Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2022 were $1.5 billion, representing a 22% increase year-over-year, benefiting from approximately $63 million in incremental sales from recent acquisitions, pricing actions, and volume demand recovery [18][19] - Adjusted EBITDA for the quarter was $251 million, with a year-over-year increase in net sales driven by pricing actions and volume recovery [18][19] - Percentage margins declined year-over-year primarily due to the mechanics of the grain-based pricing model in foodservice and a mix shift in the overall business portfolio [6][16] Business Line Data and Key Metrics Changes - **Post Consumer Brands**: Net sales and volumes increased by 23% and 14% respectively, with adjusted EBITDA decreasing by 1.3% due to ongoing supply chain challenges and increased employee incentive costs [20] - **Weetabix**: Net sales increased by 1% despite a significant foreign currency translation headwind, with volumes declining by 6% excluding the benefit from the UFIT acquisition [21] - **Foodservice**: Net sales grew by 33% and volumes by 6%, with adjusted EBITDA increasing by 45% due to volume recovery and improved average net pricing [22] - **Refrigerated Retail**: Net sales increased by 12%, while volumes decreased by 3%. Adjusted EBITDA decreased to $30 million, pressured by dairy costs and avian influenza impacts [23] Market Data and Key Metrics Changes - North American cereal business saw branded share reach 20% and total private label reach 6.7%, with strong consumption in key brands [9] - The foodservice segment is expected to exceed pre-pandemic profit levels, with ongoing improvements in supply chain fulfillment [10] Company Strategy and Development Direction - The company is focused on M&A opportunities, having completed six tuck-in acquisitions in the last two years, and is exploring combinations for a SPAC despite a weak IPO market [14][15] - The company aims to improve supply chain reliability and productivity, expecting gradual improvements rather than a binary resolution [8][50] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2023 with momentum, citing improvements in supply chains and the potential for better margins as controllable cost management improves [16][50] - The company anticipates continued inflation and pricing actions, with a focus on maintaining effective throughput in supply chains [6][32] Other Important Information - The company repurchased approximately 1.9 million shares at an average price of $76.43 per share in Q3 2022, with a total of 3.8 million shares repurchased year-to-date [24] - Net leverage at the end of Q3 was approximately 6.2x, with expectations to reduce leverage by approximately half a turn through the intended debt-for-equity exchange of retained ownership in BellRing Brands [25] Q&A Session Summary Question: Sustainability of organic growth in Post Consumer Brands - Management noted that pricing is a significant component, with good volume growth across the value portfolio and additional distribution gains [32] Question: Guidance for fiscal year 2023 - Management indicated no reason to believe differently from previous expectations but emphasized the need for planning regarding inventory and productive capacity [34] Question: Profitability in Foodservice division - Management stated that avian influenza contributed approximately $10 million in the quarter, with expectations for continued growth in profitability [43] Question: Challenges in Refrigerated Retail division - Management acknowledged that avian influenza costs impacted margins, but emphasized the importance of third-party manufacturers in the supply chain [45] Question: Pricing net of commodities and supply chain friction costs - Management expects to have priced for inflation by the beginning of 2023, with a gradual improvement in supply chain execution anticipated [50] Question: Impact of workforce changes on supply chain - Management highlighted the need for diligent training and development due to a less experienced workforce, with a focus on asset reliability and maintenance in capital expenditures [58]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company reported increased net earnings for Q3 and nine months FY2022, primarily driven by a significant gain on its BellRing investment and favorable swap adjustments, despite operational profit declines from cost inflation and higher corporate expenses [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2022 net sales increased by **22.2%** to **$1,524.9 million**, but operating profit declined **31.9%** to **$105.5 million**, while net earnings swung to a **$170.2 million** profit due to investment gains and swap adjustments Q3 FY2022 vs Q3 FY2021 Statement of Operations (in millions, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,524.9 | $1,247.5 | 22.2% | | **Gross Profit** | $364.7 | $368.1 | -0.9% | | **Operating Profit** | $105.5 | $155.0 | -31.9% | | **Net Earnings (Loss)** | $170.2 | $(54.3) | N/A | | **Diluted EPS from Continuing Operations** | $2.72 | $(1.30) | N/A | Nine Months FY2022 vs FY2021 Statement of Operations (in millions, except per share data) | Metric | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $4,272.1 | $3,624.8 | 17.9% | | **Gross Profit** | $1,074.9 | $1,095.6 | -1.9% | | **Operating Profit** | $283.7 | $403.0 | -29.6% | | **Net Earnings** | $672.7 | $136.8 | 391.7% | | **Diluted EPS from Continuing Operations** | $10.47 | $1.38 | 658.7% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$11.56 billion** as of June 30, 2022, primarily due to the BellRing spin-off, while total liabilities also decreased to **$7.85 billion** and shareholders' equity increased to **$3.41 billion** Balance Sheet Summary (in millions) | Account | June 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $2,291.0 | $2,086.1 | | **Total Assets** | $11,560.2 | $12,414.7 | | **Total Current Liabilities** | $757.7 | $1,049.2 | | **Long-term debt** | $6,032.4 | $6,441.6 | | **Total Liabilities** | $7,848.1 | $9,355.5 | | **Total Shareholders' Equity** | $3,406.7 | $2,754.2 | - The balance sheet reflects the removal of assets and liabilities related to discontinued operations (BellRing), which amounted to **$385.7 million** in current assets and **$248.9 million** in current liabilities as of September 30, 2021[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$218.1 million** for the nine months ended June 30, 2022, while investing activities used **$133.1 million** and financing activities used **$635.9 million**, driven by debt and share repurchases Cash Flow Summary - Nine Months Ended June 30 (in millions) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $218.1 | $395.3 | | **Net Cash Used in Investing Activities** | $(133.1) | $(737.4) | | **Net Cash Used in Financing Activities** | $(635.9) | $(75.2) | | **Net Decrease in Cash** | $(556.7) | $(411.1) | - Significant financing activities in the first nine months of 2022 included **$1,340.0 million** in debt proceeds, **$904.4 million** in debt repayments, **$343.0 million** in treasury stock purchases, and a net distribution of **$547.2 million** to BellRing Brands, Inc[13](index=13&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate actions, including the **80.1%** BellRing spin-off and its reclassification as discontinued operations, the **14.2%** retained equity stake, and the acquisition of Lacka Foods for **$32.2 million** - On March 10, 2022, the company completed the distribution of **80.1%** of its interest in BellRing Brands, Inc. to shareholders, with historical results now presented as discontinued operations[17](index=17&type=chunk) - The company's remaining **14.2%** equity interest in BellRing was remeasured to a fair value of **$482.8 million** as of June 30, 2022, resulting in a recognized gain of **$482.8 million** for the nine-month period[62](index=62&type=chunk) - On April 5, 2022, the company acquired Lacka Foods Limited for approximately **$32.2 million**, reported within the Weetabix segment[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **22%** increase in Q3 net sales, offset by a **32%** decline in operating profit due to cost inflation and higher corporate expenses, detailing segment performance, impacts of external factors, and liquidity management - The BellRing Spin-off, completed on March 10, 2022, represented a strategic shift, and BellRing's historical results are now presented as discontinued operations[161](index=161&type=chunk) - The business has been negatively impacted by external factors including labor shortages, input and freight inflation, supply chain disruptions from the COVID-19 pandemic, increased energy and commodity costs due to the conflict in Ukraine, and higher egg prices resulting from avian influenza[176](index=176&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk) Overall Financial Performance Summary (in millions) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,524.9 | $1,247.5 | 22% | | **Operating Profit** | $105.5 | $155.0 | (32)% | | **Net Earnings (Loss)** | $170.2 | $(54.3) | 413% | [Results of Operations](index=37&type=section&id=RESULTS%20OF%20OPERATIONS) Q3 2022 net sales increased **22%** to **$1.5 billion** and nine-month sales grew **18%** to **$4.3 billion**, but operating profit declined **32%** in Q3 and **30%** over nine months due to higher corporate expenses and lower segment profit, despite significant gains from interest rate swaps and the BellRing investment - Net sales increased by **$277.4 million (22%)** in Q3 and **$647.3 million (18%)** in the nine-month period, driven by growth across all segments and contributions from recent acquisitions[182](index=182&type=chunk)[183](index=183&type=chunk) - Operating profit decreased by **$49.5 million (32%)** in Q3 and **$119.3 million (30%)** in the nine-month period, primarily due to increased general corporate expenses and lower segment profit in most retail-facing segments[184](index=184&type=chunk)[185](index=185&type=chunk) - The company recognized a net gain of **$131.6 million** in Q3 and **$222.9 million** in the nine-month period from mark-to-market adjustments on interest rate swaps, compared to a loss and a smaller gain in the respective prior-year periods[193](index=193&type=chunk)[194](index=194&type=chunk) - A gain of **$35.1 million** in Q3 and **$482.8 million** in the nine-month period was recorded on the company's remaining **14.2%** investment in BellRing[196](index=196&type=chunk) [Segment Results](index=39&type=section&id=SEGMENT%20RESULTS) In Q3 2022, Foodservice profit increased **65%** due to pricing and volume recovery, while Post Consumer Brands' profit fell **7%** despite **23%** sales growth, and Weetabix and Refrigerated Retail profits also declined due to inflation and higher costs Q3 2022 Segment Performance (in millions) | Segment | Net Sales | % Change (YoY) | Segment Profit | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | **Post Consumer Brands** | $574.7 | 23% | $81.8 | (7)% | | **Weetabix** | $124.9 | 1% | $27.8 | (3)% | | **Foodservice** | $579.0 | 33% | $45.9 | 65% | | **Refrigerated Retail** | $246.4 | 12% | $10.4 | (27)% | - Post Consumer Brands' profit was negatively impacted by **$16.6 million** in raw material inflation, **$11.1 million** in increased freight costs, and **$10.8 million** in higher manufacturing costs[204](index=204&type=chunk) - Foodservice sales and profit growth were driven by higher average net selling prices, partly due to passing on higher raw material costs from grain markets and avian influenza, and volume recovery from the COVID-19 pandemic[211](index=211&type=chunk)[213](index=213&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity was shaped by significant capital allocation, including debt transactions related to the BellRing spin-off, new senior note issuance, and repurchases, with cash from operations decreasing to **$219.7 million** but sufficient liquidity maintained through cash and credit facilities - Key financing activities in the nine months ended June 30, 2022 included repurchasing **3.8 million** shares for **$339.0 million**, issuing **$500.0 million** of **5.50%** senior notes, and redeeming **$840.0 million** of **5.75%** senior notes[228](index=228&type=chunk) - The BellRing spin-off involved a complex debt-for-debt exchange where Post borrowed **$840.0 million** in a short-term loan, received **$840.0 million** in BellRing notes, and used those notes to repay the loan[228](index=228&type=chunk) - Cash provided by continuing operations decreased by **$29.7 million** compared to the prior year, driven by unfavorable changes in inventory pricing and timing of receivables[236](index=236&type=chunk) - As of June 30, 2022, the company was not required to comply with its secured net leverage ratio covenant as its outstanding revolving credit obligations did not exceed the **30%** threshold[242](index=242&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from commodity prices, foreign currency, and interest rates, managing them with derivatives; a **10%** adverse change in commodity prices would impact derivatives by **$6 million**, and a **10%** adverse change in interest rates would decrease interest rate swap fair value by **$38 million** - The company is exposed to commodity price risk for inputs like natural gas, soybean oil, corn, and wheat; a hypothetical **10%** adverse price change would decrease the fair value of its commodity derivatives portfolio by about **$6 million** as of June 30, 2022[256](index=256&type=chunk) - As of June 30, 2022, **$6.03 billion** of the company's total debt was fixed-rate, with a weighted-average interest rate of **5.0%**[259](index=259&type=chunk) - The company held interest rate swaps with a notional value of **$1,049.3 million**; a hypothetical **10%** adverse change in interest rates would decrease the fair value of these swaps by approximately **$38 million** as of June 30, 2022[261](index=261&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2022, with no significant changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[262](index=262&type=chunk) - No significant changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2022[263](index=263&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 16, primarily discussing antitrust litigation against Michael Foods, with no environmental proceedings meeting the **$1.0 million** disclosure threshold - Information regarding legal proceedings is incorporated by reference from Note 16 of the financial statements[264](index=264&type=chunk) - The company has elected a disclosure threshold of **$1.0 million** for environmental proceedings involving a governmental entity and reports no such proceedings for the period[265](index=265&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report for fiscal year 2021 and the Q2 2022 Form 10-Q have occurred - There have been no material changes to the risk factors previously disclosed in the Annual Report for fiscal year 2021 and the Q2 2022 10-Q[266](index=266&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 FY2022, Post Holdings repurchased **1,907,301** shares of common stock at an average price of **$76.43** per share, with **$145.8 million** remaining available under the repurchase authorization Common Stock Repurchases (Q3 FY2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2022 | 849,077 | $74.10 | | May 2022 | 1,034,539 | $78.25 | | June 2022 | 23,685 | $80.54 | | **Total** | **1,907,301** | **$76.43** | - As of June 30, 2022, **$145.8 million** remained available under the company's stock repurchase authorization, which is effective through November 20, 2023[267](index=267&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including agreements related to the BellRing spin-off, corporate governance documents, debt indentures, and Sarbanes-Oxley certifications - Exhibits filed include agreements related to the BellRing spin-off, corporate governance documents, debt indentures, and Sarbanes-Oxley certifications[269](index=269&type=chunk)

Post Holdings, Inc. (NYSE:POST) Q2 2022 Earnings Conference Call May 6, 2022 9:00 AM ET Company Participants Jennifer Meyer - IR Robert Vitale - President, CEO Jeff Zadoks – CFO Conference Call Participants Andrew Lazar - Barclays David Palmer - Evercore ISI Chris Growe - Stifel Michael Lavery - Piper Sandler Jason English - Goldman Sachs Bill Chappell - Truist Securities Ken Zaslow - Bank of Montreal Operator Welcome to the Post Holdings Second Quarter 2022 Earnings Conference Call and Webcast. Hosting the ...

Spin-off and Acquisitions - The BellRing Spin-off was completed on March 10, 2022, resulting in Post Holdings owning approximately 14.2% of BellRing Common Stock and shareholders receiving 1.267788 shares of BellRing for each share of Post common stock held [158][161][163]. - The company acquired the private label RTE cereal business from TreeHouse Foods on June 1, 2021, and the Egg Beaters brand on May 27, 2021, both contributing to the Post Consumer Brands and Refrigerated Retail segments [174]. - The company completed the sale of Willamette Egg Farms on December 1, 2021, prior to which its results were included in the Refrigerated Retail segment [171]. Financial Performance - Net sales increased by $208.2 million, or 17%, for the three months ended March 31, 2022, compared to the same period last year, driven by growth across all segments and contributions from prior year acquisitions [183]. - Operating profit decreased by $29.5 million, or 23%, for the three months ended March 31, 2022, due to increased corporate expenses and lower segment profit in Refrigerated Retail and Post Consumer Brands [185]. - Net earnings increased by $413.4 million, or 376%, for the three months ended March 31, 2022, compared to the same period last year [181]. - Net sales increased by $369.9 million, or 16%, for the six months ended March 31, 2022, attributed to growth in Foodservice, Post Consumer Brands, and Weetabix segments [184]. - Operating profit decreased by $69.8 million, or 28%, for the six months ended March 31, 2022, due to increased corporate expenses and lower segment profit in Refrigerated Retail [186]. Segment Performance - Net sales for the Post Consumer Brands segment increased by $93.2 million, or 19%, for the three months ended March 31, 2022, driven by prior year acquisitions and increased average net selling prices [201]. - Segment profit for the Post Consumer Brands segment decreased by $12.3 million, or 13%, for the three months ended March 31, 2022, primarily due to raw material inflation and higher manufacturing costs [203]. - Net sales for the Foodservice segment increased by $82.7 million, or 22%, for the three months ended March 31, 2022, positively impacted by the acquisition of Almark and higher egg product sales [209]. - Segment profit for the Foodservice segment increased by $11.2 million, or 127%, for the three months ended March 31, 2022, driven by higher net sales despite raw material inflation [212]. - Net sales for the Refrigerated Retail segment increased by $28.1 million, or 12%, for the three months ended March 31, 2022, influenced by prior year acquisitions and price increases [214]. Inflation and Cost Pressures - Inflationary pressures from raw materials, packaging, wages, and freight have negatively impacted profit margins across all segments, prompting the company to take pricing actions [176]. - The COVID-19 pandemic has caused ongoing economic disruptions, impacting supply chains and resulting in missed sales and higher manufacturing costs [176]. - Segment profit decreased by $27.3 million, or 47%, for the six months ended March 31, 2022, primarily due to increased manufacturing costs of $20.6 million and raw material inflation of $13.7 million [217]. Cash Flow and Financing Activities - Cash provided by operating activities for the six months ended March 31, 2022, increased by $55.1 million compared to the prior year period, driven by favorable changes in trade accounts payables and lower tax payments [232]. - Cash used in investing activities for the six months ended March 31, 2022, was $43.0 million, primarily due to capital expenditures of $102.5 million, partially offset by proceeds from the sale of a business and assets held for sale totaling $50.5 million [233]. - Cash used in financing activities for the six months ended March 31, 2022 was $276.9 million, compared to $273.3 million for the same period in 2021 [235][237]. Debt and Interest Expenses - Interest expense, net increased by $3.7 million, or 4%, for the three months ended March 31, 2022, primarily due to the issuance of senior notes [187]. - The company recognized a loss of $19.3 million related to the partial redemption of senior notes during the three and six months ended March 31, 2022 [191]. - The company repaid approximately 65% of its outstanding 5.75% senior notes using proceeds from an incremental term loan of $840.0 million [227]. Tax and Equity Interests - The effective income tax rate was 3.7% for the three months ended March 31, 2022, significantly lower than the 19.8% for the same period in 2021, primarily due to a non-cash mark-to-market adjustment on the investment in BellRing [196]. - A gain of $447.7 million was recorded related to the company's 14.2% equity interest in BellRing for both the three and six months ended March 31, 2022 [195]. Corporate Expenses and Risks - General corporate expenses increased by $62.2 million, or 215%, for the six months ended March 31, 2022, driven by separation-related expenses of $28.4 million and increased net losses related to mark-to-market adjustments of $19.8 million [220]. - The company faces risks related to supply chain disruptions, high leverage, and potential impacts from the COVID-19 pandemic [246].

Financial Data and Key Metrics Changes - Consolidated net sales for Q1 2022 were $1.6 billion, representing a 13% increase, benefiting from approximately $98 million from recent acquisitions and pricing actions across segments [24][25] - Adjusted EBITDA for the quarter was $263 million, with higher manufacturing input and freight costs continuing to pressure margins [24][25] - Net leverage at the end of Q1 was approximately 6.4 times, with expectations to deleverage between 3 quarters post-separation of BellRing, reducing gross debt by $1.3 billion to $1.6 billion [36][37] Business Segment Data and Key Metrics Changes - **Post Consumer Brands**: Net sales and volumes increased by 14% and 8% respectively; however, excluding acquisitions, net sales and volumes declined by 1% and 9% due to softness in value and private label cereal products [26][27] - **Foodservice**: Net sales grew by 24% and volumes by 13%, driven by higher away-from-home demand; however, total segment volumes remained below pre-pandemic levels [30][31] - **Refrigerator Retail**: Net sales increased by 4%, while volumes decreased by 5%; adjusted EBITDA decreased to approximately $36 million due to lower volumes and increased costs [32][33] - **BellRing**: Net sales increased by 8.5%, with Premier Protein and Dymatize benefiting from pricing actions, although higher raw material and freight costs pressured gross margins [34][35] Market Data and Key Metrics Changes - U.S. Cereal consumption for branded products is running nearly 2% ahead of pre-COVID levels, with market share just shy of 20% [14] - The Foodservice segment is expected to recover to pre-pandemic profit levels in 2023, despite experiencing soft demand due to the Omicron variant [16][21] Company Strategy and Development Direction - The company is actively exploring acquisition opportunities while maintaining a cautious approach to ensure execution is not jeopardized in a challenging year [20] - The separation of BellRing is expected to be completed by the end of March, with a distribution of approximately $400 million in cash to BellRing stockholders [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging environment with cost inflation running ahead of pricing actions, but remains optimistic about the ability to manage controllables and adapt to changes [10][13] - The company expects significant improvement in the second half of the year due to price realization, supply chain execution improvements, and volume recovery in Foodservice [21][22] Other Important Information - The company has taken nearly $150 million in annualized pricing actions, with the majority beginning in Q2 [15] - Cash flow generated from operations in the quarter was $106 million, with working capital slightly increasing due to decreased payables and increased inventories [36] Q&A Session Summary Question: Has inflation peaked and how are labor expectations playing out? - Management indicated that the environment remains unsettled, but there is a strong ability to get pricing where needed, with marginal improvements in labor and supply chain situations [41][44] Question: What is the outlook for the value segment and private label? - Management noted a flattening of the value segment in Post Consumer Brands, with improved volumes in private label businesses, although margins remain under pressure [45][48] Question: What is driving the expected deceleration at BellRing in Q2? - Management attributed the deceleration to normal seasonality, which was already factored into prior guidance [49] Question: What actions are being taken to ease labor and transportation issues? - Management is focusing on labor retention strategies and improving recruitment, while transportation remains a more challenging area due to market conditions [84][85] Question: What is the long-term growth outlook for each business segment? - Management views the cereal market as steady with slight growth potential, expresses confidence in the Refrigerated Retail segment, and anticipates substantial growth in Foodservice and BellRing post-pandemic [88][90][91]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q1 FY2022 financials report a **$20.8 million** net loss, a significant decline from **$81.2 million** net earnings year-over-year, with total assets at **$12.61 billion** and liabilities at **$9.74 billion** [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Financial Metric | Three Months Ended Dec 31, 2021 (in millions) | Three Months Ended Dec 31, 2020 (in millions) | | :--- | :--- | :--- | | **Net Sales** | **$1,643.7** | **$1,458.0** | | Gross Profit | $424.0 | $455.4 | | Operating Profit | $128.7 | $166.3 | | Net (Loss) Earnings | **$(20.8)** | **$81.2** | | Diluted (Loss) Earnings per Share | **$(0.25)** | **$1.21** | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Balance Sheet Item | Dec 31, 2021 (in millions) | Sep 30, 2021 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | **$2,435.0** | **$2,086.1** | | Total Assets | $12,612.9 | $12,414.7 | | **Total Current Liabilities** | **$941.4** | **$1,049.2** | | Long-term debt | $7,429.0 | $6,922.8 | | Total Liabilities | $9,736.3 | $9,355.5 | | **Total Shareholders' Equity** | **$2,571.6** | **$2,754.2** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended Dec 31, 2021 (in millions) | Three Months Ended Dec 31, 2020 (in millions) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | **$106.1** | **$114.5** | | Net Cash Provided by (Used in) Investing Activities | $3.2 | $(41.5) | | Net Cash Provided by (Used in) Financing Activities | $227.4 | $(154.5) | | **Net Increase (Decrease) in Cash** | **$335.9** | **$(74.9)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant accounting policies, recent transactions, and financial instruments, including the planned BellRing Brands separation, fiscal 2021 acquisitions, Willamette Egg Farms divestiture, ongoing antitrust litigation, and a new **$500 million** senior note issuance - Post entered an agreement in October 2021 to distribute a significant portion of its BellRing Brands ownership to shareholders, incurring **$4.4 million** in separation-related expenses during the quarter[37](index=37&type=chunk) - The company recorded an equity method loss of **$18.5 million** for the quarter, net of tax, for its **60.5%** common equity interest in 8th Avenue Food & Provisions, Inc[38](index=38&type=chunk)[40](index=40&type=chunk) - During fiscal 2021, the company completed four acquisitions: the private label RTE cereal business, Egg Beaters brand, Almark Foods business, and Peter Pan nut butter brand[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - On December 1, 2021, the company sold its Willamette Egg Farms business, resulting in a loss on sale of **$6.7 million**[56](index=56&type=chunk) - The company remains a defendant in antitrust litigation related to egg product purchases by three opt-out plaintiffs, with **$3.5 million** accrued for this matter as of December 31, 2021[119](index=119&type=chunk)[121](index=121&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net sales increased **13%** to **$1.64 billion**, while operating profit fell **23%** to **$128.7 million** due to higher corporate expenses and segment profit declines, as the company navigates significant supply chain disruptions and inflation [Overview](index=29&type=section&id=Overview) The company operates five segments and is significantly impacted by COVID-19 related labor shortages, input and freight inflation, and supply chain disruptions, alongside key activities like the announced BellRing Brands separation and fiscal 2021 acquisitions - The company announced a plan to distribute a significant portion of its BellRing Brands ownership to shareholders, expected to close in the first calendar quarter of 2022[136](index=136&type=chunk) - The company faces significant supply chain pressures across all segments, including labor shortages, input and freight inflation, and availability issues, leading to missed sales, higher manufacturing costs, and downward pressure on profit margins[149](index=149&type=chunk) - The Foodservice segment's recovery depends on mobility restrictions and supply chain navigation, with pre-pandemic profitability expected in fiscal 2023, while Refrigerated Retail volume growth is constrained by supply chain performance[150](index=150&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) For Q1 FY2022, net sales rose **13%** to **$1.64 billion**, operating profit declined **23%** to **$128.7 million**, and the company reported a net loss of **$20.8 million** compared to **$81.2 million** net earnings in the prior year, largely due to a **$78.5 million** unfavorable swing in interest rate swaps | Metric (in millions) | Q1 FY2022 | Q1 FY2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | **$1,643.7** | **$1,458.0** | **$185.7** | **13%** | | Operating Profit | $128.7 | $166.3 | $(37.6) | (23)% | | **Net (Loss) Earnings** | **$(20.8)** | **$81.2** | **$(102.0)** | **(126)%** | - Operating profit decreased by **$37.6 million (23%)** primarily due to increased general corporate expenses and lower segment profit in Refrigerated Retail and Weetabix[158](index=158&type=chunk) - A significant factor in the net loss was a **$78.5 million** increase in 'Expense on swaps, net', reflecting mark-to-market adjustments on non-designated interest rate swaps[161](index=161&type=chunk) [Segment Results](index=33&type=section&id=Segment%20Results) Segment performance was mixed: Post Consumer Brands sales grew **14%** (acquisitions), Weetabix sales rose **4%** (pricing/currency), Foodservice sales increased **24%** (demand recovery), Refrigerated Retail sales increased **4%** (acquisitions) but profit fell **60%** (supply/inflation), and BellRing Brands sales grew **9%** (pricing/supply constraints) | Segment | Net Sales Q1 FY22 (in millions) | Net Sales Q1 FY21 (in millions) | % Change | Segment Profit Q1 FY22 (in millions) | Segment Profit Q1 FY21 (in millions) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Post Consumer Brands | $507.3 | $445.0 | 14% | $71.3 | $70.5 | 1% | | Weetabix | $118.6 | $113.5 | 4% | $27.2 | $28.1 | (3)% | | Foodservice | $438.6 | $354.5 | 24% | $15.1 | $10.8 | 40% | | Refrigerated Retail | $273.4 | $263.1 | 4% | $13.6 | $33.7 | (60)% | | BellRing Brands | $306.5 | $282.4 | 9% | $50.6 | $47.8 | 6% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow was **$106.1 million**, slightly down year-over-year, while financing activities provided **$227.4 million**, primarily from a new **$500 million** senior note issuance, with major cash uses including **$159.0 million** for share repurchases and **$90.1 million** for BellRing debt repayment - Key financing activities included the issuance of **$500.0 million** in additional **5.50%** senior notes, repayment of **$90.1 million** on the BellRing Term B Facility, repurchase of **1.5 million** shares of Post common stock for **$155.0 million**, and repurchase of **0.8 million** shares of BellRing Class A Common Stock for **$18.1 million**[184](index=184&type=chunk)[185](index=185&type=chunk) | Cash Flow Activity (in millions) | Q1 FY2022 | Q1 FY2021 | | :--- | :--- | :--- | | Operating activities | $106.1 | $114.5 | | Investing activities | $3.2 | $(41.5) | | Financing activities | $227.4 | $(154.5) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from commodity prices, foreign currency, and interest rates, exacerbated by COVID-19, using derivatives to manage exposures, with **$7.47 billion** in outstanding debt as of December 31, 2021, and a hypothetical **10%** adverse change in commodity prices decreasing derivative value by approximately **$14 million** - The company is exposed to commodity price risk and uses derivatives to hedge, where a hypothetical **10%** adverse change in principal hedged commodity prices would decrease the fair value of its derivatives portfolio by approximately **$14 million** as of December 31, 2021[212](index=212&type=chunk) - As of December 31, 2021, the company had **$7.47 billion** in outstanding debt, with **$6.94 billion** being fixed-rate at a weighted-average interest rate of **5.1%**, and interest rate swaps with a notional value of **$2.1 billion**[214](index=214&type=chunk)[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2021, with no significant changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period, providing reasonable assurance of achieving their objectives[217](index=217&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing antitrust litigation concerning egg products with claims from three opt-out plaintiffs, for which **$3.5 million** has been accrued, while other legal proceedings are not expected to have a material impact - The company remains a defendant in antitrust litigation related to egg products, with claims from three opt-out plaintiffs still outstanding[119](index=119&type=chunk)[219](index=219&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended September 30, 2021, though these risks may be heightened by the COVID-19 pandemic - No material changes have been made to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2021[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 FY2022, the company repurchased approximately **1.5 million** shares of common stock for **$155.0 million**, and in November 2021, the Board approved a new **$400 million** share repurchase authorization, with **$329.7 million** remaining available at quarter-end | Period (2021) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | October | 463,908 | $106.01 | | November | 709,192 | $103.29 | | December | 326,198 | $99.82 | | **Total** | **1,499,298** | **$103.37** | - On November 17, 2021, the Board approved a new **$400 million** share repurchase authorization, effective November 20, 2021, and expiring on November 20, 2023[223](index=223&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with or incorporated by reference into the Form 10-Q, including agreements, corporate governance documents, and certifications

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 10-K _______________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 1-35305 ______________________ POST HOLDINGS, INC. (Exact name of registrant as specified in its charte ...

Post Holdings, Inc. (NYSE:POST) Q4 2021 Earnings Conference Call November 19, 2021 9:00 AM ET Company Participants Jennifer Meyer - Investor Relations Rob Vitale - President and Chief Executive Officer Jeff Zadoks - Executive Vice President and Chief Financial Officer Conference Call Participants Chris Growe - Stifel Andrew Lazar - Barclays Jason English - Goldman Sachs David Palmer - Evercore ISI Michael Lavery - Piper Sandler Ken Zaslow - Bank of Montreal Disclaimer*: This transcript is designed to be use ...

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2021 were $1.6 billion, a 19% increase compared to the prior year, including $78.5 million from recent acquisitions [16] - Adjusted EBITDA was $302.6 million, reflecting a decrease of 23% compared to the prior year but was roughly flat to 2019 [16][18] - The top end of the guidance range was lowered from $620 million to $610 million for the full year [7] Business Line Data and Key Metrics Changes - Post Consumer Brands experienced an 11% decline in net sales and volumes, attributed to a temporary consumer shift towards premium purchasing and the exit from low-margin businesses [17] - Weetabix net sales increased by 10%, driven by a stronger British Pound, while volumes decreased by 2% [19] - The Foodservice business saw net sales and volume growth of 80% and 56% respectively, although total volumes remain below pre-pandemic levels [20] - Refrigerated Retail net sales and volumes decreased by 12% and 10% respectively, impacted by labor shortages and reduced service levels [21] Market Data and Key Metrics Changes - Post branded products achieved a market share of 12.5%, primarily driven by the performance of the Pebbles brand [8] - The company noted extraordinary volatility in shop pricing and significant pricing actions taken to offset inflation [10] Company Strategy and Development Direction - The company is focusing on capital allocation through M&A, having acquired assets from TreeHouse and the Egg Beaters brand from Conagra [14] - A full distribution of the position in BellRing Brands is planned, allowing shareholders to choose greater exposure to BellRing [15] - The company is navigating a challenging environment with supply chain issues and is working on productivity opportunities and management strength [13] Management Comments on Operating Environment and Future Outlook - Management expects the current challenging environment to persist through Q4 and into fiscal 2022, with a focus on navigating labor and supply chain issues [6][12] - The outlook for the cereal business is clouded by unusual consumer behavior, but management remains optimistic about long-term defensibility [33] - Management anticipates a gradual recovery in the Foodservice segment, particularly in breakfast and lunch categories [35] Other Important Information - The company is facing challenges with labor availability and supply chain inefficiencies, which have impacted manufacturing capacity [9][12] - Adjusted EBITDA for the Refrigerated Retail segment decreased to $33 million due to lower volumes and increased costs [21] Q&A Session Summary Question: What advantages will the BellRing share distribution provide to Post shareholders? - Management explained that the distribution allows for direct investment into different segments, providing clarity and transparency for shareholders [26] Question: What is the outlook for sustainable profitable growth? - Management acknowledged the challenging environment but emphasized the strength of their brands and the potential for margin expansion [32] Question: How does the company view the cereal business outlook? - Management indicated that the cereal category is facing headwinds but remains optimistic about long-term growth, particularly in branded portfolios [33] Question: What are the company's plans regarding labor issues and capital allocation? - Management confirmed ongoing efforts to identify capital projects that reduce reliance on labor and improve productivity [47] Question: How is the company addressing inflation and pricing across its portfolio? - Management stated that they have taken pricing actions across the portfolio, but volatility in commodity prices remains a concern [82]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited).) The unaudited financial statements detail performance, financial position, and cash flows for the periods ended June 30, 2021 [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 net sales rose 19% but a net loss was recorded due to swap expenses, while nine-month earnings improved significantly Condensed Consolidated Statements of Operations (in millions, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Nine Months Ended June 30, 2021 | Nine Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,589.8 | $1,336.4 | $4,531.1 | $4,287.4 | | **Gross Profit** | $479.4 | $436.8 | $1,385.8 | $1,347.1 | | **Operating Profit** | $206.5 | $172.1 | $517.9 | $521.6 | | **Net (Loss) Earnings** | $(54.3) | $36.0 | $136.8 | $(56.2) | | **Diluted (Loss) Earnings per Share** | $(0.95) | $0.52 | $1.99 | $(0.81) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $12.6 billion, driven by goodwill and investments related to the PHPC SPAC IPO Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2021 | September 30, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $2,099.2 | $2,287.8 | | **Total Assets** | $12,562.4 | $12,146.7 | | **Total Current Liabilities** | $930.9 | $974.4 | | **Long-term debt** | $6,932.1 | $6,959.0 | | **Total Liabilities** | $9,424.6 | $9,317.7 | | **Total Shareholders' Equity** | $2,832.8 | $2,829.0 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow slightly decreased while investing cash outflow increased significantly due to acquisitions and the PHPC IPO Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | Nine Months Ended June 30, 2021 | Nine Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $395.3 | $408.4 | | **Net Cash Used in Investing Activities** | $(737.4) | $(94.8) | | **Net Cash Used in Financing Activities** | $(75.2) | $(313.9) | | **Net (Decrease) Increase in Cash** | $(411.1) | $0.2 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the consolidation of the PHPC SPAC, four acquisitions, significant debt refinancing, and a U.K. tax rate change - The company completed the IPO of a special purpose acquisition company, Post Holdings Partnering Corporation (PHPC), on May 28, 2021, raising gross proceeds of **$345.0 million**; Post maintains control and consolidates PHPC[22](index=22&type=chunk)[26](index=26&type=chunk) - During fiscal 2021, the company completed four acquisitions: the private label RTE cereal business from TreeHouse Foods (**$85.0M**), the Egg Beaters brand (**$50.0M**), the Almark Foods business (**$52.0M**), and the Peter Pan nut butter brand (**$102.0M**)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - In March 2021, the company issued **$1.8 billion** of 4.50% senior notes due 2031 and used the proceeds to redeem its 5.00% senior notes, resulting in a loss on extinguishment of debt of **$94.8 million** for the nine-month period[125](index=125&type=chunk)[144](index=144&type=chunk) - The company recorded a tax expense of **$39.3 million** during the three and nine months ended June 30, 2021, due to remeasuring its U.K. deferred tax assets and liabilities following an enacted increase in the U.K.'s corporate income tax rate from **19% to 25%**, effective April 2023[64](index=64&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management analyzes a 19% Q3 sales increase driven by Foodservice recovery, segment performance, liquidity, and financing activities [Overview](index=36&type=section&id=OVERVIEW) The company discusses its five operating segments, recent acquisitions, and the mixed impacts of the COVID-19 pandemic - The company operates through five reportable segments: **Post Consumer Brands, Weetabix, Foodservice, Refrigerated Retail, and BellRing Brands**[163](index=163&type=chunk) - The COVID-19 pandemic initially boosted retail sales due to at-home consumption, but these are now trending toward pre-pandemic levels; the foodservice business, while recovering, remains below pre-pandemic levels and is pressured by **labor and freight shortages**[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - In fiscal 2021, the company completed four acquisitions: **PL RTE Cereal Business, Egg Beaters, Almark, and Peter Pan**[171](index=171&type=chunk) [Results of Operations](index=39&type=section&id=RESULTS%20OF%20OPERATIONS) Q3 sales and operating profit grew 19% and 20% respectively, but a net loss resulted from swap expenses and a U.K. tax charge Overall Financial Performance (in millions) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,589.8 | $1,336.4 | 19% | | **Operating Profit** | $206.5 | $172.1 | 20% | | **Net (Loss) Earnings** | $(54.3) | $36.0 | (251)% | - The Q3 net loss was primarily driven by a **$121.6 million expense** from mark-to-market adjustments on interest rate swaps not designated as hedges[191](index=191&type=chunk) - The effective tax rate was significantly impacted by a **$39.3 million tax expense** recorded due to the U.K. increasing its corporate income tax rate from 19% to 25%, effective in 2023[193](index=193&type=chunk) [Segment Results](index=41&type=section&id=SEGMENT%20RESULTS) Foodservice and BellRing Brands drove growth, while Post Consumer and Refrigerated Retail declined against prior-year pandemic highs Segment Net Sales (in millions) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | % Change | | :--- | :--- | :--- | :--- | | Post Consumer Brands | $468.7 | $528.1 | (11)% | | Weetabix | $123.4 | $111.8 | 10% | | Foodservice | $435.1 | $242.3 | 80% | | Refrigerated Retail | $220.8 | $250.3 | (12)% | | BellRing Brands | $342.6 | $204.2 | 68% | Segment Profit (Loss) (in millions) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | % Change | | :--- | :--- | :--- | :--- | | Post Consumer Brands | $87.8 | $127.6 | (31)% | | Weetabix | $28.6 | $32.6 | (12)% | | Foodservice | $27.9 | $(40.3) | 169% | | Refrigerated Retail | $14.3 | $42.3 | (66)% | | BellRing Brands | $51.5 | $30.6 | 68% | - Post Consumer Brands' sales decline was driven by lapping prior year's COVID-19 demand, softness in value cereal, and exiting low-margin private label business[197](index=197&type=chunk) - Foodservice sales surged due to recovery from prior year's pandemic impact, though current period volumes were negatively impacted by labor shortages reducing service levels[205](index=205&type=chunk) - Refrigerated Retail sales declined due to reduced service levels from labor shortages and lapping increased purchases from the prior year[210](index=210&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains sufficient liquidity through cash, operating flows, and credit, detailing major financing and investing activities - Key financing activities in the first nine months of fiscal 2021 included issuing **$1.8B of 4.50% senior notes**, repaying **$1.7B of 5.00% senior notes**, and repurchasing **3.3 million shares for $315.3 million**[223](index=223&type=chunk) Cash Flow Summary (Nine Months Ended June 30, in millions) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Operating activities | $395.3 | $408.4 | | Investing activities | $(737.4) | $(94.8) | | Financing activities | $(75.2) | $(313.9) | - The company was not required to comply with its secured net leverage ratio covenant as of June 30, 2021, as outstanding revolving credit obligations did not exceed the 30% threshold; BellRing was in compliance with its total net leverage ratio covenant[238](index=238&type=chunk)[240](index=240&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company details its exposure to commodity, foreign currency, and interest rate risks and the use of derivatives for hedging - A hypothetical **10% adverse change** in the market price of principal hedged commodities would have decreased the fair value of the commodity derivatives portfolio by approximately **$20 million** as of June 30, 2021[253](index=253&type=chunk) - As of June 30, 2021, the company had **$7,066.4 million in debt**, with **$6,440.2 million** at a weighted-average fixed interest rate of **5.1%**[255](index=255&type=chunk) - A hypothetical **10% decrease in interest rates** would have increased the fair value of the fixed-rate debt by approximately **$32 million** as of June 30, 2021[256](index=256&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management confirms the effectiveness of disclosure controls and procedures as of June 30, 2021 - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[258](index=258&type=chunk) - The company is in the process of implementing changes in controls and procedures related to its **fiscal 2021 acquisitions**[259](index=259&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings.) The company discloses ongoing antitrust litigation against its subsidiary MFI, with an accrued liability of $3.5 million - MFI, a subsidiary, remains a defendant in antitrust litigation concerning egg products, with claims from **three opt-out plaintiffs** still pending[112](index=112&type=chunk) - The company has accrued **$3.5 million** for this legal matter as of June 30, 2021[114](index=114&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors.) New risks are highlighted concerning the PHPC SPAC and the proposed distribution of its interest in BellRing Brands - A new risk factor relates to the uncertainties surrounding Post Holdings Partnering Corporation (PHPC), a SPAC sponsored by the company, including the potential **failure to find a suitable acquisition target** and heightened regulatory focus on SPACs[263](index=263&type=chunk)[264](index=264&type=chunk) - The company's proposed plan to distribute its interest in BellRing Brands, Inc to shareholders is subject to inherent risks, including the possibility that the **transaction may not be consummated** or deliver anticipated benefits[266](index=266&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No common stock was repurchased in Q3, with $333.6 million remaining under the current buyback authorization - **No shares of common stock were repurchased** during the three months ended June 30, 2021[267](index=267&type=chunk) - As of June 30, 2021, **$333.6 million remained available** under the company's share repurchase authorization[268](index=268&type=chunk) [Exhibits](index=58&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including indentures and required officer certifications - This section provides a list of all exhibits filed with or incorporated by reference into the Form 10-Q[271](index=271&type=chunk)