Post Holdings, Inc. (POST) FY 2023 MD&A

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of Post Holdings, Inc. This discussion should be read in conjunction with the financial statements under Item 8 of this report and the “Cautionary Statement on Forward-Looking Statements” on page 1 of this report. The terms “our,” “we,” “us,” “Company” and “Post” as used herein refer to Post Holdings, Inc. and its subsidiaries.

The following should be read in conjunction with the discussion and analysis of our fiscal 2022 results compared to our fiscal 2021 results, including any related discussion of fiscal 2021 results and activity, which can be found in Item 7 under the title “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended September 30, 2022, and such discussion and analysis is incorporated by reference herein.

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

OVERVIEW

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

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

•Post Consumer Brands: North American ready-to-eat (“RTE”) cereal, pet food and nut butters;

•Weetabix: primarily United Kingdom (the “U.K.”) RTE cereal, muesli and protein-based shakes;

•Foodservice: primarily egg and potato products; and

•Refrigerated Retail: primarily side dish, egg, cheese and sausage products.

Transactions

Post Holdings Partnering Corporation

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

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

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

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

Proceeds of $345.0 million were deposited in a trust account established for the benefit of PHPC’s public stockholders, which consisted of certain proceeds from the PHPC IPO and certain proceeds from the PHPC Private Placement, net of underwriters’ discounts and commissions and other costs and expenses. A minimum balance of $345.0 million, which

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represented the number of PHPC Units sold at the offering price of $10.00 per PHPC Unit, was required by the underwriting agreement to be maintained in the trust account. These proceeds were invested only in United States (“U.S.”) treasury securities. At September 30, 2022, there was $346.8 million held in the trust account, which was included in “Investments held in trust” on the Consolidated Balance Sheets.

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

As of September 30, 2022 and prior to the PHPC Redemption (as defined below), we beneficially owned 31.0% of the equity of PHPC and the net earnings and net assets of PHPC were consolidated within our financial statements. The remaining 69.0% of the consolidated net earnings and net assets of PHPC, which represented the percentage of economic interest in PHPC held by the public stockholders of PHPC through their ownership of PHPC equity, were allocated to redeemable NCI. All transactions between PHPC and PHPC Sponsor, as well as related financial statement impacts, eliminated in consolidation.

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

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

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

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

•redeemable NCI of $312.5 million immediately prior to the PHPC Redemption was reduced to zero on the Consolidated Balance Sheets as of September 30, 2023.

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

BellRing Brands, Inc.

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

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

Upon completion of the BellRing Distribution, BellRing Merger Sub merged with and into Old BellRing (the “BellRing Merger”), with Old BellRing continuing as the surviving corporation and becoming a wholly-owned subsidiary of BellRing.

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The transactions described above, including the BellRing Contribution, the BellRing Distribution and the BellRing Merger, and the Debt-for-Debt Exchange described under “Liquidity and Capital Resources” within this section, are collectively referred to as the “BellRing Spin-off.”

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

On August 11, 2022, we transferred 14.8 million shares of our Investment in BellRing to repay certain outstanding debt obligations as part of the First Debt-for-Equity Exchange (as defined in “Liquidity and Capital Resources” within this section).

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

We incurred separation-related expenses of $0.1 million and $29.9 million during the years ended September 30, 2023 and 2022, respectively, related to the BellRing Spin-off and subsequent divestment of our Investment in BellRing. These expenses generally included third-party costs for advisory services, fees charged by other service providers and government filing fees and were included in “Selling, general and administrative expenses” in the Consolidated Statements of Operations.

For additional information on the BellRing Spin-off and the transactions to subsequently divest of our Investment in BellRing, refer to Notes 4, 5 and 16 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

Acquisitions

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

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

For additional information on our acquisitions, refer to Note 6 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

Divestitures

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

Market and Company Trends

Our Company, as well as the consumer packaged goods industry in which we operate, have been impacted by the following trends which have impacted our results of operations and may continue to impact our results of operations in the future, including:

•inflationary pressures, which have driven increased input costs and therefore pricing actions within each of our respective segments (refer to “Commodity Trends and Seasonality” section below);

•shifting consumer preferences from branded to private label or other value products as consumers continue to be impacted by rising costs, which has negatively impacted sales volumes within our Refrigerated Retail, Post Consumer Brands and Weetabix segments and driven shifts in product mix toward lower margin products within our Post Consumer Brands and Weetabix segments; and

•outbreaks of avian influenza during fiscal 2022 and early fiscal 2023, which impacted our Foodservice and Refrigerated Retail segments, and drove increased costs related to production inefficiencies, egg supply constraints and higher market-based egg prices, all of which were mitigated through volume management with customers and pricing actions.

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RESULTS OF OPERATIONS

Net Sales

Net sales increased $1,139.8 million, or 19%, during the year ended September 30, 2023, when compared to the prior year. This increase was due to higher net sales within our Post Consumer Brands, Foodservice and Weetabix segments, partially offset by lower net sales in our Refrigerated Retail segment. For further discussion, refer to “Segment Results” within this section.

Operating Profit

Operating profit increased $183.3 million, or 44%, during the year ended September 30, 2023, when compared to the prior year. This increase was driven by higher segment profit within our Foodservice, Post Consumer Brands and Refrigerated Retail segments, partially offset by a goodwill impairment charge of $42.2 million related to our Cheese and Dairy reporting unit, lower segment profit within our Weetabix segment and increased general corporate expenses. For further discussion, refer to “Segment Results” within this section.

Interest Expense, net

Interest expense decreased $38.7 million, or 12%, for the year ended September 30, 2023, when compared to the prior year. The decrease was driven by lower average outstanding principal amounts of debt, increased interest income primarily on our investments held in trust prior to the PHPC Redemption and a lower weighted-average interest rate when compared to fiscal 2022. Our weighted-average interest rate on our total outstanding debt was 4.9% and 5.0% for the years ended September 30, 2023 and 2022, respectively.

For additional information on our debt, refer to Note 16 within “Notes to Consolidated Financial Statements” in Item 8 of this report and “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of this report.

(Gain) Loss on Extinguishment of Debt, net

During the year ended September 30, 2023, we recognized a net gain of $40.5 million related to the extinguishment of debt. The net gain primarily related to the partial repurchase of our 4.50% senior notes and our 4.625% senior notes. The net gain included debt discounts received of $42.9 million and the write-off of unamortized premiums of $0.9 million, partially offset by the write-off of debt issuance costs of $3.3 million related to our senior notes and our Third Incremental Term Loan (as defined in “Liquidity and Capital Resources” within this section).

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During the year ended September 30, 2022, we recognized a net gain of $72.6 million related to the extinguishment of debt. The net gain primarily related to the partial repurchase of our 4.50% senior notes, our 4.625% senior notes and our 5.50% senior notes, partially offset by a net loss related to the partial redemption of our 5.75% senior notes. The net gain included net debt discounts received of $73.7 million and the write-off of unamortized premiums of $15.3 million, partially offset by the write-off of debt issuance costs and tender fees of $16.4 million related to our senior notes, our First Incremental Term Loan and our Second Incremental Term Loan (as such terms are defined in “Liquidity and Capital Resources”) within this section.

For additional information on our debt, refer to Note 16 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

Income on Swaps, net

During the years ended September 30, 2023 and 2022, we recognized income on swaps, net of $39.9 million and $268.0 million, respectively, related to mark-to-market adjustments on our interest rate swaps. For additional information on our interest rate swaps, refer to Note 13 within “Notes to Consolidated Financial Statements” in Item 8 of this report and “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of this report.

Gain on Investment in BellRing

During the years ended September 30, 2023 and 2022, we recorded a gain related to our Investment in BellRing of $5.1 million and $437.1 million, respectively. For additional information on our Investment in BellRing, refer to Notes 4, 5 and 14 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

Income Tax Expense

Our effective income tax rate for fiscal 2023 was 24.1% compared to 9.6% for fiscal 2022. The following table presents the reconciliation of income tax expense with amounts computed at the U.S. federal statutory tax rate.

(a)No income taxes have been recorded with respect to the non-cash realized and unrealized book gains on the Company’s Investment in BellRing during the years ended September 30, 2023 or 2022, as the Company fully divested its remaining Investment in BellRing within 12 months of the BellRing Spin-off in a manner intended to qualify as tax-free for U.S. federal income tax purposes. For additional information on our Investment in BellRing, refer to Notes 4, 5 and 16 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

In fiscal 2022, our effective income tax rate differed significantly from the statutory rate primarily as a result of (i) a $91.8 million tax-effected benefit from the non-cash realized and unrealized book gains on our Investment in BellRing, which was divested in a manner intended to qualify as tax-free for U.S. federal income tax purposes, and (ii) $14.1 million of discrete income tax benefit items related to our equity method loss attributable to 8th Avenue Food & Provisions, Inc. (“8th Avenue”). See Notes 4 and 5 within “Notes to Consolidated Financial Statements” in Item 8 of this report and “Liquidity and Capital Resources” within this section for additional information on our Investment in BellRing and the 8th Avenue equity method loss.

Discontinued Operations

The BellRing Spin-off represented a strategic shift that had a major effect on our operations and consolidated financial results. Accordingly, the historical results of Old BellRing and BellRing Distribution, LLC prior to the BellRing Spin-off were

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presented as discontinued operations in the Consolidated Statements of Operations. For additional information on the BellRing Spin-off, refer to Notes 4 and 16 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

SEGMENT RESULTS

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

Post Consumer Brands

Net sales for the Post Consumer Brands segment increased $790.4 million, or 35%, for the year ended September 30, 2023, when compared to the prior year. The increase in net sales was primarily due to the inclusion of five months of Pet Food net sales of $679.8 million. The remaining increase was driven by higher average net selling prices primarily due to increased pricing taken to mitigate inflation. Excluding Pet Food, pricing increases were partially offset by a volume decline of 5% and unfavorable product mix as branded cereal volumes declined, partially offset by increased private label cereal volumes.

Segment profit for the year ended September 30, 2023 increased $64.2 million, or 20%, when compared to the prior year. This increase was primarily driven by higher net sales, as previously discussed, partially offset by higher product costs, which included five months of incremental costs attributable to Pet Food of $503.0 million, raw material inflation of $116.7 million and higher manufacturing costs of $65.5 million, partially offset by lower freight costs of $27.7 million. In addition, employee-related expenses, integration costs, advertising and consumer spending and amortization expense increased compared to the prior year, primarily due to the inclusion of five months of Pet Food expenses.

Weetabix

Net sales for the Weetabix segment increased $34.8 million, or 7%, for the year ended September 30, 2023, when compared to the prior year. Excluding the impact of unfavorable foreign exchange rates and six incremental months of net sales of $14.2 million attributable to our prior year acquisition of Lacka Foods, net sales increased $42.7 million, or 9%, on 1% lower volumes. The increase in net sales was driven by higher average net selling prices primarily due to list price increases, partially offset by a shift in product mix towards private label products and increased promotional spending. Volumes declined 1%, driven by volume decreases in branded products, partially offset by increases in private label products.

Segment profit decreased $35.6 million, or 33%, for the year ended September 30, 2023, when compared to the prior year. Excluding the impact of unfavorable foreign exchange rates, segment profit decreased $32.3 million, or 30%. This decrease was primarily driven by raw material inflation of $33.4 million and higher manufacturing costs of $13.1 million, partially offset by higher net sales, as previously discussed.

Foodservice

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Net sales for the Foodservice segment increased $330.9 million, or 16%, for the year ended September 30, 2023, when compared to the prior year. The increase in net sales was primarily driven by higher average net selling prices during the current year and the lapping of lower product demand as a result of the COVID-19 pandemic in the prior year. Egg product sales were up $289.6 million, or 16%, with volume up 4%, driven by price increases taken to mitigate cost inflation as well as the pass-through of increased grain and egg market prices. Egg volumes increased due to distribution gains in the foodservice channel, partially offset by lower food ingredient volume. Sales of side dishes were up $55.0 million, or 27%, with volume up 7%, driven by price increases taken to mitigate inflation and volume increases as a result of distribution gains. Sales of other products were down $13.7 million.

Segment profit increased $198.5 million, or 131%, for the year ended September 30, 2023, when compared to the prior year, driven by higher net sales, as previously discussed, lower freight costs of $31.7 million and lapping a provision for legal settlement and related legal fees of $18.2 million in the prior year. These positive impacts were partially offset by raw material inflation of $140.1 million, primarily driven by higher egg raw material costs due to unfavorable grain and egg market prices and higher potato raw material costs, increased employee-related expenses of $6.6 million, increased manufacturing costs of $6.5 million and higher warehousing costs of $5.2 million.

Refrigerated Retail

Net sales for the Refrigerated Retail segment decreased $16.9 million, or 2%, for the year ended September 30, 2023, when compared to the prior year. Net sales for the year ended September 30, 2023 were impacted by the absence of net sales as a result of the WEF Transaction. Excluding this impact, net sales decreased $9.8 million, or 1%, driven by 7% lower volumes primarily due to price elasticities and a shift towards private label products. These negative impacts were partially offset by higher average net selling prices compared to the prior year primarily due to price increases taken to mitigate input cost inflation, partially offset by increased promotional spending. Cheese and other dairy product sales were down $22.8 million, or 11%, with volume down 16%, and were additionally impacted by distribution losses. Egg product sales were down $4.6 million, or 2%, on 12% lower volumes, and were additionally impacted by avian influenza-related supply constraints. Sausage sales declined $1.9 million, or 1%, with volume down 1%. Sales of side dishes increased $24.7 million, or 6%, with volume down 4%. Sales of other products were down $5.2 million.

Segment profit increased $12.1 million, or 21%, for the year ended September 30, 2023, when compared to the prior year. This increase was driven by higher average net selling prices, as previously discussed, and lower freight costs of $8.0 million. These positive impacts were partially offset by raw material inflation of $17.9 million, increased advertising and consumer spending of $13.6 million, lower net sales volume, as previously discussed, and higher employee-related costs.

Other Items

General Corporate Expenses and Other

General corporate expenses and other increased $25.9 million, or 13%, during the year ended September 30, 2023, when compared to the prior year. The current year included $12.0 million of restructuring and facility closure costs, including accelerated depreciation, incurred by our Refrigerated Retail, Post Consumer Brands and Weetabix segments. The prior year included $11.1 million of restructuring and facility closure costs incurred by our Post Consumer Brands and Foodservice segments, a loss on sale of business of $6.3 million related to the WEF Transaction and a gain on assets held for sale of $9.4 million related to the sale of equipment in Klingerstown, Pennsylvania within our Foodservice segment. Excluding these impacts, general corporate expenses and other increased $21.9 million. This increase was driven by higher employee-related expenses of $19.6 million, higher acquisition-related costs of $14.6 million primarily related to Pet Food, increased mark-to-market adjustments and impairments on equity securities and investments of $14.5 million and increased net losses related to mark-to-market adjustments on economic hedges and warrant liabilities of $6.9 million. These negative impacts were partially offset by decreased separation-related expenses of $29.8 million in connection with the BellRing Spin-off and a gain related to the write-off of deferred underwriting commissions of $10.7 million in connection with the PHPC Redemption.

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Impairment of Goodwill

During the year ended September 30, 2023, we recorded a goodwill impairment charge of $42.2 million related to our Cheese and Dairy reporting unit, which is reported in our Refrigerated Retail segment. There were no goodwill impairment charges recorded during the years ended September 30, 2022 or 2021. For additional information on our goodwill impairment charge, refer to Note 8 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

LIQUIDITY AND CAPITAL RESOURCES

We completed the following activities during the reporting period (for additional information, see Notes 4, 5, 6, 16 and 20 within “Notes to Consolidated Financial Statements” in Item 8 of this report) impacting our liquidity and capital resources:

Fiscal 2023

•entered into a Joinder Agreement No. 4 (the “Fourth Joinder Agreement”), which provided for an incremental term loan (the “Fourth Incremental Term Loan”) of $400.0 million under our second amended and restated credit agreement dated March 18, 2020 (the “Credit Agreement”), which we borrowed in full on April 26, 2023;

•issued 5.4 million shares of our common stock to Smucker to fund a portion of the Pet Food acquisition;

•entered into a Joinder Agreement No. 3 (the “Third Joinder Agreement”), which provided for an incremental term loan (the “Third Incremental Term Loan”) of $130.0 million under our Credit Agreement, which we borrowed in full on November 18, 2022;

•transferred our remaining 4.6 million shares of BellRing Common Stock to the lender under the Third Joinder Agreement to repay $99.9 million in aggregate principal amount of the Third Incremental Term Loan (the “Second Debt-for-Equity Exchange”) on November 25, 2022;

•repaid the remaining principal amount of $30.1 million on the Third Incremental Term Loan on November 25, 2022;

•$220.8 million principal value of our 4.50% senior notes repurchased at a discount of $31.5 million;

•$96.8 million principal value of our 4.625% senior notes repurchased at a discount of $11.4 million;

•$1.0 million principal value of our 5.625% senior notes repurchased;

•$43.5 million paid related to the termination of certain of our rate-lock interest rate swap contracts, which contained non-cash, off-market financing elements;

•$345.0 million of investments held in the trust account returned in connection with the PHPC Redemption, of which $312.5 million was distributed to PHPC public stockholders;

•4.4 million shares of our common stock repurchased at an average share price of $87.13 per share and at a total cost, including broker’s commissions, of $387.1 million; and

•had outstanding letters of credit of $19.7 million under our $750.0 million revolving credit facility under our Credit Agreement (the “Revolving Credit Facility”), which reduced the available borrowing capacity under our Revolving Credit Facility to $730.3 million at September 30, 2023.

Fiscal 2022

•entered into a second amendment to our Credit Agreement to, among other provisions, facilitate the BellRing Spin-off and to change the reference interest rate applicable to revolving loan borrowings in U.S. Dollars from the London Interbank Offered Rate (“LIBOR”) to a rate based on the secured overnight financing rate;

•entered into a Joinder Agreement No. 1 (the “First Joinder Agreement”), in connection with the BellRing Spin-off, which provided for an incremental term loan (the “First Incremental Term Loan”) of $840.0 million under our Credit Agreement, which we borrowed in full on March 8, 2022;

•contributed $550.4 million to BellRing in exchange for certain limited liability company interests of BellRing and the right to receive $840.0 million in aggregate principal amount of BellRing Notes in connection with the BellRing Spin-off. On March 10, 2022, we delivered the BellRing Notes to the lenders under the First Joinder Agreement in full satisfaction of the principal amount of the First Incremental Term Loan (the “Debt-for-Debt Exchange”);

•$840.0 million principal value repaid, or approximately 65%, of our outstanding 5.75% senior notes using the $840.0 million proceeds from the First Incremental Term Loan, and $24.1 million premium payment made on the partial extinguishment of our 5.75% senior notes;

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•entered into a Joinder Agreement No. 2 (the “Second Joinder Agreement”), which provided for an incremental term loan (the “Second Incremental Term Loan”) of $450.0 million under our Credit Agreement, which we borrowed in full on July 25, 2022;

•transferred 14.8 million of our shares of BellRing Common Stock to the lenders under the Second Joinder Agreement to repay $342.3 million in aggregate principal amount of the Second Incremental Term Loan (the “First Debt-for-Equity Exchange”) on August 11, 2022;

•repaid the remaining principal amount of $107.7 million of the Second Incremental Term Loan on September 14, 2022;

•$575.0 million principal value issued of 2.50% convertible senior notes;

•settled a modified “Dutch Auction” tender offer and purchased $139.8 million principal value, or approximately 8%, of our 4.625% senior notes at 87% of par, including a 5% tender premium, and $381.8 million principal value, or approximately 22%, of our 4.50% senior notes at 86% of par, including a 5% tender premium, for aggregate cash consideration of $450.0 million, excluding accrued interest and fees;

•$147.7 million principal value of our 4.50% senior notes repurchased at a discount of $21.3 million;

•$28.0 million principal value of our 4.625% senior notes repurchased at a discount of $3.8 million;

•$15.0 million principal value of our 5.50% senior notes repurchased at a discount of $1.2 million;

•$500.0 million additional principal value issued of 5.50% senior notes;

•4.9 million shares of our common stock repurchased at an average share price of $90.02 per share and at a total cost, including broker’s commissions, of $439.0 million; and

•had outstanding letters of credit of $19.7 million under our Revolving Credit Facility, which reduced the available borrowing capacity under our Revolving Credit Facility to $730.3 million at September 30, 2022.

Sources and Uses of Cash

Historically, we have generated and expect to continue to generate positive cash flows from operations. We believe our cash on hand, cash flows from operations and current and possible future credit facilities will be sufficient to satisfy our working capital requirements, purchase commitments, interest payments, research and development activities, capital expenditures, pension contributions and other financing requirements for the foreseeable future. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact meeting our capital needs during or beyond the next twelve months. Our ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures and other business risk factors. We believe that we have sufficient liquidity and cash on hand to satisfy our cash needs. If we are unable to generate sufficient cash flows from operations, or are otherwise unable to comply with the terms of our credit facilities, we may be required to seek additional financing alternatives, which may require waivers under our Credit Agreement and our indentures governing our senior notes, in order to generate additional cash. There can be no assurance that we would be able to obtain additional financing or any such waivers on terms acceptable to us or at all. For additional information on our debt, refer to Note 16 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

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

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

Our senior notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of our existing and subsequently acquired or organized domestic subsidiaries, other than immaterial subsidiaries, certain excluded

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subsidiaries and subsidiaries we designate as unrestricted subsidiaries, which include 8th Avenue and its subsidiaries. These guarantees are subject to release in certain circumstances.

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

Cash Requirements

Our cash requirements under our various contractual obligations and commitments include:

•    Debt and interest obligations – See Note 16 within “Notes to Consolidated Financial Statements” in Item 8 of this report for information on our debt and the timing of future principal and interest payments. For information on our interest rate swaps that require monthly settlements, see Note 13 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

•    Purchase obligations – Purchase obligations are legally binding agreements to purchase goods, services or equipment that specify all significant terms, including: fixed or minimum quantities to be purchased and/or penalties imposed for failing to meet contracted minimum purchase quantities (such as “take-or-pay” contracts); fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company has long-term ingredient, packaging, utility and information technology commitments used to support our various businesses for periods up to fiscal 2034. Minimum amounts committed to as of September 30, 2023 were $4,511.1 million (with $1,925.2 million due in fiscal 2024), primarily related to long-term egg contracts, open purchase orders and accrued capital expenditures.

•    Leases – See Note 15 within “Notes to Consolidated Financial Statements” in Item 8 of this report for information on our lease obligations and the amount and timing of future payments.

•    Pension and other postretirement benefit obligations – See Note 18 within “Notes to Consolidated Financial Statements” in Item 8 of this report for information on our pension and other postretirement benefit obligations and the amount and timing of future payments.

•    Other liabilities – Other liabilities include obligations associated with certain employee benefit programs, payments for workers’ compensation, general liability and auto liability claim losses, unrecognized tax benefits and various other long-term liabilities, all of which have some inherent uncertainty as to the amount and timing of payments and were reflected on our Consolidated Balance Sheets as of September 30, 2023.

On October 7, 2023, we entered into a definitive agreement to acquire substantially all of the assets of Perfection Pet Foods, LLC (“Perfection”) for $235.0 million, subject to working capital adjustments. Perfection is a manufacturer and packager of private label and co-manufactured pet food and baked treat products. The acquisition is expected to close in our first quarter of fiscal 2024, and we plan to use a combination of cash on hand and borrowings under our Revolving Credit Facility to fund the purchase price.

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

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Operating Activities - Continuing Operations

Cash provided by operating activities for the year ended September 30, 2023 increased $366.1 million compared to the year ended September 30, 2022, primarily driven by higher operating profit, cash inflows related to fluctuations in the timing of sales and collections of trade receivables at our Post Consumer Brands and Foodservice segments (compared to cash outflows in fiscal 2022), lower interest payments of $19.8 million and lower net payments on our interest rate swaps of $16.9 million. These impacts were partially offset by cash outflows related to fluctuations in the timing of purchases and payments of trade payables at our Post Consumer Brands and Foodservice segments (compared to cash inflows in fiscal 2022) and higher tax payments of $68.9 million.

Investing Activities - Continuing Operations

Fiscal 2023

Cash used in investing activities for the year ended September 30, 2023 was $669.3 million, primarily driven by net cash payments of $715.2 million related to the Pet Food acquisition and capital expenditures of $303.0 million. Capital expenditures in the period primarily related to ongoing projects in our Post Consumer Brands and Foodservice segments. These cash outflows were partially offset by a return of $345.0 million in connection with the PHPC Redemption which had been deposited in a trust account in connection with the PHPC IPO and the PHPC Private Placement.

Fiscal 2022

Cash used in investing activities for the year ended September 30, 2022 was $220.2 million. The cash outflow during the year ended September 30, 2022 was driven by capital expenditures of $255.3 million, net cash payments of $24.8 million primarily related to our acquisition of Lacka Foods and cash paid related to investments in partnerships of $9.0 million. These cash outflows were partially offset by proceeds from the sale of a business (related to the WEF Transaction) of $50.5 million and proceeds from the sale of property and assets held for sale of $18.0 million. Capital expenditures in the period were primarily driven by ongoing projects in our Post Consumer Brands and Foodservice segments.

Financing Activities - Continuing Operations

Fiscal 2023

Cash used in financing activities was $555.7 million for the year ended September 30, 2023. We received proceeds of $400.0 million and $130.0 million from our Fourth Incremental Term Loan and our Third Incremental Term Loan, respectively. The Third Incremental Term Loan was partially repaid through the Second Debt-for-Equity Exchange, and the remaining principal balance of $30.1 million was repaid using cash on hand. In addition, we repaid $318.6 million principal value of our 4.50%, 4.625% and 5.625% senior notes, net of $42.9 million of discounts, and $1.1 million principal value of our municipal bond, which resulted in total net repayments of debt of $306.9 million. We distributed $312.5 million to PHPC public stockholders in connection with the PHPC Redemption. We paid $387.1 million, including broker’s commissions, for repurchases of shares of our common stock and $43.5 million related to the termination of certain of our rate-lock interest rate swap contracts, which contained non-cash, off-market financing elements.

Fiscal 2022

Cash used in financing activities was $237.2 million for the year ended September 30, 2022. We paid $550.4 million of cash to BellRing in connection with the BellRing Spin-off, which was partially offset by cash receipts from BellRing of $3.2 million prior to the BellRing Spin-off related to quarterly tax distributions pursuant to BellRing Brands, LLC’s amended and restated limited liability company agreement. We received proceeds of $840.0 million from our First Incremental Term Loan, which were used to repay $840.0 million principal value of our 5.75% senior notes. We received proceeds of $450.0 million from our Second Incremental Term Loan. The Second Incremental Term Loan was partially repaid through the First Debt-for-Equity Exchange and the remaining principal balance of $107.7 million was repaid using cash on hand. We repaid $712.3 million principal value of our 4.50%, 4.625% and 5.50% senior notes, net of $97.8 million in discounts. These repayments, combined with a principal payment of $1.1 million on a municipal bond, resulted in total net repayments of long-term debt of $1,563.3 million. In connection with the repayment of the 5.75% senior notes (discussed above), we paid $24.1 million in debt premiums. We received proceeds of $500.0 million and a premium of $17.5 million from our additional 5.50% senior notes issuance. We received proceeds of $575.0 million from our 2.50% convertible senior notes issuance. We paid $26.4 million in debt issuance costs and deferred financing fees primarily in connection with our additional 5.50% senior notes issuance, our 2.50% convertible senior notes issuance, our First Incremental Term Loan, our Second Incremental Term Loan and the amendment of our Credit Agreement. We paid $443.0 million, including broker’s commissions, for repurchases of shares of our common stock, which included repurchases of shares of our common stock that were accrued at September 30, 2021 and did not settle until fiscal 2022.

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Debt Covenants

Credit Agreement

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

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

COMMODITY TRENDS AND SEASONALITY

Our Company is exposed to regular price fluctuations primarily from purchases of raw materials, including ingredients and packaging materials, energy and other inputs. Primary exposures include wheat, oats, rice, corn, other grain products, eggs, sows, pasta, potatoes, bakery products, cheese, milk, butter, vegetable oils, dairy- and vegetable-based proteins, sugar and other sweeteners, fruit, nuts, natural gas, electricity, diesel fuel, carbon dioxide, folding cartons, corrugated boxes, flexible and rigid plastic film, trays and containers, beverage packaging, plastic lined cartonboard, large format bags and steel cans and lids. These costs have been volatile in recent years and future changes in such costs may cause our results of operations and our operating margins to fluctuate significantly. We manage the impact of cost increases, wherever possible, on commercially reasonable terms, by locking in prices on the quantities required to meet our anticipated production requirements. In addition, we may offset the effect of increased costs by raising prices to our customers. However, for competitive reasons, we may not be able to pass along the full effect of increases in raw materials and other input costs as we incur them.

Inflationary pressures can have an adverse effect on us through higher raw material, including ingredients and packaging, and energy costs, and we experienced input cost inflationary headwinds across all segments of our business during the year ended September 30, 2023. Raw material, including ingredient and packaging, and energy inflation has been widespread, rapid and significant and has put downward pressures on our profit margins. We have largely mitigated these impacts through pricing actions across all segments, cost savings measures and hedging programs. We expect inflationary pressures to continue into fiscal 2024, albeit at a slower rate than fiscal 2023 for our domestic segments. These trends could have a materially adverse impact on our businesses in the future if inflation rates significantly exceed our ability to continue to achieve price increases or cost savings or if such price increases significantly impact demand for our products.

Demand for certain of our products may be influenced by holidays, changes in seasons or other events, which may impact customer and consumer spending patterns and the timing of promotional activities. For example, demand for our egg products, potatoes, sausage, side dishes, butter and cheese tends to increase during the Thanksgiving, Christmas, Easter and other holiday seasons, which may result in increased net sales during the corresponding quarters of our fiscal year when such holidays occur. However, on a consolidated basis our net sales and results of operations generally are distributed relatively evenly over the quarters of our fiscal year.

CURRENCY

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

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires the use of judgment, estimates and assumptions. We make these subjective determinations after considering our historical performance, management’s experience, current economic trends and events and information from outside sources. Inherent in this process is the possibility that actual results could differ from these estimates and assumptions for any particular period.

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Our critical accounting estimates are those that involve a significant amount of estimation uncertainty and have a meaningful impact on the reporting of our financial condition and results of operations and should be read in conjunction with our significant accounting policies as described in Note 2 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

Revenue Recognition, Allowance for Trade Promotions — The recognition of certain variable trade promotions requires significant management judgment regarding estimated purchase volumes and program participation. Estimates are based on contractual provisions, redemption rate assumptions and our assessment of current market provisions. Redemption rate assumptions are based on historical results of similar promotions on a program-by-program basis, adjusted for current expectations of promotion performance based on current market trends. We review and update estimates of variable consideration quarterly. Uncertainties related to the estimates of variable consideration are resolved in a short time frame and do not require any additional constraint on variable consideration. Approximately 1% of our annual net sales represent variable consideration that will be resolved in the subsequent period. Based on historical experience, we do not believe that there will be significant changes to our estimates of variable consideration when any uncertainties are resolved with customers. However, significant changes in our estimates could have a material impact on our results of operations.

Business Combinations — We use the acquisition method of accounting for acquired businesses that meet the criteria to be accounted for as a business combination, whereby the fair value of total consideration transferred is allocated to the assets acquired and liabilities assumed based on their respective estimated fair values as of the date of acquisition. The allocation of the purchase price in a business combination requires us to perform valuations with significant judgment and estimates. As such, in the case of significant acquisitions, we engage the assistance of third-party valuation specialists in estimating the fair value of certain assets acquired and liabilities assumed.

Various valuation methodologies may be used in estimating the fair value of assets acquired and liabilities assumed based on the nature of the underlying asset or liability. Inventory acquired is valued using a combination of the replacement cost and comparatives sales methodologies, while property acquired is valued using a combination of the market and replacement cost new approaches. Intangible assets acquired, including customer relationships and trademarks and licensing agreements, are valued using an income-based approach. The income approach utilizes inputs that require significant assumptions for each identifiable intangible asset, including estimates regarding future revenue growth, profitability, discount rates, attrition rates, royalty rates and economic lives. Revenue growth assumptions (along with profitability assumptions) are based on historical trends and management’s expectations for future growth. Discount rates are based on a weighted-average cost of capital utilizing industry market data of similar companies. Attrition rates are estimated based on historical customer experience and analysis of comparable peer transactions. Royalty rates are determined based on profit levels, research of external royalty rates by third-party specialists and the relative importance of each trademark to our Company.

The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While we believe those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. Additionally, determining the useful lives of tangible and intangible assets requires judgment, as different types of assets will have different useful lives.

Indefinite-Lived Assets — We assess indefinite-lived intangible assets for recoverability utilizing either a qualitative or quantitative test. If a quantitative test is performed, the fair value is determined using an income-based approach, which requires significant assumptions for each indefinite-lived asset, including estimates regarding future revenue growth, discount rates and royalty rates. Revenue growth assumptions are based on historical trends and management’s expectations for future growth. The discount rates are based on a risk adjusted weighted-average cost of capital utilizing industry market data of similar companies. Royalty rates are determined based on profit levels, research of external royalty rates by third-party specialists and the relative importance of each brand to our Company.

Changes in the assumptions used to estimate the fair value of our indefinite-lived intangible assets could result in impairment charges in future periods. These key assumptions are inherently uncertain and require a high degree of estimation and are subject to change based on, among others, industry and geopolitical conditions, our ability to navigate changing macroeconomic conditions and trends and the timing and success of strategic initiatives. Additionally, certain factors have the potential to create variances in the estimated fair values of our indefinite-lived intangible assets, which also could result in impairment charges. These factors include (i) failure to achieve forecasted revenue growth rates, (ii) increases in the discount rate or (iii) a significant change in profitability and the corresponding royalty rate.

In fiscal 2023, 2022 and 2021, we performed a quantitative impairment test for all indefinite-lived intangible assets and concluded each year there were no impairments. The estimated fair value of all indefinite-lived trademarks exceeded book value by 11% or greater, 23% or greater and 22% or greater at September 30, 2023, 2022 and 2021, respectively.

Goodwill — We assess goodwill for recoverability using either a qualitative or quantitative test. If a quantitative test is performed, the fair value of each reporting unit is determined using a combined income and market approach with a greater

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weighting on the income approach (75% of the calculation for all reporting units). The income approach is based on discounted future cash flows and requires significant assumptions, including estimates regarding future revenue growth, profitability, capital requirements and discount rates. The market approach (25% of the calculation for all reporting units) is based on a market multiple (revenue and “EBITDA,” which stands for earnings before interest, income taxes, depreciation and amortization) and requires an estimate of appropriate multiples based on market data. Revenue growth assumptions (along with profitability and cash flow assumptions) were based on historical trends for the reporting units and management’s expectations for future growth. The discount rates were based on a risk adjusted weighted-average cost of capital utilizing industry market data of businesses similar to the reporting units and based upon management’s judgment. For the market approach, we used estimated EBITDA and revenue multiples based on industry market data.

Changes in the assumptions used to estimate the fair value of each reporting unit could result in impairment charges in future periods. These key assumptions are inherently uncertain and require a high degree of estimation and are subject to change based on, among others, industry and geopolitical conditions, our ability to navigate changing macroeconomic conditions and trends and the timing and success of strategic initiatives. Variances between the actual performance of the businesses and the assumptions that were used in developing the estimates of fair value could result in impairment charges in future periods. Factors that could create variances in the estimated fair value of the reporting units include but are not limited to (i) fluctuations in forecasted sales volumes, which can be driven by external factors affecting demand such as changes in consumer preferences and consumer responses to marketing and pricing strategy, (ii) changes in product costs, including commodities, (iii) a significant change in profitability, (iv) interest rate fluctuations and (v) currency fluctuations.

In fiscal 2023, we recorded a goodwill impairment charge of $42.2 million related to our Cheese and Dairy reporting unit driven primarily by narrowing of the pricing gap between branded and private label competitors, resulting in distribution losses and declining profitability. The Cheese and Dairy reporting unit had an aggregate carrying value after impairment of $335.3 million as of September 30, 2023.

At September 30, 2023, our Weetabix reporting unit fair value exceeded its carrying value by approximately 6.4% and was impacted by raw material and energy cost inflation as well as U.K. economic pressures negatively impacting consumer spending trends, both of which impacted near-term profitability. We expect these impacts to be transitory in nature; however, inherent risk to the reporting unit’s cash flows remains. If we had increased the discount rate assumption used to estimate the fair value of our Weetabix reporting unit as of the fiscal 2023 annual impairment test by 50 basis points, this isolated change, which is reasonably possible to occur, would have decreased the Weetabix reporting unit’s fair value below its carrying value by 1.1%. The Weetabix reporting unit had a goodwill balance of $854.3 million as of September 30, 2023.

For additional information on the results of our annual goodwill impairment assessment for the years ended September 30, 2023, 2022 and 2021, refer to Note 8 within “Notes to Consolidated Financial Statements” in Item 8 of this report.

Pension and Other Postretirement Benefits — Pension assets and liabilities are determined on an actuarial basis and are affected by the estimated market-related value of plan assets, estimates of the expected return on plan assets, discount rates, future salary increases and other assumptions inherent in these valuations. We annually review the assumptions underlying the actuarial calculations and make changes to these assumptions, based on current market conditions and historical trends, as necessary. Differences between the actual returns on plan assets and the expected returns on plan assets and changes to projected future rates of return on plan assets will affect the amount of pension expense or income ultimately recognized. The other postretirement benefits liability (partially subsidized retiree health and life insurance) is also determined on an actuarial basis and is affected by assumptions including discount rates and expected trends in healthcare costs. Changes in the discount rates and differences between actual and expected healthcare costs will affect the recorded amount of other postretirement benefits expense.

For both pensions and other postretirement benefit calculations, the assumed discount rates are determined by projecting the plans’ expected future benefit payments as defined for the projected benefit obligation or accumulated postretirement benefit obligation, discounting those expected payments using a theoretical zero-coupon spot yield curve derived from a universe of high-quality (rated AA or better by Moody’s Investor Service) corporate bonds as of the measurement date and solving for the single equivalent discount rate that results in the same present value. A one percentage point decrease in the assumed discount rates (from 6.06% to 5.06% for U.S. pension; from 6.01% to 5.01% for U.S. other postretirement benefits; from 5.68% to 4.68% for Canadian pension; from 5.67% to 4.67% for Canadian other postretirement benefits and from 5.67% to 4.67% for other international pension) would have increased the recorded benefit obligations at September 30, 2023 by approximately $71 million for pensions and approximately $5 million for other postretirement benefits.

The expected return on plan assets was determined based on historical and expected future returns of the various asset classes, using the target allocations of the plans. A one percentage point decrease in the assumed return on plan assets (from 6.50% to 5.50% for U.S.; from 5.75% to 4.75% for Canada and from 5.63% to 4.63% for other international) would have increased the net periodic benefit cost for the pension plans by approximately $7 million. We expect to contribute $0.3 million to the combined pension plans in fiscal 2024. Contributions beyond fiscal 2024 remain uncertain and will significantly depend

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on changes in actuarial assumptions, actual return on plan assets and any legislative or regulatory changes that may affect plan funding requirements. We do not make contributions to our postretirement medical benefit plans. See Note 18 within “Notes to Consolidated Financial Statements” in Item 8 of this report for more information about pension and other postretirement benefit assumptions.

RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS

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