Document
Table of Contents


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2016
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____

Commission File Number: 1-35305
Post Holdings, Inc.
(Exact name of registrant as specified in its charter)

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

2503 S. Hanley Road
St. Louis, Missouri 63144
(Address of principal executive offices) (Zip Code)
(314) 644-7600
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Common stock, $0.01 Par Value – 64,279,120 shares as of January 31, 2017
 


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POST HOLDINGS, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS

 
 
Page
PART I.
FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
PART II.
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 6.
 
 
 
 


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PART I.     FINANCIAL INFORMATION.
ITEM 1.    FINANCIAL STATEMENTS.
POST HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except per share data)
 
 
Three Months Ended
December 31,
 
2016
 
2015
Net Sales
$
1,249.8

 
$
1,248.8

Cost of goods sold
870.6

 
886.3

Gross Profit
379.2

 
362.5

Selling, general and administrative expenses
264.1

 
187.0

Amortization of intangible assets
38.9

 
38.1

Other operating expenses, net
—

 
4.5

Operating Profit
76.2

 
132.9

Interest expense, net
72.9

 
77.8

Other (income) expense
(144.5
)
 
15.9

Earnings before Income Taxes
147.8

 
39.2

Income tax expense
50.2

 
13.7

Net Earnings
97.6

 
25.5

Preferred stock dividends
(3.4
)
 
(15.0
)
Net Earnings Available to Common Shareholders
$
94.2

 
$
10.5

 
 
 
 
Earnings per Common Share:
 
 
 
Basic
$
1.36

 
$
0.16

Diluted
$
1.22

 
$
0.15

 
 
 
 
Weighted-Average Common Shares Outstanding:
 
 
 
Basic
69.2

 
67.4

Diluted
79.7

 
68.8

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



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POST HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in millions)


 
Three Months Ended
December 31,
 
2016
 
2015
Net Earnings
$
97.6

 
$
25.5

Pension and postretirement benefits adjustments:
 
 
 
Reclassifications to net earnings
(0.6
)
 
0.5

Foreign currency translation adjustments:
 
 
 
Unrealized foreign currency translation adjustments
(1.9
)
 
(9.8
)
Tax benefit (expense) on other comprehensive income
0.2

 
(0.2
)
Total Comprehensive Income
$
95.3

 
$
16.0



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



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POST HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)  
 
December 31, 2016
 
September 30, 2016
ASSETS
Current Assets
 
 
 
Cash and cash equivalents
$
869.1

 
$
1,143.6

Restricted cash
13.0

 
8.4

Receivables, net
410.4

 
385.0

Inventories
513.4

 
503.1

Prepaid expenses and other current assets
44.0

 
36.8

Total Current Assets
1,849.9

 
2,076.9

Property, net
1,350.8

 
1,354.4

Goodwill
3,127.1

 
3,079.7

Other intangible assets, net
2,843.3

 
2,833.7

Other assets
16.7

 
15.9

Total Assets
$
9,187.8

 
$
9,360.6

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
 
 
 
Current portion of long-term debt
$
8.8

 
$
12.3

Accounts payable
235.0

 
264.4

Other current liabilities
298.4

 
357.3

Total Current Liabilities
542.2

 
634.0

Long-term debt
4,552.5

 
4,551.2

Deferred income taxes
806.5

 
726.5

Other liabilities
302.6

 
440.3

Total Liabilities
6,203.8

 
6,352.0

 
 
 
 
Shareholders’ Equity
 
 
 
Preferred stock
—

 
—

Common stock
0.7

 
0.7

Additional paid-in capital
3,559.2

 
3,546.0

Accumulated deficit
(326.7
)
 
(424.3
)
Accumulated other comprehensive loss
(62.7
)
 
(60.4
)
Treasury stock, at cost
(186.5
)
 
(53.4
)
Total Shareholders’ Equity
2,984.0

 
3,008.6

Total Liabilities and Shareholders’ Equity
$
9,187.8

 
$
9,360.6


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

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POST HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
 
Three Months Ended
December 31,
 
2016
 
2015
Cash Flows from Operating Activities
 
 
 
Net Earnings
$
97.6

 
$
25.5

Adjustments to reconcile net earnings to net cash flow (used in) provided by operating activities:
 
 
 
Depreciation and amortization
77.1

 
74.8

Unrealized (gain) loss on interest rate swaps
(145.0
)
 
15.9

Amortization of deferred financing costs and debt premium, net
1.5

 
1.1

Assets held for sale
(0.2
)
 
4.0

Non-cash stock-based compensation expense
4.9

 
3.5

Deferred income taxes
62.1

 
16.8

Other, net
(1.5
)
 
0.4

Other changes in current assets and liabilities, net of business acquisitions:
 
 
 
(Increase) decrease in receivables, net
(18.0
)
 
10.7

Increase in inventories
(8.7
)
 
(16.0
)
Increase in prepaid expenses and other current assets
(6.9
)
 
(3.5
)
Decrease in accounts payable and other current liabilities
(90.2
)
 
(47.5
)
Increase in non-current liabilities
3.7

 
3.0

Net Cash (Used in) Provided by Operating Activities
(23.6
)
 
88.7

 
 
 
 
Cash Flows from Investing Activities
 
 
 
Business acquisitions, net of cash acquired
(91.4
)
 
(94.4
)
Additions to property
(31.8
)
 
(18.5
)
Restricted cash
(4.6
)
 
4.7

Proceeds from sale of property and assets held for sale
6.0

 
0.3

Net Cash Used in Investing Activities
(121.8
)
 
(107.9
)
 
 
 
 
Cash Flows from Financing Activities
 
 
 
Repayments of long-term debt
(3.6
)
 
(3.6
)
Purchases of treasury stock
(133.1
)
 
—

Payments of preferred stock dividends
(3.4
)
 
(4.3
)
Preferred stock conversion
—

 
(10.9
)
Proceeds from exercise of stock awards
9.4

 
—

Other, net
2.3

 
(0.6
)
Net Cash Used in Financing Activities
(128.4
)
 
(19.4
)
Effect of Exchange Rate Changes on Cash and Cash Equivalents
(0.7
)
 
(0.4
)
Net Decrease in Cash and Cash Equivalents
(274.5
)
 
(39.0
)
Cash and Cash Equivalents, Beginning of Year
1,143.6

 
841.4

Cash and Cash Equivalents, End of Period
$
869.1

 
$
802.4

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

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POST HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in millions, except per share information and where indicated otherwise)
NOTE 1 — BASIS OF PRESENTATION
These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), and on a basis substantially consistent with the audited consolidated financial statements of Post Holdings, Inc. (herein referred to as “Post,” “the Company,” “us,” “our” or “we”) as of and for the fiscal year ended September 30, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with such audited consolidated financial statements which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016, filed with the SEC on November 18, 2016.
These unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair statement of the Company’s financial position, results of operations, comprehensive income and cash flows for the interim periods presented. Interim results are not necessarily indicative of the results for any other interim period or for the entire fiscal year.
NOTE 2 - RECENTLY ISSUED ACCOUNTING STANDARDS
The Company has considered all new accounting pronouncements, and has concluded there are no new recently issued pronouncements (other than the ones described below) that had or will have a material impact on the results of operations, financial condition or cash flows based on current information.
Recently Issued
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 along with amending other parts of the goodwill impairment test. Under this ASU, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein (i.e., Post’s financial statements for the year ending September 30, 2021) with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. At adoption, this update will require a prospective approach. The Company is currently evaluating the impact of adopting this guidance.
In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses by providing a more specific definition of a business. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods therein (i.e., Post’s financial statements for the year ending September 30, 2019) with early adoption permitted. This ASU currently has no impact on the Company, however, Post will evaluate the impact of this ASU on future business acquisitions and disposals.
In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” ASU 2016-20 is intended to clarify and suggest improvements to the application of current standards under Topic 606 and other Topics amended by ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The effective date of this ASU is the same as the effective date for ASU 2014-09 (i.e., Post’s financial statements for the year ending September 30, 2019). The Company continues to evaluate its existing revenue recognition policies to determine the types of contracts that are within the scope of this guidance and the impact the adoption of this standard may have on the Company’s consolidated financial statements. It has not yet been determined if the full retrospective or the modified retrospective method will be applied.
In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents, and therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of year cash balance to the end of year cash balance as shown on the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods therein (i.e., Post’s financial statements for the year ending September 30, 2019) with early adoption permitted. The Company currently classifies changes in restricted cash as an investing activity in the Condensed Consolidated Statements of Cash Flows, not as a component of cash and cash equivalents as required by this ASU.

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NOTE 3 — RESTRUCTURING
In September 2015, the Company announced its plan to close its Dymatize manufacturing facility located in Farmers Branch, Texas and permanently transfer production to third party facilities under co-manufacturing agreements. Plant production ceased in the fourth quarter of 2015, and the facility was sold in December 2016. No additional restructuring costs have been incurred or are expected to be incurred in fiscal 2017.
In May 2015, the Company announced its plan to consolidate its cereal business administrative offices into its Lakeville, Minnesota location. In connection with the consolidation, the Company closed its office located in Parsippany, New Jersey and relocated those functions as well as certain functions located in Battle Creek, Michigan to the Lakeville office. The Parsippany office closure was completed in fiscal 2016. No additional restructuring costs have been incurred or are expected to be incurred in fiscal 2017.
Amounts related to the restructuring events discussed above are shown in the following table. Expense is recognized in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Operations. These expenses are not included in the measure of segment performance for any segment (see Note 17).
 
Employee-Related Costs
 
Accelerated Depreciation
 
Total
Balance at September 30, 2015
$
10.5

 
$
—

 
$
10.5

Charge to expense
0.9

 
0.3

 
1.2

Cash payments
(2.9
)
 
—

 
(2.9
)
Non-cash charges
(0.4
)
 
(0.3
)
 
(0.7
)
Balance at December 31, 2015
$
8.1

 
$
—

 
$
8.1

 
 
 
 
 
 
Balance at September 30, 2016
$
1.1

 
$
—

 
$
1.1

Charge to expense
—

 
—

 
—

Cash payments
(0.6
)
 
—

 
(0.6
)
Non-cash charges
—

 
—

 
—

Balance at December 31, 2016
$
0.5

 
$
—

 
$
0.5

 
 
 
 
 
 
Total expected restructuring charge
$
12.6

 
$
2.5

 
$
15.1

Cumulative restructuring charges incurred to date
12.6

 
2.5

 
15.1

Remaining expected restructuring charge
$
—

 
$
—

 
$
—

Assets Held for Sale
Related to the closure of its Modesto, California facility in September 2015, the Company had land, building and equipment classified as assets held for sale at December 31, 2016 and September 30, 2016. The carrying value of the assets included in “Prepaid expenses and other current assets” on the Condensed Consolidated Balance Sheets was $4.3 as of December 31, 2016, as well as September 30, 2016. Related to the manufacturing shutdown of its Farmers Branch, Texas facility, the Company had land and buildings classified as assets held for sale as of September 30, 2016. The carrying value of the assets included in “Prepaid expenses and other current assets” on the Condensed Consolidated Balance Sheets was $5.8 as of September 30, 2016. The land and buildings were sold in December 2016. Held for sale (gains)/losses of $(0.2) and $4.0 were recorded in the three months ended December 31, 2016 and 2015, respectively, to adjust the carrying value of the assets to their fair value less estimated selling costs. These losses are reported as “Other operating expenses, net” on the Condensed Consolidated Statements of Operations. These expenses are not included in the measure of segment performance (see Note 17).
NOTE 4 — BUSINESS COMBINATIONS
On October 3, 2016, the Company completed its acquisition of National Pasteurized Eggs, Inc. (“NPE”) for $93.5, subject to net working capital and other adjustments, resulting in a payment of $97.0. The parties have not yet agreed to a final net working capital adjustment. The Company currently estimates the final net working capital adjustment will result in an amount due back to the Company of $1.3. In addition, the Company acquired an income tax receivable of $2.0 that is due back to the sellers when it is collected. NPE is a producer of pasteurized shell eggs, including cage-free and hard boiled eggs. NPE is reported in Post’s Michael Foods Group segment (see Note 17). Based upon the preliminary purchase price allocation, the Company recorded $41.0 of customer relationships to be amortized over a weighted-average period of 17 years and $7.5 of trademarks and brands to be amortized over

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a weighted-average period of 20 years. Net sales and operating loss included in the Condensed Consolidated Statement of Operations related to NPE were $23.3 and $(2.1), respectively, for the three months ended December 31, 2016.
On October 3, 2015, the Company completed its acquisition of Willamette Egg Farms (“WEF”) for $90.0, subject to working capital and other adjustments, resulting in a payment at closing of $109.0. In December 2015, a final settlement of net working capital and other adjustments was reached, resulting in an additional amount paid by the Company of $4.6. WEF is a producer, processor and wholesale distributor of eggs and egg products and is also reported in Post’s Michael Foods Group segment (see Note 17).
Each of the acquisitions was accounted for using the acquisition method of accounting, whereby the results of operations are included in the financial statements from the date of acquisition. The respective purchase prices were allocated to acquired assets and assumed liabilities based on their estimated fair values at the date of acquisition, and any excess was allocated to goodwill, as shown in the table below. Goodwill represents the value the Company expects to achieve through the implementation of operational synergies and the expansion of the business into new or growing segments of the industry. The Company does not expect the final fair value of goodwill related to the acquisition of NPE to be deductible for U.S. income tax purposes.
Certain estimated values for the NPE acquisition, including property, goodwill, other intangible assets and deferred taxes, are not yet finalized pending the final purchase price allocation and are subject to change once additional information is obtained. The following table provides the preliminary allocation of the purchase price related to the fiscal 2017 acquisition of NPE based upon the fair value of assets and liabilities assumed.
Cash and cash equivalents
$
5.6

Receivables
9.8

Inventories
2.1

Prepaid expenses and other current assets
0.4

Property
11.4

Goodwill
47.6

Other intangible assets
48.5

Current portion of capital lease
(0.1
)
Accounts payable
(6.3
)
Other current liabilities
(2.9
)
Long-term capital lease
(0.2
)
Deferred tax liability - long-term
(18.2
)
Total acquisition cost
$
97.7

Transaction related costs
The Company incurred acquisition and divestiture related expenses of $0.7 and $2.0 during the three months ended December 31, 2016 and 2015, respectively, recorded as “Selling, general and administrative expenses,” and include amounts for transactions that were signed, spending for due diligence on potential acquisitions that were not signed or announced at the time of the Company’s reporting, and spending for divestiture transactions.
Pro Forma Information
The following unaudited pro forma information presents a summary of the results of operations of the Company combined with the aggregate results of NPE and WEF for the periods presented as if the fiscal 2017 acquisition of NPE had occurred on October 1, 2015 and the fiscal 2016 acquisition of WEF had occurred on October 1, 2014, along with certain pro forma adjustments. These pro forma adjustments give effect to the amortization of certain definite-lived intangible assets, adjusted depreciation based upon fair value of assets acquired, interest expense related to the financing of the business combinations, inventory revaluation adjustments on acquired businesses and related income taxes. The following unaudited pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations as they would have been had the acquisitions occurred on the assumed dates, nor is it necessarily an indication of future operating results.  

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Three Months Ended
December 31,
 
2016
 
2015
Pro forma net sales
$
1,249.8

 
$
1,283.8

Pro forma net earnings available to common shareholders
$
94.3

 
$
13.0

Pro forma basic earnings per common share
$
1.36

 
$
0.19

Pro forma diluted earnings per common share
$
1.22

 
$
0.19

NOTE 5 — GOODWILL
The changes in the carrying amount of goodwill by segment are noted in the following table.
 
Post Consumer Brands
 
Michael Foods Group
 
Active Nutrition
 
Private Brands
 
Total
Balance, September 30, 2016
 
 
 
 
 
 
 
 
 
Goodwill (gross)
$
1,994.0

 
$
1,345.8

 
$
180.7

 
$
256.6

 
$
3,777.1

Accumulated impairment losses
(609.1
)
 
—

 
(88.3
)
 
—

 
(697.4
)
Goodwill (net)
$
1,384.9

 
$
1,345.8

 
$
92.4

 
$
256.6

 
$
3,079.7

Goodwill acquired
—

 
47.6

 
—

 
—

 
47.6

Currency translation adjustment
(0.2
)
 
—

 
—

 
—

 
(0.2
)
Balance, December 31, 2016
 
 
 
 
 
 
 
 
 
Goodwill (gross)
$
1,993.8

 
$
1,393.4

 
$
180.7

 
$
256.6

 
$
3,824.5

Accumulated impairment losses
(609.1
)
 
—

 
(88.3
)
 
—

 
(697.4
)
Goodwill (net)
$
1,384.7

 
$
1,393.4

 
$
92.4

 
$
256.6

 
$
3,127.1

NOTE 6 — INCOME TAXES
The effective income tax rate was 34.0% and 34.9% for the three months ended December 31, 2016 and 2015, respectively. In accordance with Accounting Standards Codification (“ASC”) Topic 740, the Company records income tax expense for the interim periods using the estimated annual effective tax rate for the full fiscal year adjusted for the impact of discrete items occurring during the three month periods.
NOTE 7 — INTANGIBLE ASSETS, NET
Total intangible assets are as follows:
 
December 31, 2016
 
September 30, 2016
 
Carrying
Amount
 
Accumulated Amortization
 
Net
Amount
 
Carrying
Amount
 
Accumulated Amortization
 
Net
Amount
Subject to amortization:
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
2,053.7

 
$
(330.0
)
 
$
1,723.7

 
$
2,012.7

 
$
(302.0
)
 
$
1,710.7

Trademarks/brands
802.6

 
(131.0
)
 
671.6

 
795.1

 
(120.6
)
 
674.5

Other intangible assets
21.7

 
(8.2
)
 
13.5

 
21.7

 
(7.7
)
 
14.0

 
2,878.0

 
(469.2
)
 
2,408.8

 
2,829.5

 
(430.3
)
 
2,399.2

Not subject to amortization:
 
 
 
 
 
 
 
 
 
 
 
Trademarks/brands
434.5

 
—

 
434.5

 
434.5

 
—

 
434.5

 
$
3,312.5

 
$
(469.2
)
 
$
2,843.3

 
$
3,264.0

 
$
(430.3
)
 
$
2,833.7

NOTE 8 — EARNINGS PER SHARE
Basic earnings per share is based on the average number of common shares outstanding during the period. Diluted earnings per share is based on the average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options, stock appreciation rights and restricted stock equivalents using the “treasury stock” method. The impact of potentially dilutive convertible preferred stock is calculated using the “if-converted” method. The Company’s tangible equity units (“TEUs”) are assumed to be settled at the minimum settlement amount of 1.7114 shares per TEU for weighted-average shares for

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basic earnings per share. For diluted earnings per share, the shares, to the extent dilutive, are assumed to be settled at a conversion factor based on the Company’s daily volume-weighted-average price per share of the Company’s common stock not to exceed 2.0964 shares per TEU.
The following table sets forth the computation of basic and diluted earnings per share for the three months ended December 31, 2016 and 2015.
 
Three Months Ended
December 31,
 
2016
 
2015
Net earnings for basic earnings per share
$
94.2

 
$
10.5

Net earnings for diluted earnings per share
$
97.6

 
$
10.5

 
 
 
 
Weighted-average shares outstanding
64.5

 
62.5

Effect of TEUs on weighted-average shares for basic earnings per share
4.7

 
4.9

Weighted-average shares for basic earnings per share
69.2

 
67.4

Effect of dilutive securities:
 
 
 
Stock options
1.2

 
1.0

Stock appreciation rights
0.1

 
0.1

Restricted stock awards
0.2

 
0.3

Preferred shares conversion to common
9.0

 
—

Total dilutive securities
10.5

 
1.4

Weighted-average shares for diluted earnings per share
79.7

 
68.8

 
 
 
 
Basic earnings per common share
$
1.36

 
$
0.16

Diluted earnings per common share
$
1.22

 
$
0.15

The following table details the securities that have been excluded from the calculation of weighted-average shares for diluted earnings per share as they were anti-dilutive.
 
Three Months Ended
December 31,
 
2016
 
2015
Stock options
0.3

 
0.3

Restricted stock awards
—

 
0.2

Preferred shares conversion to common
—

 
9.1

NOTE 9 — INVENTORIES
 
December 31,
2016
 
September 30,
2016
Raw materials and supplies
$
114.2

 
$
112.4

Work in process
20.9

 
17.4

Finished products
346.7

 
339.3

Flocks
31.6

 
34.0

 
$
513.4

 
$
503.1

NOTE 10 — PROPERTY, NET
 
December 31,
2016
 
September 30, 2016
Property, at cost
$
1,933.5

 
$
1,900.3

Accumulated depreciation
(582.7
)
 
(545.9
)
 
$
1,350.8

 
$
1,354.4


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NOTE 11 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
In the ordinary course of business, the Company is exposed to commodity price risks relating to the acquisition of raw materials and supplies, interest rate risks relating to floating rate debt, and foreign currency exchange rate risks relating to its foreign subsidiaries. The Company utilizes derivative financial instruments, including (but not limited to) futures contracts, option contracts, forward contracts and swaps, to manage certain of these exposures by hedging when it is practical to do so. The Company does not hold or issue financial instruments for speculative or trading purposes.
The Company maintains options, futures contracts and interest rate swaps which have been designated as economic hedges of raw materials, energy purchases and variable rate debt.
At December 31, 2016, the notional amounts of commodity and energy contracts were $105.9 and $20.5, respectively. These contracts relate to inputs that generally will be utilized within the next 18 months. At December 31, 2016 and September 30, 2016, the Company had pledged collateral of $6.0 and $6.1, respectively, related to its commodity and energy contracts. These amounts are classified as “Restricted cash” on the Condensed Consolidated Balance Sheets.
As of December 31, 2016, the Company had interest rate swaps with a notional amount of $77.2 that obligate Post to pay a fixed rate of 3.1% and receive one-month LIBOR, and require monthly settlements. These settlements began in July 2016 and end in May 2021. In addition, the Company has interest rate swaps with a $750.0 notional amount that obligate Post to pay a weighted-average fixed interest rate of approximately 4.0% and receive three-month LIBOR and will result in a net lump sum settlement in July 2018, as well as interest rate swaps with a $899.3 notional amount that obligate Post to pay a weighted-average fixed interest rate of approximately 3.7% and receive three-month LIBOR and will result in a net lump sum settlement in December 2019.
Commodity and energy derivatives are valued using an income approach based on index prices less the contract rate multiplied by the notional amount. The Company’s calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve.
The following table presents the balance sheet location and fair value of the Company’s derivative instruments on a gross and net basis as of December 31, 2016 and September 30, 2016. The Company does not offset derivative assets and liabilities within the Condensed Consolidated Balance Sheets.
 
 
Balance Sheet Location
 
December 31,
2016
 
September 30, 2016
Commodity contracts
 
Prepaid expenses and other current assets
 
$
3.9

 
$
0.6

Energy contracts
 
Prepaid expenses and other current assets
 
6.8

 
2.4

Total Assets
 
 
 
$
10.7

 
$
3.0

 
 
 
 
 
 
 
Commodity contracts
 
Other current liabilities
 
4.1

 
3.3

Energy contracts
 
Other current liabilities
 
—

 
0.2

Interest rate swaps
 
Other current liabilities
 
2.0

 
2.0

Interest rate swaps
 
Other liabilities
 
168.2

 
313.2

Total Liabilities
 
 
 
$
174.3

 
$
318.7

The following table presents the recognized loss (gain) from derivative instruments that were not designated as qualified hedging instruments on the Company’s Condensed Consolidated Statements of Operations.
 
 
 
 
Loss (Gain) Recognized in Statement of Operations
 
 
Statement of Operations Location
 
Three Months Ended December 31,
 
 
 
2016
 
2015
Commodity contracts
 
Cost of goods sold
 
$
4.5

 
$
4.4

Energy contracts
 
Cost of goods sold
 
(3.2
)
 
4.1

Interest rate swaps
 
Other (income) expense
 
(144.5
)
 
15.9

NOTE 12 — FAIR VALUE MEASUREMENTS
The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis and the basis for that measurement according to the levels in the fair value hierarchy in ASC Topic 820.

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December 31, 2016
 
September 30, 2016
 
Total
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
Assets:
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation investment
$
12.6

 
$
12.6

 
$
—

 
$
11.5

 
$
11.5

 
$
—

Derivative assets
10.7

 
—

 
10.7

 
3.0

 
—

 
3.0

 
$
23.3

 
$
12.6

 
$
10.7

 
$
14.5

 
$
11.5

 
$
3.0

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation liabilities
$
18.7

 
$
—

 
$
18.7

 
$
17.3

 
$
—

 
$
17.3

Derivative liabilities
174.3

 
—

 
174.3

 
318.7

 
—

 
318.7

 
$
193.0

 
$
—

 
$
193.0

 
$
336.0

 
$
—

 
$
336.0

The following table presents the fair value of the Company’s long-term debt which is classified as Level 2 in the fair value hierarchy per ASC Topic 820:
 
December 31,
2016
 
September 30, 2016
Senior notes
$
4,748.4

 
$
4,835.9

TEUs
10.3

 
15.0

4.57% 2012 Series Bond maturing September 2017
1.3

 
1.3

Capital leases
0.3

 
—

 
$
4,760.3

 
$
4,852.2

The deferred compensation investment is invested primarily in mutual funds and its fair value is measured using the market approach. This investment is in the same funds and purchased in substantially the same amounts as the participants’ selected investment options (excluding Post common stock equivalents), which represent the underlying liabilities to participants in the Company’s deferred compensation plans. Deferred compensation liabilities are recorded at amounts due to participants in cash, based on the fair value of participants’ selected investment options (excluding certain Post common stock equivalents to be distributed in shares) using the market approach. The Company utilizes the income approach to measure fair value for its derivative assets, which include options and futures contracts for commodities and energy. The income approach uses pricing models that rely on market observable inputs such as yield curves and forward prices. Changes in the deferred compensation investment and related liability are recorded as “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Operations.
Refer to Note 11 for the classification of changes in fair value of derivative assets and liabilities measured at fair value on a recurring basis within the Condensed Consolidated Statements of Operations.
As stated previously (see Note 3), the Company had land, buildings and equipment classified as assets held for sale related to the closure of its Modesto, California facility. At December 31, 2016 and September 30, 2016, the carrying value, as determined by estimated fair value less estimated costs to sell, of the assets held for sale was $4.3 and is included in “Prepaid expenses and other current assets” on the Condensed Consolidated Balance Sheets. Related to its Farmers Branch, Texas facility, the Company had land and buildings classified as assets held for sale as of September 30, 2016. The carrying value of the assets included in “Prepaid expenses and other current assets” on the Condensed Consolidated Balance Sheets was $5.8 as of September 30, 2016. The fair value of the assets held for sale were measured at fair value on a nonrecurring basis based on third-party offers to purchase the assets. The fair value measurement was categorized as Level 3, as the fair values utilize significant unobservable inputs. The following table summarizes the Level 3 activity.
Balance, September 30, 2016
$
10.1

Gain on assets held for sale
0.2

Cash received from sale of assets
(6.0
)
Balance, December 31, 2016
$
4.3

The carrying amounts reported on the Condensed Consolidated Balance Sheets for cash and cash equivalents, receivables and accounts payable approximate fair value because of the short maturities (less than 12 months) of these financial instruments.

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NOTE 13 — LEGAL PROCEEDINGS
In late 2008 and early 2009, some 22 class action lawsuits were filed in various federal courts against Michael Foods, Inc. and some 20 other defendants (producers of shell eggs and egg products, and egg industry organizations), alleging violations of federal and state antitrust laws in connection with the production and sale of shell eggs and egg products, and seeking unspecified damages. All cases were transferred to the Eastern District of Pennsylvania for coordinated and/or consolidated pretrial proceedings.
The case involves three plaintiff groups: (1) direct purchasers of eggs and egg products; (2) companies (primarily large grocery chains and food companies that purchase considerable quantities of eggs) that opted out of any eventual class and brought their own separate actions against the defendants (“opt-out plaintiffs”); and (3) indirect purchasers of shell eggs.
Motions related to class certification: In September of 2015, the court granted the motion of the direct purchaser plaintiffs to certify a shell-egg subclass, but denied their motion to certify an egg-products subclass. Also in September of 2015, the court denied the motion of the indirect purchaser plaintiffs for class certification. The indirect purchaser plaintiffs have filed an alternative motion for certification of an injunctive class, and the denial of their original class-certification motion is subject to appeal.
Motions for summary judgment: In September of 2016, the court granted the defendants’ motion to dismiss claims based on purchases of egg products, thereby limiting all claims to shell eggs. Certain of the egg products purchasers whose claims were dismissed have appealed to the Third Circuit Court of Appeals. Also in September of 2016, the court denied individual motions for summary judgment made by Michael Foods and three other defendants that had sought the dismissal of all claims against them. All four defendants moved to have denial of their summary judgment motions certified for immediate appeal to the Third Circuit Court of Appeals; there has been no ruling on those motions.
Settlements by Michael Foods: On December 8, 2016, Michael Foods reached an agreement to settle all class claims asserted against it by the direct purchaser plaintiffs for a payment of $75.0. The Company has paid such amount into escrow. This settlement is subject to approval by the court following notice to all class members. While the Company expects the settlement will receive the needed approval, there can be no assurance that the court will approve the agreement as proposed by the parties.
On January 19, 2017, Michael Foods entered into a settlement, the details of which are confidential, with the opt-out plaintiffs (excluding those opt-out plaintiffs whose claims relate primarily or exclusively to egg products; several of those plaintiffs are now appealing the dismissal of the egg products claims). Michael Foods has at all times denied liability in this matter, and neither settlement contains any admission of liability by Michael Foods.
During the three months ended December 31, 2016, the Company expensed $74.5, included in “Selling, general and administrative expenses” on the Condensed Consolidated Statements of Operations, related to these settlements. At December 31, 2016 and September 30, 2016, the Company had accruals related to these settlements of $28.0 and $28.5, respectively, were included in “Other current liabilities” on the Condensed Consolidated Balance Sheets.
Under current law, any settlement paid, including the settlement with the direct purchaser plaintiffs and the settlement with the opt-out plaintiffs, is deductible for federal income tax purposes.
These settlements do not affect (a) the claims of the opt-out plaintiffs who are appealing the dismissal of egg-products claims from the case or (b) the claims of the indirect purchaser plaintiffs. While the likelihood of a material adverse outcome in the egg antitrust litigation has been significantly reduced as a result of the settlements described above, there is still a possibility of an adverse outcome in the remaining portions of the case. At this time, however, we do not believe it is possible to estimate any loss in connection with these remaining portions of the egg antitrust litigation. Accordingly, we cannot predict what impact, if any, these remaining matters and any results from such matters could have on our future results of operations.

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NOTE 14 — LONG-TERM DEBT
Long-term debt as of the dates indicated consists of the following:
 
December 31,
2016
 
September 30, 2016
5.00% Senior Notes maturing August 2026
$
1,750.0

 
$
1,750.0

7.375% Senior Notes maturing February 2022
133.0

 
133.0

6.75% Senior Notes maturing December 2021
875.0

 
875.0

6.00% Senior Notes maturing December 2022
630.0

 
630.0

7.75% Senior Notes maturing March 2024
800.0

 
800.0

8.00% Senior Notes maturing July 2025
400.0

 
400.0

TEUs
7.4

 
11.0

4.57% 2012 Series Bond maturing September 2017
1.3

 
1.3

Capital leases
0.3

 
—

 
$
4,597.0

 
$
4,600.3

Less: Current Portion
(8.8
)
 
(12.3
)
Debt issuance costs, net
(51.6
)
 
(53.5
)
Plus: Unamortized premium
15.9

 
16.7

Total long-term debt
$
4,552.5

 
$
4,551.2

On January 29, 2014, the Company entered into a credit agreement (as subsequently amended, the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility with an aggregate principal value of $400.0 as well as an incremental term loan. The revolving credit facility has outstanding letters of credit of $12.2 which reduced the available borrowing capacity to $387.8 at December 31, 2016.
The Credit Agreement contains customary financial covenants including (a) a quarterly maximum senior secured leverage ratio of 3.00 to 1.00 and (b) a quarterly minimum interest coverage ratio of 1.75 to 1.00. The Credit Agreement permits the Company to incur additional unsecured debt only if its consolidated interest coverage ratio, calculated as provided in the Credit Agreement, would be greater than 2.00 to 1.00 after giving effect to such new debt.
The Credit Agreement provides for customary events of default, including material breach of representations and warranties, failure to make required payments, failure to comply with certain agreements or covenants, failure to pay, or default under, certain other material indebtedness, certain events of bankruptcy and insolvency, inability to pay debts, the occurrence of one or more unstayed or undischarged judgments in excess of $75.0 or attachments issued against a material part of the Company’s property, change in control, the invalidity of any loan document, the failure of the collateral documents to create a valid and perfected first priority lien and certain ERISA events. Upon the occurrence of an event of default, the maturity of the loans under the Credit Agreement may be accelerated and the agent and lenders under the Credit Agreement may exercise other rights and remedies available at law or under the loan documents, including with respect to the collateral and guarantees for the Company’s obligations under the Credit Agreement.
Debt Covenants
Under the terms of the Credit Agreement, the Company is required to comply with certain financial covenants consisting of ratios for quarterly maximum senior secured leverage and minimum interest coverage. As of December 31, 2016, the Company was in compliance with such financial covenants. The Company does not believe non-compliance is reasonably likely in the foreseeable future.
NOTE 15 — PENSION AND OTHER POSTRETIREMENT BENEFITS
The Company maintains qualified defined benefit plans in the United States and Canada for certain employees primarily within its Post Consumer Brands segment. Certain of the Company’s employees are eligible to participate in the Company’s qualified and supplemental noncontributory defined benefit pension plans and other postretirement benefit plans (partially subsidized retiree health and life insurance) or separate plans for Post Foods Canada Inc. Amounts for the Canadian plans are included in these disclosures and are not disclosed separately because they do not constitute a significant portion of the combined amounts. Effective January 1, 2011, benefit accruals for defined pension plans were frozen for all administrative employees and certain production employees.
The following tables provide the components of net periodic benefit cost (gain) for the plans.

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Pension Benefits
 
Three Months Ended
December 31,
 
2016
 
2015
Components of net periodic benefit cost
 
 
 
Service cost
$
1.0

 
$
1.0

Interest cost
0.6

 
0.6

Expected return on plan assets
(0.7
)
 
(0.7
)
Recognized net actuarial loss
0.4

 
0.3

Recognized prior service cost
—

 
0.1

Net periodic benefit cost
$
1.3

 
$
1.3


 
Other Benefits
 
Three Months Ended
December 31,
 
2016
 
2015
Components of net periodic benefit cost
 
 
 
Service cost
$
0.1

 
$
0.4

Interest cost
0.5

 
1.3

Recognized net actuarial loss
0.2

 
0.4

Recognized prior service credit
(1.2
)
 
(0.3
)
Net periodic benefit (gain) cost
$
(0.4
)
 
$
1.8

NOTE 16 — SHAREHOLDERS’ EQUITY
During the three months ended December 31, 2016, the Company repurchased 1.7 shares of its common stock at an average share price of $76.32 for a total cost of $133.1, which was recorded as “Treasury stock, at cost” on the Condensed Consolidated Balance Sheets.
NOTE 17 — SEGMENTS
The Company’s reportable segments are as follows:
•
Post Consumer Brands: primarily ready-to-eat (“RTE”) cereals;
•
Michael Foods Group: eggs, potatoes, cheese and pasta;
•
Active Nutrition: protein shakes, bars and powders and nutritional supplements; and
•
Private Brands: primarily peanut and other nut butters, dried fruit and nuts, and granola.
Management evaluates each segment’s performance based on its segment profit, which is its operating profit before impairment of property and intangible assets, facility closure related costs, restructuring expenses, losses on assets held for sale, gain on sale of business and other unallocated corporate income and expenses. The following tables present information about the Company’s reportable segments, including corresponding amounts for the prior year.

14
Table of Contents


 
 
 
Three Months Ended
December 31,
 
 
 
2016
 
2015
Net Sales
 
 
 
 
Post Consumer Brands
$
420.6

 
$
411.6

 
Michael Foods Group
539.8

 
586.4

 
Active Nutrition
153.9

 
115.8

 
Private Brands
135.6

 
135.6

 
Eliminations
(0.1
)
 
(0.6
)
 
Total
$
1,249.8

 
$
1,248.8

Segment Profit (Loss)
 
 
 
 
Post Consumer Brands
$
81.6

 
$
62.9

 
Michael Foods Group
(17.0
)
 
80.8

 
Active Nutrition
24.9

 
10.5

 
Private Brands
7.0

 
12.9

 
Total segment profit
96.5

 
167.1

General corporate expenses and other
20.3

 
34.2

Interest expense, net
72.9

 
77.8

Other (income) expense
(144.5
)
 
15.9

Earnings before income taxes
$
147.8

 
$
39.2

Depreciation and amortization
 
 
 
 
Post Consumer Brands
$
26.8

 
$
26.3

 
Michael Foods Group
36.7

 
34.4

 
Active Nutrition
6.2

 
6.2

 
Private Brands
6.5

 
6.2

 
 
Total segment depreciation and amortization
76.2

 
73.1

 
Corporate and accelerated depreciation
0.9

 
1.7

 
Total
$
77.1

 
$
74.8

 
 
 
 
 
 
 

Assets
December 31, 2016
 
September 30, 2016
 
Post Consumer Brands
$
3,376.9

 
$
3,387.0

 
Michael Foods Group
3,592.2

 
3,498.1

 
Active Nutrition
636.7

 
624.8

 
Private Brands
660.3

 
655.9

 
Corporate
921.7

 
1,194.8

 
Total
$
9,187.8

 
$
9,360.6


15
Table of Contents


NOTE 18 — CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF GUARANTORS
All of the Company’s senior notes (see Note 14) are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our existing 100% owned domestic subsidiaries and future domestic subsidiaries, the “Guarantors.” Our foreign subsidiaries, the “Non-Guarantors,” do not guarantee the senior notes. These guarantees are subject to release in limited circumstances (only upon the occurrence of certain customary conditions).
Set forth below are the condensed consolidating financial statements presenting the results of operations, financial position and cash flows of the Parent Company (Post Holdings, Inc.), the Guarantors on a combined basis, the Non-Guarantors on a combined basis and eliminations necessary to arrive at the information for the Company as reported, on a consolidated basis. The Condensed Consolidating Financial Statements present the Parent Company’s investments in subsidiaries using the equity method of accounting. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among the Parent Company, the Guarantor and the Non-Guarantor subsidiaries. Post Holdings, Inc. and all of its domestic subsidiaries form a single consolidated tax group for U.S. income tax purposes. Accordingly, income tax expense has been presented on the Guarantors’ Condensed Statements of Operations using the consolidated U.S. effective tax rate for the Company. Income tax payable and deferred tax items for the consolidated U.S. tax paying group reside solely on the Parent Company’s Condensed Consolidated Balance Sheets.



16
Table of Contents



POST HOLDINGS, INC.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Unaudited)
 
Three Months Ended December 31, 2016
 
Parent
 
 
 
Non-
 
 
 
 
 
Company
 
Guarantors
 
Guarantors
 
Eliminations
 
Total
Net Sales
$
—

 
$
1,134.4

 
$
128.8

 
$
(13.4
)
 
$
1,249.8

Cost of goods sold
—

 
773.7

 
110.3

 
(13.4
)
 
870.6

Gross Profit
—

 
360.7

 
18.5

 
—

 
379.2

Selling, general and administrative expenses
3.9

 
250.8

 
9.4

 
—

 
264.1

Amortization of intangible assets
—

 
36.6

 
2.3

 
—

 
38.9

Operating (Loss) Profit
(3.9
)
 
73.3

 
6.8

 
—

 
76.2

Interest expense, net
70.4

 
—

 
2.5

 
—

 
72.9

Other income
(144.5
)
 
—

 
—

 
—

 
(144.5
)
Earnings before Income Taxes
70.2

 
73.3

 
4.3

 
—

 
147.8

Income tax expense
23.9

 
25.2

 
1.1

 
—

 
50.2

Net Earnings before Equity in Subsidiaries
46.3

 
48.1

 
3.2

 
—

 
97.6

Equity earnings in subsidiaries
51.3

 
(0.2
)
 
—

 
(51.1
)
 
—

Net Earnings
$
97.6

 
$
47.9

 
$
3.2

 
$
(51.1
)
 
$
97.6

Total Comprehensive Income
$
95.3

 
$
47.5

 
$
4.7

 
$
(52.2
)
 
$
95.3

 
Three Months Ended December 31, 2015
 
Parent
 
 
 
Non-
 
 
 
 
 
Company
 
Guarantors
 
Guarantors
 
Eliminations
 
Total
Net Sales
$
—

 
$
1,122.2

 
$
142.3

 
$
(15.7
)
 
$
1,248.8

Cost of goods sold
—

 
782.4

 
119.6

 
(15.7
)
 
886.3

Gross Profit
—

 
339.8

 
22.7

 
—

 
362.5

Selling, general and administrative expenses
4.6

 
173.8

 
8.6

 
—

 
187.0

Amortization of intangible assets
—

 
35.8

 
2.3

 
—

 
38.1

Other operating expenses, net
—

 
4.5

 
—

 
—

 
4.5

Operating (Loss) Profit
(4.6
)
 
125.7

 
11.8

 
—

 
132.9

Interest expense (income), net
75.2

 
(0.2
)
 
2.8

 
—

 
77.8

Other expense
15.9

 
—

 
—

 
—

 
15.9

(Loss) Earnings before Income Taxes
(95.7
)
 
125.9

 
9.0

 
—

 
39.2

Income tax (benefit) expense
(33.4
)
 
44.5

 
2.6

 
—

 
13.7

Net (Loss) Earnings before Equity in Subsidiaries
(62.3
)
 
81.4

 
6.4

 
—

 
25.5

Equity earnings (loss) in subsidiaries
87.8

 
(0.5
)
 
—

 
(87.3
)
 
—

Net Earnings
$
25.5

 
$
80.9

 
$
6.4

 
$
(87.3
)
 
$
25.5

Total Comprehensive Income
$
16.0

 
$
81.2

 
$
1.4

 
$
(82.6
)
 
$
16.0



17
Table of Contents


POST HOLDINGS, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS (Unaudited)

 
December 31, 2016
 
Parent
 
 
 
Non-
 
 
 
 
 
Company
 
Guarantors
 
Guarantors
 
Eliminations
 
Total
 
 
ASSETS
Current Assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
814.9

 
$
36.2

 
$
30.0

 
$
(12.0
)
 
$
869.1

Restricted cash
1.0

 
11.3

 
0.7

 
—

 
13.0

Receivables, net
51.3

 
325.3

 
49.4

 
(15.6
)
 
410.4

Inventories
—

 
441.5

 
71.9

 
—

 
513.4

Prepaid expenses and other current assets
4.0

 
38.5

 
1.5

 
—

 
44.0

Total Current Assets
871.2

 
852.8

 
153.5

 
(27.6
)
 
1,849.9

Property, net
—

 
1,313.4

 
37.4

 
—

 
1,350.8

Goodwill
—

 
2,996.6

 
130.5

 
—

 
3,127.1

Other intangible assets, net
—

 
2,757.0

 
86.3

 
—

 
2,843.3

Intercompany receivable
1,556.7

 
—

 
—

 
(1,556.7
)
 
—

Intercompany notes receivable
145.8

 
—

 
—

 
(145.8
)
 
—

Investment in subsidiaries
6,022.8

 
20.1

 
—

 
(6,042.9
)
 
—

Other assets
9.3

 
7.4

 
—

 
—

 
16.7

Total Assets
$
8,605.8

 
$
7,947.3

 
$
407.7

 
$
(7,773.0
)
 
$
9,187.8

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
 
 
 
 
 
 
 
 
 
Current portion of long-term debt
$
7.4

 
$
1.4

 
$
—

 
$
—

 
$
8.8

Accounts payable
0.1

 
218.3

 
44.2

 
(27.6
)
 
235.0

Other current liabilities
85.3

 
201.9

 
11.2

 
—

 
298.4

Total Current Liabilities
92.8

 
421.6

 
55.4

 
(27.6
)
 
542.2

Long-term debt
4,552.3

 
0.2

 
—

 
—

 
4,552.5

Intercompany payable
—

 
1,546.3

 
10.4

 
(1,556.7
)
 
—

Intercompany notes payable
—

 
—

 
145.8

 
(145.8
)
 
—

Deferred income taxes
784.3

 
—

 
22.2

 
—

 
806.5

Other liabilities
192.4

 
100.9

 
9.3

 
—

 
302.6

Total Liabilities
5,621.8

 
2,069.0

 
243.1

 
(1,730.1
)
 
6,203.8

Total Shareholders’ Equity
2,984.0

 
5,878.3

 
164.6

 
(6,042.9
)
 
2,984.0

Total Liabilities and Shareholders’ Equity
$
8,605.8

 
$
7,947.3

 
$
407.7

 
$
(7,773.0
)
 
$
9,187.8



18
Table of Contents


 
September 30, 2016
 
Parent
 
 
 
Non-
 
 
 
 
 
Company
 
Guarantors
 
Guarantors
 
Eliminations
 
Total
 
 
ASSETS
Current Assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,116.2

 
$
14.1

 
$
28.6

 
$
(15.3
)
 
$
1,143.6

Restricted cash
1.0

 
6.7

 
0.7

 
—

 
8.4

Receivables, net
31.2

 
316.9

 
50.6

 
(13.7
)
 
385.0

Inventories
—

 
435.3

 
67.8

 
—

 
503.1

Prepaid expenses and other current assets
3.5

 
31.5

 
1.8

 
—

 
36.8

Total Current Assets
1,151.9

 
804.5

 
149.5

 
(29.0
)
 
2,076.9

Property, net
—

 
1,314.9

 
39.5

 
—

 
1,354.4

Goodwill
—

 
2,949.0

 
130.7

 
—

 
3,079.7

Other intangible assets, net
—

 
2,745.0

 
88.7

 
—

 
2,833.7

Intercompany receivable
1,519.5

 
—

 
—

 
(1,519.5
)
 
—

Intercompany notes receivable
149.1

 
—

 
—

 
(149.1
)
 
—

Investment in subsidiaries
5,843.6

 
25.6

 
—

 
(5,869.2
)
 
—

Other assets
9.3

 
6.6

 
—

 
—

 
15.9

Total Assets
$
8,673.4

 
$
7,845.6

 
$
408.4

 
$
(7,566.8
)
 
$
9,360.6

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
 
 
 
 
 
 
 
 
 
Current portion of long-term debt
$
11.0

 
$
1.3

 
$
—

 
$
—

 
$
12.3

Accounts payable
0.1

 
252.9

 
40.4

 
(29.0
)
 
264.4

Other current liabilities
61.4

 
278.8

 
17.1

 
—

 
357.3

Total Current Liabilities
72.5

 
533.0

 
57.5

 
(29.0
)
 
634.0

Long-term debt
4,551.2

 
—

 
—

 
—

 
4,551.2

Intercompany payable
—

 
1,509.9

 
9.6

 
(1,519.5
)
 
—

Intercompany notes payable
—

 
—

 
149.1

 
(149.1
)
 
—

Deferred income taxes
703.8

 
—

 
22.7

 
—

 
726.5

Other liabilities
337.3

 
93.5

 
9.5

 
—

 
440.3

Total Liabilities
5,664.8

 
2,136.4

 
248.4

 
(1,697.6
)
 
6,352.0

Total Shareholders’ Equity
3,008.6

 
5,709.2

 
160.0

 
(5,869.2
)
 
3,008.6

Total Liabilities and Shareholders’ Equity
$
8,673.4

 
$
7,845.6

 
$
408.4

 
$
(7,566.8
)
 
$
9,360.6

















19
Table of Contents


POST HOLDINGS, INC.
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Unaudited)

 
Three Months Ended December 31, 2016
 
Parent
 
 
 
Non-
 
 
 
 
 
Company
 
Guarantors
 
Guarantors
 
Eliminations
 
Total
Net Cash (Used In) Provided by Operating Activities
$
(46.0
)
 
$
16.0

 
$
3.1

 
$
3.3

 
$
(23.6
)
 
 
 
 
 
 
 
 
 
 
Cash Flows from Investing Activities
 
 
 
 
 
 
 
 
 
Business acquisitions, net of cash acquired
—

 
(91.4
)
 
—

 
—

 
(91.4
)
Additions to property
—

 
(30.8
)
 
(1.0
)
 
—

 
(31.8
)
Restricted cash
—

 
(4.6
)
 
—

 
—

 
(4.6
)
Proceeds from sale of property and assets held for sale
—

 
6.0

 
—

 
—

 
6.0

Capitalization of subsidiaries
(126.9
)
 
—

 
—

 
126.9

 
—

Net Cash (Used in) Investing Activities
(126.9
)
 
(120.8
)
 
(1.0
)
 
126.9

 
(121.8
)
 
 
 
 
 
 
 
 
 
 
Cash Flows from Financing Activities
 
 
 
 
 
 
 
 
 
Repayments of long-term debt
(3.6
)
 
—

 
—

 
—

 
(3.6
)
Payment of preferred stock dividend
(3.4
)
 
—

 
—

 
—

 
(3.4
)
Purchases of treasury stock
(133.1
)
 
—

 
—

 
—

 
(133.1
)
Proceeds from exercise of stock awards
9.4

 
—

 
—

 
—

 
9.4

Proceeds from Parent capitalization
—

 
126.9

 
—

 
(126.9
)
 
—

Other, net
2.3

 
—

 
—

 
—

 
2.3

Net Cash (Used in) Provided by Financing Activities
(128.4
)
 
126.9

 
—

 
(126.9
)
 
(128.4
)
Effect of exchange rate changes on cash and cash equivalents
—

 
—

 
(0.7
)
 
—

 
(0.7
)
 
 
 
 
 
 
 
 
 
 
Net (Decrease) Increase in Cash and Cash Equivalents
(301.3
)
 
22.1

 
1.4

 
3.3

 
(274.5
)
Cash and Cash Equivalents, Beginning of Year
1,116.2

 
14.1

 
28.6

 
(15.3