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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Number of shares of Common Stock, $0.01 par value, outstanding as of ~~October 31, 2017: 57,215,184~~April 30, 2018: 56,325,844

	September 30,			December 31,			March 31,			December 31,
	2017			2016			2018			2017
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	131.9		$	62.1		$	128.5		$	132.8
Investments		13.2			10.4			13.7			14.1
Receivables, net		432.1			429.0
Receivables, net (Note 3)								345.2			329.8
Inventories		1,137.5			978.0			940.6			918.3
Assets held for sale		—			3.6
Prepaid expenses and other current assets		110.4			77.6			104.9			89.7
Total current assets		1,825.1			1,560.7			1,532.9			1,484.7
Property, plant, and equipment, net		1,289.8			1,359.3			1,279.2			1,294.4
Goodwill		2,459.2			2,447.2			2,178.7			2,182.0
Intangible assets, net		1,068.3			1,137.6			752.8			773.0
Other assets, net		43.2			41.0			41.9			45.2
Total assets	$	6,685.6		$	6,545.8		$	5,785.5		$	5,779.3
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	773.8		$	626.8		$	648.7		$	589.7
Current portion of long-term debt		72.1			66.4			10.1			10.1
Total current liabilities		845.9			693.2			658.8			599.8
Long-term debt		2,620.4			2,724.8			2,533.2			2,535.7
Deferred income taxes		421.4			422.2			175.8			178.4
Other long-term liabilities		200.6			202.3			197.9			202.1
Total liabilities		4,088.3			4,042.5			3,565.7			3,516.0
Commitments and contingencies (Note 15)
Commitments and contingencies (Note 17)
Stockholders’ equity:
Preferred stock, par value $0.01 per share, 10.0 shares authorized, none issued		—			—			—			—
Common stock, par value $0.01 per share, 90.0 shares authorized, 57.2 and 56.8 shares issued and outstanding, respectively		0.6			0.6
Common stock, par value $0.01 per share, 90.0 shares authorized, 56.4 and 56.6 shares issued and outstanding, respectively								0.6			0.6
Treasury stock								(45.8	)		(28.7	)
Additional paid-in capital		2,101.4			2,071.9			2,124.2			2,107.0
Retained earnings		554.9			532.1			213.3			245.9
Accumulated other comprehensive loss		(59.6	)		(101.3	)		(72.5	)		(61.5	)
Total stockholders’ equity		2,597.3			2,503.3			2,219.8			2,263.3
Total liabilities and stockholders’ equity	$	6,685.6		$	6,545.8		$	5,785.5		$	5,779.3

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2017			2016			2017			2016			2018			2017
	(Unaudited)						(Unaudited)						(Unaudited)
Net sales	$	1,548.8		$	1,586.9		$	4,607.2		$	4,398.5		$	1,481.2		$	1,536.2
Cost of sales		1,288.7			1,301.3			3,783.8			3,622.5			1,249.3			1,249.8
Gross profit		260.1			285.6			823.4			776.0			231.9			286.4
Operating expenses:
Selling and distribution		95.6			102.2			295.0			292.0			108.4			104.6
General and administrative		67.1			71.9			229.3			244.6			81.1			79.1
Amortization expense		28.5			28.6			85.8			80.9			22.2			28.6
Other operating expense, net		11.1			5.3			111.9			10.3			28.9			6.8
Total operating expenses		202.3			208.0			722.0			627.8			240.6			219.1
Operating income		57.8			77.6			101.4			148.2
Operating (loss) income														(8.7	)		67.3
Other expense:
Interest expense		31.4			30.8			92.9			88.0			28.5			29.7
Interest income		(0.4	)		(0.1	)		(3.5	)		(3.5	)		(2.0	)		(2.8	)
Gain on foreign currency exchange		(2.5	)		(1.1	)		(2.8	)		(6.0	)
Other (income) expense, net		(0.8	)		(4.6	)		1.0			(0.3	)
Loss on foreign currency exchange														2.5			0.1
Other expense, net														6.2			0.6
Total other expense		27.7			25.0			87.6			78.2			35.2			27.6
Income before income taxes		30.1			52.6			13.8			70.0
(Loss) income before income taxes														(43.9	)		39.7
Income taxes		1.3			15.2			(9.0	)		16.8			(9.8	)		11.5
Net income	$	28.8		$	37.4		$	22.8		$	53.2
Net (loss) income													$	(34.1	)	$	28.2

Net earnings per common share:
Net (loss) earnings per common share:
Basic	$	0.50		$	0.66		$	0.40		$	0.96		$	(0.60	)	$	0.50
Diluted	$	0.50		$	0.65		$	0.40		$	0.95		$	(0.60	)	$	0.49
Weighted average common shares:
Basic		57.3			56.8			57.1			55.4			56.5			56.9
Diluted		57.7			57.6			57.7			56.2			56.5			57.6

	Three Months Ended					Nine Months Ended				Three Months Ended
	September 30,					September 30,				March 31,
	2017		2016			2017		2016		2018			2017
	(Unaudited)					(Unaudited)				(Unaudited)
Net income	$	28.8	$	37.4		$	22.8	$	53.2
Net (loss) income										$	(34.1	)	$	28.2

Other comprehensive income:
Foreign currency translation adjustments(1)		18.0		(7.3	)		34.5		21.6		(10.1	)		3.6
Pension and postretirement reclassification adjustment ~~(1)~~(2)		0.1		0.3			7.2		0.8		0.2			0.3
Other comprehensive income (loss)		18.1		(7.0	)		41.7		22.4
Adoption of ASU 2018-02 reclassification to retained earnings											(1.1	)		—
Other comprehensive (loss) income											(11.0	)		3.9

Comprehensive income	$	46.9	$	30.4		$	64.5	$	75.6
Comprehensive (loss) income										$	(45.1	)	$	32.1

	Nine Months Ended						Three Months Ended
	September 30,						March 31,
	2017			2016			2018			2017
	(Unaudited)						(Unaudited)
Cash flows from operating activities:
Net income	$	22.8		$	53.2
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(34.1	)	$	28.2
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		213.2			208.1			67.0			72.4
Stock-based compensation		25.2			22.8			16.3			7.5
Loss on divestiture		85.6			—
Other		0.7			(10.8	)		13.4			(15.0	)
Changes in operating assets and liabilities, net of effect of acquisitions:
Receivables		0.2			(16.8	)		(16.5	)		45.0
Inventories		(205.0	)		(8.1	)		(24.9	)		(10.6	)
Prepaid expenses and other assets		(39.2	)		(32.2	)		(10.5	)		3.3
Accounts payable, accrued expenses, and other liabilities		159.9			82.2			47.1			(52.3	)
Net cash provided by operating activities		263.4			298.4			57.8			78.5
Cash flows from investing activities:
Additions to property, plant, and equipment		(102.5	)		(131.9	)		(38.5	)		(34.7	)
Additions to intangible assets		(18.6	)		(10.9	)		(2.9	)		(8.7	)
Acquisitions, less cash acquired		—			(2,644.4	)
Proceeds from sale of fixed assets		7.2			1.5			—			0.2
Proceeds from divestiture		19.3			—
Other		(1.0	)		(1.4	)		(0.3	)		(0.3	)
Net cash used in investing activities		(95.6	)		(2,787.1	)		(41.7	)		(43.5	)
Cash flows from financing activities:
Borrowings under Revolving Credit Facility		584.5			239.3			5.9			115.0
Payments under Revolving Credit Facility		(634.5	)		(313.3	)		(5.9	)		(137.0	)
Proceeds from issuance of Term Loan A-2		—			1,025.0
Proceeds from issuance of 2024 Notes		—			775.0
Payments on capitalized lease obligations and other debt		(2.3	)		(2.6	)		(0.3	)		(1.4	)
Payment of deferred financing costs		—			(34.3	)
Payments on Term Loans		(50.8	)		(25.9	)		(3.5	)		(12.7	)
Net proceeds from issuance of common stock		—			835.1
Repurchases of common stock								(17.1	)		—
Receipts related to stock-based award activities		11.1			7.6			1.9			6.7
Payments related to stock-based award activities		(6.7	)		(8.7	)		(1.1	)		(0.9	)
Net cash (used in) provided by financing activities		(98.7	)		2,497.2
Net cash used in financing activities								(20.1	)		(30.3	)
Effect of exchange rate changes on cash and cash equivalents		0.7			3.8			(0.3	)		0.4
Net increase in cash and cash equivalents		69.8			12.3
Net (decrease) increase in cash and cash equivalents								(4.3	)		5.1
Cash and cash equivalents, beginning of period		62.1			34.9			132.8			62.1
Cash and cash equivalents, end of period	$	131.9		$	47.2		$	128.5		$	67.2


Supplemental cash flow disclosures
Interest paid	$	102.8		$	80.8			44.3			43.7
Income taxes paid		25.8			49.5			2.4			6.2

Non-cash investing activities:
Accrued purchase of property and equipment	$	20.9		$	15.5			21.0			12.3
Accrued other intangible assets		3.8			4.4			4.8			5.7

As of and for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018

The unaudited Condensed Consolidated Financial Statements included herein have been prepared by TreeHouse Foods, Inc. and its consolidated subsidiaries (the “Company,” “TreeHouse,” “we,” “us,” or “our”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to quarterly reporting on Form 10-Q. In our opinion, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by such rules and regulations. ~~Certain prior year amounts in the Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.~~ The Condensed Consolidated Financial Statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2017. Results of operations for interim periods are not necessarily indicative of annual results.

In the first quarter of 2017, the Company completed changes in its organizational structure that resulted in a change in how the Company manages its business and allocates resources. As a result, the Company revised its reportable segments to reflect how management currently reviews financial information and makes operating decisions. See Note 18 for additional details. All prior period amounts have been recast to reflect the change in reportable segments.

On February 1, 2016, the Company acquired all of the outstanding common stock of Ralcorp Holdings, Inc., the Missouri corporation through which the private brands business (“Private Brands Business”) of ConAgra Foods, Inc. was operated. Ralcorp Holdings, Inc. was renamed TreeHouse Private Brands, Inc. during the first quarter of 2016. The results of operations of the Private Brands Business are included in our financial statements from the date of acquisition and are included in the Baked Goods, Condiments, Meals, and Snacks segments, as applicable.

The Private Brands Business was on a 4-4-5 fiscal calendar during the third quarter of 2016, and September 25, 2016 was the fiscal period end closest to the Company’s fiscal quarter end. This difference did not have a significant impact on the results of operations of the Private Brands Business. In the fourth quarter of 2016, the Company changed the fiscal year end of the Private Brands Business to December 31. The Company did not retrospectively apply the effects of this change to the three and nine month periods ended September 30, 2016 due to impracticability, and believes the effects would be immaterial.

The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires us to use our judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from these estimates.

A detailed description of the Company’s significant accounting policies can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2017.

The Company’s restructuring and margin improvement activities are part of an enterprise-wide transformation to improve long-term profitability of the Company. ~~Upon completion of our multi-year multi-phase programs, the projects~~These activities are ~~expected~~aggregated into three categories: (1) Structure to ~~deliver higher margin sales~~Win – a selling, general, and administrative reduction initiative; (2) TreeHouse 2020 – a long-term growth and ~~reduced expenses resulting in~~ margin ~~expansion.~~improvement strategy; and (3) Pre-2020 other restructuring and plant closing costs. For additional detail on each activity, see subsequent sections of this note. Total costs associated with these categories are outlined below:

Expenses associated with these programs are ~~primarily aggregated~~recorded in the Cost of sales and Other operating expense, net ~~line of~~lines in the Condensed Consolidated Statements of Operations, with the exception of asset-related costs, which are recorded in Cost of sales. During the three months ended September 30, 2017, the Company recorded total charges $20.7 million across all restructuring programs and margin improvement activities. The charges included $10.2 million recorded in Cost of sales and $10.5 million recorded in Other operating expenses, net. During the three months ended September 30, 2016, the Company recorded total charges of $5.9 million across all restructuring programs and margin improvement activities. The charges included $1.0 million recorded in Cost of sales and $4.9 million recorded in Other operating expenses, net. During the nine months ended September 30, 2017, the Company recorded charges of $39.5 million across all restructuring programs and margin improvement activities. These charges included $13.5 million recorded in Cost of sales and $26.0 million recorded in Other operating expenses, net. During the nine months ended September 30, 2016, the Company recorded charges of $12.9 million across all restructuring programs and margin improvement activities. These charges included $3.9 million recorded in Cost of sales and $9.0 million recorded in Other operating expenses, net.Operations. The Company does not allocate restructuring and margin improvement activities costs to reportable segments when evaluating the performance of its

segments. As a result, restructuring and margin improvement activities costs by reportable segment has not been presented. See Note 1820 for more information.

In the first quarter of 2018, the Company announced an Operating expenses improvement program (“Structure to Win”) designed to align our organization structure with strategic priorities. The program is intended to support operational effectiveness, cost reduction, and position the Company for growth with a focus on a lean customer focused go-to-market team, centralized supply chain, and streamlined back office. We expect to spend $30.1 million in 2018 primarily on employee-related costs and consulting services.

All of the costs associated with Structure to Win are recorded in the Other operating expense, net line of the Condensed Consolidated Statements of Operations. Below is a summary of costs by type associated with this program:

For the three months ended March 31, 2018, employee-related costs primarily consisted of severance and other costs primarily consisted of consulting services. These costs were recorded in the Other operating expense, net line. There were no costs related to this program during the three months ended March 31, 2017.

In the third quarter of 2017, the Company announced TreeHouse 2020, a program intended to accelerate long-term growth through optimization of our manufacturing network, transformation of our mixing centers and warehouse footprint, and leveraging of systems and processes to drive performance. The Company’s workstreams related to these activities and selling, general, and administrative reductions continue to deliver value by increasing our capacity utilization, expanding operating margins, and streamlining our plant structure to optimize our supply chain. TreeHouse 2020 is expected to produce significant savings to achieve our operating margin expansion targets creating reinvestment opportunities to drive future growth.

This program began in 2017 and will be executed in multiple phases ~~over the next several years.~~ through 2020. The key elements of Phase 1 include the closure of the Company’s Brooklyn Park, Minnesota and Plymouth, Indiana facilities, as well as the downsizing of the Dothan, Alabama ~~facility. Production at the Brooklyn Park, Minnesota and Plymouth, Indiana facilities is expected to cease~~facility, which are successfully tracking toward their closure dates noted in the ~~fourth~~table below. Key elements of Phase 2, which was announced in the first quarter of ~~2017.~~ 2018, include the closure of the Company’s Visalia, CA and Battle Creek, MI facilities.

The key information regarding the Company’s announced facility ~~downsizing at Dothan, Alabama~~closures related to TreeHouse 2020 is ~~expected to be complete~~outlined in the ~~third quarter of 2018.In addition, we have taken steps toward increasing our capacity utilization, operational margin expansion, and streamlining our plant structure to optimize our supply chain.~~ table below:

For the three months ended ~~September 30, 2017~~March 31, 2018, asset-related costs primarily consisted of accelerated depreciation; employee-related costs primarily consisted of severance; and other costs primarily consisted of third-party costs. Asset-related costs were recorded in the Cost of sales line while employee-related and other costs were primarily recorded in the Other operating expense, net line of the Condensed Consolidated Statement of Operations. Total expected cost increased primarily due to the closure of the Visalia and Battle Creek plants announced in the first quarter of 2018. There were no costs related to the TreeHouse 2020 program during the three months ended March 31, 2017.

The Company continually analyzes its plant network to align operations with the current and future needs of its customers. Facility closure decisions are made when the Company identifies opportunities to lower production costs or eliminate excess manufacturing capacity while maintaining a competitive cost structure, service levels, and product quality. Expenses associated with facility closures are primarily aggregated in the Other operating expense, net line of the Condensed Consolidated Statements of Operations, with the exception of asset-related costs, which are recorded in Cost of sales. The key information regarding the Company’s announced facility closures is outlined in the table below.

Facility Location

Date of Closure

Announcement

End of

Production

Full Facility

Closure

Primary Products

Produced

Primary Segment(s)

Affected

Total

Costs to

Total

Cash

Costs to

Date of Closure

Announcement

Full Facility

Closure

Primary Products

Produced

Primary Segment(s)

Affected

Total

Costs to

Total

Cash

Costs to

(In millions)

City of Industry, California

November 18, 2015

First quarter of 2016

Third quarter of 2016

Liquid non-dairy creamer and refrigerated salad dressings

Beverages, Condiments

6.9

3.8

November 18, 2015

Completed in Q3 2016

Liquid non-dairy creamer and refrigerated salad dressings

Beverages, Condiments

6.8

3.6

Ayer, Massachusetts

April 5, 2016

First quarter of 2017

Third quarter of 2017

Spoonable dressings

Condiments

5.9

4.1

April 5, 2016

Completed in Q3 2017

Mayonnaise

Condiments

5.6

4.0

Azusa, California

May 24, 2016

First quarter of 2017

Third quarter of 2017

Bars and snack products

Snacks

19.5

16.1

May 24, 2016

Completed in Q3 2017

Bars and fruit snacks

Snacks

21.2

17.0

Ripon, Wisconsin

May 24, 2016

Fourth quarter of 2016

Sugar wafer cookies

Baked Goods

0.9

1.2

May 24, 2016

Completed in Q4 2016

Sugar wafer cookies

Baked Goods

0.8

1.0

Delta, British Columbia

November 3, 2016

Fourth quarter of 2017

First quarter of 2018

Frozen griddle products

Baked Goods

3.7

2.7

November 3, 2016

Completed in Q1 2018

Frozen griddle products

Baked Goods

3.7

2.7

Battle Creek, Michigan

November 3, 2016

(1)

Ready-to-eat cereal

Meals

10.4

2.8

November 3, 2016

(1)

Ready-to-eat cereal

Meals

10.4

2.2

48.5

30.5

Total expected costs to close the City of Industry, California, Ayer, Massachusetts, Ripon, Wisconsin, and Delta, British Columbia facilities have been reduced by approximately $4.9 million, $0.6 million, $1.2 million, and $1.5 million, respectively, since the initial announcements, while total expected costs to close the Azusa, California and Battle Creek, Michigan facilities have been increased by approximately $4.6 million and $0.9 million, respectively, since their initial announcement.9

	Three Months Ended September 30,				Nine Months Ended September 30,				Cumulative Costs		Total Expected		Three Months Ended			Three Months Ended		Cumulative Costs		Total Expected
	2017		2016		2017		2016		To Date		Costs		March 31, 2018			March 31, 2017		To Date		Costs
	(In millions)												(In millions)
Asset-related	$	0.8	$	1.0	$	4.3	$	2.5	$	14.5	$	16.6	$	0.9		$	4.4	$	18.0	$	18.0
Employee-related		0.2		2.2		2.9		4.1		10.2		11.9		—			2.5		10.5		11.2
Other closure costs		1.9		2.7		12.2		3.8		16.7		18.8		(0.1	)		2.5		18.4		19.3
Total	$	2.9	$	5.9	$	19.4	$	10.4	$	41.4	$	47.3	$	0.8		$	9.4	$	46.9	$	48.5

For the three months ended ~~September 30, 2017,~~March 31, 2018, asset-related costs primarily consisted of ~~accelerated depreciation; employee-related costs primarily consisted~~inventory dispositions and were recorded in the Cost of ~~severance;~~sales line of the Condensed Consolidated Statement of Operations. Employee-related and other closure costs ~~primarily consisted of third-party costs.~~ were recorded in the Other operating expense, net line.

Other ~~individually insignificant~~ cost reduction activities not related to our plant closings above totaled ~~$3.1~~$1.7 million for the three months ended ~~September 30, 2017 and $5.4 million for the~~March 31, 2018 ~~nine months ended September 30, 2017~~ and were primarily the result of a Private Brands plant closure initiated prior to TreeHouse’s acquisition. Other cost reduction activities were ~~insignificant~~$1.6 million for the three months ended ~~September 30, 2016 and $2.5 million for the nine months ended September 30, 2016.~~March 31, 2017.

Liabilities recorded as of ~~September 30, 2017~~March 31, 2018 associated with total exit cost reserves relate to severance, the partial withdrawal from a multiemployer pension plan, and lease termination costs. The severance and lease termination liabilities were included in the Accounts payable and accrued expenses line of the Condensed Consolidated Balance Sheets, while the multiemployer pension plan withdrawal liability was included in the Other long-term liabilities line of the Condensed Consolidated Balance Sheets. The table below presents a reconciliation of the liabilities as of ~~September 30, 2017:~~March 31, 2018:

	Severance			Multiemployer Pension Plan Withdrawal		Other Costs			Total Liabilities			Severance			Multiemployer Pension Plan Withdrawal		Other Costs			Total Liabilities
	(In millions)											(In millions)
Balance as of December 31, 2016	$	3.5		$	0.8	$	-		$	4.3
Balance as of December 31, 2017												$	6.1		$	0.8	$	2.7		$	9.6
Expense		6.6			—		2.4			9.0			6.7			—		—			6.7
Payments		(4.2	)		—		(0.5	)		(4.7	)		(3.7	)		—		(2.0	)		(5.7	)
Adjustments		(0.3	)		—		—			(0.3	)		—			—		(0.7	)		(0.7	)
Balance as of September 30, 2017	$	5.6		$	0.8	$	1.9		$	8.3
Balance as of March 31, 2018												$	9.1		$	0.8	$	—		$	9.9

On ~~February~~January 1, ~~2016,~~2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”) using the ~~Company acquired~~modified retrospective method. See Note 21 for additional information. As a result of the ~~Private Brands Business, which is primarily engaged in manufacturing, distributing,~~adoption of Topic 606, we have updated our accounting policy for revenue recognition as follows:

In the following tables, segment revenue is disaggregated by segment and the results of operations were included in our Condensed Consolidated Financial Statements from the date of acquisition in the Baked Goods, Condiments, Meals, and Snacks segments. Included in the Company’s Condensed Consolidated Statements of Operations are the Private Brands Business’s net sales of approximately $2,074.6 million and income before income taxes of $55.6 million from the date of acquisition through September 30, 2016. Integration costs of $7.5 million, which were included in the Cost of sales and General and administrative expense lines of the Condensed Consolidated Statements of Operations, were included in determining income before income taxes.

~~We have completed the purchase price allocation to net tangible and intangible assets acquired and liabilities assumed as follows:~~product category groups.

The Company allocated $496.1 million to customer relationships with retail grocery customers, which have an estimated life of 13 years, and $14.8 million to customer relationships with food away from home customers, which have an estimated life of 10 years. The Company allocated $33.0 million to trade names, which have an estimated life of 10 years. The Company allocated $23.2 million to formulas, which have an estimated life of 5 years. The Company allocated $19.6 million to capitalized software with estimated lives

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of 1account for revenue recognition. A contract’s transaction price is allocated to ~~5 years, depending~~each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations are food and beverage products.

Revenue recognition is completed on ~~expected use.~~a point in time basis when product control is transferred to the customer. In general, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can direct the use and obtain substantially all of the remaining benefits from the asset at this point in time.

Customer contracts generally do not include more than one performance obligation. When a contract does contain more than one performance obligation, we allocate the contract’s transaction price to each performance obligation based on its relative standalone selling price. The ~~aforementioned intangibles~~standalone selling price for each distinct good is generally determined by directly observable data.

The performance obligations in our contracts are satisfied within one year. As such, we have not disclosed the transaction price allocated to remaining performance obligations as of March 31, 2018.

Our customer contracts identify the product, quantity, price, payment and final delivery terms. Payment terms usually include early pay discounts. We grant payment terms consistent with industry standards. Although some payment terms may be more extended, no terms beyond one year are granted at contract inception. As a result, we do not adjust the promised amount of consideration for the effects of a significant financing component because the period between our transfer of a promised good or service to a customer and the customer’s payment for that good or service will be ~~amortized over their expected useful lives. Indemnification assets related to taxes of approximately $13.8 million were also recorded. The~~one year or less.

Taxes collected by the Company, ~~increased~~which are assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions, are normally excluded from revenue.

All shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are in included in the cost of ~~acquired inventories by approximately $8.4 million~~sales; this includes shipping and ~~expensed the amount~~handling costs after control over a product has transferred to a customer.

In addition to fixed contract consideration, most contracts include some form of variable consideration. The most common forms of variable consideration include discounts, rebates and sales returns and allowances. Variable consideration is treated as a ~~component~~reduction in revenue when product revenue is recognized. Depending on the specific type of ~~Cost~~variable consideration, we use either the expected value or most likely amount method to determine the variable consideration. We believe there will not be significant changes to our estimates of ~~sales.~~variable consideration when any related uncertainties are resolved with our customers. The Company ~~has allocated $555.0 million, $73.3 million, $413.8 million,~~reviews and ~~$97.9~~updates its estimates and related accruals of variable consideration each period based on the terms of the agreements, historical experience, and any recent changes in the market. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe therefore not requiring any additional constraint on the variable consideration.

TreeHouse provides all customers with a standard or assurance type warranty. Either stated or implied, the Company provides assurance the related products will comply with all agreed-upon specifications and other warranties provided under the law. No services beyond an assurance warranty are provided to customers.

The Company does not grant a general right of return. However, customers may return defective or non-conforming products. Customer remedies may include either a cash refund or an exchange of the product. As a result, the right of return and related refund liability is estimated and recorded as a reduction in revenue. This return estimate is reviewed and updated each period and is based on historical sales and return experience.

Contract asset and liability balances as of March 31, 2018 are immaterial. The Company does not have significant deferred revenue or unbilled receivable balances because of transactions with customers.

We have identified certain incremental costs to obtain a contract, primarily sales commissions, requiring capitalization under the new standard. The Company continues to expense these costs as incurred because the amortization period for the costs would have been one year or less. The Company does not incur significant fulfillment costs requiring capitalization.

The following tables summarize the impact of our adoption of Topic 606 on a modified retrospective basis on select Condensed Consolidated Balance Sheet items. There were no material impacts to the Condensed Consolidated Statement of Operations or the

Condensed Consolidated Statement of Cash Flows. Upon adoption, the Company reclassified certain customer liabilities related to customer trade promotional activity from accounts receivable to current liabilities.

In December 2017, the Company entered into an agreement (the “Receivables Sales Agreement”), to sell, on a revolving basis, certain trade accounts receivable balances to an unrelated third-party financial institution. Transfers under this agreement are accounted for as sales of receivables resulting in the receivables being de-recognized from the Condensed Consolidated Balance Sheet. The Receivables Sales Agreement provides for the continuing sale of certain receivables on a revolving basis until terminated by either party. The maximum receivables that may be sold at any time is $200.0 million.

For the quarter ended March 31, 2018, $183.1 million of ~~goodwill to the Baked Goods, Condiments, Meals, and Snacks segments, respectively. Goodwill arises principally as a result~~accounts receivable have been sold via this arrangement. The proceeds from these sales of expansion opportunities and synergies across both new and legacy product categories. None of the goodwill resulting from this acquisition is tax deductible. The Company incurred approximately $35.2 million in acquisition costs in 2016 and none in 2017. These costsreceivables are included within the change in receivables in the ~~General and administrative expense line~~operating activities section of the Condensed Consolidated Statements of ~~Operations.~~

Cash Flows. The ~~fair values~~recorded net loss on sale of receivables is $0.6 million for ~~customer relationships at~~ the acquisition date were determined using the excess earnings method under the income approach. Trade name fair values were determined using the relief from royalty method, while the fair value of formulas was determined using the cost approach. Real property fair values were determined using the costquarter ended March 31, 2018 and market approaches, while the fair value of personal property was determined using the indirect cost approach. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates, and royalty rates.

~~Since the preliminary purchase price allocation~~is included in the ~~Company’s Annual Report for the fiscal year ended December 31, 2016, the Company recorded purchase price adjustments related to taxes, resulting~~Other expense, net line in ~~an increase to goodwill of approximately $3.0 million in the first quarter of 2017. These adjustments did not impact~~ the Condensed Consolidated Statements of Operations.

The ~~following unaudited pro forma information shows~~Company has no retained interest in the ~~results of operations~~receivables sold under the program above, however the Company does have collection and administrative responsibilities for the sold receivables. The Company has not recorded any servicing assets or liabilities as ~~if its acquisition~~of March 31, 2018, as the fair value of the ~~Private Brands Business had been completed~~servicing arrangement as ~~of January 1, 2016. Adjustments have been made for~~well as the ~~pro forma effects of depreciation and amortization of tangible and intangible assets recognized as part of the business combination, the issuance of common stock, interest expense related~~fees earned were not material to the financing of the business combination, and related income taxes. Excluded from the 2016 pro forma results were $35.2 million of costs incurred by the Company in connection with the acquisition. The pro forma results may not necessarily reflect actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.financial statements.

	September 30,			December 31,			March 31,			December 31,
	2017			2016			2018			2017
	(In millions)						(In millions)
Raw materials and supplies	$	544.2		$	429.4		$	450.0		$	416.5
Finished goods		618.5			571.9			519.5			530.0
LIFO reserve		(25.2	)		(23.3	)		(28.9	)		(28.2	)
Total inventories	$	1,137.5		$	978.0		$	940.6		$	918.3

Inventory was generally accounted for under the FIFO method and a portion was accounted for under the last-in, first-out (“LIFO”) ~~method and the weighted average costing approach.~~method. Approximately ~~$95.1~~$65.9 million and ~~$105.9~~$92.9 million of our inventory was accounted for under the LIFO method of accounting at ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively. ~~Approximately $197.8~~In the first quarter of 2018, the Company changed the inventory costing methodology for a portion of the Snacks segment from weighted average cost to FIFO. The FIFO costing method was preferable to the prior method used as it aligns all of the Snacks inventory costing with the majority of the Company, allows for more accurate matching of revenues and expenses, and is a more common industry practice. The change in costing methodology was not material to the presented periods. As such, prior period information was not retrospectively revised, and the impact of the change was recorded in the period ended March 31, 2018.

Depreciation expense was $44.8 million and ~~$116.2~~$43.8 million ~~of our inventory was accounted~~ for ~~using~~ the ~~weighted average costing approach at September 30,~~three months ended March 31, 2018 and 2017, ~~and December 31, 2016,~~ respectively.

Depreciation expense was $45.7 million and $46.7 million for the three months ended September 30, 2017 and 2016, respectively, and $127.4 million and $127.2 million for the nine months ended September 30, 2017 and 2016, respectively.

As a result of the changes in organizational structure completed in the first quarter of 2017, the Company has the following five operating segments, which are also its reporting units: Baked Goods, Beverages, Condiments, Meals, and Snacks. See Note 18 for more information.

The Company allocated the goodwill balance as of January 1, 2017 between the new reporting units using a relative fair value allocation approach. The change was considered a triggering event indicating a test for goodwill impairment was required as of January 1, 2017. The Company performed the first step of the impairment test, which did not result in the identification of any impairment losses. Changes in the carrying amount of goodwill for the nine months ended September 30, 2017 are as follows:

Baked

Goods

Beverages

Condiments

Meals

Snacks

Total

(In millions)

Balance at January 1, 2017

$
554.2

$
713.2

$
433.1

$
470.6

$
276.1

$
2,447.2

Purchase price adjustments

1.4

—

0.2

1.1

0.3

3.0

Foreign currency exchange adjustments

—

3.8

5.2

—

—

9.0

Balance at September 30, 2017

$
555.6

$
717.0

$
438.5

$
471.7

$
276.4

$
2,459.2

	Baked
	Goods		Beverages			Condiments			Meals		Snacks			Total
	(In millions)
Goodwill	$	555.6	$	716.7		$	449.5		$	471.7	$	609.8		$	2,803.3
Accumulated impairment losses		—		—			(11.5	)		—		(609.8	)		(621.3	)
Balance at January 1, 2018		555.6		716.7			438.0			471.7		—			2,182.0
Foreign currency exchange adjustments		—		(1.4	)		(1.9	)		—		—			(3.3	)
Balance at March 31, 2018	$	555.6	$	715.3		$	436.1		$	471.7	$	—		$	2,178.7

The carrying amounts of our intangible assets with indefinite lives, other than goodwill, as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 are as follows:

	September 30, 2017		December 31, 2016		March 31, 2018		December 31, 2017
	(In millions)				(In millions)
Trademarks	$	22.8	$	21.6	$	22.3	$	22.8
Total indefinite lived intangibles	$	22.8	$	21.6	$	22.3	$	22.8

The ~~increase~~decrease in the indefinite lived intangibles balance is due to foreign currency translation.

The gross carrying amounts and accumulated amortization of intangible assets with finite lives as of March 31, 2018 and December 31, 2017 are as follows:

	March 31, 2018							December 31, 2017
	Gross					Net		Gross								Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Impairment			Carrying
	Amount		Amortization			Amount		Amount		Amortization			Losses			Amount
	(In millions)
Intangible assets with finite lives:
Customer-related	$	961.7	$	(347.7	)	$	614.0	$	1,265.4	$	(361.4	)	$	(273.3	)	$	630.7
Contractual agreements		3.0		(3.0	)		—		3.0		(3.0	)		—			—
Trademarks		69.4		(29.9	)		39.5		69.6		(28.7	)		—			40.9
Formulas/recipes		33.8		(19.6	)		14.2		33.8		(18.3	)		—			15.5
Computer software		141.9		(79.1	)		62.8		137.8		(74.7	)		—			63.1
Total finite lived intangibles	$	1,209.8	$	(479.3	)	$	730.5	$	1,509.6	$	(486.1	)	$	(273.3	)	$	750.2

Total intangible assets, excluding goodwill, as of March 31, 2018 and December 31, 2017 were $752.8 million and $773.0 million, respectively. Amortization expense on intangible assets for the three months ended March 31, 2018 and 2017 was $22.2 million and $28.6 million, respectively. Estimated amortization expense on intangible assets for 2018 and the next four years is as follows:

~~The gross carrying amounts and accumulated amortization of intangible assets with finite lives as of September 30, 2017 and December 31, 2016 are as follows:~~

September 30, 2017

December 31, 2016

Gross

Net

Gross

Net

Carrying

Accumulated

Carrying

Carrying

Accumulated

Carrying

Amount

Amortization

Amount

Amount

Amortization

Amount

(In millions)

(In millions)

Intangible assets with finite lives:

Customer-related

$
1,266.6

$
(341.2
)

$
925.4

$
1,284.3

$
(293.3
)

$
991.0

Contractual agreements

2.8

(2.8
)

—

3.0

(2.9
)

0.1

Trademarks

69.6

(27.4
)

42.2

69.6

(23.6
)

46.0

Formulas/recipes

33.8

(16.9
)

16.9

33.7

(12.8
)

20.9

Computer software

130.8

(69.8
)

61.0

115.7

(57.7
)

58.0

Total finite lived intangibles

$
1,503.6

$
(458.1
)

$
1,045.5

$
1,506.3

$
(390.3
)

$
1,116.0

Total intangible assets, excluding goodwill, as of September 30, 2017 and December 31, 2016 were $1,068.3 million and $1,137.6 million, respectively. Amortization expense on intangible assets for the three months ended September 30, 2017 and 2016 was $28.5 million and $28.6 million, respectively, and $85.8 million and $80.9 million for the nine months ended September 30, 2017 and 2016, respectively. Estimated amortization expense on intangible assets for 2017 and the next four years is as follows:

	September 30,		December 31,		March 31,		December 31,
	2017		2016		2018		2017
	(In millions)				(In millions)
Accounts payable	$	652.5	$	458.1	$	468.4	$	451.3
Payroll and benefits		58.2		78.5		68.7		59.9
Trade promotion liabilities (1)						51.0		—
Health insurance, workers’ compensation, and other insurance costs						27.1		28.7
Marketing expenses						8.4		10.4
Interest		7.4		24.1		7.8		23.8
Taxes		10.8		31.0		4.5		7.4
Health insurance, workers’ compensation, and other insurance costs		27.4		17.2
Marketing expenses		9.5		12.4
Other accrued liabilities		8.0		5.5		12.8		8.2
Total	$	773.8	$	626.8	$	648.7	$	589.7

Income taxes were recorded at an effective rate of ~~4.3%~~22.3% and ~~(65.2)%~~29.0% for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017, ~~respectively, compared to 28.9% and 24.0% for the three and nine months ended September 30, 2016,~~ respectively. The ~~changes~~change in the effective tax rates for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2018 compared to ~~September 30, 2016~~March 31, 2017 was primarily a result of the ~~income~~decrease in the U.S. Federal statutory tax ~~benefits related to share-based payments, the income tax benefit from the release of reserves for unrecognized tax benefits,~~rate and ~~the income tax benefit derived from foreign tax credits.~~an increase in non-deductible executive compensation expense. Our effective tax rate may change from period to period based on recurring and non-recurring factors including the jurisdictional mix of earnings, enacted tax legislation, state income taxes, settlement of tax audits, and the expiration of the statute of limitations in relation to unrecognized tax benefits.

The Company’s effective tax rate differs from the U.S. federal statutory tax rate primarily due to state tax expense, the ~~benefits associated with the federal domestic production activities deduction,~~impact of non-deductible stock compensation expense, and an intercompany financing structure entered into in

conjunction with the E.D. Smith Foods, Ltd. (“E.D. Smith”) acquisition in 2007. In addition, the Company’s effective tax rate for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 reflects a discrete ~~benefit~~expense with a rate impact of approximately ~~17.7%~~(1.76%) attributable to the vesting and exercise of share-based awards.

The Internal Revenue Service (“IRS”) ~~is currently examining~~completed their examination of the TreeHouse Foods, Inc. & Subsidiaries’ 2015 tax ~~year.~~year, resulting in an insignificant impact to income tax expense during the quarter. Our Canadian operations are under exam by the Canadian Revenue Agency (“CRA”) for tax years 2008 through 2015. These examinations are expected to be completed in ~~2017~~2018 or ~~2018.~~2019. The Italian Agency of Revenue (“IAR”) is examining the 2007 through 2009 and 2013 tax years of our Italian operations. The IAR examinations are not expected to be completed prior to 2020 due to a backlog of appeals before the agency. The Company has examinations in process with various state taxing authorities, which are expected to be completed in ~~2017 and~~ 2018.

Management estimates that it is reasonably possible that the total amount of unrecognized tax benefits could decrease by as much as ~~$9.2~~$9.7 million within the next 12 months, primarily as a result of the resolution of audits currently in progress and the lapsing of statutes of limitations. Approximately ~~$1.5~~$1.4 million of the ~~$9.2~~$9.7 million would affect net income when settled.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act made significant changes to the Internal Revenue Code, including, but not limited to, a corporate tax rate decrease from 35% to 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings, the transition of U.S. international taxation from a worldwide tax system to a territorial system, allowing for the full expensing of certain qualified property and a one-time transition tax on the mandatory repatriation of cumulative foreign earnings.

The SEC issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of US GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. To the extent that a company’s accounting for the Tax Act is incomplete but it is able to provide a reasonable estimate, it must record a provisional amount in the financial statements. SAB 118

provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740.

For the period ended December 31, 2017, the Company recorded a provisional net tax benefit of $104.2 million primarily consisting of (1) a $108.4 million benefit related to adjustments to our net deferred tax liability and (2) a $9.6 million expense related to the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings. No adjustments were recorded to the provisional benefit during the period ended March 31, 2018.

The Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low Taxed Income or “GILTI”) earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFC’s U.S. shareholder. The FASB allows an entity to make an accounting policy election of either (1) treating taxes due of future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred or (2) factoring such amounts into the company’s measurement of deferred taxes. We continue to assess the impact of GILTI and have not yet made an accounting policy election.

As the Company has not completed its analysis of the impact of the Tax Act the net tax benefit of $104.2 million remains provisional and is subject to change due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, and additional regulatory guidance that may be issued. We expect to complete our analysis within the one-year measurement period allowed by SAB 118.

	September 30,			December 31,			March 31,			December 31,
	2017			2016			2018			2017
	(In millions)						(In millions)
Revolving Credit Facility	$	120.0		$	170.0
Term Loan A		276.7			288.0		$	497.5		$	498.8
Term Loan A-1		172.5			180.0			895.5			897.8
Term Loan A-2		973.8			1,005.8
2022 Notes		400.0			400.0			400.0			400.0
2024 Notes		775.0			775.0			775.0			775.0
Other debt		3.0			5.7			2.8			3.1
Total outstanding debt		2,721.0			2,824.5			2,570.8			2,574.6
Deferred financing costs		(28.5	)		(33.3	)		(27.5	)		(28.8	)
Less current portion		(72.1	)		(66.4	)		(10.1	)		(10.1	)
Total long-term debt	$	2,620.4		$	2,724.8		$	2,533.2		$	2,535.7

On ~~February~~December 1, ~~2016, coincident with the closing of the acquisition of the Private Brands Business,~~2017, the Company entered into the ~~Amended and Restated Credit Agreement. The~~Second Amended and Restated Credit Agreement (the “Credit Agreement”) which amends, restates, and replaces the Company’s prior credit agreement, dated as of February 1, 2016 (as amended from time to time prior to February 1, 2016, the “Prior Credit Agreement”). As amended, the senior unsecured credit facility includes a revolving credit facility (the “Revolving Credit Facility” or the “Revolver”) and two term loans. The Credit Agreement (1) ~~amended~~extended the maturity dates of the Revolving Credit Facility, Term Loan A, and Term Loan A-1, ~~so that they are conterminous~~(2) resized the Revolver from $900 million to $750 million, (3) consolidated three term loans into two, (4) tightened pricing, and ~~mature~~(5) modified the fee structure on ~~February 1, 2021, (2) provided for~~ the ~~issuance of Term Loan A-2, and (3) increased credit spreads. The proceeds from Term Loan A-2 were used~~Revolving Credit Facility to ~~fund a~~now calculate based on the unused portion of the ~~purchase price of~~commitments under the ~~Private Brands Business. After satisfying all of the required collateral release conditions set forth in the Credit Agreement, the~~Revolving Credit Facility ~~became unsecured in August 2017. Amongst other conditions,~~rather than the ~~Company had to reach a leverage ratio of 3.5 as defined in~~total commitments under the Revolving Credit ~~Agreement and have no other pari-passu secured debt outstanding to become unsecured.~~Facility.

The Revolving Credit Facility, Term Loan A, ~~Term Loan A-1,~~ and Term Loan ~~A-2~~A-1 are known collectively as the “Amended and Restated Credit Agreement.” The Company’s average interest rate on debt outstanding under its Amended and Restated Credit Agreement for the three months ended ~~September 30, 2017~~March 31, 2018 was ~~3.106%~~3.22%. Including the $875 million of interest rate swap agreements ~~described below~~in effect as of March 31, 2018 with a weighted average fixed interest rate base of approximately ~~0.86% on $500 million,~~1.40%, the average rate decreases to 2.99%.

Revolving Credit Facility — As of ~~September 30, 2017, $729.5~~March 31, 2018, $716.0 million of the aggregate commitment of ~~$900~~$750 million of the Revolving Credit Facility was available. Under the Amended and Restated Credit Agreement, the Revolving Credit Facility matures on February 1, ~~2021.~~2023. In addition, as of ~~September 30, 2017,~~March 31, 2018, there were ~~$50.5~~$34.0 million in letters of credit under the Revolving Credit Facility that were issued but undrawn, which have been included as a reduction to the calculation of available credit.

On November 2, 2017, the Company announced that the Board of Directors adopted a stock repurchase program. The stock repurchase program authorizes the Company to repurchase up to $400 million of the Company’s common stock at any time, or from time to time. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The size and timing of any repurchases will depend on price, market and business conditions, and other factors. The Company is authorized to enter into an administrative repurchase plan for $50 million of the $400 million in the fourteen months following November 6, 2017. The Company plans to repurchase $50 million shares through the plan and up to another $100 million opportunistically (total annual cap of $150 million). Any shares repurchased will be held as treasury stock.

For the three months ended March 31, 2018, the Company repurchased approximately 0.4 million shares of common stock for a total of $17.1 million.

Basic earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the reporting period. The weighted average number of common shares used in the diluted earnings per share calculation is determined using the treasury stock method and includes the incremental effect related to the Company’s outstanding stock-based compensation awards.

The following table summarizes the effect of the share-based compensation awards on the weighted average number of shares outstanding used in calculating diluted earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2018			2017
	(In millions, except per share data)								(In millions, except per share data)
Net income	$	28.8	$	37.4	$	22.8	$	53.2
Net (loss) income									$	(34.1	)	$	28.2

Weighted average common shares outstanding		57.3		56.8		57.1		55.4		56.5			56.9
Assumed exercise/vesting of equity awards (1)		0.4		0.8		0.6		0.8		—			0.7
Weighted average diluted common shares outstanding		57.7		57.6		57.7		56.2		56.5			57.6

Net earnings per basic share	$	0.50	$	0.66	$	0.40	$	0.96	$	(0.60	)	$	0.50
Net earnings per diluted share	$	0.50	$	0.65	$	0.40	$	0.95	$	(0.60	)	$	0.49

The Board of Directors adopted, and the Company’s stockholders approved, the “TreeHouse Foods, Inc. Equity and Incentive Plan” (the “Plan”). ~~On April 27, 2017, the Plan was amended and restated to increase the number of shares available for issuance under the Plan by 3.8 million shares, effective February 14, 2017.~~ The Plan is administered by our Compensation Committee, which consists entirely of independent directors. The Compensation Committee determines specific awards for our executive officers. For all other employees, if the committee designates, our Chief Executive Officer or such other officers will, from time to time, determine specific persons to whom awards under the Plan will be granted, and the terms and conditions of each award. The Compensation Committee or its designee, pursuant to the terms of the Plan, will also make all other necessary decisions and interpretations under the Plan.

Under the Plan, the Compensation Committee may grant awards of various types of compensation, including stock options, restricted stock, restricted stock units, performance shares, performance units, other types of stock-based awards, and other cash-based

compensation. The maximum number of shares available to be awarded under the Plan is approximately 16.1 million, of which approximately ~~4.9~~3.1 million remain available at ~~September 30, 2017.~~March 31, 2018.

Income before income taxes for the three ~~and nine month periods~~months ended ~~September 30,~~March 31, 2018 and 2017 includes stock-based compensation expense for employees and directors of ~~$6.6~~$16.3 million and ~~$25.2 million, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2016 was $8.5 million and $22.8~~$7.5 million, respectively. The tax benefit recognized related to the compensation cost of these share-based awards was approximately ~~$2.4~~$4.0 million and ~~$9.3~~$2.8 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017, ~~respectively,~~respectively.

In the first quarter of 2018, the Company entered into an amended employment agreement with our former Chief Executive Officer, Sam K. Reed. The amended plan resulted in the modification of his outstanding equity awards accelerating the vesting dates, changing outstanding performance units to vest at target, and ~~$3.1~~extending the exercisability of options outstanding. Modification of the existing awards resulted in a charge of $10.0 million in the three months ended March 31, 2018. The impact of this modification on expense recognized for stock options, restricted units, and performance units was $1.2 million, $3.8 million, and ~~$8.3~~$5.0 million, ~~for the three and nine months ended September 30, 2016,~~ respectively.

Stock Options — The following table summarizes stock option activity during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2018. Stock options generally vest in approximately three equal installments on each of the first three anniversaries of the grant date and expire ten years from the grant date.

Weighted

Weighted

Average

Average

Remaining

Aggregate

Employee

Director

Exercise

Contractual

Intrinsic

Options

Options

Price

Term (yrs)

Value

(In thousands)

(In millions)

Outstanding, at December 31, 2016

2,069

20

$
64.77

5.8

$
28.9

Granted

481

—

84.16

Forfeited

(87
)

—

87.85

Exercised

(257
)

(16
)

40.83

Expired

(2
)

—

87.83

Outstanding, at September 30, 2017

2,204

4

71.03

6.3

16.3

Vested/expected to vest, at September 30, 2017

2,140

4

70.57

6.2

16.3

Exercisable, at September 30, 2017

1,404

4

61.99

4.7

16.3

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Employee			Exercise		Contractual		Intrinsic
	Options			Price		Term (yrs)		Value
	(In thousands)							(In millions)
Outstanding, at December 31, 2017		2,099		$	71.46		6.1	$	5.9
Forfeited		(36	)		87.90
Exercised		(80	)		24.06
Expired		(7	)		91.73
Outstanding, at March 31, 2018		1,976			72.99		6.0		2.0
Vested/expected to vest, at March 31, 2018		1,927			72.66		6.0		2.0
Exercisable, at March 31, 2018		1,395			66.89		5.0		2.0

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2018		2017
	(In millions)				(In millions)				(In millions)
Compensation expense	$	2.3	$	2.0	$	6.8	$	5.5	$	2.7	$	1.8
Intrinsic value of stock options exercised		0.9		0.1		11.0		6.1		1.5		4.5
Tax benefit recognized from stock option exercises		0.4		0.1		4.2		2.2		—		1.7

Compensation costs related to unvested options totaled ~~$16.3~~$7.4 million at ~~September 30, 2017~~March 31, 2018 and will be recognized over the remaining vesting period of the grants, which averages ~~2.1~~1.7 years. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used to calculate the fair value of stock options issued in 2017 include the following: weighted average expected volatility of 26.71%, expected term of six years, weighted average risk free rate of 2.07%, and no dividends. The weighted average grant date fair value of awards granted in 2017 was $24.41.

Restricted Stock Units — Employee restricted stock unit awards generally vest based on the passage of time. These awards generally vest in approximately three equal installments on each of the first three anniversaries of the grant date. Director restricted stock units generally vest on the first anniversary of the grant date. Certain directors have deferred receipt of their awards until either their departure from the Board of Directors or a specified date. As of ~~September 30, 2017, 100~~March 31, 2018, 91 thousand director restricted stock units have been earned and deferred.

~~The following table summarizes the restricted stock unit activity during the nine months ended September 30, 2017:~~

The following table summarizes the restricted stock unit activity during the three months ended March 31, 2018:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017

2016

2017

2016

(In millions)

(In millions)

Compensation expense

$
5.5

$
4.9

$
17.3

$
12.9

Fair value of vested restricted stock units

0.7

2.8

13.7

15.9

Tax benefit recognized from vested restricted stock units

0.3

1.0

5.0

5.7

				Weighted					Weighted
	Employee			Average		Director			Average
	Restricted			Grant Date		Restricted			Grant Date
	Stock Units			Fair Value		Stock Units			Fair Value
	(In thousands)					(In thousands)
Outstanding, at December 31, 2017		547		$	85.41		117		$	60.21
Granted		636			38.32		36			38.27
Vested		(82	)		83.93		(25	)		61.20
Forfeited		(28	)		86.43		(1	)		84.66
Outstanding, at March 31, 2018		1,073			57.57		127			53.77

Future compensation costs related to restricted stock units are approximately ~~$33.9~~$37.1 million as of ~~September 30, 2017~~March 31, 2018 and will be recognized on a weighted average basis over the next ~~2.0~~2.3 years. The grant date fair value of the awards is equal to the Company’s closing stock price on the grant date.

Performance Units — Performance unit awards are granted to certain members of management. These awards contain service and performance conditions. For each of the three performance periods, one-third of the units will accrue, multiplied by a predefined percentage between 0% and 200%, depending on the achievement of certain operating performance measures. Additionally, for the cumulative performance period, a number of units will accrue, equal to the number of units granted multiplied by a predefined percentage between 0% and 200%, depending on the achievement of certain operating performance measures, less any units previously accrued. Accrued units will be converted to stock or cash, at the discretion of the Compensation Committee, generally, on the third anniversary of the grant date. The Company intends to settle these awards in stock and has the shares available to do so. ~~On June 27, 2017, based on an achievement of operating performance measures, 72,335~~During the three months ended March 31, 2018, no performance units were converted into ~~81,556~~ shares of ~~stock, an average conversion of 1.13 shares for each performance unit.~~ common stock.

The following table summarizes the performance unit activity during the ~~nine~~three months ended ~~September 30, 2017:~~March 31, 2018:

Future compensation costs related to the performance units are estimated to be approximately ~~$6.2~~$3.2 million as of ~~September 30, 2017,~~March 31, 2018 and are expected to be recognized over the next ~~2.2~~2.6 years. The grant date fair value of the awards is equal to the Company’s closing stock price on the date of grant.

Accumulated other comprehensive loss consists of the following components, all of which are net of tax, except for the foreign currency translation adjustment:

Unrecognized

Accumulated

Foreign

Pension and

Other

Currency

Postretirement

Comprehensive

Translation (1)

Benefits (2)

Loss

(In millions)

Balance at December 31, 2016

$
(89.4
)

$
(11.9
)

$
(101.3
)
Other comprehensive income

34.5

—

34.5

Reclassifications from accumulated other comprehensive loss

—

7.2

7.2

Other comprehensive income

34.5

7.2

41.7

Balance at September 30, 2017

$
(54.9
)

$
(4.7
)

$
(59.6
)

				Unrecognized			Accumulated
	Foreign			Pension and			Other
	Currency			Postretirement			Comprehensive
	Translation (1)			Benefits (2)			Loss
	(In millions)
Balance at December 31, 2017	$	(57.2	)	$	(4.3	)	$	(61.5	)
Other comprehensive loss		(10.1	)		—			(10.1	)
Reclassifications from accumulated other comprehensive loss		—			0.2			0.2
Reclassifications from accumulated other comprehensive loss - Adoption of ASU 2018-02		—			(1.1	)		(1.1	)
Other comprehensive loss		(10.1	)		(0.9	)		(11.0	)
Balance at March 31, 2018	$	(67.3	)	$	(5.2	)	$	(72.5	)

				Unrecognized			Accumulated						Unrecognized			Accumulated
	Foreign			Pension and			Other			Foreign			Pension and			Other
	Currency			Postretirement			Comprehensive			Currency			Postretirement			Comprehensive
	Translation (1)			Benefits (2)			Loss			Translation (1)			Benefits (2)			Loss
	(In millions)									(In millions)
Balance at December 31, 2015	$	(100.5	)	$	(13.0	)	$	(113.5	)
Balance at December 31, 2016										$	(89.4	)	$	(11.9	)	$	(101.3	)
Other comprehensive income		21.6			—			21.6			3.6			—			3.6
Reclassifications from accumulated other comprehensive loss		—			0.8			0.8			—			0.3			0.3
Other comprehensive income		21.6			0.8			22.4			3.6			0.3			3.9
Balance at September 30, 2016	$	(78.9	)	$	(12.2	)	$	(91.1	)
Balance at March 31, 2017										$	(85.8	)	$	(11.6	)	$	(97.4	)

The Condensed Consolidated Statements of Operations lines impacted by reclassifications out of Accumulated other comprehensive loss are outlined below:

									Affected line in						Affected line in
	Reclassifications from Accumulated								the Condensed Consolidated	Reclassifications from Accumulated					the Condensed Consolidated
	Other Comprehensive Loss								Statements of Operations	Other Comprehensive Loss					Statements of Operations
	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
	2017		2016		2017		2016			2018			2017
	(In millions)				(In millions)					(In millions)
Amortization of defined benefit pension and postretirement items:
Prior service costs	$	—	$	—	$	0.1	$	0.2	(a)	$	—		$	0.1	Cost of Sales
Unrecognized net loss		0.1		0.4		0.7		1.1	(a)		0.2			0.4	Other expense, net
Actuarial adjustment		—		—		2.1		—	(b)
Divestiture		—		—		8.7		—	Other operating expense, net
Total before tax		0.1		0.4		11.6		1.3			0.2			0.5
Income taxes		—		0.1		4.4		0.5	Income taxes		—			0.2	Income taxes
Adoption of ASU 2018-02											(1.1	)		—	Income taxes
Net of tax	$	0.1	$	0.3	$	7.2	$	0.8		$	(0.9	)	$	0.3

Pension, Profit Sharing, and Postretirement Benefits — Certain employees and retirees participate in pension and other postretirement benefit plans. Employee benefit plan obligations and expenses included in the Condensed Consolidated Financial Statements are determined based on plan assumptions, employee demographic data, including years of service and compensation, benefits and claims paid, and employer contributions. In connection with the divestiture of the canned soup and infant feeding (“SIF”) business in the second quarter of 2017, the Company divested a pension plan and a postretirement benefit plan. The net unfunded liability associated with these plans as of the closing date, which is included in the Other operating expense, net line of the Condensed Consolidated Statements of Operations, was $10.5 million.

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2017			2016			2017			2016			2018			2017
	(In millions)						(In millions)						(In millions)
Service cost	$	0.8		$	1.3		$	2.9		$	3.6		$	0.6		$	1.2
Interest cost		3.6			4.1			11.4			11.2			2.9			4.0
Expected return on plan assets		(4.2	)		(4.5	)		(13.3	)		(12.2	)		(4.0	)		(4.7	)
Amortization of unrecognized prior service cost		—			—			0.1			0.2			—			0.1
Amortization of unrecognized net loss		0.1			0.4			0.7			1.1			0.2			0.4
Net periodic pension cost	$	0.3		$	1.3		$	1.8		$	3.9		$	(0.3	)	$	1.0

The Company ~~does not expect~~expects to ~~make any contributions~~contribute approximately $1.5 million to the pension plans ~~in 2017.~~during 2018.

	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2017		2016		2017		2016		2018		2017
	(In millions)				(In millions)				(In millions)
Interest cost	$	0.3	$	0.3	$	0.9	$	0.9	$	0.3	$	0.3
Net periodic postretirement cost	$	0.3	$	0.3	$	0.9	$	0.9	$	0.3	$	0.3

The Company expects to contribute approximately ~~$1.6~~$1.8 million to the postretirement health plans during ~~2017.~~2018.

~~Net~~The service cost components of net periodic pension and postretirement costs ~~are~~were recorded in the Cost of sales line and ~~General and administrative lines~~the other components were recorded in the Other expense, net line of the Condensed Consolidated Statements of Operations.

The Company incurred other operating expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ which consisted of the following:

On May 22, 2017, the Company completed the divestiture of its SIF business. The SIF business was based in Pittsburgh, Pennsylvania and produced private label condensed and ready-to-serve soup, baby food, and gravies for the Meals segment. The divestiture of this business did not meet the criteria to be presented as discontinued operations as it did not represent a strategic shift that would have a

~~major effect on the Company’s results of operations. The transaction remains subject to working capital adjustments that are expected to be finalized in the fourth quarter of 2017.~~

Litigation, Investigations, and Audits — On November 16, 2016, a purported TreeHouse shareholder filed a putative class action captioned Tarara v. TreeHouse Foods, Inc., et al., Case No. 1:16-cv-10632, in the United States District Court for the Northern District of Illinois against TreeHouse and certain of its officers. The complaint, amended on March 24, 2017, is purportedly brought on behalf of all purchasers of TreeHouse common stock from January 20, 2016 through and including November 2, 2016, asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seeks, among other things, damages and costs and expenses. On December 22, 2016, another purported TreeHouse shareholder filed an action captioned Wells v. Reed, et al.,

Case No. 2016-CH-16359, in the Circuit Court of Cook County, Illinois, against TreeHouse and certain of its officers. This complaint, purportedly brought derivatively on behalf of TreeHouse, asserts state law claims against certain officers for breach of fiduciary duty, unjust enrichment, and corporate waste. On February 7, 2017, another purported TreeHouse shareholder filed an action captioned Lavin v. Reed, Case No. 17-cv-01014, in the Northern District of Illinois, against TreeHouse and certain of its officers. This complaint, like Wells, is purportedly brought derivatively on behalf of TreeHouse, and it asserts state law claims against certain officers for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and corporate waste.

All three complaints make substantially similar allegations (though the amended complaint in Tarara now contains additional detail). Essentially, the complaints allege that TreeHouse, under the authority and control of the individual defendants: (i) made certain false and misleading statements regarding the Company’s business, operations, and future prospects; and (ii) failed to disclose that (a) the Company’s private label business was underperforming; (b) the Company’s Flagstone business was underperforming; (c) the Company’s acquisition strategy was underperforming; (d) the Company had overstated its full-year 2016 guidance; and (e) TreeHouse’s statements lacked reasonable basis. The complaints allege that these actions artificially inflated the market price of TreeHouse common stock during the class period, thus purportedly harming investors. We believe that these claims are without merit and intend to defend against them vigorously.

Since its initial docketing, the Tarara matter has been re-captioned as Public Employees’ Retirement Systems of Mississippi v. TreeHouse Foods, Inc., et al., in accordance with the Court’s order appointing Public Employees’ Retirement Systems of Mississippi as the lead plaintiff. ~~The~~On May 26, 2017, the Public Employees’ defendants ~~have~~ filed a motion to dismiss, which ~~has been fully briefed.~~the court denied on February 12, 2018. On April 12, 2018, the Public Employees’ defendants filed their answer to the amended complaint. On April 23, 2018, the parties filed a joint status report with the Court, describing the nature of the case and issued involved, as well as setting forth a proposed discovery and briefing schedule for the Court’s consideration.

Additionally, due to the similarity of the complaints, the parties in Wells and Lavin have entered stipulations deferring the litigation until the earlier of (i) the court in Public Employees’ entering an order resolving defendants’ anticipated motion to dismiss therein or (ii) plaintiffs’ counsel receiving notification of a settlement of Public Employees’ or until otherwise agreed to by the Parties. The ~~next~~parties filed a joint status ~~date in~~ ~~Wells~~ ~~is April 27,~~report on the progress of the related litigation on October 26, 2017. The parties filed an additional status report with the Court on March 12, 2018. There is no set status date in Lavin at this ~~time, but the parties are directed to file a joint status report on the progress of the related litigation by October 26, 2017, after which point the~~ ~~Lavin~~ ~~court could set a new status date.~~time.

In addition, ~~we are~~the Company is party in the ordinary course of business to certain claims, litigation, audits, and investigations. The Company will record an accrual for a ~~variety of legal proceedings arising out~~loss contingency when it is probable that a loss has been incurred and the amount of the ~~conduct~~loss can be reasonably estimated. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable that may be incurred in connection with any such currently pending or threatened matter, none of ~~our business. While~~which are significant. In the ~~results~~Company’s opinion, the settlement of ~~proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will~~any such currently pending or threatened matter is not expected to have a material ~~adverse effect~~impact on ~~our consolidated~~the Company’s financial ~~statements,~~position, results of operations, or cash flows.

~~16.~~On October 29, 2017, Mr. Robert Aiken resigned as the Company’s President and Chief Operating Officer. On December 1, 2017, Mr. Aiken filed a demand for arbitration under his employment agreement. Shortly thereafter, the Company filed a counterclaim in arbitration against Mr. Aiken. At this time, no dates have been set for the arbitration and fact discovery has yet to commence.

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by derivative instruments include interest rate risk, foreign currency risk, and commodity price risk. Derivative contracts are entered into for periods consistent with the related underlying exposure and do not constitute positions independent of those exposures. The Company does not enter into derivative instruments for trading or speculative purposes.

Interest Rate Risk - The Company manages its exposure to changes in interest rates by optimizing the use of variable-rate and fixed-rate debt and by utilizing interest rate swaps to hedge our exposure to changes in interest rates, to reduce the volatility of our financing costs, and to achieve a desired proportion of fixed versus floating-rate debt, based on current and projected market conditions, with a bias toward fixed-rate debt.

~~In June 2016,~~As of March 31, 2018, the Company had entered into ~~$500 million~~$2.1 billion of long-term interest rate swap agreements to lock into a fixed LIBOR interest rate base. Under the terms of the agreements, ~~$500 million~~$2.1 billion in variable-rate debt was swapped for a weighted average fixed interest rate

base of approximately ~~0.86% for a period of 37 months, beginning on January 31, 2017 and ending on~~2.22% through February 28, ~~2020.~~2025. These ~~agreements do~~instruments are not ~~qualify~~accounted for under hedge accounting and the changes in their fair value are recorded in the Condensed Consolidated Statements of Operations, with their fair value recorded on the Condensed Consolidated Balance Sheets.

Foreign Currency Risk - Due to the Company’s foreign operations, we are exposed to foreign currency risk. The Company enters into foreign currency contracts to manage the risk associated with foreign currency cash flows. The Company’s objective in using foreign currency contracts is to establish a fixed foreign currency exchange rate for the net cash flow requirements for purchases that are denominated in U.S. dollars. These contracts do not qualify for hedge accounting and changes in their fair value are recorded in the Condensed Consolidated Statements of Operations, with their fair value recorded on the Condensed Consolidated Balance Sheets. As of ~~September 30, 2017,~~March 31, 2018, the Company had ~~$46.5~~$63.7 million of U.S. dollar foreign currency contracts outstanding, expiring throughout ~~2018.~~2018 and 2019.

Commodity Risk - Certain commodities we use in the production and distribution of our products are exposed to market price risk. The Company utilizes derivative contracts to manage this risk. The majority of commodity forward contracts are not derivatives, and those that are generally qualify for the normal purchases and normal sales scope exception under the guidance for derivative instruments and hedging activities and, therefore, are not subject to its provisions. For derivative commodity contracts that do not qualify for the normal purchases and normal sales scope exception, the Company records their fair value on the Condensed Consolidated Balance Sheets, with changes in value being recorded in the Condensed Consolidated Statements of Operations.

The Company’s derivative commodity contracts may include contracts for diesel, oil, plastics, natural gas, electricity, and other commodity contracts that do not meet the requirements for the normal purchases and normal sales scope exception.

Diesel contracts are used to manage the Company’s risk associated with the underlying cost of diesel fuel used to deliver products. Contracts for oil and plastics are used to manage the Company’s risk associated with the underlying commodity cost of a significant component used in packaging materials. Contracts for natural gas and electricity are used to manage the Company’s risk associated with the utility costs of its manufacturing facilities, and commodity contracts that are derivatives that do not meet the normal purchases and normal sales scope exception are used to manage the price risk associated with raw material costs. As of ~~September 30, 2017,~~March 31, 2018, the Company had outstanding contracts for the purchase of ~~66,473~~0.2 million megawatts of electricity, expiring throughout ~~2017~~2018, 2019, and ~~2018; 8.8~~2020; 10.4 million gallons of diesel, expiring throughout ~~2017~~2018; and ~~early 2018; 1.9~~5.3 million dekatherms of natural gas, expiring throughout ~~2017~~2018 and ~~2018; 0.1 million bushels of wheat, expiring throughout 2017 and early 2018; and 0.9 million bushels of corn, expiring throughout 2017 and early 2018.~~2019.

The following table identifies the derivative, its fair value, and location on the Condensed Consolidated Balance Sheets:

		Fair Value
	Balance Sheet Location	September 30, 2017		December 31, 2016		Balance Sheet Location	March 31, 2018		December 31, 2017
		(In millions)					(In millions)
Asset Derivatives
Commodity contracts	Prepaid expenses and other current assets	$	2.5	$	1.0	Prepaid expenses and other current assets	$	1.1	$	2.7
Foreign currency contracts	Prepaid expenses and other current assets		0.6		0.7	Prepaid expenses and other current assets		2.2		0.5
Interest rate swap agreements	Prepaid expenses and other current assets		9.6		10.4	Prepaid expenses and other current assets		14.1		11.9
		$	12.7	$	12.1		$	17.4	$	15.1
Liability Derivatives
Commodity contracts	Accounts payable and accrued expenses	$	0.4	$	0.5	Accounts payable and accrued expenses	$	0.6	$	1.2
Foreign currency contracts	Accounts payable and accrued expenses		1.2		—
Interest rate swap agreements						Accounts payable and accrued expenses		8.6		—
		$	1.6	$	0.5		$	9.2	$	1.2

We recorded the following gains and losses on our derivative contracts in the Condensed Consolidated Statements of Operations:

		Three Months Ended						Nine Months Ended								Three Months Ended
	Location of Gain (Loss)	September 30,						September 30,							Location of Gain (Loss)	March 31,
	Recognized in Net Income	2017			2016			2017			2016				Recognized in Net (Loss) Income	2018			2017
		(In millions)						(In millions)								(In millions)
Mark-to-market unrealized gain (loss):
Mark-to-market unrealized (loss) gain:														Mark-to-market unrealized (loss) gain:
Commodity contracts	Other (income) expense, net	$	2.6		$	2.3		$	1.5		$	3.3			Other expense, net	$	(1.0	)	$	(1.1	)
Foreign currency contracts	Other (income) expense, net		(0.5	)		2.1			(1.3	)		(0.2	)		Other expense, net		1.8			(0.1	)
Interest rate swap agreements	Other (income) expense, net		(0.3	)		2.4			(0.8	)		0.8			Other expense, net		(6.4	)		1.0
Total unrealized gain (loss)			1.8			6.8			(0.6	)		3.9
Total unrealized loss																	(5.6	)		(0.2	)
Realized gain (loss):
Commodity contracts	Manufacturing related to Cost of sales and transportation related to Selling and distribution		(0.2	)		0.1			(0.4	)		(0.9	)		Manufacturing related to Cost of sales and transportation related to Selling and distribution		2.4			0.5
Foreign currency contracts	Cost of sales		(1.3	)		(1.3	)		(0.1	)		(3.3	)		Cost of sales		0.6			0.2
Interest rate swap agreements	Interest expense		0.5			—			0.6			—			Interest expense		0.8			(0.1	)
Total realized (loss) gain			(1.0	)		(1.2	)		0.1			(4.2	)
Total gain (loss)		$	0.8		$	5.6		$	(0.5	)	$	(0.3	)
Total realized gain																	3.8			0.6
Total (loss) gain																$	(1.8	)	$	0.4

The following table presents the carrying value and fair value of our financial instruments as of ~~September 30, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:

	September 30, 2017						December 31, 2016								March 31, 2018						December 31, 2017
	Carrying Value			Fair Value			Carrying Value			Fair Value			Level		Carrying Value			Fair Value			Carrying Value			Fair Value			Level
	(In millions)						(In millions)								(In millions)						(In millions)
Not recorded at fair value (liability):
Revolving Credit Facility	$	(120.0	)	$	(118.8	)	$	(170.0	)	$	(167.1	)		2
Term Loan A		(276.7	)		(277.2	)		(288.0	)		(288.1	)		2	$	(497.5	)	$	(499.1	)	$	(498.8	)	$	(500.7	)		2
Term Loan A-1		(172.5	)		(172.8	)		(180.0	)		(180.3	)		2		(895.5	)		(897.2	)		(897.8	)		(900.0	)		2
Term Loan A-2		(973.8	)		(975.4	)		(1,005.8	)		(1,007.4	)		2
2022 Notes		(400.0	)		(411.0	)		(400.0	)		(410.0	)		2		(400.0	)		(399.0	)		(400.0	)		(405.0	)		2
2024 Notes		(775.0	)		(829.3	)		(775.0	)		(809.9	)		2		(775.0	)		(780.8	)		(775.0	)		(806.0	)		2
Recorded on a recurring basis at fair value asset (liability):
Commodity contracts	$	2.1		$	2.1		$	0.5		$	0.5			2	$	0.5		$	0.5		$	1.5		$	1.5			2
Foreign currency contracts		(0.6	)		(0.6	)		0.7			0.7			2		2.2			2.2			0.5			0.5			2
Interest rate swap agreements		9.6			9.6			10.4			10.4			2		5.5			5.5			11.9			11.9			2
Investments		13.2			13.2			10.4			10.4			1		13.7			13.7			14.1			14.1			1

Cash and cash equivalents and accounts receivable are financial assets with carrying values that approximate fair value. Accounts payable are financial liabilities with carrying values that approximate fair value.

The fair ~~value~~values of ~~the Revolving Credit Facility,~~ Term Loan A, Term Loan A-1, ~~Term Loan A-2,~~ 2022 Notes, 2024 Notes, commodity contracts, foreign currency contracts, and interest rate swap agreements are determined using Level 2 inputs. Level 2 inputs are inputs other than quoted market prices that are observable for an asset or liability, either directly or indirectly. The fair values of ~~the Revolving Credit Facility,~~ Term Loan A ~~Term Loan A-1,~~ and Term Loan ~~A-2~~A-1 were estimated using present value techniques and

~~market based~~ market-based interest rates and credit spreads. The fair values of the Company’s 2022 Notes and 2024 Notes were estimated based on quoted market prices for similar instruments, where the inputs are considered Level 2, due to their infrequent trading volume. The fair values of the commodity contracts, foreign currency contracts, and interest rate swap agreements are based on an analysis comparing the contract rates to the market rates at the balance sheet date. The commodity contracts, foreign currency contracts, and interest rate swap agreements are recorded at fair value on the Condensed Consolidated Balance Sheets.

The fair value of the investments was determined using Level 1 inputs. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement dates. The investments are recorded at fair value on the Condensed Consolidated Balance Sheets.

In the first quarter of 2017, the Company completed changes in its organizational structure that resulted in a change in how the Company manages its business and allocates resources. Our reportable segments are now organized and managed by products: Baked Goods, Beverages, Condiments, Meals, and Snacks. Previously, our reportable segments were organized and managed by customer channels: North American Retail Grocery, Food Away From Home, and Industrial and Export. All prior period information has been recast to reflect this change.

The Company manages operations on a company-wide basis, thereby making determinations as to the allocation of resources in total rather than on a segment-level basis. The Company has designated reportable segments based on how management views its business. The Company does not segregate assets between segments for internal reporting. Therefore, asset-related information has not been presented. The reportable segments, as presented below, are consistent with the manner in which the Company reports its results to the Chief Operating Decision Maker. Our segments are as follows:

Baked Goods – Our Baked Goods segment sells candy; cookies; crackers; in-store bakery products; pita chips; pretzels; refrigerated dough; and retail griddle waffles, pancakes, and French toast.

Beverages – Our Beverages segment sells broths; liquid non-dairy creamer; non-dairy powdered creamers; powdered drinks; single serve hot beverages; specialty teas, and sweeteners.

Condiments – Our Condiments segment sells aseptic cheese and pudding products; jams, preserves, and jellies; mayonnaise; Mexican, barbeque, and other sauces; pickles and related products; refrigerated and shelf stable dressings and sauces; and table and flavored syrups.

Meals – Our Meals segment sells baking and mix powders; powdered soups and gravies; macaroni and cheese; pasta; ready-to-eat and hot cereals; and skillet dinners. Condensed and ready to serve soup and infant feeding products were sold within the Meals segment through the divestiture of the SIF business on May 22, 2017.

Snacks – Our Snacks segment sells bars; dried fruit; snack nuts; trail mixes; and other wholesome snacks.

The Company evaluates the performance of its segments based on net sales dollars and direct operating income. ~~In conjunction with the change in segments, the Company revised its calculation of direct operating income to include direct general and administrative expenses.~~ Direct operating income is ~~now~~ defined as gross profit less freight out, sales commissions, and direct selling, general, and administrative expenses. ~~All prior period information has been recast to reflect this change.~~ The amounts in the following tables are obtained from reports used by senior management and do not include income taxes. Other expenses not allocated include unallocated selling, general, and administrative expenses, unallocated costs of sales, and unallocated corporate expenses (amortization expense and other operating expense). The accounting policies of the Company’s segments are the same as those described in the summary of significant accounting policies set forth in Note 1 to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2017.

Financial information relating to the Company’s reportable segments is as follows:

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2017			2016			2017			2016			2018			2017
	(In millions)						(In millions)						(In millions)
Net sales to external customers:
Baked Goods	$	351.2		$	329.4		$	1,016.6		$	871.8		$	346.0		$	341.1
Beverages		244.9			234.9			759.1			672.7			249.1			268.0
Condiments		333.8			322.9			988.8			959.0			315.2			310.1
Meals		284.6			347.9			897.0			937.3			277.0			324.0
Snacks		332.6			351.7			940.2			967.5			293.9			290.6
Unallocated		1.7			0.1			5.5			(9.8	)		—			2.4
Total	$	1,548.8		$	1,586.9		$	4,607.2		$	4,398.5		$	1,481.2		$	1,536.2
Direct operating income:
Baked Goods	$	46.9		$	33.8		$	121.3		$	97.4		$	28.0		$	41.9
Beverages		51.7			63.8			170.7			175.6			39.4			58.7
Condiments		34.4			38.0			102.2			115.0			27.2			31.7
Meals		32.1			33.1			99.9			88.9			29.9			34.0
Snacks		1.8			18.5			24.4			47.3			6.7			12.5
Total		166.9			187.2			518.5			524.2			131.2			178.8
Unallocated selling, general, and administrative expenses		(66.0	)		(74.3	)		(228.1	)		(254.2	)		(81.3	)		(80.0	)
Unallocated cost of sales (1)		(5.2	)		(1.5	)		3.2			(20.8	)		(7.5	)		1.5
Unallocated corporate expense and other(1)		(37.9	)		(33.8	)		(192.2	)		(101.0	)		(51.1	)		(33.0	)
Operating income		57.8			77.6			101.4			148.2
Operating (loss) income														(8.7	)		67.3
Other expense		(27.7	)		(25.0	)		(87.6	)		(78.2	)		(35.2	)		(27.6	)
Income before income taxes	$	30.1		$	52.6		$	13.8		$	70.0
(Loss) income before income taxes													$	(43.9	)	$	39.7

Geographic Information — The Company had revenues from customers outside of the United States of approximately ~~8.7% and 8.9%~~8.3% of total consolidated net sales in the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017 with 6.2% and ~~2016, respectively, with 6.9% and 7.1%~~6.6% of total consolidated net sales ingoing to Canada, respectively. Sales are determined based on the customer destination where the products are shipped. The Company held ~~12.2%~~12.0% and ~~10.8%~~11.0% of its property, plant, and equipment outside of the United States as of ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively.

Major Customers — Walmart Stores, Inc. and affiliates accounted for approximately ~~21.0%~~23.3% and ~~18.2%~~20.5% of consolidated net sales in the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively. ~~Costco accounted for approximately 10.1% of consolidated net sales in the nine months ended September 30, 2017, with less than 10% for the same period in the prior year.~~ No other customer accounted for more than 10% of our consolidated net sales during these periods.

~~Product Information~~ — The following table presents the Company’s net sales by major products for the three and nine months ended September 30, 2017 and 2016. In the first quarter of 2017, the Company changed the product categories to align with the changes in organizational structure described above. All prior period information has been recast to reflect this change.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

(In millions)

(In millions)

Products:

Dressings and sauces

$
250.4

$
241.9

$
738.6

$
711.3

Snack nuts

224.9

207.0

609.1

555.0

Baked products

181.8

162.3

502.6

432.4

Retail bakery

169.4

167.1

514.0

439.4

Beverages

168.1

161.9

518.9

448.0

Pasta and dry dinners

147.8

146.6

420.6

384.0

Cereals and other meals

136.8

201.3

476.4

553.3

Trail mix and bars

109.4

144.8

336.6

402.7

Pickles

83.4

81.0

250.2

247.7

Beverage enhancers

76.8

73.0

240.2

224.7

Total net sales

$
1,548.8

$
1,586.9

$
4,607.2

$
4,398.5

In May 2014, the ~~fourth quarter of 2016, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting~~. Under this ASU, excess tax benefits and deficiencies are no longer recognized as additional paid-in capital in the Condensed Consolidated Balance Sheets. The ASU requires recognition of excess tax benefits and deficiencies in the Condensed Consolidated Statements of Operations. As the Company adopted the ASU in the fourth quarter, any related adjustments were requiredFASB issued Topic 606, which introduced a new framework to be ~~reflected as~~used when recognizing revenue to reduce complexity and increase comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. Topic 606 supersedes the ~~beginning of~~revenue recognition requirements under Topic 605 “Revenue Recognition”. On January 1, 2018, we adopted Topic 606 using the ~~fiscal year of adoption. The results for the three~~modified retrospective method and ~~nine months periods ended September 30, 2016 have been recast~~elected to ~~reflect the adoption of the ASU~~apply guidance retrospectively to all contracts that were not completed as of January 1, ~~2016, resulting in income tax benefits of $0.2 million and $3.8 million, respectively, related~~2018. Under the modified retrospective method, periods beginning January 1, 2018 are presented under Topic 606 while prior periods continue to be presented under Topic 605. We have determined that the ~~recognition of excess tax benefits and deficiencies, which are included in the Income taxes line of the Condensed Consolidated Statements of Operations. The~~cumulative effect on ~~basic~~ net ~~earnings per common share was $0.01~~income and the opening balance sheet caused by adopting Topic 606 effective January 1, 2018 is immaterial. See Note 3 for ~~the three months ended September 30, 2016, with no impact~~additional information on diluted net earnings per common share. The effect on basic and diluted net earnings per common share for the nine months ended September 30, 2016 was $0.07 and $0.06, respectively. Additionally, the ASU requires excess tax benefits to be reported as a component of operating activities in the Condensed Consolidated Statements of Cash Flows. Excess tax benefits of $3.7 million were retrospectively reclassified from financing to operating activities in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016. The effects of the adoption of the other provisions of this ASU were immaterial.revenue recognition.

In ~~July 2015,~~November 2016, the FASB issued ASU No. ~~2015-11,~~2016-18, ~~Simplifying the Measurement of Inventory,~~ which requires entities to measure inventory at the lower of cost and net realizable value (“NRV”). This ASU will not apply to inventory valued under the last-in-first-out method. Under current guidance, an entity is required to measure inventory at the lower of cost or market, with market defined as replacement cost, NRV, or NRV less a normal profit margin. The three market measurements added complexity and reduced comparability in the valuation of inventory. FASB issued this ASU as part of its simplification initiative to address these issues. The ASU is effective on a prospective basis for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company prospectively adopted the ASU during the first quarter of 2017, the impact of which was not significant.

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~Restricted Cash, to ~~eliminate~~require that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the second step of the goodwill impairment test. This ASU requires an entity to measure a goodwill impairment loss as the amount by which the carrying value of a reporting unit exceeds its fair value. Additionally, an entity should include the income tax effects from any tax deductible goodwillbeginning-of-period and end-of-period amounts on the ~~carrying value~~statement of ~~the reporting unit when measuring a goodwill impairment loss, if applicable.~~cash flows. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, ~~2019. Early adoption~~2017 and is ~~permitted for interim or annual goodwill impairment tests performed on testing dates after~~required to be applied retrospectively. The Company adopted this standard as of January 1, ~~2017. The~~2018. For the periods presented within this Form 10-Q, the Company ~~early adopted the ASU during the third quarter of 2017, and will apply to~~does not have any ~~goodwill impairment losses prospectively.~~restricted cash balances reported. No adjustments are required.

~~Recently Issued~~In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows, to provide cash flow statement classification guidance for certain cash receipts and payments including (a) debt prepayment or extinguishment costs; (b) contingent consideration payments made after a business combination; (c) insurance settlement proceeds; (d) distributions from equity method investees; (e) beneficial interests in securitization transactions and (f) application of the predominance principle for cash receipts and payments with aspects of more than one class of cash flows. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The amendments in this ASU should be applied retrospectively. The Company adopted this ASU on January 1, 2018. The adoption of this ASU did not result in any changes to our financial statements as we were already compliant with the changes or they did not apply.

In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which revises how employers that sponsor defined benefit pension and other postretirement plans present net periodic benefit cost. The ASU requires an employer to present the service cost component in the same income statement line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of any subtotal of operating income. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The standard requires adoption on a retrospective basis for the presentation of net benefit cost components. The Company ~~is currently assessing the impact that~~adopted this standard ~~will have upon adoption.~~as of January 1, 2018. The Company recorded the service cost component of net benefit cost ($0.6 million) in the Cost of sales line and the other components of net benefit cost in the Other expense, net line of the Condensed Consolidated Statements of Operations.

In ~~November~~October 2016, the FASB issued ASU No. ~~2016-18,~~2016-16, ~~Restricted Cash~~Intra-Entity Transfers of Assets Other Than Inventory,, to ~~require that restricted cash and restricted cash equivalents be included with cash and cash equivalents~~improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This ASU requires an entity to recognize the consequences of an intra-entity transfer of an asset other than inventory when ~~reconciling~~ the ~~beginning-of-period and end-of-period amounts on the statement~~transfer occurs. This ASU was issued as part of ~~cash flows. The Company currently classifies changes in restricted cash as an investing activity in the Consolidated Statements of Cash Flows.~~a simplification initiative. The ASU is effective on a modified retrospective basis for fiscal years, and interim periods within those years, beginning after ~~December~~September 15, 2017. The Company adopted the ASU on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings during the first quarter of 2018, the impact of which was not significant.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated AOCI, which allows an entity to elect to reclassify the deferred tax effects, including any related valuation allowance, resulting from the application of the Tax Act from AOCI to retained earnings. The amendment in this ASU essentially eliminates the stranded deferred tax effects in AOCI resulting from the enactment of the Tax Act. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the federal income tax rate in the Tax Act is recognized. The Company adopted this ASU in the first quarter of 2018 and elected to reclassify the deferred tax effects due to the decrease in the U.S. Federal statutory tax rate, primarily associated with its pension and postretirement activity, from AOCI to retained earnings. The impact of adopting this ASU is outlined in Note 14.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities, which simplifies hedge accounting by better aligning an entity’s financial reporting for hedging relationships with its risk management activities. The ASU also simplifies the application of the hedge accounting guidance. The new guidance is effective on January 1, 2019, with early adoption permitted. For cash flow hedges existing at the adoption date, the standard requires adoption on a modified retrospective ~~basis.~~basis with a cumulative-effect adjustment to the Consolidated Balance Sheet as of the beginning of the year of adoption. The amendments to presentation guidance and disclosure requirements are required to be adopted prospectively. The Company is currently assessing the impact ~~that~~and timing of adoption of this ~~standard will have upon adoption, which is not expected to be significant.~~ASU.

In February 2016, the FASB issued ASU No. 2016-02, Leases, to increase transparency and comparability by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between existing GAAP and this ASU is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under existing GAAP. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The standard requires that entities apply the effects of these changes using a modified retrospective approach, which includes a number of optional practical expedients. The adoption of this ASU will result in a significant increase to the Company’s Balance Sheets for lease liabilities and lease assets, and the Company is currently assessing the impact that this standard will have upon ~~adoption.~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~, which introduced a new framework to be used when recognizing revenue in an attempt to reduce complexity and increase comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The standard requires that entities apply the effects of these changes to all prior years presented, upon adoption using either the full retrospective method, which presents the impact of the change separately in each prior year presented, or the modified retrospective method, which includes the cumulative changes to all prior years presented in beginning retained earnings in the year of initial adoption. The Company expects to use the modified retrospective method. The FASB also issued ASU No. 2016-10, ~~Identifying Performance Obligations and Licensing, and ASU No. 2016-12,~~ ~~Narrow-Scope Improvements and Practical Expedients~~, in April 2016 and May 2016, respectively, which amend the guidance in ASU 2014-09 and have the same effective date as the original standard. The Company is currently finalizing the impact that these standards will have on its accounting policies, processes, system requirements, internal controls, and ~~disclosures using internal resources and the assistance of a third-party.~~disclosures. The Company has established a project plan, ~~completed~~is in the process of completing an initial review of its ~~customer~~lease contracts and is ~~updating~~considering the impact on policies and ~~procedures. Based upon implementation procedures to date, the Company does not expect significant changes in its revenue recognition policies once the standard is adopted.~~processes.

The Company’s 2022 Notes and 2024 Notes are guaranteed fully and unconditionally, as well as jointly and severally, by its Guarantor Subsidiaries. The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances, only upon the occurrence of certain customary conditions. There are no significant restrictions on the ability of the parent company or any guarantor to obtain funds from its subsidiaries by dividend or loan. The following condensed supplemental consolidating financial information presents the results of operations, financial position, and cash flows of the parent company, its Guarantor Subsidiaries, its non-guarantor subsidiaries, and the eliminations necessary to arrive at the information for the Company on a consolidated basis as of ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ and for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2018 and ~~2016.~~2017. The equity method has been used with respect to investments in subsidiaries. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

	Parent			Guarantor		Non-Guarantor							Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiaries		Eliminations			Consolidated		Company			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	76.7		$	0.2	$	55.0	$	—		$	131.9	$	70.4		$	0.2	$	57.9	$	—		$	128.5
Investments		—			—		13.2		—			13.2		—			—		13.7		—			13.7
Accounts receivable, net		—			377.6		54.5		—			432.1		0.6			291.0		53.6		—			345.2
Inventories, net		—			1,008.3		129.2		—			1,137.5		—			835.0		105.6		—			940.6
Prepaid expenses and other current assets		71.7			17.6		21.1		—			110.4		82.3			0.7		21.9		—			104.9
Total current assets		148.4			1,403.7		273.0		—			1,825.1		153.3			1,126.9		252.7		—			1,532.9
Property, plant, and equipment, net		27.9			1,104.8		157.1		—			1,289.8		38.5			1,087.0		153.7		—			1,279.2
Goodwill		—			2,333.7		125.5		—			2,459.2		—			2,057.4		121.3		—			2,178.7
Investment in subsidiaries		5,212.5			572.0		—		(5,784.5	)		—		4,981.2			578.3		—		(5,559.5	)		—
Intercompany accounts (payable) receivable, net		(152.7	)		137.4		15.3		—			—		(430.6	)		381.6		49.0		—			—
Deferred income taxes		23.4			—		—		(23.4	)		—		12.5			—		—		(12.5	)		—
Intangible and other assets, net		59.4			945.3		106.8		—			1,111.5		64.0			636.2		94.5		—			794.7
Total assets	$	5,318.9		$	6,496.9	$	677.7	$	(5,807.9	)	$	6,685.6	$	4,818.9		$	5,867.4	$	671.2	$	(5,572.0	)	$	5,785.5
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	25.3		$	675.3	$	73.2	$	—		$	773.8	$	40.7		$	551.8	$	56.2	$	—		$	648.7
Current portion of long-term debt		70.8			1.2		0.1		—			72.1		9.6			0.5		—		—			10.1
Total current liabilities		96.1			676.5		73.3		—			845.9		50.3			552.3		56.2		—			658.8
Long-term debt		2,618.7			1.5		0.2		—			2,620.4		2,532.0			0.6		0.6		—			2,533.2
Deferred income taxes		—			418.7		26.1		(23.4	)		421.4		—			166.2		22.1		(12.5	)		175.8
Other long-term liabilities		6.8			187.7		6.1		—			200.6		16.8			167.1		14.0		—			197.9
Stockholders’ equity		2,597.3			5,212.5		572.0		(5,784.5	)		2,597.3		2,219.8			4,981.2		578.3		(5,559.5	)		2,219.8
Total liabilities and stockholders’ equity	$	5,318.9		$	6,496.9	$	677.7	$	(5,807.9	)	$	6,685.6	$	4,818.9		$	5,867.4	$	671.2	$	(5,572.0	)	$	5,785.5

	Parent		Guarantor			Non-Guarantor								Parent			Guarantor		Non-Guarantor
	Company		Subsidiaries			Subsidiaries			Eliminations			Consolidated		Company			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	0.2		$	61.9		$	—		$	62.1		83.2		$	0.2	$	49.4	$	—		$	132.8
Investments		—		—			10.4			—			10.4		—			—		14.1		—			14.1
Accounts receivable, net		—		372.9			56.1			—			429.0		0.2			297.1		32.5		—			329.8
Inventories, net		—		869.6			108.4			—			978.0		—			803.1		115.2		—			918.3
Assets held for sale		—		3.6			—			—			3.6
Prepaid expenses and other current assets		23.6		36.7			17.3			—			77.6		69.8			32.0		20.0		(32.1	)		89.7
Total current assets		23.6		1,283.0			254.1			—			1,560.7		153.2			1,132.4		231.2		(32.1	)		1,484.7
Property, plant, and equipment, net		31.3		1,181.0			147.0			—			1,359.3		29.3			1,108.7		156.4		—			1,294.4
Goodwill		—		2,330.8			116.4			—			2,447.2		—			2,057.3		124.7		—			2,182.0
Investment in subsidiaries		5,031.5		519.4			—			(5,550.9	)		—		4,945.5			582.6		—		(5,528.1	)		—
Intercompany accounts receivable (payable), net		199.6		(196.9	)		(2.7	)		—			—		(328.6	)		274.5		54.1		—			(0.0	)
Deferred income taxes		20.7		—			—			(20.7	)		—		15.1			—		—		(15.1	)		—
Intangible and other assets, net		53.9		1,018.0			106.7			—			1,178.6		62.5			652.1		103.6		—			818.2
Total assets	$	5,360.6	$	6,135.3		$	621.5		$	(5,571.6	)	$	6,545.8	$	4,877.0		$	5,807.6	$	670.0	$	(5,575.3	)	$	5,779.3
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	61.3	$	493.1		$	72.4		$	—		$	626.8	$	53.3		$	513.8	$	54.7	$	(32.1	)	$	589.7
Current portion of long-term debt		63.1		3.2			0.1			—			66.4		9.0			1.1		—		—			10.1
Total current liabilities		124.4		496.3			72.5			—			693.2		62.3			514.9		54.7		(32.1	)		599.8
Long-term debt		2,722.3		2.2			0.3			—			2,724.8		2,533.8			1.4		0.5		—			2,535.7
Deferred income taxes		—		418.3			24.6			(20.7	)		422.2		—			167.3		26.2		(15.1	)		178.4
Other long-term liabilities		10.6		187.0			4.7			—			202.3		17.6			178.5		6.0		—			202.1
Stockholders’ equity		2,503.3		5,031.5			519.4			(5,550.9	)		2,503.3		2,263.3			4,945.5		582.6		(5,528.1	)		2,263.3
Total liabilities and stockholders’ equity	$	5,360.6	$	6,135.3		$	621.5		$	(5,571.6	)	$	6,545.8	$	4,877.0		$	5,807.6	$	670.0	$	(5,575.3	)	$	5,779.3

	Parent			Guarantor			Non-Guarantor									Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,458.0		$	175.9		$	(85.1	)	$	1,548.8		$	—		$	1,408.8		$	177.2		$	(104.8	)	$	1,481.2
Cost of sales		—			1,221.5			152.3			(85.1	)		1,288.7			—			1,194.3			159.8			(104.8	)		1,249.3
Gross profit		—			236.5			23.6			—			260.1			—			214.5			17.4			—			231.9
Selling, general, and administrative expense		23.9			128.5			10.3			—			162.7			44.6			136.0			8.9			—			189.5
Amortization expense		3.3			22.7			2.5			—			28.5			3.0			16.9			2.3			—			22.2
Other operating expense, net		2.4			8.0			0.7			—			11.1			18.8			10.0			0.1			—			28.9
Operating (loss) income		(29.6	)		77.3			10.1			—			57.8			(66.4	)		51.6			6.1			—			(8.7	)
Interest expense		31.3			0.1			3.8			(3.8	)		31.4			29.0			—			1.4			(1.9	)		28.5
Interest income		—			(3.8	)		(0.4	)		3.8			(0.4	)		(2.2	)		(1.7	)		—			1.9			(2.0	)
Other (income) expense, net		(2.4	)		(1.7	)		0.8			—			(3.3	)
Other expense (income), net																	7.1			3.6			(2.0	)		—			8.7
(Loss) income before income taxes		(58.5	)		82.7			5.9			—			30.1			(100.3	)		49.7			6.7			—			(43.9	)
Income taxes		(22.4	)		22.7			1.0			—			1.3			(20.2	)		9.2			1.2			—			(9.8	)
Equity in net income (loss) of subsidiaries		64.9			4.9			—			(69.8	)		—			46.0			5.5			—			(51.5	)		—
Net income (loss)	$	28.8		$	64.9		$	4.9		$	(69.8	)	$	28.8
Net (loss) income																$	(34.1	)	$	46.0		$	5.5		$	(51.5	)	$	(34.1	)

Parent

Guarantor

Non-Guarantor

Company

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
1,501.8

$
167.0

$
(81.9
)

$
1,586.9

Cost of sales

—

1,240.2

143.0

(81.9
)

1,301.3

Gross profit

—

261.6

24.0

—

285.6

Selling, general, and administrative expense

23.5

134.5

16.1

—

174.1

Amortization expense

2.3

23.9

2.4

—

28.6

Other operating expense, net

—

4.7

0.6

—

5.3

Operating (loss) income

(25.8
)

98.5

4.9

—

77.6

Interest expense

31.0

(0.1
)

1.1

(1.2
)

30.8

Interest income

—

(1.0
)

(0.3
)

1.2

(0.1
)
Other (income) expense, net

—

(0.5
)

(5.2
)

—

(5.7
)
(Loss) income before income taxes

(56.8
)

100.1

9.3

—

52.6

Income taxes

(22.1
)

35.4

1.9

—

15.2

Equity in net income (loss) of subsidiaries

72.1

7.4

—

(79.5
)

—

Net income (loss)

$
37.4

$
72.1

$
7.4

$
(79.5
)

$
37.4

	Parent			Guarantor			Non-Guarantor									Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	4,353.3		$	498.8		$	(244.9	)	$	4,607.2		$	—		$	1,455.4		$	164.0		$	(83.2	)	$	1,536.2
Cost of sales		—			3,596.9			431.8			(244.9	)		3,783.8			—			1,188.4			144.6			(83.2	)		1,249.8
Gross profit		—			756.4			67.0			—			823.4			—			267.0			19.4			—			286.4
Selling, general, and administrative expense		86.0			408.0			30.3			—			524.3			27.5			146.6			9.6			—			183.7
Amortization expense		9.4			69.2			7.2			—			85.8			2.9			23.4			2.3			—			28.6
Other operating expense, net		2.4			107.4			2.1			—			111.9			—			6.6			0.2			—			6.8
Operating (loss) income		(97.8	)		171.8			27.4			—			101.4			(30.4	)		90.4			7.3			—			67.3
Interest expense		94.2			0.3			4.8			(6.4	)		92.9			31.2			0.2			1.2			(2.9	)		29.7
Interest income		(2.2	)		(6.4	)		(1.3	)		6.4			(3.5	)		(2.2	)		(2.9	)		(0.6	)		2.9			(2.8	)
Other (income) expense, net		(0.8	)		(1.8	)		0.8			—			(1.8	)		0.1			—			0.6			—			0.7
(Loss) income before income taxes		(189.0	)		179.7			23.1			—			13.8			(59.5	)		93.1			6.1			—			39.7
Income taxes		(72.6	)		59.2			4.4			—			(9.0	)		(22.8	)		33.4			0.9			—			11.5
Equity in net income (loss) of subsidiaries		139.2			18.7			—			(157.9	)		—			64.9			5.2			—			(70.1	)		—
Net income (loss)	$	22.8		$	139.2		$	18.7		$	(157.9	)	$	22.8		$	28.2		$	64.9		$	5.2		$	(70.1	)	$	28.2

Parent

Guarantor

Non-Guarantor

Company

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
4,161.1

$
459.8

$
(222.4
)

$
4,398.5

Cost of sales

—

3,448.0

396.9

(222.4
)

3,622.5

Gross profit

—

713.1

62.9

—

776.0

Selling, general, and administrative expense

100.1

394.1

42.4

—

536.6

Amortization expense

6.8

67.1

7.0

—

80.9

Other operating expense, net

—

8.8

1.5

—

10.3

Operating (loss) income

(106.9
)

243.1

12.0

—

148.2

Interest expense

87.4

0.2

4.0

(3.6
)

88.0

Interest income

(2.2
)

(3.9
)

(1.0
)

3.6

(3.5
)
Other (income), net

—

(2.5
)

(3.8
)

—

(6.3
)
(Loss) income before income taxes

(192.1
)

249.3

12.8

—

70.0

Income taxes

(73.4
)

90.1

0.1

—

16.8

Equity in net income (loss) of subsidiaries

171.9

12.7

—

(184.6
)

—

Net income (loss)

$
53.2

$
171.9

$
12.7

$
(184.6
)

$
53.2

Parent

Guarantor

Non-Guarantor

Company

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net income (loss)

$
28.8

$
64.9

$
4.9

$
(69.8
)

$
28.8

Other comprehensive income:

Foreign currency translation adjustments

—

—

18.0

—

18.0

Pension and postretirement reclassification
adjustment, net of tax

—

0.1

—

—

0.1

Other comprehensive income

—

0.1

18.0

—

18.1

Equity in other comprehensive income (loss) of
subsidiaries

18.1

18.0

—

(36.1
)

—

Comprehensive income (loss)

$
46.9

$
83.0

$
22.9

$
(105.9
)

$
46.9

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net (loss) income	$	(34.1	)	$	46.0		$	5.5		$	(51.5	)	$	(34.1	)
Other comprehensive income:
Foreign currency translation adjustments		—			—			(10.1	)		—			(10.1	)
Pension and postretirement reclassification adjustment, net of tax		—			0.2			—			—			0.2
Adoption of ASU 2018-02 reclassification to retained earnings		—			(1.1	)		—			—			(1.1	)
Other comprehensive loss:		—			(0.9	)		(10.1	)		—			(11.0	)
Equity in other comprehensive (loss) income of subsidiaries		(9.9	)		(10.1	)		—			20.0			—
Comprehensive (loss) income	$	(44.0	)	$	35.0		$	(4.6	)	$	(31.5	)	$	(45.1	)

	Parent			Guarantor			Non-Guarantor									Parent		Guarantor		Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Company		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Net income (loss)	$	37.4		$	72.1		$	7.4		$	(79.5	)	$	37.4		$	28.2	$	64.9	$	5.2	$	(70.1	)	$	28.2
Other comprehensive income:
Foreign currency translation adjustments		—			—			(7.3	)		—			(7.3	)		—		—		3.6		—			3.6
Pension and postretirement reclassification adjustment, net of tax		—			0.3			—			—			0.3			—		0.3		—		—			0.3
Other comprehensive income (loss)		—			0.3			(7.3	)		—			(7.0	)		—		0.3		3.6		—			3.9
Equity in other comprehensive (loss) income of subsidiaries		(7.0	)		(7.3	)		—			14.3			—			3.9		3.6		—		(7.5	)		—
Comprehensive income (loss)	$	30.4		$	65.1		$	0.1		$	(65.2	)	$	30.4		$	32.1	$	68.8	$	8.8	$	(77.6	)	$	32.1

Condensed Supplemental Consolidating Statement of ~~Comprehensive Income (Loss)~~Cash Flows

Parent

Guarantor

Non-Guarantor

Company

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net income (loss)

$
22.8

$
139.2

$
18.7

$
(157.9
)

$
22.8

Other comprehensive income:

Foreign currency translation adjustments

—

—

34.5

—

34.5

Pension and postretirement reclassification
adjustment, net of tax

—

7.2

—

—

7.2

Other comprehensive income

—

7.2

34.5

—

41.7

Equity in other comprehensive income (loss) of
subsidiaries

41.7

34.5

—

(76.2
)

—

Comprehensive income (loss)

$
64.5

$
180.9

$
53.2

$
(234.1
)

$
64.5

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	41.3		$	41.2		$	26.5		$	(51.2	)	$	57.8
Cash flows from investing activities:
Additions to property, plant, and equipment		(0.9	)		(32.3	)		(5.3	)		—			(38.5	)
Additions to intangible assets		(2.5	)		(0.4	)		—			—			(2.9	)
Intercompany transfer		(42.8	)		(43.3	)		0.5			85.6			—
Other		—			—			(0.3	)		—			(0.3	)
Net cash provided by (used in) investing activities		(46.2	)		(76.0	)		(5.1	)		85.6			(41.7	)
Cash flows from financing activities:
Net (repayment) borrowing of debt		(2.4	)		(1.4	)		—			—			(3.8	)
Intercompany transfer		10.8			36.2			(12.6	)		(34.4	)		—
Repurchases of common stock		(17.1	)		—			—			—			(17.1	)
Receipts related to stock-based award activities		1.9			—			—			—			1.9
Payments related to stock-based award activities		(1.1	)		—			—			—			(1.1	)
Net cash provided by (used in) financing activities		(7.9	)		34.8			(12.6	)		(34.4	)		(20.1	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(0.3	)		—			(0.3	)
Increase (decrease) in cash and cash equivalents		(12.8	)		—			8.5			—			(4.3	)
Cash and cash equivalents, beginning of period		83.2			0.2			49.4			—			132.8
Cash and cash equivalents, end of period	$	70.4		$	0.2		$	57.9		$	—		$	128.5

~~Condensed Supplemental Consolidating Statement of Comprehensive Income (Loss)~~

	Parent			Guarantor			Non-Guarantor									Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated			Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	13.4		$	406.0		$	1.4		$	(157.4	)	$	263.4		$	44.6		$	97.7		$	5.5		$	(69.3	)	$	78.5
Cash flows from investing activities:
Additions to property, plant, and equipment		(1.6	)		(87.4	)		(13.5	)		—			(102.5	)		(1.1	)		(30.5	)		(3.1	)		—			(34.7	)
Additions to intangible assets		(17.7	)		(0.8	)		(0.1	)		—			(18.6	)		(8.2	)		(0.5	)		—			—			(8.7	)
Intercompany transfer		69.8			(128.2	)		—			58.4			—			(34.1	)		(31.0	)		—			65.1			—
Proceeds from sale of fixed assets		—			7.2			—			—			7.2			—			0.2			—			—			0.2
Proceeds from divestiture		—			19.0			0.3			—			19.3
Other		—			—			(1.0	)		—			(1.0	)		—			—			(0.3	)		—			(0.3	)
Net cash provided by (used in) investing activities		50.5			(190.2	)		(14.3	)		58.4			(95.6	)
Net cash (used in) provided by investing activities																	(43.4	)		(61.8	)		(3.4	)		65.1			(43.5	)
Cash flows from financing activities:
Net (repayment) borrowing of debt		(100.8	)		(2.2	)		(0.1	)		—			(103.1	)
Net borrowing (repayment) of debt																	(34.7	)		(1.4	)		—			—			(36.1	)
Intercompany transfer		109.2			(213.6	)		5.4			99.0			—			27.7			(33.9	)		2.0			4.2			—
Receipts related to stock-based award activities		11.1			—			—			—			11.1			6.7			—			—			—			6.7
Payments related to stock-based award activities		(6.7	)		—			—			—			(6.7	)		(0.9	)		—			—			—			(0.9	)
Net cash provided by (used in) financing activities		12.8			(215.8	)		5.3			99.0			(98.7	)		(1.2	)		(35.3	)		2.0			4.2			(30.3	)
Effect of exchange rate changes on cash and cash equivalents		—			—			0.7			—			0.7			—			—			0.4			—			0.4
Increase (decrease) in cash and cash equivalents		76.7			—			(6.9	)		—			69.8
(Decrease) increase in cash and cash equivalents																	—			0.6			4.5			—			5.1
Cash and cash equivalents, beginning of period		—			0.2			61.9			—			62.1			—			0.2			61.9			—			62.1
Cash and cash equivalents, end of period	$	76.7		$	0.2		$	55.0		$	—		$	131.9		$	—		$	0.8		$	66.4		$	—		$	67.2

Parent

Guarantor

Non-Guarantor

Company

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Cash flows from operating activities:

Net cash provided by (used in)  operating
   activities

$
94.2

$
398.7

$
(10.7
)

$
(183.8
)

$
298.4

Cash flows from investing activities:

Additions to property, plant, and equipment

(2.8
)

(119.9
)

(9.2
)

—

(131.9
)
Additions to intangible assets

(8.2
)

(2.7
)

—

—

(10.9
)
Intercompany transfer

32.4

(78.4
)

—

46.0

—

Acquisitions, less cash acquired

(2,687.7
)

0.3

43.0

—

(2,644.4
)
Proceeds from sale of fixed assets

—

1.5

—

—

1.5

Other

—

(0.6
)

(0.8
)

—

(1.4
)
Net cash (used in) provided by investing
   activities

(2,666.3
)

(199.8
)

33.0

46.0

(2,787.1
)
Cash flows from financing activities:

Net borrowing (repayment) of debt

1,700.1

(2.6
)

—

—

1,697.5

Payment of deferred financing costs

(34.3
)

—

—

—

(34.3
)
Intercompany transfer

61.9

(196.4
)

(3.3
)

137.8

—

Net proceeds from issuance of common stock

835.1

—

—

—

835.1

Receipts related to stock-based award activities

7.6

—

—

—

7.6

Payments related to stock-based award activities

(8.7
)

—

—

—

(8.7
)
Net cash provided by (used in) financing
   activities

2,561.7

(199.0
)

(3.3
)

137.8

2,497.2

Effect of exchange rate changes on cash and cash
   equivalents

—

—

3.8

—

3.8

(Decrease) increase in cash and cash equivalents

(10.4
)

(0.1
)

22.8

—

12.3

Cash and cash equivalents, beginning of period

10.4

0.1

24.4

—

34.9

Cash and cash equivalents, end of period

$
—

$
—

$
47.2

$
—

$
47.2

On November 2, 2017, the Company announced that the Board of Directors adopted a stock repurchase program. The stock repurchase program authorizes the Company to repurchase up to $400 million of the Company’s common stock at any time, or from time to time. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The size and timing of any repurchases will depend on price, market and business conditions, and other factors. Provided, however, that the Company is authorized to enter into an administrative repurchase plan for $50 million of the $400 million in the twelve months following November, 6 2017. The Company will repurchase shares opportunistically with a total annual cap of $150 million. Any shares repurchased will be held as treasury stock.

On October 29, 2017 Mr. Robert Aiken resigned as the Company’s President and Chief Operating Officer. The Company is in discussions with Mr. Aiken regarding the satisfaction of his monetary obligations to the Company under his employment agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

TreeHouse Foods, Inc. is a manufacturer of packaged foods and beverages with ~~more than 50~~ manufacturing facilities across the United States, Canada, and Italy that focuses primarily on private label products for both retail grocery and food away from home customers. We manufacture shelf stable, refrigerated, frozen, and fresh products within our five segments (Baked goods, Beverages, Condiments, Meals, and Snacks). We have a comprehensive offering of packaging formats and flavor profiles, and we also offer natural, organic, and preservative free ingredients in many categories.

Our reportable segments, and the product categories that make up each segment, are as follows:

We believe we are the largest manufacturer of private label snack nuts, trail mixes, refrigerated dough, ~~retail griddle items, in-store bakery cookies, pretzels,~~crackers, pickles, salsa, ~~macaroni and cheese dinners,~~ non-dairy powdered creamer, ready-to-eat cereals, bouillon, and dry pasta in the United States, the largest manufacturer of private label pretzels, retail griddle items, powdered drink mixes, retail salad dressings, macaroni and cheese dinners, and instant hot cereals in both the United States and Canada, and the largest manufacturer of private label jams and pasta sauces in Canada, based on volume.

We also believe we are one of the largest manufacturers of private label ~~crackers,~~in-store bakery products, cookies, pitas, snack bars, table syrup, flavored syrup, barbeque sauce, preserves, and jellies in the United States, based on volume.

The following discussion and analysis presents the factors that had a material effect on our results of operations for the three month period ended March 31, 2018 and ~~nine month periods ended September 30, 2017 and 2016.~~2017. Also discussed is our financial position as of the end of the current period. This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and the Notes to those Condensed Consolidated Financial Statements included elsewhere in this report. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See Cautionary Statement Regarding Forward-Looking Statements on page 5347 for a discussion of the uncertainties, risks, and assumptions associated with these statements.

In the first quarter of 2017, the Company completed changes in its organizational structure that resulted in a change in how the Company manages its business and allocates resources. Our reportable segments are now organized and managed by products: Baked Goods, Beverages, Condiments, Meals, and Snacks. Our reportable segments are discussed in greater detail in Note 18 within the Notes to Condensed Consolidated Financial Statements.

Despite the overall improvement in the U.S. economy, consumer spending continues to remain challenged. Specifically, retail food ~~volumes continue to be weak compared to overall consumer spending. September total retail food~~ sales and volumes ~~showed sequential declines month-to-month~~have been under pressure in recent years. However, trends might be starting to shift as ~~consumers executed stock-up trips to stores in advance of early September hurricanes. On a quarterly basis, third quarter~~positive sales growth has returned across most measured channels. Based on the Citi DD’s Nielsen AOC+C Data Analysis – 3/24/18 report, total retail food sales across the industry increased ~~sequentially over~~1.2% in the ~~second~~first quarter of 2017 with sales up nearly 0.6%. The sequential improvement in sales was mirrored, though to a lesser extent, in the third quarter year-over-year comparison. Total retail food sales across the industry increased 0.3% in the third quarter of 20172018 compared to the same period last year as relatively flat volume ~~declines (-1.8%~~(slight decline of 0.3%) ~~were~~was more than offset by price increases ~~(+2.1%)~~of 1.4%. Although volume softness continued in the industry, pricing actions have mostly offset this impact. Branded products continue to be the hardest hit as volumes were 2.7% lower in the third quarter of 2017 compared to 2016 with pricing offsetting 2.5% of the decline. Comparatively, privatePrivate label food volumes were down 0.1% for the third quarter year-over-year with a corresponding 2.7% increase in pricing. As such, comparatively stable industry volumes combined with similar pricing actions demonstrates private label products are well positioned against their branded counterparts.

~~While overall~~sales and volume growth continues to outpace branded products as total private label sales in measured channels for the first quarter of 2018 compared to the same period of the prior year increased 3.8% year-over-year compared to 0.5% for branded products. These increases were led by private label volume and pricing increases of 2.2% and 1.5%, respectively, compared to branded volume decreases of (1.6)% and pricing increases of 2.1%. As such, on an industry basis, strong private label sales and volumes continue to be ~~a challenge, certain retail~~attractive compared to branded counterparts.

Retail sectors are ~~experiencing~~continuing to experience growth in premium, better for you, natural, and organic foods (collectively referred to as “PBFY”) as consumers ~~continue to snack, with~~shift their consumptions trends towards a focus on ~~“healthy” and “better for you” foods. “Healthy” and “better for you”~~healthier eating with cleaner labels. PBFY foods include items such as fresh or freshly prepared foods, foods with premium ingredients, natural, organic, clean label, or specialty foods, most of which are located in the perimeter of the store. Recent data shows that these product offerings are expected to be the primary growth area for both branded and private label products, and that growth in private label is expected to drive the overall growth in these product categories. The Company is seeing similar growth in our PBFY labels (excluding snack nuts and coffee) which showed 10.7% and 18.4% volume and sales growth, respectively, in the first quarter of 2018 compared to the first quarter of 2017. Additionally, the margin on these PBFY products tend to be higher and more stable than other labels. These trends are prompting companies, TreeHouse included, to increase or adjust their offerings, while retaining their commitment to provide products at reasonable prices. In an effort to respond to shifting consumer demand, the Company offers an increasing variety of ~~snacks, natural,~~PBFY products, currently offering PBFY products in 26 of our categories. Our mix of these offerings increased from 18.8% of net sales in the first quarter of 2017 to 21.6% in the first quarter of 2018, demonstrating our focus on these growing labels.

In March 2018, Sam K. Reed retired as the Chief Executive Office of the Company and ~~organic products.~~Steven Oakland assumed the role of Chief Executive Officer and President.

On August 3, 2017, the Company announced the TreeHouse 2020 program, which is a comprehensive strategic blueprint intended to accelerate long-term growth through optimization of our manufacturing network, transformation of our mixing centers and warehouse footprint, and leveraging of systems and processes to drive performance. TreeHouse 2020 is a multi-year plan to fully integrate the business and reduce its cost structure in order to invest in market-differentiated capabilities, including higher growth potential product categories to serve the rapidly evolving needs of customers which are strategically focused and highly committed to their corporate brands. TreeHouse 2020 is expected to produce significant savings to achieve our operating margin expansion targets creating reinvestment opportunities to drive future growth. Specifically, we are targeting to improve our operating margin structure by

approximately 300 basis points by the end of 2020. In the short-term, while we continue to execute on these margin improvement initiatives we might experience modest sales declines due to the rationalization of low margin business.

The TreeHouse 2020 program will be executed in multiple phases ~~over the next several years.~~though 2020. The key elements of Phase 1 include the closure of the Company’s Brooklyn Park, Minnesota and Plymouth, Indiana facilities, as well as the downsizing of the Dothan, Alabama facility. Production at the Brooklyn Park, Minnesota and Plymouth, Indiana facilities ~~is expected to cease~~ceased in the fourth quarter of 2017. The facility downsizing at Dothan, Alabama is expected to be complete in the third quarter of 2018. In addition, we have taken steps toward increasing our capacity utilization, operational margin expansion, and streamlining our plant structure to optimize our supply

chain. See Note 2 to our Condensed Consolidated Financial Statements for additional information regarding restructuring and margin improvement activities.

~~Recent Developments~~On January 31, 2018, the Company announced its intention to close its remaining operations in Battle Creek, Michigan. The Company had previously announced its decision to downsize the Battle Creek facility; however, following completion of the first phase of downsizing, it was determined that the remaining operations would not be economically viable. Current production at Battle Creek will be moved to other cereal manufacturing facilities. The costs to close the remainder of the Battle Creek facility are expected to be approximately $18.2 million, of which approximately $11.8 million is expected to be in cash. Components of the charges include non-cash asset write-offs of approximately $6.4 million, employee-related costs of approximately $3.2 million, and other closure costs of approximately $8.6 million. Total expected costs to close decreased $11.8 million since the initial announcement due to revised estimates. The full closure of the facility was initially scheduled for the fourth quarter of 2018, but this date has been delayed to mid-2019 due to recent bid activity.

On February 15, 2018, the Company announced the planned closure of its Visalia, California facility by the end of the first quarter of 2019. The plant primarily produces pretzels and cereal snack mixes for the Baked Goods segment. Current pretzel production will be moved to other TreeHouse manufacturing facilities prior to the plant closure. The costs to close the Visalia facility are expected to be approximately $23.6 million, of which approximately $11.0 million is expected to be in cash. Components of the charges include non-cash asset write-offs of approximately $12.6 million, employee-related costs of approximately $3.7 million, and other closure costs of approximately $7.3 million. Total expected costs to close increased $2.6 million since the initial announcement due to revised estimates.

In the first quarter of 2018, the Company announced an operating expenses improvement program designed to align our organization structure with strategic priorities. The program is intended to support operational effectiveness, cost reduction, and position the Company for growth with a focus on a lean customer focused go-to-market team, centralized supply chain, and streamlined back office. In the first quarter of 2018, we incurred $8.4 million on this program. We expect to spend $30.1 million in 2018 primarily on employee-related costs and consulting services, which is intended to yield $55.0 million in annualized run-rate savings starting in 2019.

On November 2, 2017, the Company announced that the Board of Directors adopted a stock repurchase program. The stock repurchase program authorizes the Company to repurchase up to $400 million of the Company’s common stock at any time, or from time to ~~time~~.time. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The size and timing of any repurchases will depend on price, market and business conditions, and other factors. ~~Provided, however, that the~~The Company is authorized to enter into an administrative repurchase plan for $50 million of the $400 million in the ~~twelve~~fourteen months following November 6, 2017. The Company ~~will~~plans to repurchase $50 million of shares through the plan and up to another $100 million opportunistically ~~with a total~~(total annual cap of $150 ~~million.~~ million). Any shares repurchased will be held as treasury stock.

~~On April 25, 2017,~~three months ended March 31, 2018, the Company ~~announced that it had entered into~~repurchased approximately 0.4 million shares of common stock for a definitive agreement to sell its canned soup and infant feeding (“SIF”) business. The SIF business is based in Pittsburgh, Pennsylvania and produces private label condensed and ready-to-serve soup, baby food, and gravies for the Meals segment. The transaction closed on May 22, 2017 and remains subject to working capital adjustments that are expected to be finalized in the fourth quartertotal of ~~2017.~~$17.1 million.

The following table presents certain information concerning our financial results, including information presented as a percentage of consolidated net sales:

	Three Months Ended September 30,												Nine Months Ended September 30,												Three Months Ended March 31,
	2017						2016						2017						2016						2018						2017
	Dollars			Percent			Dollars			Percent			Dollars			Percent			Dollars			Percent			Dollars			Percent			Dollars			Percent
	(Dollars in millions)												(Dollars in millions)												(Dollars in millions)
Net sales	$	1,548.8			100.0	%	$	1,586.9			100.0	%	$	4,607.2			100.0	%	$	4,398.5			100.0	%	$	1,481.2			100.0	%	$	1,536.2			100.0	%
Cost of sales		1,288.7			83.2			1,301.3			82.0			3,783.8			82.1			3,622.5			82.4			1,249.3			84.3			1,249.8			81.4
Gross profit		260.1			16.8			285.6			18.0			823.4			17.9			776.0			17.6			231.9			15.7			286.4			18.6
Operating expenses:
Selling and distribution		95.6			6.2			102.2			6.4			295.0			6.4			292.0			6.6			108.4			7.3			104.6			6.8
General and administrative		67.1			4.3			71.9			4.5			229.3			5.0			244.6			5.6			81.1			5.5			79.1			5.2
Amortization expense		28.5			1.8			28.6			1.8			85.8			1.9			80.9			1.8			22.2			1.5			28.6			1.9
Other operating expense, net		11.1			0.7			5.3			0.3			111.9			2.4			10.3			0.2			28.9			2.0			6.8			0.4
Total operating expenses		202.3			13.0			208.0			13.0			722.0			15.7			627.8			14.2			240.6			16.3			219.1			14.3
Operating income		57.8			3.8			77.6			5.0			101.4			2.2			148.2			3.4
Operating (loss) income																										(8.7	)		(0.6	)		67.3			4.3
Other expense:
Interest expense		31.4			2.0			30.8			1.9			92.9			2.0			88.0			2.0			28.5			1.9			29.7			1.9
Interest income		(0.4	)		—			(0.1	)		—			(3.5	)		(0.1	)		(3.5	)		(0.1	)		(2.0	)		(0.1	)		(2.8	)		(0.2	)
Gain on foreign currency exchange		(2.5	)		(0.2	)		(1.1	)		(0.1	)		(2.8	)		(0.1	)		(6.0	)		(0.1	)
Other (income) expense, net		(0.8	)		—			(4.6	)		(0.2	)		1.0			0.1			(0.3	)		—
Loss on foreign currency exchange																										2.5			0.2			0.1			—
Other expense, net																										6.2			0.4			0.6			0.1
Total other expense		27.7			1.8			25.0			1.6			87.6			1.9			78.2			1.8			35.2			2.4			27.6			1.8
Income before income taxes		30.1			2.0			52.6			3.4			13.8			0.3			70.0			1.6
(Loss) income before income taxes																										(43.9	)		(3.0	)		39.7			2.5
Income taxes		1.3			0.1			15.2			1.0			(9.0	)		(0.2	)		16.8			0.4			(9.8	)		(0.7	)		11.5			0.7
Net income	$	28.8			1.9	%	$	37.4			2.4	%	$	22.8			0.5	%	$	53.2			1.2	%
Net (loss) income																									$	(34.1	)		(2.3	)%	$	28.2			1.8	%

Three Months Ended ~~September 30, 2017~~March 31, 2018 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2017

Net Sales —
~~Third~~First quarter net sales decreased by ~~$38.1~~$55.0 million, or ~~2.4%~~3.6%, in ~~2017~~2018 compared to ~~2016.~~2017. The change in net sales from the ~~third~~first quarter of ~~2016~~2017 to the ~~third~~first quarter of ~~2017~~2018 was due to the following:

	Dollars			Percent			Dollars			Percent
	(Dollars in millions)						(Dollars in millions)
2016 Net sales	$	1,586.9
2017 Net sales							$	1,536.2
Volume/mix		1.4			0.1	%		(29.8	)		(1.9	)%
Pricing		1.5			0.1			16.5			1.1
Product recalls		1.6			0.1			(2.4	)		(0.2	)
Acquisition/divestiture		(45.6	)		(2.9	)
Divestiture								(42.6	)		(2.8	)
Foreign currency		3.0			0.2			3.3			0.2
2017 Net sales	$	1,548.8			(2.4	)%
2018 Net sales							$	1,481.2			(3.6	)%

The change in net sales was ~~more than~~mostly explained by the divestiture of the ~~SIF~~soup and infant feeding business (“SIF”) in May of 2017 which contributed ~~2.9%~~2.8% to the year-over-year decline. Volume/mix ~~pricing,~~was also unfavorable year-over-year driven by the Beverages, Meals, and Snacks segments. Efforts to simplify and rationalize low margin SKUs contributed 2.7% to the volume/mix decline. Excluding the impact of the SIF divestiture in the second quarter of 2017 and SKU rationalization, net sales increased 1.9%. Pricing and foreign exchange were ~~slightly~~ favorable 1.3%, in total, compared to the prior ~~year, partially offsetting the decline from the divestiture.~~year. Included in first quarter 2017 net sales was a ~~$1.7~~$2.4 million product recall reimbursement, ~~compared to a $0.1 million impact~~which did not repeat in ~~2016,~~2018, that contributed ~~an increase~~a decrease of ~~0.1%~~0.2% to net sales year-over-year.

Cost of Sales — Cost of sales as a percentage of net sales was ~~83.2%~~84.3% in the ~~third~~first quarter of ~~2017,~~2018, compared to ~~82.0%~~81.4% in the ~~third~~first quarter of ~~2016.~~2017. Included in cost of sales in the ~~third~~first quarter of ~~2017~~2018 was ~~$1.5 million related to product recall reimbursement compared to expense of $0.2 million in the third quarter of 2016. Also included in cost of sales was $10.2~~$9.7 million of restructuring and other margin improvement activities in the ~~third~~first quarter of ~~2017~~2018 compared to ~~$1.0~~$4.2 million in the prior year. Also included in cost of sales in the first quarter of 2017 was a $1.4 million reimbursement related to product recalls. These transactions, coupled with the product recall reimbursement outlined above in net sales, increased cost of sales as a percentage of net sales by ~~0.5%~~0.6% in the ~~third~~first quarter of ~~2017~~2018 and 0.1% in the ~~third~~first quarter of ~~2016.~~2017. The remaining ~~0.8%~~2.4% increase in cost of sales as a percentage of net sales was primarily due to higher operating costs

(including costs associated with a labor dispute in the Beverages segment); higher commodity costs (primarily for cashews, durum, almonds, packaging, eggs, and oils), and unfavorable mix, partially offset by ~~a reduction in variable incentive compensation and depreciation.~~favorable pricing.

Operating Expenses — Total operating expenses were ~~$202.3~~$240.6 million in the ~~third~~first quarter of ~~2017~~2018 compared to ~~$208.0~~$219.1 million in the ~~third~~first quarter of ~~2016.~~2017. The ~~decrease~~increase in ~~2017~~2018 resulted from the following:

Selling and distribution expenses ~~decreased $6.6~~increased $3.8 million, or ~~6.5%~~3.6%, in the ~~third~~first quarter of ~~2017~~2018 compared to the ~~third~~first quarter of ~~2016.~~2017. Selling and distribution expenses as a percentage of net sales ~~decreased~~increased to ~~6.2%~~7.3% in the ~~third~~first quarter of ~~2017,~~2018, compared to ~~6.4%~~6.8% in the ~~third~~first quarter of ~~2016.~~2017. The ~~decrease~~increase was primarily related to higher freight rates due to lower ~~volumes,~~carrier acceptance rates and a ~~reduction in variable incentive compensation, and cost savings in 2017,~~competitive spot market partially offset by ~~unfavorable freight rates.~~cost savings.

General and administrative expenses ~~decreased $4.8~~increased $2.0 million, or ~~6.7%~~2.5%, in the ~~third~~first quarter of ~~2017~~2018 compared to the ~~third~~first quarter of ~~2016.~~2017. General and administrative expenses as a percentage of net sales ~~decreased slightly~~increased to ~~4.3%~~5.5% in the ~~third~~first quarter of 2018, compared to 5.2% in the first quarter of 2017. Included in general and administrative expense in the first quarter of 2018 was $13.0 million of CEO transition expense mostly related to stock compensation modification and acceleration which contributed 0.9 percentage points to general and administrative expense as a percentage of net sales. Included in general and administrative expense in the first quarter of 2017 ~~compared~~was $3.5 million of acquisition, integration, divestiture, and related costs which contributed 0.2 percentage points to ~~4.5% in~~general and administrative expense as a percentage of net sales. Excluding the ~~third quarter~~impact of ~~2016 mostly related~~these items, general and administrative expense as a percentage of net sales decreased 0.4 percentage points year-over-year due to ~~lower revenues~~savings from the Structure to Win initiative and ~~a reduction in variable incentive compensation.~~other cost saving measures.

Amortization expense ~~was relatively flat~~decreased $6.4 million in the ~~third~~first quarter of 2018 compared to the first quarter of 2017 ~~compared~~due to lower intangibles resulting from the ~~third~~impairment of the Snacks segment customer related intangible assets in the fourth quarter of ~~2016.~~2017.

Other operating expense was ~~$11.1~~$28.9 million in the ~~third~~first quarter of ~~2017~~2018 compared to ~~$5.3~~$6.8 million in the ~~third~~first quarter of ~~2016.~~2017. The increase was entirely due to higher costs associated with restructuring and other margin improvement activities that were announced in recent quarters with respect to the Structure to Win initiative, the TreeHouse 2020 margin improvement plan, and the Company’s closure of the Brooklyn Park, Minnesota; Plymouth, Indiana; City of Industry, California; Ayer, Massachusetts; Azusa, California; Delta, British Columbia (frozen griddle); and Ripon, Wisconsin facilities as well as the downsizing of the Dothan, Alabama and Battle Creek, Michigan facilities.plant closures discussed in Note 2. See Note 2 to our Condensed Consolidated Financial Statements for additional information regarding restructuring and margin improvement activities.

Interest Expense — Interest expense ~~increased~~decreased to ~~$31.4~~$28.5 million in the ~~third~~first quarter of ~~2017,~~2018, compared to ~~$30.8~~$29.7 million in ~~2016,~~2017, primarily due to lower net debt partially offset by higher interest rates associated with ~~Federal~~LIBOR interest rate ~~increases partially offset by lower net debt.~~increases.

Interest Income – Interest income of ~~$0.4~~$2.0 million primarily relates to cash held by our Canadian subsidiaries and gains on investments. Interest income ~~increased~~decreased slightly from the ~~third~~first quarter of ~~2016.~~2017.

Foreign Currency — The Company’s foreign currency impact was a $2.5 million ~~gain~~loss for ~~the third~~first quarter of ~~2017,~~2018, compared to a ~~gain~~loss of ~~$1.1~~$0.1 million in the ~~third~~first quarter of ~~2016,~~2017, primarily due to fluctuations in currency exchange rates between the U.S. and Canadian dollar during the respective periods.

Other ~~(Income)~~ Expense, net — Other ~~income~~expense was ~~$0.8~~$6.2 million for the ~~third~~first quarter of ~~2017,~~2018, compared to ~~income~~expense of ~~$4.6~~$0.6 million in the ~~third~~first quarter of ~~2016.~~2017. The change was primarily due to ~~lower gains~~non-cash mark-to-market losses from hedging activities, primarily ~~foreign currency contracts,~~interest rate swaps, commodity contracts, and ~~interest rate swaps.~~foreign currency contracts.

Income Taxes — Income tax ~~expense~~benefit of ~~$1.3~~$9.8 million was recorded in the ~~third~~first quarter of ~~2017~~2018 compared to expense of ~~$15.2~~$11.5 million for the same period of ~~2016.~~2017. The effective rate was ~~4.3%~~22.3% for the ~~third~~first quarter of ~~2017~~2018 compared to ~~28.9%~~29.0% for the ~~third~~first quarter of ~~2016.~~2017. The change in the effective tax rate for the ~~three months ended September 30, 2017 as~~first quarter of 2018 compared to ~~September 30, 2016 is~~the first quarter of 2017 was primarily a result of the ~~income~~decrease in the U.S. Federal statutory tax ~~benefit from the release of reserves for unrecognized tax benefits due to the lapse of statutes~~rate and ~~a benefit from foreign tax credits on a year-over-year basis.~~an increase in non-deductible executive compensation expense. Our effective tax rate may change from period to period based on recurring and non-recurring factors including the jurisdictional mix of earnings, enacted tax legislation, state income taxes, settlement of tax audits, and the expiration of the statute of limitations in relation to unrecognized tax benefits.

The Company’s effective tax rate differs from the U.S. federal statutory tax rate primarily due to state tax expense, ~~the benefits associated with the federal domestic production activities deduction, the excess tax benefits related to share-based payments, the benefit of~~non-deductible executive compensation expense, and an intercompany financing structure entered into in conjunction with the E.D. Smith Foods, Ltd. (“E.D. Smith”) acquisition in ~~2007, and the benefit derived from foreign tax credits.~~2007.

Three Months Ended ~~September 30, 2017~~March 31, 2018 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2017 — Results by Segment

	Three Months Ended September 30,										Three Months Ended March 31,
	2017					2016					2018					2017
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
	(Dollars in millions)										(Dollars in millions)
Net sales	$	351.2		100.0	%	$	329.4		100.0	%	$	346.0		100.0	%	$	341.1		100.0	%
Cost of sales		275.1		78.3			267.0		81.1			279.3		80.7			267.9		78.5
Gross profit		76.1		21.7			62.4		18.9			66.7		19.3			73.2		21.5
Freight out and commissions		22.2		6.3			20.8		6.3			31.6		9.1			22.4		6.6
Direct selling, general, and administrative		7.0		2.0			7.8		2.3			7.1		2.1			8.9		2.6
Direct operating income	$	46.9		13.4	%	$	33.8		10.3	%	$	28.0		8.1	%	$	41.9		12.3	%

Net sales in the Baked Goods segment increased ~~$21.8~~$4.9 million, or ~~6.6%~~1.4%, in the ~~third~~first quarter of ~~2017~~2018 compared to the ~~third~~first quarter of ~~2016.~~2017. The change in net sales from ~~2016~~2017 to ~~2017~~2018 was due to the following:

	Dollars			Percent			Dollars		Percent
	(Dollars in millions)						(Dollars in millions)
2016 Net sales	$	329.4
2017 Net sales							$	341.1
Volume/mix		21.7			6.6	%		0.9		0.2	%
Pricing		(0.7	)		(0.2	)		3.1		0.9
Foreign currency		0.8			0.2			0.9		0.3
2017 Net sales	$	351.2			6.6	%
2018 Net sales							$	346.0		1.4	%

Net sales increased during the ~~third~~first quarter of 2018 compared to the first quarter of 2017 ~~compared to the third quarter of 2016~~ primarily due to favorable pricing, favorable foreign currency, and favorable volume/mix from increased distribution predominantly in the cracker and cookie ~~categories, partially offset by unfavorable pricing from competitive pressure.~~categories.

Cost of sales as a percentage of net sales ~~decreased 2.8%~~increased 2.2%, from ~~81.1%~~78.5% in the ~~third quarter of 2016 to 78.3% in the third~~first quarter of 2017 to 80.7% in the first quarter of 2018, primarily due to ~~lower~~higher commodity ~~costs (flour, sugar,~~(packaging, wheat, oils, and eggs) and warehouse costs, partially offset by lower operating costs.

Freight out and commissions paid to independent sales brokers was ~~$22.2~~$31.6 million in the ~~third~~first quarter of ~~2017,~~2018, compared to ~~$20.8~~$22.4 million in the ~~third~~first quarter of ~~2016.~~2017. Freight and commissions as a percentage of net sales increased 2.5 points year-over-year due to freight rate increases primarily reflecting the competitive current market spot rates and increased volumes.

Direct selling, general, and administrative expenses were $7.1 million in the first quarter of 2018 compared to $8.9 million in the first quarter of 2017. The decrease in direct selling, general, and administrative expenses as a percentage of net sales was ~~flat year-over-year.~~primarily due to lower spend due to cost saving activities.

Net sales in the Beverages segment decreased $18.9 million, or (7.1)%, in the first quarter of 2018 compared to the first quarter of 2017. The change in net sales from 2017 to 2018 was due to the following:

Net sales decreased during the first quarter of 2018 compared to the first quarter of 2017 primarily due to unfavorable volume/mix related to the labor dispute at a Beverage plant and competitive pressure, principally in the single serve beverages, liquid beverages, and tea categories and unfavorable pricing from competitive pressure.

Cost of sales as a percentage of net sales increased 5.5%, from 72.5% in the first quarter of 2017 to 78.0% in the first quarter of 2018, primarily due to unfavorable mix and higher commodity costs (primarily related to oils).

Freight out and commissions paid to independent sales brokers was $10.6 million in the first quarter of 2018, compared to $9.1 million in the first quarter of 2017. Freight and commissions as a percentage of net sales increased 0.9 percentage points year-over-year due to freight rate increases reflecting the competitive current market spot rates and a shift in mix from customer pick-up to delivery.

Direct selling, general, and administrative expenses were $4.8 million in the first quarter of 2018, compared to $5.8 million in the first quarter of 2017. The decrease in direct selling, general, and administrative expenses as a percentage of net sales was primarily due to lower spend due to cost saving activities.

Net sales in the Condiments segment increased $5.1 million, or 1.6%, in the first quarter of 2018 compared to the first quarter of 2017. The change in net sales from 2017 to 2018 was due to the following:

Net sales increased during the first quarter of 2018 compared to the first quarter of 2017 primarily due to favorable pricing and favorable foreign currency exchange rates, partially offset by unfavorable volume/mix from simplification and SKU rationalization and competitive pressure in the pickles, sauces, and jams categories.

Cost of sales as a percentage of net sales increased 1.6%, from 83.0% in the first quarter of 2017 to 84.6% in the first quarter of 2018, primarily due to higher commodity costs (primarily packaging and eggs), higher operating costs, and favorable foreign currency exchange.

Freight out and commissions paid to independent sales brokers was $15.8 million in the first quarter of 2018, compared to $13.4 million in the first quarter of 2017. Freight and commissions as a percentage of net sales increased 0.6 points year-over-year due to freight rate increases reflecting the competitive current market spot rates.

Direct selling, general, and administrative expenses were ~~$7.0~~$5.5 million in the ~~third~~first quarter of ~~2017 compared to $7.8~~2018 and $7.5 million in the ~~third~~first quarter of ~~2016.~~2017. The decrease in direct selling, general, and administrative expenses as a percentage of net sales was primarily due to lower spend due to cost saving activities.

	Three Months Ended September 30,										Three Months Ended March 31,
	2017					2016					2018					2017
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
	(Dollars in millions)										(Dollars in millions)
Net sales	$	244.9		100.0	%	$	234.9		100.0	%	$	277.0		100.0	%	$	324.0		100.0	%
Cost of sales		178.3		72.8			158.5		67.5			226.6		81.8			266.2		82.2
Gross profit		66.6		27.2			76.4		32.5			50.4		18.2			57.8		17.8
Freight out and commissions		10.3		4.2			6.9		2.9			13.6		4.9			15.4		4.7
Direct selling, general, and administrative		4.6		1.9			5.7		2.4			6.9		2.5			8.4		2.6
Direct operating income	$	51.7		21.1	%	$	63.8		27.2	%	$	29.9		10.8	%	$	34.0		10.5	%

Net sales in the ~~Beverages~~Meals segment ~~increased $10.0~~decreased $47.0 million, or ~~4.3%~~(14.5)%, in the ~~third~~first quarter of ~~2017~~2018 compared to the ~~third~~first quarter of ~~2016.~~2017. The change in net sales from ~~2016~~2017 to ~~2017~~2018 was due to the following:

	Dollars			Percent			Dollars			Percent
	(Dollars in millions)						(Dollars in millions)
2016 Net sales	$	234.9
2017 Net sales							$	324.0
Volume/mix		14.0			6.0	%		(9.9	)		(3.1	)%
Pricing		(4.0	)		(1.7	)		5.5			1.7
2017 Net sales	$	244.9			4.3	%
Divestiture								(42.6	)		(13.1	)
2018 Net sales							$	277.0			(14.5	)%

Net sales ~~increased~~decreased during the ~~third~~first quarter of 2018 compared to the first quarter of 2017 ~~compared~~which is mostly explained by the divestiture of the SIF business. Also contributing to the ~~third quarter of 2016 primarily due to favorable~~decrease in net sales was unfavorable volume/mix from ~~increased distribution, principally~~competitive pressure (principally in the ~~single serve beverages, creamer, broth,~~dry dinner, pasta, and ~~liquid beverages categories,~~ready-to-eat cereal categories), partially offset by ~~unfavorable~~favorable pricing ~~from competitive pressure.~~adjustments due to commodity price fluctuations.

Cost of sales as a percentage of net sales ~~increased 5.3%~~decreased 0.4%, from ~~67.5%~~82.2% in the ~~third quarter of 2016 to 72.8% in the third~~first quarter of 2017 to 81.8% in the first quarter of 2018, primarily due to ~~higher~~lower operating costs from recent restructuring and ~~unfavorable~~margin improvement activities, partially offset by higher commodity costs ~~(primarily related to oils).~~

Freight out and commissions paid to independent sales brokers was ~~$10.3~~$13.6 million in the ~~third~~first quarter of ~~2017,~~2018, compared to ~~$6.9~~$15.4 million in the ~~third~~first quarter of ~~2016. The increase is primarily related~~2017. Freight and commissions as a percentage of net sales increased 0.2 points year-over-year due to ~~increased volume year-over-year and a shift in mix from customer pick-up~~freight rate increases reflecting the competitive current market spot rates partially offset by lower volumes due to ~~delivery.~~the SIF divestiture.

Direct selling, general, and administrative expenses were ~~$4.6~~$6.9 million in the ~~third~~first quarter of 2018 compared to $8.4 million in 2017. Direct selling, general, and administrative expenses as a percentage of net sales decreased slightly compared to prior year primarily due to lower spend due to cost saving activities.

Net sales in the Snacks segment increased $3.3 million, or 1.1%, in the first quarter of 2018 compared to the first quarter of 2017. The change in net sales from 2017 to 2018 was due to the following:

Net sales increased during the first quarter of 2018 compared to the first quarter of 2017 ~~compared~~primarily due to ~~$5.7~~favorable pricing from commodity-based price increases, partially offset by unfavorable volume/mix from soft consumer trends and competitive pressure.

Cost of sales as a percentage of net sales increased 2.2%, from 91.3% in the first quarter of 2017 to 93.5% in the first quarter of 2018, primarily due to higher commodity costs (predominantly in cashews) and higher operating costs due to weather related issues.

Freight out and commissions paid to independent sales brokers was $8.1 million in the ~~third~~first quarter of ~~2016.~~2018, compared to $6.5 million in 2017. Freight and commissions as a percentage of net sales increased 0.6 percentage points year-over-year due to freight rate increases reflecting the competitive current market spot rates offset by lower volume.

Direct selling, general, and administrative expenses were $4.2 million in the first quarter of 2018 compared to $6.3 million in the first quarter of 2017. The decrease in direct selling, general, and administrative expenses as a percentage of net sales was primarily due to ~~cost saving activities.~~

Net sales in the Condiments segment increased $10.9 million, or 3.4%, in the third quarter of 2017 compared to the third quarter of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales increased during the third quarter of 2017 compared to the third quarter of 2016 primarily due to favorable volume/mix from increased distribution, predominantly in the pickles, dressings, cheese, and salsa categories, favorable pricing, and favorable foreign currency exchange rates.

Cost of sales as a percentage of net sales increased 1.9%, from 81.6% in the third quarter of 2016 to 83.5% in the third quarter of 2017, primarily due to higher commodity costs (soy bean oil and dairy) and higher operating costs.

Freight out and commissions paid to independent sales brokers was $14.8 million in the third quarter of 2017, compared to $14.3 million in the third quarter of 2016. Costs remained consistent with sales activity as freight out and commissions as a percentage of net sales was 4.4% for both the third quarter of 2017 and 2016.

Direct selling, general, and administrative expenses were $5.8 million in the third quarter of 2017 and $7.0 million in the third quarter of 2016. The decrease in direct selling, general, and administrative expenses as a percentage of net sales was primarily due to cost saving activities.

Net sales in the Meals segment decreased $63.3 million, or (18.2)%, in the third quarter of 2017 compared to the third quarter of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales decreased during the third quarter of 2017 compared to the third quarter of 2016 which is more than explained by the divestiture of the SIF business, unfavorable volume/mix from competitive pressure (principally in the ready-to-eat cereal category), and unfavorable pricing from competitive pressure.

~~Cost of sales as a percentage of net sales decreased 1.7%, from 83.8% in the third quarter of 2016 to 82.1% in the third quarter of 2017, primarily due to~~ lower ~~costs related to the SIF divestiture and favorable depreciation, partially offset by higher operating costs.~~

Freight out and commissions paid to independent sales brokers was $11.6 million in the third quarter of 2017, compared to $14.5 million in the third quarter of 2016. Freight out and commissions as a percentage of net sales was relatively flat in the third quarter of 2017 compared to the third quarter of 2016.

Direct selling, general, and administrative expenses were $7.2 million in the third quarter of 2017 compared to $8.7 million in 2016. Direct selling, general, and administrative expenses as a percentage of net sales was flat to prior year as the costs associated with the divested business decreased proportionately with the decline in net sales.

Net sales in the Snacks segment decreased $19.1 million, or (5.4)%, in the third quarter of 2017 compared to the third quarter of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales decreased during the third quarter of 2017 compared to the third quarter of 2016 primarily due to unfavorable volume/mix from soft consumer trends and the exit of low margin co-pack business, partially offset by favorable pricing from commodity-based price increases.

Cost of sales as a percentage of net sales increased 4.8%, from 90.7% in the third quarter of 2016 to 95.5% in the third quarter of 2017, primarily due to higher commodity costs (predominantly in cashews), unfavorable mix, and higher operating costs. Contributing to higher operating costs in the third quarter was the launch of a large scale private label customer in snack nuts.

Freight out and commissions paid to independent sales brokers was $8.4 million in the third quarter of 2017, compared to $8.6 million in 2016. Freight out and commissions as a percentage of net sales was relatively flat in the third quarter of 2017 compared to the third quarter of 2016.

Direct selling, general, and administrative expenses were $4.8 million in the third quarter of 2017 compared to $5.5 million in the third quarter of 2016. Direct selling, general, and administrative expenses as a percentage of net sales decreased slightly year-over-yearspend due to cost saving activities.

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Net Sales~~ ~~— Net sales increased by $208.7 million, or 4.7%, in the first nine months of 2017 compared to the first nine months of 2016. The change in net sales from 2016 to 2017 was due to the following:~~

~~The change in net sales is primarily due to an additional month of sales from the 2016 acquisition of the Private Brands Business, partially offset by~~ ~~the divestiture of the~~ ~~SIF business in the second quarter of 2017 and unfavorable pricing. Volume/mix and foreign currency was relatively flat year-over-year.~~ Included in net sales was $5.4 million of product recall reimbursement in the first nine months of 2017, compared to a $9.8 million cost in 2016, that contributed an increase of 0.3% to net sales year-over-year.

~~Cost of Sales~~ — Cost of sales as a percentage of net sales was 82.1% in the first nine months of 2017, compared to 82.4% in the first nine months of 2016. Included in cost of sales in the first nine months of 2017 was $3.0 million related to product recall reimbursement compared to expense of $5.5 million in the first nine months of 2016. Also included in cost of sales was $13.5 million of restructuring and other margin improvement activities in the first nine months of 2017 compared to $3.9 million in the prior year. Finally, included in cost of sales for the nine months ended 2016 was $8.5 million of acquisition, integration, divestiture, and related costs compared to none in 2017. These transactions, coupled with the product recall reimbursement and costs outlined above in net sales, increased cost of sales as a percentage of net sales by 0.1% in the first nine months of 2017 and 0.6% in the first nine months of 2016. The remaining 0.2% increase in cost of sales as a percentage of net sales was primarily due to higher operating costs, higher commodity costs, and unfavorable mix, partially offset by a reduction in variable incentive compensation and depreciation.

~~Operating Expenses~~ ~~— Total operating expenses were $722.0 million in the first nine months of 2017 compared to $627.8 million in the first nine months of 2016. The increase in 2017 resulted from the following:~~

Selling and distribution expenses increased $3.0 million, or 1.0%, in the first nine months of 2017 compared to the first nine months of 2016. Selling and distribution expenses as a percentage of net sales decreased to 6.4% in the first nine months of 2017 compared to 6.6% in the first nine months of 2016. The increase in selling and distribution expense dollars is primarily related to the additional month of Private Brands Business in 2017, while the decrease in selling and distribution expense as a percentage of net sales was primarily due to cost saving activities and reduced variable incentive compensation.

General and administrative expenses decreased by $15.3 million, or 6.3%, in the first nine months of 2017 compared to the first nine months of 2016. This decrease is primarily related to lower acquisition, integration, divestiture, and related costs in the first nine months of 2017 compared to the first nine months of 2016, partially offset by an additional month of Private Brands business in 2016. General and administrative expenses as a percentage of net sales decreased from 5.6% in the first nine months of 2016 to 5.0% in the first nine months of 2017 due to the change in acquisition, integration, divestiture, and related costs year-over-year. In the first nine months of 2016, the Company incurred approximately $42.0 million of acquisition, integration, divestiture, and related costs primarily related to the Private Brands Business acquisition, compared to $12.7 million in the first nine months of 2017. Excluding the impact of acquisition, integration, divestiture, and related costs, general and administrative expenses as a percentage of net sales was relatively flat year-over-year as an additional month of Private Brands business, increased stock compensation costs related to the shift of the annual grant period to the first quarter in 2017, and the build-out of the new segment structure was mostly offset by a reduction in variable incentive compensation.

Amortization expense increased $4.9 million in the first nine months of 2017 compared to the first nine months of 2016, primarily due to the amortization of intangible assets from the acquisition of Private Brands.

Other operating expense was $111.9 million in the first nine months of 2017 compared to $10.3 million in the first nine months of 2016. The increase was entirely due to a loss on the divestiture of the SIF business of $85.6 million and higher costs associated with restructuring and other margin improvement activities that were announced in recent quarters with respect to the TreeHouse 2020 margin improvement plan and the Company’s closure of the Brooklyn Park, Minnesota; Plymouth, Indiana; City of Industry, California; Ayer, Massachusetts; Azusa, California; Delta, British Columbia (frozen griddle); and Ripon, Wisconsin facilities as well as the downsizing of the Dothan, Alabama and Battle Creek, Michigan facilities. See Note 2 to our Condensed Consolidated Financial Statements for additional information regarding restructuring and margin improvement activities.

~~Interest Expense~~ — Interest expense increased to $92.9 million in the first nine months of 2017, compared to $88.0 million in 2016, due to higher average interest rates from financing the acquisition and Federal interest rate increases.

~~Interest Income~~ – Interest income of $3.5 million includes $1.6 million of interest income related to annual patronage refunds pertaining to Term Loan A. The patronage refund represents our participation in a capital plan related to our Term Loan A and is an annual payment based on a percentage of our average daily loan balance. The remaining $1.9 million in interest income primarily relates to cash held by our Canadian subsidiaries and gains on investments.

~~Foreign Currency~~ — The Company’s foreign currency impact was a $2.8 million gain for the first nine months of 2017, compared to a gain of $6.0 million in the first nine months of 2016, primarily due to fluctuations in currency exchange rates between the U.S. and Canadian dollar during the respective periods.

~~Other (Income) Expense, net~~ — Other expense was $1.0 million for the first nine months of 2017, compared to income of $0.3 million in the first nine months of 2016. The change was mostly due to hedging activities, primarily foreign currency contracts, commodity contracts, and interest rate swaps.

~~Income Taxes~~ — Income tax benefit of $9.0 million was recorded in the first nine months of 2017 compared to expense of $16.8 million for the same period of 2016. The effective tax rate was (65.2)% for the first nine months of 2017 and 24.0% for the first nine months of 2016. The change in the effective tax rate for the nine months ended September 30, 2017 compared to September 30, 2016 is primarily a result of the income tax benefits related to share-based payments, the income tax benefit from the release of reserves for unrecognized tax benefits due to the lapse of statutes, and a benefit from foreign tax credits on a year-over-year basis. Our effective tax rate may change from period to period based on recurring and non-recurring factors including the jurisdictional mix of earnings, enacted tax legislation, state income taxes, settlement of tax audits, and the expiration of the statute of limitations in relation to unrecognized tax benefits.

The Company’s effective tax rate differs from the U.S. federal statutory tax rate primarily due to state tax expense, the benefits associated with the federal domestic production activities deduction, the excess tax benefits related to share-based payments, the benefit of an intercompany financing structure entered into in conjunction with the E.D. Smith Foods, Ltd. (“E.D. Smith”) acquisition in 2007, and the benefit derived from foreign tax credits.

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016 — Results by Segment~~

Net sales in the Baked Goods segment increased $144.8 million, or 16.6%, in the first nine months of 2017 compared to the first nine months of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales increased from 2016 to 2017 mostly due to an additional month of Private Brands Business in 2017 and favorable volume/mix (predominantly in the cracker, griddle, and dough categories), partially offset by unfavorable pricing mostly from competitive pressure.

Cost of sales as a percentage of net sales decreased 0.7%, from 80.1% in the first nine months of 2016 to 79.4% in the first nine months of 2017, primarily due to lower commodity costs (flour, sugar, and eggs), partially offset by higher operating costs and the non-repeat of a rebate received in the second quarter of 2016.

Freight out and commissions paid to independent sales brokers was $63.8 million in the first nine months of 2017, compared to $54.4 million in the first nine months of 2016. The increase is primarily associated with the additional month of Private Brands Business in 2017. Freight and commissions as a percentage of net sales was relatively flat year-over-year.

Direct selling, general, and administrative expenses were $23.9 million in the first nine months of 2017 compared to $21.8 million in the first nine months of 2016. The increase in direct selling, general, and administrative expenses was primarily due an additional

~~month of Private Brands Business in 2017. Direct selling, general, and administrative expenses as a percentage of net sales was relatively flat year-over-year.~~

Net sales in the Beverages segment increased $86.4 million, or 12.8%, in the first nine months of 2017 compared to the first nine months of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales increased from 2016 to 2017 primarily due to favorable volume/mix associated with additional distribution, primarily in the single serve beverage, broth, non-dairy creamer, and tea categories, partially offset by unfavorable pricing due to competitive pressure and lower sales due to the sale of a part of the Tetra re-cart broth business associated with the divestiture of the SIF business in the second quarter of 2017.

Cost of sales as a percentage of net sales increased 3.4%, from 68.3% in the first nine months of 2016 to 71.7% in the first nine months of 2017, primarily due to higher commodity costs (primarily oils) and unfavorable mix.

Freight out and commissions paid to independent sales brokers was $28.3 million in the first nine months of 2017, compared to $20.0 million in the first nine months of 2016. Freight out and commissions paid as a percentage of net sales increased year-over-year by 0.8%. The increase is primarily related to increased volume year-over-year and a shift in mix from customer pick-up to delivery.

Direct selling, general, and administrative expenses were $15.5 million in the first nine months of 2017 and $17.7 million in the first nine months of 2016. The decrease in direct selling, general, and administrative expenses as a percentage of net sales (0.6%) was due to cost saving activities.

Net sales in the Condiments segment increased $29.8 million, or 3.1%, in the first nine months of 2017 compared to the first nine months of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales increased from 2016 to 2017 mostly due to an additional month of Private Brands Business in 2017, favorable volume/mix from increased distribution (predominantly in the pickles and dressings categories), and favorable foreign currency and pricing.

Cost of sales as a percentage of net sales increased 2.0%, from 81.4% in the first nine months of 2016 to 83.4% in the first nine months of 2017, primarily due to higher operating costs and higher commodity costs primarily for soy bean oil, cucumbers, peppers, and packaging.

Freight out and commissions paid to independent sales brokers was $42.2 million in the first nine months of 2017, compared to $41.1 million in the first nine months of 2016. Costs remained consistent with sales activity as freight out and commissions as a percentage of net sales was 4.3% for both the first nine months of 2017 and 2016.

Direct selling, general, and administrative expenses were $19.9 million in the first nine months of 2017 and $22.6 million in the first nine months of 2016. The decrease in direct selling, general, and administrative expenses as a percentage of net sales (0.3%) was due to cost saving activities.

Net sales in the Meals segment decreased $40.3 million, or (4.3)%, in the first nine months of 2017 compared to the first nine months of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales decreased from 2016 to 2017 primarily due to the divestiture of the SIF business, unfavorable volume/mix (predominantly in the cereal and pasta categories), and unfavorable pricing related to commodity-based price reductions and competitive pressure, partially offset by an additional month of Private Brands Business in 2017.

Cost of sales as a percentage of net sales decreased 1.7%, from 83.7% in the first nine months of 2016 to 82.0% in the first nine months of 2017, primarily due to an additional month of higher margin Private Brands Business and lower depreciation, commodity, and operating costs.

Freight out and commissions paid to independent sales brokers was $39.2 million in the first nine months of 2017, compared to $39.4 million in the first nine months of 2016. Freight out and commissions as a percentage of net sales was 4.4% in the first nine months of 2017 compared to 4.2% in 2016. The increase is associated with temporarily higher freight costs associated with one customer primarily in the first quarter.

Direct selling, general, and administrative expenses were $22.3 million in the first nine months of 2017 compared to $24.1 million in the first nine months of 2016. Direct selling, general, and administrative expenses as a percentage of net sales was relatively flat in the first nine months of 2017 compared to the first nine months of 2016.

Net sales in the Snacks segment decreased $27.3 million, or (2.8)%, in the first nine months of 2017 compared to the first nine months of 2016. The change in net sales from 2016 to 2017 was due to the following:

Net sales decreased from 2016 to 2017 primarily due to unfavorable volume/mix from weak consumer trends in the first nine months of 2017 compared to the prior year and the exit from low margin co-pack business, partially offset by an additional month of Private Brands Business in 2017 and favorable pricing.

Cost of sales as a percentage of net sales increased 2.2%, from 90.8% in the first nine months of 2016 to 93.0% in the first nine months of 2017, primarily due to the impact of higher commodity costs (mostly in cashews) and higher operating costs, partially offset by lapping a 2016 quality issue.

Freight out and commissions paid to independent sales brokers decreased to $22.2 million in the first nine months of 2017, compared to $23.5 million in the first nine months of 2016 primarily due to lower volumes. Freight out and commissions as a percentage of net sales was relatively flat in the first nine months of 2017 compared to the first nine months of 2016.

Direct selling, general, and administrative expenses were $18.8 million in the first nine months of 2017 compared to $17.8 million in the first nine months of 2016. The increase in direct selling, general, and administrative expenses was primarily due to an additional month of Private Brands Business in 2017. Direct selling, general, and administrative expenses as a percentage of net sales increased slightly year-over-year due to the realignment of the Company’s organizational structure and the associated build-out of the Snacks segment.

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities. The Company continues to generate substantial cash flow from operating activities and remains in a strong financial position, with resources available for reinvesting in existing businesses, conducting acquisitions, and managing its capital structure on a short and long-term ~~basis.~~basis including the repurchase of common stock and senior debt. If additional borrowings are needed, approximately ~~$729.5~~$716 million was available under the Revolving

Credit Facility as of ~~September 30, 2017.~~March 31, 2018. See Note 910 to our Condensed Consolidated Financial Statements for additional information regarding our Revolving Credit Facility. We believe that, given our cash flow from operating activities and our available credit capacity, we comply with the current terms of the Revolving Credit Facility and can meet foreseeable financial requirements.

The following table is derived from our Condensed Consolidated Statement of Cash Flows:

	Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2018			2017
	(In millions)						(In millions)
Net Cash Flows Provided By (Used In):
Operating activities	$	263.4		$	298.4		$	57.8		$	78.5
Investing activities		(95.6	)		(2,787.1	)		(41.7	)		(43.5	)
Financing activities		(98.7	)		2,497.2			(20.1	)		(30.3	)

Our cash ~~from~~provided by operations was ~~$263.4~~$57.8 million in the first ~~nine months~~quarter of ~~2017~~2018 compared to ~~$298.4~~$78.5 million in ~~2016,~~the first quarter of 2017, a decrease of ~~$35.0~~$20.7 million. The decrease is mostly attributable to lower first quarter earnings year-over-year, partially offset by improved working capital. Working capital management is focused around extending payment terms, managing inventory, and faster collection of receivables. The Company entered into an agreement (the “Receivables Sales Agreement”) to sell, on a revolving basis, certain trade receivable balances to an unrelated institution. The agreement will allow us to sell our accounts receivable to increase operating cash flow, while reducing the cost of borrowing on the Revolving Credit Facility (as defined below under “Sources of Capital”), net working capital, and interest expense. The agreement provides for the periodic sale of certain receivables on a revolving basis with a minimum funding of at least $0.5 million on each sale. During the first quarter of 2018, we sold $183.1 million, under this

program. There were no sales under this program in ~~cash~~the first quarter of 2017. We have the ability to sell up to $200 million under this program. See Note 4 to the Consolidated Financial Statements for more information regarding Receivables Sales Agreement. The management of receivables is a component of the Company’s focus on continued working capital management. The Company uses cash provided by operating activities ~~was primarily due~~ to ~~lower net income of $30.4 million mostly due to higher operating~~pay down debt, repurchase senior public debt, and ~~commodity costs. Cash provided by working capital declined $109.2 million primarily due to a build of inventory associated with recent distribution gains, partially offset by improved payable~~fund investments in property, plant, and ~~cash management resulting in a reduction in accounts payable and accrued expenses.~~

Cash used in investing activities ~~decreased~~was relatively flat year-over-year with an increase in additions to property, plant, and equipment offset by ~~$2.7 billion compared~~a decrease in additions to ~~2016, due to the acquisition of the Private Brands Business in the first quarter of 2016.~~intangible assets.

We expect capital spending programs to be approximately ~~$175~~$200 million in ~~2017.~~2018. Capital spending in ~~2017~~2018 is focused on ~~food safety, quality, productivity improvements,~~TreeHouse 2020, continued implementation of an Enterprise Resource Planning system, ~~TreeHouse 2020,~~food safety, quality, productivity improvements, and routine equipment upgrades or replacements at our plants.

Net cash used in financing activities decreased by ~~$2.6 billion~~$10.2 million in the first ~~nine~~three months of ~~2017~~2018 compared to ~~2016.~~2017 primarily due to reduced loan activity partially offset by repurchases of common stock. The Company reduced net debt by approximately ~~$300~~$275 million since ~~September 30, 2016~~March 31, 2017 consistent with our objective of using available cash to pay down outstanding debt. The cash used in 2016 was related to the Company funding the acquisition of the Private Brands Business primarily through the issuance of common stock, the 2024 Notes, and Term Loan A-2 in the first quarter.

As of September 30, 2017, $55.0 million of cash held by our foreign subsidiaries as cash and cash equivalents is expected to be used for general corporate purposes in foreign jurisdictions, including capital projects and acquisitions. The cash relates to foreign earnings that, if repatriated, would result in a tax liability. As of September 30, 2017, $2.6 million of cash is restricted from use to meet certain insurance requirements.

~~Cash provided by operating activities is used to pay down debt and fund investments in property, plant, and equipment.~~

~~Our short-term financing needs are primarily for financing working capital. As discussed in “Seasonality~~”, our financing needs are generally highest in the second and third quarters due to inventory builds, while cash flow is highest in the fourth and first quarters following the corresponding sale of this built-up inventory. We expect our Revolving Credit Facility, plus cash flow from operations, to be adequate to provide liquidity for current operations. Our long-term financing needs depend largely on potential acquisition activity.

In addition to measuring our cash flow generation and usage based upon the operating, investing, and financing classifications included in the Condensed Consolidated Statements of Cash Flows, we also measure free cash flow (a Non-GAAP measure) which represents net cash provided by operating activities less capital expenditures. We believe free cash flow is an important measure of operating performance because it provides management and investors a measure of cash generated from operations that is available for mandatory payment obligations and investment opportunities such as funding acquisitions, repaying debt, repurchasing public debt, and repurchasing our common stock.

The following table reconciles our free cash flow to cash flow provided by operating activities, the most comparable GAAP measure:

	Nine Months Ended September 30,						Three Months Ended March 31,
Free Cash Flow	2017			2016
							2018			2017
	(In millions)						(In millions)
Cash flow provided by operating activities	$	263.4		$	298.4		$	57.8		$	78.5
Less: Capital expenditures		(121.1	)		(142.8	)		(41.4	)		(43.4	)
Free cash flow	$	142.3		$	155.6		$	16.4		$	35.1

For the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2018, we generated free cash flow of ~~$142.3~~$16.4 million. Free cash flow in ~~2017~~2018 decreased ~~$13.3~~$18.7 million over the prior year primarily due to lower cash flow provided by operations.

~~At September 30, 2017, we had $120.0 million in borrowings outstanding under~~The earnings of our ~~Revolving Credit Facility, $276.7 million outstanding under Term Loan A, $172.5 million outstanding under Term Loan A-1, $973.8 million outstanding under Term Loan A-2, $400.0~~Canadian and Italian operations generate a portion of the Company’s cash. As of March 31, 2018, there was $57.9 million of ~~the 2022 Notes outstanding, $775.0 million of the 2024 Notes outstanding,~~cash and ~~$3.0 million of other obligations. In addition, at September 30, 2017, there were $50.5 million~~cash equivalents held by our foreign subsidiaries. The Tax Act imposes a one-time transition tax on cumulative foreign earnings and eliminates U.S. taxes on foreign subsidiary distributions. As earnings in ~~letters of credit under the Revolving Credit Facility that were issued but undrawn.~~

~~Also, at September 30, 2017, our Revolving Credit Facility provided~~foreign jurisdictions are now available for an aggregate commitment of $900 million, of which $729.5 million was available. Interest rates on debt outstanding under the Revolving Credit Facility, Term Loan A, Term Loan A-1, and Term Loan A-2 (collectively known as the “Amended and Restated Credit Agreement”) for the three months ended September 30, 2017 averaged 3.11%. Including the interest rate swap agreements with a weighted average fixed interest rate base of approximately 0.86% on $500 million, the average rate decreases to 2.99%.

We are in compliance with all applicable debt covenants as of September 30, 2017. From an interest coverage ratio perspective, the Company’s actual ratio as of September 30, 2017 is 105.0% higher than the minimum required level. As it relatesdistribution to the ~~leverage ratio,~~U.S. without incremental U.S. taxes, the Company ~~was 2.86% below~~no longer considers these earnings as permanently reinvested outside the ~~maximum level.~~U.S.

~~See Note 9 to our Condensed Consolidated Financial Statements~~Our short-term financing needs are primarily for ~~additional information regarding our indebtedness and related agreements.~~

In the aggregate, our sales are slightly weighted toward the second half of the year, particularly the fourth quarter, with a more pronounced impact on profitability. As our product portfolio has grown, we have shifted to a higher percentage of cold weather products. Products that show a higher level of seasonality include non-dairy powdered creamer, coffee, specialty teas, cappuccinos, hot cereal, saltine and entertainment crackers, in-store bakery items, refrigerated dough products, and certain pasta products, all of which generally have higher sales in the first and fourth quarters. Additionally, sales of broths and snack nuts are generally higher in the fourth quarter. Warmer weather products such as dressings, pickles, and condiments typically have higher sales in the second quarter, while drink mixes generally show higher sales in the second and third quarters. As a result of our product portfolio and the related seasonality, ourfinancing working capital. Our financing needs are generally highest in the second and third quarters due to inventory builds, while cash flow is highest in the fourth and first quarters following the ~~seasonality~~corresponding sale of this built-up inventory. We expect our ~~sales.~~Revolving Credit Facility, plus cash flow from operations, to be adequate to provide liquidity for current operations. Our long-term financing needs depend largely on potential acquisition activity. Additionally, the Company may, from time to time, purchase on the open market portions of its 2022 Notes and 2024 Notes at a price below the applicable redemption price set forth in the related indenture.

At March 31, 2018, we had $497.5 million outstanding under Term Loan A, $895.5 million outstanding under Term Loan A-1, $400.0 million of the 2022 Notes outstanding, $775.0 million of the 2024 Notes outstanding, and $2.8 million of other obligations. In addition, at March 31, 2018, there were $34.0 million in letters of credit under the Revolving Credit Facility that were issued but undrawn.

Also, at March 31, 2018, our Revolving Credit Facility provided for an aggregate commitment of $750 million, of which $716.0 million was available. Interest rates on debt outstanding under the Revolving Credit Facility, Term Loan A, and Term Loan A-1 (collectively known as the “Amended and Restated Credit Agreement”) for the three months ended March 31, 2018 averaged 3.22%. Including the interest rate swap agreements with a weighted average fixed interest rate base of approximately 1.40% on $875 million, the average rate decreases to 2.99%.

We are in compliance with all applicable debt covenants as of March 31, 2018. From a leverage ratio perspective, the Company was 10.5% below the maximum level set forth in the Amended and Restated Credit Agreement.

See Note 10 to our Condensed Consolidated Financial Statements for additional information regarding our indebtedness and related agreements.

We have included in this report measures of financial performance that are not defined by GAAP (“Non-GAAP”). A Non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s Condensed Consolidated Financial Statements. We believe these measures provide useful information to the users of the financial statements as we also have included these measures in other communications and publications.

For each of these Non-GAAP financial measures, we provide a reconciliation between the Non-GAAP measure and the most directly comparable GAAP measure, an explanation of why management believes the Non-GAAP measure provides useful information to financial statement users, and any additional purposes for which management uses the Non-GAAP measure. This Non-GAAP

financial information is provided as additional information for the financial statement users and is not in accordance with, or an alternative to, GAAP. These Non-GAAP measures may be different from similar measures used by other companies.

Adjusted Diluted Earnings Per Share, Adjusting for Certain Items Affecting Comparability

Adjusted earnings per fully diluted share (“Adjusted Diluted EPS”) reflects adjustments to GAAP earnings per fully diluted share to identify items that, in management’s judgment, significantly affect the assessment of earnings results between periods. This information is provided in order to allow investors to make meaningful comparisons of the Company’s earnings performance between periods and to view the Company’s business from the same perspective as Company management. This measure is also used as a component of the Board of Director’s measurement of the Company’s performance for incentive compensation purposes. As the Company cannot predict the timing and amount of charges that include, but are not limited to, items such as acquisition, integration, divestiture, and related costs, mark-to-market adjustments on derivative contracts, foreign currency exchange impact on the re-measurement of intercompany notes, or restructuring and margin improvement activities, management does not consider these costs when evaluating the Company’s performance, when making decisions regarding the allocation of resources, in determining incentive compensation for management, or in determining earnings estimates.

The reconciliation of Adjusted Diluted EPS, excluding certain items affecting comparability, to the relevant GAAP measure of diluted EPS as presented in the Condensed Consolidated Statements of Operations, is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2018			2017
	(unaudited)						(unaudited)						(unaudited)
Diluted earnings per share per GAAP	$	0.50		$	0.65		$	0.40		$	0.95		$	(0.60	)	$	0.49
Restructuring and margin improvement activities		0.35			0.10			0.68			0.23			0.68			0.19
CEO transition costs														0.23			—
Mark-to-market adjustments														0.10			—
Foreign currency loss (gain) on re-measurement of intercompany notes														0.03			(0.01	)
Acquisition, integration, divestiture, and related costs		0.07			0.08			1.71			0.90			—			0.06
Mark-to-market adjustments		(0.03	)		(0.12	)		0.01			(0.07	)
Product recall (reimbursement) costs		(0.06	)		—			(0.15	)		0.27
Foreign currency (gain) loss on re-measurement of intercompany notes		(0.07	)		0.02			(0.13	)		(0.09	)
Product recall reimbursement														—			(0.06	)
Taxes on adjusting items		(0.09	)		(0.03	)		(0.73	)		(0.39	)		(0.26	)		(0.06	)
Adjusted diluted EPS	$	0.67		$	0.70		$	1.79		$	1.80		$	0.18		$	0.61

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ the Company entered into transactions that affected the year-over-year comparison of its financial results that included restructuring and margin improvement activities, CEO transition costs, mark-to-market adjustments, foreign currency loss (gains) on intercompany notes, acquisition, integration, divestiture, and related costs, ~~mark-to-market adjustments, restructuring and margin improvement activities,~~ product recall ~~(reimbursement) costs, foreign currency (gains) loss on intercompany notes,~~reimbursement, and the related tax impact of these items.

As the Company continues to grow, consolidation, restructuring, and margin improvement activities are necessary. During the ~~third~~first quarter of ~~2017,~~2018, the Company incurred approximately ~~$20.7~~$38.6 million in costs versus ~~$5.9~~$11.0 million last year. ~~For the nine months ended September 30, 2017 and 2016, the Company incurred restructuring and margin improvement activity costs of approximately $39.5 million and $12.9 million, respectively.~~

The ~~acquisition, integration, divestiture,~~CEO transition cost line primarily relates to accelerated stock-based compensation and related costs line represents costs associated with completed and potential acquisitions, the related integration of the acquisitions, and divestitures. Costs incurred in the first nine months of 2017 primarilymodification accounting related to the ~~divestiture~~transition of the SIF business, which closed on May 22, 2017, while costs incurred in the first nine months of 2016 primarily related to the acquisition and integration of the Private Brands Business, which was acquired on February 1, 2016. Costs associated with integrating businesses into the Company’s operations are also included in this line.Chief Executive Officers.

The Company’s derivative contracts are marked-to-market each period with the changes being recorded in the Condensed Consolidated Statements of Operations. These are non-cash charges. As the contracts are settled, realized gains and losses are recognized.

The Company has Canadian dollar denominated intercompany loans and incurred foreign currency ~~gains~~losses of ~~$4.2~~$1.9 million in the ~~third~~first quarter of ~~2017~~2018 versus foreign currency ~~losses~~gains of ~~$1.4~~$0.8 million in the prior year to re-measure the loans at quarter end. ~~For the nine months ended September 30, 2017 and 2016, the Company incurred foreign currency gains of $7.6 million and $5.2 million, respectively.~~ These charges are non-cash and the loans are eliminated in consolidation.

The product recall ~~(reimbursement) costs~~reimbursement line primarily represents insurance proceeds related to an announced voluntary recall of products that may have been impacted by sunflower seeds contaminated with Listeria monocytogenes (L.mono) that were provided by a supplier. Product was distributed nationwide through retail stores. TreeHouse initiated the voluntary recall as a cautionary measure to protect public health. Related costs include, but are not limited to, customer fees, customer reimbursements, inventory write-offs, and other costs to manage the recall. The Company expects to be reimbursed for these costs and will exclude any gains from adjusted earnings in the period in which the proceeds are received, consistent with the Company’s exclusion from adjusted earnings of the costs incurred in 2016. In each of February 2017 and August 2017, the Company received a $4.0 million reimbursement ($8.0 million combined) and has included it in this line. Other product recalls during the first ~~nine~~three months of 2018 and 2017 were insignificant.

The acquisition, integration, divestiture, and related costs line represents costs associated with completed and potential acquisitions, the related integration of the acquisitions, and divestitures. Gains incurred in the first three months of 2018 primarily related to the divestiture of the SIF business and the related transition services agreement (“TSA”) revenue, while costs incurred in the first three months of 2017 ~~were insignificant.~~primarily related to the acquisition and integration of the Private Brands Business, which was acquired on February 1, 2016. Costs associated with integrating businesses into the Company’s operations are also included in this line.

The tax impact on adjusting items is calculated based upon the tax laws and statutory tax rates applicable in the tax jurisdiction of the underlying non-GAAP adjustments.

Adjusted Net Income, Adjusted EBIT, and Adjusted EBITDAS, Adjusting for Certain Items Affecting Comparability

Adjusted net income represents GAAP net (loss) income as reported in the Condensed Consolidated Statements of Operations adjusted for items that, in management’s judgment, significantly affect the assessment of earnings results between periods as outlined in the ~~Adjusted Diluted~~adjusted diluted EPS section above. This information is provided in order to allow investors to make meaningful comparisons of

the Company’s earnings performance between periods and to view the Company’s business from the same perspective as Company management. This measure is also used as a component of the Board of Director’s measurement of the Company’s performance for incentive compensation purposes and is the basis of calculating the ~~Adjusted Diluted~~adjusted diluted EPS metric outlined above.

Adjusted ~~EBITDAS~~EBIT represents adjusted net income before interest expense, interest income, and income tax ~~expense,~~expense. Adjusted EBITDAS represents adjusted EBIT before depreciation ~~and~~expense, amortization expense, and non-cash stock-based compensation expense. Adjusted EBIT and adjusted EBITDAS ~~is a~~are performance ~~measure~~measures commonly used by management to assess operating performance, and the Company believes ~~it is~~they are commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance between periods.

The following table reconciles the Company’s net (loss) income as presented in the Condensed Consolidated Statements of Operations, the relevant GAAP measure, to Adjusted net income, Adjusted EBIT, and Adjusted EBITDAS for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2018 and ~~2016:~~2017:

		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2017			2016			2017			2016				2018			2017
		(unaudited in millions)													(unaudited in millions)
Net income per GAAP		$	28.8		$	37.4		$	22.8		$	53.2
Product recall (reimbursement) costs	(1)		(3.2	)		0.1			(8.4	)		15.3
Foreign currency (gain) loss on re-measurement of intercompany notes	(2)		(4.2	)		1.4			(7.6	)		(5.2	)
Net (loss) income per GAAP															$	(34.1	)	$	28.2
Restructuring and margin improvement activities														(1)		38.6			11.0
CEO transition costs														(2)		13.0			—
Mark-to-market adjustments	(3)		(1.9	)		(6.8	)		0.6			(3.9	)	(3)		5.6			0.2
Foreign currency loss (gain) on re-measurement of intercompany notes														(4)		1.9			(0.8	)
Product recall reimbursement														(5)		—			(3.8	)
Acquisition, integration, divestiture, and related costs	(4)		3.8			4.5			98.5			50.6		(6)		(0.1	)		3.7
Restructuring and margin improvement activities	(5)		20.7			5.9			39.5			12.9
Less: Taxes on adjusting items			(5.1	)		(1.9	)		(42.0	)		(22.2	)			(14.8	)		(3.5	)
Adjusted net income			38.9			40.6			103.4			100.7				10.1			35.0
Interest expense			31.4			30.8			92.9			88.0				28.5			29.7
Interest income			(0.4	)		(0.1	)		(3.5	)		(3.5	)			(2.0	)		(2.8	)
Income taxes			1.3			15.2			(9.0	)		16.8				(9.8	)		11.5
Add: Taxes on adjusting items																14.8			3.5
Adjusted EBIT																41.6			76.9
Depreciation and amortization	(6)		65.1			73.0			199.6			203.3		(7)		58.8			69.7
Stock-based compensation expense	(7)		6.6			8.2			25.2			22.2		(8)		6.4			7.5
Add: Taxes on adjusting items			5.1			1.9			42.0			22.2
Adjusted EBITDAS		$	148.0		$	169.6		$	450.6		$	449.7			$	106.8		$	154.1

Three Months Ended

Nine Months Ended

Location in Condensed

September 30,

September 30,

Consolidated Statements of Operations

2017

2016

2017

2016

(unaudited in millions)

(1)
Product recall (reimbursement) costs
Net sales

$
(1.7
)

$
(0.1
)

$
(5.4
)

$
9.8

Cost of sales

(1.5
)

0.2

(3.0
)

5.5

(2)
Foreign currency (gain) loss on re-measurement of
intercompany notes
Gain on foreign currency exchange

(4.2
)

1.4

(7.6
)

(5.2
)
(3)
Mark-to-market adjustments
Other (income) expense, net

(1.9
)

(6.8
)

0.6

(3.9
)
(4)
Acquisition, integration, divestiture, and related costs
General and administrative

3.4

4.5

12.7

42.0

Other operating expense, net

0.6

—

85.8

—

Other (income) expense, net

(0.2
)

—

—

0.1

Cost of sales

—

—

—

8.5

(5)
Restructuring and margin improvement activities
Other operating expense, net

10.5

4.9

26.0

9.0

Cost of sales

10.2

1.0

13.5

3.9

(6)
Depreciation and amortization included as an adjusting item
Cost of sales

9.1

2.3

13.3

4.8

General and administrative

—

—

0.3

—

(7)
Stock-based compensation expense included in acquisition, integration, divestiture, and related costs
General and administrative

—

0.3

—

0.6

We also have the following commitments and contingent liabilities, in addition to contingent liabilities related to the ordinary course of litigation, investigations, and tax audits:

See Note 1517 to our Condensed Consolidated Financial Statements included herein and Note 19 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2017 for more information about our commitments and contingent obligations.

Information regarding recent accounting pronouncements is provided in Note 1921 to the Company’s Condensed Consolidated Financial Statements.

A description of the Company’s critical accounting policies is contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016. There were no material changes to~~2017. We adopted ASC 606, Revenue from Contracts with Customers, effective January 1, 2018 and have updated our ~~critical~~revenue recognition accounting ~~policies in the nine months ended September 30, 2017.~~

As discussed in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2016, the Company evaluates goodwill for impairment using an income approach, which is corroborated by a market approach. The Company believes the income approach is the most reliable indicator of the fair value of its reporting units. Key assumptions used in the income approach include growth and discount rates, margins, and the weighted average cost of capital. Historical performance and management estimates of future performance are used to determine margins and growth rates. Discount rates vary by reporting unit, with the weighted average

~~of all discount rates approximating the Company’s total discount rate. Weighted average cost of capital is determined based on a review and assessment of market and capital structure assumptions.~~

~~As discussed in greater detail in~~policy accordingly. See Note 63 to our Condensed Consolidated Financial Statements in Part I – Item 1 of this Form 10-Q, the Company has the following five operating segments as of the first quarter of 2017, which are also its reporting units: Baked Goods, Beverages, Condiments, Meals, and Snacks. Reporting units are based on the components one level below operating segments. These components have been aggregated in determining the Company’s reporting units. The change in reporting units was considered a triggering event indicating a test for ~~goodwill impairment was required as of January 1, 2017. The Company performed the first step of the impairment test, which did not result in the identification of any impairment losses.~~additional information regarding these updates.

The estimated fair value of the Snacks reporting unit exceeded its carrying value by approximately 18% as of January 1, 2017, and the reporting unit has allocated goodwill of $276.4 million. The reporting unit has not achieved the forecasted results for the nine months ended September 30, 2017. The Company’s long-term commitment to the Snacks reporting unit remains consistent. If the reporting unit does not achieve forecasted results in future periods or if other key assumptions change, the estimated fair value of the reporting unit could decline, which may result in a material impairment in a subsequent period.

We do not have any obligations that meet the definition of an off-balance sheet arrangement, other than operating leases and letters of credit, which have or are reasonably likely to have a material effect on our Condensed Consolidated Financial Statements.

From time to time, we and our representatives may provide information, whether orally or in writing, including certain statements in this Quarterly Report on Form 10-Q, which are deemed to be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Litigation Reform Act”). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available.

The words “anticipate,” “believe,” “estimate,” “project,” “expect,” “intend,” “plan,” “should,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, or intended. We do not intend to update these forward-looking statements following the date of this report.

In accordance with the provisions of the Litigation Reform Act, we are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this Quarterly Report on Form 10-Q and other public statements we make. Such factors include, but are not limited to: our level of indebtedness and related obligations; disruptions in the financial markets; interest rates; changes in foreign currency exchange rates; customer consolidation; raw material and commodity costs; competition; integration of the Private Brands ~~Business~~ acquisition and our ability to continue to make acquisitions in accordance with our business strategy or effectively manage the growth from acquisitions; changes and developments affecting our industry, including consumer preferences; the outcome of litigation and regulatory proceedings to which we may be a party; product recalls; changes in laws and ~~regulations;~~regulations applicable to us; disruptions in or failures of our information technology systems; and labor strikes or work stoppages; and other risks that are set forth in the Risk Factors section, the Legal Proceedings section, the Management’s Discussion and Analysis of Financial Condition and Results of Operations section, and other sections of this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2017, and from time to time in our filings with the Securities and Exchange Commission.

As of ~~September 30, 2017,~~March 31, 2018, the Company was party to the Revolving Credit Facility with an aggregate commitment of ~~$900~~$750 million, with an interest rate based on the Company’s consolidated leverage ratio or the Company’s Corporate Credit Rating, whichever results in lower pricing, and determined by either (i) LIBOR, plus a margin ranging from ~~1.25%~~1.20% to ~~3.00%~~1.60%, or (ii) a ~~base rate~~Base Rate (as defined in the ~~Amended and Restated~~ Credit Agreement), plus a margin ranging from ~~0.25%~~0.20% to ~~2.00%~~0.60%. The unused fee on the Revolving Credit Facility is also based on the Company’s consolidated net leverage ratio or the Company’s Corporate Credit Rating, whichever results in lower pricing, and accrues at a rate ranging from 0.20% to 0.30%. The Company was also party to Term Loan A ~~Term Loan A-1,~~ and Term Loan ~~A-2.~~A-1. Interest rates for the Term Loans are based on the Company’s consolidated leverage ratio or the Company’s Corporate Credit Rating, whichever results in lower pricing, and determined as follows: Term Loan A by either (i) LIBOR, plus a margin ranging from ~~1.25%~~1.675% to ~~3.00%~~2.075%, or (ii) a ~~base rate~~Base Rate (as defined in the ~~Amended and Restated~~ Credit Agreement), plus a margin ranging from ~~0.25%~~0.675% to ~~2.00%~~1.075 %; Interest rates for Term Loan A-1 are the same as those applicable to the Revolving Credit Facility (other than, for the avoidance of doubt, the unused fee).

In June 2016, the Company entered into $500 million of long-term interest rate swap agreements to lock into a fixed LIBOR interest rate base. Under the terms of the agreements, $500 million in variable-rate debt was swapped for a weighted average fixed interest rate base of approximately 0.86% for a period of 37 months, beginning on January 31, 2017 and ending on February 28, 2020. The borrowing cost on the swapped principal will range from ~~2.11%~~2.26% to ~~3.86%~~2.76% during the life of the swap agreement based on the credit spreads under the Amended and Restated Credit Agreement.

In February of 2018, the Company entered into an additional $1,625 million of staggered long-term interest rate swap agreements to lock into a fixed LIBOR interest rate base. Together with the existing $500 million in interest rate swaps, the weighted average fixed interest rate base is approximately 2.22% over a period of 97 months. The new swaps cover a period of seven years which began on February 28, 2018 and mature on February 28, 2025. Based on the weighted average rate of 2.22%, the borrowing cost on the swapped principal and revolver will range from 3.62% to 4.12% during the life of the swap agreement based on the credit spreads under the Amended and Restated Credit Agreement.

We do not hold any derivative financial instruments, other than the interest rate swap agreements discussed above, which could expose us to significant interest rate market risk as of ~~September 30, 2017.~~March 31, 2018. Our exposure to market risk for changes in interest rates relates primarily to the increase in the amount of interest expense we expect to pay with respect to our Amended and Restated Credit Agreement, which is tied to variable market rates. Based on our outstanding debt balance of ~~$1,543.0~~$1,393 million under the Amended and Restated Credit Agreement at ~~September 30, 2017,~~March 31, 2018 and adjusting for the impact of the ~~$500~~$875 million in interest rate swap agreements (in effect as of March 31, 2018) that have a fixed interest rate base, each 1% rise in ~~our interest~~the LIBOR rate would increase our annual interest expense by approximately ~~$10.4~~$5.2 million.

The costs of raw materials, packaging materials, fuel, and energy have varied widely in recent years and future changes in such costs may cause our results of operations and our operating margins to fluctuate significantly. When comparing the ~~third quarter of~~three month period ended March 31, 2018 to March 31, 2017, ~~to the third quarter of 2016,~~ price decreases in ~~almonds, flour, rice, grains, sugars,~~cocoa, coffee, diesel, and ~~eggs~~tomatoes were more than offset by price increases in almonds, cashews, ~~coffee, soybean and other oils, dairy,~~ corn sweeteners, dairy, durum, eggs, tropical oils, packaging (plastic containers and ~~packaging materials.~~lids, cartons, and corrugate), and soybean oil. We expect the volatile nature of these costs to continue with an overall long-term upward trend.

We manage the cost of certain raw materials by entering into forward purchase contracts. Forward purchase contracts help us manage our business and reduce cost volatility. There can be no assurance that our purchasing programs will result in the optimal price. Some of these forward purchase contracts qualify as derivatives; however, the majority of commodity forward contracts are not derivatives. Those that are derivatives generally qualify for the normal purchases and normal sales scope exception under the guidance for derivative instruments and hedging activities and, therefore, are not subject to its provisions. For derivative commodity contracts that do not qualify for the normal purchases and normal sales scope exception, the Company records their fair value on the Condensed Consolidated Balance Sheets, with changes in value being recorded in the Condensed Consolidated Statements of Operations.

~~We use a significant volume~~Our raw materials consist of ~~fruits, vegetables,~~ingredients and ~~nuts~~packaging materials. Principal ingredients used in our operations ~~as raw materials. Certain of these inputs~~include casein, cheese, cocoa, coconut oil, coffee, corn and corn syrup, cucumbers, eggs, fruit, non-fat dry milk, nuts (cashews, peanuts, pecans, and almonds), oats, palm oil, peppers, processed meats, rice, soybean oil, sugar, tea, tomatoes, and wheat (including durum wheat). These ingredients are generally purchased under ~~seasonal grower~~supply contracts, ~~with a variety of growers strategically located~~and we occasionally engage in forward buying when we determine such buying to ~~supply~~be to our production facilities. Bad weather or disease in a particular growing area can damage or destroy the crop in that area. If we are unable to buy the inputs from local suppliers, we would purchase them from more distant locations, including other locations within the United States, Mexico, or India, thereby increasing our raw material costs.advantage. When entering into contracts for input costs, the Company generally seeks contract lengths between nine and twelve months. We believe these ingredients generally are available from a number of suppliers. The cost of raw materials used in our products may fluctuate due to weather conditions, regulations, industry and general U.S. and global economic conditions, fuel prices, energy costs, labor disputes, transportation delays, political unrest, or other unforeseen circumstances. The most important

packaging materials and supplies used in our operations are composite cans, corrugated containers, glass, linerboard cartons, metal cans, metal closures, and plastics. Most packaging materials are purchased under long-term supply contracts. We believe these packaging materials are generally available from a number of suppliers. Volatility in the cost of our raw materials and packaging supplies can adversely affect our performance, as price changes often lag behind changes in costs, and we are not always able to adjust our pricing to reflect changes in raw material and supply costs.

Changes in the prices of our products may lag behind changes in the costs of our products. Competitive pressures also may limit our ability to quickly raise prices in response to increased raw materials, packaging, fuel, and energy costs. Accordingly, if we are unable to increase our prices to offset increasing costs, our operating profits and margins could be materially affected. In addition, in instances of declining input costs, customers may seek price reductions in situations where we are locked into ~~input prices~~pricing at higher costs.

The Company is exposed to fluctuations in foreign currency as a result of our Canadian and Italian subsidiaries, where the functional currency is the Canadian dollar and Euro, respectively. Items that give rise to foreign exchange transaction gains and losses primarily include foreign denominated intercompany loans and input costs. The foreign exchange gain or loss on intercompany loans and foreign denominated working capital balances are recorded in the ~~Gain~~Loss on foreign currency exchange line of the Condensed

Consolidated Statements of Operations where the Company recognized ~~gains~~losses of ~~$2.8~~$2.5 million and ~~$6.0~~$0.1 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively.

A significant portion of the Company’s Canadian operations purchase their inputs and packaging materials in U.S. dollars, resulting in higher costs when the U.S. dollar strengthens as compared to the Canadian dollar. The Company estimates the impact on input costs (and Cost of sales) to be ~~approximately $2~~less than $2.0 million for each one cent change in the exchange rate between the U.S. and Canadian dollar.

Also impacted by foreign exchange is the translation of the Company’s Canadian and Italian financial statements. ~~For the nine months ended September 30, 2017 and 2016, the~~The Company recognized translation losses of $10.1 million and gains of ~~$34.5~~$3.6 million for the three months ended March 31, 2018 and ~~$21.6 million,~~2017, respectively, as a component of Accumulated other comprehensive loss.

The Company enters into foreign currency contracts due to the exposure to Canadian/U.S. dollar currency fluctuations on cross border transactions. The Company does not apply hedge accounting to these contracts and records them at fair value on the Condensed Consolidated Balance Sheets. The contracts are entered into for the purchase of U.S. dollar denominated raw materials by our Canadian subsidiaries. As of ~~September 30, 2017,~~March 31, 2018, the Company had ~~$46.5~~$63.7 million of U.S. dollar foreign currency contracts outstanding.

The Company maintains a system of disclosure controls and procedures to give reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the ~~Securities~~ Exchange Act ~~of 1934~~ is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. These controls and procedures also give reasonable assurance that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures.

As of ~~September 30, 2017,~~March 31, 2018, the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), together with management, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the CEO and CFO concluded that these disclosure controls and procedures are effective.

There has been no change in the Company’s internal control over financial reporting that occurred during the quarter ended ~~September 30, 2017~~March 31, 2018 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

We have reviewed the accompanying condensed consolidated balance sheet of ~~TreeHouse~~Treehouse Foods, Inc. and subsidiaries (the "Company") as of ~~September 30, 2017, and~~March 31, 2018, the related condensed consolidated statements of operations, ~~and~~ comprehensive (loss) income, ~~(loss) for the three-month~~ and ~~nine-month periods ended September 30, 2017 and 2016, and of~~ cash flows, for the ~~nine-month~~three-month periods ended ~~September 30,~~March 31, 2018 and 2017, and ~~2016. This~~the related notes and schedules (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information isfor it to be in conformity with accounting principles generally accepted in the ~~responsibility~~United States of ~~the Company’s management.~~America.

We ~~conducted our reviews~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of December 31, 2017, and the related consolidated statements of operations, comprehensive income (loss), and cash flows for the year then ended (not presented herein); and in our report dated February 20, 2018, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2017, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial information taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of TreeHouse Foods, Inc. and subsidiaries as of December 31, 2016, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 16, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2016 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Litigation, Investigations and Audits — On November 16, 2016, a purported TreeHouse shareholder filed a putative class action captioned Tarara v. TreeHouse Foods, Inc., et al., Case No. 1:16-cv-10632, in the United States District Court for the Northern District of Illinois against TreeHouse and certain of its officers. The complaint, amended on March 24, 2017, is purportedly brought on behalf of all purchasers of TreeHouse common stock from January 20, 2016 through and including November 2, 2016, asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seeks, among other things, damages and costs and expenses. On December 22, 2016, another purported TreeHouse shareholder filed an action captioned Wells v. Reed, et al., Case No. 2016-CH-16359, in the Circuit Court of Cook County, Illinois, against TreeHouse and certain of its officers. This complaint, purportedly brought derivatively on behalf of TreeHouse, asserts state law claims against certain officers for breach of fiduciary duty, unjust enrichment, and corporate waste. On February 7, 2017, another purported TreeHouse shareholder filed an action captioned Lavin v. Reed, Case No. 17-cv-01014, in the Northern District of Illinois, against TreeHouse and certain of its officers. This complaint, like Wells, is purportedly brought derivatively on behalf of TreeHouse, and it asserts state law claims against certain officers for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and corporate waste.

Additionally, due to the similarity of the complaints, the parties in WellsandLavin have entered stipulations deferring the litigation until the earlier of (i) the court in Public Employees’ entering an order resolving defendants’ anticipated motion to dismiss therein or (ii) plaintiffs’ counsel receiving notification of a settlement of Public Employees’ or until otherwise agreed to by the Parties. The ~~next~~parties filed a joint status ~~date in~~ ~~Wells~~ ~~is April 27,~~report on the progress of the related litigation on October 26, 2017. The parties filed an additional status report with the Court on March 12, 2018. There is no set status date in Lavin at this ~~time, but the parties are directed to file a joint status report on the progress of the related litigation by October 26, 2017, after which point the~~ ~~Lavin~~ ~~court could set a new status date.~~time.

In addition, we are party to a variety of legal proceedings arising out of the conduct of our business. While the results of proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on our consolidated financial statements, results of operations, or cash flows.

Information regarding risk factors appears in Management’s Discussion and Analysis of Financial Condition and Results of Operations — Information Related to Forward-Looking Statements, in Part I — Item 2 of this Form 10-Q, and in Part I — Item 1A of the TreeHouse Foods, Inc. Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2017. There have been no material changes from the risk factors previously disclosed in the TreeHouse Foods, Inc. Annual Report on Form 10-K for the year ended December 31, ~~2016, with the exception of the following:~~2017.

~~Our TreeHouse 2020 restructuring plan could result, from time to time, in the impairment~~Item 2. Unregistered Sale of ~~assets, including goodwill~~Equity Securities and ~~other intangible assets, and we may not realize some or all~~Use of ~~the anticipated benefits of this plan in the anticipated time frame or at all.~~Proceeds

On ~~August 3,~~November 2, 2017, the Company announced that the ~~TreeHouse 2020 restructuring plan, which will be executed in multiple phases over~~Board of Directors adopted a stock repurchase program. The stock repurchase program authorizes the next several years. The plan targets a 300 basis point operating margin improvement by the end of 2020 through a comprehensive program of category and customer portfolio management, as well as manufacturing and supply chain optimization. Phase 1 of TreeHouse 2020 consists of the closureCompany to repurchase up to $400 million of the Company’s ~~Brooklyn Park, Minnesota and Plymouth, Indiana facilities as well as the downsizing of the Dothan, Alabama facility. TreeHouse 2020 could result,~~common stock at any time, or from time to ~~time,~~time. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in ~~significant financial charges for~~accordance with Rules 10b5-1 and 10b-18 under the ~~impairment~~Exchange Act. The size and timing of ~~assets, including goodwill~~any repurchases will depend on price, market and business conditions, and other ~~intangible assets.~~factors. The ~~calculation~~Company is authorized to enter into an administrative repurchase plan for $50 million of ~~anticipated charges, as well as cost savings and other benefits, resulting from our corporate restructuring are based on estimates and assumptions which are subject to~~the $400 million in the fourteen months following

~~uncertainties. If any~~November 6, 2017. The Company plans to repurchase $50 million of ~~our estimates or assumptions prove~~shares through the plan and up to another $100 million opportunistically (total annual cap of $150 million). Any shares repurchased will be ~~inaccurate, we~~held as treasury stock.

The following table presents the total number of shares of common stock purchased during the first quarter of 2018, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, and the approximate dollar value of the maximum number of shares that may ~~incur greater than expected charges, which could have a material adverse effect on our financial condition and results of operations.~~yet be purchased under the share repurchase program:

~~Events and circumstances, such as financial or strategic difficulties, delays and unexpected costs may occur that could result in our not realizing all or any~~

For the three months ended March 31, 2018, the Company repurchased approximately 0.4 million shares of the anticipated benefits on our expected timetable or at all, and there can be no assurance that any benefits we realize from these restructuring efforts will be sufficient to offset the restructuring charges and other costs that we expect to incur. If our restructuring measures are not successful, we may need to undertake additional cost reduction efforts, which could result in future charges. If we fail to realize the anticipated benefits from these measures, our financial condition and operating results may be adversely affected.common stock for a total of $17.1 million.

In addition, we expect that our restructuring plan will require a substantial amount of management and operational resources. These and related demands on our resources may divert the Company’s attention from existing core businesses, potentially disrupting our operations and adversely affecting our relationships with suppliers and customers. As a result, our financial condition, results of operations or cash flows may be adversely affected.

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware	20-2311383
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

2021 Spring Road, Suite 600
Oak Brook, IL	60523
(Address of principal executive offices)	(Zip Code)

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting Company	☐
(Do not check if a smaller reporting company)

Emerging growth company	☐

	Page
Part I — Financial Information

Item 1 — Financial Statements (Unaudited)	3

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	3534

Item 3 — Quantitative and Qualitative Disclosures About Market Risk	5348

Item 4 — Controls and Procedures	5449

Report of Independent Registered Public Accounting Firm	5550

Part II — Other Information

Item 1 — Legal Proceedings	5651

Item 1A — Risk Factors	5651

Item 2 — Unregistered Sale of Equity Securities and Use of Proceeds	51

Item 6 — Exhibits	5753

Signatures	5854

	(In millions)
Cash	$	43.3
Receivables		162.7
Inventory		443.7
Property, plant, and equipment		809.6
Customer relationships		510.9
Trade names		33.0
Software		19.6
Formulas		23.2
Other assets		50.2
Goodwill		1,141.2
Assets acquired		3,237.4
Deferred taxes		(152.8	)
Assumed current liabilities		(246.6	)
Assumed long-term liabilities		(150.3	)
Total purchase price	$	2,687.7

Condensed Consolidated Balance Sheets (in millions)
	As of the Period Ended March 31, 2018
	Unadjusted		Adoption of ASC 606		Effect of Change Higher / (Lower)
Receivables, net	$	294.2	$	345.2	$	51.0
Accounts payable and accrued expenses	$	597.7	$	648.7	$	51.0

		Three Months Ended March 31, 2018		Three Months Ended March 31, 2017
	(In millions)
Structure to Win		$	8.4	$	—
TreeHouse 2020			27.7		—
Other Restructuring and Plant Closing Costs			2.5		11.0
Total		$	38.6	$	11.0

	Nine Months Ended September 30, 2016
	(In millions, except per share data)
Pro forma net sales	$	4,722.4
Pro forma net income	$	74.9
Pro forma basic earnings per common share	$	1.32
Pro forma diluted earnings per common share	$	1.30

				Weighted
				Average
	Performance			Grant Date
	Units			Fair Value
	(In thousands)
Unvested, at December 31, 2016		246		$	85.16
Granted		114			86.66
Vested		(72	)		79.89
Forfeited		(18	)		87.02
Unvested, at September 30, 2017		270			86.23

			Three Months Ended
		Location in Condensed	March 31,
		Consolidated Statements of Operations	2018			2017
			(unaudited in millions)
(1)	Restructuring and margin improvement activities	Other operating expense, net	$	28.9		$	6.8
		Cost of sales		9.7			4.2
(2)	CEO transition costs	General and administrative		13.0			—
(3)	Mark-to-market adjustments	Other expense, net		5.6			0.2
(4)	Foreign currency loss (gain) on re-measurement of intercompany notes	Loss on foreign currency exchange		1.9			(0.8	)
(5)	Product recall reimbursement	Net sales		—			(2.4	)
		Cost of sales		—			(1.4	)
(6)	Acquisition, integration, divestiture, and related costs	General and administrative		(0.1	)		3.6
		Other operating expense, net		—			0.1
(7)	Depreciation included as an adjusting item	Cost of sales		8.2			2.7
(8)	Stock-based compensation expense included as an adjusting item	General and administrative		9.9			—

Period	Weighted Average Price Paid per Share		Total Number of Shares Purchased		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Maximum Number of Shares that may yet be Purchased under the Program
			(in millions)		(in millions)		(in millions)
January 1 through January 31, 2018	$	48.84		0.2		0.2	$	362.5
February 1 through February 28, 2018	$	45.96		0.1		0.1	$	358.3
March 1 through March 31, 2018	$	39.14		0.1		0.1	$	354.2
Total 2018 Activity	$	45.41		0.4		0.4	$	354.2


10.1	Amended and Restated Employment Agreement, dated as of February 20, 2018, between TreeHouse Foods, Inc. and Sam K. Reed (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated February 21, 2018).**

10.2	Amended and Restated Employment Agreement, dated as of February 20, 2018, between TreeHouse Foods, Inc. and Thomas E. O’Neill (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated February 21, 2018).**

10.3	Amended and Restated Employment Agreement, dated as of February 20, 2018, between TreeHouse Foods, Inc. and Matthew Foulston (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated February 21, 2018).**

10.4	Employment Agreement, dated as of March 2, 2018, between TreeHouse Foods, Inc. and Steven Oakland (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated March 5, 2018).**

10.5	First Amendment to Amended and Restated Employment Agreement, dated as of March 4, 2018, between TreeHouse Foods, Inc. and Sam K. Reed (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated March 5, 2018).**

12.1*	Computation of Ratio of Earnings to Fixed Charges.

15.1*	Awareness Letter from Deloitte & Touche LLP regarding unaudited financial information.

18.1*	Preferability letter from Deloitte & Touche LLP regarding change in inventory costing.

31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*	XBRL Instance Document.

101.SCH*	XBRL Taxonomy Extension Schema Document.

101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.

	(In millions)
2018	$	85.0
2019		82.5
2020		80.3
2021		71.5
2022		67.6