Business Combinations

6 Months Ended

Mar. 31, 2012

Business Combinations [Abstract]

Business Combinations

NOTE 5—BUSINESS COMBINATIONS

On October 3, 2011, Ralcorp completed the acquisition of the North American private-brand refrigerated dough business of Sara Lee Corporation ("Refrigerated Dough"). Refrigerated Dough business is a leading manufacturer and distributor of a full range of private-brand refrigerated dough products in the U.S. To fund the transaction, Ralcorp entered into a credit agreement consisting of a $550 term loan (see Note 16) that was repaid with a portion of the proceeds generated in connection with the separation of its Post cereals business (see Note 4). Refrigerated Dough business, included in the Frozen Bakery Products segment, employs approximately 700 people and has manufacturing and distribution facilities in Carrollton, Texas and Forest Park, Georgia. The assigned goodwill is deductible for tax purposes. The purchase price allocation included $259.6 of customer relationships, trademarks, and other intangibles subject to amortization over a weighted average amortization period of approximately 15 years. Net sales and operating profit included in the statement of earnings related to this acquisition were $79.5 and $10.6, respectively, for the three months ended March 31, 2012 and $180.5 and $25.8, respectively, for the six months ended March 31, 2012.

On December 28, 2011, Ralcorp completed the acquisition of Pastificio Annoni S.p.A. ("Annoni"), a pasta manufacturer located in Bergamo, Italy. Annoni operates as a part of the Pasta segment. The assigned goodwill is not deductible for tax purposes. The purchase price allocation included $4.6 of customer relationships subject to amortization over a weighted average amortization period of 10 years. Net sales and operating profit included in the statement of earnings related to this acquisition for both the three and six months ended March 31, 2012 were $2.9 and $.1, respectively.

Each of the acquisitions was accounted for using the purchase method of accounting, whereby the results of operations of each of the following acquisitions are included in the statements of earnings from the date of acquisition. The purchase price was allocated to acquired assets and liabilities based on their estimated fair values at the date of acquisition, and any excess was allocated to goodwill, as shown in the following table. For each acquisition, the goodwill is attributable to the assembled workforce of the acquired business and the significant synergies and opportunities expected from the combination of the acquired business with the existing Ralcorp businesses. Certain estimated values are not yet finalized (primarily deferred tax assets and liabilities and other intangible assets for Annoni) and are subject to change once additional information is obtained (but no later than one year from the applicable acquisition date).

	Refrigerated Dough			Annoni
Cash	$	—		$	.9
Receivables		14.6			8.2
Inventories		23.1			.5
Other current assets		.1			—
Property		62.6			3.6
Goodwill		218.4			7.2
Other intangible assets		259.6			4.6
Total assets acquired		578.4			25.0
Accounts payable		(14.1	)		(3.8	)
Other current liabilities		(8.4	)		(1.3	)
Other liabilities		(3.9	)		(3.1	)
Total liabilities assumed		(26.4	)		(8.2	)
Net assets acquired	$	552.0		$	16.8

Supplemental Pro Forma Information

The following unaudited pro forma information shows Ralcorp's results of operations as if the fiscal 2012 business combinations had been completed on October 1, 2010. The acquirees' pre-acquisition results have been added to Ralcorp's historical results, and the totals have been adjusted for the pro forma effects of amortization of intangible assets recognized as part of the business combination, inventory and property valuation adjustments, interest expense related to the financing of the business combinations, and related income taxes. These pro forma results may not necessarily reflect the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.

	Three Months Ended March 31,				Six Months Ended March 31,
	2012		2011		2012		2011
Net sales	$	1,062.2	$	997.4	$	2,233.3	$	2,048.5
Earnings from continuing operations		29.4		45.3		73.9		88.3
Basic earnings per share from continuing operations		.53		.82		1.34		1.61
Diluted earnings per share from continuing operations		.52		.81		1.31		1.59