accumulated other comprehensive loss | 0 | 0 |
Other comprehensive income (loss) | 0.9 | (15.9) |
Ending balance | (66.4) | (95.3) |
Unrecognized Pension and Postretirement Benefits | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 3.3 | (4.6) |
Other comprehensive income (loss) before reclassification | 0 | 0 |
Reclassifications from accumulated other comprehensive loss | 0.1 | 0.1 |
Other comprehensive income (loss) | 0.1 | 0.1 |
Ending balance | 3.4 | (4.5) |
Accumulated Other Comprehensive Loss | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (64) | (84) |
Other comprehensive income (loss) | 1 | (15.8) |
Ending balance | $ (63) | $ (99.8) |
Employee Retirement and Postr_3
Employee Retirement and Postretirement Benefits - Summary of Net Periodic Cost of Pension and Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Pension Benefits | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 0.2 | $ 0.4 |
Interest cost | 2.2 | 2.7 |
Expected return on plan assets | (3.5) | (3.6) |
Amortization of unrecognized net loss | 0.1 | 0.1 |
Net periodic pension/postretirement (benefit) cost | (1) | (0.4) |
Postretirement Benefits | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Interest cost | 0.2 | 0.2 |
Net periodic pension/postretirement (benefit) cost | $ 0.2 | $ 0.2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 10, 2020 | Dec. 16, 2019 | Mar. 31, 2021USD ($)complaint |
Loss Contingencies [Line Items] | |||
Extension term | 77 days | 90 days | |
Loss contingency, cash payment | $ 27 | ||
Loss contingency insurance receivable | 27 | ||
Loss contingency, liability | 27 | ||
Negrete v Ralcorp Holdings Inc et al | |||
Loss Contingencies [Line Items] | |||
Loss contingency, liability | 9 | ||
Negrete v Ralcorp Holdings Inc et al | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Loss contingency, estimate of possible loss | $ 9 | ||
Class Actions Filed by Shareholders | |||
Loss Contingencies [Line Items] | |||
Loss contingency, number of claims | complaint | 5 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) lb in Millions, gal in Millions, bu in Millions, MW in Millions, DTH in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($)MWDTHlbgalbu | Dec. 31, 2025 | Dec. 31, 2020 | |
Interest Rate Swap Agreements | |||
Derivative [Line Items] | |||
Weighted average fixed interest rate | 2.68% | ||
Interest Rate Swap Agreements | Scenario, Forecast | |||
Derivative [Line Items] | |||
Weighted average fixed interest rate | 2.91% | ||
Interest Rate Swap Agreements | LIBOR Interest Rate | |||
Derivative [Line Items] | |||
Derivative notional amount | $ 875,000,000 | ||
Foreign Currency Contracts | |||
Derivative [Line Items] | |||
Derivative notional amount | $ 7,800,000 | ||
Electricity Contract | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount | MW | 0.1 | ||
Diesel Contract | |||
Derivative [Line Items] | |||
Derivative, notional amount, volume (in gal) | gal | 12 | ||
Natural Gas Contract | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount | DTH | 5.5 | ||
Coffee Contract | |||
Derivative [Line Items] | |||
Derivative, notional amount, mass (in lbs) | lb | 1.5 | ||
Resin Contract | |||
Derivative [Line Items] | |||
Derivative, notional amount, mass (in lbs) | lb | 17.5 | ||
Flour Contract | |||
Derivative [Line Items] | |||
Derivative, notional amount, volume (in gal) | bu | 2.2 | ||
Total Return Swap | |||
Derivative [Line Items] | |||
Derivative notional amount | $ 10,300,000 |
Derivative Instruments - Deriva
Derivative Instruments - Derivative, Fair Value, and Location on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Asset derivative, fair value | $ 14.5 | $ 12.6 |
Liability derivative, fair value | 78.3 | 98.1 |
Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivative, fair value | 14.4 | 12.6 |
Liability derivative, fair value | 0.3 | 0.7 |
Foreign currency contracts | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivative, fair value | 0.3 | 0 |
Interest rate swap agreements | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivative, fair value | 77.7 | 97.4 |
Total return swap contract | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivative, fair value | $ 0.1 | $ 0 |
Derivative Instruments - Gains
Derivative Instruments - Gains and Losses on Derivative Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Mark to market unrealized (loss) gain, derivative | $ 21.7 | $ (64.1) |
Total unrealized gain (loss) | 21.7 | (64.1) |
Total realized gain (loss) | 1.5 | (2.2) |
Total gain (loss) | 23.2 | (66.3) |
Commodity contracts | Other (income) expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Mark to market unrealized (loss) gain, commodity | 2.2 | (12.6) |
Commodity contracts | Manufacturing related to Cost of sales and transportation related to Selling and distribution | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total realized gain (loss) | 7.6 | (1.5) |
Foreign currency contracts | Other (income) expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Mark to market unrealized (loss) gain, derivative | (0.3) | 0.5 |
Foreign currency contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total realized gain (loss) | 0 | 0.1 |
Interest rate swap agreements | Other (income) expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Mark to market unrealized (loss) gain, derivative | 19.7 | (52) |
Interest rate swap agreements | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total realized gain (loss) | (6.1) | (0.8) |
Total return swap contract | General and administrative | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Mark to market unrealized (loss) gain, derivative | $ 0.1 | $ 0 |
Segment Information - Financial
Segment Information - Financial Information Relating to Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,057.3 | $ 1,084.9 |
Unallocated cost of sales | (876.2) | (890) |
Operating income | 11 | 30.2 |
Meal Preparation | ||
Segment Reporting Information [Line Items] | ||
Net sales | 678.5 | 673.6 |
Snacking & Beverages | ||
Segment Reporting Information [Line Items] | ||
Net sales | 378.8 | 411.3 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,057.3 | 1,084.9 |
Direct operating income | 122.2 | 134.4 |
Operating Segments | Meal Preparation | ||
Segment Reporting Information [Line Items] | ||
Net sales | 678.5 | 673.6 |
Direct operating income | 80.5 | 86.3 |
Operating Segments | Snacking & Beverages | ||
Segment Reporting Information [Line Items] | ||
Net sales | 378.8 | 411.3 |
Direct operating income | 41.7 | 48.1 |
Unallocated Amount to Segment | ||
Segment Reporting Information [Line Items] | ||
Unallocated selling, general, and administrative expenses | (69) | (71.4) |
Unallocated cost of sales | (4.1) | 3.2 |
Unallocated corporate expense and other | $ (38.1) | $ (36) |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 1,057.3 | $ 1,084.9 |
Retail grocery | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 852.1 | 885.5 |
Food-away-from-home | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 65.2 | 74 |
Industrial, co-manufacturing, and other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 140 | 125.4 |
Meal Preparation | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 678.5 | 673.6 |
Meal Preparation | Center store grocery | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 414.1 | 432 |
Meal Preparation | Main course | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 264.4 | 241.6 |
Snacking & Beverages | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 378.8 | 411.3 |
Snacking & Beverages | Sweet & savory snacks | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 273 | 305 |
Snacking & Beverages | Beverages & drink mixes | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 105.8 | $ 106.3 |