In the ordinary course of business, the Company is exposed to commodity price risks relating to the purchases of raw materials and supplies, interest rate risks relating to variable rate debt and foreign currency exchange rate risks. The Company utilizes derivative financial instruments, including (but not limited to) futures contracts, option contracts, forward contracts and 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 December 31, 2020, the Company’s derivative instruments, none of which were designated as hedging instruments under ASC Topic 815, “Derivatives and Hedging,” consisted of:

•foreign currency forward contracts maturing in the next year that have the effect of hedging currency fluctuations between the Euro and the Pound Sterling and the United States (“U.S.”) Dollar and the Pound Sterling;

•pay-fixed, receive-variable interest rate swaps maturing in December 2022 that require monthly settlements and have the effect of hedging forecasted interest payments on BellRing’s variable rate debt.

In the first quarter of fiscal 2020, contemporaneously with the repayment of its term loan, the Company changed the designation of one of its interest rate swap contracts from a cash flow hedge to a non-designated hedging instrument. In connection with the de-designation, the Company reclassified losses previously recorded in accumulated other comprehensive income (“OCI”) of $7.2 to “Interest expense, net” in the Condensed Consolidated Statement of Operations for the three months ended December 31, 2019.

As of April 1, 2020, the Company changed the designation of its interest rate swap contracts that are used as hedges of forecasted interest payments on BellRing’s variable rate debt from cash flow hedges to non-designated hedging instruments as the swaps were no longer effective (as defined by ASC Topic 815). In connection with the de-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 BellRing’s variable rate debt. Mark-to-market adjustments related to these swaps will also be included in “Interest expense, net” in the Condensed Consolidated Statements of Operations. At December 31, 2020 and September 30, 2020, the remaining net loss before taxes to be amortized was $8.9 and $9.4, respectively.


	December 31, 2020		September 30, 2020

Commodity contracts	$	36.9	$	24.7
Energy contracts	76.0		87.1
Foreign exchange contracts - Forward contracts	39.0		28.9
Interest rate swaps	621.3		621.7
Interest rate swaps - Rate-lock swaps	1,666.0		1,666.0
Interest rate swaps - Options	433.3		433.3

The following table presents the balance sheet location and fair value of the Company’s derivative instruments. The Company does not offset derivative assets and liabilities within the Condensed Consolidated Balance Sheets.



	Balance Sheet Location	December 31, 2020		September 30, 2020
Asset Derivatives:
Commodity contracts	Prepaid expenses and other current assets	$	6.6	$	5.0
Energy contracts	Prepaid expenses and other current assets	1.6		1.8
Commodity contracts	Other assets	5.9		0.1
Energy contracts	Other assets	1.7		0.9
Foreign exchange contracts	Prepaid expenses and other current assets	—		0.1

Interest rate swaps	Prepaid expenses and other current assets	2.1		6.8
Interest rate swaps	Other assets	7.7		—
		$	25.6	$	14.7

Liability Derivatives:
Commodity contracts	Other current liabilities	$	0.9	$	1.4
Energy contracts	Other current liabilities	3.8		10.1
Energy contracts	Other liabilities	0.9		3.9
Foreign exchange contracts	Other current liabilities	1.4		—

Interest rate swaps	Other current liabilities	164.1		176.4
Interest rate swaps	Other liabilities	322.3		351.3
		$	493.4	$	543.1

The following tables present the effects of the Company’s derivative instruments on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income for the three months ended December 31, 2020 and 2019.


Derivatives Not Designated as Hedging Instruments	Statement of Operations Location	(Gain) Loss Recognized in Statement of Operations
		2020		2019
Commodity contracts	Cost of goods sold	$	(7.4)	$	(1.9)
Energy contracts	Cost of goods sold	(8.0)		(2.5)
Foreign exchange contracts	Selling, general and administrative expenses	1.5		—

Interest rate swaps	Interest expense, net	0.5		—
Interest rate swaps	Income on swaps, net	(41.6)		(61.4)


Derivatives Designated as Hedging Instruments	(Gain) Loss Recognized in OCI including NCI				Loss Reclassified from Accumulated OCI including NCI into Earnings (a)				Statement of Operations Location
	2020		2019		2020		2019

Interest rate swaps	$	—	$	(1.3)	$	0.5	$	7.2	Interest expense, net
Cross-currency swaps	—		34.6		—		—		Income on swaps, net

(a)For the three months ended December 31, 2020, this amount includes the amortization of previously unrealized losses on BellRing’s interest rate swaps that were de-designated as hedging instruments as of April 1, 2020. For the three months ended December 31, 2019, this amount includes the amortization of previously unrealized losses on interest rate swaps that were de-designated as hedging instruments in the first quarter of fiscal 2020.

The following table presents the components of the Company’s net hedging losses (gains) on interest rate swaps, which are included in “Interest expense, net” and “Income on swaps, net” in the Condensed Consolidated Statements of Operations.


Three Months Ended December 31,	Statement of Operations Location	Mark-to-Market (Gain), net (a)		Cash Settlements Paid, Net (b)		Net Loss Reclassified from Accumulated OCI including NCI (c)
	Interest expense, net	$	(1.2)	$	1.2	$	0.5
	Income on swaps, net	(43.1)		1.5		—
2020	Total	$	(44.3)	$	2.7	$	0.5

	Interest expense, net	$	—	$	—	$	7.2
	Income on swaps, net	(80.5)		19.1		—
2019	Total	$	(80.5)	$	19.1	$	7.2

(c)Includes the amortization of previously unrealized losses on BellRing’s interest rate swaps over the term of the related debt that were de-designated as hedging instruments, as well as the reclassification of previously unrealized losses on interest rate swaps that were de-designated as hedging instruments.

Accumulated OCI, including amounts reported as NCI, included a $90.7 net gain on hedging instruments before taxes ($68.3 after taxes) at December 31, 2020, compared to a $90.2 net gain before taxes ($67.9 after taxes) at September 30, 2020. Approximately $2.3 of the net hedging losses reported in accumulated OCI at December 31, 2020 are expected to be reclassified into earnings within the next 12 months. Accumulated OCI included settlements of and previously unrealized gains on cross-currency swaps of $99.5 at both December 31, 2020 and September 30, 2020. In connection with the settlements of cross-currency swaps, the Company recognized gains in accumulated OCI of $1.4 during the three months ended December 31, 2019. Reclassification of amounts recorded in accumulated OCI into earnings will only occur in the event United Kingdom-based operations are substantially liquidated.