XML 30 R15.htm IDEA: XBRL DOCUMENT v3.21.2
Income Taxes (Notes)
 12 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income taxes INCOME TAXES
At both September 30, 2021 and 2020, BellRing Inc. held 28.8% of the economic interest in BellRing LLC (see Note 1), which, as a result of the IPO and formation transactions, is treated as a partnership for U.S. federal income tax purposes. As a partnership, BellRing LLC is itself generally not subject to U.S. federal income tax under current U.S. tax laws. Generally, items of taxable income, gain, loss and deduction of BellRing LLC are passed through to its members, BellRing Inc. and Post. BellRing Inc. is responsible for its share of taxable income or loss of BellRing LLC allocated to it in accordance with the BellRing LLC Agreement and partnership tax rules and regulations.
The expense (benefit) for income taxes consisted of the following:
Year Ended September 30,
202120202019
Current:
Federal$9.2 $10.7 $33.6 
State1.7 2.0 5.0 
Foreign(0.6)(0.2)0.3 
10.3 12.5 38.9 
Deferred:
Federal(1.3)(2.0)0.2 
State(0.2)(1.3)0.3 
Foreign— — — 
(1.5)(3.3)0.5 
Income tax expense$8.8 $9.2 $39.4 
The effective income tax rate for fiscal 2021 was 7.1% compared to 8.4% for fiscal 2020 and 24.2% for fiscal 2019. The decrease in the effective income tax rate compared to each of the prior years was primarily due to the Company taking into account for U.S. federal, state and local income tax purposes its 28.8% distributive share of the items of income, gain, loss and deduction of BellRing LLC in the periods subsequent to the IPO. Prior to the IPO and formation transactions, the Company reported 100% of the income, gain, loss and deduction of BellRing LLC.
A reconciliation of income tax expense with amounts computed at the federal statutory tax rate follows:
Year Ended September 30,
202120202019
Computed tax (21%)$25.9 $23.0 $34.1 
Income tax expense attributable to NCI(19.5)(16.2)— 
State income taxes, net of effect on federal tax4.0 3.0 4.9 
Tax-deductible transaction costs— (1.2)— 
Uncertain tax position— 1.5 — 
Other, net (none in excess of 5% of computed tax)(1.6)(0.9)0.4 
Income tax expense$8.8 $9.2 $39.4 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax non-current assets (liabilities) were as follows:
September 30, 2021September 30, 2020
AssetsLiabilitiesNetAssetsLiabilitiesNet
Stock-based compensation awards0.1 — 0.1 — — — 
Accrued liabilities2.5 — 2.5 2.6 — 2.6 
Intangible assets1.0 — 1.0 1.0 — 1.0 
Investment in partnership (a)— (11.2)(11.2)— (12.6)(12.6)
Deferred income taxes$3.6 $(11.2)$(7.6)$3.6 $(12.6)$(9.0)
(a)As of September 30, 2021 and 2020, the Company’s deferred tax liability for investment in partnership of $11.2 and $12.6, respectively, related to excess financial reporting outside basis over tax outside basis, of which $5.4 and $3.0, respectively, related to a deferred tax asset attributable to BellRing Inc.’s investment in BellRing LLC and $16.6 and $15.6, respectively, related to a deferred tax liability attributable to a partnership wholly-owned by BellRing LLC and its subsidiaries.
No provision has been made for income taxes on undistributed earnings of consolidated foreign subsidiaries of $1.0 and $2.3 at September 30, 2021 and 2020, respectively, as it is the Company’s intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. It is not practicable to estimate the additional income taxes and applicable foreign withholdings that would be payable on the remittance of such undistributed earnings.
For fiscal 2021 and 2020, foreign loss before income taxes was $1.9 and $0.8, respectively. For fiscal 2019, foreign income before taxes was $1.0.
CARES Act
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted and signed into law. The CARES Act had no significant U.S. federal or state income tax impacts during the years ended September 30, 2021 or 2020.
Unrecognized Tax Benefits
The Company recognizes the tax benefit from uncertain tax positions only if it is “more likely than not” that the tax position will be sustained on examination by the taxing authorities. The tax benefits recognized from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. To the extent the Company’s assessment of such tax positions changes, the change in estimate will be recorded in the period in which the determination is made.
Unrecognized tax benefits activity for the years ended September 30, 2021, 2020 and 2019 is presented in the following table:
Year Ended September 30,
202120202019
Balance, beginning of year$1.5 $— $0.5 
Additions for tax positions taken in current year and acquisitions— 1.5 — 
Reductions for tax positions taken in prior years— — (0.5)
Balance, end of year$1.5 $1.5 $— 
The amount of the net unrecognized tax benefits that, if recognized, would directly affect the effective tax rate was $1.5 at September 30, 2021. None of the unrecognized tax benefit at September 30, 2021 is expected to be recognized within the next twelve months.
The Company computes tax-related interest and penalties as the difference between the tax position recognized for financial reporting purposes and the amount previously taken on the Company’s tax returns and classifies these amounts as components of income tax (benefit) expense. During each of the years ended September 30, 2021, 2020 and 2019, expenses recorded related to interest and penalties were immaterial, and the Company had immaterial interest and penalty accruals at both September 30, 2021 and 2020.
U.S. federal, U.S. state and German income tax returns for the tax years ended September 30, 2018 through September 30, 2020 are generally open and subject to examination by the tax authorities in each respective jurisdiction.