Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Versum Materials, Inc. | |
Entity Central Index Key | 1,660,690 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 108,943,401 |
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENTS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 340.7 | $ 270.8 | $ 671.5 | $ 541.6 |
Cost of sales | 195.9 | 154.5 | 387.5 | 305.4 |
Selling and administrative | 36.6 | 29.5 | 71.9 | 59.7 |
Research and development | 11.1 | 10.9 | 23.8 | 21.2 |
Business separation, restructuring and cost reduction actions | 8.2 | 6.1 | 10 | 9.3 |
Other (income) expense, net | (0.5) | (0.1) | 0 | (3) |
Operating Income (Loss) | 89.4 | 69.9 | 178.3 | 149 |
Interest expense | 11.9 | 11.6 | 23.2 | 23.1 |
Gain (Loss) on Extinguishment of Debt | 0 | 0 | 2.1 | 0 |
Income Before Taxes | 77.5 | 58.3 | 153 | 125.9 |
Income tax provision | 14.2 | 11.5 | 69.1 | 26.8 |
Net Income | 63.3 | 46.8 | 83.9 | 99.1 |
Less: Net Income Attributable to Non-Controlling Interests | 1.7 | 1.9 | 3.7 | 3.4 |
Net Income Attributable to Versum | $ 61.6 | $ 44.9 | $ 80.2 | $ 95.7 |
Net income attributable to Versum per common share: | ||||
Basic (usd per share) | $ 0.57 | $ 0.41 | $ 0.74 | $ 0.88 |
Diluted (usd per share) | $ 0.56 | $ 0.41 | $ 0.73 | $ 0.88 |
Shares used in computing per common share amounts: | ||||
Basic (shares) | 108.9 | 108.7 | 108.9 | 108.7 |
Diluted (shares) | 109.7 | 109.3 | 109.8 | 109.2 |
CONSOLIDATED COMPREHENSIVE INCO
CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 63.3 | $ 46.8 | $ 83.9 | $ 99.1 |
Other Comprehensive Income (Loss), net of tax | ||||
Translation adjustments, net | 6.6 | 29.3 | 26.3 | (0.8) |
Gain from hedging activities | 0 | 0 | 0.1 | 0 |
Pension activity, net of tax for the three and six months ended March 31, 2018 of $0 and for the three and six months ended March 31, 2017 of $0 and $1.5 million, respectively | 0 | (0.2) | 0 | (5.7) |
Total Other Comprehensive Income (Loss) | 6.6 | 29.1 | 26.4 | (6.5) |
Comprehensive Income | 69.9 | 75.9 | 110.3 | 92.6 |
Net Income Attributable to Non-controlling Interests | 1.7 | 1.9 | 3.7 | 3.4 |
Other Comprehensive Income (Loss) Attributable to Non-controlling Interests | 0.9 | 2.4 | 1.6 | 1.4 |
Comprehensive Income Attributable to Versum | $ 67.3 | $ 71.6 | $ 105 | $ 87.8 |
CONSOLIDATED COMPREHENSIVE INC4
CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Pension activity, tax | $ 0 | $ 0 | $ 0 | $ 1.5 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Current Assets | ||
Cash and cash items | $ 254.4 | $ 271.4 |
Trade receivables, net | 165.9 | 145.3 |
Inventories | 167.8 | 151.6 |
Contracts in progress, less progress billings | 35.3 | 15.6 |
Prepaid expenses | 18 | 12.2 |
Other current assets | 10.4 | 10.8 |
Total Current Assets | 651.8 | 606.9 |
Plant and equipment: | ||
Plant and equipment, at cost | 1,033.4 | 955.2 |
Less: accumulated depreciation | 649.4 | 624.9 |
Plant and equipment, net | 384 | 330.3 |
Goodwill | 188.2 | 182.6 |
Intangible assets, net | 67.3 | 70.8 |
Other noncurrent assets | 54.1 | 56.2 |
Total Noncurrent Assets | 693.6 | 639.9 |
Total Assets | 1,345.4 | 1,246.8 |
Current Liabilities | ||
Payables and accrued liabilities | 75.8 | 120.8 |
Accrued income taxes | 46.5 | 31.4 |
Current portion of long-term debt | 5.8 | 5.8 |
Total Current Liabilities | 128.1 | 158 |
Long-term debt | 976.1 | 977 |
Noncurrent income tax payable | 29 | 0 |
Deferred tax liabilities | 31.4 | 37.3 |
Other noncurrent liabilities | 53.8 | 49.9 |
Total Noncurrent Liabilities | 1,090.3 | 1,064.2 |
Total Liabilities | 1,218.4 | 1,222.2 |
Commitments and Contingencies - See Note 14 | ||
Stockholders’ Equity (Deficit) | ||
Common stock (par value $1 per share; 250,000,000 shares authorized; outstanding 108,943,401 and 108,815,330 at March 31, 2018 and September 30, 2017, respectively) | 108.9 | 108.8 |
Capital in excess of par | 0 | 4.8 |
Accumulated deficit | (28.2) | (105.2) |
Accumulated other comprehensive income (loss) | 6.4 | (18.4) |
Total Versum’s Stockholders’ Equity (Deficit) | 87.1 | (10) |
Non-controlling Interests | 39.9 | 34.6 |
Total Stockholders’ Equity | 127 | 24.6 |
Total Liabilities and Stockholders’ Equity | $ 1,345.4 | $ 1,246.8 |
CONSOLIDATED BALANCE SHEETS (U6
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 1 | $ 1 |
Common stock, shares authorized (shares) | 250,000,000 | 250,000,000 |
Common stock, shares outstanding (shares) | 108,943,401 | 108,815,330 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net income | $ 83.9 | $ 99.1 |
Less: Net Income Attributable to Non-Controlling Interests | 3.7 | 3.4 |
Net Income Attributable to Versum | 80.2 | 95.7 |
Adjustments to reconcile income to cash provided by operating activities: | ||
Depreciation and amortization | 23.9 | 21.8 |
Deferred income taxes | (4.5) | 2.5 |
Gain on sale of assets | (0.3) | (0.4) |
Share-based compensation | 5 | 3.5 |
Other adjustments | (1.2) | (1.1) |
Working capital changes that provided (used) cash: | ||
Trade receivables | (16.9) | (32) |
Inventories | (10.6) | (8.7) |
Contracts in progress, less progress billings | (18) | 7.4 |
Payables and accrued liabilities | (46.4) | (17.4) |
Accrued income taxes | 39.2 | (1.9) |
Other working capital | 6.1 | 23.6 |
Cash Provided by Operating Activities | 56.5 | 93 |
Investing Activities | ||
Additions to plant and equipment | (65.1) | (20.2) |
Proceeds from sale of assets | 1 | 0.9 |
Cash Used for Investing Activities | (64.1) | (19.3) |
Financing Activities | ||
Payments on long-term debt | (2.9) | (2.9) |
Proceeds from Short-term Debt | 0 | 1.5 |
Debt issuance costs | 0 | (1.7) |
Dividends paid to shareholders | (10.9) | 0 |
Payments of Ordinary Dividends, Noncontrolling Interest | 0 | 1.2 |
Other financing activity | (2.8) | 0.1 |
Cash Used for Financing Activities | (16.6) | (4.2) |
Effect of Exchange Rate Changes on Cash | 7.2 | 0.7 |
(Decrease) Increase in Cash and Cash Items | (17) | 70.2 |
Cash and Cash items-Beginning of Year | 271.4 | |
Cash and Cash items-End of Period | 254.4 | |
Interest Paid | 21.8 | 20.6 |
Income Taxes Paid | $ 37 | $ 26.6 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Capital in Excess of Par | Accumulated Deficit | Air Products’ Net Investment | Accumulated Other Comprehensive Income (Loss) | Total Versum’s Stockholders’ Equity (Deficit) | Non-controlling Interests |
Stockholders' equity, beginning balance at Sep. 30, 2016 | $ (103.4) | $ 0 | $ 0 | $ 0 | $ (127.3) | $ (10) | $ (137.3) | $ 33.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 99.1 | 95.7 | 0 | 95.7 | 3.4 | |||
Net Transfer to Air Products | (157.6) | (291) | 135.4 | (2.1) | (157.7) | 0.1 | ||
Reclassification of Air Products' net investment to additional paid in capital | 8.1 | (8.1) | ||||||
Cash dividend paid | (5.4) | (5.4) | (5.4) | |||||
Issuance of common stock at separation | 108.7 | 108.7 | 108.7 | |||||
Issuance of common stock through shared based compensation plans | 0.1 | 0.1 | 0.1 | |||||
Other comprehensive income | (4.4) | (5.8) | (5.8) | 1.4 | ||||
Share-based compensation | 2.4 | 2.4 | 0 | 2.4 | ||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | (1.2) | (1.2) | ||||||
Stockholders' equity, ending balance at Mar. 31, 2017 | (61.7) | 108.8 | 5.1 | (195.3) | 0 | (17.9) | (99.3) | 37.6 |
Stockholders' equity, beginning balance at Sep. 30, 2017 | 24.6 | 108.8 | 4.8 | (105.2) | 0 | (18.4) | (10) | 34.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 83.9 | 80.2 | 80.2 | 3.7 | ||||
Cash dividend paid | (10.9) | (7.7) | (3.2) | (10.9) | ||||
Issuance of common stock through shared based compensation plans | 0.1 | 0.1 | 0.1 | |||||
Other comprehensive income | 26.4 | 24.8 | 24.8 | 1.6 | ||||
Share-based compensation | 2.9 | 2.9 | 2.9 | |||||
Stockholders' equity, ending balance at Mar. 31, 2018 | $ 127 | $ 108.9 | $ 0 | $ (28.2) | $ 0 | $ 6.4 | $ 87.1 | $ 39.9 |
Basis of Presentation and Major
Basis of Presentation and Major Accounting Policies | 6 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Major Accounting Policies | BASIS OF PRESENTATION AND MAJOR ACCOUNTING POLICIES In September 2016, Versum Materials, Inc. was formed and after its Separation from Air Products on October 1, 2016, Versum began operating as an independent public company with its common stock listed under the symbol “VSM” on the New York Stock Exchange. We are a global business that provides innovative solutions for specific customer applications within niche markets based upon expertise in specialty materials. Our business employs applications technology to provide solutions to the semiconductor industry through chemical synthesis, analytical technology, process engineering, and surface science. We are comprised of two operating segments, Materials and Delivery Systems and Services, under which we manage our operations and assess performance, and a Corporate segment. Basis of Presentation The accompanying Consolidated Financial Statements are presented on a consolidated basis and include all of the accounts and operations of Versum and its majority-owned subsidiaries. The financial statements reflect the financial position, results of operations and cash flows of Versum in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. The financial statements are unaudited and should be read in conjunction with the Annual Consolidated Financial Statements presented in the Company's Annual Report on Form 10-K for our fiscal year ended September 30, 2017 . The financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented; all adjustments have been included to provide a fair statement of the results for the reporting periods presented. All significant inter-company accounts and transactions have been eliminated. The results of operations for the three and six months ended March 31, 2018 are not necessarily indicative of the results of operations for the full year. Accounting Policies The policies used in preparing the Consolidated Financial Statements are the same as those used in our Annual Report on Form 10-K for our fiscal year ended September 30, 2017 . There have been no significant changes to these accounting policies during the three and six months ended March 31, 2018 . Estimates and Assumptions The Consolidated Financial Statements have been prepared in conformity with GAAP, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. |
New Accounting Guidance
New Accounting Guidance | 6 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Guidance | NEW ACCOUNTING GUIDANCE Accounting Guidance Implemented Income Taxes In March 2018, the FASB issued guidance relative to Incomes Taxes (Topic 740) that adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act (the “Tax Act”) in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cuts and Jobs Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. We have accounted for the tax effects of the Tax Act under the guidance of SAB 118, on a provisional basis. Our accounting for certain income tax effects is incomplete, but we have determined reasonable estimates for those effects and have recorded provisional amounts in our Consolidated Financial Statements as of March 31, 2018. Goodwill Impairment In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance simplifying the test for goodwill impairment, which removes certain steps from the goodwill impairment test. The guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those periods, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the standard effective October 1, 2017. The adoption did not have a material impact on the Consolidated Financial Statements. Measurement of Inventory In July 2015, the FASB issued guidance to simplify the measurement of inventory recorded using either the first-in, first-out (“FIFO”) or average cost basis by changing the subsequent measurement guidance from lower of cost or market to the lower of cost or net realizable value. Inventory measured using last-in, first-out (“LIFO”) is not impacted. The Company adopted the standard effective October 1, 2017. This guidance did not have a significant impact on our Consolidated Financial Statements. New Accounting Guidance to be Implemented Net Periodic Pension Costs In March 2017, the FASB issued guidance which requires an entity to report the service cost component of pension expense in the same line item as other compensation costs. The other components of net (benefit) cost will be required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. The components of the net (benefit) cost are shown in Note 10 , Retirement Benefits . The Company is currently evaluating the impact of adopting this guidance. Business Combinations In January 2017, the FASB issued guidance on the definition of a business in business combinations. The guidance clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company will adopt the standard effective October 1, 2018. The adoption is not expected to have a material impact on the Consolidated Financial Statements. Revenue Recognition In May 2014, the FASB issued guidance based on the principle that revenue is recognized in an amount expected to be collected and to which the entity expects to be entitled in exchange for the transfer of goods or services. In August 2015, the FASB deferred the effective date by one year, while providing the option to early adopt the standard on the original effective date. In December 2016 there were further updates to the original guidance that did not revise the effective date. The guidance can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company will adopt the standard effective October 1, 2018. The standard could impact the amount and timing of revenue that we recognize. We are currently evaluating the adoption alternatives and impact that this standard and related updates will have on our Consolidated Financial Statements. Leases In February 2016, the FASB issued guidance which requires lessees to recognize a right of use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. The guidance is effective in fiscal year 2020, with early adoption permitted, and must be applied using a modified retrospective approach. The Company is currently the lessee under various agreements for distribution equipment, vehicles and buildings that are currently accounted for as operating leases. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. We are currently evaluating the impact of adopting this new guidance on our Consolidated Financial Statements. Cash Flow Statement Classification In August 2016, the FASB issued guidance to reduce diversity in practice on how certain cash receipts and cash payments are classified in the statement of cash flows. The guidance is effective beginning fiscal year 2019, with early adoption permitted, and should be applied retrospectively. We are currently evaluating the impact of adopting this new guidance on our Consolidated Financial Statements. |
Business Separation, Restructur
Business Separation, Restructuring, and Cost Reduction Actions | 6 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Business Separation, Restructuring, and Cost Reduction Actions | BUSINESS SEPARATION, RESTRUCTURING AND COST REDUCTION ACTIONS The charges we record for business restructuring and cost reduction actions have been excluded from segment operating income. During the three and six months ended March 31, 2018 , we recognized a net charge of $8.2 million and $10.0 million , respectively. The net charge primarily consisted of additional costs as a result of the relocation of certain research and development activities and headquarters and set up of the stand-alone organization and infrastructure. During the three and six months ended March 31, 2017 , we recognized a net charge of $6.1 million and $9.3 million , respectively. The net charge primarily consisted of additional costs as a result of the relocation of certain research and development activities and headquarters and set up of the stand-alone organization and infrastructure. The following table summarizes the carrying amount of the accrual for the business separation, restructuring and cost reduction actions at March 31, 2018 : Severance and Other Benefits (In millions) Balance, September 30, 2017 $ 4.2 Current Period Charge 0.2 Cash Payments (1.3 ) Balance, March 31, 2018 $ 3.1 |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES The components of inventories are as follows: March 31, 2018 September 30, 2017 (In millions) Inventories at FIFO cost Finished goods $ 98.0 $ 87.6 Work in process 18.0 20.3 Raw materials, supplies and other 60.8 52.5 176.8 160.4 Less: Excess of FIFO cost over LIFO cost (9.0 ) (8.8 ) Inventories $ 167.8 $ 151.6 FIFO cost approximates replacement cost. |
Goodwill
Goodwill | 6 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL Changes to the carrying amount of goodwill by segment are as follows: Materials Delivery Systems and Services Total (In millions) Balance, September 30, 2017 $ 165.3 $ 17.3 $ 182.6 Currency translation adjustment 5.2 0.4 5.6 Balance, March 31, 2018 $ 170.5 $ 17.7 $ 188.2 Goodwill is subject to impairment testing in the fourth quarter of each fiscal year and whenever events and changes in circumstances indicate that the carrying value of goodwill might not be recoverable. There were no events or circumstances indicating that goodwill might be impaired at March 31, 2018 . |
Debt
Debt | 6 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Components of Debt March 31, 2018 September 30, 2017 (In millions) Short-term borrowings (A) $ — $ — Current portion of long-term debt 5.8 5.8 Long-term debt 976.1 977.0 Total Debt $ 981.9 $ 982.8 (A) Represents borrowing under foreign lines of credit by non-U.S. subsidiaries which are short term in nature. Availability under these lines of credit at March 31, 2018 is $20.8 million . Long-term debt March 31, 2018 September 30, 2017 (In millions) Term loan facility under Credit Agreement $ 566.4 $ 569.3 Revolving facility under Credit Agreement — — 5.500% Senior Notes due 2024 425.0 425.0 Total debt 991.4 994.3 Less debt discount 2.0 2.5 Less deferred debt costs 7.5 9.0 Less current portion of long-term debt 5.8 5.8 Long-term debt payable after one year $ 976.1 $ 977.0 Credit Agreement On September 30, 2016, Versum entered into a credit agreement (the “Credit Agreement”) providing for a senior secured first lien term loan B facility of $575 million (the “Term Facility”) and a senior secured first lien revolving credit facility of $200 million (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facilities”). The Senior Credit Facilities are guaranteed by Versum’s material direct and indirect wholly-owned domestic restricted subsidiaries and secured by substantially all of the assets of Versum and its subsidiary guarantors. Borrowings under the Term Facility bore interest at a rate of either LIBOR (adjusted for statutory reserve requirements), subject to a minimum floor of 0.75% , plus a margin of 2.50% or an alternate base rate , subject to a minimum floor of 1.75% , plus a margin of 1.50% . On October 10, 2017, Versum amended its Credit Agreement. The amendment decreased the interest rate on borrowings under the Term Facility to LIBOR plus a margin of 2.00% , or an alternate base rate plus a margin of 1.00% (effective rate of 4.30% as of March 31, 2018 ). The amendment removed the minimum floor on LIBOR and the alternate base rate. If our total leverage ratio is equal to or less than 2.00 : 1.00 (calculated without any netting of cash on hand) the interest rate will decrease further to LIBOR plus a margin of 1.75% , or an alternate base rate plus a margin of 0.75% . The Term Facility matures on September 30, 2023 , and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Term Facility, with the balance payable on September 30, 2023 . Borrowings under the Revolving Facility bear interest initially at a rate of either LIBOR (adjusted for statutory reserve requirements) plus a margin of 2.00% or an alternate base rate plus a margin of 1.00% , and after delivery of the financial statements for the first full fiscal quarter, subject to a 0.25% margin reduction based on achieving a first lien net leverage ratio of 1.00 :1.00 for the prior four-quarter period. A commitment fee of 0.375% initially, subject to a reduction to 0.25% based on achieving a first lien net leverage ratio of 1.00 :1.00 for the prior four-quarter period after delivery of the financial statements for the first full fiscal quarter, on the unused portion of the Revolving Facility is payable quarterly in arrears. Letter of credit fees are payable on outstanding letters of credit under the Revolving Facility, and fronting fees equal to a percentage to be agreed with each issuing bank (not to exceed 0.125% ) are payable to the issuing banks. The Revolving Facility matures on September 30, 2021 . A maximum first lien net leverage ratio covenant (total debt net of cash on hand to total adjusted EBITDA) of 3.25 :1.00 will apply if we draw upon the Revolving Facility. As of March 31, 2018 , we had availability of $200 million under the Revolving Facility. The Credit Agreement, as amended, provides that, commencing with Versum’s fiscal year ending on September 30, 2017, a percentage of excess cash flow ranging from 0% to 50% , depending on the first lien net leverage ratio, is required to be used to prepay the Term Facility. As of March 31, 2018 , there was no requirement to prepay due to excess cash flows. Senior Notes On September 30, 2016, Versum issued $425 million of 5.5% Senior Notes due 2024 . The Notes are unsecured senior obligations of Versum, guaranteed by each of Versum’s subsidiaries that is a guarantor under the Senior Credit Facilities. The Notes bear interest at a rate of 5.5% per annum payable semiannually on March 15 and September 15 of each year, commencing on March 15, 2017. The Notes will mature on September 30, 2024 . Versum may, at its option, redeem some or all of the Notes during such times and at such prices as described in the Indenture governing the Senior Notes, plus accrued and unpaid interest, if any, to the date of redemption. The agreements governing our indebtedness contain a number of affirmative and negative covenants. We were in compliance with all of our covenants at March 31, 2018 . |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the Tax Act was enacted in the U.S. Certain provisions of the Tax Act are effective for the Company’s fiscal year 2018, whereas other material provisions of the Tax Act will not apply to the Company until the Company’s fiscal year 2019. For fiscal year 2018, Versum’s statutory U.S. federal income tax rate will be 24.5% , which represents a blending of the 35.0% statutory rate under prior law and the new 21.0% statutory rate effective January 1, 2018, prorated based on the number of days during the Company’s current fiscal year that each rate was effective. For fiscal years 2019 and later, the Company’s statutory U.S. federal income tax rate will be 21.0% . As a result of the Tax Act, the Company recorded a provisional net one-time charge of $33.8 million for the six months ended March 31, 2018 . This charge is comprised of a $45.9 million charge for federal and state taxes on the mandatory deemed repatriation of certain of the Company’s foreign accumulated earnings. We expect to elect to pay the federal portion of the resulting liability, net of available tax credits, over the eight year period provided in the Tax Act, with $2.5 million of the federal liability payable in connection with our fiscal year 2018. The deemed repatriation charge was partially offset by a $12.0 million tax benefit related to the estimated revaluation of the Company’s deferred tax assets and liabilities using the U.S. statutory federal and state income tax rates and compensation deductibility rules that are anticipated to apply when the deferred tax assets and liabilities will become current. The methodology used in calculating these provisional items incorporates assumptions about required tax adjustments to book earnings, foreign taxes paid, future executive compensation levels, estimated temporary book to tax differences, pending guidance and other items. We will continue to obtain information, actively monitor factual and legal developments, complete our tax compliance cycles, analyze and review the available information, and expect to adjust the provisional tax accrual consistent with the SEC’s Staff Accounting Bulletin No. 118. For the three months ended March 31, 2018 , the adjustment to the provisional tax accrual recorded in the three months ended December 31, 2017, was a tax benefit of $3.7 million . This resulted in a decrease of 2.4% to the Company’s effective tax rate for the six months ended March 31, 2018 . The adjustment was primarily due to a change in estimated cumulative earnings and profits and tax pools in a foreign jurisdiction that reduced the Company’s tax on the mandatory deemed repatriation. Beginning in the Company’s fiscal year 2019, Versum will be subject to additional provisions in accordance with the Tax Act. These provisions include income inclusions, limitations on interest expense and other deductions and our ability to utilize certain tax credits, and minimum taxes, among other things. The Company will be monitoring and actively working throughout fiscal year 2018 to refine the provision tax accruals. Versum records U.S. income and foreign withholding taxes on the undistributed earnings of our foreign subsidiaries and corporate joint ventures unless those earnings are indefinitely reinvested. As a result, foreign withholding tax cost of $1.3 million was recognized as an expense during the three months ended March 31, 2018 . For the six months ended March 31, 2018 , the expense related to withholding taxes on undistributed earnings is $2.5 million . |
Financial Instruments
Financial Instruments | 6 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS We enter into forward exchange contracts to hedge the fair value exposure on inter-company loans. During the three months ended March 31, 2018 , this portfolio of forward exchange contracts consisted primarily of Japanese Yen and U.S. Dollars as well as Euros and U.S. Dollars. During the three months ended March 31, 2017 , this portfolio of forward exchange contracts consisted primarily of Korean Won and U.S. Dollars as well as Euros and U.S. Dollars. The maximum remaining term of any forward exchange contract currently outstanding at March 31, 2018 and 2017 was approximately 6 months. At March 31, 2018 and September 30, 2017 , the total notional principal amount of our outstanding hedge contracts was $33.8 million and $158.4 million , respectively. As of March 31, 2018 and September 30, 2017 , there were no derivatives designated as hedging instruments. The tables below summarize the fair values of our derivatives not designated as hedging instruments and balance sheet location of these outstanding derivatives: March 31, 2018 Balance Sheet Location Amount Balance Sheet Location Amount (In millions) Forward exchange contracts Other current assets $ — Payables and accrued liabilities $ 1.1 September 30, 2017 Balance Sheet Location Amount Balance Sheet Location Amount (In millions) Forward exchange contracts Other current assets $ 0.9 Payables and accrued liabilities $ 1.5 Refer to Note 9 , Fair Value , which defines fair value, describes the method for measuring fair value, and provides additional disclosures regarding fair value measurements. The table below summarizes the gain or loss related to our forward contracts: Three Months Ended March 31, Six Months Ended March 31, (In millions) 2018 2017 2018 2017 Forward Exchange Contracts, net of tax: Net loss recognized in other (income) expense, net (A) $ 1.9 $ 0.9 $ 1.9 $ 1.1 (A) The impact of the non-designated hedges noted above was largely offset by gains and losses resulting from the impact of changes in exchange rates on recognized assets and liabilities denominated in nonfunctional currencies. The cash flows related to all derivative contracts are reported in the operating activities section of the consolidated statements of cash flows. |
Fair Value
Fair Value | 6 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE Fair value is defined as an exit price, i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 - Inputs that are unobservable for the asset or liability based on our own assumptions (about the assumptions market participants would use in pricing the asset or liability). The methods and assumptions used to measure the fair value of financial instruments are as follows: Derivatives The fair value of our forward exchange contracts is quantified using the income approach and are based on estimates using standard pricing models. These models take into account the value of future cash flows as of the balance sheet date, discounted to a present value using discount factors that match both the time to maturity and currency of the underlying instruments. The computation of the fair values of these instruments is generally performed by the Company. These standard pricing models utilize inputs which are derived from or corroborated by observable market data such as interest rate yield curves and currency spot and forward rates. Therefore, the fair value of our derivatives is classified as a level 2 measurement. Refer to Note 8 , Financial Instruments , for a description of derivative instruments, including details on the balance sheet line classifications. Long-term Debt The fair value of our Senior Notes is based primarily on quoted market prices reported on or near the respective balance sheet date and is therefore level 1. The fair value of our Term Facility debt is based on estimates using standard pricing models that take into account the value of future cash flows as of the balance sheet date, discounted to a present value using market based assumptions including published interest rates. This standard valuation model utilizes observable market data therefore, the fair value of our debt is classified as a level 2 measurement. The carrying values and fair values of our derivatives and debt are as follows: March 31, 2018 September 30, 2017 Fair Value Carrying Value Fair Value Carrying Value (In millions) Assets Forward Exchange Contracts $ — $ — $ 0.9 $ 0.9 Liabilities Forward Exchange Contracts $ 1.1 $ 1.1 $ 1.5 $ 1.5 Long-term Debt Senior Notes $ 440.9 $ 425.0 $ 450.5 $ 425.0 Term Facility 571.0 566.4 575.7 569.3 Total Long-term Debt $ 1,011.9 $ 991.4 $ 1,026.2 $ 994.3 The carrying amounts reported in the consolidated balance sheet for cash and cash items, trade receivables, payables and accrued liabilities, and accrued income taxes approximate fair value due to the short-term nature of these instruments. Accordingly, these items have been excluded from the above table. |
Retirement Benefits
Retirement Benefits | 6 Months Ended |
Mar. 31, 2018 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Benefits | RETIREMENT BENEFITS Defined Benefit Pensions Our plans provide certain international employees in Germany, Korea and Taiwan various pension benefits. Charges to expense are based upon actuarial analysis. The components of net periodic pension costs for Versum’s defined benefit pension plans are as follows: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Service cost $ 0.5 $ 0.5 $ 1.0 $ 1.1 Interest cost 0.2 0.2 0.4 0.3 Actuarial loss amortization — 0.1 — 0.2 Net periodic pension cost $ 0.7 $ 0.8 $ 1.4 $ 1.6 Defined Contribution Plan Versum provides benefits for all U.S. employees and certain non-U.S. employees under a Versum defined contribution plan. The following table summarizes our defined contribution expense: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Defined contribution expense $ 2.1 $ 1.8 $ 4.2 $ 3.7 |
Share Based Compensation
Share Based Compensation | 6 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION In accordance with the Employee Matters Agreement entered into between Versum and Air Products on September 29, 2016 in connection with the Separation, all share-based compensation awards previously granted to Versum employees under Air Products’ Long-Term Incentive Plan that were outstanding on October 1, 2016, other than restricted stock, were adjusted and converted into Versum equity with substantially the same terms and conditions as the original Air Products awards. The converted awards will continue to vest over the original vesting period defined at the grant date. As a result of the conversion, we have the following outstanding share-based compensation awards: (a) stock options; (b) time-based restricted stock units; and (c) market-based restricted stock units. During the six months ended March 31, 2017 , under the Versum Long-Term Incentive Plan we made a one-time Founders grant of time-based restricted stock units. In addition, during the six months ended March 31, 2018 and 2017 we granted annual awards of market-based restricted stock units, consisting of performance-based restricted stock units and performance-based market stock units. Under all programs, the terms of the awards are fixed at the grant date. We issue new shares upon the payout of restricted stock units and the exercise of stock options. As of March 31, 2018 , there were 3.2 million shares available for future grant under the Versum Long-Term Incentive Plan. Total after-tax share-based compensation awards cost recognized in the consolidated income statement is summarized below: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Before-Tax Share-Based Compensation Award Cost $ 2.6 $ 1.9 $ 5.0 $ 3.5 Income Tax Benefit 0.6 0.7 1.2 1.2 After-Tax Share-Based Compensation Award Cost $ 2.0 $ 1.2 $ 3.8 $ 2.3 Before-tax share-based compensation award cost is primarily included in selling and administrative expense on our consolidated income statements. Total before-tax share-based compensation award cost by type of program was as follows: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Restricted stock units $ 2.4 $ 1.9 $ 4.7 $ 3.4 Stock options — — — 0.1 Director awards 0.2 — 0.3 — Before-Tax Share-Based Compensation Cost $ 2.6 $ 1.9 $ 5.0 $ 3.5 Restricted Stock Units Converted share-based compensation awards . As a result of the conversion in connection with the Separation described above, Versum executive officers and employees have outstanding time-based restricted stock units and market-based restricted stock units. These converted restricted stock units entitle the recipient to shares of common stock and accumulated dividends upon vesting. The payout of the converted market-based restricted stock units is conditioned on continued employment during a three year deferral period subject to payout upon death, disability, or retirement. The converted time-based restricted stock units vest four years after the grant date subject to payout upon death, disability or retirement. Upon involuntary termination without cause, a pro rata portion of restricted stock units will vest. Dividend equivalents are paid in cash and equal the dividends that would have accrued on a share of stock from the grant date to the vesting date. New share-based compensation awards During the six months ended March 31, 2018 , under its Long-Term Incentive Plan Versum granted 200,088 market based restricted stock units, consisting of performance-based restricted stock units and performance-based market stock units. The performance-based restricted stock units are earned at the end of a performance period beginning October 1, 2017 and ending September 30, 2020, conditioned on the level of Versum’s total shareholder return in relation to a defined peer group over the three -year performance period. The performance-based market stock units are earned based on the percentage change in the price of Versum’s common stock over the performance period beginning October 1, 2017 and ending September 30, 2020. During the six months ended March 31, 2017 , under the Versum Long-Term Incentive Plan we made a one-time Founders grant of 424,247 time-based restricted stock units at a weighted-average grant-date fair value of $22.53 per unit. One third of the Founders RSUs vest on October 1, 2018, one third vest on October 1, 2019, and one third vest on October 1, 2020, subject to the holder’s continued employment with the Company. In addition, during the six months ended March 31, 2017 , under its Long-Term Incentive Plan Versum granted 304,520 market-based restricted stock units, consisting of performance-based restricted stock units and performance-based market stock units. The performance-based restricted stock units are earned at the end of a performance period beginning October 1, 2016 and ending September 30, 2019, conditioned on the level of Versum’s total shareholder return in relation to a defined peer group over the three -year performance period. The performance-based market stock units are earned based on the percentage change in the price of Versum’s common stock over the performance period beginning October 1, 2016 and ending September 30, 2019. Subject to the recipient’s continued employment, these restricted stock units granted during the six months ended March 31, 2018 and 2017 generally vest on the date that the Versum Compensation Committee certifies the payout determination under the performance goals, which date must be within 90 days after the end of the performance period. Vesting is subject to certain exceptions in the event of involuntary termination by Versum, death, disability or retirement. Under GAAP, both the performance-based restricted stock units and performance-based market stock units are considered market-based awards. Upon vesting, restricted stock units represent the right to receive shares of our common stock. Dividend equivalent rights accrue for these awards, but do not vest unless the underlying awards vest. The market-based restricted stock units awarded during the six months ended March 31, 2018 and 2017 had an estimated grant-date fair value of $50.18 and $29.68 , respectively, per unit for the performance-based restricted stock units and $45.71 and $28.37 , respectively, for the performance-based market stock units. The fair value of market-based restricted stock units was estimated using a Monte Carlo simulation model as these equity awards are tied to a market condition. The model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the grant and calculates the fair value of the awards. We generally expense the grant-date fair value of these awards on a straight-line basis over the vesting period; however, expense recognition is accelerated for retirement eligible individuals who meet the requirements for vesting upon retirement. The calculation of the fair value of market-based restricted stock units during the six months ended March 31, 2018 and 2017 used the following assumptions: Six Months Ended March 31, 2018 2017 (In percentages) Expected volatility 28.0 % 28.7 % Risk-free interest rate 1.9 % 1.4 % Expected dividend yield 0.5 % — % A summary of restricted stock unit activity is presented below: Shares Weighted Average Grant-Date Fair Value (In millions, except weighted average) Outstanding, September 30, 2017 1.1 $ 25.30 Granted 0.2 47.23 Paid out (0.2 ) 29.68 Outstanding, March 31, 2018 1.1 $ 29.40 Shares Weighted Average Grant-Date Fair Value (In millions, except weighted average) Outstanding, September 30, 2016 — $ — Converted on October 1, 2016 0.5 22.85 Granted 0.7 25.30 Paid out (0.1 ) 15.55 Outstanding, March 31, 2017 1.1 $ 25.30 No cash payments were made for restricted stock units for the three and six months ended March 31, 2018 and 2017 . As of March 31, 2018 and 2017 , there was $18.9 million and $18.1 million , respectively, of unrecognized compensation cost related to restricted stock units. The cost is expected to be recognized over a weighted average period of 2.3 and 3.0 years, respectively. The total fair value of restricted stock units paid out during the three and six months ended March 31, 2018 , including shares vested in prior periods, was $0.0 million and $5.0 million , respectively. The total fair value of restricted stock units paid out during the three and six months ended March 31, 2017 , including shares vested in prior periods, was $0.2 million and $1.7 million , respectively. Stock Options We may grant awards of options to purchase common stock to executive officers and selected employees. All of our outstanding stock options are a result of the conversion in connection with the Separation as described above. The exercise price of stock options equals the market price of our stock on the date of the grant. Options generally vest incrementally over three years and remain exercisable for ten years from the date of grant. During the three and six months ended March 31, 2018 and 2017 , no stock options were granted. A summary of stock option activity is presented below: Shares Weighted Average Exercise Price (In millions, except weighted average) Outstanding, September 30, 2017 0.5 $ 18.55 Granted — — Exercised — — Outstanding, March 31, 2018 0.5 $ 18.61 Shares Weighted Average Exercise Price (In millions, except weighted average) Outstanding, September 30, 2016 — $ — Converted on October 1, 2016 0.5 18.37 Granted — — Exercised — — Outstanding, March 31, 2017 0.5 $ 18.36 Weighted Average Remaining Contractual Terms (In years) Aggregate Intrinsic Value (In millions, except years) Outstanding, March 31, 2018 5.2 $ 8.8 Exercisable, March 31, 2018 5.2 8.8 Weighted Average Remaining Contractual Terms (In years) Aggregate Intrinsic Value (In millions, except years) Outstanding, March 31, 2017 5.9 $ 6.3 Exercisable, March 31, 2017 5.8 6.2 The aggregate intrinsic value represents the amount by which our closing stock price of $37.63 and $30.60 as of March 31, 2018 and 2017 exceeds the exercise price multiplied by the number of in-the-money options outstanding or exercisable. The total intrinsic value of stock options exercised was $0.3 million during the three and six months ended March 31, 2018 . The total intrinsic value of stock options exercised was $0.1 million during the three and six months ended March 31, 2017 . Compensation cost is generally recognized over the stated vesting period consistent with the terms of the arrangement (i.e., either on a straight-line or graded-vesting basis). Expense recognition is accelerated for retirement-eligible individuals who would meet the requirements for vesting of awards upon their retirement. As of March 31, 2018 the stock options were fully expensed. As of March 31, 2017 , there was $0.1 million of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 0.6 years. Director Awards Non-employee directors were granted equity awards under the Versum Long-Term Incentive Plan, with a grant date fair value of $100,000 annually. In the second quarter 2018 non-employee directors were granted restricted stock units (“RSUs”) for service on our Board of Directors through the 2019 annual meeting of stockholders. Subject to continued service on the Board of Directors, the RSUs vest on the earlier of February 8, 2019, and the date immediately prior to Versum's next annual meeting of stockholders, and will be settled in common stock upon vesting. The grant date fair value per share is equal to the closing sales price of our common stock as reported on the New York Stock Exchange on the date of grant. During the three and six months ended March 31, 2018 , $0.2 million and $0.3 million , respectively, in share-based compensation expense was recognized related to these awards. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY Accumulated Other Comprehensive Income (Loss) The table below summarizes changes in accumulated other comprehensive income (loss) (“AOCL”), net of tax: Net income on derivatives qualifying as hedges Foreign currency translation adjustments Pension and postretirement benefits Total (In millions) Balance, September 30, 2017 $ (0.2 ) $ (16.0 ) $ (2.2 ) $ (18.4 ) Other comprehensive income before reclassifications 0.1 26.3 — 26.4 Amounts reclassified from AOCL — — — — Net current period other comprehensive income 0.1 26.3 — 26.4 Other comprehensive income attributable to non-controlling interest — 1.6 — 1.6 Balance, March 31, 2018 $ (0.1 ) $ 8.7 $ (2.2 ) $ 6.4 Net loss on derivatives qualifying as hedges Foreign currency translation adjustments Pension and postretirement benefits Total (In millions) Balance, September 30, 2016 $ (0.2 ) $ (9.8 ) $ — $ (10.0 ) Other comprehensive loss before reclassifications — (4.6 ) — (4.6 ) Net transfers from Air Products — 3.8 (5.9 ) (2.1 ) Amounts reclassified from AOCL — — 0.2 0.2 Net current period other comprehensive loss — (0.8 ) (5.7 ) (6.5 ) Other comprehensive loss attributable to non-controlling interest — 1.4 — 1.4 Balance, March 31, 2017 $ (0.2 ) $ (12.0 ) $ (5.7 ) $ (17.9 ) The table below summarizes the reclassifications out of accumulated other comprehensive income (loss) and the affected line item on the consolidated income statements: Six Months Ended March 31, 2018 2017 (In millions) Pension and Postretirement Benefits, net of tax (A) $ — $ 0.2 (A) The components include actuarial loss amortization and are reflected in net periodic benefit cost. Refer to Note 10 , Retirement Benefits , for further information. Cash Dividend Holders of the Company’s common stock are entitled to receive dividends when they are declared by the Company’s Board of Directors. On October 31, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.05 per share, totaling $5.5 million , which was paid on November 27, 2017 to shareholders of record as of November 13, 2017. On January 30, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.05 per share, totaling $5.4 million , which was paid on February 27, 2018 to shareholders of record as of February 13, 2018. Future dividend declarations, if any, as well as the record and payment dates for such dividends, are subject to the final determination of the Company’s Board of Directors. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions, except per share data) Numerator Net Income Attributable to Versum $ 61.6 $ 44.9 $ 80.2 $ 95.7 Denominator Weighted average number of common shares - Basic 108.9 108.7 108.9 108.7 Effect of dilutive securities Employee stock option and other award plans 0.8 0.6 0.9 0.5 Weighted average number of common shares - Diluted 109.7 109.3 109.8 109.2 Earnings Per Common Share Attributable to Versum Net Income Attributable to Versum - Basic $ 0.57 $ 0.41 $ 0.74 $ 0.88 Net Income Attributable to Versum - Diluted 0.56 0.41 0.73 0.88 For the three and six months ended March 31, 2018 , outstanding share-based awards of 0.2 million and 0.1 million shares, respectively, were anti-dilutive and therefore excluded from the computation of diluted earnings per share. For the three and six months ended March 31, 2017 , outstanding share-based awards of 0.0 million and 0.1 million shares, respectively, were anti-dilutive and therefore excluded from the computation of diluted earnings per share. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation In the normal course of business, Versum may be involved in various legal proceedings, including commercial, environmental, health, safety, and product liability matters. Although litigation with respect to these matters is routine and incidental to the conduct of our business, such litigation may result in large monetary awards for compensatory and punitive damages. Versum does not currently believe that there are any legal proceedings, individually or in the aggregate, that are reasonably possible to have a material impact on its financial condition, results of operations, or cash flows. While Versum cannot predict the outcome of any litigation, environmental, or regulatory matter or the potential for future litigation or regulatory action, we have evaluated all litigation, environmental and regulatory proceedings, claims and assessments in which Versum is involved, and do not believe that any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any. Refer to Note 21 of "Notes to the Annual Consolidated Financial Statements" in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended September 30, 2017 , for additional information regarding commitments and contingencies. |
Segment Information
Segment Information | 6 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We are comprised of two primary operating segments, Materials and Delivery Systems and Services, under which we manage our operations and assess performance, and a Corporate segment. Our segments are differentiated by the types of products sold. Segment Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Sales Materials $ 218.9 $ 198.3 $ 433.5 $ 406.3 Delivery Systems and Services 121.1 71.7 236.4 133.6 Corporate 0.7 0.8 1.6 1.7 Total $ 340.7 $ 270.8 $ 671.5 $ 541.6 Operating Income (Loss) Materials $ 71.6 $ 65.1 $ 137.4 $ 138.0 Delivery Systems and Services 32.9 17.7 66.3 30.1 Corporate (6.9 ) (6.8 ) (15.4 ) (9.8 ) Segment Total $ 97.6 $ 76.0 $ 188.3 $ 158.3 Business separation, restructuring and cost reduction actions (8.2 ) (6.1 ) (10.0 ) (9.3 ) Total $ 89.4 $ 69.9 $ 178.3 $ 149.0 March 31, 2018 September 30, 2017 (In millions) Total Assets Materials $ 831.8 $ 773.8 Delivery Systems and Services 151.1 110.9 Corporate 362.5 362.1 Total $ 1,345.4 $ 1,246.8 |
Subsequent Event
Subsequent Event | 6 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT Cash Dividend On May 2, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.06 per share, to be paid on May 29, 2018 to shareholders of record as of May 15, 2018. |
Basis of Presentation and Maj25
Basis of Presentation and Major Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements are presented on a consolidated basis and include all of the accounts and operations of Versum and its majority-owned subsidiaries. The financial statements reflect the financial position, results of operations and cash flows of Versum in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. |
Consolidation | The financial statements are unaudited and should be read in conjunction with the Annual Consolidated Financial Statements presented in the Company's Annual Report on Form 10-K for our fiscal year ended September 30, 2017 . The financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented; all adjustments have been included to provide a fair statement of the results for the reporting periods presented. All significant inter-company accounts and transactions have been eliminated. |
Estimates and Assumptions | Estimates and Assumptions The Consolidated Financial Statements have been prepared in conformity with GAAP, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. |
Business Separation, Restruct26
Business Separation, Restructuring, and Cost Reduction Actions (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of the Carrying Amount of the Accrual for the Business Alignment and Reorganization | The following table summarizes the carrying amount of the accrual for the business separation, restructuring and cost reduction actions at March 31, 2018 : Severance and Other Benefits (In millions) Balance, September 30, 2017 $ 4.2 Current Period Charge 0.2 Cash Payments (1.3 ) Balance, March 31, 2018 $ 3.1 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories are as follows: March 31, 2018 September 30, 2017 (In millions) Inventories at FIFO cost Finished goods $ 98.0 $ 87.6 Work in process 18.0 20.3 Raw materials, supplies and other 60.8 52.5 176.8 160.4 Less: Excess of FIFO cost over LIFO cost (9.0 ) (8.8 ) Inventories $ 167.8 $ 151.6 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes to the Carrying Amount of Goodwill by Segment | Changes to the carrying amount of goodwill by segment are as follows: Materials Delivery Systems and Services Total (In millions) Balance, September 30, 2017 $ 165.3 $ 17.3 $ 182.6 Currency translation adjustment 5.2 0.4 5.6 Balance, March 31, 2018 $ 170.5 $ 17.7 $ 188.2 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Components of Debt | Components of Debt March 31, 2018 September 30, 2017 (In millions) Short-term borrowings (A) $ — $ — Current portion of long-term debt 5.8 5.8 Long-term debt 976.1 977.0 Total Debt $ 981.9 $ 982.8 (A) Represents borrowing under foreign lines of credit by non-U.S. subsidiaries which are short term in nature. Availability under these lines of credit at March 31, 2018 is $20.8 million . |
Long-term Debt | Long-term debt March 31, 2018 September 30, 2017 (In millions) Term loan facility under Credit Agreement $ 566.4 $ 569.3 Revolving facility under Credit Agreement — — 5.500% Senior Notes due 2024 425.0 425.0 Total debt 991.4 994.3 Less debt discount 2.0 2.5 Less deferred debt costs 7.5 9.0 Less current portion of long-term debt 5.8 5.8 Long-term debt payable after one year $ 976.1 $ 977.0 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of the Fair Value and Balance Sheet Location of Outstanding Derivatives | The tables below summarize the fair values of our derivatives not designated as hedging instruments and balance sheet location of these outstanding derivatives: March 31, 2018 Balance Sheet Location Amount Balance Sheet Location Amount (In millions) Forward exchange contracts Other current assets $ — Payables and accrued liabilities $ 1.1 September 30, 2017 Balance Sheet Location Amount Balance Sheet Location Amount (In millions) Forward exchange contracts Other current assets $ 0.9 Payables and accrued liabilities $ 1.5 |
Summary of Gain or Loss Related to Forward Contract Cash Flow Hedges and Forward Contracts Not Designated as Hedging Instrument | The table below summarizes the gain or loss related to our forward contracts: Three Months Ended March 31, Six Months Ended March 31, (In millions) 2018 2017 2018 2017 Forward Exchange Contracts, net of tax: Net loss recognized in other (income) expense, net (A) $ 1.9 $ 0.9 $ 1.9 $ 1.1 (A) The impact of the non-designated hedges noted above was largely offset by gains and losses resulting from the impact of changes in exchange rates on recognized assets and liabilities denominated in nonfunctional currencies. |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Carrying Values and Fair Values of Derivatives and Debt | The carrying values and fair values of our derivatives and debt are as follows: March 31, 2018 September 30, 2017 Fair Value Carrying Value Fair Value Carrying Value (In millions) Assets Forward Exchange Contracts $ — $ — $ 0.9 $ 0.9 Liabilities Forward Exchange Contracts $ 1.1 $ 1.1 $ 1.5 $ 1.5 Long-term Debt Senior Notes $ 440.9 $ 425.0 $ 450.5 $ 425.0 Term Facility 571.0 566.4 575.7 569.3 Total Long-term Debt $ 1,011.9 $ 991.4 $ 1,026.2 $ 994.3 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Net Period Pension Costs | The components of net periodic pension costs for Versum’s defined benefit pension plans are as follows: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Service cost $ 0.5 $ 0.5 $ 1.0 $ 1.1 Interest cost 0.2 0.2 0.4 0.3 Actuarial loss amortization — 0.1 — 0.2 Net periodic pension cost $ 0.7 $ 0.8 $ 1.4 $ 1.6 |
Defined Contribution Expense | The following table summarizes our defined contribution expense: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Defined contribution expense $ 2.1 $ 1.8 $ 4.2 $ 3.7 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Cost Recognized | hare-based compensation awards cost recognized in the consolidated income statement is summarized below: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Before-Tax Share-Based Compensation Award Cost $ 2.6 $ 1.9 $ 5.0 $ 3.5 Income Tax Benefit 0.6 0.7 1.2 1.2 After-Tax Share-Based Compensation Award Cost $ 2.0 $ 1.2 $ 3.8 $ 2.3 |
Share-based Compensation Cost by Type of Program | Total before-tax share-based compensation award cost by type of program was as follows: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Restricted stock units $ 2.4 $ 1.9 $ 4.7 $ 3.4 Stock options — — — 0.1 Director awards 0.2 — 0.3 — Before-Tax Share-Based Compensation Cost $ 2.6 $ 1.9 $ 5.0 $ 3.5 |
Assumptions Used in the Calculation of the Fair Value of Market-based Deferred Stock Units | The calculation of the fair value of market-based restricted stock units during the six months ended March 31, 2018 and 2017 used the following assumptions: Six Months Ended March 31, 2018 2017 (In percentages) Expected volatility 28.0 % 28.7 % Risk-free interest rate 1.9 % 1.4 % Expected dividend yield 0.5 % — % |
Summary of Restricted Stock Unit Activity | A summary of restricted stock unit activity is presented below: Shares Weighted Average Grant-Date Fair Value (In millions, except weighted average) Outstanding, September 30, 2017 1.1 $ 25.30 Granted 0.2 47.23 Paid out (0.2 ) 29.68 Outstanding, March 31, 2018 1.1 $ 29.40 Shares Weighted Average Grant-Date Fair Value (In millions, except weighted average) Outstanding, September 30, 2016 — $ — Converted on October 1, 2016 0.5 22.85 Granted 0.7 25.30 Paid out (0.1 ) 15.55 Outstanding, March 31, 2017 1.1 $ 25.30 |
Summary of Stock Option Activity | A summary of stock option activity is presented below: Shares Weighted Average Exercise Price (In millions, except weighted average) Outstanding, September 30, 2017 0.5 $ 18.55 Granted — — Exercised — — Outstanding, March 31, 2018 0.5 $ 18.61 Shares Weighted Average Exercise Price (In millions, except weighted average) Outstanding, September 30, 2016 — $ — Converted on October 1, 2016 0.5 18.37 Granted — — Exercised — — Outstanding, March 31, 2017 0.5 $ 18.36 Weighted Average Remaining Contractual Terms (In years) Aggregate Intrinsic Value (In millions, except years) Outstanding, March 31, 2018 5.2 $ 8.8 Exercisable, March 31, 2018 5.2 8.8 Weighted Average Remaining Contractual Terms (In years) Aggregate Intrinsic Value (In millions, except years) Outstanding, March 31, 2017 5.9 $ 6.3 Exercisable, March 31, 2017 5.8 6.2 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | The table below summarizes changes in accumulated other comprehensive income (loss) (“AOCL”), net of tax: Net income on derivatives qualifying as hedges Foreign currency translation adjustments Pension and postretirement benefits Total (In millions) Balance, September 30, 2017 $ (0.2 ) $ (16.0 ) $ (2.2 ) $ (18.4 ) Other comprehensive income before reclassifications 0.1 26.3 — 26.4 Amounts reclassified from AOCL — — — — Net current period other comprehensive income 0.1 26.3 — 26.4 Other comprehensive income attributable to non-controlling interest — 1.6 — 1.6 Balance, March 31, 2018 $ (0.1 ) $ 8.7 $ (2.2 ) $ 6.4 Net loss on derivatives qualifying as hedges Foreign currency translation adjustments Pension and postretirement benefits Total (In millions) Balance, September 30, 2016 $ (0.2 ) $ (9.8 ) $ — $ (10.0 ) Other comprehensive loss before reclassifications — (4.6 ) — (4.6 ) Net transfers from Air Products — 3.8 (5.9 ) (2.1 ) Amounts reclassified from AOCL — — 0.2 0.2 Net current period other comprehensive loss — (0.8 ) (5.7 ) (6.5 ) Other comprehensive loss attributable to non-controlling interest — 1.4 — 1.4 Balance, March 31, 2017 $ (0.2 ) $ (12.0 ) $ (5.7 ) $ (17.9 ) |
Reclassification out of Accumulated Other Comprehensive Loss | The table below summarizes the reclassifications out of accumulated other comprehensive income (loss) and the affected line item on the consolidated income statements: Six Months Ended March 31, 2018 2017 (In millions) Pension and Postretirement Benefits, net of tax (A) $ — $ 0.2 (A) The components include actuarial loss amortization and are reflected in net periodic benefit cost. Refer to Note 10 , Retirement Benefits , for further information. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions, except per share data) Numerator Net Income Attributable to Versum $ 61.6 $ 44.9 $ 80.2 $ 95.7 Denominator Weighted average number of common shares - Basic 108.9 108.7 108.9 108.7 Effect of dilutive securities Employee stock option and other award plans 0.8 0.6 0.9 0.5 Weighted average number of common shares - Diluted 109.7 109.3 109.8 109.2 Earnings Per Common Share Attributable to Versum Net Income Attributable to Versum - Basic $ 0.57 $ 0.41 $ 0.74 $ 0.88 Net Income Attributable to Versum - Diluted 0.56 0.41 0.73 0.88 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Three Months Ended March 31, Six Months Ended March 31, 2018 2017 2018 2017 (In millions) Sales Materials $ 218.9 $ 198.3 $ 433.5 $ 406.3 Delivery Systems and Services 121.1 71.7 236.4 133.6 Corporate 0.7 0.8 1.6 1.7 Total $ 340.7 $ 270.8 $ 671.5 $ 541.6 Operating Income (Loss) Materials $ 71.6 $ 65.1 $ 137.4 $ 138.0 Delivery Systems and Services 32.9 17.7 66.3 30.1 Corporate (6.9 ) (6.8 ) (15.4 ) (9.8 ) Segment Total $ 97.6 $ 76.0 $ 188.3 $ 158.3 Business separation, restructuring and cost reduction actions (8.2 ) (6.1 ) (10.0 ) (9.3 ) Total $ 89.4 $ 69.9 $ 178.3 $ 149.0 |
Assets | March 31, 2018 September 30, 2017 (In millions) Total Assets Materials $ 831.8 $ 773.8 Delivery Systems and Services 151.1 110.9 Corporate 362.5 362.1 Total $ 1,345.4 $ 1,246.8 |
Basis of Presentation and Maj37
Basis of Presentation and Major Accounting Policies (Details) | 6 Months Ended |
Mar. 31, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of primary operating segments | 2 |
Business Separation, Restruct38
Business Separation, Restructuring, and Cost Reduction Actions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Net restructuring charge (gain) | $ (8.2) | $ (6.1) | $ (10) | $ (9.3) |
Business Separation, Restruct39
Business Separation, Restructuring, and Cost Reduction Actions (Details) - Severance and Other Benefits $ in Millions | 6 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | $ 4.2 |
Current Period Charge | 0.2 |
Cash Payments | (1.3) |
Restructuring reserve, ending balance | $ 3.1 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Inventories at FIFO cost | ||
Finished goods | $ 98 | $ 87.6 |
Work in process | 18 | 20.3 |
Raw materials, supplies and other | 60.8 | 52.5 |
Inventories at FIFO cost | 176.8 | 160.4 |
Less: Excess of FIFO cost over LIFO cost | (9) | (8.8) |
Inventories | $ 167.8 | $ 151.6 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 182.6 |
Currency translation adjustment | 5.6 |
Goodwill, ending balance | 188.2 |
Materials | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 165.3 |
Currency translation adjustment | 5.2 |
Goodwill, ending balance | 170.5 |
Delivery Systems and Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 17.3 |
Currency translation adjustment | 0.4 |
Goodwill, ending balance | $ 17.7 |
Debt - Components of Debt (Deta
Debt - Components of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Debt Disclosure [Abstract] | ||
Short-term borrowings | $ 0 | $ 0 |
Current portion of long-term debt | 5.8 | 5.8 |
Long-term debt | 976.1 | 977 |
Total Debt | 981.9 | $ 982.8 |
Foreign lines of credit | ||
Short-term Debt [Line Items] | ||
Availability under line of credit | $ 20.8 |
Debt - Components of Long Term
Debt - Components of Long Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Debt Instrument [Line Items] | |||
Total debt | $ 991.4 | $ 994.3 | |
Less debt discount | 2 | 2.5 | |
Less deferred debt costs | 7.5 | 9 | |
Less current portion of long-term debt | 5.8 | 5.8 | |
Long-term debt payable after one year | $ 976.1 | 977 | |
Term loan facility under Credit Agreement | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 4.30% | ||
Total debt | $ 566.4 | 569.3 | |
Line of Credit | Revolving facility under Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total debt | 0 | 0 | |
Senior Notes | 5.500% Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Total debt | $ 425 | $ 425 | |
Interest rate (as percent) | 5.50% | 5.50% |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Oct. 10, 2017 | Sep. 30, 2016USD ($) | Mar. 31, 2018USD ($) |
Term Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 575,000,000 | ||
Effective interest rate (as percent) | 4.30% | ||
Term facility, percent original principal annual amortization (as percent) | 1.00% | ||
Term Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Prepayment amount of excess cash flows, percentage | 0.00% | ||
Term Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Prepayment amount of excess cash flows, percentage | 50.00% | ||
Term Facility | Prior Four Quarter Period After Delivery of Financial Statements | |||
Debt Instrument [Line Items] | |||
Net leverage ratio | 2 | ||
Term Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Minimum floor (as percent) | 0.75% | ||
Basis spread on variable rate (as percent) | 2.00% | 2.50% | |
Term Facility | LIBOR | Leverage Ratio is Met [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as percent) | 1.75% | ||
Term Facility | Base Rate | |||
Debt Instrument [Line Items] | |||
Minimum floor (as percent) | 1.75% | ||
Basis spread on variable rate (as percent) | 1.00% | 1.50% | |
Term Facility | Base Rate | Leverage Ratio is Met [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as percent) | 0.75% | ||
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 200,000,000 | ||
Commitment fee percentage (as percent) | 0.375% | ||
Fronting fee percentage (as percent) | 0.125% | ||
Maximum net leverage ratio | 3.25 | ||
Remaining borrowing capacity | $ 200,000,000 | ||
Line of Credit | Revolving Credit Facility | Prior Four Quarter Period | |||
Debt Instrument [Line Items] | |||
Net leverage ratio | 1 | ||
Line of Credit | Revolving Credit Facility | Prior Four Quarter Period After Delivery of Financial Statements | |||
Debt Instrument [Line Items] | |||
Net leverage ratio | 1 | ||
Line of Credit | Revolving Credit Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as percent) | 2.00% | ||
Basis spread on variable rate, reduction (as percent) | 0.25% | ||
Line of Credit | Revolving Credit Facility | LIBOR | Prior Four Quarter Period After Delivery of Financial Statements | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate, reduction (as percent) | 0.25% | ||
Line of Credit | Revolving Credit Facility | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as percent) | 1.00% | ||
Senior Notes | 5.5% Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 425,000,000 | ||
Interest rate (as percent) | 5.50% | 5.50% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | Oct. 01, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2016 |
Income Tax Examination [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||||||
Net expense in consolidated income statements related to change in tax law | $ 3.7 | $ 33.8 | |||||
Change in effective tax rate from tax act adjustments | 2.40% | ||||||
Expense related to repatriation tax and future repatriation effect on foreign investments | 45.9 | ||||||
Tax Cuts And Jobs Act Of 2017 Change In Tax Rate Deferred Tax Liability Income Tax Expense Benefit | 12 | ||||||
Income taxes payable | $ 46.5 | 46.5 | $ 31.4 | ||||
Undistributed foreign earnings, tax | $ 2.5 | $ 2.5 | $ 1.3 | ||||
Subsequent Event [Member] | |||||||
Income Tax Examination [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 24.50% | |||||
Tax Act Additional Federal Portion of the Liability to be Paid in Cash | $ 2.5 |
Financial Instruments (Details)
Financial Instruments (Details) - Derivative Designated as Hedging Instruments $ in Millions | 6 Months Ended | ||
Mar. 31, 2018USD ($)derivative_instrument | Mar. 31, 2017 | Sep. 30, 2017USD ($)derivative_instrument | |
Derivative [Line Items] | |||
Number of derivatives | derivative_instrument | 0 | 0 | |
Cash Flow Hedge | Forward exchange contracts | |||
Derivative [Line Items] | |||
Maximum remaining term | 6 months | 6 months | |
Notional amount | $ | $ 33.8 | $ 158.4 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value and Balance Sheet Location of Outstanding Derivatives (Details) - Forward exchange contracts - Fair Value - Level 2 - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset | $ 0 | $ 0.9 |
Derivative Liability | $ 1.1 | $ 1.5 |
Financial Instruments - Gain or
Financial Instruments - Gain or Loss Related to Forward Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Forward exchange contracts | Derivatives Not Designated as Hedging Instruments | Other (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net loss recognized in other (income) expense, net | $ 1.9 | $ 0.9 | $ 1.9 | $ 1.1 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Long-term Debt | $ 1,011.9 | $ 1,026.2 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Long-term Debt | 991.4 | 994.3 |
Level 2 | Fair Value | Term Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Long-term Debt | 571 | 575.7 |
Level 2 | Carrying Value | Term Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Long-term Debt | 566.4 | 569.3 |
Level 2 | Forward Exchange Contracts | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Forward Exchange Contracts | 0 | 0.9 |
Liabilities, Forward Exchange Contracts | 1.1 | 1.5 |
Level 2 | Forward Exchange Contracts | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Forward Exchange Contracts | 0 | 0.9 |
Liabilities, Forward Exchange Contracts | 1.1 | 1.5 |
Level 1 | Fair Value | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Long-term Debt | 440.9 | 450.5 |
Level 1 | Carrying Value | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total Long-term Debt | $ 425 | $ 425 |
Retirement Benefits - Net Perio
Retirement Benefits - Net Periodic Pension Cost (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.5 | $ 0.5 | $ 1 | $ 1.1 |
Interest cost | 0.2 | 0.2 | 0.4 | 0.3 |
Actuarial loss amortization | 0 | 0.1 | 0 | 0.2 |
Net periodic pension cost | $ 0.7 | $ 0.8 | $ 1.4 | $ 1.6 |
Retirement Benefits - Defined B
Retirement Benefits - Defined Benefit Contribution (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | ||||
Defined contribution expense | $ 2.1 | $ 1.8 | $ 4.2 | $ 3.7 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) | Oct. 01, 2016 | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / shares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted (in shares) | shares | 0 | 0 | 0 | ||
Closing stock price (in dollars per share) | $ / shares | $ 37.63 | $ 30.6 | $ 37.63 | $ 30.6 | |
Total intrinsic value of stock options exercised | $ 300,000 | $ 100,000 | $ 300,000 | $ 100,000 | |
Unrecognized compensation cost related to non-vested stock options | 100,000 | 100,000 | |||
Allocated Share-based Compensation Expense | 2,600,000 | 1,900,000 | $ 5,000,000 | $ 3,500,000 | |
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Service period | 3 years | ||||
Vesting period | 4 years | ||||
Shares granted (in shares) | shares | 200,000 | 700,000 | |||
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 47.23 | $ 25.30 | |||
Share-based compensation costs paid | 0 | $ 0 | |||
Unrecognized compensation cost related to restricted stock units | 18,900,000 | 18,100,000 | $ 18,900,000 | $ 18,100,000 | |
Weighted average period to recognize compensation costs | 2 years 4 months | 3 years | |||
Total fair value of shares paid out | 0 | 200,000 | $ 5,000,000 | $ 1,700,000 | |
Allocated Share-based Compensation Expense | 2,400,000 | 1,900,000 | $ 4,700,000 | $ 3,400,000 | |
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Weighted average period to recognize compensation costs | 7 months | ||||
Exercise period | 10 years | ||||
Allocated Share-based Compensation Expense | 0 | 0 | $ 0 | $ 100,000 | |
Director Award [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual Director Award | 100,000,000 | ||||
Allocated Share-based Compensation Expense | $ 200,000 | $ 0 | $ 300,000 | $ 0 | |
Long-Term Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant (in shares) | shares | 3,200,000 | 3,200,000 | |||
Long-Term Incentive Plan | Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted (in shares) | shares | 424,247 | ||||
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 22.53 | ||||
Long-Term Incentive Plan | Restricted stock units | Vesting period 1, October 1, 2018 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage (as percent) | 33.33% | ||||
Long-Term Incentive Plan | Restricted stock units | Vesting period 2, October 1, 2019 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage (as percent) | 33.33% | ||||
Long-Term Incentive Plan | Restricted stock units | Vesting period 3, October 1, 2020 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage (as percent) | 33.33% | ||||
Long-Term Incentive Plan | Market-based restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted (in shares) | shares | 200,088 | 304,520 | |||
Payout determination period | 90 days | ||||
Long-Term Incentive Plan | Performance-based restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 50.18 | $ 29.68 | |||
Long-Term Incentive Plan | Performance-based market stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average grant-date fair value (in dollars per share) | $ / shares | $ 45.71 | $ 28.37 | |||
Air Products | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock split conversion ratio | 0.5 |
Share-Based Compensation - Comp
Share-Based Compensation - Compensation Awards Cost Recognized (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Before-Tax Share-Based Compensation Award Cost | $ (2.6) | $ (1.9) | $ (5) | $ (3.5) |
Income Tax Benefit | 0.6 | 0.7 | 1.2 | 1.2 |
After-Tax Share-Based Compensation Award Cost | $ 2 | $ 1.2 | $ 3.8 | $ 2.3 |
Share-Based Compensation - Befo
Share-Based Compensation - Before-tax Share-Based Compensation Award (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Before-Tax Share-Based Compensation Cost | $ 2.6 | $ 1.9 | $ 5 | $ 3.5 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Before-Tax Share-Based Compensation Cost | 2.4 | 1.9 | 4.7 | 3.4 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Before-Tax Share-Based Compensation Cost | 0 | 0 | 0 | 0.1 |
Director Award [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Before-Tax Share-Based Compensation Cost | $ 0.2 | $ 0 | $ 0.3 | $ 0 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions used in Calculation of Fair Value of Market-based Restricted Stock Units (Details) - Market-based restricted stock units | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 28.00% | 28.70% |
Risk-free interest rate | 1.90% | 1.40% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.50% | 0.00% |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted stock units - $ / shares shares in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | ||
Outstanding, September 30, 2016 (in shares) | 1.1 | 0 |
Converted on October 1, 2016 (in shares) | 0.5 | |
Paid out (in shares) | 0.2 | 0.7 |
Forfeited/adjustments (in shares) | (0.2) | (0.1) |
Outstanding at June 30, 2017 (in shares) | 1.1 | 1.1 |
Weighted Average Grant-Date Fair Value | ||
Outstanding, September 30, 2016 (in dollars per share) | $ 25.30 | $ 0 |
Granted (in dollars per share) | 22.85 | |
Paid out (in dollars per share) | 47.23 | 25.30 |
Forfeited/adjustments (in dollars per share) | 29.68 | 15.55 |
Outstanding at June 30, 2017 (in dollars per share) | $ 29.40 | $ 25.30 |
Share-Based Compensation - Su57
Share-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | |||
Outstanding, September 30, 2016 (in shares) | 500,000 | 0 | |
Converted on October 1, 2016 (in shares) | 500,000 | ||
Exercised (in shares) | 0 | 0 | 0 |
Forfeited (in shares) | 0 | 0 | |
Outstanding at March 31, 2017 (in shares) | 500,000 | 500,000 | 500,000 |
Weighted Average Exercise Price | |||
Outstanding, September 30, 2016 (in dollars per share) | $ 18.55 | $ 0 | |
Converted on October 1, 2016 (in dollars per share) | 18.37 | ||
Exercised (in dollars per share) | 0 | 0 | |
Forfeited (in dollars per share) | 0 | 0 | |
Outstanding at March 31, 2017 (in dollars per share) | $ 18.61 | $ 18.61 | $ 18.36 |
Weighted average remaining contractual terms, options outstanding | 5 years 2 months | 5 years 11 months | |
Aggregate intrinsic value, options outstanding | $ 8.8 | $ 8.8 | $ 6.3 |
Weighted average remaining contractual terms, options exercisable | 5 years 2 months | 5 years 9 months | |
Aggregate intrinsic value, options exercisable | $ 8.8 | $ 8.8 | $ 6.2 |
Stockholders' Equity - Changes
Stockholders' Equity - Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Stockholders' equity, beginning balance | $ 24.6 | $ (103.4) | ||
Other comprehensive loss before reclassifications | 26.4 | (4.6) | ||
Net transfers from Air Products | (2.1) | |||
Amounts reclassified from AOCL | 0 | 0.2 | ||
Total Other Comprehensive Income (Loss) | $ 6.6 | $ 29.1 | 26.4 | (6.5) |
Other comprehensive loss attributable to non-controlling interest | 0.9 | 2.4 | 1.6 | 1.4 |
Stockholders' equity, ending balance | 127 | (61.7) | 127 | (61.7) |
Accumulated other comprehensive loss | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Stockholders' equity, beginning balance | (18.4) | (10) | ||
Stockholders' equity, ending balance | 6.4 | (17.9) | 6.4 | (17.9) |
Net loss on derivatives qualifying as hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Stockholders' equity, beginning balance | (0.2) | (0.2) | ||
Other comprehensive loss before reclassifications | 0.1 | 0 | ||
Net transfers from Air Products | 0 | |||
Amounts reclassified from AOCL | 0 | 0 | ||
Total Other Comprehensive Income (Loss) | 0.1 | 0 | ||
Other comprehensive loss attributable to non-controlling interest | 0 | 0 | ||
Stockholders' equity, ending balance | (0.1) | (0.2) | (0.1) | (0.2) |
Foreign currency translation adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Stockholders' equity, beginning balance | (16) | (9.8) | ||
Other comprehensive loss before reclassifications | 26.3 | (4.6) | ||
Net transfers from Air Products | 3.8 | |||
Amounts reclassified from AOCL | 0 | 0 | ||
Total Other Comprehensive Income (Loss) | 26.3 | (0.8) | ||
Other comprehensive loss attributable to non-controlling interest | 1.6 | 1.4 | ||
Stockholders' equity, ending balance | 8.7 | (12) | 8.7 | (12) |
Pension and postretirement benefits | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Stockholders' equity, beginning balance | (2.2) | 0 | ||
Other comprehensive loss before reclassifications | 0 | 0 | ||
Net transfers from Air Products | (5.9) | |||
Amounts reclassified from AOCL | 0 | 0.2 | ||
Total Other Comprehensive Income (Loss) | 0 | (5.7) | ||
Other comprehensive loss attributable to non-controlling interest | 0 | 0 | ||
Stockholders' equity, ending balance | $ (2.2) | $ (5.7) | $ (2.2) | $ (5.7) |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Pension and Postretirement Benefits, net of tax | $ 0 | $ 0.2 |
Pension and Postretirement Benefits, net of tax | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Pension and Postretirement Benefits, net of tax | $ 0 | $ 0.2 |
Stockholders' Equity - Cash Div
Stockholders' Equity - Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 27, 2018 | Nov. 27, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Equity [Abstract] | ||||
Quarterly cash dividend declared (usd per share) | $ 0.05 | $ 0.05 | ||
Cash dividends paid | $ 5.4 | $ 5.5 | $ 10.9 | $ 5.4 |
Payments of Dividends | $ 10.9 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator | ||||
Net Income Attributable to Versum | $ 61.6 | $ 44.9 | $ 80.2 | $ 95.7 |
Denominator | ||||
Weighted average number of common shares - Basic (shares) | 108.9 | 108.7 | 108.9 | 108.7 |
Effect of dilutive securities | ||||
Employee stock option and other award plans (shares) | 0.8 | 0.6 | 0.9 | 0.5 |
Weighted average number of common shares - Diluted (shares) | 109.7 | 109.3 | 109.8 | 109.2 |
Earnings Per Common Share Attributable to Versum | ||||
Net Income Attributable to Versum - Basic (usd per share) | $ 0.57 | $ 0.41 | $ 0.74 | $ 0.88 |
Net Income Attributable to Versum - Diluted (usd per share) | $ 0.56 | $ 0.41 | $ 0.73 | $ 0.88 |
Share-based awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the computation of earnings per share (shares) | 0.2 | 0 | 0.1 | 0.1 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 6 Months Ended |
Mar. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of primary operating segments | 2 |
Segment Information - Segments
Segment Information - Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |||||
Sales | $ 340.7 | $ 270.8 | $ 671.5 | $ 541.6 | |
Business separation, restructuring and cost reduction actions | (8.2) | (6.1) | (10) | (9.3) | |
Operating Income (Loss) | 89.4 | 69.9 | 178.3 | 149 | |
Total Assets | 1,345.4 | 1,345.4 | $ 1,246.8 | ||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Operating Income (Loss) | 97.6 | 76 | 188.3 | 158.3 | |
Operating Segments | Materials | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 218.9 | 198.3 | 433.5 | 406.3 | |
Operating Income (Loss) | 71.6 | 65.1 | 137.4 | 138 | |
Total Assets | 831.8 | 831.8 | 773.8 | ||
Operating Segments | Delivery Systems and Services | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 121.1 | 71.7 | 236.4 | 133.6 | |
Operating Income (Loss) | 32.9 | 17.7 | 66.3 | 30.1 | |
Total Assets | 151.1 | 151.1 | 110.9 | ||
Operating Segments | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 0.7 | 0.8 | 1.6 | 1.7 | |
Operating Income (Loss) | (6.9) | (6.8) | (15.4) | (9.8) | |
Total Assets | 362.5 | 362.5 | $ 362.1 | ||
Segment Reconciling Items | |||||
Segment Reporting Information [Line Items] | |||||
Business separation, restructuring and cost reduction actions | $ (8.2) | $ (6.1) | $ (10) | $ (9.3) |
Subsequent Event (Details)
Subsequent Event (Details) - $ / shares | May 29, 2018 | Feb. 27, 2018 | Nov. 27, 2017 |
Subsequent Event [Line Items] | |||
Quarterly cash dividend declared (usd per share) | $ 0.05 | $ 0.05 | |
Subsequent event | |||
Subsequent Event [Line Items] | |||
Quarterly cash dividend declared (usd per share) | $ 0.06 |