Income Taxes (Notes)

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income taxes

INCOME TAXES

Prior to the Spin-off, Old BellRing held an economic interest in BellRing LLC (see Note 1) which, as a result of the IPO and formation transactions, was treated as a partnership for U.S. federal income tax purposes. As a partnership, BellRing LLC was 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 were passed through to its members, Old BellRing and Post. Old BellRing was 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.

Subsequent to the Spin-off, the Company reported 100% of the income, gain, loss and deduction of BellRing LLC for U.S. federal, state and local income tax purposes.

The expense (benefit) for income taxes consisted of the following:

	Year Ended September 30,
	2023		2022		2021
Current:
Federal	$	49.1	$	28.0	$	9.2
State	10.9		5.2		1.7
Foreign	0.9		0.4		(0.6)
	60.9		33.6		10.3
Deferred:
Federal	(4.9)		(3.4)		(1.3)
State	(1.1)		(0.6)		(0.2)
Foreign	—		—		—
	(6.0)		(4.0)		(1.5)
Income tax expense	$	54.9	$	29.6	$	8.8

The effective income tax rate for fiscal 2023 was 24.9% compared to 20.3% for fiscal 2022 and 7.1% for fiscal 2021. The increase in the effective income tax rate compared to fiscal 2022 and 2021 was primarily due to the change in tax expense allocation related to the Spin-off. After the Spin-off, the Company reported 100% of the income, gain, loss and deduction of BellRing LLC for U.S. federal, state, and local income tax purposes, whereas, prior to the Spin-off in the second quarter of fiscal 2022, the Company reported Old BellRing’s share of such activity. This increase was partially offset by higher separation-related expenses incurred in connection with the Spin-off in fiscal 2022 that were treated as non-deductible.

The following table presents the reconciliation of income tax expense with amounts computed at the federal statutory tax rate.

	Year Ended September 30,
	2023		2022		2021
Computed tax at federal statutory rate (21%)	$	46.3	$	30.6	$	25.9
Income tax expense attributable to NCI	—		(7.6)		(19.5)
State income taxes, net of effect on federal tax	8.4		4.7		4.0
Transaction costs	—		2.0		—
Other, net (none in excess of 5% of computed tax)	0.2		(0.1)		(1.6)
Income tax expense	$	54.9	$	29.6	$	8.8

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, 2023						September 30, 2022
	Assets		Liabilities		Net		Assets		Liabilities		Net
Stock-based compensation awards	$	2.2	$	—	$	2.2	$	1.6	$	—	$	1.6
Accrued vacation, incentive and severance	3.1		—		3.1		2.6		—		2.6
Inventory	4.4		—		4.4		4.1		—		4.1
Accrued liabilities	6.0		—		6.0		4.7		—		4.7
ROU assets	—		(1.4)		(1.4)		—		(1.7)		(1.7)
Lease liabilities	1.4		—		1.4		1.7		—		1.7
Property	—		(0.3)		(0.3)		—		(0.4)		(0.4)
Intangible assets	—		(13.9)		(13.9)		—		(14.8)		(14.8)
Capitalized research and development	2.3		—		2.3		—		—		—
Total deferred income taxes	$	19.4	$	(15.6)	$	3.8	$	14.7	$	(16.9)	$	(2.2)

No provision has been made for income taxes on undistributed earnings of consolidated foreign subsidiaries of $2.8 and $1.7 at September 30, 2023 and 2022, 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 2023, 2022 and 2021, foreign income (loss) before income taxes was $2.0, $1.1 and $(1.9), respectively.

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.

At both September 30, 2023 and 2022, the Company had net unrecognized tax benefits of $1.5. There was no unrecognized tax benefits activity during the years ended September 30, 2023, 2022 or 2021. The amount of the net unrecognized tax benefits that, if recognized, would directly affect the effective tax rate was $1.5 at September 30, 2023. No material changes to unrecognized tax benefits at September 30, 2023 are 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, 2023, 2022 and 2021, expenses recorded related to interest and penalties were immaterial, and the Company had immaterial interest and penalty accruals at both September 30, 2023 and 2022.

U.S. federal, U.S. state and German income tax returns for the tax years ended September 30, 2020 through September 30, 2022 are generally open and subject to examination by the tax authorities in each respective jurisdiction.