Derivative Financial Instruments (Notes)

6 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative financial instruments and hedging

DERIVATIVE FINANCIAL INSTRUMENTS

In the ordinary course of business, the Company is exposed to commodity price risks relating to the acquisition of raw materials and supplies, interest rate risks relating to floating rate debt and foreign currency exchange rate risks. The Company utilizes swaps to manage certain of these exposures by hedging when it is practical to do so. The Company does not hold or issue financial instruments for speculative or trading purposes.

At March 31, 2020, the Company had pay-fixed, receive-variable interest rate swaps maturing in December 2022 that require monthly settlements which began on January 31, 2020 and are used as cash flow hedges of forecasted interest payments on its variable rate debt (see Note 15). The interest rate swaps are designated as hedging instruments under ASC Topic 815. At March 31, 2020, the notional amount of interest rate swaps held by the Company was $350.0. No derivative instruments were held by the Company at September 30, 2019.

The following table presents the balance sheet location and fair value of the Company’s derivative instruments on a gross basis, along with the portion designated as hedging instruments under ASC Topic 815, as of March 31, 2020. The Company does not offset derivative assets and liabilities within the Condensed Consolidated Balance Sheet.

Balance Sheet Location	Fair Value		Portion Designated as Hedging Instrument
Other liabilities	$	3.8	$	3.8
Other noncurrent liabilities	6.8		6.8
Total other liabilities	$	10.6	$	10.6

At March 31, 2020, accumulated OCI included a $10.6 net hedging loss before taxes ($9.8 after taxes). During the three and six months ended March 31, 2020, net hedging losses of $11.0 and $10.4 were recognized in OCI, respectively, and net hedging gains of $0.2 were reclassified from accumulated OCI to “Interest expense, net” in the Condensed Consolidated Statements of Operations. Approximately $3.8 of the net hedging loss reported in accumulated OCI at March 31, 2020 is expected to be reclassified into earnings within the next 12 months. The reclassification will occur on a straight-line basis over the term of the related debt.