v3.20.4

Noncontrolling Interests, Equity Interests and Related Party Transactions (Notes) | 3 Months Ended
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Dec. 31, 2020
Equity Method Investments and Joint Ventures [Abstract] |
Noncontrolling Interests, Equity Interests and Related Party Transactions | NONCONTROLLING INTERESTS, EQUITY INTERESTS AND RELATED PARTY TRANSACTIONS BellRing On October 21, 2019, BellRing Brands, Inc. (“BellRing”), a subsidiary of the Company, closed its initial public offering (the “IPO”) of 39.4 shares of its Class A common stock, $0.01 par value per share (the “Class A Common Stock”). BellRing received net proceeds from the IPO of $524.4, after deducting underwriting discounts and commissions. As a result of the IPO and certain other transactions completed in connection with the IPO, BellRing became a publicly-traded company whose Class A Common Stock is traded on the New York Stock Exchange under the ticker symbol “BRBR” and the holding company of BellRing Brands, LLC, a Delaware limited liability company (“BellRing LLC”), owning 28.8% of BellRing LLC’s non-voting membership units (the “BellRing LLC units”), with Post owning 71.2% of the BellRing LLC units and one share of BellRing’s Class B common stock, $0.01 par value per share (the “Class B Common Stock” and, collectively with the Class A Common Stock, the “BellRing Common Stock”). The Class B Common Stock has voting rights but no rights to dividends or other economic rights. For so long as Post or its affiliates (other than BellRing and its subsidiaries) directly own more than 50% of the BellRing LLC units, the Class B Common Stock represents 67% of the combined voting power of the BellRing Common Stock, which provides the Company control over BellRing’s board of directors and results in the full consolidation of BellRing and its subsidiaries into the Company’s financial statements. The BellRing LLC units held by the Company include a redemption feature that allows the Company to, at BellRing LLC’s option (as determined by its board of managers), redeem BellRing LLC units for either (i) Class A Common Stock of BellRing or (ii) cash equal to the market value of the BellRing Class A Common Stock at the time of redemption. BellRing LLC is the holding company for the Company’s historical active nutrition business. The term “BellRing” as used herein generally refers to BellRing Brands, Inc.; however, in discussions related to debt facilities, the term “BellRing” refers to BellRing Brands, LLC. BellRing and its subsidiaries are reported herein as the BellRing Brands segment. In the event the Company (other than BellRing and its subsidiaries) holds 50% or less of the BellRing LLC units, the holder of the share of Class B Common Stock will be entitled to a number of votes equal to the number of BellRing LLC units held by all persons other than BellRing and its subsidiaries. In such situation, the Company, as the holder of the share of Class B Common Stock, will only be entitled to cast a number of votes equal to the number of BellRing LLC units held by the Company (other than BellRing and its subsidiaries). Also, in such situation, if any BellRing LLC units are held by persons other than the Company, then the Company, as the holder of the share of Class B Common Stock, will cast the remainder of votes to which the share of Class B Common Stock is entitled only in accordance with the instructions and directions from such other holders of the BellRing LLC units. As of December 31, 2020 and September 30, 2020, the Company owned 71.2% of the BellRing LLC units and the net income and net assets of BellRing and its subsidiaries were consolidated within the Company’s financial statements, and the remaining 28.8% of the consolidated net income and net assets of BellRing and its subsidiaries, representing the percentage of economic interest in BellRing LLC held by BellRing (and therefore indirectly held by the public stockholders of BellRing through their ownership of the Class A Common Stock), were allocated to noncontrolling interest (“NCI”). The following table summarizes the effects of changes in ownership of BellRing on the Company’s equity:
|  |  |  |  | Three Months Ended December 31,
|  |  |  |  | 2020 |  | 2019
Increase in additional paid-in capital related to net proceeds from IPO |  |  |  |  | $ | — |  |  | $ | 524.4 |
Increase in additional paid-in capital related to establishment of noncontrolling interest |  |  |  |  | — |  |  | 66.3 |
Decrease in additional paid-in capital related to tax effects of IPO |  |  |  |  | — |  |  | (133.7) |
Net transfers from noncontrolling interest |  |  |  |  | $ | — |  |  | $ | 457.0 |
8th Avenue The Company has a 60.5% common equity interest in 8th Avenue Food & Provisions, Inc. (“8th Avenue”) that is accounted for using the equity method. In determining the accounting treatment of the common equity interest, management concluded that 8th Avenue was not a variable interest entity as defined by Accounting Standards Codification (“ASC”) Topic 810, “Consolidation” and, as such, was evaluated under the voting interest model. Based on the terms of 8th Avenue’s governing documents, management determined that the Company does not have a controlling voting interest in 8th Avenue due to substantive participating rights held by third parties associated with the governance of 8th Avenue. However, Post does retain significant influence, and therefore, the use of the equity method of accounting is required. The following table presents the calculation of the Company’s equity method loss attributable to 8th Avenue:
|  |  | Three Months Ended December 31,
|  |  |  |  | 2020 |  | 2019
8th Avenue’s net loss available to 8th Avenue’s common shareholders |  |  |  |  | $ | (10.2) |  |  | $ | (8.7) |
|  |  |  |  | 60.5 | % |  | 60.5 | %
Equity method loss available to Post |  |  |  |  | $ | (6.2) |  |  | $ | (5.3) |
Less: Amortization of basis difference, net of tax (a) |  |  |  |  | 1.7 |  |  | 1.7 |
Equity method loss, net of tax |  |  |  |  | $ | (7.9) |  |  | $ | (7.0) |
(a)The Company adjusted the historical basis of 8th Avenue’s assets and liabilities to fair value and recognized a basis difference of $70.3. The basis difference related to property, plant and equipment and other intangible assets is being amortized over the weighted average useful lives of the assets. At December 31, 2020 and September 30, 2020, the remaining basis difference to be amortized was $52.9 and $54.6, respectively. Summarized financial information of 8th Avenue is presented in the following table.
|  |  | Three Months Ended December 31,
|  |  |  |  | 2020 |  | 2019
Net sales |  |  |  |  | $ | 229.0 |  |  | $ | 218.4 |
Gross profit |  |  |  |  | $ | 35.4 |  |  | $ | 38.4 |
Net loss |  |  |  |  | $ | (1.4) |  |  | $ | (0.9) |
Less: Preferred stock dividend |  |  |  |  | 8.8 |  |  | 7.8 |
Net Loss Available to 8th Avenue Common Shareholders |  |  |  |  | $ | (10.2) |  |  | $ | (8.7) |
The Company provides services to 8th Avenue under a master services agreement (the “MSA”), as well as certain advisory services for a fee. The Company recorded MSA and advisory income of $0.8 and $1.0 during the three months ended December 31, 2020 and 2019, respectively, which were recorded in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Operations. During the three months ended December 31, 2020 and 2019, the Company had net sales to 8th Avenue of $2.0 and $1.6, respectively, and purchases from and royalties paid to 8th Avenue of $2.2 and $2.8, respectively. Sales and purchases between the Company and 8th Avenue were all made at arm’s-length. The investment in 8th Avenue was $102.2 and $110.1 at December 31, 2020 and September 30, 2020, respectively, and was included in “Equity method investments” on the Condensed Consolidated Balance Sheets. The Company had current receivables, current payables and a long-term liability with 8th Avenue of $4.6, $0.6 and $0.7, respectively, at December 31, 2020 and current receivables, current payables and a long-term liability of $3.2, $0.6 and $0.7, respectively, at September 30, 2020. The current receivables, current payables and long-term liability, which related to the separation of 8th Avenue from the Company, MSA fees, pass through charges owed by 8th Avenue to the Company and related party sales and purchases, were included in “Receivables, net,” “Accounts payable” and “Other liabilities,” respectively, on the Condensed Consolidated Balance Sheets. Alpen and Weetabix East Africa The Company holds an equity interest in two legal entities, Alpen Food Company South Africa (Pty) Limited (“Alpen”) and Weetabix East Africa Limited (“Weetabix East Africa”). Alpen is a South African-based company that produces ready-to-eat (“RTE”) cereal and muesli. The Company owns 50% of Alpen’s common stock with no other indicators of control, and accordingly, the Company accounts for its investment in Alpen using the equity method. The Company’s equity method earnings (loss), net of tax, attributable to Alpen was zero and $(0.3) for the three months ended December 31, 2020 and 2019, respectively, and was included in “Equity method loss, net of tax” in the Condensed Consolidated Statements of Operations. The investment in Alpen was $4.6 and $4.0 at December 31, 2020 and September 30, 2020, respectively, and was included in “Equity method investments” on the Condensed Consolidated Balance Sheets. The Company had a note receivable balance with Alpen of $0.5 at both December 31, 2020 and September 30, 2020, which was included in “Other assets” on the Condensed Consolidated Balance Sheets. Weetabix East Africa is a Kenyan-based company that produces RTE cereal and muesli. The Company owns 50.1% of Weetabix East Africa and holds a controlling voting and financial interest through its appointment of management and representation on Weetabix East Africa’s board of directors. Accordingly, Weetabix East Africa is fully consolidated into the Company’s financial statements and its assets and results from operations are reported in the Weetabix segment (see Note 19). The remaining interest in the consolidated net income and net assets of Weetabix East Africa is allocated to NCI.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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