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PART I

ITEM 1.    BUSINESS

INTRODUCTION

On February 3, 2012, Post completed its legal separation via a tax free spin-off (the “Spin-Off”) from Ralcorp Holdings, Inc. (Ralcorp was subsequently acquired by ConAgra Foods, Inc. on January 29, 2013).our former parent company. On February 6, 2012, Post common stock began trading on the New York Stock Exchange under the ticker symbol “POST.” In 2012, we had a single operating segment, ourAs of September 30, 2018, Post Foods branded ready-to-eat (“RTE”) cereal business. As a result of acquisitions, we now operateoperated in fourfive reportable segments:

FinancialOn October 1, 2018, Post, together with its subsidiary, 8th Avenue, completed its previously announced transaction with affiliates of the private equity firm Thomas H. Lee Partners, L.P. (collectively, “THL”), in which Post and THL separately capitalized 8th Avenue. 8th Avenue became the holding company for Post’s private brands food products business, which has historically been reported and is reported herein as Post’s Private Brands segment. After completion of the transaction, Post retained 60.5% of the common equity in 8th Avenue, which, effective October 1, 2018, is accounted for using the equity method and is no longer consolidated in the Company's financial statements, and the private brands business is no longer considered a reportable segment information for the four reportable segments for fiscal 2015 is contained in this Annual Report. “Management’s Discussion and Analysis of Financial Condition and ResultsPost.

On November 15, 2018, Post announced its intention to pursue an initial public offering of Operations”, which we refer to as MD&A, under Item 7 of this report contains financial and other information concerning our business developments and operations and are incorporated into this Item 1.its Active Nutrition business.

Additional information about us, including our Form 10, Forms 10-K, Forms 10-Q, Forms 8-K, other securities filings (and amendments thereto), press releases and other important announcements, is available at our website at www.postholdings.com or the SecuritySecurities and Exchange Commission’s (“SEC”) website at www.sec.gov (for securities filings only). These documents can be printed free of charge as soon as reasonably practicable after their electronic filing with the SEC.SEC or their release, as applicable. Our Corporate Governance Guidelines, Global Standards of Business Conduct, Directorour Code of Ethics,Conduct and the charters of the Audit and Corporate Governance and

Our Active Nutrition segment markets and distributes premium proteinready-to-drink beverages, bars, powders and gelsother nutritional supplements under the Premier Protein, Dymatize, PowerBar, Supreme Protein andPowerBar brands, and ready-to-drink beverages and other liquid-based solutions under the Joint Juice brand.brands. The Active Nutrition segment’s products are primarily manufactured under co-manufacturing agreements at various third party facilities located in the United States and Europe. We also own a facility in Germany that primarily manufactures bar products for our PowerBar brand.Active Nutrition brands and private label customers. Our active nutritionActive Nutrition products are primarily sold in club, mass merchandise, grocery, drug, specialty and specialtyconvenience stores as well as online. For fiscal 2018, 2017 and 2016, protein-based products and supplements contributed 13.2%, 13.6% and 11.4%, respectively, to our consolidated revenue.

Our historical Private Brands segment manufactures and distributes organic and conventional private label peanut butter and other nut butters, baking nuts, raisins and other dried fruit and trail mixes,nuts, pasta products, premium natural and organic granola, cereals and snacks, with sales to grocery retailers,customers in the foodservice, retail and food ingredient and foodservice channels primarily in the United States and Canada. WeCanada, and also co-manufacturein the European Union and the Middle East. The historical Private Brands business also co-manufactures peanut butter and other nut butters for national brands, private label retail markets and industrial markets. OurIn addition, the historical Private Brands business also provides peanut blanching, granulation and roasting services for the commercial peanut industry.

Each of our businesses has developed marketing strategies specific to eachits product line that emphasize high quality products and customer service.lines. For certain of our products, we have consumer-targeted marketing campaigns, which include television, digital and print advertisements, coupon offers, co-marketing arrangements with complementary consumer product and entertainment companies and co-opjoint advertising with select retail customers. We also use traditional outdoor, print and digital advertising and social media, as well as more targeted grass roots programs such as sampling events and business drops, in order to increase brand awareness and loyalty at both national and local levels. Our internet and social media efforts are used to educate consumers about the nutritional value of our products as well asand for product promotion and consumer entertainment.

Our Post Consumer Brands segment sells products primarily through an internal sales staff and broker organizations. We also occasionally sell Post Consumer Brands products to military, internete-commerce and foodservice channels and may utilize broker, distribution or similar arrangements for sales of Post Consumer Brands products outsideproducts. Our Weetabix segment services its key U.K. markets through a centralized commercial team which manages relationships with customers at the United States.corporate level while a third party sales force operates at the store level to ensure maximum availability and compliance with agreed plans. Our Michael Foods GroupRefrigerated Food segment aligns its sales and marketing efforts by distribution channel, with a dedicated team of internal sales staff and broker organizations for each of the foodservice,commercial and retail and food ingredient channels. Our Active Nutrition segment uses a flexible sales model that combines a national and international direct sales force, and

Our research and development efforts span our business segments. These capabilities extend to ingredients grains and packaging technologies; new product and process development, as well as analytical support; bench-top and pilot plant capabilities; and research support to operations. We incurred expenses of approximately $16.8 million, $10.2 million and $8.6 million during the fiscal years ended September 30, 2015, 2014 and 2013, respectively, for research and development activities.

Raw materials used in our businesses (purchased from local, regional and international suppliers) consist of ingredients and packaging materials. The principal ingredients for most of our businesses are agricultural commodities, including wheat, oats, rice, corn, other grain products, vegetable oils, fruits, peanuts, almonds and other treedried fruit, nuts, dairy and soy basedsoy-based proteins, cocoa, corn syrup and sugar. Additionally, the principal ingredients for the Refrigerated Food business are eggs, pork, potatoes, cheese, milk and butter. A portion of the segment’s egg needs comes from Company-owned hens, and the balance is purchased under third party contracts and in the spot market. We also buy significant amounts of grain to feed layer hens. Additionally, the principal ingredientsIn addition, we procure live sows at prevailing market prices from terminals, local auctions, country markets and corporate and family farms in various United States locations. Each of our segments utilize raw material sources that ensure that its products meet standards and certification requirements, for the Michael Foods business are eggs, potatoes, cheese and other dairy products.example, non-GMO, organic, gluten-free and/or cage-free. The principal packaging materials used by the Company are linerboard cartons, corrugated boxes, plastic containers, flexible and beverage packaging, cartonboard, and aseptic foil and plastic lined cartonboard.

Cereal processing ovens and most of the Michael FoodsRefrigerated Food production facilities are generally fueled by natural gas or propane, which are obtained from local utilities or other local suppliers. Electricity and steam (generated in on-site, gas-fired boilers) also are also used in our processing facilities. Short-term standby propane storage exists at several plants for use in the event of an interruption

A description of our working capital practices is included in the Liquidity“Liquidity and Capital ResourcesResources” section under “Management’s Discussion and Analysis of MD&AFinancial Condition and Results of Operations” in Item 7 of this report. ReceiptsCash receipts from goods sold, supplemented as required by borrowings, provide for our operating expenses and working capital needs.

We sell Post Consumer Brands products primarily to grocery stores, mass merchandise customers, supercenters, club storestores, natural/specialty stores and drug store customers. We also sell to military, internete-commerce and foodservice channels. Our Michael Foods Group’sWeetabix segment’s products are primarily sold to grocery stores, discounters, wholesalers and convenience stores. Our Refrigerated Food segment’s primary customers include foodservice distributors, national restaurant chains, retail grocery stores, mass merchandise customers and major food manufacturers and processors. Our Active Nutrition segment’s customers are predominately warehouse club stores, mass merchandise customers, grocery stores, drug stores, convenientconvenience stores and online retailers, and also include specialty retailers, supplement stores.stores and distributors. Our historical Private Brands segment’s products are sold primarily to the natural/specialty and conventional grocery store,stores, mass merchandise customers and discount stores and foodservice and food ingredient customers as well as natural/specialty grocery stores and conventional grocery stores.customers.

Our largest customer, Walmart, accounted for approximately 10%13% of our consolidated net sales in fiscal 2015.2018. No other customer accounted for more than 10% of our fiscal 20152018 consolidated net sales, but certain of our segments depend on sales to large customers.  For example, the largest customer of our Post Consumer Brands segment, Walmart, accounted for approximately 27%29% of Post Consumer Brands’ net sales in fiscal 2015.2018. The largest customers of our Weetabix segment, Tesco, Asda, Morrison’s and Sainsbury’s, accounted for approximately 52% of Weetabix’s net sales in fiscal 2018. Additionally, the largest customers of our Michael Foods GroupRefrigerated Food segment, Sysco and US Foods, accounted for approximately 14% and 12%, respectively,27% of the segment’s net sales in fiscal 2015, 2018,

The consumer foods industry is highly competitive,food and the foodbeverage, sports nutrition and sports supplement categories in which we participateoperate are also veryhighly competitive and highly sensitive to both pricing and promotion. Many of our principal competitors in these categories may have substantially more financial, marketing and other resources. Competition is based on, among other things, product quality, price, effective promotional activities and the ability to identify and satisfy dynamic, emerging consumer preferences. Our principal strategies for competing in each of our segments include effective customer relationship management, category insights, superior product quality and food safety, product innovation, an efficient supply chain and price.competitive pricing. In addition, in many of our product categories, we compete not only with widely advertised branded products, but also with private label products. The industries in which we operate are expected to remain highly competitive infor the foreseeable future.

We are subject to regulation by federal, state, local and foreign governmental entities and agencies. Our activities in Canada and GermanyEurope are subject to regulations similar to those applicable to our business in the United States. As a producer and distributor of goods for human consumption, our operations must comply with stringent production, storage, distribution, labeling and marketing standards administered by the Food and Drug Administration (“FDA”), Department of Commerce and the Federal Trade Commission in the United States as well as similar regulatory agencies in Canada, Mexico, the U.K. and Germany.the European Union. Products that do not meet regulatory standards may be considered to be adulterated and/or misbranded and subject to recall. Additionally, following the recent adoption of the Food Safety Modernization Act, the FDA is developingimplementing additional regulations focused on prevention of food contamination, more frequent inspection of high-risk facilities, increased record-keeping and improved tracing of food.

Certain meat and egg products produced by our Michael Foods GroupRefrigerated Food segment are under the jurisdiction of U.S.the United States Department of Agriculture (“USDA”) and its regulations regarding quality, labeling and sanitary control, rather than FDA regulations. The Michael FoodsRefrigerated Food egg products division processing plants that break eggs, and some of our other meat and egg-processing operations, are subject to continuous on-site USDA inspection. Our other United States facilities are subject to periodic inspection by the USDA, FDA and/or state regulatory authorities, such as state departments of agriculture. The pork product manufacturing operations of our Refrigerated Food segment are subject to the Packers & Stockyards Act, which also is administered by the USDA and which regulates trade practices.

Our facilities, like those of similar businesses, are subject to certain safety regulations, including regulations issued pursuant to the U.S.United States Occupational Safety and Health Act in the United States and similar regulatory agenciesregulations in Canada, the U.K. and Germany. These regulations require us to comply with certain manufacturing safety standards to protect our employees from accidents. Additionally, some of the food commodities on which our business relies are subject to governmental agricultural programs. These programs (e.g., subsidies and import/export regulations), which have substantial effects on prices and supplies andof these commodities.

ITEM 1A.    RISK FACTORS

In addition to the factors discussed elsewhere in this report, the following risks and uncertainties could have a material adverse effect on our business, financial condition, and results of operations.operations and cash flows. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may also impair our business, operation, financial condition, or results.results of operations and cash flows.

Risks Related to Our Business

The consumer food and beverage, industrysports nutrition and sports supplement categories are highly competitive. Competition in these categories is highly competitive.based on, among other things, product quality, price, effective promotional activities and the ability to identify and satisfy dynamic, emerging consumer preferences. Our competitors may have substantial financial, marketing and other resources. Increased competition can reduce our sales due to loss of market share or the need to reduce prices to respond to competitive and customer pressures. Competitive and customer pressures, as well as industry supply and market demand, also may limit our ability to increase prices, including in response to cost increases. In most product categories, we compete not only with widely advertised branded products, but also with private label and store brand products. A strong competitive response from one or more of our competitors to our marketplace efforts, or a shift in consumer preferences to competitors’ products, could result in us reducing pricing,prices, increasing marketing or other expenditures or losing market share. Our profits could decrease if a reduction in prices or increased costs are not counterbalanced with increased sales volume. In addition, our competitors are increasingly using social media networks to advertise products. If we are unable to compete in this environment, it could adversely affect our financial condition, results of operations and cash flows.

Consumer and customer preferences evolve over time. The success of our food products depends on our ability to identify the tastes and dietary habits of consumersthese changing preferences and to offer products that appeal to their preferences, includingconsumers and customers. Consumer preference changes include dietary trends, attention to different nutritional aspects of foods and beverages, concerns of consumers regarding health and wellness, obesity, product attributes and ingredients, including carbohydrate content and processed ingredients. Introduction of new products and product extensions requires significant development and marketing investment. If our products fail to meet consumer preferences, or we fail to introduce new and improved products on a timely basis, the return on that investment will be less than anticipated and our strategy to grow sales and profits with investments in marketing and innovation will be less successful. Similarly, demand for our products could be affected by consumer concerns or perceptions regarding the health effects of certain foods and beverages, sourcing practices relating to ingredients and animal welfare concerns. Any significant changes in consumer preferences or our inability to anticipate or react to such changes could result in reduced demand for our products and negatively impact our financial condition, results of operations and cash flows.

Our Refrigerated Food business is and will continue to be affected by changing preferences as to the housing of egg-laying hens. Many restaurant chains, foodservice companies and grocery chains have announced goals to transition to a cage-free egg supply by specified future dates. Meeting anticipated customer demand has resulted, and will continue to result, in additional operating and capital costs to procure cage-free eggs, to modify existing layer facilities and to construct new cage-free layer housing. These changing preferences also could require us to use specially sourced ingredients that may be more difficult to source or certain ingredients.entail a higher cost or incremental capital investment which we may not be able to pass on to customers. 

WeAlthough we continuously evaluate andstrategic transactions, we may be unable to identify suitable strategic transactions in the future or may not be able to enter into such transactions at favorable prices. Alternatively, we may in the future enter into additional strategic transactions. Anytransactions, and any such transaction could happen at any time, could be material to our business and could take any number of forms, including, for example, an acquisition, investment or merger, for cash or in exchange for our equity securities, or a divestiture.

Evaluating potential transactions, including divestitures, and integrating businesses after completion of an acquisition requires additional expenditures (including legal, accounting and due diligence expenses, higher administrative costs to support the acquired entities and information technology, personnel and other integration expenses) and may divert the attention of our management from ordinary operating matters.

In addition, the success of these potential transactionsacquired businesses will depend, in part, on our ability to realize the anticipated growth opportunities and cost synergies through the successful integration of the businesses we acquire with our existing businesses. Even if we are successful in integrating acquired businesses, we cannot assure you that these integrations will result in the realization of the full benefit of any anticipated growth opportunities or cost synergies or that these benefits will be realized within the expected time frames. In addition, acquired businesses may have unanticipated liabilities or contingencies.

Our freight costs may increase due to factors such as increased fuel costs, limited carrier availability, increased compliance costs associated with new or changing government regulations and inflation. The primary commodities used by our businesses include wheat, semolina,oats, rice, corn, other grain products, eggs, sows, potatoes, cheese, vegetable oils, dried fruit, nuts, sugar, edible oils,dairy and soy-based proteins, cocoa, corn oats, cocoa, milksyrup and soy based protein.sugar. The supply and price of these ingredients are subject to market conditions and are influenced by many factors beyond our control, including animal feed costs, weather patterns affecting ingredient production, governmental programs and regulations, insects, plant diseases and plant diseases.inflation. Our primary packaging includesmaterials include linerboard cartons, corrugated boxes, plastic bagscontainers, flexible and liners,beverage packaging, cartonboard, and flexible beverage packaging.aseptic foil and plastic lined cartonboard. In addition, our manufacturing operations use large quantities of natural gas, propane and electricity. The cost

Michael Foods’Our Refrigerated Food segment’s operating results are significantly affected by egg, sow, potato and cheese prices and the prices of corn and soybean meal, which are the primary grains fed to laying hens. Historically, the prices of these raw materials have fluctuated widely. In addition, the Michael Foodsour Refrigerated Food segment’s cheese and butter products are affected by milk price supports established by the U.S. Department of Agriculture (USDA).USDA. Although steps can be taken to mitigate the effects of changes in raw material costs, fluctuations in prices are outside theof our control, of the Michael Foods business, and changes in the price of such items may have a material adverse effect on the Michael Foodsour business, prospects, financial condition, results of operations and financial condition. Ancash flows. Certain supply and demand disruptions, such as those resulting from diseases affecting livestock and those experienced with the 2015 avian influenza outbreak, could create an inability to keep selling prices in line with input costs and may result in lowersignificant fluctuations in operating profit margins.

Our balance sheet includes a significant amount of intangible assets, including goodwill, trademarks, trade names and other acquired intangibles. Intangibles and goodwill expected to contribute indefinitely to our cash flows are not amortized, but our management reviews them for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying value may be impaired. Impairments to intangible assets may be caused by factors outside of our control, such as increasing competitive pricing pressures, lower than expected revenue and profit growth rates, changes in industry EBITDA and revenue multiples, changes in discount rates based on changes in cost of capital (interest rates, etc.) or the bankruptcy of a significant customer. These factors, along with other internal and external factors, could negatively impact our net worth and could have a significant negative impact on our fair valuationvalue determination, which could then result in a material impairment charge in our results of operations. DuringIn fiscal 20152018, we had an impairment of other intangible assets and no impairment of goodwill. In fiscal 2014,2017, we had an impairment of goodwill and trademarkno impairment of other intangible assets. In fiscal 20132016, we had an impairmentno impairments of trademarkgoodwill or other intangible assets. We could have additional impairments in the future. See further discussion of these impairment lossesimpairments in MD&A“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this report and Notes 2 and 6 of7 within the “Notes to Consolidated Financial Statements” of our audited consolidated financial statements contained in this report.

Many of our costs, such as raw materials, energy and freight, are outside of our control. Therefore, we must seek to reduce costs in other areas, such as through operating efficiency. If we are not able to complete projects designed to reduce costs and increase operating efficiency on time or within budget, our operating profitsfinancial condition, results of operations and cash flows may be adversely impacted. In addition, if the cost-saving initiatives we have implemented, or any future cost-saving initiatives, do not generate the expected cost savings and synergies, our financial condition, results of operations and cash flows may be adversely affected.

Our products and operations are subject to the laws and regulations of the federal Food and Drug Administration (which we refer to as FDA), the USDA, and other applicable laws and regulations. Some of our Active Nutrition products are regulated by the FDA as dietary supplements, which are subject to different FDA regulations and levels of regulatory scrutiny. Certain of Michael Foods’ products, specifically theour Refrigerated Food’s meat and egg products are also subject to higher scrutinycontinuous on-site inspections by the FDA and the USDA, as well as continuous on-site inspections.USDA. It also is also possible that federal, state or foreign enforcement authorities might take regulatory or enforcement action, which could result in significant fines or penalties. If we are found to be significantly out of compliance, the FDAan

The success of our businesses depends, in part, on our ability to maintain our level of sales and product distribution through high-volume food distributors, retailers, club stores, super centers and mass merchandisers. The competition to supply products to these high-volume stores is intense. Currently, we do not have long-term supply agreements with a substantial number of our retail customers, including our largest customers. These high-volume stores and mass merchandisers frequently reevaluate the products they carry. A decision by our major customers to decrease the amount of merchandise purchased from us, sell aanother national brand on an exclusive basis or change the manner of doing business with us could reduce our revenues and materially adversely affect our financial condition, results of operations.operations and cash flows. In addition, our customers offer branded and private label products that compete directly with our products for retail shelf space and consumer purchases. Accordingly, there is a risk that our customers may give higher priority to their own products or to the products of our competitors. In the event of a loss of any of our large customers, a significant reduction of purchases by any of our large customers or the bankruptcy or serious financial difficulty of any of our large customers, our salesfinancial condition, results of operations and cash flows may be adversely affected.

Over the past several years, the retail grocery and foodservice industrieschannels have undergone significant consolidations and mass merchandisers and non-traditional retailers are gaining market share. As this trend continues and such customers grow larger, they may seek to use their position to improve their profitability through improved efficiency, lower pricing, increased reliance on their own brand name products, increased emphasis on generic and other value brands and increased promotional programs. If we are unable to respond to these requirements, our profitability or volume growth could be negatively impacted. Additionally, if any of our existing retailer or distributor customers are consolidated with another entity and the surviving entity of any such consolidation is not a customer or decides to discontinue purchasing our products, we may lose significant amounts of our preexisting business once held with the acquired retailer.

We are, or may become, party to various lawsuits and claims arising in the normal course of business, which may include lawsuits or claims relating to contracts, intellectual property, product recalls, product liability, false or deceptive advertising,

Our business relies on independent third parties for the manufacture of many products, such as shakes, protein bars shakes and powders, andbreakfast drinks, certain cereal and granola products and certain refrigerated food products. TheOur business could be materially affected if we fail to develop or maintain our relationships with these third parties, if these third parties fail to comply with governmental regulations applicable to the manufacturing of our products or if any of these third parties ceases doing business with us or goes out of business. Additionally, we cannot be certain that we will not experience operational difficulties with these third-partythird party manufacturers, such as increases in manufacturing costs, reductions in the availability of production capacity, errors in complying with merchandise specifications, insufficient quality control and failure to meet production deadlines. The inability of a third party manufacturer to ship orders in a timely manner, in desirable quantities or to meet our safety, quality and social compliance standards or regulatory requirements could have a material adverse impact on our business. While certain of our relationships with these third parties are subject to minimum volume commitments, whereby the third party manufacturer has committed to produce and we have committed to purchase a minimum quantity of product, we may nonetheless experience situations where such manufacturers are unable to fulfill their obligations under our agreements.

We manufacture and market certain of our products in the United States, Canada, the U.K. and several other locations pursuant to intellectual property license agreements. These licenses give us the right to use certain names, characters and logos in connection with our products and to sell the products in certain regions. If we were to breach any material term of these license agreements and not timely cure the breach, the licensor could terminate the agreement. If the licensor were to terminate our rights to use the names, characters and logos for this reason or any other reason, or if a licensor decided not to renew a license agreement upon the expiration of the license term, the loss of such rights could have a material adverse effect on our business.

U.S.United States and global credit markets have, from time to time, experienced significant dislocations and liquidity disruptions which caused the spreads on prospective debt financings to widen considerably. These circumstances materially impacted liquidity in the debt markets, making financing terms for borrowers less attractive and in certain cases resulted in the unavailability of certain types of debt financing. Events affecting the credit markets also have also had an adverse effect on other financial markets in the U.S.,United States, which may make it more difficult or costly for us to raise capital through the issuance of common stock or other equity securities or refinance our existing debt, sell our assets or borrow more money, if necessary. Our business also could also be negatively impacted if our suppliers or customers experience disruptions resulting from tighter capital and credit markets or a slowdown in the general economy. Any of these risks could impair our ability to fund our operations or limit our ability to expand our business or increase our interest expense, which could have a material adverse effect on our financial results.

We have operations and assets in the United States as well as foreign jurisdictions, and a portion of our contracts and revenues are denominated in foreign currencies. Our consolidated financial statements are presented in U.S.United States dollars. We therefore must translate our foreign assets, liabilities, revenue and expenses into U.S.United States dollars at applicable exchange rates. Consequently, fluctuations in the value of foreign currencies relative to the United States dollar may negatively affect the value of these items in our consolidated financial statements. To the extent we fail to manage our foreign currency exposure adequately, we may suffer losses in value of our net foreign currency investment, and our consolidated financial condition, results of operations and financial positioncash flows may be negatively affected.

The food productionresults of the referendum relating to the membership of the U.K. in the European Union, advising for the exit of the U.K. from the European Union (“Brexit”), may cause disruptions to and marketing industry is subjectcreate uncertainty surrounding our business, including affecting our relationships with our existing and future customers, suppliers and employees. The effects of Brexit will depend on any agreements the U.K. makes to retain access to European Union markets either during a variety of federal, state, localtransitional period or more permanently.

These developments may have a direct or indirectmaterial adverse effect on our business or thoseglobal economic conditions and the stability of our customers or suppliers. In addition, because we market and advertise our products, we could be the target of claims relating to alleged false or deceptive advertising under federal, state and foreign laws and regulationsglobal financial markets, and may be subjectsignificantly reduce global market liquidity and restrict the ability of key market participants to initiatives to limit or prohibit the marketingoperate in certain financial markets. Any of these factors could depress economic activity and advertising of our products to children. Changes in these laws or regulations or the introduction of new laws or regulations could increase the costs of doing business for us or our customers or suppliers or restrict our actions, causing our results of operationsaccess to be adversely affected. As a specific example, possible new laws in the future, similar to legislation that has been introduced in various state legislatures, could require us to alter hen cage sizes. Further, if we are found to be out of compliance with applicable laws and regulations in these areas, we could be subject to civil remedies, including fines, injunctions or recalls, as well as potential criminal sanctions, any and/or all ofcapital, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Avian influenza occasionally affects the domestic poultry industry, leading to hen deaths. In 2015, an avian influenza outbreak occurred in an increasethe midwest of the United States affecting a substantial portion of our owned and third party contracted flocks. Although we utilize biosecurity measures at our layer locations to protect against disease exposures, if our facilities are exposed to diseases and pests, such exposure could affect a substantial portion of our production facilities in expensesany year and could have a diversionmaterial adverse effect on our business, prospects, financial condition, results of management’s time.operations and cash flows. Diseases affecting livestock occasionally impact sow supply, which also could adversely affect our business, prospects, financial condition, results of operations and cash flows.

We are highly dependent on our ability to attract and retain qualified personnel to operate and expand our business. If we lose key personnel or one or more members of our senior management team, or if we fail to attract new employees, our business, and financial position,condition, results of operations orand cash flows could be harmed.

Some of our full-time production, maintenance and maintenancewarehouse employees are covered by collective bargaining agreements. A dispute with a union or employees represented by a union could result in production interruptions caused by work stoppages. If a strike or work stoppage were to occur, our financial condition, results of operations and cash flows could be adversely affected. In addition, we could be subject to unionization efforts at our non-union facilities. Increased unionization of our workforce could lead to disruptions in our business, increases in our operating costs and/orand constraints on our operating flexibility.

In the event of a work stoppage, we have contingency plans in place to hire additional labor or manufacture products in other locations to mitigate disruption to theour business. However, there are limitations inherent in any plan to mitigate disruption to our business in the event of a work stoppage and, particularly in the case of a prolonged work stoppage, there can be no assurance that it would not have a material adverse effect on our financial condition, results of operations.

We maintain qualified defined benefit plans in the United States, Canada and Canadathe U.K. primarily for our Post Foods business,Consumer Brands and Weetabix businesses, and we are obligated to ensure that these plans are funded or paid in accordance with applicable regulations. In the event the assets in which we invest do not perform according to expectations, or the valuation of the projected benefit obligation increases due to changes in interest rates or other factors, we may be required to make significant cash contributions to these plans and recognize increased expense on our financial statements.

We are increasingly dependentrely on information technology networks and systems including the internet, to process, transmit and store electronicoperating and financial information, to manage and support a variety of business processes and activities and to comply with regulatory, legal and tax requirements. We increasingly rely on information technology systems to process, transmit and store electronic information. For example, our production and distribution facilities and inventory management utilize information technology to increase efficiencies and limitcontrol costs. Furthermore, a significant portion of the communications between our personnel, customers and suppliers depends on information technology. Some of our information technology needs are outsourced to third parties. Our and our third party vendors’ information technology systems may be vulnerable to a variety of interruptions due to events beyond our or their control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, power outages, computer viruses and malware, hardware or software failures, cybersecurity incidents, hackers and other security issues. Such interruptions could negatively impact our business.

If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure and to maintain and protect the related automated and manual control processes, or if one of our third party service providers fails to provide the services we require, we could be subject to billing and collection errors, business disruptions or damage resulting from such events, particularly material security breaches.breaches and cybersecurity incidents. If any of our significant information technology systems suffersuffers severe damage, disruption or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, and results of operations and cash flows may be materially and adversely affected, and we could experience delays in reporting our financial results. In addition, there is a risk of business interruption, litigation risks, and reputational damage from leakageleaks of confidential or personal information. While we have insurance programs in place related to these matters, the potential liabilities associated with such events, or those that could arise in the future, could be excluded from coverage or, if covered, could exceed the coverage provided by such programs. Although we have not detected a material security breach or cybersecurity incident to date, we have been the target of events of this nature and expect them to continue.

We consider our intellectual property rights, particularly our trademarks, but also our patents, trade secrets, copyrights and licenses, to be a significant and valuable aspectasset of our business. We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as exclusive and nonexclusive licensing agreements, third party nondisclosure, confidentiality and assignment agreements and the policing of third party misuses of our intellectual property. Our failure or inability to obtain or maintain adequate protection of our intellectual property rights, or any change in law or other changes that serve to lessen or remove the current legal protections of intellectual property, may diminish our competitiveness and could materially harm our business.

We face the risk of claims that we have infringed third parties’ intellectual property rights. Any claims of intellectual property infringement, even those without merit, could be expensive and time consuming to defend; cause us to cease making, licensing or using products that incorporate the challenged intellectual property; require us to redesign or rebrand our products or packaging, if feasible; divert management’s attention and resources; or require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property. Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. Additionally, a successful claim of infringement against us could result in our being requiredrequire us to pay significant damages, enter into costly license or royalty agreements or stop the sale of certain products, any and/or all of which could have a negative impact on our operating profits and harm our future prospects.

We are subject to extensive and frequently changing federal, state, local and foreign laws and regulations relating to the protection of human health and the environment, including those limiting the discharge and release of pollutants into the environment and those regulating the transport, use, treatment, storage, disposal and remediation of, and exposure to, solid and hazardous wastes and materials.wastes. In addition, our Michael FoodsRefrigerated Food business is subject to particular federal and state environmental requirements governing animal feeding operations involvingand the management of animal waste, which have become the subject of increasing regulatory scrutiny.waste. Certain environmental laws and regulations can impose joint and several liability without regard to fault on responsible

Future events, such as new or more stringent environmental laws and regulations, any new environmental claims, the discovery of currently unknown environmental conditions requiring response action or more vigorous enforcementinterpretations or a new interpretationenforcement of existing environmental laws and regulations, might require us to incur additional costs that could have a material adverse effect on our financial results.condition, results of operations and cash flows.

There is growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns and the frequency and severity of extreme weather and natural disasters. If any of these climate changes has a negative effect on agricultural productivity, we may be subject to decreased availability or less favorable pricing for certain commodities that are necessary for our products, including wheat, oats and other grain products, dairy-based proteins, eggs and sows. In addition, increases in the frequency and severity of extreme weather and natural disasters may result in damage and disruptions to our manufacturing operations subject usand distribution channels. The increasing concern over climate change also may result in more federal, state, local and foreign legal requirements to additional risks.

From time to time, we release guidance regarding our future performance, the future performance of some or all of our unconsolidated subsidiaries or the expected future performance of companies or businesses that we have agreed to acquire. This guidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and subject to, the assumptions and the other information contained or referred to in such release and the factors described under “Forward-Looking“Cautionary Statement on Forward-Looking Statements” in our current and periodic reports filed with the SEC. Our guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our independent registered public accounting firm nor any other independent expert or outside party compiles or examines the guidance and, accordingly, no such person expresses any opinion or any other form of assurance with respect thereto.

Guidance is based upon a number of assumptions and estimates that, whilealthough presented with numerical specificity, are inherently subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. We generally state possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested ranges. The principal reason that we release this data is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by any such persons.

Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from the guidance. Investors also should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that the data is forecast. In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.  

Any failure to successfully implement our operating strategy or the occurrence of any of the eventsrisks or circumstancesuncertainties set forth in this report could result in actual operating results being different than the guidance, and such differences may be adverse and material.

Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”) requires any company subject to the reporting requirements of the U.S.United States securities laws to perform a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, we are required to document and test our internal control procedures, our management is required to assess and issue a report concerning our internal control over financial reporting and our independent registered public accounting firm is required to issue an opinion on theirits audit of our internal control over financial reporting.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules.

From time to time, we may be subject to proposals and other requests from shareholders urging us to take certain corporate actions, including proposals seeking to influence our corporate policies or effecting a change in our management. In the event of such shareholder proposals, particularly with respect to matters which our management and Board of Directors, in exercising their fiduciary duties, disagree with or have determined not to pursue, our business could be adversely affected because responding to actions and requests of shareholders can be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees.  Additionally, perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners and customers.

We have a significant amount of debt. We had $4,485.2$7,917.4 million in aggregate principal amount of total debt as of September 30, 2015.2018, which includes $625.0 million borrowed under a bridge loan facility that was assumed by 8th Avenue upon the closing of the transaction involving our historical Private Brands business on October 1, 2018 (the “Bridge Loan”) and was classified as held for sale as of September 30, 2018. Additionally, our secured revolving credit facility has borrowing capacity of $395.8$781.5 million at September 30, 20152018 (all of which would be secured when drawn).

Our overall leverage and the terms of our financing arrangements could:

Our ability to meet expenses and debt service obligations will depend on our future performance, which will be affected by financial, business, economic and other factors, including potential changes in consumer preferences, the success of product and

Our financing arrangements contain restrictions, covenants and events of default that, among other things, require us to satisfy certain financial tests and maintain certain financial ratios and restrict our ability to incur additional indebtedness and to refinance our existing indebtedness. Financing arrangements which we enter into in the future could contain similar restrictions and could additionally require us to comply with similar, new or additional financial tests or to maintain similar, new or additional financial ratios. The terms of our financing arrangements, financing arrangements which we enter into in the future and any future indebtedness may impose various restrictions and covenants on us that could limit our ability to pay dividends, respond to market conditions, provide for capital investment needs or take advantage of business opportunities by limiting the amount of additional borrowings we may incur. These restrictions include compliance with, or maintenance of, certain financial tests and ratios and may limit or prohibit our ability to, among other things:

Various risks, uncertainties and events beyond our control could affect our ability to comply with these restrictions and covenants. Failure to comply with any of the restrictions and covenants in our existing or future financing arrangements could result in a default under those arrangements and under other arrangements containing cross-default provisions.

Our credit agreement contains customary financial covenants, including a maximumcovenant requiring us to maintain a senior secured leverage ratio (as defined in our 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 a quarterly minimum interest coverage ratio.letter of credit obligations (subject to certain exceptions specified in our credit agreement) exceeds 30% of our revolving credit commitments. Our credit agreement permits us, subject to certain exceptions, to incur additional unsecured debt only if, among other conditions, our pro forma consolidated interest coverage ratio, calculated as provided in our credit agreement, would be greater than or equal to 2.00 to 1.00 after giving effect to such new debt. The indentures that govern our senior notes, subject to certain exceptions, contain a similar restriction.

A default would permit lenders to accelerate the maturity of the debt under these arrangements and to foreclose upon any collateral securing the debt. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations, including our obligations under the notes.our indentures, credit agreement and convertible preferred stock. In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing.

Our ability to pay interest on our outstanding senior notes, to satisfy our other debt obligations and to fund any planned capital expenditures, dividends and other cash needs will depend in part upon the future financial and operating performance of our subsidiaries and upon our ability to renew or refinance borrowings. Prevailing economic conditions and financial, business, competitive, legislative, regulatory and other factors, many of which are beyond our control, will affect our ability to make these payments.

If we are unable to make payments or refinance our debt or obtain new financing under these circumstances, we may consider other options, including:

Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us in an amount sufficient to enable us to pay our indebtedness, including the senior notes and our other debt obligations, including the term loan, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance any of our debt on commercially reasonable terms or at all.

Risks Related to Our Common Stock

As with any publicly traded company, our shareholders’ percentage ownership in Post may be diluted in the future because of equity issuances for acquisitions, capital market transactions or otherwise, including equity awards that we expect will be granted to our directors, officers and employees and the accelerated vesting of other equity awards. For a more detailed description of the stockour equity incentive plan, see “Executive Compensation.”Compensation” in Item 11 of this report.

The market price of our common stock could fluctuate significantly for many reasons, including in response to the risk factors listedrisks and uncertainties discussed in this report or for reasons unrelated to our performance, such as reports by industry analysts, investor perceptions or negative developments relating to our customers, competitors or suppliers, as well as general economic and industry conditions.

Our articles of incorporation, bylaws and Missouri law contain provisions intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive and to incentivizeincentivizing prospective acquirers to negotiate with our boardBoard of directorsDirectors rather than to attempt a hostile takeover. These provisions include, among others:

ITEM 1B.    UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.    PROPERTIES

We own our principal executive offices and lease corporate administrative offices in St. Louis, Missouri. The general offices and location of our principal operations for each of our businesses are set forth in the summary below. We also lease sales offices mainly in the United States and maintain a number of stand-alone distribution facilities. In addition, there is on-site warehouse space available at many of our manufacturing facilities. Utilization of manufacturing capacity varies by manufacturing plant based upon the type of products assigned and the level of demand for those products.

We own many of our manufacturing facilities. Certain of our owned real propertyproperties are subject to mortgages or other applicable security interests pursuant to our financing arrangements. Management believes our facilities are suitable and adequate for the purposes for which they are used and are adequately maintained. We generally believe each location or facility providesour facilities, with our announced plans for expansion, provide adequate capacity for current and anticipated future customer demand.

Post Consumer Brands

The main administrative office for Post Consumer Brands, which we own, is located in Lakeville, Minnesota. Post Consumer Brands also leases domestic administrative and sales offices in Irvine, California and Bentonville, Arkansas. Post Consumer Brands also has administrative office space in Bentonville, Arkansas and Toronto, Canada, which is leased.Canada.

Post Consumer Brands has eightnine owned manufacturing facilities located in Asheboro, North Carolina; Battle Creek, Michigan; Clinton, Massachusetts; Jonesboro, Arkansas; Niagara Falls, Ontario; Asheboro, North Carolina; Tremonton, Utah; St. Ansgar, Iowa; Tremonton, Utah and two facilities, in addition to warehouse space, in Northfield, Minnesota. Post Consumer Brands also leases land for another owned manufacturing facility located in Cobourg, Ontario. Post Consumer Brands maintains approximately 3.24.4 million square feet of warehouse and distribution space throughout the United States 2.0and Canada, approximately 1.0 million of which is directly leasedowned by us and 1.2approximately 3.4 million of which we contract with third party logistics providers who operate warehouse and distribution space on our behalf. As previously announced, the Modesto, California facility closedis leased by us.

Weetabix has four owned manufacturing facilities in the fourth fiscal quarter of 2014. We expect to sell thisU.K. in Burton Latimer, Corby and Ashton-under-Lyne. In addition, Weetabix’s joint ventures in Kenya and South Africa each own a manufacturing facility within a year. Asin those respective countries. Weetabix also previously announced,leases office space in the Parsippany, New Jersey administrative office, which we lease, is expected to close by May 2016United Arab Emirates, Spain and China, and leases warehouse space in connection with the expiration of the lease.China.

The Michael Foods Group’s primaryRefrigerated Food segment has administrative offices, which are leased, are located in Minnetonka, Minnesota. Michael Foods owns sixMinnesota; New Albany, Ohio and Rogers, Arkansas. Refrigerated Food has eight owned egg products production facilities which are locatedin Illinois, Iowa, Minnesota, Nebraska and Oregon, and leases facilities for egg products production in Iowa, Minnesota and Nebraska. The egg products business also leases three facilities inNew Jersey, Pennsylvania and New Jersey and a facility in Canada for egg product production and/or distribution.South Dakota. Additionally, the egg products business owns fiveeight layer facilities located in the United States. With the acquisition of WEF in October 2015, Michael Foods GroupRefrigerated Food also owns two layersausage production plants in Hillsdale, Michigan and Xenia, Ohio. The Refrigerated Food business owns facilities in Canby, Oregon and Moses Lake, Washington. The refrigerated potato products business’ main processing facility is located in Chaska, Minnesota which is owned, and the business alsoMars Hill, Maine, as well as leases a smaller processing facility in North Las Vegas, Nevada.Nevada, for its refrigerated potato products business. Refrigerated Food also leases manufacturing plants in Sulphur Springs, Texas, which produces ready-to-eat products, such as sandwiches, soups and gravies, and Lima, Ohio, which produces refrigerated mashed potatoes and other potato-based side dishes, macaroni and cheese and other pasta side dishes. In addition, Refrigerated Food owns a transportation facility in Springfield, Ohio and leases a transportation facility in Sunnyvale, Texas. The Michael Foods GroupRefrigerated Food segment also owns a cheese processing and packaging facility and warehouse in Lake Mills, Wisconsin for its cheese and other dairy-case products business. Finally, Dakota Growers,

The Active Nutrition segment’s PNC administrative offices, which is reportedare leased, are located in our Michael Foods Group segment,Emeryville, California. PNC also leases offices and a development kitchen in Boise, Idaho. The Dymatize business has a leased administrative office in Dallas, Texas. Additionally, Active Nutrition owns a manufacturing facility in Voerde, Germany and leases office space in Munich, Germany; Bern, Switzerland and Manchester in the U.K.

Our historical Private Brands business owns manufacturing facilities in Fitzgerald, Georgia, which are used for peanut butter production and peanut blanching; in Carrington, North Dakota and New Hope, Minnesota, which are used for pasta production.

ITEM 3.    LEGAL PROCEEDINGS

The Company is possible to estimate the possible loss in connection with these litigated matters. Accordingly, we cannot predict what impact, if any, these matters and any results from such matters could have on our future results of operations.

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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 and the “Cautionary Statement on Forward-Looking Statements” on page 1.

We are a consumer packaged goods holding company, operating in fourfive reportable segments:segments as of September 30, 2018: Post Consumer Brands, Michael Foods Group,Weetabix, Refrigerated Food, Active Nutrition and Private Brands. Our products are sold through a variety of channels such as grocery, club and drug stores, mass merchandisers, foodservice, food ingredient and via the internet.

We have completed the following acquisitions:acquisitions during fiscal 2018, 2017 and 2016:

During the thirdsecond quarter of fiscal 2015, we2018, the Company reorganized ourits operating segments, which resulted in reorganized reportable segments in accordance with ASCAccounting Standards Codification (“ASC”) Topic 280, “Segment Reporting.” At September 30, 2015, our2018, the Company’s reportable segments were as follows:

Net Sales

Net sales increased $2,237.1$1,031.4 million, or 93%20%, during the year ended September 30, 2015.2018. This increase includeswas primarily due to the inclusion of incremental contributions from our current year acquisition of Bob Evans and our prior year acquisition of the Weetabix Group, combined with net sales contributions from fiscal 2015 and 2014 acquisitions for the years ended September 30, 2015 and 2014growth in all of $3,363.9 million and $1,185.6 million, respectively. Excluding the impact of acquisitions, net sales increased 5%our segments for the year ended September 30, 2015 compared to the corresponding period in the prior year.2018. For further discussion, refer to “Segment Results” within this section.

Operating profit (loss) increased $420.4$67.2 million, to $212.7 millionor 13%, for the year ended September 30, 2015. This increase includes2018. In the years ended September 30, 2018 and 2017, operating profit was impacted by losses related to the impairment of goodwill and other intangible assets of $60.8$124.9 million and $295.6$26.5 million, respectively, and provisions for legal settlement of $17.3 million and $74.5 million, respectively. Additionally, the yearsyear ended September 30, 2015 and 2014, respectively, as well as2017 was impacted by net foreign currency gains of $30.0 million related to cash held in Pounds Sterling to fund the fiscal 2017 acquisition of the Weetabix Group. Excluding these impacts in both years, operating profit increased $138.4 million, or 23%, primarily resulting from the inclusion of incremental segment profit contributions from our current year acquisition of Bob Evans and our prior year acquisitionsacquisition of $192.6 million and $18.3 million for the years ended September 30, 2015 and 2014, respectively. Excluding impairment charges and incrementalWeetabix Group, as well as increased segment profit contributions from acquisitions, operating profit increased 16%within our Refrigerated Food, Active Nutrition and Private Brands segments for the year ended September 30, 2015 compared to2018, partially offset by a decrease in segment profit within our Post Consumer Brands segment. General corporate expenses and other, excluding the corresponding periodpreviously described foreign currency gains, were higher in the prior year.year ended September 30, 2018. For further discussion, refer to “Segment Results” within this section.

Operating profit (loss) decreased $315.5$25.4 million, to $(207.7) millionor 5%, for the year ended September 30, 2014. This decrease includes2017. Operating profit was impacted in the year ended September 30, 2017 by losses related to the impairment of goodwill of $26.5 million, a provision for legal settlement of $74.5 million (compared to $28.5 million in the year ended September 30, 2016) in the Refrigerated Food segment and intangible assetsnet foreign currency gains of $295.6$30.0 million and $2.9related to cash held in Pounds Sterling to fund the fiscal 2017 acquisition of the Weetabix Group. Excluding these impacts in both years, operating profit increased $17.1 million, recorded in fiscal 2014 and 2013, respectively, as well asor 3%, primarily resulting from the

During the years ended September 30, 20152018, 2017 and 2014,2016, we recognized net losses of $92.5$31.1 million, $222.9 million and $35.5$86.4 million, respectively, related to the extinguishment of debt.

During the years ended September 30, 2018, 2017 and 2016, we recognized net (gains) losses of $(95.6) million, $(91.8) million and $182.9 million, respectively, on our interest rate swaps and cross-currency foreign exchange contracts that were not designated as hedging instruments. Of the total gains recognized in the year ended September 30, 2018, $(96.7) million related to non-cash mark-to-market adjustments, which was offset by $1.1 million related to cash settlements, both of which related to our interest rate swaps. These amounts are reported in “Other expense” onOf the Consolidated Statements of Operations. There were no such lossestotal gains recognized in the year ended September 30, 2013.2017, $(93.6) million related to non-cash mark-to-market adjustments on our interest rate swaps, cross-currency swaps and foreign exchange forward contracts, which was offset by $1.8 million related to cash settlements on our interest rate swaps. Of the total losses recognized in the year ended

TheOur effective tax rate for fiscal 20152018 was 31.1%(77.1)% compared to 19.6%35.1% for fiscal 20142017 and 31.8%89.0% for fiscal 2013.2016. A reconciliation of income tax (benefit) expense with amounts computed at the statutory federal rate follows:

In fiscal 2015 was affected by incremental tax expense (benefit) of $16.5 million related to the non-deductible goodwill impairment loss, $0.4 million resulting from non-deductible compensation in accordance with the provisions of Internal Revenue Code (“IRC”) section 162(m), $0.6 million resulting from non-deductible outside service expenses incurred in relation to merger and acquisition transactions, $6.7 million resulting from recording valuation allowances against the net deferred tax assets of various subsidiaries, $(2.7) million resulting from the receipt of non-taxable interest income, $4.9 million resulting from changes in deferred tax rates and $(3.4) million resulting from changes in uncertain tax positions.

The effective tax rate was also impactedchanges included in all threethe Tax Act are broad and complex, and as such, the final transition impacts of the Tax Act may differ from the above estimates, possibly materially, due to, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act, any changes in current accounting standards for income taxes or related interpretations in response to the Tax Act or any updates or changes to estimates we have utilized to calculate the transition impacts, including impacts resulting from changes to fiscal years by minor effects of shifts between the relative amounts of domestic2018 earnings estimates and foreign incomeexchange rates. ASU 2018-05 allows for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. We currently anticipate finalizing and state tax apportionment.recording any resulting adjustments by December 31, 2018.

We evaluate each segment’s performance based on its segment profit, which is its operating profit before impairment of property, goodwill and other intangible assets, plantfacility closure related costs, restructuring expenses, (gains)/losses on assets and liabilities held for sale, gain(gains)/losses on sale of plant and other unallocated corporate income and expenses. During the first quarter of fiscal 2015, we changed our methodology for allocating certain corporate costs to segment profit. Accordingly, segment profit for years ended September 30, 2014 and 2013 has been adjusted to align with current year presentation.