TreeHouse Enterprise StrategySelection and Simple Truth. W. RODNEY MCMULLEN Chairman & CEO, Kroger...

TREEHOUSE FOODS

F E B R U A R Y 2 1 , 2 0 1 9

C O N S U M E R A N A LY S T G R O U P O F N E W YO R K C O N F E R E N C E

SAFE HARBOR STATEMENTFrom time to time, we and our representatives may provide information, whether orally or in writing, including certain statements in this Investor Day presentation

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 presentation 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; our

ability to continue to make acquisitions in accordance with our business strategy; 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 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 our Quarterly Report on Form 10-Q, our Annual

Report on Form 10-K for the year ended December 31, 2018, and from time to time in our filings with the Securities and Exchange Commission.

2

3

STEVE OAKLANDCHIEF EXECUTIVE OFFICER & PRESIDENT

3

WHY PRIVATE LABEL

P R I V A T E L A B E L P R O V I D E S

C O N S U M E R SP R I V A T E L A B E L H E L P S

R E TA I L E R S

4

C U STO M E RS A R E CO M M I T T E D TO T H E

G ROW T H O F P R I VAT E L A B E L

Wal-Mart has increased its

focus on private labels in an

effort to boost quality and

profit margins in the category,

which is vital when competing

with online retailers.

DOUG MCMILLON

Walmart CEOQ1 2017

“Customers love our brands

better than the national

brands and better than other

private label offerings. We are

especially focused on our top

brands of Kroger, Private

Selection and Simple Truth.

W. RODNEY MCMULLEN

Chairman & CEO, KrogerJune 2018

We pioneered a grocery

model built around value,

convenience, quality and

selection and now Aldi is one

of America’s favorite and

fastest growing retailers.

We’re growing at a time when

other retailers are struggling.

JASON HARTCEO, Aldi

June 2017

By 2020, we intend to have

50% of our own-brand sales

coming from healthier

products. We are the only

retailer that dares to set a

hard target of this kind.

DICK BOERAhold Delhaize CEO

Q2 2018

“ “ “

5

E U RO P EA N P R I VAT E L A B E L P E N E T R AT I O N I N D I C AT E S

U P S I D E O P P O RT U N I T Y I N N O RT H A M E R I C A

18 18 18 19 20 21 21 2123 24 25 25 26 26 27 27

3032 32

36

41 42 43

USA

Can

ada

Co

lum

bia

Ital

y

Sou

th A

fric

a

Au

stra

lia

Po

lan

d

Cze

ch R

ep

.

Slo

vaki

a

No

rway

Hu

nga

ry

Fin

lan

d

Fran

ce

Swe

de

n

De

nm

ark

Ne

the

rlan

ds

Po

rtu

gal

Be

lgiu

m

Au

stri

a

Ge

rman

y

UK

Spai

n

Swit

zerl

and

2016 Private Label Dollar Share by Country

Source: Nielsen Retail Hot Buttons, Q4 2017. Data refreshed through calendar year 2016.6

7

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

10 YEARS OF INCREASING PRIVATE LABEL SHARE PENETRATION WITH CONTINUED GROWTH ANTICIPATED

Private Label Dollar Share

14.7%

18.6%

Source: MULO+C IRI, Consumer Edge. Excludes commodity categories such as dairy and bread.

ABOUT TREEHOUSE

WE HAVE AN UNMATCHED PORTFOLIO ACROSS 32 FOOD & BEVERAGE CATEGORIES

BAKED GOODS

Refrigerated Dough

Griddle

In-Store Bakery

Pita

Pretzels

Cookies

Crackers

Other

Indicates an area where we are #1 in private label

Indicates Clean Label or Better-For-You Offerings

BEVERAGES

Creamers

Powdered Beverages

SS Beverages

Liquid Beverages

Other Blends

Broth

Tea

CONDIMENTS

Pickles

Pourable Dressings

Preserves

Tomato Sauces

Spoonable Dressings

Salsa

Syrups

Cheese/Pudding

Sauces

MEALS

Pasta

Dry Dinners

Boullion

Hot Cereal

RTE Cereal

SNACKS

Snack Nuts

Trail Mix

Bars

PRIVATE LABEL LEADERSHIP POSITIONS IN 22 CATEGORIESCLEAN LABEL AND BETTER-FOR-YOU IN 26 CATEGORIES 9

WHERE WE ARE IN THE STORE

REFRIGERATED

SNACKS

PRODUCE

FROZEN

IN-STORE BAKERY

DELI

CONDIMENTS

MEALS

BEVERAGES

BAKED GOODS

BROTH

ADDING CAPACITY

Single serve coffee and tea

Frozen waffles

Snack bars

Broth

Ready-to-drink beverages

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W E H AV E G RO W N TO B E T H E L A RG E S T P R I VAT E L A B E L FO O D & B E V E R AG E M A N U FAC T U R E R I N N O RT H A M E R I C A

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$708$939

$1,158$1,501 $1,512

$1,817$2,050 $2,182 $2,294

$2,946$3,206

$6,175 $6,307

$5,812

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

A NEW TREEHOUSE

12

Make high quality food and beverages

affordable to all

P U R P O S E

V I S I O N

Be the undisputed solutions leader for

custom brands

M I S S I O N

Create value as our customers’ preferred

manufacturing and distribution partner

providing thought leadership, superior

innovation and a relentless focus on execution

OPERATIONAL EXCELLENCE

PEOPLE & TALENT

COMMERCIAL EXCELLENCE

OPTIMIZED PORTFOLIO

T R E E H O U S E E N T E R P R I S E

S T R A T E G Y

Deliver shareholder value through a performance-

based culture

OPTIMIZED PORTFOLIO

COMMERCIAL EXCELLENCE /

PEOPLE & TALENT

REVENUE & EARNINGS GROWTH


DELIVER THE BENEFITS OF SCALE

Pivot THS2020 to more rapid payback projects

From plant closures to accelerated TMOS rollout

Manufacturing, logistics and distribution excellence

IMPROVE THE PROFILE OF THE PORTFOLIO

Strategic review of Snacks

Evaluate additional divestitures of up to $300m in revenue

Provides ~ 200 bp EBITDA margin improvement with

negligible EPS reduction

FOCUS ON THE CUSTOMER

4 divisions

Best in class go-to-market capability

Optimize administrative footprint

Further SG&A reductions

RETURN TREEHOUSE TO GROWTH

1-2% revenue growth post 2019

>10% EPS growth

~$300 m in free cash flow

Smaller bolt-on synergistic acquisitions over time

13

THE WAY FORWARD

C U S T O M E R C E N T R I C C U L T U R E

THE PATH TO 1 -2% ORGANIC GROWTH POST 2019

Note: Retail CAGR uses IRI universe, with panel data for major untracked customers (Costco, Aldi, TJ), L52 as of Q3 2018.

Hold share case assumes 2018-2019 % change is annualized. Certain small or newly-defined category growth rates unknown.14

1-2% ORGANIC GROWTH

2018 2019 2020 2021

THS Net Sales ScenariosExcluding Snack Nuts / Trail Mix

(Extrapolated Based on Current 2Y CAGR, Excludes SIF)

THS Holds Share in PL+2.2% CAGR

THS: Trailing 2Y TrendIncl. SKU Rat. Effects-2.3% CAGR

THS: Trailing 2Y Trend Excl. SKU Rat. Effects-0.6% CAGR

$5.0 B

$4.8 B

$4.6 B

$4.4 B

FOUNDATION INVESTMENTS THROUGH

TREEHOUSE 2020 AND STRUCTURE TO WIN

PLANT CLOSINGS

Ayer, MAAzusa, CARipon, WIDelta, BC

Brooklyn Park, MNPlymouth, IN

Dothan, AL (partial)

Announced/OngoingBattle Creek, MI

Visalia, CA

P R O G R E S S T O D AT E

WAREHOUSE CONSOLIDATION

12 closed in 2018

Reduced inventory levels by $138 m over

the last 2 years

SIMPLIFY THE PORTFOLIO

OPTIMIZE THE NETWORK

INCREASE AGILITY IN DELIVERY

BUILD CONTINUOUS

IMPROVEMENT CULTURE

SYSTEMS SIMPLIFICATION

SKU REDUCTION

27% of SKUs

Sold McCann’s

TMOS(TreeHouse

Management Operating Structure)

14 plants as of YE1812 plants in FY19All plants by YE20

Dedicated Continuous Improvement Group

IT PLATFORMS

100% Order-to-Cash 2016: 13 mfg ERPs2018: 7 mfg ERPs

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STRUCTURE TO WIN

ADMINISTRATIVE COST REDUCTION

~$75m savings in 2018$20m target

net savings in 2019Cumulative 2 year SG&A

reduction of ~20%

Consolidate administrative footprint

Align division support structure

TMOS FULL IMPLEMENTATION

PLANT/LINE NETWORK OPTIMIZATION

WORKSTREAM

Payback timeframe

2-3 years <1 year

To date

YE19

6 closures

2 closures(Visalia, Battle Creek)

14 plants

29 plants

YE20 All N. America plantsTotal network = 46 plants

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PIVOT FROM PLANT CLOSURE FOCUSTO ACCELERATED TMOS ROLL -OUT

W E R E M A I N C O M M I T T E D T O 3 0 0 B P S O F M A R G I N I M P R O V E M E N T T H R O U G H 2 0 2 0G I V E N C O N S TA N T V O L U M E , P R I C E & M I X

MANUFACTURING IS ON A CONTINUOUS IMPROVEMENT JOURNEY

TMOS

Metrics

Communication

Engagement

Cadence

P E R FO R M A N C E I M P ROV E M E N T TO O L B OX

M A I N T E NA N C E & E Q U I P M E N T R E L I A B I L I T Y

QUALITY SPEED EFFICIENCY COST LESS WASTE

Discovery | Profit Improvement Teams | Line Studies | Speed Trials | Cycle Time Reduction | 5 S | Center-Lining | Measles Maps | Process Maps | SMED

T I M E

L E A N M A N U FAC T U R I N G

18

BUILDING A PROCESS DRIVEN

CULTURE

19

BEST SERVICE LEVELS SINCE Q1 17 WITH MUCH LOWER INVENTORY LEVELS

90

91

92

93

94

95

96

97

98

99

100

Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

Quarterly Average Order Fill Rate

Fill Rates % Target 98.1%

COMMERCIAL EXCELLENCE

AND PEOPLE & TALENT

2121

WE MUST RE-IGNITE TOP LINE GROWTH

21

GROW SHARE

Capturing additional distribution where we

have a right to win

GROW THE CATEGORY

Creating successful products that lead to

organic growth and stable margins

INNOVATION AND

ADJACENCIES

Lead the development of private brands into new categories and formats

ACQUIRE

Bolt-on, smaller, synergistic, margin

accretive acquisitions over time

~$ 1B PROFITABLE REVENUE OPPORTUNITY

Consumer dynamics

Shopper Demographics

Understand the channel

Organic

Better-for-you

Clean label

Premium

Packaging

Flavors

Commercialization

Customer service

Supply chain solutions

Certifications

Verifications

Monitoring

Documentation

Scale

Transparency

INNOVATIONQUALITY AND

SAFETY

COMPETITIVE

COSTS

UNDERSTAND

CUSTOMERS’

NEEDS

EXECUTION

COMMERCIAL EXCELLENCE: BEING A SOLUTIONS PROVIDER

VALUE-BASED PRIVATE BRANDS

Profit driver

Consumer compares prices on shelf

Basic items and formats

EXPERIENCE-BASED PRIVATE BRANDS

Differentiator for retailers

Consumer is engaged store-wide

Innovative and differentiated products

EMERGING PRIVATE BRANDS STRATEGY

Variable development by category

Occasional price tiers

Retailer incentives may be mixed

PRIVATE BRANDS CONTINUE TO EVOLVE

CUSTOMERS’ PRIVATE BRANDS MODELS

PriceCustomer

Service PriceCustomer

Service

Category Management

PriceCustomer

Service

Category Management Innovation

HOW WE RESOURCE

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HOW WE LEVERAGE SCALE

PRIVATE BRAND

COMPETITION

CONSUMER & SHOPPER INSIGHTS

NBE

SERVICE

PRICE COMPETITIVE

CATEGORY KNOWLEDGEMULTI-CATEGORY SUPPLY

CHAIN INTEGRATION

INNOVATION EXPERTISE

PROCUREMENT EXPERTISE AND PARTNERSHIPS

Privately Owned

Responsive

MULTI-CATEGORY R&D CAPABILITY Single Category

Supplier

R&D Support

OPTIMIZING THE GO-TO-MARKET PLATFORM

Approached the Customer as

5 Divisions Plus Strategic Sales Lead

One Face to Each Customer With Clearly

Aligned Resources and Ownership

25

CUSTOMER

Division

Division

DivisionDivision

Strategic Sales

?Division

CUSTOMER

Sales

4 Divisions Finance Supply Chain

OUR GO -TO-MARKET PLATFORM WILL LEAD US TO STRONGER, MORE VALUABLE PARTNERSHIPS

GROW SHARE

Capturing additional distribution where we

have a right to win

GROW THE CATEGORY

Creating successful products that lead to organic growth and

stable margins

INNOVATION AND ADJACENCIES

Lead the development of private brands into new categories and formats

26

COMMERCIAL AND


ALIGNS ALL OF OUR

PEOPLE AND CULTURE

Aligned incentives

Clear decision ownership

Strong operating principles

P E R FO R M A N C E BAS E D C U LT U R E

27

28

MATTHEW FOULSTONEXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER

EXAMINING AND RESHAPING OUR PORTFOLIO

GENERATES CASH FOCUS TO GROW

CHANGE COURSE GROWTH BETSWeakens

Value

GeneratesValue

MARGIN

Limited High

GROWTH

Other businesses< $300m in revenue

Premium Nuts & Trail Mix ~$1B in revenue

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ST RAT EG I C REV I EW O F S NAC K N U TS & T R AI L M I X

Premium Nuts

Trail Mix

Peanuts

Other Snacks

SNACK NUTS & TRAIL MIX

BUSINESS

* Does not include bars

share in private label snack nuts and trail

mix segments

#12017-2022 U.S.

private label nut and trail mix

forecasted CAGR

~4%

2018E net sales

~$1Bdedicated employees

~1,200

strategically located manufacturing

plants with broad capabilities

4customers

account for 95% of the revenue

25

OVERVIEW

30

31

WE MADE A GREAT DEAL OF PROGRESS IN 2018

Met or exceeded quarterly financial guidance all year

Strong cash performance has enabled net debt reduction of over $800 million since the Private Brands acquisition

Communicated vision and strategy for achieving both near term and longer term goals in December

Exploring strategic options for the Snack Nuts and Trail Mix business

Consolidated 3 manufacturing and 12 warehouse locations and optimized administrative footprint (Omaha; pending St. Louis)

Implemented TreeHouse Management Operating System (TMOS) at 14 sites

100% SAP Order to Cash

Full year Structure to Win savings exceeded original target

DELIVERED FY 18 ADJUSTED EPS OF $2.20,

ABOVE THE MIDPOINT OF $2.05 TO $2.25 GUIDANCE

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2018 RESULTS SCORECARD

2018 Guidance communicated on Q3 18 earnings call

Adjusted1 Results Result

Net SalesLow end of

$5.8 - $6.0 b$5.8 b ✓

EBIT $265 - $290 m2 $266 m ✓

EBIT Margin 4.6% - 4.8%2 4.6% ✓

Depreciation and Amortization ~ $240 - $250 m $234 m ✓

Net Interest Expense 3 $116 - $118 m $112 m ✓

Tax Rate < 25% 21% ✓

Diluted EPS $2.05 - $2.25 $2.20 ✓

Capital Expenditures ~ $190 m $196 m ✗1 Adjusted for items impacting comparability included in corporate unallocated expense. A reconciliation of Adjusted EBIT, Adjusted Depreciation and Amortization, Adjusted Net Interest Expense, Adjusted Tax Rate and Adjusted Diluted EPS to the most comparable GAAP measure is provided in the Appendix.2 Guidance as of Q2 18 earnings call; no subsequent update.3 Includes $3.8 m loss on sale related to accounts receivable monetization program.

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Q4 16 Q4 17 Q4 18

B/(W) vs Q4 17

B/(W) vs Q4 16

Accounts Receivable 2 (487)$ (387)$ (351)$ 36$ 136$

Inventory (978) (918) (840) 78 138

Accounts Payable 458 451 578 3 127 120

Working Capital (1,007)$ (854)$ (613)$ 241$ 394$

REDUCED NET DEBT BY $804 MILLION SINCE THE PRIVATE BRANDS ACQUISITION AND BY $285 MILLION IN 2018;

REDUCED INVENTORY BY $138 MILLION SINCE 2017 AND BY $78 MILLION IN 2018

$2,961

$2,157

Q1 2016 Q4 2018

Net Debt 1

($ in mil)Working Capital

($ in mil)

1 Net debt reflects total outstanding debt excluding deferred financing costs less cash and cash equivalents.2 Q4 2017 and 2016 A/R balance adjusted to reclassify certain customer receivables to liabilities related to trade promotional activity due to adoption of the new revenue recognition standard. Adjustment made only for comparative purposes within this presentation.3 Includes $119 m related to accounts receivable monetization program whereby both payment from bank and payment from customer were received and are reflected in 2018 balance sheet.

$804

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2019 GUIDANCE DETAIL

FY 2019 E

Net Sales $ 5.35 - $ 5.75 b

Adjusted EBIT $ 290 - $ 325 m

Adjusted EBIT Margin 5.4 % - 5.7 %

Depreciation and Amortization $ 240 - $ 250 m

Net Interest Expense $ 115 - $ 120 m

Tax Rate 23 % - 24 %

Adjusted Diluted EPS $ 2.35 - $ 2.75

Capital Expenditures ~ $190 m

Free Cash Flow 1 $ 150 - $ 200 m

1 Free cash flow is defined as operating cash flow less capital expenditures.

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Long-term growth goals

beyond 2019 include:

1-2% organic revenue

growth

>10% EPS growth

~$300 m of annual free

cash flow

KEY TAKEAWAYS

A New TreeHouse with

Purpose, Vision and

Mission

Customer centric strategy

focused on commercial

and operational excellence,

optimized portfolio and

investment in people and

talent

Delivered FY 18 adjusted

EPS of $2.20; Met or

exceeded quarterly

financial guidance all year

Strong cash performance

has enabled net debt

reduction of over $800

million since the Private

Brands acquisition

FY19 revenue guidance of

$5.35 - $5.75 b and

EPS of $2.35 to $2.75

Q1 19 guidance of

$0.05 - $0.15

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COMPARISON OF ADJUSTED INFORMATION TO GAAP INFORMATION

The Company has included in this release measures of financial performance that are not defined by GAAP (“Non-GAAP”). A Non-GAAPfinancial 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 Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, and the Consolidated Statements of Cash Flows. The Company believes 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, the Company provides 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. Given the inherent uncertainty regarding adjusted items in any future period, a reconciliation of forward-looking financial measures to the most directly comparable GAAP measure is not feasible.

Adjusted Earnings Per Fully Diluted Share, Adjusting for Certain Items Affecting Comparability Adjusted earnings per fully diluted share (“Adjusted Diluted EPS”) reflects adjustments to GAAP income (loss) 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, and foreign currency exchange impact on the re-measurement of intercompany notes, management does not consider these costs when evaluating the Company’s performance, when making decisionsregarding the allocation of resources, in determining incentive compensation, 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 Consolidated Statements of Operations, is presented below.

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 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 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 EPS metric outlined above. Adjusted EBIT represents adjusted net income before interest expense, interest income, and income tax expense. Adjusted EBITDAS represents adjusted EBIT before depreciation expense, amortization expense, and non-cash stock-based compensation expense. Adjusted EBIT and adjusted EBITDAS are performance measures commonly used by management to assess operating performance, and the Company believes they are commonly reported and widely used by investors andother interested parties as a measure of a company’s operating performance between periods. A full reconciliation between the relevant GAAP measure of reported net (loss) income for the three and twelve month periods ended December 31, 2018 and 2017 calculated according to GAAP, adjusted net income, adjusted EBIT, and adjusted EBITDAS is presented in the below tables.

Free Cash Flow and Net Debt In addition to measuring the Company’s cash flow generation and usage based upon the operating, investing, and financing classifications included in the Consolidated Statements of Cash Flows, we also measure free cash flow which represents net cash provided by operating activities less capitalexpenditures. The Company believes 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, and repurchasing our common stock. A reconciliation between the relevant GAAP measure of cash provided by operating activities for the twelve months ended December 31, 2018 and 2017 calculated according to GAAP and free cash flow is presented in the tables below. The Company uses a metric of Net Debt to measure our levered position at any specific point in time. Net Debt is defined as total outstanding debt excluding deferred financing fees, less cash and cash equivalents. The calculation of Net Debt is presented in the tables below.

38

2018 2017 2018 2017

Diluted loss per share per GAAP (0.23)$ (5.40)$ (1.10)$ (5.01)$

Restructuring programs 0.91 0.84 3.29 1.52

Mark-to-market adjustments 0.50 (0.05) 0.40 (0.04)

CEO transition costs — — 0.23 —

Plant restoration costs 0.10 — 0.18 —

Debt amendment and repurchase activity — 0.09 0.12 0.09

Foreign currency loss (gain) on re-measurement of intercompany notes 0.08 0.03 0.11 (0.10)

Tax indemnification (0.08) — 0.06 —

Product recall 0.01 — 0.01 (0.15)

Acquisition, integration, divestiture, and related costs 0.04 0.05 (0.12) 1.76

Impairment of goodwill and other intangible assets — 9.57 — 9.55

Tax reform — (1.86) — (1.86)

Taxes on adjusting items (0.30) (2.26) (1.00) (2.99)

Dilutive impact of shares — 0.01 0.02 0.04

Adjusted diluted EPS 1.03$ 1.02$ 2.20$ 2.81$

Three Months Ended

December 31,

(unaudited)

Twelve Months Ended

December 31,

(unaudited)

TREEHOUSE FOODS, INC.

RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS

39

2018 2017 2018 2017

Net loss per GAAP (12.6)$ (309.0)$ (61.4)$ (286.2)$

Restructuring programs (1) 51.3 48.2 186.0 87.7

Mark-to-market adjustments (2) 28.3 (2.9) 22.5 (2.3)

CEO transition costs (3) — — 13.0 —

Plant restoration costs (4) 5.7 — 10.4 —

Debt amendment and repurchase activity (5) — 5.0 6.8 5.0

Foreign currency loss (gain) on re-measurement of intercompany notes (6) 4.3 1.7 6.2 (5.9)

Tax indemnification (7) (4.7) — 3.2 —

Product recall (8) 0.4 — 0.4 (8.4)

Acquisition, integration, divestiture, and related costs (9) 2.3 2.9 (6.6) 101.4

Impairment of goodwill and other intangible assets (10) — 549.7 — 549.7

Tax reform (11) — (106.8) — (106.8)

Less: Taxes on adjusting items (17.0) (130.3) (56.3) (172.3)

Adjusted net income 58.0 58.5 124.2 161.9

Interest expense 27.0 30.6 112.2 123.5

Interest income — (0.8) (3.8) (4.3)

Income taxes (2.3) (125.0) (23.4) (134.0)

Add: Taxes on adjusting items 17.0 130.3 56.3 172.3

Adjusted EBIT 99.7 93.6 265.5 319.4

Depreciation and amortization (12) 59.0 64.4 233.5 264.0

Stock-based compensation expense (13) 4.1 4.7 22.1 29.9

Adjusted EBITDAS 162.8$ 162.7$ 521.1$ 613.3$

(unaudited in millions)


RECONCILIATION OF NET LOSS TO ADJUSTED NET INCOME, ADJUSTED EBIT, AND ADJUSTED EBITDAS

Three Months Ended

December 31,

Twelve Months Ended

December 31,

40

Location in

Consolidated Statements of O perations 2018 2017 2018 2017

(1) Restructuring programs Other operating expense, net 43.4$ 15.4$ 156.0$ 41.4$

Cost of sales 6.9 32.8 25.7 46.3

General and administrative 1.0 — 4.3 —

(2) Mark-to-market adjustments Other expense (income), net 28.3 (2.9) 22.5 (2.3)

(3) CEO transition costs General and administrative — — 13.0 —

(4) Plant restoration costs Cost of sales 5.7 — 10.4 —

(5) Debt amendment and repurchase activity General and administrative — 1.7 0.2 1.7

Other expense (income), net — — 4.2 —

Interest expense — 3.3 2.4 3.3

(6) Foreign currency loss (gain) on re-measurement of

intercompany notes

Loss (gain) on foreign currency exchange 4.3 1.7 6.2 (5.9)

(7) Tax indemnification Other expense (income), net (4.7) — 3.2 —

(8) Product recall Net sales — — — (5.5)

Cost of sales — — — (2.9)


(9) Acquisition, integration, divestiture, and related costs General and administrative 2.0 1.4 6.8 14.1

Other operating expense, net 0.3 1.5 (13.4) 87.3

(10) Impairment of goodwill and other intangible assets Impairment of goodwill and other intangible assets — 549.7 — 549.7

(11) Tax reform Income tax (benefit) expense — (104.4) — (104.4)

Other expense (income), net — (2.4) — (2.4)

(12) Accelerated depreciation included as an adjusting

item

Cost of sales 4.8 10.0 20.7 23.3

General and administrative 0.8 — 4.1 0.3

(13) Stock-based compensation expense included as an

adjusting item

General and administrative 0.1 0.1 10.3 0.1


FOOTNOTES FOR RECONCILIATION OF NET LOSS TO ADJUSTED NET INCOME, ADJUSTED EBIT, AND ADJUSTED EBITDAS

Twelve Months Ended

December 31,


Three Months Ended

December 31,

41

Location in

Consolidated Statements of O perations 2018 2017 2018 2017

Restructuring programs Other operating expense, net 43.4$ 15.4$ 156.0$ 41.4$

Cost of sales 6.9 32.8 25.7 46.3


CEO transition costs General and administrative — — 13.0 —

Product recall reimbursement Net sales — — — (5.5)

Cost of sales — — — (2.9)


Acquisition, integration, divestiture, and related costs General and administrative 2.0 1.4 6.8 14.1

Other operating expense, net 0.3 1.5 (13.4) 87.3

Debt amendment and repurchase activity General and administrative — 1.7 0.2 1.7

Plant restoration costs Cost of sales 5.7 — 10.4 —

Impairment of goodwill and other intangible assets Impairment of goodwill and other intangible assets — 549.7 — 549.7

59.7$ 602.5$ 203.4$ 732.1$


ITEMS IMPACTING COMPARABILITY INCLUDED IN CORPORATE UNALLOCATED EXPENSE

Twelve Months Ended

December 31,


Three Months Ended

December 31,


42

2018 2017 2018 2017

Net sales to external customers:

Baked Goods 387.4$ 387.3$ 1,385.3$ 1,403.9$

Beverages 286.6 314.3 1,008.4 1,073.4

Condiments 284.1 311.8 1,252.5 1,300.6

Meals 262.8 292.2 1,040.0 1,189.2

Snacks 260.2 394.3 1,125.9 1,334.5

Unallocated — — — 5.5

Total 1,481.1$ 1,699.9$ 5,812.1$ 6,307.1$

Direct operating income:

Baked Goods 55.9$ 54.2$ 149.8$ 175.5$

Beverages 51.0 56.2 180.3 226.9

Condiments 35.7 34.4 148.5 136.5

Meals 37.8 37.4 125.9 137.3

Snacks (5.0) 1.1 2.3 25.5

Total 175.4 183.3 606.8 701.7

Unallocated selling, general, and administrative expenses (59.3) (71.6) (278.7) (299.7)

Unallocated cost of sales (8.5) (29.4) (31.2) (26.2)

Unallocated corporate expense and other (65.1) (596.2) (229.0) (788.6)

Operating income (loss) 42.5 (513.9) 67.9 (412.8)

Other expense (57.4) (24.5) (152.7) (111.8)

Loss before income taxes (14.9)$ (538.4)$ (84.8)$ (524.6)$


RECONCILIATION OF SEGMENT AND UNALLOCATED CORPORATE COSTS TO OPERATING INCOME

Three Months Ended

December 31,


Twelve Months Ended

December 31,


43

December 31, December 31, March 31,

Consolidated Balance Sheet 2018 2017 2016

Current portion of long-term debt 1.2$ 10.1$ 41.6$

Long-term debt 2,297.4 2,535.7 2,942.3

Add back deferred financing costs 22.7 28.8 38.4

(Less) Cash and cash equivalents (164.3) (132.8) (61.1)

Net debt 2,157.0$ 2,441.8$ 2,961.2$


NET DEBT RECONCILIATION


TreeHouse Enterprise StrategySelection and Simple Truth. W. RODNEY MCMULLEN Chairman & CEO, Kroger...

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