# Post Holdings, Inc.: Form 10-Q for the period ended Jun 30, 2023

- Company: [Post Holdings, Inc.](/companies/post.md) (CIK 1530950)
- Form: 10-Q
- Filed: 2023-08-04
- Accepted by EDGAR: Aug 4, 2023, 11:05 ET
- Period: 2023-06-30
- Accession: 0001530950-23-000236
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1530950/000153095023000236/post-20230630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1530950/000153095023000236/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-04-01 to 2023-06-30 | $1.86bn | us-gaap:Revenues |
| Revenue | 9 months, 2022-10-01 to 2023-06-30 | $5.05bn | us-gaap:Revenues |
| Cost of revenue | 3 months, 2023-04-01 to 2023-06-30 | $1.36bn | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2022-10-01 to 2023-06-30 | $3.72bn | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2023-04-01 to 2023-06-30 | $501.6m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2022-10-01 to 2023-06-30 | $1.33bn | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2023-04-01 to 2023-06-30 | $300.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2022-10-01 to 2023-06-30 | $768.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-04-01 to 2023-06-30 | $158.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2022-10-01 to 2023-06-30 | $445.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-04-01 to 2023-06-30 | $72.7m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2022-10-01 to 2023-06-30 | $202.4m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-04-01 to 2023-06-30 | $26.8m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2022-10-01 to 2023-06-30 | $70.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | $89.6m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2022-10-01 to 2023-06-30 | $235.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-30 | $1.38 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2022-10-01 to 2023-06-30 | $3.82 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | $1.49 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2022-10-01 to 2023-06-30 | $4.13 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-04-01 to 2023-06-30 | 68,500,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2022-10-01 to 2023-06-30 | 66,700,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2022-10-01 to 2023-06-30 | $480.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2022-10-01 to 2023-06-30 | $201.9m | us-gaap:PaymentsToAcquireProductiveAssets |
| Share repurchases | 9 months, 2022-10-01 to 2023-06-30 | $242.4m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-06-30 | $208.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-06-30 | $1.64bn | us-gaap:AssetsCurrent |
| Total assets | at 2023-06-30 | $11.89bn | us-gaap:Assets |
| Current liabilities | at 2023-06-30 | $795.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-06-30 | $7.93bn | us-gaap:Liabilities |
| Long-term debt | at 2023-06-30 | $6.19bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-06-30 | $1.1m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2023-06-30 | $3.95bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 62,583 characters.

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of Post Holdings, Inc. and its subsidiaries. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included herein, our audited consolidated financial statements and notes thereto found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 and the “Cautionary Statement on Forward-Looking Statements” section included below. The terms “our,” “we,” “us,” “Company” and “Post” as used herein refer to Post Holdings, Inc. and its subsidiaries.

On March 10, 2022, we completed the BellRing Spin-off (as defined below), which represented a strategic shift that had a major effect on our operations and consolidated financial results. Accordingly, the historical results of BellRing Intermediate Holdings, Inc. (formerly known as BellRing Brands, Inc.) (“Old BellRing”) and BellRing Distribution, LLC prior to the BellRing Spin-off have been presented as discontinued operations in our Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. See below for additional information. The following discussion reflects continuing operations only, unless otherwise indicated.

### OVERVIEW

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

At June 30, 2023, our reportable segments were as follows:

- Post Consumer Brands: North American ready-to-eat (“RTE”) cereal, pet food and nut butters;
- Weetabix: primarily United Kingdom (the “U.K.”) RTE cereal, muesli and protein-based shakes;
- Foodservice: primarily egg and potato products; and
- Refrigerated Retail: primarily side dish, egg, cheese and sausage products.

### Transactions

#### Post Holdings Partnering Corporation

In May and June of 2021, we and Post Holdings Partnering Corporation, a special purpose acquisition company (“PHPC”), consummated the initial public offering of 34.5 million units of PHPC (the “PHPC Units” and such transaction, the “PHPC IPO”), of which PHPC Sponsor, LLC, our wholly-owned subsidiary (“PHPC Sponsor”), purchased 4.0 million PHPC Units. Each PHPC Unit consisted of one share of Series A common stock of PHPC, $0.0001 par value per share (“PHPC Series A Common Stock”), and one-third of one redeemable warrant of PHPC; each whole warrant entitled the holder thereof to purchase one share of PHPC Series A Common Stock at an exercise price of $11.50 per share (the “PHPC Warrants”). The PHPC Units were sold at a price of $10.00 per PHPC Unit, generating gross proceeds to PHPC of $345.0 million. Under the terms of the PHPC IPO, PHPC was required to consummate a partnering transaction by May 28, 2023, which could have been extended to August 28, 2023 in certain circumstances (the “Combination Period”).

Substantially concurrently with the closing of the PHPC IPO, PHPC completed the private sale of 1.1 million units of PHPC (the “PHPC Private Placement Units”), at a purchase price of $10.00 per PHPC Private Placement Unit, to PHPC Sponsor, generating proceeds to PHPC of $10.9 million (the “PHPC Private Placement”). Each PHPC Private Placement Unit consisted of one share of PHPC Series A Common Stock and one-third of one redeemable warrant of PHPC; each whole warrant entitled the holder thereof to purchase one share of PHPC Series A Common Stock at an exercise price of $11.50 per share (the “PHPC Private Placement Warrants”).

In addition, we, through PHPC Sponsor’s ownership of 8.6 million shares of Series F common stock of PHPC, $0.0001 par value per share (the “PHPC Series F Common Stock”), had certain governance rights in PHPC relating to the election of PHPC directors and voting rights on amendments to PHPC’s certificate of incorporation.

In connection with the PHPC IPO, PHPC incurred offering costs of $17.9 million, of which $10.7 million were deferred underwriting commissions that would have become payable to the underwriters solely in the event that PHPC completed a partnering transaction and were included in “Other current liabilities” on the Condensed Consolidated Balance Sheets at September 30, 2022.

Proceeds of $345.0 million were deposited in a trust account established for the benefit of PHPC’s public stockholders, which consisted of certain proceeds from the PHPC IPO and certain proceeds from the PHPC Private Placement, net of underwriters’ discounts and commissions and other costs and expenses. A minimum balance of $345.0 million, which represented the number of PHPC Units sold at the offering price of $10.00 per PHPC Unit, was required by the underwriting agreement to be maintained in the trust account. These proceeds were invested only in U.S. treasury securities. At September 30, 2022, there was $346.8 million held in the trust account, which was included in “Investments held in trust” on the Condensed Consolidated Balance Sheets.

The public stockholders’ ownership of PHPC equity represented a noncontrolling interest (“NCI”) to us, which was classified outside of permanent shareholders’ equity as the PHPC Series A Common Stock was redeemable at the option of the public stockholders in certain circumstances. As of September 30, 2022, the carrying amount of the redeemable NCI was recorded at its redemption value of $306.6 million on the Condensed Consolidated Balance Sheets.

On May 11, 2023, PHPC announced that it would not complete a partnering transaction within the Combination Period and that the entity would liquidate and dissolve in accordance with the terms of its amended and restated certificate of incorporation. Subsequent to the decision to liquidate and dissolve, PHPC completed certain winding-up activities, which included writing-off the deferred underwriting commissions as the underwriters agreed to waive their rights to these amounts should a partnering transaction not occur. We recorded a $10.7 million gain in connection with this write-off, which was recorded in “Other income, net” on the Condensed Consolidated Statements of Operations during both the three and nine months ended June 30, 2023.

On May 28, 2023, the PHPC Warrants and the PHPC Private Placement Warrants expired worthless, as PHPC had not completed a partnering transaction before the expiration of the Combination Period.

On May 30, 2023, PHPC redeemed all of the outstanding public shares of PHPC Series A Common Stock (the “PHPC Redemption”). Each share of PHPC Series A Common Stock was redeemed for approximately $10.24 per share, representing the per share price equal to the aggregate amount then on deposit in the trust account, including interest earned on the trust account not previously released to pay taxes or dissolution expenses, divided by the number of then outstanding shares of PHPC Series A Common Stock. In connection with the PHPC Redemption:

- $353.4 million of funds held in the trust account immediately prior to the PHPC Redemption were distributed to redeem all of the outstanding shares of PHPC Series A Common Stock, which reduced “Investments held in trust” on the Condensed Consolidated Balance Sheets to zero as of June 30, 2023. We received $40.9 million from the PHPC Redemption related to our ownership of 4.0 million shares of PHPC Series A Common Stock; and
- redeemable NCI of $312.5 million immediately prior to the PHPC Redemption was reduced to zero on the Condensed Consolidated Balance Sheets as of June 30, 2023.

Subsequent to the PHPC Redemption, PHPC was delisted from the New York Stock Exchange and dissolved in June 2023, and all classes of shares of PHPC equity were cancelled, including the PHPC Private Placement Units and the shares of PHPC Series F Common Stock, which were surrendered by PHPC Sponsor for no consideration.

#### BellRing Brands, Inc.

On March 9, 2022, pursuant to the Transaction Agreement and Plan of Merger, dated as of October 26, 2021 (as amended by Amendment No. 1 to the Transaction Agreement and Plan of Merger, dated as of February 28, 2022, the “Spin-off Agreement”), by and among us, Old BellRing, BellRing Brands, Inc. (formerly known as BellRing Distribution, LLC) (“BellRing”) and BellRing Merger Sub Corporation, a wholly-owned subsidiary of BellRing (“BellRing Merger Sub”), we contributed our share of Old BellRing Class B common stock, $0.01 par value per share, all of our BellRing Brands, LLC non-voting membership units and $550.4 million of cash to BellRing in exchange for certain limited liability company interests of BellRing and the right to receive $840.0 million in aggregate principal amount of BellRing’s 7.00% senior notes maturing in 2030 (the “BellRing Notes” and such transactions, collectively, the “BellRing Contribution”).

On March 10, 2022, BellRing converted into a Delaware corporation and changed its name to “BellRing Brands, Inc.”, and we distributed an aggregate of 78.1 million, or 80.1%, of our shares of BellRing common stock, $0.01 par value per share (“BellRing Common Stock”), to our shareholders of record as of the close of business, Central Time, on February 25, 2022 (the “Record Date”) in a pro-rata distribution (the “BellRing Distribution”). Our shareholders received 1.267788 shares of BellRing Common Stock for every one share of our common stock held as of the Record Date. No fractional shares of BellRing Common Stock were issued, and instead, cash in lieu of any fractional shares was paid to our shareholders.

Upon completion of the BellRing Distribution, BellRing Merger Sub merged with and into Old BellRing (the “BellRing Merger”), with Old BellRing continuing as the surviving corporation and becoming a wholly-owned subsidiary of BellRing. The transactions described above, including the BellRing Contribution, the BellRing Distribution and the BellRing Merger, and the Debt-for-Debt Exchange (as defined and described in more detail in Note 15 within “Notes to Condensed Consolidated Financial Statements”), are collectively referred to as the “BellRing Spin-off.”

Our equity interest in BellRing subsequent to the BellRing Spin-off (our “Investment in BellRing”) was 14.2% immediately following the BellRing Spin-off. As a result of the BellRing Spin-off, the dual class voting structure in the BellRing business was eliminated. The BellRing Distribution was structured in a manner intended to qualify as a tax-free distribution to our shareholders for United States (the “U.S.”) federal income tax purposes, except to the extent of any cash received in lieu of fractional shares of BellRing Common Stock.

On August 11, 2022, we transferred 14.8 million shares of our Investment in BellRing to repay certain outstanding debt obligations as part of the First Debt-for-Equity Exchange (as defined and described in more detail in Note 15 within “Notes to Condensed Consolidated Financial Statements”).

On November 25, 2022, we transferred the remaining 4.6 million shares of our Investment in BellRing to repay certain outstanding debt obligations as part of the Second Debt-for-Equity Exchange (as defined in “Liquidity and Capital Resources” within this section). We had no ownership of BellRing Common Stock as of June 30, 2023.

We incurred separation-related expenses related to the BellRing Spin-off and subsequent divestment of our Investment in BellRing of zero and $0.1 million during the three and nine months ended June 30, 2023, respectively, and $0.4 million and $28.8 million during the three and nine months ended June 30, 2022, respectively. These expenses generally included third party costs for advisory services, fees charged by other service providers and government filing fees and were included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Operations.

For additional information on the BellRing Spin-off and the transactions to subsequently divest of our Investment in BellRing, refer to Notes 3, 4 and 15 within “Notes to Condensed Consolidated Financial Statements.”

### Acquisitions

On April 28, 2023, we completed our acquisition of a portion of The J. M. Smucker Company’s (“Smucker”) pet food business, including brands such as *Rachael Ray Nutrish, Nature’s Recipe, 9Lives, Kibbles ’n Bits* and *Gravy Train*, private label pet food assets and certain manufacturing and distribution facilities (collectively, “Pet Food”), which is reported in our Post Consumer Brands segment. In connection with the Pet Food acquisition, we entered into a Transition Services Agreement with Smucker (the “TSA”) pursuant to which Smucker provides certain Pet Food support services to us for a transition period of 18 months (or up to 24 months at our election) following the close of the acquisition (the “TSA Period”) based on the terms set forth in the TSA. Pet Food receivables and payables are settled between us and Smucker monthly on a net basis per the terms of the TSA.

We completed the Lacka Foods Limited (“Lacka Foods”) acquisition on April 5, 2022, which is reported in our Weetabix segment.

For additional information on these acquisitions, refer to Note 5 within “Notes to Condensed Consolidated Financial Statements.”

### Divestitures

We completed the sale of the Willamette Egg Farms business (the “WEF Transaction”) on December 1, 2021. Prior to the WEF Transaction, Willamette Egg Farms’ operating results were reported in our Refrigerated Retail segment.

### Market Trends

#### Supply Chain

Events such as the COVID-19 pandemic have resulted in certain ongoing impacts to the global economy, including market disruptions, supply chain challenges and inflationary pressures. During fiscal 2023, labor shortages and input availability have continued to pressure our supply chain. Raw material and packaging inflation has been widespread, rapid and significant and has put downward pressure on our profit margins. We have largely mitigated these impacts through pricing actions across all segments, cost savings measures and hedging programs. We expect inflationary pressures to continue throughout the remainder of fiscal 2023. These trends could have a materially adverse impact on our businesses in the future if inflation rates significantly exceed our ability to continue to achieve price increases or cost savings or if such price increases impact demand for our products.

#### Currency

Certain sales and costs of our foreign operations are denominated in currencies other than our functional currency, primarily Pounds Sterling and Canadian Dollars. Consequently, profits from these operations are impacted by fluctuations in the value of these currencies relative to the U.S. Dollar. We incur gains and losses within our shareholders’ equity due to the translation of our financial statements from foreign currencies into U.S. Dollars. Our results of operations may be impacted by the translation of the results of operations of our foreign operations into U.S. Dollars. The exchange rates used to translate our foreign sales into U.S. Dollars negatively affected net sales by less than 1% during the three and nine months ended June 30, 2023 and did not have a material impact to our operating profit or net earnings during the three and nine months ended June 30, 2023.

### Conflict in Ukraine

The ongoing conflict in Ukraine and the subsequent economic sanctions imposed by some countries have had, and may continue to have, an adverse impact on fuel, transportation and commodity costs and may cause supply and demand disruptions in the markets we serve, including Europe. While we do not have operations in Russia, Ukraine or Belarus and do not have significant direct exposure to customers or suppliers in those countries, our businesses and operations have been negatively impacted by increased inflation, escalating energy and fuel prices and constrained availability, and thus increasing costs, of certain raw materials and other commodities, and declarations of force majeure by certain suppliers during fiscal 2022. We expect certain energy costs and raw material costs to remain elevated through the end of fiscal 2023 as a result of the ongoing conflict. To date, the economic sanctions imposed on Russian businesses have not had a direct impact on our procurement of energy and raw materials, however, there can be no assurance that additional sanctions will not be implemented. If our energy and raw materials purchases are directly impacted by sanctions, we may incur additional costs to procure such commodities. Our ability to procure energy and raw materials in the quantities necessary for the normal operations of our business may be limited.

### Avian Influenza

During fiscal 2022 and continuing into early fiscal 2023, our Foodservice and Refrigerated Retail segments were impacted by outbreaks of avian influenza. As a result of avian influenza, we incurred increased costs related to production inefficiencies, egg supply constraints and higher market-based egg prices due to the decreased availability of eggs on the open market. We mitigated these increased costs through the management of volume needs with customers and pricing actions to cover the higher cost structure.

### RESULTS OF OPERATIONS

*dollars in millions*

|  | Three Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change | Nine Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $1,859.4 | $1,524.9 | $334.5 | 22% | $5,045.6 | $4,272.1 | $773.5 | 18% |
| Operating Profit | $158.3 | $105.5 | $52.8 | 50% | $445.9 | $283.7 | $162.2 | 57% |
| Interest expense, net | 72.7 | 75.6 | 2.9 | 4% | 202.4 | 245.6 | 43.2 | 18% |
| (Gain) loss on extinguishment of debt, net | (6.4) | (10.2) | (3.8) | (37)% | (21.2) | 9.1 | 30.3 | 333% |
| Income on swaps, net | (17.1) | (131.6) | (114.5) | (87)% | (20.4) | (222.9) | (202.5) | (91)% |
| Gain on investment in BellRing | — | (35.1) | (35.1) | (100)% | (5.1) | (482.8) | (477.7) | (99)% |
| Other income, net | (16.0) | (12.8) | 3.2 | 25% | (27.8) | (14.0) | 13.8 | 99% |
| Income tax expense | 26.8 | 35.0 | 8.2 | 23% | 70.4 | 43.3 | (27.1) | (63)% |
| Equity method loss, net of tax | — | 12.0 | 12.0 | 100% | 0.2 | 49.3 | 49.1 | 100% |
| Less: Net earnings attributable to noncontrolling interests from continuing operations | 8.7 | 2.4 | (6.3) | (263)% | 11.8 | 5.0 | (6.8) | (136)% |
| Net earnings from discontinued operations, net of tax and noncontrolling interest | — | — | — | n/a | — | 21.6 | (21.6) | (100)% |
| Net Earnings | $89.6 | $170.2 | $(80.6) | (47)% | $235.6 | $672.7 | $(437.1) | (65)% |

### Net Sales

Net sales increased $334.5 million, or 22%, during the three months ended June 30, 2023, compared to the prior year period, as a result of higher net sales in our Post Consumer Brands, Foodservice and Weetabix segments, partially offset by lower net sales in our Refrigerated Retail segment.

Net sales increased $773.5 million, or 18%, during the nine months ended June 30, 2023, compared to the prior year period, as a result of higher net sales in our Foodservice, Post Consumer Brands and Weetabix segments.

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

### Operating Profit

Operating profit increased $52.8 million, or 50%, during the three months ended June 30, 2023, compared to the prior year period, driven by higher segment profit within our Foodservice segment, as well as increases within our Refrigerated Retail and Post Consumer Brands segments, partially offset by lower segment profit within our Weetabix segment and higher general corporate expenses.

Operating profit increased $162.2 million, or 57%, during the nine months ended June 30, 2023, compared to the prior year period, driven by higher segment profit within our Foodservice segment, as well as increases within our Refrigerated Retail and Post Consumer Brands segments, partially offset by lower segment profit within our Weetabix segment and higher general corporate expenses.

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

### Interest Expense, Net

Interest expense, net decreased $2.9 million, or 4%, during the three months ended June 30, 2023, compared to the prior year period, primarily driven by increased interest income on our investments held in trust prior to the PHPC Redemption. Our weighted-average interest rate on our total outstanding debt was 5.0% for both the three months ended June 30, 2023 and 2022.

Interest expense, net decreased $43.2 million, or 18%, during the nine months ended June 30, 2023, compared to the prior year period. The decrease was driven by lower average outstanding principal amounts of debt, increased interest income on our investments held in trust prior to the PHPC Redemption and a lower weighted-average interest rate compared to the prior year period. Our weighted-average interest rate on our total outstanding debt was 4.9% and 5.1% for the nine months ended June 30, 2023 and 2022, respectively.

For additional information on our debt, refer to Note 15 within “Notes to Condensed Consolidated Financial Statements.”

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

#### Fiscal 2023

During the three months ended June 30, 2023, we recognized a net gain of $6.4 million related to the partial repurchase of our 4.50% and 4.625% senior notes. This net gain included debt discounts received of $6.4 million and the write-off of unamortized premiums of $0.3 million, partially offset by the write-off of debt issuance costs of $0.3 million.

During the nine months ended June 30, 2023, we recognized a net gain of $21.2 million primarily related to the partial repurchase of our 4.50% and 4.625% senior notes. The net gain included debt discounts received of $23.3 million and the write-off of unamortized premiums of $0.3 million, partially offset by the write-off of debt issuance costs of $1.3 million related to our 4.50% and 4.625% senior notes and $1.1 million related to our Third Incremental Term Loan (as defined in “Liquidity and Capital Resources” within this section).

#### Fiscal 2022

During the three months ended June 30, 2022, we recognized a net gain of $10.2 million primarily related to the partial repurchase of our 4.50% and 5.50% senior notes. This net gain included debt discounts received of $10.6 million and the write-off of unamortized premiums of $0.2 million, partially offset by the write-off of debt issuance costs of $0.6 million.

During the nine months ended June 30, 2022, we recognized a net loss of $9.1 million primarily related to the partial redemption of our 5.75% senior notes and partial repurchase of our 4.50% senior notes and 5.50% senior notes. This loss included debt premiums, net paid of $13.5 million, the write-off of debt issuance costs of $5.6 million related to our senior notes and $3.5 million related to our First Incremental Term Loan (as defined in Note 15 within “Notes to Condensed Consolidated Financial Statements”), partially offset by the write-off of unamortized premiums of $13.5 million.

For additional information on our debt, refer to Note 15 within “Notes to Condensed Consolidated Financial Statements.”

### Income on Swaps, Net

During the three and nine months ended June 30, 2023, we recognized income on swaps, net of $17.1 million and $20.4 million, respectively, related to mark-to-market adjustments on our interest rate swaps.

During the three and nine months ended June 30, 2022, we recognized income on swaps, net of $131.6 million and $222.9 million, respectively, related to mark-to-market adjustments on our interest rate swaps.

For additional information on our interest rate swap contracts and exposure to risk related to interest rate swaps, refer to Note 13 within “Notes to Condensed Consolidated Financial Statements” and “Quantitative and Qualitative Disclosures About Market Risk,” respectively.

### Gain on Investment in BellRing

We recorded a gain related to our Investment in BellRing of $5.1 million during the nine months ended June 30, 2023 and $35.1 million and $482.8 million during the three and nine months ended June 30, 2022, respectively. There was no gain or loss recorded related to our Investment in BellRing during the three months ended June 30, 2023 as we completed the final divestment of our remaining Investment in BellRing during the first quarter of fiscal 2023.

For additional information on our Investment in BellRing, refer to Notes 3, 4 and 14 within “Notes to Condensed Consolidated Financial Statements.”

### Income Tax Expense

The effective income tax rate was 21.4% and 22.1% for the three and nine months ended June 30, 2023, respectively, and 15.9% and 5.8% for the three and nine months ended June 30, 2022, respectively. In accordance with Accounting Standards Codification Topic 740, “Income Taxes,” we record income taxes for interim periods using the estimated annual effective income tax rate for the full fiscal year adjusted for the impact of discrete items occurring during the interim periods.

In the three and nine months ended June 30, 2022, the effective income tax rate differed significantly from the statutory rate primarily as a result of (i) a $35.1 million and $482.8 million, respectively, non-cash mark-to-market adjustment on our Investment in BellRing, which was divested in a manner intended to qualify as tax-free for U.S. federal income tax purposes, and (ii) $2.9 million and $12.1 million, respectively, of discrete income tax benefit items related to our equity method loss attributable to 8th Avenue Food & Provisions, Inc. (“8th Avenue”).

See Note 4 within “Notes to Condensed Consolidated Financial Statements” for additional information on the Investment in BellRing and the 8th Avenue equity method loss.

### Discontinued Operations

The BellRing Spin-off represented a strategic shift that had a major effect on our operations and consolidated financial results. Accordingly, the historical results of Old BellRing and BellRing Distribution, LLC prior to the BellRing Spin-off were presented as discontinued operations in the Condensed Consolidated Statements of Operations. For additional information on the BellRing Spin-off, refer to Notes 3 and 15 within “Notes to Condensed Consolidated Financial Statements.”

### SEGMENT RESULTS

We evaluate each segment’s performance based on its segment profit, which for all segments is its earnings/loss before income taxes and equity method earnings/loss before impairment of property, goodwill and other intangible assets, facility closure related costs, restructuring expenses, gain/loss on assets and liabilities held for sale, gain/loss on sale of businesses and facilities, gain on/adjustment to bargain purchase, interest expense and other unallocated corporate income and expenses. Due to the level of integration of Pet Food within the Post Consumer Brands segment, it is impracticable to separately present Pet Food segment profit within the analysis below.

### Post Consumer Brands

*dollars in millions*

|  | Three Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change | Nine Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $871.3 | $574.7 | $296.6 | 52% | $2,025.1 | $1,655.1 | $370.0 | 22% |
| Segment Profit | $83.0 | $81.8 | $1.2 | 1% | $237.8 | $232.6 | $5.2 | 2% |
| Segment Profit Margin | 10% | 14% |  |  | 12% | 14% |  |  |

Net sales for the Post Consumer Brands segment increased $296.6 million, or 52%, for the three months ended June 30, 2023, when compared to the prior year period. The increase in net sales was primarily due to two months of Pet Food net sales of $275.3 million. The remaining increase was driven by higher average net selling prices as a result of pricing increases to mitigate inflation. Excluding Pet Food, pricing increases were partially offset by a volume decline of 6% driven by the lapping of prior year temporary nut butters volume increases related to competitor out-of-stocks. Additionally, net sales were negatively impacted by unfavorable product mix as branded cereal volumes declined, partially offset by increased private label cereal volumes.

Net sales for the Post Consumer Brands segment increased $370.0 million, or 22%, for the nine months ended June 30, 2023, when compared to the prior year period. The increase in net sales was primarily due to two months of Pet Food net sales of $275.3 million. The remaining increase was driven by higher average net selling prices as a result of pricing increases to mitigate inflation. Excluding Pet Food, pricing increases were partially offset by a volume decline of 4% and unfavorable product mix as branded cereal volumes declined, partially offset by increased private label cereal volumes.

Segment profit for the three months ended June 30, 2023 increased $1.2 million, or 1%, when compared to the prior year period. This increase was primarily driven by higher net sales, as previously discussed, partially offset by higher product costs. The increase in product costs was primarily driven by two months of product costs attributable to Pet Food of $215.5 million, raw material inflation of $30.2 million and higher manufacturing costs of $28.9 million, partially offset by lower freight costs of $11.9 million. In addition, integration costs and employee-related expenses increased compared to the prior year period, primarily due to two months of Pet Food expenses.

Segment profit for the nine months ended June 30, 2023 increased $5.2 million, or 2%, when compared to the prior year period. This increase was primarily driven by higher net sales, as previously discussed, partially offset by higher product costs. The increase in product costs was primarily driven by two months of product costs attributable to Pet Food of $215.5 million, raw material inflation of $97.2 million and higher manufacturing costs of $49.9 million, partially offset by lower freight costs of $16.4 million. In addition, integration costs and employee-related expenses increased compared to the prior year period, primarily due to two months of Pet Food expenses.

### Weetabix

*dollars in millions*

|  | Three Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change | Nine Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $134.2 | $124.9 | $9.3 | 7% | $377.2 | $360.5 | $16.7 | 5% |
| Segment Profit | $17.9 | $27.8 | $(9.9) | (36)% | $58.8 | $81.8 | $(23.0) | (28)% |
| Segment Profit Margin | 13% | 22% |  |  | 16% | 23% |  |  |

Net sales for the Weetabix segment increased $9.3 million, or 7%, for the three months ended June 30, 2023, when compared to the prior year period. Excluding the impact of unfavorable foreign exchange rates, net sales increased $9.9 million, or 8%, on 5% lower volumes. The increase in net sales was driven by higher average net selling prices primarily due to list price increases, partially offset by a shift in product mix towards private label products. Volumes declined 5% driven by volume decreases in branded products, partially offset by increases in private label products.

Net sales for the Weetabix segment increased $16.7 million, or 5%, for the nine months ended June 30, 2023, when compared to the prior year period. Excluding the impact of unfavorable foreign exchange rates and six incremental months of net sales of $14.2 million attributable to our prior year acquisition of Lacka Foods, net sales increased $33.1 million, or 9%, on 3% lower volumes. The increase in net sales was driven by higher average net selling prices primarily due to list price increases, partially offset by a shift in product mix towards private label products. Volumes declined 3% driven by volume decreases in branded products, partially offset by increases in private label products.

Segment profit for the three months ended June 30, 2023 decreased $9.9 million, or 36%, when compared to the prior year period. Excluding the impact of unfavorable foreign currency exchange rates, segment profit decreased $9.8 million, or 35%. This decrease was primarily driven by raw material inflation of $10.6 million and higher manufacturing costs of $4.4 million, partially offset by higher net sales, as previously discussed.

Segment profit for the nine months ended June 30, 2023 decreased $23.0 million, or 28%, when compared to the prior year period. Excluding the impact of unfavorable foreign currency exchange rates, segment profit decreased $18.0 million, or 22%. This decrease was primarily driven by raw material inflation of $26.2 million and higher manufacturing costs of $10.6 million, partially offset by higher net sales, as previously discussed.

### Foodservice

*dollars in millions*

|  | Three Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change | Nine Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $622.7 | $579.0 | $43.7 | 8% | $1,856.4 | $1,469.5 | $386.9 | 26% |
| Segment Profit | $107.7 | $45.9 | $61.8 | 135% | $264.9 | $81.0 | $183.9 | 227% |
| Segment Profit Margin | 17% | 8% |  |  | 14% | 6% |  |  |

Net sales for the Foodservice segment increased $43.7 million, or 8%, for the three months ended June 30, 2023, when compared to the prior year period. The increase in net sales was primarily driven by higher average net selling prices during the current year period and volume increases. Egg product sales were up $34.9 million, or 7%, with volume up 2%, driven by price increases taken to mitigate cost inflation as well as the timing of the pass-through of increased grain and egg market prices. Egg volumes increased primarily due to distribution gains in the foodservice channel. Sales of side dishes were up $12.5 million, or 24%, with volume up 7%, driven by price increases taken to mitigate inflation and volume increases as a result of distribution gains. Sales of other products were down $3.7 million.

Net sales for the Foodservice segment increased $386.9 million, or 26%, for the nine months ended June 30, 2023, when compared to the prior year period. The increase in net sales was primarily driven by higher average net selling prices during the current year period and the lapping of lower product demand as a result of the COVID-19 pandemic in the prior year period. Egg product sales were up $349.9 million, or 27%, with volume up 6%, driven by price increases taken to mitigate cost inflation as well as the pass-through of increased grain and egg market prices. Egg volumes increased due to distribution gains in the foodservice channel, partially offset by lower food ingredient volume. Sales of side dishes were up $48.0 million, or 32%, with volume up 9%, driven by price increases taken to mitigate inflation and volume increases as a result of distribution gains. Sales of other products were down $11.0 million.

Segment profit for the three months ended June 30, 2023 increased $61.8 million, or 135%, when compared to the prior year period. This increase was primarily driven by higher net sales, as previously discussed, lower freight costs of $10.0 million and lower raw material costs of $6.3 million, primarily due to favorable grain and egg market prices. These positive impacts were partially offset by higher potato raw material costs.

Segment profit for the nine months ended June 30, 2023 increased $183.9 million, or 227%, when compared to the prior year period, driven by higher net sales, as previously discussed, and lower freight costs of $23.7 million. These positive impacts were partially offset by raw material inflation of $192.0 million, primarily driven by higher egg raw material costs due to unfavorable grain and egg market prices and higher potato raw material costs.

### Refrigerated Retail

*dollars in millions*

|  | Three Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change | Nine Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $230.7 | $246.4 | $(15.7) | (6)% | $786.4 | $787.4 | $(1.0) | —% |
| Segment Profit | $18.0 | $10.4 | $7.6 | 73% | $57.2 | $41.0 | $16.2 | 40% |
| Segment Profit Margin | 8% | 4% |  |  | 7% | 5% |  |  |

Net sales for the Refrigerated Retail segment decreased $15.7 million, or 6%, for the three months ended June 30, 2023, when compared to the prior year period, driven by 11% lower volumes primarily due to price elasticities and a shift towards private label products. Average net selling prices were higher during the period due to price increases taken to mitigate input cost inflation, partially offset by increased promotional spending. Egg product sales declined $4.4 million, or 9%, on 12% lower volumes, and were incrementally impacted by avian influenza-related supply constraints. Sausage sales declined $1.9 million, or 5%, with volume down 5%. Cheese and other dairy product sales were down $8.0 million, or 16%, with volume down 16%, and were incrementally impacted by distribution losses. Sales of side dishes increased $0.2 million, or less than 1%, on 10% lower volumes. Sales of other products were down $1.6 million.

Net sales for the Refrigerated Retail segment decreased $1.0 million, or less than 1%, for the nine months ended June 30, 2023, when compared to the prior year period. Net sales for the nine months ended June 30, 2023 were impacted by the absence of net sales as a result of the WEF Transaction. Excluding this impact, net sales increased $6.1 million, or 1%, driven by higher average net selling prices primarily due to price increases taken to mitigate input cost inflation, partially offset by increased promotional spending. This positive impact was partially offset by 7% lower volumes primarily due to price elasticities and a shift towards private label products. Sales of side dishes increased $23.8 million, or 7%, with volume down 3%. Egg product sales were up $5.7 million, or 4%, on 11% lower volumes, and were incrementally impacted by avian influenza-related supply constraints. Sausage sales increased $1.2 million, or 1%, with volume down 1%. Cheese and other dairy product sales were down $20.7 million, or 13%, with volume down 20%, and were incrementally impacted by distribution losses. Sales of other products were down $3.9 million.

Segment profit for the three months ended June 30, 2023 increased $7.6 million, or 73%, when compared to the prior year period, driven by higher average net selling prices, as previously discussed, lower manufacturing costs of $7.2 million and lower freight costs of $1.5 million. These positive impacts were partially offset by raw material inflation of $1.0 million, lower net sales volume, as previously discussed, and increased advertising and consumer spending of $3.9 million.

Segment profit for the nine months ended June 30, 2023 increased $16.2 million, or 40%, when compared to the prior year period, driven by higher average net selling prices, as previously discussed, and lower freight costs of $6.7 million. These positive impacts were partially offset by raw material inflation of $23.2 million, lower net sales volume, as previously discussed, increased advertising and consumer spending of $9.2 million and higher manufacturing costs of $5.1 million.

### Other Items

#### General Corporate Expenses and Other

*dollars in millions*

|  | Three Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change | Nine Months Ended June 30, 2023 | 2022 | favorable/(unfavorable) $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| General corporate expenses and other | $52.3 | $47.6 | $(4.7) | (10)% | $145.0 | $138.7 | $(6.3) | (5)% |

General corporate expenses and other increased $4.7 million, or 10%, for the three months ended June 30, 2023, when compared to the prior year period. The current year period included $3.7 million of restructuring and facility closure costs, including accelerated depreciation, incurred by our Refrigerated Retail and Weetabix segments, and the prior year period included $0.8 million of restructuring and facility closure costs incurred by our Post Consumer Brands and Foodservice segments. Excluding these impacts, general corporate expenses and other increased $1.8 million. This increase was primarily driven by acquisition-related costs of $12.0 million related to Pet Food, decreased net gains related to mark-to-market adjustments on equity securities of $5.7 million and higher employee-related expenses of $5.8 million. These negative impacts were partially offset by a gain related to the write-off of deferred underwriting commissions of $10.7 million, decreased net losses related to mark-to-market adjustments on economic hedges and warrant liabilities of $10.3 million and decreased separation-related expenses of $0.4 million in connection with the BellRing Spin-off.

General corporate expenses and other increased $6.3 million, or 5%, for the nine months ended June 30, 2023, when compared to the prior year period. The current year period included $3.7 million of restructuring and facility closure costs, including accelerated depreciation, incurred by our Refrigerated Retail and Weetabix segments, and the prior year period included $9.3 million of restructuring and facility closure costs incurred by our Post Consumer Brands and Foodservice segments, a loss on sale of business of $6.3 million related to the WEF Transaction and a gain on assets held for sale of $9.8 million related to the sale of equipment in Klingerstown, Pennsylvania within our Foodservice segment. Excluding these impacts, general corporate expenses and other increased $8.4 million. This increase was primarily driven by increased net losses related to mark-to-market adjustments on economic hedges and warrant liabilities of $25.4 million (compared to gains in the prior year period), acquisition-related costs of $16.0 million related to Pet Food and higher employee-related expenses of $14.0 million. These negative impacts were partially offset by decreased separation-related expenses of $28.7 million in connection with the BellRing Spin-off, a gain related to the write-off of deferred underwriting commissions of $10.7 million and increased net gains related to mark-to-market adjustments on equity securities of $9.5 million (compared to losses in the prior year period).

For additional information on the gain related to the write-off of deferred underwriting commissions, loss on sale of business and our assets held for sale, see Notes 4 and 6 within “Notes to Condensed Consolidated Financial Statements.”

### LIQUIDITY AND CAPITAL RESOURCES

We completed the following activities during the nine months ended June 30, 2023 (for additional information, see Notes 4, 13, 15 and 18 within “Notes to Condensed Consolidated Financial Statements”) impacting our liquidity and capital resources:

- entered into a Joinder Agreement No. 4 (the “Fourth Joinder Agreement”), which provided for an incremental term loan (the “Fourth Incremental Term Loan”) of $400.0 million under our second amended and restated credit agreement dated March 18, 2020 (the “Credit Agreement”), which we borrowed in full on April 26, 2023;
- issued 5.4 million shares of our common stock to Smucker to fund a portion of the Pet Food acquisition;
- entered into a Joinder Agreement No. 3 (the “Third Joinder Agreement”), which provided for an incremental term loan (the “Third Incremental Term Loan”) of $130.0 million under our Credit Agreement, which we borrowed in full on November 18, 2022;
- transferred our remaining 4.6 million shares of BellRing Common Stock to the lender under the Third Joinder Agreement to repay $99.9 million in aggregate principal amount of the Third Incremental Term Loan (the “Second Debt-for-Equity Exchange”) on November 25, 2022;
- repaid the remaining principal amount of $30.1 million on the Third Incremental Term Loan on November 25, 2022;
- $141.2 million principal value of our 4.50% senior notes repurchased at a discount of $19.9 million;
- $29.3 million principal value of our 4.625% senior notes repurchased at a discount of $3.4 million;
- $43.5 million paid related to the termination of certain of our rate-lock interest rate swap contracts, which contained non-cash, off-market financing elements;
- $345.0 million of investments held in the trust account returned in connection with the PHPC Redemption, of which $312.5 million was distributed to PHPC public stockholders; and
- 2.9 million shares of our common stock repurchased at an average share price of $86.91 per share and a total cost, including broker’s commissions, of $250.5 million.

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

*dollars in millions*

| Cash provided by (used in): | Nine Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: |
| Operating activities - continuing operations | $480.5 | $219.7 |
| Investing activities - continuing operations | (567.9) | (132.3) |
| Financing activities - continuing operations | (279.7) | (486.4) |
| Net cash used in discontinued operations | — | (151.9) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3.8 | (5.8) |
| Net decrease in cash, cash equivalents and restricted cash | $(363.3) | $(556.7) |

Historically, we have generated and expect to continue to generate positive cash flows from operations. We believe our cash on hand, cash flows from operations and current and possible future credit facilities will be sufficient to satisfy our working capital requirements, purchase commitments, interest payments, research and development activities, capital expenditures, pension contributions and other financing requirements for the foreseeable future. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact meeting our capital needs during or beyond the next twelve months. Our ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures and other business risk factors. We believe that we have sufficient liquidity and cash on hand to satisfy our cash needs. If we are unable to generate sufficient cash flows from operations, or are otherwise unable to comply with the terms of our credit facilities, we may be required to seek additional financing alternatives, which may require waivers under our Credit Agreement and our indentures governing our senior notes, in order to generate additional cash. There can be no assurance that we would be able to obtain additional financing or any such waivers on terms acceptable to us or at all. For additional information on our debt, refer to Note 15 within “Notes to Condensed Consolidated Financial Statements.”

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

Obligations under our Credit Agreement are unconditionally guaranteed by our existing and subsequently acquired or organized subsidiaries (other than immaterial subsidiaries, certain excluded subsidiaries and subsidiaries we designate as unrestricted subsidiaries, which include 8th Avenue and its subsidiaries and PHPC Sponsor) and are secured by security interests in substantially all of our assets and the assets of our subsidiary guarantors, but excluding, in each case, real property.

Our senior notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our existing and subsequently acquired or organized domestic subsidiaries, other than immaterial subsidiaries, certain excluded subsidiaries and subsidiaries we designate as unrestricted subsidiaries, which include 8th Avenue and its subsidiaries and PHPC Sponsor. These guarantees are subject to release in certain circumstances.

Our 2.50% convertible senior notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our existing domestic subsidiaries that have guaranteed our other senior notes, which excludes certain immaterial subsidiaries, certain excluded subsidiaries and subsidiaries we designate as unrestricted subsidiaries under our other senior notes indentures, which include 8th Avenue and its subsidiaries and PHPC Sponsor. If, after the date our 2.50% convertible senior notes were issued, any domestic wholly-owned subsidiary guarantees any of our existing senior notes or any other debt securities we may issue in the form of senior unsecured notes or convertible or exchangeable notes, then we must cause such subsidiary to become a guarantor under the 2.50% convertible senior notes as well.

8th Avenue and its subsidiaries and PHPC Sponsor are not obligors or guarantors under our Credit Agreement or senior notes.

### Operating Activities - Continuing Operations

Cash provided by operating activities for the nine months ended June 30, 2023 increased $260.8 million compared to the prior year period, primarily driven by favorable changes related to fluctuations in the timing of sales and collections of trade receivables at our Post Consumer Brands and Foodservice segments, lower interest payments of $21.2 million and lower net payments on our interest rate swaps of $14.0 million. These positive impacts were partially offset by unfavorable changes related to fluctuations in the timing of purchases and payments of trade payables at our Post Consumer Brands and Foodservice segments and higher tax payments of $68.3 million.

### Investing Activities - Continuing Operations

#### Nine months ended June 30, 2023

Cash used in investing activities for the nine months ended June 30, 2023 was $567.9 million, primarily driven by net cash payments of $715.2 million related to the Pet Food acquisition and capital expenditures of $201.9 million. Capital expenditures in the period primarily related to ongoing projects in our Post Consumer Brands and Foodservice segments. These cash outflows were partially offset by a return of $345.0 million in connection with the PHPC Redemption which had been deposited in a trust account in connection with the PHPC IPO and the PHPC Private Placement.

#### Nine months ended June 30, 2022

Cash used in investing activities for the nine months ended June 30, 2022 was $132.3 million, primarily driven by capital expenditures of $167.3 million, net cash payments of $24.8 million, primarily related to our acquisition of Lacka Foods, and cash paid related to investments in partnerships of $8.9 million, partially offset by proceeds from the sale of a business and property and assets held for sale of $50.5 million and $17.8 million, respectively. Capital expenditures in the period primarily related to ongoing projects in our Post Consumer Brands and Foodservice segments.

### Financing Activities - Continuing Operations

#### Nine months ended June 30, 2023

Cash used in financing activities for the nine months ended June 30, 2023 was $279.7 million. We received proceeds of $400.0 million and $130.0 million from our Fourth Incremental Term Loan and our Third Incremental Term Loan, respectively. The Third Incremental Term Loan was partially repaid through the Second Debt-for-Equity Exchange, and the remaining principal balance of $30.1 million was repaid using cash on hand. In addition, we repaid $170.5 million principal value of our 4.50% and 4.625% senior notes, net of $23.3 million of discounts, and $1.1 million principal value of our municipal bond, which resulted in total net repayments of debt of $178.4 million. We distributed $312.5 million to PHPC public stockholders in connection with the PHPC Redemption. We paid $242.4 million, including broker’s commissions, for the repurchase of shares of our common stock and $43.5 million related to the termination of certain of our rate-lock interest rate swap contracts, which contained non-cash, off-market financing elements.

#### Nine months ended June 30, 2022

Cash used in financing activities for the nine months ended June 30, 2022 was $486.4 million. We paid $550.4 million of cash to BellRing in connection with the BellRing Spin-off, which was partially offset by cash receipts from BellRing of $3.2 million prior to the BellRing Spin-off related to quarterly tax distributions pursuant to BellRing Brands, LLC’s amended and restated limited liability company agreement. We received proceeds of $840.0 million from the First Incremental Term Loan, which were used to repay $840.0 million of principal balance of our 5.75% senior notes. We repaid $73.9 million principal value of our 4.50% senior notes and 5.50% senior notes, net of a $10.6 million discount. These repayments, combined with a principal payment on a municipal bond, resulted in total net repayments in long-term debt of $904.4 million. In connection with the repayment of the 5.75% senior notes (discussed above), we paid $24.1 million in debt premiums. We received proceeds of $500.0 million and a premium of $17.5 million from our additional 5.50% senior notes issuance. We paid $7.4 million in debt issuance costs and deferred financing fees in connection with our additional 5.50% senior notes issuance, the First Incremental Term Loan and the amendment of our Credit Agreement. We paid $343.0 million, including broker’s commissions, for the repurchase of shares of our common stock, which included repurchases of shares of our common stock that were accrued at September 30, 2021 and did not settle until fiscal 2022.

### Debt Covenants

Under the terms of our Credit Agreement, we are required to comply with a financial covenant consisting of a secured net leverage ratio (as defined in the Credit Agreement) not to exceed 4.25 to 1.00 measured as of the last day of any fiscal quarter if, as of the last day of such fiscal quarter, the aggregate outstanding amount of all revolving credit loans, swing line loans and letter of credit obligations (subject to certain exceptions specified in the Credit Agreement) exceeds 30% of our revolving credit commitments. In addition to the foregoing, under the terms of the Fourth Joinder Agreement, so long as any principal or accrued interest remains outstanding with respect to the Fourth Incremental Term Loan, we are required to comply with financial covenants consisting of the foregoing secured net leverage ratio and a minimum consolidated interest coverage ratio (as defined in the Credit Agreement) of not less than 2.00 to 1.00 measured as of the last day of each fiscal quarter. As of June 30, 2023, we were in compliance with these financial covenants. We do not believe non-compliance is reasonably likely in the foreseeable future.

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

### CRITICAL ACCOUNTING ESTIMATES

Our critical accounting estimates are more fully described in our Annual Report on Form 10-K for the year ended September 30, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on November 17, 2022. There have been no significant changes to our critical accounting estimates since September 30, 2022.

### RECENTLY ISSUED ACCOUNTING STANDARDS

We considered all new accounting pronouncements and have concluded there are no new pronouncements that had or will have a material impact on our consolidated results of operations, comprehensive income, financial condition, cash flows, shareholders’ equity or related disclosures based on current information.

### CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, are made throughout this report. These forward-looking statements are sometimes identified from the use of forward-looking words such as “believe,” “should,” “could,” “potential,” “continue,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “aim,” “intend,” “plan,” “forecast,” “target,” “is likely,” “will,” “can,” “may” or “would” or the negative of these terms or similar expressions elsewhere in this report. Our financial condition, results of operations and cash flows may differ materially from the forward-looking statements in this report. Such statements are based on management’s current views and assumptions and involve risks and uncertainties that could affect expected results. Those risks and uncertainties include, but are not limited to, the following:

- volatility in the cost or availability of inputs to our businesses (including raw materials, energy and other supplies and freight);
- consumer and customer reaction to our pricing actions;
- disruptions or inefficiencies in our supply chain, inflation, labor shortages, public health crises, climatic events, avian influenza and other agricultural diseases and pests, fires and other events beyond our control;
- changes in economic conditions, financial instability, disruptions in capital and credit markets, changes in interest rates and fluctuations in foreign currency exchange rates;
- our high leverage, our ability to obtain additional financing and service our outstanding debt (including covenants restricting the operation of our businesses) and a potential downgrade in our credit ratings;
- business disruption or other losses from political instability, terrorism, war or armed hostilities or geopolitical tensions;
- our ability to hire and retain talented personnel, increases in labor-related costs, employee safety, labor strikes, work stoppages and unionization efforts;
- our and our private brands customers’ ability to compete in their product categories, including the success of pricing, advertising and promotional programs and the ability to anticipate and respond to changes in consumer and customer preferences and behaviors;
- the success of new product introductions;
- allegations that our products cause injury or illness, product recalls and withdrawals, product liability claims and other related litigation;
- compliance with existing and changing laws and regulations;
- the impact of litigation;
- our ability to identify, complete and integrate or otherwise effectively execute acquisitions or other strategic transactions;
- our ability to successfully integrate the Pet Food operations, deliver on the expected financial contribution, cost savings and synergies from the Pet Food acquisition and maintain relationships with Pet Food employees, customers and suppliers, while maintaining focus on our pre-acquisition businesses;
- our and Smucker’s ability to comply with certain ancillary agreements associated with the Pet Food acquisition;
- differences in our actual operating results from any of our guidance regarding our future performance;
- risks related to the intended tax treatment of our divestitures of our interest in BellRing;
- our ability to successfully implement business strategies to reduce costs;
- the loss of, a significant reduction of purchases by or the bankruptcy of a major customer;
- costs, business disruptions and reputational damage associated with information technology failures, cybersecurity incidents or information security breaches;
- our reliance on third parties for the manufacture of many of our products;
- costs associated with the obligations of Bob Evans Farms, Inc. (“Bob Evans”) in connection with the sale of its restaurants business, including certain indemnification obligations and Bob Evans’s payment and performance obligations as a guarantor for certain leases;
- our ability to protect our intellectual property and other assets and to license third party intellectual property;
- risks associated with our international businesses;
- impairment in the carrying value of goodwill or other intangibles;
- changes in critical accounting estimates;
- losses or increased funding and expenses related to our qualified pension or other postretirement plans;
- conflicting interests or the appearance of conflicting interests resulting from any of our directors and officers also serving as directors or officers of other companies; and
- other risks and uncertainties included under “Risk Factors” in Item 1A of Part II of this report, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 5, 2023, and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, filed with the SEC on November 17, 2022.

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

## Market risk

As filed, 4,594 characters.

### Commodity Price Risk

In the ordinary course of business, the Company is exposed to commodity price risks relating to the acquisition of raw materials, energy and fuels. The Company may use futures contracts and options to manage certain of these exposures when it is practical to do so. A hypothetical 10% adverse change in the market price of the Company’s principal hedged commodities, including natural gas, heating oil, soybean oil, corn, wheat and dairy, would have decreased the fair value of the Company’s commodity-related derivatives portfolio by approximately $4 million and $7 million as of June 30, 2023 and September 30, 2022, respectively. This volatility analysis ignores changes in the exposures inherent in the underlying hedged transactions. Because the Company does not hold or trade derivatives for speculation or profit, all changes in derivative values are effectively offset by corresponding changes in the underlying exposures.

For more information regarding the Company’s commodity derivative contracts, refer to Note 13 within “Notes to Condensed Consolidated Financial Statements.”

### Foreign Currency Risk

Related to its foreign subsidiaries, the Company is exposed to risks of fluctuations in future cash flows and earnings due to changes in foreign currency exchange rates. To mitigate these risks, the Company uses a combination of foreign currency exchange contracts, which may consist of options, forward contracts and currency swaps. As of June 30, 2023, a hypothetical 10% adverse change in the expected Euro-GBP and USD-GBP foreign currency exchange rates would have reduced the fair value of the Company’s foreign currency-related derivatives portfolio by approximately $1 million. As of September 30, 2022, a hypothetical 10% adverse change in the expected Euro-GBP foreign currency exchange rates would have reduced the fair value of the Company’s foreign currency-related derivatives portfolio by an immaterial amount.

For additional information regarding the Company’s foreign currency derivative contracts, refer to Note 13 within “Notes to Condensed Consolidated Financial Statements.”

### Interest Rate Risk

#### Long-term debt

As of June 30, 2023, the Company had outstanding principal value of indebtedness of $6,197.7 million related to its senior notes, Fourth Incremental Term Loan and a municipal bond. At June 30, 2023, Post’s revolving credit facility had available borrowing capacity of $730.3 million. Of the total $6,197.7 million of outstanding indebtedness, $5,792.4 million bore interest at a weighted-average fixed interest rate of 4.8%. As of September 30, 2022, the Company had principal value of indebtedness of $5,969.3 million related to its senior notes and a municipal bond. At September 30, 2022, Post’s revolving credit facility had available borrowing capacity of $730.3 million. Of the total $5,969.3 million of outstanding indebtedness, $5,962.9 million bore interest at a weighted-average fixed interest rate of 4.8%.

As of June 30, 2023 and September 30, 2022, the fair value of the Company’s debt, excluding any outstanding borrowings under the municipal bond, was $5,723.1 million and $5,171.0 million, respectively. Changes in interest rates impact fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas a change in interest rates on variable rate debt will impact interest expense and cash flows. A hypothetical 10% decrease in interest rates would have increased the fair value of the fixed rate debt by approximately $103 million and $111 million as of June 30, 2023 and September 30, 2022, respectively. A hypothetical 10% increase in interest rates would have had an immaterial impact on both interest expense and interest paid on variable rate debt during each of the three and nine months ended June 30, 2023 and 2022.

For additional information regarding the Company’s debt, refer to Note 15 within “Notes to Condensed Consolidated Financial Statements.”

#### Interest rate swaps

As of June 30, 2023 and September 30, 2022, the Company had interest rate swaps with a notional value of $700.0 million and $1,381.9 million, respectively. A hypothetical 10% adverse change in interest rates would have decreased the fair value of the interest rate swaps by approximately $13 million and $48 million as of June 30, 2023 and September 30, 2022, respectively.

For additional information regarding the Company’s interest rate swap contracts, refer to Note 13 within “Notes to Condensed Consolidated Financial Statements.”

## Controls and procedures

As filed, 1,298 characters.

#### Evaluation of Disclosure Controls and Procedures

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

#### Changes in Internal Control Over Financial Reporting

In connection with the Company’s Pet Food acquisition completed in fiscal 2023, management is in the process of analyzing, evaluating and, where necessary, implementing changes in controls and procedures. This process may result in additions or changes to the Company’s internal control over financial reporting. There were no other significant changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 1,512 characters.

In addition to the information set forth elsewhere in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, filed with the SEC on November 17, 2022 (the “Annual Report”), as well as the risk factors contained in “Risk Factors” within Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 5, 2023 (the “Second Quarter Report”), which are incorporated herein by reference. Many of the risks set forth in the Annual Report regarding our existing businesses and categories prior to our acquisition of a portion of The J. M. Smucker Company’s pet food business (“Pet Food”) also are risks to the ongoing operations of the Pet Food business, and risks related to food for human consumption, the food and beverage category and the food and beverage industry included in the Annual Report should be read to include pet food, the pet food category and the pet food industry, respectively. The risks included in the Annual Report, the Second Quarter Report and herein could materially and adversely affect our businesses, financial condition, results of operations and cash flows. Such enumerated risks are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our businesses, financial condition, results of operations and cash flows.

Filed Aug 4, 2023.
Source: SEC EDGAR, the filing index for accession 0001530950-23-000236. Last ingested by Listed: Nov 3, 2026, 21:21 ET. No prices; not investment advice.