TREEHOUSE FOODS C O N S U M E R A N A L Y S T G R O U P O F N E W Y O R K C O N F E R E N C E F E B R U A R Y 1 8 , 2 0 2 1 FORWARD LOOKING STATEMENTS From time to time, we and our representatives may provide information, whether orally or in writing are deemed to be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) TreeHouse Foods is a leading North American private label food and beverage manufacturer, operating in two segments and focused on strategic growth and customer concentration - TreeHouse is a leading manufacturer and distributor of private label packaged foods and beverages in North America with approximately **40** production facilities[14](index=14&type=chunk) - The company's four-point enterprise strategy includes: Commercial Excellence, Operational Excellence, Optimized Portfolio, and People & Talent[17](index=17&type=chunk)[18](index=18&type=chunk) - Effective January 1, 2020, the company reorganized into two reportable segments: Meal Preparation and Snacking & Beverages[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - In 2020, the company acquired the majority of the U.S. branded pasta portfolio from Riviana Foods and sold two of its In-Store Bakery facilities[19](index=19&type=chunk)[20](index=20&type=chunk) Customer Concentration (FY 2020) | Customer Group | Percentage of Consolidated Net Sales | | :--- | :--- | | Ten Largest Customers | **58.5%** | | Walmart Inc. and affiliates | **23.9%** | - As of December 31, 2020, the company had approximately **10,900** full-time employees, with about **2,400** being union members[50](index=50&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including pandemic disruptions, intense competition, customer concentration, supply chain issues, high indebtedness, and restructuring challenges - The COVID-19 pandemic poses risks of workforce and facility shutdowns, decreased demand in the food-away-from-home channel, and supply chain disruptions[54](index=54&type=chunk)[55](index=55&type=chunk) - The company is highly dependent on a limited number of customers, with the ten largest accounting for **58.5%** of net sales in 2020. The loss of a significant customer could adversely affect results[60](index=60&type=chunk) - The company's ability to manufacture and sell products is subject to supply chain disruptions from weather, natural disasters, pandemics, strikes, or other factors[64](index=64&type=chunk) - As of December 31, 2020, the company had **$2,233.0 million** of outstanding indebtedness. This leverage could limit management's flexibility and ability to service debt[83](index=83&type=chunk) - Agreements governing indebtedness contain restrictive covenants, including maintaining a specific consolidated net leverage ratio, which may limit operational and financial flexibility[84](index=84&type=chunk)[85](index=85&type=chunk) - The company faces risks from its restructuring plans, such as TreeHouse 2020 and Structure to Win, which may not yield anticipated benefits and could divert management resources. Restructuring costs in 2020 were approximately **$73.2 million**[93](index=93&type=chunk) [Unresolved Staff Comments](index=19&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[94](index=94&type=chunk) [Properties](index=20&type=section&id=Item%202.%20Properties) As of December 31, 2020, the company operates numerous production facilities across the United States, Canada, and Italy, the majority of which are owned - The company operates production facilities, most of which it owns, across North America and Italy. It leases its principal executive offices in Oak Brook, Illinois[96](index=96&type=chunk) - Facilities are listed by their segment (Meal Preparation or Snacking & Beverages) and the principal products they produce[96](index=96&type=chunk) - Facilities in Sparks, Nevada and Lancaster, Ohio, related to the Ready-to-eat (RTE) Cereal business, are classified as discontinued operations and excluded from the main property list[98](index=98&type=chunk) [Legal Proceedings](index=20&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding the company's legal proceedings is detailed in Note 19 to the Consolidated Financial Statements - Refer to Note 19 of the Consolidated Financial Statements for details on legal proceedings[99](index=99&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[100](index=100&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=21&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, with no cash dividends paid, and an active stock repurchase program with $291.7 million remaining as of Q4 2020 - The company's common stock is traded on the New York Stock Exchange under the symbol "THS"[102](index=102&type=chunk) - The company has not paid any cash dividends and anticipates retaining earnings for business development for the foreseeable future[103](index=103&type=chunk) Q4 2020 Stock Repurchase Activity | Period | Total Shares Purchased (millions) | Weighted Average Price Paid per Share | Total Cost (millions) | Approx. Value Remaining for Purchase (millions) | | :--- | :--- | :--- | :--- | :--- | | Q4 2020 | **0.6** | **$38.64** | **$25.0** | **$291.7** | [Selected Financial Data](index=24&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents five years of selected financial data, highlighting net sales, operating income, and cash flow, with retrospective adjustments for inventory and discontinued operations Selected Financial Data (2018-2020) | Metric (In millions, except per share data) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Operating Data** | | | | | Net sales | **$4,349.7** | **$4,288.9** | **$4,587.8** | | Operating income (loss) | **$149.1** | **$(16.1)** | **$83.4** | | Net income (loss) from continuing operations | **$49.2** | **$(110.3)** | **$(46.2)** | | Net income (loss) | **$13.8** | **$(361.0)** | **$(64.4)** | | Earnings (loss) per diluted share | **$0.24** | **$(6.42)** | **$(1.15)** | | **Balance Sheet Data (at end of period)** | | | | | Total assets | **$5,485.7** | **$5,139.4** | **$5,629.3** | | Long-term debt, excluding current portion | **$2,199.0** | **$2,091.7** | **$2,297.4** | | **Cash Flow Data** | | | | | Net cash provided by operating activities | **$416.7** | **$307.7** | **$505.8** | - The company changed its inventory valuation method for Pickles from LIFO to FIFO, applying the change retrospectively. Additionally, the Snacks division and RTE Cereal business were classified as discontinued operations, with prior periods recast accordingly[113](index=113&type=chunk)[114](index=114&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion covers recent developments, operational results, liquidity, and critical accounting policies, including a pasta acquisition, debt refinancing, and COVID-19 impacts [Recent Developments](index=25&type=section&id=Recent%20Developments) In 2020, the company acquired a pasta business, refinanced debt, managed COVID-19 impacts on retail and food-away-from-home channels, and reorganized into two reporting segments - On December 11, 2020, the company acquired the majority of the U.S. branded pasta portfolio from Riviana Foods for approximately **$239.2 million** in cash[119](index=119&type=chunk) - On September 9, 2020, the company issued **$500 million** of **4.0%** notes due 2028 and used the proceeds to redeem all of its outstanding 2022 Notes[120](index=120&type=chunk) - The COVID-19 pandemic led to a shift in consumer habits towards more food-at-home, which favorably impacted the retail grocery business (approx. **80%** of net sales) but negatively impacted the food-away-from-home channel[123](index=123&type=chunk) - Effective January 1, 2020, the company reorganized from a three-segment structure to a two-segment structure: Meal Preparation and Snacking & Beverages[126](index=126&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Consolidated net sales increased 1.4% in 2020 due to 2.7% organic growth, leading to a significant operating income turnaround from a prior-year loss, primarily due to the absence of impairment charges Consolidated Net Sales Change (2020 vs. 2019) | Component | Change (in millions) | Change (%) | | :--- | :--- | :--- | | 2019 Net Sales | **$4,288.9** | | | Volume/mix (organic) | **$115.5** | **2.7%** | | Divestitures | **$(59.4)** | **(1.4%)** | | Acquisition | **$11.6** | **0.3%** | | **2020 Net Sales** | **$4,349.7** | **1.4%** | Operating Income (Loss) Comparison (2018-2020) | Year | Operating Income (Loss) (in millions) | As % of Net Sales | | :--- | :--- | :--- | | 2020 | **$149.1** | **3.5%** | | 2019 | **$(16.1)** | **(0.4%)** | | 2018 | **$83.4** | **1.8%** | - The decrease in total operating expenses in 2020 compared to 2019 was primarily due to non-recurring impairment charges of **$129.1 million** in 2019[131](index=131&type=chunk) - Net loss from discontinued operations decreased to **$35.4 million** in 2020 from **$250.7 million** in 2019, mainly due to a large non-recurring impairment charge and loss on sale of the Snacks division in 2019[136](index=136&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $364.6 million in cash and $727.1 million credit facility availability, driven by increased operating cash flow and strategic debt management, including a partial $200.0 million 2024 Notes redemption Cash Flow Summary (Continuing Operations) | Cash Flow Activity (In millions) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | **$403.6** | **$263.9** | **$472.1** | | Net Cash from Investing Activities | **$(330.4)** | **$(139.3)** | **$(142.4)** | | Net Cash from Financing Activities | **$74.0** | **$(206.9)** | **$(311.0)** | - As of December 31, 2020, the company had approximately **$727.1 million** available under its Revolving Credit Facility[157](index=157&type=chunk) - The company utilized provisions of the CARES Act, deferring **$22.8 million** in payroll taxes and receiving a **$71.4 million** tax refund related to net operating loss carrybacks[158](index=158&type=chunk) - On January 15, 2021, the company issued a notice to redeem **$200.0 million** of its **6.000%** Senior Notes due 2024, funded with available cash[159](index=159&type=chunk) Contractual Obligations Summary (as of Dec 31, 2020) | Obligation (In millions) | Total | Due in 1 Year | Due in 2-3 Years | Due in 4-5 Years | More Than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt obligations | **$2,228.9** | **$14.0** | **$673.6** | **$1,041.3** | **$500.0** | | Debt interest payments | **$326.5** | **$76.0** | **$142.3** | **$68.2** | **$40.0** | | Operating leases | **$214.2** | **$40.2** | **$62.1** | **$36.5** | **$75.4** | | Purchase obligations | **$686.9** | **$596.1** | **$83.4** | **$6.0** | **$1.4** | [Critical Accounting Policies](index=41&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant judgment, including goodwill and intangible asset impairment tests, purchase price allocation, income tax accounting, and employee benefit plan costs - Goodwill and indefinite-lived intangible assets totaled **$2.2 billion** and **$22.4 million**, respectively, as of December 31, 2020. The annual impairment test did not result in an impairment, with all three reporting units having fair values substantially in excess (**68%** to **122%**) of their carrying values[206](index=206&type=chunk)[208](index=208&type=chunk) - The fair value of one trademark with a book value of **$16.4 million** exceeds its book value by only **12%**, indicating potential risk of future impairment if revenue and profit expectations are not met[209](index=209&type=chunk) - Purchase price allocation for acquisitions requires significant estimates for the fair value of assets and liabilities, impacting the amount of goodwill recorded[210](index=210&type=chunk) - Accounting for income taxes involves judgments on deferred tax assets and liabilities, valuation allowances, and uncertain tax positions[211](index=211&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from interest rate fluctuations, commodity price volatility, and foreign currency exchange rates through various hedging strategies and contracts - The company uses interest rate swaps to manage exposure on its variable-rate debt. As of Dec 31, 2020, **$875.0 million** of debt was covered by swaps. A **1%** change in interest rates would impact annual interest expense by approximately **$2.5 million** after considering the swaps[238](index=238&type=chunk)[239](index=239&type=chunk) - The company is exposed to commodity price risk for key ingredients and packaging. A hypothetical **10%** change in commodity prices would impact the fair value of its derivative portfolio by **$50.6 million**[240](index=240&type=chunk) - Foreign currency risk is managed using foreign currency contracts. As of Dec 31, 2020, the company had **$7.7 million** of such contracts outstanding, and a **10%** movement in exchange rates would not have a material impact[245](index=245&type=chunk) [Financial Statements and Supplementary Data](index=50&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes the audited consolidated financial statements and independent auditor's report, detailing financial position, performance, cash flows, and key accounting notes [Report of Independent Registered Public Accounting Firm](index=51&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued unqualified opinions on financial statements and internal controls, identifying the valuation of acquired intangible assets as a critical audit matter - The auditor, Deloitte & Touche LLP, issued an unqualified opinion, stating the financial statements are presented fairly in conformity with U.S. GAAP[249](index=249&type=chunk) - An unqualified opinion was also issued on the company's internal control over financial reporting as of December 31, 2020[250](index=250&type=chunk) - The valuation of acquired intangible assets (customer relationships and trade names) from the Riviana pasta acquisition was identified as a Critical Audit Matter due to the significant and subjective management assumptions required[255](index=255&type=chunk)[257](index=257&type=chunk) [Consolidated Financial Statements](index=53&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, performance, and cash flows, showing total assets of $5.49 billion and net income of $13.8 million in 2020 Consolidated Balance Sheet Highlights (as of Dec 31, 2020) | Account (In millions) | Amount | | :--- | :--- | | Total Current Assets | **$1,428.8** | | Total Assets | **$5,485.7** | | Total Current Liabilities | **$990.7** | | Long-term Debt | **$2,199.0** | | Total Liabilities | **$3,620.7** | | Total Stockholders' Equity | **$1,865.0** | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2020) | Account (In millions) | Amount | | :--- | :--- | | Net Sales | **$4,349.7** | | Gross Profit | **$802.2** | | Operating Income | **$149.1** | | Net Income from Continuing Operations | **$49.2** | | Net Income | **$13.8** | Consolidated Statement of Cash Flows Highlights (Year Ended Dec 31, 2020) | Account (In millions) | Amount | | :--- | :--- | | Net cash provided by operating activities | **$416.7** | | Net cash used in investing activities | **$(332.4)** | | Net cash provided by financing activities | **$74.0** | | Net increase in cash and cash equivalents | **$162.3** | [Notes to Consolidated Financial Statements](index=60&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial data, including restructuring costs, the pasta acquisition, discontinued operations, debt structure, and customer concentration - The TreeHouse 2020 and Structure to Win restructuring programs were completed in 2020, incurring cumulative costs of **$299.8 million** and **$92.7 million**, respectively[311](index=311&type=chunk)[313](index=313&type=chunk)[317](index=317&type=chunk) - The acquisition of the Riviana pasta business for **$239.2 million** resulted in the preliminary recognition of **$113.3 million** in intangible assets and **$57.8 million** in goodwill[342](index=342&type=chunk)[344](index=344&type=chunk) - The Ready-to-eat (RTE) Cereal business remains classified as a discontinued operation, with an additional impairment charge of **$51.2 million** recognized in 2020[355](index=355&type=chunk) - Total outstanding debt as of Dec 31, 2020 was **$2.23 billion**, consisting of Term Loans and Senior Notes. The Credit Agreement requires maintaining a consolidated net leverage ratio no greater than **4.50** to **1.0**[401](index=401&type=chunk)[409](index=409&type=chunk) - Walmart Inc. and its affiliates accounted for **23.9%** of consolidated net sales from continuing operations in 2020. No other customer exceeded **10%**[516](index=516&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=103&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[526](index=526&type=chunk) [Controls and Procedures](index=103&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that as of December 31, 2020, the company's disclosure controls and procedures were effective - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[527](index=527&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2020[529](index=529&type=chunk) - The assessment of internal control over financial reporting excluded the recently acquired pasta business from Riviana Foods, which represented **0.3%** of net sales and **4.5%** of total assets for the year ended December 31, 2020[529](index=529&type=chunk)[537](index=537&type=chunk) [Other Information](index=103&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[532](index=532&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=106&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item, including details about directors, executive officers, the audit committee, and the code of ethics, is incorporated by reference from the company's 2021 Proxy Statement - Information regarding directors, executive officers, corporate governance, and the code of ethics is incorporated by reference from the definitive Proxy Statement for the 2021 Annual Meeting of Stockholders[544](index=544&type=chunk)[545](index=545&type=chunk)[546](index=546&type=chunk) [Executive Compensation](index=106&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item, including the Compensation Discussion and Analysis and details on executive compensation, is incorporated by reference from the company's 2021 Proxy Statement - Information regarding executive compensation is incorporated by reference from the 2021 Proxy Statement[547](index=547&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=107&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides information on equity compensation plans, with 2.7 million securities to be issued and 4.1 million available, and incorporates security ownership details by reference Equity Compensation Plan Information (as of Dec 31, 2020) | Plan Category | Securities to be Issued Upon Exercise (millions) | Securities Remaining Available for Future Issuance (millions) | | :--- | :--- | :--- | | Equity compensation plans approved by security holders | **2.7** | **4.1** | | Equity compensation plans not approved by security holders | **0** | **0** | | **Total** | **2.7** | **4.1** | - Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the 2021 Proxy Statement[549](index=549&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=107&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item, concerning related party transactions and director independence, is incorporated by reference from the company's 2021 Proxy Statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the 2021 Proxy Statement[550](index=550&type=chunk) [Principal Accountant Fees and Services](index=107&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item, detailing fees and services provided by the principal accountant, is incorporated by reference from the company's 2021 Proxy Statement - Information regarding principal accountant fees and services is incorporated by reference from the 2021 Proxy Statement[551](index=551&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=108&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, financial statement schedules, and a comprehensive list of exhibits filed as part of the Form 10-K - This section lists all financial statements, financial statement schedules (Schedule II), and exhibits filed with the Form 10-K[553](index=553&type=chunk)[554](index=554&type=chunk) [Form 10-K Summary](index=109&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[556](index=556&type=chunk)

Steve Oakland, CEO & President Bill Kelley, EVP & CFO FEBRUARY 11, 2021 Q4 2020 RESULTS AND OUTLOOK FORWARD LOOKING STATEMENTS From time to time, we and our representatives may provide information, whether orally or in writing, which are deemed to be "forwardlooking" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information curren ...

[Part I — Financial Information](index=4&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) This section encompasses the unaudited condensed consolidated financial statements and management's discussion and analysis for TreeHouse Foods, Inc [Item 1 — Financial Statements (Unaudited)](index=4&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements of TreeHouse Foods, Inc. for the periods ended September 30, 2020, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, recent pronouncements, restructuring programs, discontinued operations, debt, and other financial details [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity as of September 30, 2020, and December 31, 2019 | Metric | Sep 30, 2020 (Millions) | Dec 31, 2019 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | :------- | | Cash and cash equivalents | $365.1 | $202.3 | $162.8 | 80.5% | | Total current assets | $1,551.8 | $1,219.5 | $332.3 | 27.3% | | Total assets | $5,385.9 | $5,139.4 | $246.5 | 4.8% | | Total current liabilities | $920.6 | $813.4 | $107.2 | 13.2% | | Total liabilities | $3,558.6 | $3,308.5 | $250.1 | 7.6% | | Total stockholders' equity | $1,827.3 | $1,830.9 | $(3.6) | -0.2% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance, including net sales, gross profit, operating income, and net income for the three and nine months ended September 30, 2020 and 2019 | Metric (Continuing Operations) | 3 Months Ended Sep 30, 2020 (Millions) | 3 Months Ended Sep 30, 2019 (Millions) | Change (Millions) | % Change | | :----------------------------- | :------------------------------------- | :------------------------------------- | :---------------- | :------- | | Net sales | $1,045.7 | $1,057.3 | $(11.6) | -1.1% | | Gross profit | $188.2 | $186.3 | $1.9 | 1.0% | | Operating income (loss) | $39.8 | $(55.6) | $95.4 | 171.6% | | Net income (loss) | $12.1 | $(177.8) | $189.9 | 106.8% | | EPS - Basic | $0.21 | $(3.16) | $3.37 | 106.6% | | Metric (Continuing Operations) | 9 Months Ended Sep 30, 2020 (Millions) | 9 Months Ended Sep 30, 2019 (Millions) | Change (Millions) | % Change | | :----------------------------- | :------------------------------------- | :------------------------------------- | :---------------- | :------- | | Net sales | $3,172.5 | $3,149.4 | $23.1 | 0.7% | | Gross profit | $574.3 | $571.7 | $2.6 | 0.5% | | Operating income (loss) | $95.3 | $(48.0) | $143.3 | 298.5% | | Net income (loss) | $(20.6) | $(376.5) | $355.9 | 94.5% | | EPS - Basic | $(0.36) | $(6.70) | $6.34 | 94.6% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This section details the company's comprehensive income or loss, including net income and other comprehensive income components for the three and nine months ended September 30, 2020 and 2019 | Metric | 3 Months Ended Sep 30, 2020 (Millions) | 3 Months Ended Sep 30, 2019 (Millions) | Change (Millions) | | :----------------------------- | :------------------------------------- | :------------------------------------- | :---------------- | | Net income (loss) | $12.1 | $(177.8) | $189.9 | | Other comprehensive income (loss) | $5.9 | $(5.4) | $11.3 | | Comprehensive income (loss) | $18.0 | $(183.2) | $201.2 | | Metric | 9 Months Ended Sep 30, 2020 (Millions) | 9 Months Ended Sep 30, 2019 (Millions) | Change (Millions) | | :----------------------------- | :------------------------------------- | :------------------------------------- | :---------------- | | Net income (loss) | $(20.6) | $(376.5) | $355.9 | | Other comprehensive income (loss) | $(2.4) | $8.9 | $(11.3) | | Comprehensive income (loss) | $(23.0) | $(367.6) | $344.6 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section presents changes in the company's stockholders' equity, including additional paid-in capital, accumulated deficit, and other comprehensive loss from January 1, 2020, to September 30, 2020 | Metric (Millions) | Jan 1, 2020 | Sep 30, 2020 | Change | | :------------------ | :---------- | :----------- | :----- | | Additional Paid-In Capital | $2,154.6 | $2,174.0 | $19.4 | | Accumulated Deficit | $(157.0) | $(177.6) | $(20.6) | | Accumulated Other Comprehensive Loss | $(84.0) | $(86.4) | $(2.4) | | Total Equity | $1,830.9 | $1,827.3 | $(3.6) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2020 and 2019 | Cash Flow Activity (Continuing Operations) | 9 Months Ended Sep 30, 2020 (Millions) | 9 Months Ended Sep 30, 2019 (Millions) | Change (Millions) | | :----------------------------------------- | :------------------------------------- | :------------------------------------- | :---------------- | | Net cash provided by operating activities | $124.5 | $5.8 | $118.7 | | Net cash used in investing activities | $(64.6) | $(99.8) | $35.2 | | Net cash provided by (used in) financing activities | $103.9 | $(141.3) | $245.2 | | Net increase (decrease) in cash and cash equivalents | $162.8 | $(119.2) | $282.0 | | Cash and cash equivalents, end of period | $365.1 | $45.1 | $320.0 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies, significant transactions, and other financial information supporting the condensed consolidated financial statements [1. Basis of Presentation](index=12&type=section&id=1.%20Basis%20of%20Presentation) This note explains the basis of preparing the financial statements, including the company's organizational and segment structure changes - The Company changed its organizational and segment structure in Q1 2020, reorganizing from three segments to two: Meal Preparation and Snacking & Beverages, with prior period information recast[28](index=28&type=chunk) [2. Recent Accounting Pronouncements](index=12&type=section&id=2.%20Recent%20Accounting%20Pronouncements) This note outlines recently adopted and evaluated accounting pronouncements and their impact on the financial statements - Early adopted SEC Rules 3-10 and 3-16 (financial disclosure for debt offerings) and ASU 2019-12 (simplifying income tax accounting) in Q1 2020, with ASU 2019-12 having no material impact[29](index=29&type=chunk)[30](index=30&type=chunk) - Currently evaluating ASU 2020-04 (Reference Rate Reform) for potential impact on consolidated financial statements[31](index=31&type=chunk) [3. Restructuring Programs](index=13&type=section&id=3.%20Restructuring%20Programs) This note details the company's ongoing restructuring programs, including their objectives, costs, and expected impacts on operations - The Company has two restructuring programs: TreeHouse 2020 for long-term growth and margin improvement, and Structure to Win for operating expense improvement[32](index=32&type=chunk) | Program | 3 Months Ended Sep 30, 2020 (Millions) | 3 Months Ended Sep 30, 2019 (Millions) | 9 Months Ended Sep 30, 2020 (Millions) | 9 Months Ended Sep 30, 2019 (Millions) | | :------------------ | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | TreeHouse 2020 | $9.1 | $21.9 | $30.0 | $76.5 | | Structure to Win | $11.1 | $2.4 | $21.9 | $13.4 | | **Total** | **$20.2** | **$24.3** | **$51.9** | **$89.9** | - Total expected costs for the Structure to Win program increased from **$60.4 million to $90.0 million** during the nine months ended September 30, 2020, due to reorganization transition expenses[38](index=38&type=chunk) [4. Receivables Sales Program](index=15&type=section&id=4.%20Receivables%20Sales%20Program) This note describes the company's program for selling trade accounts receivable to third-party financial institutions and related financial metrics - The Company sells certain trade accounts receivable to third-party financial institutions, with a maximum of **$300.0 million** that may be sold at any time[40](index=40&type=chunk) | Metric (Millions) | Sep 30, 2020 | Dec 31, 2019 | | :-------------------------------- | :----------- | :----------- | | Outstanding accounts receivable sold | $226.7 | $243.0 | | Collections not remitted | $123.6 | $158.3 | | Loss on sale of receivables (3M) | $0.4 | $0.8 | | Loss on sale of receivables (9M) | $1.9 | $2.9 | [5. Inventories](index=15&type=section&id=5.%20Inventories) This note provides a breakdown of the company's inventory components, including raw materials, supplies, and finished goods | Inventory Type (Millions) | Sep 30, 2020 | Dec 31, 2019 | | :------------------------ | :----------- | :----------- | | Raw materials and supplies | $274.4 | $205.5 | | Finished goods | $389.7 | $338.5 | | **Total inventories** | **$664.1** | **$544.0** | [6. Discontinued Operations and Other Divestitures](index=15&type=section&id=6.%20Discontinued%20Operations%20and%20Other%20Divestitures) This note details the financial impact and status of discontinued operations and other divestitures, including the Snacks division and RTE Cereal business - The Snacks division was sold on August 1, 2019, for **$90 million cash**, resulting in a non-cash pre-tax loss of **$97.5 million**[45](index=45&type=chunk) - The Ready-to-eat (RTE) Cereal business remains classified as a discontinued operation; the sale to Post Holdings, Inc. was terminated, and the Company is pursuing an alternative buyer[48](index=48&type=chunk)[49](index=49&type=chunk) - Two In-Store Bakery facilities were sold on April 17, 2020, for **$24.0 million**, resulting in a **$0.3 million loss**, but did not meet the criteria for discontinued operations[53](index=53&type=chunk)[54](index=54&type=chunk) | Metric (Discontinued Operations) | 3 Months Ended Sep 30, 2020 (Millions) | 3 Months Ended Sep 30, 2019 (Millions) | 9 Months Ended Sep 30, 2020 (Millions) | 9 Months Ended Sep 30, 2019 (Millions) | | :------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net sales | $51.8 | $122.1 | $168.7 | $581.8 | | Operating income (loss) | $2.7 | $(120.8) | $8.5 | $(278.4) | | Net income (loss) | $0.7 | $(116.8) | $3.4 | $(250.9) | [7. Goodwill and Intangible Assets](index=18&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) This note discusses changes in goodwill and intangible assets, including impairment tests, acquisitions, and non-cash impairment charges - The change in organizational structure in Q1 2020 triggered a goodwill impairment test, which did not result in any impairment losses[57](index=57&type=chunk) | Goodwill (Millions) | Jan 1, 2020 | Sep 30, 2020 | Change | | :------------------ | :---------- | :----------- | :----- | | Meal Preparation | $1,253.0 | $1,262.0 | $9.0 | | Snacking & Beverages | $854.3 | $853.1 | $(1.2) | | **Total Goodwill** | **$2,107.3**| **$2,115.1** | **$7.8**| - Goodwill increased by **$10.7 million** due to the acquisition of a refrigerated dough business on September 1, 2020[58](index=58&type=chunk) - In Q3 2019, the Company recognized **$88.0 million** in non-cash impairment charges for Cookies and Dry Dinners asset groups, comprising **$42.8 million** in property, plant, equipment and **$45.2 million** in finite-lived intangible assets[62](index=62&type=chunk) [8. Income Taxes](index=19&type=section&id=8.%20Income%20Taxes) This note provides information on the company's effective tax rates, the impact of the CARES Act, and related tax benefits and receivables | Effective Tax Rate | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Effective Rate | 49.1% | 37.4% | 39.1% | 28.5% | - The CARES Act resulted in a **$14.0 million** income tax benefit for the three months and **$25.0 million** for the nine months ended September 30, 2020, related to NOL carryback provisions[66](index=66&type=chunk) - A federal income tax refund receivable of **$73.5 million** related to the CARES Act is included in current assets[66](index=66&type=chunk) [9. Long-Term Debt](index=20&type=section&id=9.%20Long-Term%20Debt) This note details the company's long-term debt structure, including various loan types, note redemptions, new issuances, and available credit facilities | Debt Type (Millions) | Sep 30, 2020 | Dec 31, 2019 | | :------------------- | :----------- | :----------- | | Term Loan A | $454.6 | $458.4 | | Term Loan A-1 | $674.9 | $681.6 | | 2022 Notes | $— | $375.9 | | 2024 Notes | $602.9 | $602.9 | | 2028 Notes | $500.0 | $— | | Finance leases | $4.2 | $3.9 | | **Total outstanding debt** | **$2,236.6** | **$2,122.7** | - The Company redeemed all **$375.9 million** outstanding principal of its 4.875% 2022 Notes on September 25, 2020, incurring a **$1.2 million** loss on extinguishment of debt[71](index=71&type=chunk) - Issued **$500 million** aggregate principal amount of 4.000% senior notes due September 1, 2028 (2028 Notes) on September 9, 2020, with proceeds used for the 2022 Notes redemption and general corporate purposes[72](index=72&type=chunk)[73](index=73&type=chunk)[134](index=134&type=chunk) - As of September 30, 2020, **$727.0 million** was available under the **$750.0 million** Revolving Credit Facility[70](index=70&type=chunk) [10. Earnings Per Share](index=22&type=section&id=10.%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share, including weighted average common shares outstanding and anti-dilutive equity awards | Metric (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Weighted average common shares outstanding (Basic) | 56.6 | 56.3 | 56.5 | 56.2 | | Weighted average diluted common shares outstanding | 56.8 | 56.3 | 56.5 | 56.2 | - Equity awards totaling **1.5 million** for both the three and nine months ended September 30, 2020, were excluded from diluted EPS calculation as they were anti-dilutive due to net loss[80](index=80&type=chunk) [11. Stock-Based Compensation](index=22&type=section&id=11.%20Stock-Based%20Compensation) This note outlines the company's stock-based compensation expense, related tax benefits, available shares for award, and future compensation costs | Metric (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Compensation expense related to stock-based payments | $5.8 | $5.5 | $20.7 | $17.5 | | Related income tax benefit | $1.5 | $1.2 | $5.4 | $4.4 | - Approximately **4.0 million** shares remained available for award under the Equity and Incentive Plan as of September 30, 2020[81](index=81&type=chunk) - Future compensation costs for restricted stock units are approximately **$23.1 million**, to be recognized over the next **2.0 years**[89](index=89&type=chunk) [12. Accumulated Other Comprehensive Loss](index=26&type=section&id=12.%20Accumulated%20Other%20Comprehensive%20Loss) This note details the components of accumulated other comprehensive loss, including foreign currency translation adjustments and unrecognized pension benefits | Component (Millions) | Dec 31, 2019 | Sep 30, 2020 | Change | | :------------------- | :----------- | :----------- | :----- | | Foreign Currency Translation | $(79.4) | $(82.2) | $(2.8) | | Unrecognized Pension and Postretirement Benefits | $(4.6) | $(4.2) | $0.4 | | **Accumulated Other Comprehensive Loss** | **$(84.0)** | **$(86.4)** | **$(2.4)** | [13. Employee Retirement and Postretirement Benefits](index=26&type=section&id=13.%20Employee%20Retirement%20and%20Postretirement%20Benefits) This note provides information on net periodic pension costs and significant events related to employee retirement and postretirement benefit plans | Net Periodic Pension (Benefit) Cost (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Service cost | $0.4 | $0.4 | $1.2 | $1.3 | | Interest cost | $2.7 | $3.2 | $8.1 | $9.7 | | Expected return on plan assets | $(3.7) | $(3.6) | $(10.9) | $(10.8) | | **Net periodic pension (benefit) cost** | **$(0.4)** | **$0.1** | **$(1.2)** | **$0.6** | - The Company executed a complete withdrawal from the Retail, Wholesale, and Department Store International Union and Industry Pension Fund in Q2 2019, settling a **$4.1 million** withdrawal liability in Q4 2019[98](index=98&type=chunk) [14. Commitments and Contingencies](index=28&type=section&id=14.%20Commitments%20and%20Contingencies) This note describes the company's involvement in various legal proceedings, including class action lawsuits and a preliminary settlement for wage and hour litigation - The Company is involved in multiple class action lawsuits (Tarara, Wells, Lavin, Bartelt, Ann Arbor) alleging false and misleading statements and breach of fiduciary duty, which it intends to vigorously defend[99](index=99&type=chunk)[100](index=100&type=chunk) - A preliminary settlement understanding has been reached for **$9.0 million** to resolve wage and hour practice litigation (Negrete v. Ralcorp Holdings, Inc., et al.), with an accrual recorded as of September 30, 2020[105](index=105&type=chunk) [15. Derivative Instruments](index=30&type=section&id=15.%20Derivative%20Instruments) This note explains the company's use of derivative instruments to manage interest rate, foreign currency, and commodity price risks, along with their fair values and gains/losses - The Company uses derivative instruments to manage interest rate, foreign currency, and commodity price risks, not for trading or speculative purposes[108](index=108&type=chunk) | Derivative Fair Value (Millions) | Sep 30, 2020 | Dec 31, 2019 | | :------------------------------- | :----------- | :----------- | | Asset Derivatives | $3.1 | $1.6 | | Liability Derivatives | $109.3 | $57.2 | | Total Gain (Loss) on Derivative Contracts (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total unrealized gain (loss) | $9.2 | $(12.4) | $(50.6) | $(53.6) | | Total realized (loss) gain | $(8.8) | $0.2 | $(20.2) | $6.5 | | **Total gain (loss)** | **$0.4** | **$(12.2)** | **$(70.8)** | **$(47.1)** | [16. Segment Information](index=32&type=section&id=16.%20Segment%20Information) This note provides financial data by reportable segment, including net sales and direct operating income for Meal Preparation and Snacking & Beverages, and revenue by sales channel - Effective January 1, 2020, the Company reorganized into two reportable segments: Meal Preparation and Snacking & Beverages, from the previous three segments[119](index=119&type=chunk) | Segment Net Sales (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Meal Preparation | $642.7 | $656.5 | $1,984.0 | $1,984.7 | | Snacking & Beverages | $403.0 | $400.8 | $1,188.5 | $1,164.7 | | **Total** | **$1,045.7** | **$1,057.3** | **$3,172.5** | **$3,149.4** | | Segment Direct Operating Income (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Meal Preparation | $80.1 | $92.4 | $268.7 | $273.5 | | Snacking & Beverages | $65.7 | $41.3 | $166.3 | $134.2 | | **Total** | **$145.8** | **$133.7** | **$435.0** | **$407.7** | | Revenue by Sales Channel (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :---------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Retail grocery | $850.7 | $835.4 | $2,616.8 | $2,498.0 | | Food-away-from-home | $64.2 | $94.5 | $186.3 | $271.1 | | Industrial, co-manufacturing, and other | $130.8 | $127.4 | $369.4 | $380.3 | | **Total net sales** | **$1,045.7** | **$1,057.3** | **$3,172.5** | **$3,149.4** | [17. Subsequent Events](index=34&type=section&id=17.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, including the announced acquisition of Riviana Foods' U.S. branded pasta portfolio - On November 5, 2020, the Company announced the acquisition of the majority of Riviana Foods, Inc.'s U.S. branded pasta portfolio and a manufacturing facility for approximately **$242.5 million** in cash, expected to close in Q4 2020[127](index=127&type=chunk) [Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202%20%E2%80%94%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three and nine months ended September 30, 2020, discussing business overview, recent developments, detailed analysis of financial performance by segment, liquidity, capital resources, and non-GAAP financial measures [Business Overview](index=35&type=section&id=Business%20Overview) TreeHouse Foods, Inc. is a leading manufacturer and distributor of private label foods and beverages in North America, with a vision to be the undisputed solutions leader for custom brands - TreeHouse Foods, Inc. is a leading manufacturer and distributor of private label foods and beverages in North America, aiming to be the undisputed solutions leader for custom brands[129](index=129&type=chunk) - The Company's product portfolio includes snacking, beverages, and meal preparation products, available in various formats, with a focus on high quality and affordability[129](index=129&type=chunk) [Recent Developments](index=37&type=section&id=Recent%20Developments) This section highlights key recent events and their potential impact on the company's operations and financial performance - The Company will acquire Riviana Foods' U.S. branded pasta portfolio and a manufacturing facility for approximately **$242.5 million**, strengthening its portfolio and expanding scale[133](index=133&type=chunk) - Completed a public offering of **$500 million** in 4.000% senior notes due 2028, using proceeds to redeem **$375.9 million** of 2022 Notes and for general corporate purposes[134](index=134&type=chunk) - COVID-19 led to favorable revenue and earnings impacts in retail grocery (80% of sales), offsetting weakness in food-away-from-home, with no material supply chain disruptions to date but production limitations due to a tighter labor market[137](index=137&type=chunk) - The Company expects at-home food consumption demand to remain elevated and private label to benefit from consumer shifts and economic recession[138](index=138&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including net sales, gross profit, and operating income, for the reported periods [Overall Financial Results](index=39&type=section&id=Overall%20Financial%20Results) This section provides a summary of the company's key financial results from continuing operations for the three and nine months ended September 30, 2020 and 2019 | Metric (Continuing Operations) | 3 Months Ended Sep 30, 2020 (Millions) | 3 Months Ended Sep 30, 2019 (Millions) | 9 Months Ended Sep 30, 2020 (Millions) | 9 Months Ended Sep 30, 2019 (Millions) | | :----------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net sales | $1,045.7 | $1,057.3 | $3,172.5 | $3,149.4 | | Gross profit | $188.2 | $186.3 | $574.3 | $571.7 | | Operating income (loss) | $39.8 | $(55.6) | $95.3 | $(48.0) | | Net income (loss) from continuing operations | $11.4 | $(61.0) | $(24.0) | $(125.6) | | Net income (loss) | $12.1 | $(177.8) | $(20.6) | $(376.5) | [Three Months Ended September 30, 2020 Compared to Three Months Ended September 30, 2019](index=40&type=section&id=Three%20Months%20Ended%20September%2030%2C%202020%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202019) This section provides a detailed comparative analysis of the company's financial performance for the three months ended September 30, 2020, versus the prior year | Net Sales Change (Millions) | 3 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | | 2019 Net sales | $1,057.3 | | Volume/mix (excl. SKU rationalization & divestitures) | $4.2 (0.4%) | | Pricing | $2.7 (0.3%) | | Volume/mix (divestitures) | $(17.9) (-1.7%) | | Foreign currency | $(0.6) (-0.1%) | | **2020 Net sales** | **$1,045.7 (-1.1%)** | | Organic net sales change | 0.7% | - Gross profit margin increased by **0.4 percentage points to 18.0%**, driven by favorable channel mix (more retail, less food-away-from-home) and lower operational costs, partially offset by COVID-19 incremental costs[144](index=144&type=chunk) - Total operating expenses decreased by **8.7 percentage points to 14.2% of net sales**, primarily due to the absence of non-recurring impairment charges from Q3 2019 and lower restructuring expenses[145](index=145&type=chunk) - Net income from discontinued operations increased by **$117.5 million**, primarily due to non-recurring losses in Q3 2019 related to the Snacks division sale and RTE Cereal impairment[149](index=149&type=chunk) - Meal Preparation segment net sales decreased **2.1%** (organic **-2.0%**) due to unfavorable volume/mix from distribution losses and decreased food-away-from-home demand, and unfavorable pricing[152](index=152&type=chunk) - Snacking & Beverages segment net sales increased **0.5%** (organic **+5.2%**) due to favorable volume/mix from distribution gains and innovation, and non-recurring pricing, despite divestitures[154](index=154&type=chunk) [Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019](index=43&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202020%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202019) This section provides a detailed comparative analysis of the company's financial performance for the nine months ended September 30, 2020, versus the prior year | Net Sales Change (Millions) | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | | 2019 Net sales | $3,149.4 | | Volume/mix (excl. SKU rationalization & divestitures) | $75.2 (2.4%) | | Pricing | $(4.5) (-0.1%) | | Volume/mix (divestitures) | $(40.3) (-1.4%) | | SKU rationalization | $(3.4) (-0.1%) | | Foreign currency | $(3.9) (-0.1%) | | **2020 Net sales** | **$3,172.5 (0.7%)** | | Organic net sales change | 2.3% | - Gross profit margin decreased by **0.2 percentage points to 18.0%**, primarily due to incremental COVID-19 costs and higher employee expenses, partially offset by higher operational throughput[158](index=158&type=chunk) - Total operating expenses decreased by **4.6 percentage points to 15.1% of net sales**, mainly due to the absence of Q3 2019 impairment charges, lower restructuring expenses, and SG&A discipline[159](index=159&type=chunk) - Net income from discontinued operations increased by **$254.3 million**, primarily due to non-recurring impairment charges and losses on sale from 2019[163](index=163&type=chunk) - Meal Preparation segment net sales were flat (organic **+0.1%**), with favorable volume/mix from increased retail demand offsetting unfavorable pricing and foreign currency[166](index=166&type=chunk) - Snacking & Beverages segment net sales increased **2.0%** (organic **+6.1%**), driven by increased retail demand due to COVID-19, despite divestitures and SKU rationalization[168](index=168&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash flows, its capital structure, and its capacity to meet short-term and long-term obligations - The Company maintains a strong financial position with **$727.0 million** available under its Revolving Credit Facility as of September 30, 2020[170](index=170&type=chunk) - COVID-19 has not had a material adverse impact on operations, and the CARES Act is expected to provide benefits, including deferring **$20-25 million** in payroll taxes and a **$73.5 million** NOL carryback refund[171](index=171&type=chunk) | Cash Flow Activity (Continuing Operations) | 9 Months Ended Sep 30, 2020 (Millions) | 9 Months Ended Sep 30, 2019 (Millions) | | :----------------------------------------- | :------------------------------------- | :------------------------------------- | | Operating activities | $124.5 | $5.8 | | Investing activities | $(64.6) | $(99.8) | | Financing activities | $103.9 | $(141.3) | | Discontinued operations | $(2.4) | $111.6 | | Free Cash Flow (Continuing Operations) (Millions) | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | | Cash flow provided by operating activities | $124.5 | $5.8 | | Less: Capital expenditures | $(79.1) | $(104.8) | | **Free cash flow from continuing operations** | **$45.4** | **$(99.0)** | - The Company is in compliance with all applicable financial debt covenants as of September 30, 2020[182](index=182&type=chunk) [Non-GAAP Measures](index=49&type=section&id=Non-GAAP%20Measures) This section presents non-GAAP financial measures, including organic net sales, adjusted diluted EPS, adjusted net income, adjusted EBIT, and adjusted EBITDA, to provide additional insights into the company's performance - Organic net sales, adjusted diluted EPS, adjusted net income, adjusted EBIT, and adjusted EBITDA are presented as Non-GAAP measures to provide meaningful comparisons of performance between periods[189](index=189&type=chunk)[190](index=190&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) | Adjusted Diluted EPS (Non-GAAP) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Diluted EPS (GAAP) | $0.20 | $(1.08) | $(0.42) | $(2.23) | | Adjustments (net of tax) | $0.51 | $1.63 | $2.08 | $3.51 | | **Adjusted diluted EPS** | **$0.71** | **$0.55** | **$1.66** | **$1.28** | | Adjusted EBITDA (Non-GAAP) (Millions) | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) from continuing operations (GAAP) | $11.4 | $(61.0) | $(24.0) | $(125.6) | | Adjusted net income from continuing operations | $40.5 | $31.0 | $94.2 | $72.6 | | Adjusted EBIT from continuing operations | $80.1 | $61.9 | $198.6 | $164.0 | | **Adjusted EBITDA from continuing operations** | **$131.0** | **$112.6** | **$348.9** | **$318.0** | [Other Commitments and Contingencies](index=54&type=section&id=Other%20Commitments%20and%20Contingencies) This section provides an update on the company's contractual obligations and other contingent liabilities - No material changes to the contractual obligations table from the 2019 Annual Report on Form 10-K, except for debt refinancing changes disclosed in Note 9[201](index=201&type=chunk) [Recent Accounting Pronouncements](index=54&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to the relevant note in the financial statements for details on recent accounting pronouncements - Information regarding recent accounting pronouncements is provided in Note 2 to the Condensed Consolidated Financial Statements[202](index=202&type=chunk) [Critical Accounting Policies](index=54&type=section&id=Critical%20Accounting%20Policies) This section confirms that there were no material changes to the company's critical accounting policies during the reporting period - There were no material changes to the Company's critical accounting policies in the three and nine months ended September 30, 2020[203](index=203&type=chunk) [Off-Balance Sheet Arrangements](index=54&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any material off-balance sheet arrangements maintained by the company - The Company does not have any material off-balance sheet arrangements other than letters of credit[204](index=204&type=chunk) [Cautionary Statement Regarding Forward Looking Statements](index=54&type=section&id=Cautionary%20Statement%20Regarding%20Forward%20Looking%20Statements) This section advises readers that forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are subject to risks and uncertainties, including those related to COVID-19, indebtedness, market disruptions, raw material costs, competition, supply chain, acquisitions, litigation, and regulatory changes[206](index=206&type=chunk) [Item 3 — Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rate, foreign currency, and commodity price risks, and its use of derivative instruments to manage these exposures. It notes no significant changes in market risk exposures from the prior year-end - The Company manages interest rate, foreign currency, and commodity price risks using derivative instruments[208](index=208&type=chunk) - No significant changes in the Company's portfolio of financial instruments or market risk exposures from the 2019 year-end[209](index=209&type=chunk) [Item 4 — Controls and Procedures](index=55&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of September 30, 2020, concluding they were effective. There were no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of September 30, 2020[211](index=211&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended September 30, 2020[212](index=212&type=chunk) [Report of Independent Registered Public Accounting Firm](index=56&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP reviewed the interim financial information for TreeHouse Foods, Inc. for the periods ended September 30, 2020 and 2019, and found no material modifications needed for conformity with GAAP. They also confirmed the fair statement of the December 31, 2019 balance sheet - Deloitte & Touche LLP reviewed the interim financial information and found no material modifications needed for GAAP conformity[215](index=215&type=chunk) - The accompanying condensed consolidated balance sheet as of December 31, 2019, is fairly stated in all material respects[216](index=216&type=chunk) [Part II — Other Information](index=57&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) This section provides additional information on legal proceedings, risk factors, controls, and other required disclosures [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 14 of the Condensed Consolidated Financial Statements for detailed information on legal proceedings, including ongoing class action lawsuits and a preliminary settlement understanding for wage and hour practices - Information on legal proceedings is detailed in Note 14 of the financial statements[220](index=220&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) This section highlights the potential adverse impacts of the COVID-19 pandemic on the company's business, operations, and financial condition, including workforce disruptions, facility shutdowns, decreased food-away-from-home demand, supply chain issues, and financial market volatility. It also references the 2019 Annual Report on Form 10-K for other risk factors - COVID-19 poses significant risks including workforce disruptions, facility shutdowns, decreased food-away-from-home demand, supply chain issues, and financial market volatility[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[226](index=226&type=chunk) - The company cannot accurately predict the future impact of COVID-19 due to various uncertainties[224](index=224&type=chunk) [Item 2. Unregistered Sale of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is marked as 'Not applicable,' indicating no unregistered sales of equity securities or specific use of proceeds to report for the period - This item is not applicable for the reporting period[225](index=225&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including supplemental indentures, awareness letters, certifications, and XBRL interactive data files - Exhibits include a Twelfth Supplemental Indenture, Awareness Letter from Deloitte & Touche LLP, List of Guarantor Subsidiaries, and CEO/CFO certifications[228](index=228&type=chunk) [Signatures](index=59&type=section&id=Signatures) The report is duly signed on behalf of TreeHouse Foods, Inc. by William J. Kelley Jr., Executive Vice President and Chief Financial Officer, and Patrick M. O'Donnell, Vice President, Corporate Controller, and Principal Accounting Officer, as of November 5, 2020 - The report is signed by William J. Kelley Jr. (EVP & CFO) and Patrick M. O'Donnell (VP, Corporate Controller, & Principal Accounting Officer) on November 5, 2020[231](index=231&type=chunk)

Part I — Financial Information [Item 1 — Financial Statements (Unaudited)](index=4&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements and related notes for the quarter ended June 30, 2020 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets | Metric | June 30, 2020 (in millions) | December 31, 2019 (in millions) | | :-------------------------------- | :--------------------------- | :------------------------------ | | **Assets** | | | | Total current assets | $1,405.2 | $1,219.5 | | Total assets | $5,242.0 | $5,139.4 | | **Liabilities & Equity** | | | | Total current liabilities | $951.7 | $813.4 | | Total liabilities | $3,438.3 | $3,308.5 | | Total stockholders' equity | $1,803.7 | $1,830.9 | | Total liabilities and stockholders' equity | $5,242.0 | $5,139.4 | - Total assets **increased by $102.6 million** from December 31, 2019, to June 30, 2020, primarily driven by an increase in cash and cash equivalents and inventories[10](index=10&type=chunk) - Total liabilities **increased by $129.8 million**, mainly due to higher accounts payable and accrued expenses[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Net sales | $1,041.9 | $1,025.3 | $2,126.8 | $2,092.1 | | Gross profit | $191.2 | $189.2 | $386.1 | $385.4 | | Operating income (loss) | $25.3 | $(7.9) | $55.5 | $7.6 | | Net loss from continuing operations | $(2.6) | $(50.1) | $(35.4) | $(64.6) | | Net income (loss) from discontinued operations | $1.1 | $(121.7) | $2.7 | $(134.1) | | Net loss | $(1.5) | $(171.8) | $(32.7) | $(198.7) | | Loss per share basic (1) | $(0.03) | $(3.05) | $(0.58) | $(3.54) | - Net sales **increased by 1.6%** for the three months ended June 30, 2020, and by 1.7% for the six months ended June 30, 2020, compared to the prior year periods[12](index=12&type=chunk) - Operating income **significantly improved**, moving from a loss of $7.9 million in Q2 2019 to an income of $25.3 million in Q2 2020, and from $7.6 million to $55.5 million for the six-month period[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Net loss | $(1.5) | $(171.8) | $(32.7) | $(198.7) | | Other comprehensive income (loss) | $7.5 | $7.4 | $(8.3) | $14.3 | | Comprehensive income (loss) | $6.0 | $(164.4) | $(41.0) | $(184.4) | - Comprehensive income (loss) **significantly improved** from a loss of $164.4 million in Q2 2019 to an income of $6.0 million in Q2 2020[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity | Metric | Balance, June 30, 2020 (in millions) | Balance, December 31, 2019 (in millions) | | :-------------------------- | :----------------------------------- | :----------------------------------- | | Common Stock | $0.6 | $0.6 | | Additional Paid-In Capital | $2,168.4 | $2,154.6 | | Accumulated Deficit | $(189.7) | $(157.0) | | Accumulated Other Comprehensive Loss | $(92.3) | $(84.0) | | Total Equity | $1,803.7 | $1,830.9 | - Total stockholders' equity **decreased from $1,830.9 million** at December 31, 2019, to $1,803.7 million at June 30, 2020, primarily due to an increase in accumulated deficit and accumulated other comprehensive loss[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows | Metric | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :------------------------------------------ | :----------------------------------- | :----------------------------------- | | Net cash provided by operating activities | $123.8 | $9.4 | | Net cash used in investing activities | $(25.0) | $(72.7) | | Net cash used in financing activities | $(9.1) | $(41.4) | | Net increase (decrease) in cash and cash equivalents | $91.6 | $(100.6) | | Cash and cash equivalents, end of period | $293.9 | $63.7 | - Net cash provided by operating activities **significantly increased to $123.8 million** in the first six months of 2020, compared to $9.4 million in the same period of 2019[21](index=21&type=chunk) - Cash and cash equivalents at the end of the period **increased substantially to $293.9 million** as of June 30, 2020, from $63.7 million in the prior year[21](index=21&type=chunk) [1. BASIS OF PRESENTATION](index=10&type=section&id=1.%20BASIS%20OF%20PRESENTATION) - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with SEC rules for quarterly reporting on Form 10-Q and GAAP, with certain information condensed or omitted[25](index=25&type=chunk) - The Company changed its organizational and segment structure in Q1 2020, recasting prior period information to reflect this change[28](index=28&type=chunk) [2. RECENT ACCOUNTING PRONOUNCEMENTS](index=10&type=section&id=2.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - The Company early adopted new SEC rules (Rules 3-10 and 3-16 of Regulation S-X) in Q1 2020, simplifying financial disclosure for registered debt offerings[29](index=29&type=chunk) - ASU 2019-12, Simplifying the Accounting for Income Taxes, was also early adopted in Q1 2020, with no material impact on financial statements[30](index=30&type=chunk) - The Company is evaluating ASU 2020-04, Reference Rate Reform, which provides temporary optional guidance for accounting for reference rate reform[32](index=32&type=chunk) [3. RESTRUCTURING PROGRAMS](index=11&type=section&id=3.%20RESTRUCTURING%20PROGRAMS) - The Company's restructuring efforts, 'TreeHouse 2020' and 'Structure to Win,' aim to improve long-term profitability through manufacturing optimization, supply chain streamlining, and operating expense reduction[33](index=33&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk) - Total restructuring costs **decreased significantly from $33.6 million** in Q2 2019 to $11.8 million in Q2 2020, and from $65.6 million to $31.7 million for the six-month period, as the TreeHouse 2020 program winds down[33](index=33&type=chunk) - The 'Structure to Win' program's total expected costs **increased from $60.4 million to $87.6 million** during the six months ended June 30, 2020, due to reorganization transition expenses[39](index=39&type=chunk) Restructuring Program Costs | Program | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :---------------------- | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | TreeHouse 2020 | $8.8 | $28.1 | $20.9 | $54.5 | | Structure to Win | $3.0 | $5.5 | $10.8 | $11.1 | | Total Restructuring Programs | $11.8 | $33.6 | $31.7 | $65.6 | [4. RECEIVABLES SALES PROGRAM](index=13&type=section&id=4.%20RECEIVABLES%20SALES%20PROGRAM) - The Company sells certain trade accounts receivable to third-party financial institutions, with a **maximum of $300.0 million** that may be sold at any time[41](index=41&type=chunk) - Outstanding receivables sold were **$200.1 million as of June 30, 2020**, down from $243.0 million at December 31, 2019[42](index=42&type=chunk) Loss on Sale of Receivables | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :---------------- | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Loss on sale of receivables | $0.6 | $1.2 | $1.5 | $2.1 | [5. INVENTORIES](index=13&type=section&id=5.%20INVENTORIES) - Total inventories **increased by $85.4 million** from December 31, 2019, to June 30, 2020, driven by increases in both raw materials and finished goods[45](index=45&type=chunk) Inventories | Inventory Type | June 30, 2020 (in millions) | December 31, 2019 (in millions) | | :--------------------- | :--------------------------- | :------------------------------ | | Raw materials and supplies | $257.0 | $205.5 | | Finished goods | $372.4 | $338.5 | | Total inventories | $629.4 | $544.0 | [6. DISCONTINUED OPERATIONS AND OTHER DIVESTITURES](index=13&type=section&id=6.%20DISCONTINUED%20OPERATIONS%20AND%20OTHER%20DIVESTITURES) - The Snacks division was sold on August 1, 2019, for **$90 million in cash**, after incurring $66.5 million in impairment losses in Q2 2019[46](index=46&type=chunk)[47](index=47&type=chunk) - The Ready-to-eat (RTE) Cereal business remains classified as a discontinued operation, with an expected **disposal loss of $63.9 million** recognized in Q2 2019[50](index=50&type=chunk)[51](index=51&type=chunk) - The Company completed the sale of two In-Store Bakery facilities for **$24.0 million** on April 17, 2020, recognizing a $0.3 million loss on divestiture[54](index=54&type=chunk) Discontinued Operations Financial Summary | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Net sales (discontinued operations) | $60.1 | $225.8 | $116.9 | $460.8 | | Net income (loss) from discontinued operations | $1.1 | $(121.7) | $2.7 | $(134.1) | [7. GOODWILL AND INTANGIBLE ASSETS](index=16&type=section&id=7.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) - Following a Q1 2020 organizational structure change, goodwill and accumulated impairment losses were reallocated between the new Meal Preparation and Snacking & Beverages segments. An impairment test was performed, resulting in **no new impairment losses**[56](index=56&type=chunk)[57](index=57&type=chunk) - Total goodwill **decreased slightly by $5.2 million** due to foreign currency exchange adjustments[58](index=58&type=chunk) Goodwill by Segment | Segment | Balance at January 1, 2020 (in millions) | Foreign currency exchange adjustments (in millions) | Balance at June 30, 2020 (in millions) | | :-------------------- | :----------------------------------- | :------------------------------------------ | :----------------------------------- | | Meal Preparation | $1,253.0 | $(3.0) | $1,250.0 | | Snacking & Beverages | $854.3 | $(2.2) | $852.1 | | Total Goodwill | $2,107.3 | $(5.2) | $2,102.1 | [8. INCOME TAXES](index=17&type=section&id=8.%20INCOME%20TAXES) - The effective income tax rate for Q2 2020 was **123.2%** (vs 12.0% in Q2 2019) and **42.7%** for the six months ended June 30, 2020 (vs 17.5% in 2019), primarily due to changes in valuation allowance and non-deductible executive compensation, partially offset by CARES Act benefits[61](index=61&type=chunk) - The Company recorded a **$5.0 million (Q2) and $11.0 million (YTD) income tax benefit** related to the NOL carryback provisions of the CARES Act[63](index=63&type=chunk) - An estimated federal income tax receivable of **$32.3 million** related to the CARES Act was recorded as of June 30, 2020, with an expected increase of $10 million to $15 million in Q3 2020 due to new Section 163(j) regulations[63](index=63&type=chunk)[64](index=64&type=chunk) [9. LONG-TERM DEBT](index=17&type=section&id=9.%20LONG-TERM%20DEBT) - Total outstanding debt **decreased slightly from $2,122.7 million** at December 31, 2019, to $2,115.6 million at June 30, 2020[65](index=65&type=chunk) - The Company repaid **$100.0 million** from its Revolving Credit Facility in Q2 2020, with $723.9 million remaining available as of June 30, 2020[66](index=66&type=chunk) - The average interest rate on debt outstanding under the Credit Agreement was **2.13%** for Q2 2020, increasing to 3.91% including interest rate swap agreements[65](index=65&type=chunk) Long-Term Debt Summary | Debt Type | June 30, 2020 (in millions) | December 31, 2019 (in millions) | | :------------------ | :--------------------------- | :------------------------------ | | Term Loan A | $455.9 | $458.4 | | Term Loan A-1 | $677.1 | $681.6 | | 2022 Notes | $375.9 | $375.9 | | 2024 Notes | $602.9 | $602.9 | | Finance leases | $3.8 | $3.9 | | Total outstanding debt | $2,115.6 | $2,122.7 | | Total long-term debt | $2,086.6 | $2,091.7 | [10. EARNINGS PER SHARE](index=18&type=section&id=10.%20EARNINGS%20PER%20SHARE) - The weighted average common shares outstanding for basic and diluted EPS remained consistent, as incremental shares from equity awards were anti-dilutive[68](index=68&type=chunk) Weighted Average Common Shares Outstanding | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Weighted average common shares outstanding | 56.5 | 56.3 | 56.4 | 56.2 | | Weighted average diluted common shares outstanding | 56.5 | 56.3 | 56.4 | 56.2 | [11. STOCK-BASED COMPENSATION](index=18&type=section&id=11.%20STOCK-BASED%20COMPENSATION) - Total stock-based compensation expense **increased to $7.0 million** in Q2 2020 (from $6.3 million in Q2 2019) and to $14.9 million for the six months ended June 30, 2020 (from $12.0 million in 2019)[70](index=70&type=chunk) - Approximately **3.9 million shares** remained available for award under the Equity and Incentive Plan as of June 30, 2020[69](index=69&type=chunk) Stock-Based Compensation Expense | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Compensation expense related to stock-based payments | $7.0 | $6.3 | $14.9 | $12.0 | | Related income tax benefit | $1.8 | $1.7 | $3.9 | $3.2 | [12. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=22&type=section&id=12.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) - Accumulated other comprehensive loss **increased from $84.0 million** at December 31, 2019, to $92.3 million at June 30, 2020, primarily due to foreign currency translation adjustments[80](index=80&type=chunk) Changes in Accumulated Other Comprehensive Loss | Component | Balance at December 31, 2019 (in millions) | Other comprehensive (loss) income (in millions) | Balance at June 30, 2020 (in millions) | | :-------------------------------- | :----------------------------------- | :-------------------------------------- | :----------------------------------- | | Foreign Currency Translation | $(79.4) | $(8.5) | $(87.9) | | Unrecognized Pension and Postretirement Benefits | $(4.6) | $0.2 | $(4.4) | | Accumulated Other Comprehensive Loss | $(84.0) | $(8.3) | $(92.3) | [13. EMPLOYEE RETIREMENT AND POSTRETIREMENT BENEFITS](index=22&type=section&id=13.%20EMPLOYEE%20RETIREMENT%20AND%20POSTRETIREMENT%20BENEFITS) - Net periodic pension cost **shifted from an expense of $0.5 million** in Q2 2019 to a benefit of $0.4 million in Q2 2020, and from an expense of $0.5 million to a benefit of $0.8 million for the six-month period[83](index=83&type=chunk) - The Company executed a complete withdrawal from a multiemployer pension plan in Q2 2019, settling a **$4.1 million withdrawal liability** in Q4 2019[86](index=86&type=chunk) Net Periodic Benefit Cost | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Net periodic pension (benefit) cost | $(0.4) | $0.5 | $(0.8) | $0.5 | | Net periodic postretirement cost | $0.2 | $0.3 | $0.4 | $0.6 | [14. COMMITMENTS AND CONTINGENCIES](index=24&type=section&id=14.%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is involved in several class action lawsuits, including 'Public Employees' Retirement Systems of Mississippi v. TreeHouse Foods, Inc., et al.' (securities class action) and derivative actions, which it intends to vigorously defend[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - A preliminary settlement understanding of **$9.0 million** was reached with plaintiffs in the 'Negrete v. Ralcorp Holdings, Inc., et al.' wage and hour class action, resulting in a $9.0 million liability accrual as of June 30, 2020[94](index=94&type=chunk) - Mediation for the 'Public Employees' case was postponed due to COVID-19 concerns until at least August 26, 2020[92](index=92&type=chunk) [15. DERIVATIVE INSTRUMENTS](index=25&type=section&id=15.%20DERIVATIVE%20INSTRUMENTS) - The Company uses derivative instruments (interest rate swaps, foreign currency contracts, commodity contracts) to manage interest rate, foreign currency, and commodity price risks, not for trading or speculative purposes[96](index=96&type=chunk)[97](index=97&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - As of June 30, 2020, the Company had **$875.0 million in interest rate swap agreements** to fix LIBOR rates, which are not accounted for under hedge accounting[99](index=99&type=chunk) Fair Value of Derivative Instruments | Derivative Type | Fair Value June 30, 2020 (in millions) | Fair Value December 31, 2019 (in millions) | | :---------------------- | :----------------------------------- | :----------------------------------- | | Asset Derivatives | $2.4 | $1.6 | | Liability Derivatives | $117.8 | $57.2 | Gain (Loss) on Derivative Instruments | Metric | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Total unrealized gain (loss) | $4.3 | $(25.3) | $(59.8) | $(41.2) | | Total realized (loss) gain | $(9.2) | $3.1 | $(11.4) | $6.3 | | Total loss | $(4.9) | $(22.2) | $(71.2) | $(34.9) | [16. SEGMENT INFORMATION](index=27&type=section&id=16.%20SEGMENT%20INFORMATION) - Effective January 1, 2020, the Company reorganized from three product-category segments to two market-dynamics segments: **Meal Preparation and Snacking & Beverages**[107](index=107&type=chunk) - Both segments showed **net sales growth and increased direct operating income** for both the three and six months ended June 30, 2020, compared to the prior year[112](index=112&type=chunk) Segment Financial Summary | Segment | Three Months Ended June 30, 2020 (in millions) | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :-------------------- | :------------------------------------- | :------------------------------------- | :----------------------------------- | :----------------------------------- | | Meal Preparation Net Sales | $667.7 | $657.5 | $1,341.3 | $1,328.2 | | Snacking & Beverages Net Sales | $374.2 | $367.8 | $785.5 | $763.9 | | Total Net Sales | $1,041.9 | $1,025.3 | $2,126.8 | $2,092.1 | | Meal Preparation Direct Operating Income | $102.3 | $90.3 | $188.6 | $181.1 | | Snacking & Beverages Direct Operating Income | $52.5 | $46.0 | $100.6 | $92.9 | | Total Direct Operating Income | $154.8 | $136.3 | $289.2 | $274.0 | [Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial condition, operational results, and the impact of COVID-19 [Business Overview](index=30&type=section&id=Business%20Overview) - TreeHouse Foods, Inc. is a leading North American manufacturer and distributor of private label foods and beverages, with 36 production facilities[115](index=115&type=chunk) - The Company's product portfolio includes snacking, beverages, and meal preparation products across various formats, with a focus on clean label, organic, and preservative-free options[115](index=115&type=chunk) - Effective January 1, 2020, the Company operates under two reportable segments: **Meal Preparation and Snacking & Beverages**[116](index=116&type=chunk) [Recent Developments](index=32&type=section&id=Recent%20Developments) - The COVID-19 pandemic led to significant changes in product consumption, favoring the retail grocery business (**80% of net sales**) and offsetting weakness in the food-away-from-home channel[121](index=121&type=chunk) - The Company implemented extensive safety measures for employees, including increased sanitation, physical barriers, PPE, temperature screenings, supplemental pay, and remote work[120](index=120&type=chunk) - Favorable revenue and earnings impacts from increased food-at-home consumption are expected to continue in the immediate future, though less elevated in the second half of 2020[123](index=123&type=chunk) - The Company reorganized its segments from product categories (Baked Goods, Beverages, Meal Solutions) to market dynamics (Snacking & Beverages, Meal Preparation) effective January 1, 2020[124](index=124&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) - **Organic net sales increased 3.7%** in Q2 2020 and 3.1% for the six months ended June 30, 2020, primarily due to increased retail demand from COVID-19, despite divestitures and pricing adjustments[128](index=128&type=chunk)[142](index=142&type=chunk) - Gross profit margin slightly decreased due to incremental COVID-19 costs (production shifts, supplemental pay, PPE, sanitation), partially offset by favorable channel mix and higher throughput[129](index=129&type=chunk)[143](index=143&type=chunk) - Total operating expenses **decreased significantly** due to lower restructuring expenses (TreeHouse 2020 winding down) and SG&A discipline, partially offset by higher employee expenses[130](index=130&type=chunk)[144](index=144&type=chunk) - Total other expense decreased in Q2 2020 due to non-cash mark-to-market gains on hedging activities and favorable foreign currency exchange rates, but increased for the six-month period due to mark-to-market expenses and unfavorable currency rates[131](index=131&type=chunk)[145](index=145&type=chunk) - Net income (loss) from discontinued operations **improved significantly** due to non-recurring impairment charges recognized in the prior year[134](index=134&type=chunk)[148](index=148&type=chunk) - Meal Preparation segment **organic net sales increased 1.8%** in Q2 and 1.2% YTD, driven by retail demand, with direct operating income margin increasing due to favorable channel mix and lower SG&A[137](index=137&type=chunk)[138](index=138&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Snacking & Beverages segment **organic net sales increased 7.0%** in Q2 and 6.5% YTD, also driven by retail demand, with direct operating income margin increasing due to productivity gains from higher operational throughput[139](index=139&type=chunk)[140](index=140&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) Key Financial Metrics | Metric | Q2 2020 Net Sales (in millions) | Q2 2019 Net Sales (in millions) | YTD 2020 Net Sales (in millions) | YTD 2019 Net Sales (in millions) | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Sales | $1,041.9 | $1,025.3 | $2,126.8 | $2,092.1 | | Gross Profit % | 18.4% | 18.5% | 18.1% | 18.4% | | Operating Income (Loss) | $25.3 | $(7.9) | $55.5 | $7.6 | | Net Loss | $(1.5) | $(171.8) | $(32.7) | $(198.7) | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company maintains a strong financial position, with **$723.9 million available** under its Revolving Credit Facility as of June 30, 2020, after repaying $100.0 million[156](index=156&type=chunk) - COVID-19 has not materially impacted operations, and current cash balances, cash flows, and liquidity are expected to meet requirements, with CARES Act provisions offsetting incremental expenses[157](index=157&type=chunk) - Cash provided by operating activities from continuing operations **increased by $166.8 million to $123.3 million** for the first six months of 2020, driven by higher cash earnings and improved working capital[159](index=159&type=chunk) - Cash used in investing activities from continuing operations **decreased by $44.6 million to $24.6 million**, due to lower capital expenditures and proceeds from asset sales[160](index=160&type=chunk) - **Free cash flow from continuing operations improved significantly to $66.7 million** for the first six months of 2020, compared to a negative $114.0 million in the prior year[165](index=165&type=chunk) - The Company is in compliance with all financial debt covenants as of June 30, 2020[168](index=168&type=chunk) [Guarantor Summarized Financial Information](index=41&type=section&id=Guarantor%20Summarized%20Financial%20Information) - The 2022 and 2024 Notes are fully and unconditionally guaranteed by domestic subsidiaries (Guarantor Subsidiaries), with no significant restrictions on fund transfers[169](index=169&type=chunk) Guarantor Summarized Statement of Operations | Metric | Six Months Ended June 30, 2020 (in millions) | Year Ended December 31, 2019 (in millions) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net sales | $2,004.2 | $4,104.5 | | Gross profit | $360.7 | $763.9 | | Net loss from continuing operations | $(29.3) | $(116.9) | | Net loss | $(26.6) | $(371.0) | Guarantor Summarized Balance Sheet | Metric | June 30, 2020 (in millions) | December 31, 2019 (in millions) | | :------------------ | :--------------------------- | :------------------------------ | | Current assets | $1,222.0 | $1,142.2 | | Noncurrent assets | $3,578.6 | $3,626.5 | | Current liabilities | $881.8 | $858.9 | | Noncurrent liabilities | $2,505.4 | $2,515.6 | [Non-GAAP Measures](index=42&type=section&id=Non-GAAP%20Measures) - The Company uses Non-GAAP financial measures like Organic Net Sales, Adjusted Diluted EPS, Adjusted Net Income, Adjusted EBIT, and Adjusted EBITDA from continuing operations to provide useful information for investors and management, excluding items affecting comparability[172](index=172&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - **Adjusted Diluted EPS from continuing operations increased significantly to $0.58** in Q2 2020 (from $0.40 in Q2 2019) and to $0.95 YTD (from $0.74 YTD 2019)[176](index=176&type=chunk) - **Adjusted EBITDA from continuing operations increased to $119.2 million** in Q2 2020 (from $105.4 million in Q2 2019) and to $217.9 million YTD (from $205.4 million YTD 2019), reflecting improved operating performance[183](index=183&type=chunk) Reconciliation of GAAP to Non-GAAP EPS | Metric | Q2 2020 (per share) | Q2 2019 (per share) | YTD 2020 (per share) | YTD 2019 (per share) | | :------------------------------------------ | :------------------ | :------------------ | :------------------- | :------------------- | | Diluted loss per share from continuing operations (GAAP) | $(0.05) | $(0.89) | $(0.63) | $(1.15) | | Adjusted diluted EPS from continuing operations (Non-GAAP) | $0.58 | $0.40 | $0.95 | $0.74 | Reconciliation of GAAP to Non-GAAP Financial Measures | Metric | Q2 2020 (in millions) | Q2 2019 (in millions) | YTD 2020 (in millions) | YTD 2019 (in millions) | | :------------------------------------------ | :-------------------- | :-------------------- | :--------------------- | :--------------------- | | Net loss from continuing operations (GAAP) | $(2.6) | $(50.1) | $(35.4) | $(64.6) | | Adjusted net income from continuing operations (Non-GAAP) | $33.0 | $22.7 | $53.7 | $41.6 | | Adjusted EBIT from continuing operations (Non-GAAP) | $69.6 | $54.9 | $118.5 | $102.1 | | Adjusted EBITDA from continuing operations (Non-GAAP) | $119.2 | $105.4 | $217.9 | $205.4 | | Adjusted EBITDA margin from continuing operations | 11.4% | 10.3% | 10.2% | 9.8% | [Other Commitments and Contingencies](index=46&type=section&id=Other%20Commitments%20and%20Contingencies) - The Company has commitments related to lease obligations and selected levels of property and casualty risks (employee health care, workers' compensation, other casualty losses)[185](index=185&type=chunk)[188](index=188&type=chunk) [Recent Accounting Pronouncements](index=46&type=section&id=Recent%20Accounting%20Pronouncements) - Information on recent accounting pronouncements is detailed in Note 2 to the Condensed Consolidated Financial Statements[186](index=186&type=chunk) [Critical Accounting Policies](index=46&type=section&id=Critical%20Accounting%20Policies) - There were no material changes to the Company's critical accounting policies in the three and six months ended June 30, 2020[187](index=187&type=chunk) [Off-Balance Sheet Arrangements](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company does not have any material off-balance sheet arrangements, other than letters of credit[188](index=188&type=chunk) [Item 3 — Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's exposure to market risks and the derivative instruments used for management - The Company uses derivative instruments to manage market risks related to interest rates, foreign currency, and commodity prices[191](index=191&type=chunk) - No significant changes in the Company's portfolio of financial instruments or market risk exposures have occurred since the 2019 year-end[192](index=192&type=chunk) [Item 4 — Controls and Procedures](index=47&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures with no material changes in internal controls - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2020[194](index=194&type=chunk) - There were **no material changes** in the Company's internal control over financial reporting during the quarter ended June 30, 2020[195](index=195&type=chunk) [Report of Independent Registered Public Accounting Firm](index=48&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Presents the independent auditor's review conclusion on the interim financial information - Deloitte & Touche LLP reviewed the interim financial information for Q2 2020 and found **no material modifications needed** for conformity with GAAP[197](index=197&type=chunk) - The firm expressed an unqualified opinion on the Company's consolidated financial statements as of December 31, 2019, and confirmed the fair statement of the accompanying condensed balance sheet information[198](index=198&type=chunk) Part II — Other Information [Item 1 — Legal Proceedings](index=49&type=section&id=Item%201%20%E2%80%94%20Legal%20Proceedings) Refers to Note 14 for detailed information regarding ongoing legal proceedings - Information regarding legal proceedings is available in Note 14 to the Condensed Consolidated Financial Statements[202](index=202&type=chunk) [Item 1A — Risk Factors](index=49&type=section&id=Item%201A%20%E2%80%94%20Risk%20Factors) Highlights potential adverse impacts of the COVID-19 pandemic on business operations and financial condition - The **COVID-19 pandemic** may adversely affect the Company's business, results of operations, and financial condition[204](index=204&type=chunk) - Key risks include workforce inability to work, facility shutdowns, decreased demand in food-away-from-home, commodity cost volatility, foreign currency fluctuations, supply chain disruptions, and challenges in executing strategic activities or obtaining financing[208](index=208&type=chunk) - COVID-19 could also negatively affect internal controls over financial reporting and divert management attention if key employees become ill[205](index=205&type=chunk) [Item 2 — Unregistered Sale of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202%20%E2%80%94%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is noted as not applicable for the current reporting period - This section is marked as **'Not applicable'**[207](index=207&type=chunk) [Item 6 — Exhibits](index=50&type=section&id=Item%206%20%E2%80%94%20Exhibits) Lists all exhibits filed with the Form 10-Q, including certifications and XBRL data files - The exhibits include an Awareness Letter from Deloitte & Touche LLP, a List of Guarantor Subsidiaries, and Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[211](index=211&type=chunk) - XBRL Instance Document and other XBRL Taxonomy Extension documents are also filed[211](index=211&type=chunk) [Signatures](index=51&type=section&id=Signatures) Contains the required officer signatures for the Form 10-Q filing - The report is signed by William J. Kelley Jr., Executive Vice President and Chief Financial Officer, and Patrick M. O'Donnell, Vice President, Corporate Controller, and Principal Accounting Officer, on August 6, 2020[214](index=214&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2020. or ☐ 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 001-32504 TreeHouse Foods, Inc. (Exact name of the registrant as specified in its charter) | Delaware | | | 20-2311383 | | --- | -- ...

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 December 31, 2019 Or ☐ 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 001-32504 TreeHouse Foods, Inc. (Exact name of the registrant as specified in its charter) Delaware 20-2311383 (State or other jurisdicti ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 or ☐ 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 001-32504 TreeHouse Foods, Inc. Form 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2019. (Exact name of the registrant as specified in its charter) | Delaware | | | 20-2311383 | | --- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2019. or ☐ 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 001-32504 TreeHouse Foods, Inc. (Exact name of the registrant as specified in its charter) | Delaware | | | 20-2311383 | | --- | --- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2019. 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 001-32504 TreeHouse Foods, Inc. (Exact name of the registrant as specified in its charter) Delaware 20-2311383 (State or other juri ...