Derivative Financial Instruments (Notes)

9 Months Ended

Jun. 30, 2022

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 September 30, 2021, the Company had pay-fixed, receive-variable interest rate swaps with a notional amount of $350.0. The interest rate swaps required monthly settlements, which began on January 31, 2020, and were used to hedge forecasted interest payments on the Company’s variable rate debt (see Note 14). On April 1, 2020, the Company changed the designation of the interest rate swaps from cash flow hedges to non-designated hedging instruments as the swaps were no longer effective (as defined by GAAP). In connection with the new designation, the Company started reclassifying losses previously recorded in accumulated OCI to “Interest expense, net” in the Condensed Consolidated Statements of Operations on a straight-line basis

over the term of the related debt. At September 30, 2021, accumulated OCI, including amounts reported as NCI, included a $7.1 net hedging loss before taxes ($6.7 after taxes).

In connection with the extinguishment of Old BellRing’s debt (see Note 14), the Company paid $1.5 to settle its interest rate swaps associated with the extinguished debt in the second quarter of fiscal 2022. In addition, the Company reclassified to earnings the remaining unamortized net hedging losses and related tax benefits previously recorded to accumulated OCI of $6.1 and $0.4, respectively.

The following table presents the balance sheet location and fair value of the Company’s derivative instruments on a gross basis at September 30, 2021. The Company does not offset derivative assets and liabilities within the Condensed Consolidated Balance Sheets. The Company held no material derivative instruments at June 30, 2022.

	September 30, 2021
Other current liabilities	$	4.7
Other liabilities	1.1
Total liabilities	$	5.8

The following table presents the effects of the Company’s interest rate swaps on the Condensed Consolidated Statements of Operations and the net cash settlements paid on interest rate swaps. The Company held no interest rate swaps during the three months ended June 30, 2022.

	Statement of Operations Location	Three Months Ended June 30,				Nine Months Ended June 30,
Hedging Activity		2022		2021		2022		2021
Mark-to-market adjustments	Interest expense, net	$	—	$	0.1	$	(2.3)	$	—
Net loss reclassified from accumulated OCI	Interest expense, net	—		0.6		1.0		1.7
Net loss reclassified from accumulated OCI	Loss on extinguishment and refinancing of debt, net	—		—		6.1		—
Tax benefit reclassified from accumulated OCI	Income tax expense	—		(0.1)		(0.4)		(0.1)
Total net hedging losses, net of tax		$	—	$	0.6	$	4.4	$	1.6
Cash settlements paid, net		$	—	$	(1.2)	$	(2.0)	$	(3.6)