Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Sep. 30, 2021 | Nov. 15, 2021 | Mar. 31, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2021 | ||
Current Fiscal Year End Date | --09-30 | ||
Document Transition Report | false | ||
Entity File Number | 001-37884 | ||
Entity Registrant Name | VALVOLINE INC | ||
Entity Incorporation, State or Country Code | KY | ||
Entity Tax Identification Number | 30-0939371 | ||
Entity Address, Address Line One | 100 Valvoline Way | ||
Entity Address, City or Town | Lexington | ||
Entity Address, State or Province | KY | ||
Entity Address, Postal Zip Code | 40509 | ||
City Area Code | 859 | ||
Local Phone Number | 357-7777 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | VVV | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4.7 | ||
Entity Common Stock, Shares Outstanding | 180,039,902 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001674910 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2022 Annual Meeting of Shareholders (the “Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K and |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net Income (Loss) Attributable to Parent [Abstract] | |||
Sales | $ 2,981 | $ 2,353 | $ 2,390 |
Cost of sales | 2,001 | 1,490 | 1,580 |
Gross profit | 980 | 863 | 810 |
Selling, general and administrative expenses | 520 | 442 | 449 |
Net legacy and separation-related (income) expenses | (24) | (30) | 3 |
Equity and other income, net | (44) | (34) | (40) |
Operating income | 528 | 485 | 398 |
Net pension and other postretirement plan (income) expenses | (126) | (59) | 60 |
Net interest and other financing expenses | 111 | 93 | 73 |
Income before income taxes | 543 | 451 | 265 |
Income tax expense | 123 | 134 | 57 |
Net income | $ 420 | $ 317 | $ 208 |
NET EARNINGS PER SHARE | |||
Net income per share, basic (usd per share) | $ 2.30 | $ 1.70 | $ 1.10 |
Net income per share, diluted (usd per share) | $ 2.29 | $ 1.69 | $ 1.10 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||
Weighted average common shares outstanding, basic (in shares) | 182 | 187 | 189 |
Weighted average common shares outstanding, diluted (in shares) | 183 | 188 | 189 |
COMPREHENSIVE INCOME | |||
Net income | $ 420 | $ 317 | $ 208 |
Other comprehensive income (loss), net of tax | |||
Currency translation adjustments | 7 | 7 | (12) |
Amortization of pension and other postretirement plan prior service credits | (9) | (9) | (9) |
Unrealized gain (loss) on cash flow hedges | 2 | (1) | 0 |
Other comprehensive loss | 0 | (3) | (21) |
Comprehensive income | $ 420 | $ 314 | $ 187 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Millions, $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Current assets | ||
Cash and cash equivalents | $ 230 | $ 760 |
Receivables, net | 496 | 433 |
Inventories, net | 258 | 199 |
Prepaid expenses and other current assets | 53 | 46 |
Total current assets | 1,037 | 1,438 |
Noncurrent assets | ||
Property, plant and equipment, net | 817 | 613 |
Operating lease assets | 307 | 261 |
Goodwill and intangibles, net | 775 | 529 |
Equity method investments | 47 | 44 |
Deferred income taxes | 14 | 34 |
Other noncurrent assets | 194 | 132 |
Total noncurrent assets | 2,154 | 1,613 |
Total assets | 3,191 | 3,051 |
Current liabilities | ||
Current portion of long-term debt | 17 | 0 |
Trade and other payables | 246 | 189 |
Accrued expenses and other liabilities | 306 | 255 |
Total current liabilities | 569 | 444 |
Noncurrent liabilities | ||
Long-term debt | 1,677 | 1,962 |
Employee benefit obligations | 258 | 317 |
Deferred income taxes | 26 | 1 |
Operating lease liabilities | 274 | 231 |
Other noncurrent liabilities | 252 | 172 |
Total noncurrent liabilities | 2,487 | 2,683 |
Commitments and contingencies | ||
Stockholders’ equity (deficit) | ||
Preferred stock, no par value, 40 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, par value $0.01 per share, 400 shares authorized, 180 and 185 shares issued and outstanding at September 30, 2021 and 2020, respectively | 2 | 2 |
Paid-in capital | 35 | 24 |
Retained earnings (deficit) | 90 | (110) |
Accumulated other comprehensive income | 8 | 8 |
Total stockholders’ equity (deficit) | 135 | (76) |
Total liabilities and stockholders’ equity (deficit) | $ 3,191 | $ 3,051 |
Common stock issued (in shares) | 180 | 185 |
Common stock outstanding (in shares) | 180 | 185 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock authorized (in shares) | 40,000,000 | 40,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock issued (in shares) | 180,000,000 | 185,000,000 |
Common stock outstanding (in shares) | 180,000,000 | 185,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Millions, $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Common stock | Paid-in capital | Retained (deficit) earnings | Retained (deficit) earningsCumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated other comprehensive income |
Common stock outstanding, beginning balance (in shares) at Sep. 30, 2018 | 188 | ||||||
Balance at beginning of period at Sep. 30, 2018 | $ (358) | $ 2 | $ 7 | $ (399) | $ 32 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 208 | 208 | |||||
Dividends paid per common share (usd per share) | $ 0.424 | ||||||
Dividends paid | $ (80) | (80) | |||||
Stock-based compensation, net of issuances | 6 | 6 | |||||
Common stock outstanding, ending balance (in shares) at Sep. 30, 2019 | 188 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (21) | (21) | |||||
Balance at end of period at Sep. 30, 2019 | (258) | $ (13) | $ 2 | 13 | (284) | $ (13) | 11 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 317 | 317 | |||||
Dividends paid per common share (usd per share) | $ 0.452 | ||||||
Dividends paid | $ (84) | (84) | |||||
Stock-based compensation, net of issuances | 11 | 11 | |||||
Repurchase of common stock (in shares) | (3) | ||||||
Repurchase of common stock | $ (60) | (60) | |||||
Common stock outstanding, ending balance (in shares) at Sep. 30, 2020 | 185 | 185 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ (3) | (3) | |||||
Balance at end of period at Sep. 30, 2020 | (76) | 1 | $ 2 | 24 | (110) | $ 1 | 8 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 420 | 420 | |||||
Dividends paid per common share (usd per share) | $ 0.500 | ||||||
Dividends paid | $ (90) | (91) | |||||
Stock-based compensation, net of issuances | 10 | 10 | |||||
Repurchase of common stock (in shares) | (5) | ||||||
Repurchase of common stock | $ (127) | (127) | |||||
Common stock outstanding, ending balance (in shares) at Sep. 30, 2021 | 180 | 180 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ 0 | ||||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 1 | ||||||
Balance at end of period at Sep. 30, 2021 | $ 135 | $ (2) | $ 2 | $ 35 | $ 90 | $ 8 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Deficit (Parenthetical) - $ / shares | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends paid per common share (usd per share) | $ 0.500 | $ 0.452 | $ 0.424 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | |||
Net income | $ 420 | $ 317 | $ 208 |
Adjustments to reconcile to cash flows from operations | |||
Loss on extinguishment of debt | 36 | 19 | 0 |
Depreciation and amortization | 92 | 66 | 61 |
Deferred income taxes | 48 | 92 | 23 |
Pension contributions | (5) | (11) | (10) |
(Gain) loss on pension and other postretirement plan remeasurements | (72) | (22) | 69 |
Stock-based compensation expense | 14 | 12 | 9 |
Other, net | 4 | (5) | (5) |
Change in assets and liabilities | |||
Receivables | (65) | (11) | (30) |
Inventories | (53) | (1) | (10) |
Payables and accrued liabilities | 95 | (3) | 37 |
Other assets and liabilities | (110) | (81) | (27) |
Total cash provided by operating activities | 404 | 372 | 325 |
Cash flows from investing activities | |||
Additions to property, plant and equipment | (144) | (151) | (108) |
Notes receivable, net of repayments of $3 million in 2020 | 17 | (31) | (2) |
Acquisitions of businesses, net of cash acquired | (282) | (40) | (78) |
Other investing activities, net | 9 | 0 | 0 |
Total cash used in investing activities | (400) | (222) | (188) |
Cash flows from financing activities | |||
Proceeds from borrowings | 555 | 1,558 | 752 |
Payments of debt issuance costs and discounts | (7) | (16) | (2) |
Repayments on borrowings | (829) | (929) | (734) |
Premium paid to extinguish debt | (26) | (15) | 0 |
Repurchases of common stock | (127) | (60) | 0 |
Cash dividends paid | (91) | (84) | (80) |
Other financing activities | (11) | (4) | (7) |
Total cash (used in) provided by financing activities | (536) | 450 | (71) |
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash | 2 | 2 | (3) |
(Decrease) increase in cash, cash equivalents and restricted cash | (530) | 602 | 63 |
Cash, cash equivalents and restricted cash - beginning of year | 761 | 159 | 96 |
Cash, cash equivalents and restricted cash - end of year | 231 | 761 | 159 |
Interest paid | 62 | 65 | 67 |
Income taxes paid | $ 72 | $ 44 | $ 25 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Statement of Cash Flows [Abstract] | |
Proceeds from repayment of notes receivable | $ 3 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of business Valvoline Inc. (“Valvoline” or the “Company”) is a global vehicle and engine care company that powers the future of mobility through innovative services and products for electric, hybrid, and internal combustion powertrains. Established in 1866, Valvoline’s heritage spans 155 years, during which it has developed recognition across multiple service and product channels. Valvoline's services performed at its retail stores, Valvoline-branded passenger car motor oils, and complementary products are designed to serve evolving maintenance needs and improve vehicle and engine performance and lifespan. Valvoline operates and franchises approximately 1,600 service center locations and is the second and third largest chain in the United States (“U.S.”) and Canada, respectively, by number of stores. With sales in more than 140 countries and territories, Valvoline’s solutions are available for every engine and powertrain, including high-mileage and heavy-duty applications, and are offered at more than 80,000 locations worldwide. Basis of presentation and consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Securities and Exchange Commission (“SEC”) regulations. The financial statements are presented on a consolidated basis for all periods presented and include the operations of the Company and its majority-owned and controlled subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Valvoline’s significant accounting policies, which conform to U.S. GAAP and are applied on a consistent basis in all periods presented, except when otherwise disclosed, are described below. Use of estimates, risks and uncertainties The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent matters. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. Valvoline has substantially maintained its operations throughout the novel coronavirus ("COVID-19") pandemic to-date and has continued precautionary measures to protect the Company's employees and customers and manage through the currently known impacts on its business. Given the unprecedented nature of the pandemic, the extent of future impacts cannot be reasonably estimated at this time due to numerous uncertainties, including the ultimate duration and severity of the pandemic. Cash and cash equivalents All short-term, highly liquid investments having original maturities of three months or less are considered to be cash equivalents. Receivables and allowance for credit losses Valvoline invoices customers and recognizes a receivable within its Consolidated Balance Sheets once the Company performs a service or transfers control of a product, at which point its right to consideration becomes unconditional and only the passage of time is required before payment of that consideration is due. As the majority of the Company’s performance obligations are satisfied at a point in time and customers typically do not make material payments in advance, nor does Valvoline have a right to consideration in advance of control transfer, the Company has no contract assets or contract liabilities. Valvoline adopted guidance in fiscal 2021 that changes the recognition of credit losses from an incurred or probable loss methodology to a current expected credit loss model, which results in the immediate recognition of losses that are expected to occur over the life of the financial instruments, principally trade and other receivables. Allowances are maintained to estimate expected lifetime credit losses that are based on a broad range of reasonable and supportable information and factors, including the length of time receivables are past due, the financial health of its customers, macroeconomic conditions, and historical collection experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible receivables against the allowance when collection efforts have been exhausted and/or any legal action taken by the Company has concluded. Inventories Inventories are primarily carried at the lower of cost or net realizable value using the weighted average cost method. In addition, certain lubricants are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method to provide matching of revenues with current costs. Inventory costs include materials, labor and manufacturing overhead related to the purchase and production of inventories. The Company regularly reviews inventory quantities on hand and the estimated utilization of inventory. Excess and obsolete reserves are established when inventory is estimated to not be usable based on forecasts, product demand, life cycle, or utility. Property, plant and equipment Property, plant and equipment is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the assets. Buildings generally have useful lives of ten two thirty Property, plant and equipment carrying values are evaluated for recoverability at the lowest level of identifiable cash flows when impairment indicators are present. Such indicators could include, among other factors, operating losses, unused capacity, market value declines and technological obsolescence. Recorded values of asset groups of long-lived assets that are not expected to be recovered through undiscounted future net cash flows are written down to fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). Leases Certain of the properties Valvoline utilizes, including its retail service center stores, offices, blending and warehouse facilities, in addition to certain equipment, are leased, with a small portion subleased primarily to Valvoline's franchisees. In fiscal 2020, Valvoline adopted new guidance related to leases using the optional transition approach, with prospective application from adoption on October 1, 2019 and the financial statements prior to adoption reported in accordance with the previous guidance. Valvoline's policies under the new guidance are outlined below. Valvoline determines if an arrangement contains a lease at inception primarily based on whether or not the Company has the right to control the asset during the contract period. For all agreements where it is determined that a lease exists, the related lease assets and liabilities are recognized within the Consolidated Balance Sheets as either operating or finance leases at the commencement date. The lease liability is measured based on the present value of future payments over the lease term, and the right-of-use asset is measured as the lease liability, adjusted for prepaid lease payments, lease incentives, and initial direct costs (e.g., commissions). Valvoline's leases generally have terms ranging from less than one year to more than 20 years, and leases with an initial term of 12 months or less are included in the measurement of its right-of-use asset and lease liability balances. The lease term includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Fixed rental payments, including variable payments based on a rate or index, are included in the determination of the lease liability. Many leases also require the payment of taxes, insurance, operating expenses, and maintenance. In instances where these other components are fixed, they are included in the measurement of the lease liability due to Valvoline's election to combine lease and non-lease components and account for them as a single component. Otherwise, these components are recognized along with other variable lease payments in the Consolidated Statements of Comprehensive Income in the period in which the obligation for those payments is incurred. As most leases do not provide the rate implicit in the lease, the Company estimates its incremental borrowing rate to best approximate the rate of interest that Valvoline would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Valvoline applies the incremental borrowing rate to groups of leases with similar lease terms in determining the present value of future payments. In determining the incremental borrowing rate, the Company considers information available at the commencement date, including lease term, interest rate yields for specific interest rate environments and the Company's credit spread. Business combinations The Company allocates the purchase consideration to the identifiable assets acquired and liabilities assumed in business combinations based on their acquisition-date fair values. The excess of the purchase consideration over the amounts assigned to the identifiable assets and liabilities is recognized as goodwill, or if the fair value of the net assets acquired exceeds the purchase consideration, a bargain purchase gain is recorded. Factors giving rise to goodwill generally include operational synergies that are anticipated as a result of the business combination and growth expected to result in economic benefits from access to new customers and markets. The fair values of identifiable intangible assets acquired in business combinations are generally determined using an income approach, requiring financial forecasts and estimates as well as market participant assumptions. The incremental financial results of the businesses that Valvoline has acquired are included in the Company’s consolidated financial results from the respective dates of each acquisition. Goodwill and other intangible assets Valvoline evaluates goodwill for impairment annually as of July 1 or when events and circumstances indicate an impairment may have occurred. This assessment consists of evaluating each reporting unit’s fair value compared to its carrying value. Valvoline's historical reporting units were evaluated as a result of the realignment of its global operations during the third quarter of fiscal 2021. As a result, Valvoline determined its reporting units were Retail Services and Global Products, consistent with its realigned operating and reportable segments. In connection with the identification of its current operating and reportable segments and reporting units, goodwill balances and activity presented herein were reclassified to conform to the current presentation and were subject to assessment for goodwill impairment at the reporting unit level. In evaluating goodwill for impairment, Valvoline has the option to first perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, the Company is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Qualitative factors considered include macroeconomic conditions, industry and market conditions, cost factors, and overall financial performance, among others. Under the quantitative assessment, if the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, is measured as the excess of the carrying value of the reporting unit’s goodwill over its fair value, not to exceed the total goodwill allocated to the reporting unit. Fair values of the reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a discounted cash flow (“DCF”) analysis, and a number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market shares, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate, weighted average cost of capital, terminal values, and working capital changes. Several of these assumptions vary among reporting units, and the cash flow forecasts are generally based on approved strategic operating plans. The market approach is performed using the Guideline Public Companies method based on earnings multiple data. The Company also performs a reconciliation between market capitalization and the estimated aggregate fair value of the reporting units, including consideration of a control premium. Valvoline performed a quantitative assessment during fiscal 2021 and determined that the fair values of the Company's reporting units were substantially in excess of carrying values and no impairment existed. Acquired finite-lived intangible assets principally consist of certain trademarks and trade names, reacquired franchise rights, and customer relationships. Intangible assets acquired in an asset acquisition are carried at cost, less accumulated amortization. For intangible assets acquired in a business combination, the estimated fair values of the assets acquired are used to establish the carrying values, which are determined using assumptions from the perspective of a market participant and generally an income approach. These intangible assets are amortized on a straight-line basis over their estimated useful lives. Valvoline evaluates finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable, and any assets not expected to be recovered through undiscounted future net cash flows are written down to current fair value. Equity method investments Investments in companies, including joint ventures, where Valvoline has the ability to exert significant influence over, but not control, operating and financial policies of the investee are accounted for using the equity method of accounting. Judgment regarding the level of influence over each investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, and participation in policy-making decisions. The Company’s proportionate share of the net income or loss of these companies is included within Equity and other income, net in the Consolidated Statements of Comprehensive Income. The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. Factors considered by the Company when reviewing an equity method investment for other-than-temporary impairment include the length of time and extent to which the fair value of the equity method investment has been less than its carrying amount, the investee’s financial condition and near-term prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. Pension and other postretirement benefit plans Valvoline sponsors defined benefit pension and other postretirement plans in the U.S and in certain other countries. The Company's U.S. pension plans are closed to new participants and the accrual of pension benefits has been frozen since September 30, 2016. In addition, most international pension plans are closed to new participants while those that remain open relate to areas where local laws require such plans. Valvoline also sponsors retiree healthcare and life insurance plans for certain qualifying participants with amendments effective in fiscal 2017 to limit annual per capita costs. Valvoline recognizes the funded status of each applicable plan within the Consolidated Balance Sheets whereby each unfunded plan is recognized as a liability and each funded plan is recognized as either an asset or liability based on its funded status. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation. Changes in the fair value of plan assets and net actuarial gains or losses are recognized upon remeasurement as of September 30, the annual measurement date, and whenever a remeasurement is triggered. The remaining components of pension and other postretirement benefits income or expense are recorded ratably throughout the year. The fair value of plan assets represents the current market value of assets held by irrevocable trust funds for the sole benefit of participants, and the benefit obligation is the actuarial present value of the benefits expected to be paid upon retirement, death, or other distributable event based on estimates. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain key assumptions that require significant judgment, including, but not limited to, estimates of discount rates, rate of compensation increases, interest rates and mortality rates. Actuarial gains and losses may be related to actual results that differ from assumptions as well as changes in assumptions, which may occur each year. Due to the freeze of U.S. pension benefits effective September 30, 2016, continuing service costs are limited to certain international pension plans, and are reported in the same caption of the Consolidated Statements of Comprehensive Income as the related employee costs. All components of net periodic benefit income or costs other than service cost are recognized below operating income within Net pension and other postretirement plan (income) expenses in the Consolidated Statements of Comprehensive Income. Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Legal costs such as outside counsel fees and expenses are charged to expense in the period incurred and are recorded in Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. Revenue recognition Revenue is recognized for the amount that reflects the consideration the Company is expected to be entitled to receive based on when control of the promised good or service is transferred to the customer. Revenue recognition is evaluated through the following five steps: (i) identification of the contract(s) with a customer; (ii) identification of the performance obligation(s) in the contract(s); (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligation(s) in the contract(s); and (v) recognition of revenue when or as a performance obligation is satisfied. Nature of goods and services Valvoline generates all revenues from contracts with customers, primarily as a result of the sale and service delivery of engine and automotive maintenance products to its customers. Valvoline derives its sales from its broad line of products and complementary services through the following three principal activities managed across its two reportable segments: (i) engine and automotive maintenance products, (ii) company-operated service center operations, and (iii) franchised service center operations. Valvoline’s sales are generally to mass market and auto parts retail, installer, industrial, distributor, franchise, and end consumers to facilitate vehicle and equipment preventive maintenance. Valvoline's sales are predominantly comprised of products and services sold at a point in time with approximately 98% recognized either through ship-and-bill performance obligations or company-operated service center operations. The remainder of the Company's sales generally relate to franchise fees, including royalties, transferred over time. The following table summarizes Valvoline's sales by timing of revenue recognized for the fiscal years ended September 30: (In millions) 2021 2020 2019 Sales at a point in time $ 2,931 $ 2,313 $ 2,347 Franchised revenues transferred over time 50 40 43 Total consolidated sales $ 2,981 $ 2,353 $ 2,390 Below is a summary of the key considerations for Valvoline's material revenue-generating activities: Engine and automotive maintenance products Engine and automotive maintenance products primarily include lubricants, antifreeze, chemicals, filters, and other complementary products for use across a wide array of vehicles and engines. The Company’s customers typically enter into a sales agreement which outlines a framework of terms and conditions that apply to all current and future purchase orders for the customer submitted under such sales agreement. In these situations, the Company’s contract with the customer is the sales agreement combined with the customer purchase order as specific products and quantities are not indicated until a purchase order is submitted. As the Company’s contract with the customer is typically for a single purchase order under the supply agreement to be delivered at a point in time, the duration of the contract is almost always one year or less. The Company’s products are distinct and separately identifiable on customer purchase orders, with each product sale representing a separate performance obligation that is generally delivered simultaneously. The Company has elected to not disclose information about remaining performance obligations as substantially all of the Company's product sales contracts have a duration of one year or less. Valvoline is the principal to these contracts as the Company has control of the products prior to transfer to the customer. Accordingly, revenue is recognized on a gross basis. The Company determines the point in time at which control is transferred and the performance obligation is satisfied by considering when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of the product, which generally coincides with the transfer of title and risk of loss to the customer and is typically determined based on delivery terms within the underlying contract. Customer payment terms vary by region and customer and are generally 30 to 60 days after delivery. Valvoline does not provide extended payment terms greater than one year and therefore, does not adjust the promised amount of consideration for the effects of a significant financing component. Company-operated service center operations Performance obligations related to company-operated service center operations primarily include the sale of engine and automotive maintenance products and related services. These performance obligations are distinct and are delivered simultaneously at a point in time. Accordingly, sales from company-operated service center operations is recognized when payment is tendered at the point of sale, which coincides with the completion of product and service delivery and the transfer of control and benefits from the performance obligations to the customer. Franchised service center operations The primary performance obligations related to franchised service center operations include product sales as described above and the license of intellectual property, which provides access to the Valvoline brand and proprietary information to operate service center stores over the term of a franchise agreement. Other franchise performance obligations do not result in material revenue. Each performance obligation is distinct, and franchisees generally receive and consume the benefits provided by the Company’s performance over the course of the franchise agreement, which typically ranges from 10 to 15 years. Billings and payments occur monthly. Variable consideration is not disclosed as remaining performance obligations qualify for the sales-based royalty and usage-based exemptions. In exchange for the license of Valvoline intellectual property, franchisees generally remit initial fees upon opening a service center store and royalties at a contractual rate of the applicable service center store sales over the term of the franchise agreement. The license provides access to the intellectual property over the term of the franchise agreement and is considered a right-to-access license of symbolic intellectual property as substantially all of its utility is derived from association with the Company’s past and ongoing activities. The license granted to operate each franchised service center store is the predominant item to which the royalties relate and represents a distinct performance obligation which is recognized over time as the underlying sales occur, as this is the most appropriate measure of progress toward complete satisfaction of the performance obligation. Variable consideration The Company only offers an assurance-type warranty with regard to the intended functionality of products sold, which does not represent a distinct performance obligation within the context of the contract. Product returns and refunds are generally not material and are not accepted unless the item is defective as manufactured. Estimated product returns are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience and is adjusted for known trends to arrive at the amount of consideration to which Valvoline expects to receive. The nature of Valvoline’s contracts with customers often give rise to variable consideration consisting primarily of promotional rebates and customer pricing discounts based on achieving certain levels of sales activity that generally decrease the transaction price. The Company determines the transaction price as the amount of consideration it expects to be entitled to in exchange for fulfilling the performance obligations, including the effects of any variable consideration, or amounts payable to the customer when there is a basis to reasonably estimate the amount and it is probable there will not be a significant reversal. Variable consideration is recorded as a reduction of the transaction price at the time of sale and is primarily estimated utilizing the most likely amount method that is expected to be earned as the Company is able to estimate the anticipated discounts within a sufficiently narrow range of possible outcomes based on its extensive historical experience with certain customers, similar programs and management’s judgment with respect to estimating customer participation and performance levels. Variable consideration is reassessed at each reporting date and adjustments are made, when necessary. The reduction of transaction price due to customer incentives was $402 million, $332 million, and $346 million in the Consolidated Statements of Comprehensive Income for the years ended September 30, 2021, 2020, and 2019, respectively. Reserves for these customer programs and incentives were $71 million and $64 million as of September 30, 2021 and 2020, respectively, and are recorded within Accrued expenses and other liabilities in the Consolidated Balance Sheets. Allocation of transaction price In each contract with multiple performance obligations, Valvoline allocates the transaction price, including variable consideration, to each performance obligation on a relative standalone selling price basis, which is generally determined based on the directly observable data of the Company’s standalone sales of the performance obligations in similar circumstances to similar customers. The amount allocated to each performance obligation is recognized as sales commensurate with the transfer of control to the customer. Shipping and handling activities that occur after the customer has obtained control are treated as fulfillment activities (i.e., an expense) rather than as a performance obligation. Accordingly, amounts billed for shipping and handling are a component of the transaction price included in net sales, while costs incurred are included in cost of sales. Shipping and handling costs recorded in sales were $10 million in fiscal 2021, $9 million in fiscal 2020, and $10 million in fiscal 2019. Furthermore, the Company excludes taxes collected from customers from sales, which are reflected in accrued expenses until remitted to the appropriate governmental authority. Incremental direct costs of obtaining a contract, primarily sales commissions, are expensed when incurred due to the short-term nature of individual contracts, which would result in amortization periods of one year or less. These costs are not material and are recorded within Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. Expense recognition Cost of sales are expensed as incurred and include costs associated with operation of the Company's plants, distribution network and retail service center stores, including depreciation, occupancy, labor and benefits, material and production, inbound and outbound freight, purchasing and receiving, inspection, warehousing, and all other distribution network costs. Selling, general and administrative expenses are recognized as incurred and include sales and marketing costs, research and development costs, advertising, customer support, and other administrative costs. Advertising costs were $90 million in fiscal 2021, $72 million in fiscal 2020 and $73 million in fiscal 2019, and research and development costs were $15 million in fiscal 2021 and $13 million in both fiscal 2020 and 2019. Stock-based compensation The Company recognizes expense related to stock-based compensation , net of actual forfeitures, over the requisite vesting period based on the grant date fair value of new or modified awards. The Company’s outstanding stock-based compensation awards are primarily classified as equity, with a small portion of liability-classified awards based on award terms and conditions. Income taxes Income tax expense is provided based on income before income taxes. The Company estimates its tax expense based on current tax laws in the statutory jurisdictions in which it operates. These estimates include judgments about the recognition and realization of deferred tax assets and liabilities resulting from the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled. As changes in tax laws or rates occur, deferred tax assets and liabilities are adjusted in the period changes are enacted through income tax expense. Valvoline records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Valvoline records estimated incremental withholding taxes on undistributed earnings to account for certain of its non-U.S. subsidiaries as being immediately subject to tax, while certain other outside basis differences restricted by regulations, operational or investing needs for non-U.S. subsidiaries are indefinitely reinvested. If these outside basis differences were no longer to be indefinitely reinvested in the future, the Company may be subject to additional income and withholding taxes, which are not practicable to estimate. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being sustained upon examination by authorities. Interest and penalties related to unrecognized tax benefits are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law and until such time that the related tax benefits are recognized. Interest and penalties were not material to any of the periods presented herein. Derivatives Valvoline’s derivative instruments consist of currency exchange and interest rate swap agreements, each of which is described further below. Currency derivatives The Company's currency exchange contracts are used to manage non-functional currency denominated balance sheet exposures and exchange on currency for another at a fixed rate on a future date of generally a month or less. These contracts are not designated as hedging instruments and are accounted for as either assets or liabilities in the Consolidated Balance Sheets at fair value with the resulting gains or losses recognized as adjustments to earnings within Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. Gains and losses are recognized as exchange rates change the fair value of these instruments and upon settlement to offset the remeasurement gain or loss on the related currency-denominated exposures in the same period. The Company classifies its cash flows related to currency exchange contracts as investing activities in the Consolidated Statements of Cash Flows. Interest rate swap agreements The Company's interest rate swap agreements effectively modify its exposure to interest rate risk by converting floating rate debt to a fixed rate for the t |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Recurring fair value measurements The Company’s financial assets and liabilities accounted for at fair value on a recurring basis are summarized below by level within the fair value hierarchy: As of September 30, 2021 (In millions) Total Level 1 Level 2 Level 3 NAV (a) Cash and cash equivalents Money market funds $ 13 $ 13 $ — $ — $ — Time deposits 87 — 87 — — Prepaid expenses and other current assets Currency derivatives 3 — 3 — — Other noncurrent assets Non-qualified trust funds 11 — 4 — 7 Interest rate swap agreements 2 2 Total assets at fair value $ 116 $ 13 $ 96 $ — $ 7 Accrued expenses and other liabilities Currency derivatives $ 3 $ — $ 3 $ — $ — Interest rate swap agreements 1 — 1 — — Other noncurrent liabilities Deferred compensation obligations 24 — — — 24 Total liabilities at fair value $ 28 $ — $ 4 $ — $ 24 As of September 30, 2020 (In millions) Total Level 1 Level 2 Level 3 NAV (a) Cash and cash equivalents Money market funds $ 296 $ 296 $ — $ — $ — Time deposits 139 — 139 — — Prepaid expenses and other current assets Currency derivatives 3 — 3 — — Other noncurrent assets Non-qualified trust funds 16 — 8 — 8 Total assets at fair value $ 454 $ 296 $ 150 $ — $ 8 Accrued expenses and other liabilities Currency derivatives $ 2 $ — $ 2 $ — $ — Interest rate swap agreements 1 — 1 — — Other noncurrent liabilities Deferred compensation obligations 25 — — — 25 Total liabilities at fair value $ 28 $ — $ 3 $ — $ 25 (a) Funds measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy. Money market funds Money market funds trade in an active market and are valued using quoted market prices, which are Level 1 inputs. Time deposits Time deposits are balances held with financial institutions at face value plus accrued interest, which approximates fair value and are categorized as Level 2. Currency derivatives The Company had outstanding currency forward contracts with notional values of $137 million and $149 million as of September 30, 2021 and 2020, respectively. The fair value of these outstanding contracts are recorded as assets and liabilities on a gross basis measured using readily observable market inputs to estimate the fair value for similar derivative instruments and are classified as Level 2. Gains and losses recognized related to these instruments were not material in any period presented herein. Non-qualified trust funds The Company maintains a non-qualified trust that is utilized to fund benefit payments for certain of its U.S. non-qualified pension plans. This trust is primarily invested in fixed income U.S. government bonds and mutual funds that are measured at fair value based upon Level 2 inputs corroborated by observable market data and using the NAV per share practical expedient, respectively. There were no significant redemption restrictions or unfunded commitments on these mutual fund investments as of September 30, 2021. Gains and losses related to these investments are immediately recognized within Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income and were not material in any period presented herein. Interest rate swap agreements The Company is party to four interest rate swap agreements with three to four year maturities to exchange interest rate payments on $350 million of variable rate term loan borrowings to fixed interest rates. The Company expects these hedges to be highly effective and based on interest rates as of September 30, 2021 and current circumstances, estimates that there will not be material reclassifications into earnings over the next twelve months. The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. The Company utilizes Level 2 observable inputs such as interest rate yield curves to estimate fair value for the interest rate swap agreements. Deferred compensation obligations The Company has an unfunded deferred compensation plan that is valued based on the underlying participant-directed investments. The fair value of underlying investments in collective trust funds is determined using the NAV provided by the administrator of the fund as a practical expedient. The NAV is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less its liabilities, divided by outstanding units. There were no significant redemption restrictions or unfunded commitments on these investments as of September 30, 2021. Changes in the fair values are recognized in the Consolidated Statements of Comprehensive Income within Selling, general and administrative expenses and were not material for the periods presented herein. Fair value of long-term debt Long-term debt is reported in the Consolidated Balance Sheets at carrying value, rather than fair value, and is therefore excluded from the disclosure above of financial assets and liabilities measured at fair value within the consolidated financial statements on a recurring basis. The fair values of the Company's outstanding fixed rate senior notes shown in the table below are based on recent trading values, which are considered Level 2 inputs within the fair value hierarchy. September 30, 2021 September 30, 2020 (In millions) Fair value Carrying value (a) Unamortized discounts and issuance costs Fair value Carrying value (a) Unamortized discounts and issuance costs 2025 Notes $ — $ — $ — $ 827 $ 790 $ (10) 2030 Notes 622 593 (7) 613 592 (8) 2031 Notes 531 529 (6) — — — Total $ 1,153 $ 1,122 $ (13) $ 1,440 $ 1,382 $ (18) (a) Carrying values shown are net of unamortized discounts and issuance costs. Refer to Note 8 for details of these notes as well as Valvoline's other debt instruments that have variable interest rates with carrying amounts that approximate fair value. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | ACQUISITIONS AND DIVESTITURES Acquisitions Fiscal 2021 acquisitions The Company acquired 134 service center stores in single and multi-store transactions for an aggregate purchase price of $282 million during fiscal 2021. These acquisitions expand Valvoline's services presence in key North American and international markets, increase the Retail Services system to more than 700 company-operated and nearly 1,600 system-wide service center stores, and included: • Fourteen company-operated service center stores in Texas acquired from Kent Lubrication Centers Ltd. (doing business as Avis Lube) on October 1, 2020; • Twenty-one former franchise locations converted to company-operated service center stores in Kansas and Missouri acquired from Westco Lube, Inc. on October 15, 2020; • Twelve company-operated service center stores in Idaho acquired from L&F Enterprises (doing business as Einstein's Oilery) on October 30, 2020; • Twenty-seven Mister Oil Change Express ® locations (15 company-operated and 12 franchise-operated) across seven states acquired from Car Wash Partners, Inc. on December 11, 2020; • Sixteen former franchise locations converted to company-operated service center stores in Texas acquired from AWC Premium Automotive Service Ltd. on April 30, 2021; • Thirteen former franchise and fourteen former joint venture locations converted to company-operated service center stores acquired in single and multi-store transactions; and • Eleven company-operated service center stores and six former Express Care locations acquired in single and multi-store transactions. Fiscal 2020 acquisitions During fiscal 2020, Valvoline acquired 35 service center stores in single and multi-store transactions, including 23 former franchise locations converted to company-operated service centers stores, for an aggregate purchase price of $40 million within the Retail Services reportable segment. These acquisitions provide an opportunity to expand Valvoline's Retail Services system within key markets. Fiscal 2019 acquisitions Valvoline acquired 60 service center stores and a lubricant production company during fiscal 2019 for an aggregate purchase price of $78 million. These acquisitions included 31 franchise service center stores in Canada acquired from Oil Changers Inc. on October 31, 2018, five former franchise locations converted to company-operated service centers stores, and 24 company-operated service center stores acquired in single and multi-store transactions within the Retail Services reportable segment. The Company also acquired an Eastern European lubricant production company, including its manufacturing facility, within the Global Products segment. These acquisitions provided an opportunity to grow Valvoline's Retail Services system within key markets and expand Valvoline’s presence and supply chain capabilities in Eastern Europe. Summary The following table summarizes the aggregate cash consideration paid and the total assets acquired and liabilities assumed for the years ended September 30: (In millions) 2021 2020 2019 Inventories $ 3 $ 1 $ — Other current assets 1 — — Property, plant and equipment (a) 99 6 19 Operating lease assets 38 1 — Goodwill (b) 207 17 50 Intangible assets (c) Reacquired franchise rights (d) 59 20 5 Customer relationships — — 6 Trademarks and trade names — — 1 Other 3 — 2 Other current liabilities (a) (9) (1) — Operating lease liabilities (35) — — Other noncurrent liabilities (a) (84) (4) (1) Net assets acquired 282 40 82 Bargain purchase gain (e) — — (4) Consideration transferred $ 282 $ 40 $ 78 (a) Includes $84 million of finance lease assets in property, plant and equipment and finance lease liabilities of $4 million and $80 million in other current and noncurrent liabilities, respectively, for leases acquired during the year ended September 30, 2021. (b) Goodwill is generally expected to be deductible for income tax purposes and is primarily attributed to the operational synergies and potential growth expected to result in economic benefits in the respective markets of the acquisitions. (c) Weighted average amortization period of intangible assets acquired in each period presented above is 10 years. (d) Prior to the acquisition of former franchise service center stores, Valvoline licensed the right to operate franchised quick lube service centers, including use of the Company’s trademarks and trade name. In connection with these acquisitions, Valvoline reacquired those rights and recognized separate definite-lived reacquired franchise rights intangible assets, which are being amortized on a straight-line basis over the weighted average remaining term of approximately 10 years for the rights reacquired in fiscal 2021 and 2020 and nine years for the rights reacquired in fiscal 2019. The effective settlement of these arrangements resulted in no settlement gain or loss as the contractual terms were at market. (e) Recorded in Equity and other income, net within the Consolidated Statements of Comprehensive Income. The fair values above are preliminary for up to one year from the date of acquisition as they are subject to measurement period adjustments as new information is obtained about facts and circumstances that existed as of the acquisition date. The Company does not expect any material changes to the preliminary purchase price allocations summarized above for acquisitions completed during the last twelve months. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Lease Commitments | LEASE COMMITMENTS The following table presents the Company's lease balances as of September 30: (In millions) Location in Consolidated Balance Sheets 2021 2020 Assets Operating lease assets Operating lease assets $ 307 $ 261 Finance lease assets Property, plant and equipment, net 198 77 Amortization of finance lease assets Property, plant and equipment, net (21) (10) Total leased assets $ 484 $ 328 Liabilities Current Operating lease liabilities Accrued expenses and other liabilities $ 38 $ 33 Finance lease liabilities Accrued expenses and other liabilities 9 3 Noncurrent Operating lease liabilities Operating lease liabilities 274 231 Finance lease liabilities Other noncurrent liabilities 178 70 Total lease liabilities $ 499 $ 337 The following table presents the components of total lease costs for the years ended September 30: (In millions) Location in Consolidated Statements of Comprehensive Income 2021 2020 Operating lease cost Cost of sales and Selling, general and administrative expenses $ 52 $ 45 Finance lease costs Amortization of lease assets Cost of sales (a) 11 4 Interest on lease liabilities Net interest and other financing expenses 8 3 Variable lease cost Cost of sales and Selling, general and administrative expenses (a) 10 6 Sublease income Equity and other income, net (8) (6) Total lease cost $ 73 $ 52 Other information related to the Company's leases follows for the years ended September 30: (In millions) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (a) $ 50 $ 43 Operating cash flows from finance leases $ 8 $ 4 Financing cash flows from finance leases $ 6 $ 1 Lease assets obtained in exchange for lease obligations: Operating leases $ 83 $ 49 Finance leases $ 118 $ 49 (a) Included within the change in Other assets and liabilities within the Consolidated Statements of Cash Flows offset by noncash operating lease asset amortization and liability accretion. The following table reconciles the undiscounted cash flows for the next five fiscal years ended September 30 and thereafter to the operating and finance lease liabilities recorded within the Consolidated Balance Sheet as of September 30, 2021: (In millions) Operating leases Finance leases 2022 $ 50 $ 18 2023 46 18 2024 42 18 2025 37 18 2026 31 19 Thereafter 174 166 Total future lease payments 380 257 Imputed interest 68 70 Present value of lease liabilities $ 312 $ 187 As of September 30, 2021, Valvoline has additional leases primarily related to its retail service center stores that have not yet commenced with approximately $101 million in undiscounted future lease payments that are not included in the table above. These leases are expected to commence over the next twelve months and generally have lease terms of 15 years. The weighted average remaining lease terms and interest rates as of September 30, 2021 were: Operating leases Finance leases Weighted average remaining lease term (in years) 9.6 13.7 Weighted average discount rate 3.98 % 5.20 % |
Lease Commitments | LEASE COMMITMENTS The following table presents the Company's lease balances as of September 30: (In millions) Location in Consolidated Balance Sheets 2021 2020 Assets Operating lease assets Operating lease assets $ 307 $ 261 Finance lease assets Property, plant and equipment, net 198 77 Amortization of finance lease assets Property, plant and equipment, net (21) (10) Total leased assets $ 484 $ 328 Liabilities Current Operating lease liabilities Accrued expenses and other liabilities $ 38 $ 33 Finance lease liabilities Accrued expenses and other liabilities 9 3 Noncurrent Operating lease liabilities Operating lease liabilities 274 231 Finance lease liabilities Other noncurrent liabilities 178 70 Total lease liabilities $ 499 $ 337 The following table presents the components of total lease costs for the years ended September 30: (In millions) Location in Consolidated Statements of Comprehensive Income 2021 2020 Operating lease cost Cost of sales and Selling, general and administrative expenses $ 52 $ 45 Finance lease costs Amortization of lease assets Cost of sales (a) 11 4 Interest on lease liabilities Net interest and other financing expenses 8 3 Variable lease cost Cost of sales and Selling, general and administrative expenses (a) 10 6 Sublease income Equity and other income, net (8) (6) Total lease cost $ 73 $ 52 Other information related to the Company's leases follows for the years ended September 30: (In millions) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (a) $ 50 $ 43 Operating cash flows from finance leases $ 8 $ 4 Financing cash flows from finance leases $ 6 $ 1 Lease assets obtained in exchange for lease obligations: Operating leases $ 83 $ 49 Finance leases $ 118 $ 49 (a) Included within the change in Other assets and liabilities within the Consolidated Statements of Cash Flows offset by noncash operating lease asset amortization and liability accretion. The following table reconciles the undiscounted cash flows for the next five fiscal years ended September 30 and thereafter to the operating and finance lease liabilities recorded within the Consolidated Balance Sheet as of September 30, 2021: (In millions) Operating leases Finance leases 2022 $ 50 $ 18 2023 46 18 2024 42 18 2025 37 18 2026 31 19 Thereafter 174 166 Total future lease payments 380 257 Imputed interest 68 70 Present value of lease liabilities $ 312 $ 187 As of September 30, 2021, Valvoline has additional leases primarily related to its retail service center stores that have not yet commenced with approximately $101 million in undiscounted future lease payments that are not included in the table above. These leases are expected to commence over the next twelve months and generally have lease terms of 15 years. The weighted average remaining lease terms and interest rates as of September 30, 2021 were: Operating leases Finance leases Weighted average remaining lease term (in years) 9.6 13.7 Weighted average discount rate 3.98 % 5.20 % |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | EQUITY METHOD INVESTMENTS Valvoline has a strategic relationship with Cummins, Inc. (“Cummins”), a leading supplier of engines and related component products, which includes co-branding products for heavy duty consumers and a 50 percent interest in joint ventures in India, China and Argentina. Valvoline also had investments in joint ventures with other partners in Latin and North America, as well as China. Valvoline’s investments in these unconsolidated affiliates were $47 million and $44 million as of September 30, 2021 and 2020, respectively. Undistributed earnings from affiliates accounted for under the equity method included in Valvoline’s stockholders’ equity (deficit) were $42 million and $39 million as of September 30, 2021 and 2020, respectively. Summarized financial information for Valvoline’s equity method investments follows as of and for the years ended September 30: (In millions) 2021 2020 Financial position Current assets $ 162 $ 143 Current liabilities (89) (75) Working capital 73 68 Noncurrent assets 25 26 Noncurrent liabilities (5) (8) Stockholders’ equity $ 93 $ 86 (In millions) 2021 2020 2019 Results of operations (a) Sales $ 375 $ 273 $ 309 Income from operations $ 60 $ 50 $ 59 Net income $ 31 $ 25 $ 24 (a) Includes the results of equity method investments during the Company's period of ownership. The Company’s transactions with affiliate companies accounted for under the equity method were as follows for the years ended September 30: (In millions) 2021 2020 2019 Equity income (a) $ 15 $ 12 $ 12 Distributions received $ 14 $ 5 $ 9 Royalty income (a) $ 10 $ 8 $ 9 Sales to (b) $ 33 $ 7 $ 12 Purchases from (b) $ 14 $ 7 $ 4 (a) Equity and royalty income from affiliates accounted for under the equity method of accounting are recognized in Equity and other income, net in the Consolidated Statements of Comprehensive Income and are primarily related to the Global Products reportable segment. (b) Transactions with affiliates accounted for under the equity method of accounting are eliminated commensurate with Valvoline's ownership percentage until realized through sale to an independent third party. Transactions with affiliate companies accounted for under the equity method resulted in the following balances within the Consolidated Balance Sheets as of September 30: (In millions) 2021 2020 Accounts receivable (a) $ 13 $ 4 Notes receivable (b) $ — $ 5 Trade and other payables $ 1 $ 1 (a) Included in Receivables, net within the Consolidated Balance Sheets. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | INTANGIBLE ASSETS Goodwill The following summarizes the changes in the carrying amount of goodwill for each reportable segment and in total during fiscal 2021 and 2020: (In millions) Retail Services Global Products Total Balance at September 30, 2019 (a) $ 301 $ 129 $ 430 Acquisitions 17 — 17 Currency translation 1 — 1 Dispositions (b) (3) — $ (3) Balance at September 30, 2020 (a) 316 129 445 Acquisitions (c) 205 2 207 Currency translation 2 — 2 Dispositions (b) (10) — (10) Balance at September 30, 2021 $ 513 $ 131 $ 644 (a) Goodwill balances as of September 30, 2019 and 2020 have been recast to conform to the current period presentation. Refer to Note 15 for further details regarding the Company's change in reportable segments during fiscal 2021. (b) Derecognition of goodwill as a result of the sale of service center stores to franchisees, which included 12 company-owned, franchise-operated locations in fiscal 2021 and six company-owned and operated locations in fiscal 2020. (c) Includes acquisitions within the Retail Services reportable segment of 120 service center stores and a former joint venture in the Global Products reportable segment. Refer to Note 4 for additional details. Other intangible assets Valvoline’s purchased intangible assets were specifically identified when acquired, have finite lives, and are reported in Goodwill and intangibles, net within the Consolidated Balance Sheets. The following summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets as of September 30: (In millions) 2021 2020 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Definite-lived intangible assets Trademarks and trade names $ 30 $ (8) $ 22 $ 30 $ (6) $ 24 Reacquired franchise rights 116 (25) 91 57 (14) 43 Customer relationships 23 (9) 14 22 (7) 15 Other intangible assets 6 (2) 4 3 (1) 2 Total definite-lived intangible assets $ 175 $ (44) $ 131 $ 112 $ (28) $ 84 The table that follows summarizes amortization expense (actual and estimated) for the Company's current intangible assets for the years ended September 30: (In millions) Actual Estimated 2021 2022 2023 2024 2025 2026 Amortization expense $ 16 $ 17 $ 17 $ 16 $ 14 $ 11 |
Debt
Debt | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The following table summarizes Valvoline’s debt as of September 30: (In millions) 2021 2020 2031 Notes $ 535 $ — 2030 Notes 600 600 2025 Notes — 800 Term Loan 475 475 Trade Receivables Facility 59 88 China Construction Facility 39 18 Debt issuance costs and discounts (14) (19) Total debt 1,694 1,962 Current portion of long-term debt 17 — Long-term debt $ 1,677 $ 1,962 Senior Notes The Company's outstanding fixed rate senior notes as of September 30, 2021 consist of 3.625% senior unsecured notes due 2031 with an aggregate principal amount of $535 million (the “2031 Notes”) and 4.250% senior unsecured notes due 2030 with an aggregate principal amount of $600 million (the “2030 Notes” and collectively with the 2031 Notes, the “Senior Notes”). The Senior Notes are subject to customary events of default for similar debt securities, which if triggered may accelerate payment of principal, premium, if any, and accrued but unpaid interest. If a change of control repurchase event occurs, Valvoline may be required to offer to purchase the Senior Notes from the holders thereof. The Senior Notes are not otherwise required to be repaid prior to maturity, although they may be redeemed at the option of Valvoline at any time prior to maturity in the manner specified in the governing indentures. 2031 and 2025 Notes In January 2021, Valvoline issued the 2031 Notes in a private offering for net proceeds of $528 million (after deducting initial purchasers’ discounts and debt issuance costs). The net proceeds, along with cash and cash equivalents on hand, were used to redeem in full Valvoline's 4.375% senior unsecured notes due 2025 with an aggregate principal amount of $800 million (the “2025 Notes”), including an early redemption premium of $26 million, accrued and unpaid interest, as well as related fees and expenses for an aggregate redemption price of approximately $840 million. A loss on extinguishment of the 2025 Notes of $36 million was recognized in Net interest and other financing expenses in the Consolidated Statements of Comprehensive Income during the year ended September 30, 2021, comprised of the early redemption premium and the write-off of related unamortized debt issuance costs and discounts. 2030 Notes In February 2020, Valvoline issued the 2030 Notes in a private offering for net proceeds of $592 million (after deducting initial purchasers’ discounts and debt issuance costs). A portion of the net proceeds were used to redeem in full Valvoline's 5.500% senior unsecured notes due 2024 at the aggregate principal amount of $375 million (the “2024 Notes”), plus an early redemption premium of $15 million, accrued and unpaid interest, as well as related fees and expenses for an aggregate redemption price of $394 million. A loss on extinguishment of the 2024 Notes of $19 million was recognized in Net interest and other financing expenses in the Consolidated Statements of Comprehensive Income during the year ended September 30, 2020, comprised of the early redemption premium and the write-off of related unamortized debt issuance costs and discounts. A portion of the net proceeds from the offering of the 2030 Notes were also utilized to prepay $100 million of indebtedness from the Company's term loan facility under the Senior Credit Agreement, with the remainder of the net proceeds used for general corporate purposes. In response to the COVID-19 pandemic, the Company preserved the remaining proceeds during fiscal 2020 to maintain its liquidity. Senior Credit Agreement Key terms and conditions The Senior Credit Agreement provides an aggregate principal amount of $1,050 million in senior secured credit facilities, comprised of (i) a five-year $575 million term loan facility (the “Term Loan”) and (ii) a five-year $475 million revolving credit facility (the “Revolver”), including a $100 million letter of credit sublimit. The outstanding principal balance of the Term Loan is required to be repaid in quarterly installments, with the balance due at maturity in April 2024, and prepayment of the net cash proceeds due from certain events. Amounts outstanding under the Senior Credit Agreement may be prepaid at any time, and from time to time, in whole or part, without premium or penalty. At Valvoline’s option, amounts outstanding under the Senior Credit Agreement bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate fluctuates between LIBOR plus 1.375% per year and LIBOR plus 2.000% per year (or between the alternate base rate plus 0.375% per year and the alternate base rate plus 1.000% per year), based upon Valvoline’s corporate credit ratings or its consolidated net leverage ratio, whichever yields the lowest rate. Summary of activity As of September 30, 2021 and 2020, the Term Loan had an outstanding balance of $475 million , and there were no amounts outstanding under the Revolver. The total borrowing capacity remaining under the Revolver wa s $470 million as of September 30, 2021, due to a reduction of $5 million for letters of credit outstanding. Following the Term Loan prepayment in fiscal 2020 with a portion of the proceeds from the offering of the 2030 Notes, quarterly principal payments will resume with $1 million due on June 30, 2022 and approximately $14 million due each quarter beginning with September 30, 2022 through maturity. Trade Receivables Facility Key terms and conditions In April 2021, Valvoline amended its $175 million trade receivables securitization facility (the “Trade Receivables Facility”), to extend its maturity to April 2024 and modify the eligibility requirements for certain receivables. The amendment also reduced the minimum required borrowing to the lesser of (i) 33 percent of the total facility limit or (ii) the borrowing base from the availability of eligible receivables, in addition to permitting up to a 30 consecutive day annual exemption from this requirement. The Trade Receivables Facility is subject to customary default and termination provisions. Under the Trade Receivables Facility, Valvoline sells and/or transfers a majority of its U.S. trade receivables to a wholly-owned, bankruptcy-remote subsidiary as they are originated. Advances by the lenders to that subsidiary (in the form of cash or letters of credit) are secured by its trade receivables. The assets of this financing subsidiary are restricted as collateral for the payment of its obligations under the Trade Receivables Facility, and its assets and credit are not available to satisfy the debts and obligations owed to the Company's other creditors. The Company includes the assets, liabilities and results of operations of this financing subsidiary in its consolidated financial statements. The financing subsidiary pays customary fees to the lenders, and advances by a lender under the Trade Receivables Facility accrue interest for which the weighted average interest rates were 1.0% and 1.4% for the years ended September 30, 2021 and 2020, respectively. Summary of activity The Trade Receivables Facility had an outstanding balance of $59 million and $88 million a s of September 30, 2021 and 2020, respectively. During fiscal 2021, Valvoline made payments of $29 million, resulting in $116 million of borrowing capacity remaining as of September 30, 2021. The financing subsidiary owned $301 million and $267 million of outstanding accounts receivable as of September 30, 2021 and 2020, respectively, which are reported in Receivables, net in the Company’s Consolidated Balance Sheets. China Construction Facility In May 2020, the Company entered into a five-year credit agreement for approximately $40 million to finance the preparation of the blending and packaging plant in China for production (the “China Construction Facility”). The China Construction Facility had an outstanding balance of $39 million and $18 million as of September 30, 2021 and 2020, respectively. Borrowings bear interest at the local prime rate less the applicable interest rate margin, which was 4.35% for the years ended September 30, 2021 and 2020. The proceeds from the China Construction Facility are restricted to finance capital expenditures associated with the preparation of the blending and packaging plant in China for production at capacity, and borrowings are secured by the assets underlying the project. Borrowings are required to be repaid in semiannual installments, which total approximately $2 million in fiscal 2022, $4 million in fiscal 2023, and $7 million in fiscal 2024, with the remaining balance due in fiscal 2025. China Working Capital Facility In November 2020, the Company entered into a revolving credit facility with a two-year term for approximately $23 million to finance working capital needs for the blending and packaging plant in China (the “China Working Capital Facility”). Borrowings will bear interest at the local prime rate less the applicable interest rate margin with interest due monthly and repayment of borrowings due at maturity. As of September 30, 2021, the China Working Capital Facility had no outstanding borrowings, leaving its full borrowing capacity of approximately $23 million remaining. Covenants and guarantees The Company is required to satisfy certain covenants pursuant to its long-term borrowings. These covenants contain customary limitations, including limitations on liens, additional indebtedness, investments, restricted payments, asset sales, mergers, and affiliate transactions. The maintenance of financial covenants as of the end of each fiscal quarter is required, as defined in the Senior Credit Agreement, including: i) a maximum net leverage ratio of 4.5, which is calculated as net debt divided by Adjusted EBITDA and ii) a minimum interest coverage ratio of 3.0, which is calculated as Adjusted EBITDA divided by net interest expense. Cross-default provisions also exist between certain debt instruments. As of September 30, 2021 and 2020, the Company was in compliance with all debt covenants. Valvoline’s existing and future subsidiaries (other than certain immaterial subsidiaries, joint ventures, special purpose financing subsidiaries, regulated subsidiaries, non-U.S. subsidiaries and certain other subsidiaries) guarantee obligations under the Senior Credit Agreement, which is also secured by a first-priority security interest in substantially all the personal property assets and certain real property assets of Valvoline and the guarantors, including all or a portion of the equity interests of certain of Valvoline’s domestic subsidiaries and first-tier non-U.S. subsidiaries, and in certain cases, a portion of the equity interests of other non-U.S. subsidiaries. Valvoline's subsidiaries that guarantee obligations under its Senior Credit Agreement also guarantee the Senior Notes, which have not been and are not expected to be registered in exchange offers as debt securities. Long-term debt maturities The future maturities of debt outstanding as of September 30, 2021, excluding debt issuance costs and discounts, are as follows: (In millions) Years ending September 30 2022 $ 17 2023 61 2024 468 2025 27 2026 — Thereafter 1,135 Total $ 1,708 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Components of income tax expense Income tax expense consisted of the following for the years ended September 30: (In millions) 2021 2020 2019 Current Federal $ 36 $ 16 $ 10 State 14 11 5 Non-U.S. 25 15 19 75 42 34 Deferred Federal 42 62 24 State 8 26 — Non-U.S. (2) 4 (1) 48 92 23 Income tax expense $ 123 $ 134 $ 57 The following presents pre-tax income and the principal components of the reconciliation between the effective tax rate and the U.S. federal statutory income tax rate in effect for the years ended September 30: (In millions) 2021 2020 2019 Income before income taxes United States $ 483 $ 399 $ 212 Non-U.S. 60 52 53 Total income before income taxes $ 543 $ 451 $ 265 U.S. statutory tax rate 21.0 % 21.0 % 21.0 % Income taxes computed at U.S. statutory tax rate $ 114 $ 95 $ 56 (Decrease) increase in amount computed resulting from: Unrecognized tax benefits (5) 1 5 State taxes, net of federal benefit 19 16 9 International rate differential 3 2 2 Permanent items (6) (4) (3) Remeasurement of net deferred taxes — 1 (4) Return-to-provision adjustments — (2) (6) Change in valuation allowances 1 29 (4) Tax Matters Agreement activity (6) (6) 1 Other 3 2 1 Income tax expense $ 123 $ 134 $ 57 Effective tax rate 22.7 % 29.7 % 21.5 % The lower income tax expense and effective tax rate in fiscal 2021 from the prior year was principally driven by tax benefits recognized during the year as a result of audit settlements. This decrease in expense coupled with prior year income tax expense recognized to establish a $30 million valuation allowance on certain legacy tax attributes led to a lower effective tax rate in fiscal 2021. Deferred taxes A summary of the deferred tax assets and liabilities included in the Consolidated Balance Sheets follows as of September 30: (In millions) 2021 2020 Deferred tax assets Non-U.S. net operating loss carryforwards (a) $ 2 $ 2 State net operating loss carryforwards (b) 18 18 Employee benefit obligations 46 79 Compensation accruals 29 26 Credit carryforwards (c) 12 11 Operating lease liabilities 98 69 Other 23 17 Valuation allowances (d) (32) (30) Net deferred tax assets 196 192 Deferred tax liabilities Goodwill and other intangibles 16 11 Property, plant and equipment 109 75 Operating lease assets 78 67 Undistributed earnings 5 6 Total deferred tax liabilities 208 159 Total net deferred tax (liabilities) assets (e) $ (12) $ 33 (a) Gross non-U.S. net operating loss carryforwards of $7 million expire in fiscal years 2023 to 2040. (b) Apportioned gross state net operating loss carryforwards of $361 million expire in fiscal year s 2023 through 2034. (c) Credit carryforwards consist primarily of U.S. tax credits that generally expire in fiscal years 2025 through 2036. (d) Valuation allowances at September 30, 2021 primarily relate t o state net operating loss carryforwards and certain other federal legacy tax attributes that are not expected to be realized or realizable. (e) Balances are presented in the Consolidated Balance Sheets based on the net position of each tax jurisdiction. Tax Matters Agreement Background Prior to its initial public offering (the "IPO") in September 2016, the Valvoline business operated as a wholly-owned subsidiary of Ashland Global Holdings Inc. (which together with its predecessors and consolidated subsidiaries is referred to herein as “Ashland”). In advance of the IPO, the Valvoline business and certain other legacy Ashland assets and liabilities were transferred from Ashland to Valvoline as a reorganization of entities under common Ashland control (the "Contribution"). In connection with the IPO, Ashland retained 83% of the total outstanding shares of Valvoline's common stock. On May 12, 2017, Ashland distributed its interest in Valvoline to Ashland stockholders through a pr o rata dividend on shares of Ashland common stock outstanding (the "Distribution"), which marked the completion of Valvoline's separation from Ashland. For the periods prior to the Distribution, Valvoline was included in Ashland’s consolidated U.S. and state income tax returns and in the income tax returns of certain Ashland international subsidiaries (collectively, the “Ashland Group Returns”). For the taxable periods that began on and after the Distribution, Valvoline files tax returns that include only Valvoline and its subsidiaries. Key terms and conditions A n agreement (the "Tax Matters Agreement") was entered into in September 2016 between Valvoline and Ashland, tha t generally provides that Valvoline indemnify Ashland for the following items: • The utilization of certain legacy tax attributes transferred from Ashland as the result of the Contribution; • Taxes for the pre-IPO period that arise on audit or examination and are directly attributable to the Valvoline business; • Certain U.S. federal, state or local taxes for the pre-IPO period of Ashland and/or its subsidiaries that arise on audit or examination and are not directly attributable to either the Valvoline business or the Ashland chemicals business; • Taxes of Valvoline for the period between the IPO and Distribution that are not attributable to Ashland Group Returns (as defined above); • Taxes of Valvoline for all taxable periods that begin on or after the day after the date of the Distribution; and • Certain taxes and expenses resulting from the failure of the Contribution or Distribution to qualify for the intended tax-free treatment. Summary of activity Adjustments to the net obligations to Ashland under the Tax Matters Agreement are recorded within Net legacy and separation-related (income) expenses, with any resulting impacts to Valvoline's stand-alone income tax provision recorded in Income tax expense within the Consolidated Statements of Comprehensive Income. The Company reduced its indemnity obligations to Ashland under the Tax Matters Agreement by $33 million during fiscal 2021, principally due to settlement of the fiscal 2014 to 2016 federal audit examinations. This reduction resulted in pre-tax income of $27 million, and the remaining benefit of $6 million was recognized in income tax expense for matters attributable to the Valvoline stand-alone business. During fiscal 2020, the Company determined it did not expect to utilize certain tax attributes that were transferred from Ashland as a result of the Contribution. Accordingly, the Company recognized income tax expense of $30 million to establish a valuation allowance for these tax attributes with an offsetting reduction in its indemnity obligation, the combined effects of which had no impact on net income in the fiscal year ended September 30, 2020. Total liabilities related to obligations owed to Ashland under the Tax Matters Agreement are primarily recorded in Other noncurrent liabilities in the Consolidated Balance Sheets and were $1 million and $34 million as of September 30, 2021 and 2020, resp ectively. Given the indemnification of Ashland for periods in which Valvoline was included in Ashland Group Returns, a portion of the Company's liability for unrecognized tax benefits is included in the Tax Matters Agreement obligation. The periods under indemnity that currently remain open to examination include certain U.S. state jurisdictions from fiscal 2011. Unrecognized tax benefits The aggregate changes in the balance of gross unrecognized tax benefits were as follows for the years ended September 30: (In millions) 2021 2020 2019 Gross unrecognized tax benefits as of October 1 $ 15 $ 14 $ 10 Increases related to tax positions from prior years 2 1 5 Decreases related to tax positions from prior years (1) — — Increases related to tax positions taken during the current year 1 1 — Settlements with tax authorities (4) — — Lapses of statutes of limitation (1) (1) (1) Gross unrecognized tax benefits as of September 30 (a) $ 12 $ 15 $ 14 (a) These unrecognized tax benefits would favorably impact the effective income tax rate, if recognized. Accruals for interest and penalties were $2 million as of September 30, 2021 and 2020. The Company's U.S. federal income tax returns and certain U.S. state jurisdictions remain open to examination from fisca l 2017 f orward. Fiscal years including and after 2010 remain open to examination by certain non-U.S. taxing authorities. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS Pension and other postretirement plans The components of pension and other postretirement plans net periodic benefit (income) costs and the assumptions used in this determination are summarized below for the years ended September 30: (In millions) Pension benefits Other postretirement benefits 2021 2020 2019 2021 2020 2019 Net periodic benefit (income) costs Service cost $ 2 $ 3 $ 2 $ — $ — $ — Interest cost 43 61 81 1 1 2 Expected return on plan assets (86) (87) (80) — — — Amortization of prior service credit (a) — — — (12) (12) (12) Actuarial (gain) loss (72) (24) 61 — 2 8 Net periodic benefit (income) costs $ (113) $ (47) $ 64 $ (11) $ (9) $ (2) Weighted-average plan assumptions (b) Discount rate for service cost 1.55 % 1.49 % 2.92 % 3.03 % 3.12 % 3.98 % Discount rate for interest cost 1.91 % 2.79 % 4.00 % 1.83 % 2.69 % 3.83 % Rate of compensation increase 3.00 % 3.04 % 3.06 % — — — Expected long-term rate of return on plan assets 4.34 % 4.64 % 4.66 % — — — (a) Other postretirement plan amendments are amortized within this caption during all periods presented. (b) The plan assumptions are a blended weighted-average rate for Valvoline’s U.S. and non-U.S. plans. The U.S. pension plans represented approximately 97% of the total pension projected benefit obligation as of September 30, 2021. Other postretirement benefit plans are in the U.S. and Canada, with the U.S. plan representing approximately 79% of the total other postretirement projected benefit obligation as of September 30, 2021. Non-U.S. plans use assumptions generally consistent with those of U.S. plans. Valvoline recognizes the change in the fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each fiscal year and whenever a plan is determined to qualify for remeasurement. These gains and losses are reported within Net pension and other postretirement plan income in the Consolidated Statements of Comprehensive Income and included a gain of $72 million and $22 million for the years ended September 30, 2021 and 2020, respectively, and a loss of $69 million for the year ended September 30, 2019. The fiscal 2021 gain was primarily attributed to higher than expected returns on plan assets and an increase in discount rates. The fiscal 2020 gain was primarily attributed to higher than expected returns on plan assets and favorable changes in mortality assumptions, which more than offset the impacts of lower discount rates. The following table summarizes the net periodic benefit income and the amortization of prior service credits recognized during the years ended September 30: (In millions) Pension benefits Other postretirement benefits 2021 2020 2019 2021 2020 2019 Amortization of prior service credits recognized in Accumulated other comprehensive income $ — $ — $ — $ 12 $ 12 $ 12 Net periodic benefit income (113) (47) 64 (11) (9) (2) Total pre-tax amount recognized in comprehensive income $ (113) $ (47) $ 64 $ 1 $ 3 $ 10 Obligations and funded status Changes in benefit obligations and the fair value of plan assets, as well as key assumptions used to determine the benefit obligations, and the amounts in the Consolidated Balance Sheets for the Company’s pension and other postretirement benefit plans are summarized below as of September 30: (In millions) Pension benefits Other postretirement benefits 2021 2020 2021 2020 Change in benefit obligations Benefit obligations as of October 1 $ 2,321 $ 2,287 $ 52 $ 55 Service cost 2 3 — — Interest cost 43 61 1 1 Benefits paid (133) (132) (5) (6) Actuarial (gain) loss (31) 107 — 2 Currency exchange rate changes 2 1 1 — Transfers in 3 3 — — Settlements (4) (9) — — Benefit obligations as of September 30 $ 2,203 $ 2,321 $ 49 $ 52 Change in plan assets Fair value of plan assets as of October 1 $ 2,045 $ 1,943 $ — $ — Actual return on plan assets 128 218 — — Employer contributions 14 22 5 6 Benefits paid (133) (133) (5) (6) Currency exchange rate changes 2 1 — — Settlements (4) (9) — — Transfers in 3 3 — — Fair value of plan assets as of September 30 $ 2,055 $ 2,045 $ — $ — Unfunded status of the plans as of September 30 $ 148 $ 276 $ 49 $ 52 Amounts in the Consolidated Balance Sheets Noncurrent benefit assets (a) $ 72 $ 1 $ — $ — Current benefit liabilities (b) 9 10 5 5 Noncurrent benefit liabilities (c) 211 267 44 47 Total benefit liabilities 220 277 49 52 Net liabilities recognized $ 148 $ 276 $ 49 $ 52 Balance in Accumulated other comprehensive loss Prior service cost (credit) $ 1 $ 1 $ (21) $ (33) Weighted-average plan assumptions Discount rate 2.70 % 2.59 % 2.67 % 2.39 % Rate of compensation increase 3.00 % 3.00 % — — Healthcare cost trend rate (d) — — 6.4 % 6.7 % (a) Noncurrent benefit assets are recorded in Other noncurrent assets within the Consolidated Balance Sheets, (b) Current benefit liabilities are recorded in Accrued expenses and other liabilities within the Consolidated Balance Sheets. (c) Noncurrent benefit liabilities are recorded in Employee benefit obligations within the Consolidated Balance Sheets. (d) The assumed pre-65 health care cost trend rate continues to be reduced to 4.0% in 2040 and thereafter. Accumulated benefit obligation The accumulated benefit obligation for all pension plans was $2.2 billion and $2.3 billion as of September 30, 2021 and 2020, respectively. Information for pension plans with a benefit obligation in excess of the fair value of plan assets follows for the Company’s plans as of September 30: (In millions) 2021 2020 Benefit obligation Plan assets Benefit obligation Plan assets Plans with projected benefit obligation in excess of plan assets $ 1,607 $ 1,386 $ 2,275 $ 1,998 Plans with accumulated benefit obligation in excess of plan assets $ 1,593 $ 1,374 $ 2,253 $ 1,978 Plan assets Pension plan asset investments and their level within the fair value hierarchy is summarized below as of: (In millions) September 30, 2021 Total fair value Level 1 Level 2 Level 3 Assets measured at NAV Cash and cash equivalents $ 136 $ 136 $ — $ — $ — U.S. government securities and futures 96 — 96 — — Other government securities 58 — 58 — — Corporate debt instruments 1,371 — 1,371 — — Insurance contracts 58 — — 58 — Private equity and hedge funds 11 — — — 11 Collective trust funds 316 — — — 316 Other investments 9 $ — 9 $ — — Total assets at fair value $ 2,055 $ 136 $ 1,534 $ 58 $ 327 (In millions) September 30, 2020 Total fair value Level 1 Level 2 Level 3 Assets measured at NAV Cash and cash equivalents $ 102 $ 102 $ — $ — $ — U.S. government securities and futures 172 — 172 — — Other government securities 47 — 47 — — Corporate debt instruments 1,201 — 1,201 — — Insurance contracts 12 — — 12 — Private equity and hedge funds 13 — — — 13 Collective trust funds 497 — — — 497 Other investments 1 — 1 — — Total assets at fair value $ 2,045 $ 102 $ 1,421 $ 12 $ 510 Cash and cash equivalents The carrying value of cash and cash equivalents approximates fair value. Government securities Government securities are valued based on Level 2 inputs, which include yields available for comparable securities of issuers with similar credit ratings. Corporate debt instruments Corporate debt instruments are valued based on Level 2 inputs that are observable in the market or may be derived principally from, or corroborated by, recently executed transactions, observable market data such as pricing for similar securities, cash flow models with yield curves, counterparty credit ratings, and credit spreads applied using the maturity and coupon interest rate terms of the debt instrument. Insurance contracts Insurance contracts are arrangements with insurance companies that guarantee the payment of the pension entitlements and are valued based on Level 3 inputs, which are neither quoted prices nor observable inputs for pricing. Insurance contracts are valued at cash surrender value, which approximates fair value. Private equity and hedge funds Private equity and hedge funds primarily represent alternative investments not traded on an active market which are valued at the NAV per share determined by the manager of the fund based on the fair value of the underlying net assets owned by the fund divided by the number of shares or units outstanding. Collective trust funds Collective trust funds are comprised of a diversified portfolio of investments across various asset classes, including U.S. and international equities, fixed-income securities, commodities and currencies. The collective trust funds are valued using a NAV provided by the manager of each fund, which is based on the underlying net assets owned by the fund, divided by the number of shares outstanding. The following reconciles the beginning and ending balances for Level 3 plan assets: (In millions) Total Level 3 assets Balance at September 30, 2019 $ 7 Purchases 4 Actual return on assets held at end of year 1 Balance at September 30, 2020 12 Purchases 48 Actual return on assets held at end of year (2) Balance at September 30, 2021 $ 58 The following summarizes investments for which fair value is measured using the NAV per share practical expedient as of September 30, 2021: (In millions) Fair value at NAV Unfunded commitments Redemption frequency Redemption notice period Long/short hedge funds $ 2 $ — None (a) None (a) Relative value hedge funds 3 — None (b) None (b) Event driven hedge funds 1 — None (b) None (b) Collective trust funds 299 — Daily Up to 3 days 9 — Monthly 5 days 8 — N/A (c) N/A (c) Private equity 5 2 None (d) None (d) $ 327 $ 2 (a) These hedge funds are in the process of liquidation over the next year. (b) These hedge funds are in the process of liquidation and the timing is unknown. (c) These assets are held in fund investments that include a diversified portfolio across various asset classes. The time period for redemption of these assets is not determinable. (d) These private equity instruments are estimated to be liquidated over the next 1 to 5 years. Investments and strategy In developing an investment strategy for its defined benefit plans, Valvoline considered the following factors: the nature of the liabilities of the plans; the allocation of liabilities between active, deferred and retired plan participants; the funded status of the plans; the applicable investment horizon; the respective size of the plans; and historical and expected investment returns. Valvoline’s U.S. pension plan assets are managed by outside investment managers, which are monitored against investment benchmark returns and Valvoline's established investment strategy. Investment managers are selected based on an analysis of, among other things, their investment process, historical investment results, frequency of management turnover, cost structure, and assets under management. Assets are periodically reallocated between investment managers to optimize returns and maintain an appropriate asset mix and diversification of investments. The current target asset allocation for the U.S. plans is 83% fixed income securities and 17% equity-based securities. Fixed income securities are liability matching assets that primarily include long duration, high grade corporate debt obligations. Equity-based securities are return-seeking assets that include both traditional equities as well as a mix of non-traditional assets such as hedge and commingled funds and private equity. Investment managers may employ a limited use of futures or other derivatives to manage risk within the portfolio through efficient exposure to markets. Valvoline’s pension plans hold a variety of investments designed to diversify risk and achieve an adequate net investment return to provide for future benefit payments to its participants. Valvoline’s investment strategy and management practices relative to non-U.S. plan assets are generally consistent with those for U.S. plans, except in those countries where the investment of plan assets is dictated by applicable regulations. The weighted-average asset allocations for Valvoline’s plans by asset category follow as of September 30: Target 2021 2020 Plan assets allocation Equity securities 15-25% 11 % 18 % Debt securities 65-85% 85 % 80 % Other 0-20% 4 % 2 % Total 100 % 100 % The basis for determining the expected long-term rate of return is a combination of future return assumptions for the various asset classes in Valvoline’s investment portfolio based on active management, historical analysis of previous returns, market indices, and a projection of inflation, net of plan expenses. Funding and benefit payments Valvoline contributed $14 million and $22 million to its pension plans during fiscal 2021 and 2020, respectively. Valvoline does not plan to contribute to its U.S. qualified pension plans in fiscal 2022 and expects to contribute approximately $12 million to its U.S. non-qualified and non-U.S. pension plans. The following benefit payments, which reflect future service expectations, are projected to be paid in each of the next five fiscal years ended September 30 and the five fiscal years thereafter in aggregate: (In millions) Pension benefits Other postretirement benefits 2022 $ 145 $ 5 2023 145 4 2024 141 4 2025 139 3 2026 138 3 2027 - 2031 651 14 Total $ 1,359 $ 33 Other plans Defined contribution and other defined benefit plans Valvoline sponsors certain defined contribution savings plans that provide matching contributions. Expense associated with these plans was $19 million in fiscal 2021, $15 million in fiscal 2020 and $14 million in fiscal 2019. Valvoline also sponsors various other benefit plans, some of which are required by local laws within certain countries. Total liabilities associated with these plans were $3 million as of September 30, 2021 and 2020. Multiemployer pension plans Valvoline participates in two multiemployer pension plans that provide pension benefits to certain union-represented employees under the terms of collective bargaining agreements. Valvoline assumed responsibility for contributions to these plans in connection with the separation from its former parent company. Contributions to these plans were not material for any period presented herein. |
Litigation, Claims and Continge
Litigation, Claims and Contingencies | 12 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Claims and Contingencies | LITIGATION, CLAIMS AND CONTINGENCIESFrom time to time, Valvoline is party to lawsuits, claims and other legal proceedings that arise in the ordinary course of business. The Company establishes liabilities for the outcome of such matters where losses are determined to be probable and reasonably estimable. Where appropriate, the Company has recorded liabilities with respect to these matters, which were not material for the periods presented as reflected in the consolidated financial statements herein. There are certain claims and legal proceedings pending where loss is not determined to be probable or reasonably estimable, and therefore, accruals have not been made. In addition, there are currently no matters for which management believes a material loss is at least reasonably possible. In all instances, management has assessed each matter based on current information available and made a judgment concerning its potential outcome, giving due consideration to the amount and nature of the claim and the probability of success. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable. Although the ultimate resolution of these matters cannot be predicted with certainty and there can be no assurances that the actual amounts required to satisfy liabilities from these matters will not exceed the amounts reflected in the consolidated financial statements, based on information available at this time, it is the opinion of management that such pending claims or proceedings will not have a material adverse effect on its consolidated financial statements. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation Plans | STOCK-BASED COMPENSATION PLANS Valvoline has approved stock-based incentive plans that authorize 21 million shares of common stock to be issued, with approximately 12 million shares of common stock remaining available for issuance as of September 30, 2021. The Valvoline stock-based incentive plans authorize the grant of stock options, stock appreciation rights (“SARs”), and nonvested stock awards, principally in the form of restricted stock, restricted stock units, and performance share units. T he following summarizes stock-based compensation expense recognized by the Company during the years ended September 30: (In millions) 2021 2020 2019 Stock appreciation rights $ 1 $ 1 $ 1 Nonvested stock awards (a) 14 11 9 Total stock-based compensation expense, pre-tax 15 12 10 Tax benefit (4) (3) (2) Total stock-based compensation expense, net of tax $ 11 $ 9 $ 8 (a) Includes approximately $1 million in each period presented related to certain awards that are cash-settled and liability-classified; therefore, fair value is remeasured at the end of each reporting period until settlement. Stock appreciation rights SARs are granted to certain Valvoline employees to provide vested award holders with the ability to profit from the appreciation in value of a set number of shares of common stock over a period of time by receiving the differential between the value of the Company's common stock price at the grant and exercise dates. SARs typically vest and become exercisable over a period of one Nonvested stock awards Nonvested stock awards in the form of Restricted Stock Awards ("RSAs") and Restricted Stock Units ("RSUs") are granted to certain Valvoline employees and directors. These awards can have service-based or both service and performance-based vesting conditions. Nonvested stock awards generally vest over a one Nonvested stock awards with both service and performance conditions vest through continued employee service and upon the achievement of specific financial targets subject to adjustment relative to performance among selected industry peer groups. These awards are granted annually and subject to a three-year performance and vesting period. Each performance share unit is convertible to one share of common stock, the actual number of which is dependent upon performance compared to financial and market performance targets at the end of each performance period. Compensation cost for performance-based nonvested stock awards is recognized at fair value over the requisite service period based on the probable achievement of the financial performance conditions. The following summarizes nonvested stock award activity during the year ended September 30, 2021: Number of shares Weighted average grant date fair value per share Unvested shares as of September 30, 2020 1,668 $ 20.89 Granted 520 $ 22.33 Performance adjustments (a) 126 $ 22.96 Vested (288) $ 22.69 Forfeited (58) $ 21.85 Unvested shares as of September 30, 2021 1,968 $ 21.50 (a) Adjustments based on current attainment expectations of performance targets. The fair value of new or modified nonvested stock awards with service-only conditions was determined based on the closing market price of Valvoline common stock on the grant date, and the fair value of performance-based nonvested stock awards that include both financial and market performance conditions was determined using a Monte Carlo simulation valuation model with the following key assumptions: 2021 2020 2019 Weighted average grant date fair value per share $ 21.81 $ 23.21 $ 21.22 Assumptions (weighted average) Risk-free interest rates (a) 0.2 % 1.6 % 2.8 % Expected dividend yield 2.3 % 2.1 % 1.3 % Expected volatility (b) 42.0 % 26.0 % 26.8 % Expected term (in years) 3.0 3.0 3.0 (a) Based on the U.S. Treasury yield curve in effect at the time of grant or modification for the expected term of the award. The range of risk-free interest rates used for performance awards was 0.13% to 0.23% in fiscal 2021, 1.55% to 1.59% in fiscal 2020, and 2.66% to 2.82% in fiscal 2019. (b) Expected volatility is based on historical volatilities over periods commensurate with the expected term. In recent years, Valvoline utilized its historical daily closing price over this period, and in fiscal 2019, expected volatility was determined based on the average of peer companies due to Valvoline's lack of historical data at the time. The total grant date fair value of nonvested stock awards vested and the weighted average grant date fair value of nonvested stock awards granted follows for the years ended September 30: (In millions, except weighted average) 2021 2020 2019 Total grant date fair value of shares vested $ 7 $ 5 $ 12 Weighted average grant date fair value $ 22.33 $ 22.17 $ 20.72 A s of September 30, 2021 , there w as $11 million of total unrecognized compensation costs related to nonvested stock awards, which is expected to be recognized over a weighted average period of 2.4 years. The aggregate intrinsic value of nonvested stock awards as of September 30, 2021 is $61 million. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following is the summary of basic and diluted EPS for the years ended September 30: (In millions, except per share data) 2021 2020 2019 Numerator Net income $ 420 $ 317 $ 208 Denominator Weighted average common shares outstanding 182 187 189 Effect of potentially dilutive securities (a) 1 1 — Weighted average diluted shares outstanding 183 188 189 Earnings per share Basic $ 2.30 $ 1.70 $ 1.10 Diluted $ 2.29 $ 1.69 $ 1.10 |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Deficit | Changes in Accumulated other comprehensive income by component for fiscal years 2021 and 2020 were as follows: (In millions) Unamortized benefit plan credits Currency translation adjustments Changes in fair value of cash flow hedges Total Balance as of September 30, 2019 $ 34 $ (23) $ — $ 11 Other comprehensive income (loss) before reclassification — 6 (1) 5 (Gain) loss reclassified out of accumulated other comprehensive income (12) 1 — (11) Tax expense 3 — — 3 Balance as of September 30, 2020 25 (16) (1) 8 Other comprehensive income before reclassification — 7 3 10 Gains reclassified out of accumulated other comprehensive income (12) — (1) (13) Tax expense 3 — — 3 Balance as of September 30, 2021 $ 16 $ (9) $ 1 $ 8 Amounts reclassified from Accumulated other comprehensive income follow for the years ended September 30: (in millions) 2021 2020 2019 Amortization of pension and other postretirement plan prior service credits (a) $ (12) $ (12) $ (12) Loss (gain) on liquidation of subsidiaries (b) — 1 (1) Gain on cash flow hedges (c) (1) — — Tax effect of reclassifications 3 3 3 Total amounts reclassified, net of tax $ (10) $ (8) $ (10) (a) Amortization of unrecognized prior service credits included in net periodic benefit income for pension and other postretirement plans was reported in Net pension and other postretirement plan (income) expenses within the Consolidated Statements of Comprehensive Income. The Company releases the income tax effects from Accumulated other comprehensive income as benefit plan credits are amortized into earnings. (b) Represents the realization of cumulative translation adjustments in Equity and other income, net within the Consolidated Statements of Comprehensive Income as a result of the liquidation of certain non-U.S. subsidiaries. (c) Represents the realization of gains from cash flow hedges reported in Net interest and other financing expenses within the Consolidated Statements of Comprehensive Income. |
Reportable Segment Information
Reportable Segment Information | 12 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | REPORTABLE SEGMENT INFORMATION During the third quarter of fiscal 2021, the Company realigned its global operations to support its strategic initiatives to transition to a services-driven business. As a result of the realignment, Valvoline now manages its business through the following two reportable segments: • Retail Services - services the passenger car and light truck quick lube market in the United States and Canada with a broad array of preventive maintenance services and capabilities performed through Valvoline’s retail network of Company-operated, independent franchise, and Express Care stores that service vehicles with Valvoline products. • Global Products - sells engine and automotive products in more than 140 countries and territories to mass market and automotive parts retailers, installers, and commercial customers, including original equipment manufacturers, to service light- and heavy-duty vehicles and equipment. These segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker in allocating resources and evaluating performance of the business. Adjusted EBITDA is the primary measure used in making these operating decisions, which Valvoline defines as segment operating income adjusted for depreciation and amortization and certain key items impacting comparability. In connection with the realignment, the Company changed its allocation of certain indirect expenses for such costs to be recognized by each segment based on the estimated utilization of indirect resources. Costs to support corporate functions and certain non-operational and corporate activity that is not directly attributable to a particular segment are not included in the segment operating results regularly utilized by the chief operating decision maker. This activity is separately delineated within Corporate to reconcile to consolidated results. Prior period segment financial information presented herein has been recast on a basis that is consistent with the realignment of Valvoline’s global operations. Reportable segment results The following table presents sales and adjusted EBITDA of each reportable segment for the years ended September 30: (In millions) 2021 2020 2019 Sales Retail Services $ 1,221 $ 883 $ 822 Global Products 1,760 1,470 1,568 Consolidated sales $ 2,981 $ 2,353 $ 2,390 Adjusted EBITDA Retail Services $ 382 $ 247 $ 239 Global Products 327 309 296 Total operating segments 709 556 535 Corporate (a) (75) (61) (57) Consolidated Adjusted EBITDA 634 495 478 Reconciliation to income before income taxes: Net interest and other financing expenses (111) (93) (73) Depreciation and amortization (92) (66) (61) Key items: (b) Net pension and other postretirement plan income (expenses) 126 59 (60) Net legacy and separation-related income (expenses) 24 30 (3) LIFO (charge) credit (41) 15 — Business interruption recovery (expenses) 3 2 (6) Compensated absences benefits change — 11 — Acquisition and divestiture-related (costs) income — (2) 4 Restructuring and related expenses — — (14) Income before income taxes $ 543 $ 451 $ 265 (a) Corporate includes the costs of corporate functions and certain other non-operational matters and corporate activity that is not directly attributable to a particular segment. (b) Key items represent adjustments to U.S. GAAP results and consist of non-operational matters, including pension and other postretirement plan non-service income and remeasurement adjustments, net legacy and separation-related activity, changes in the LIFO inventory reserve, and certain other corporate matters excluded from operating results, which management believes impacts the comparability of operational results between periods. Disaggregation of revenue The following table summarizes sales by category for each reportable segment for the years ended September 30: (In millions) 2021 2020 2019 Retail Services Company operations Oil changes $ 657 $ 450 $ 407 Non-oil changes 205 141 124 Non-company operations Franchise fees 50 40 43 Product sales 309 252 248 Total Retail Services $ 1,221 $ 883 $ 822 Global Products Lubricants $ 1,570 $ 1,287 $ 1,364 Antifreeze 119 104 121 Filters 13 13 12 Chemicals and other 58 66 71 Total Global Products $ 1,760 $ 1,470 $ 1,568 Sales by primary customer channel for the Company’s reportable segments are summarized below for the years ended September 30: (In millions) 2021 2020 2019 Retail Services Company operations $ 862 $ 591 $ 531 Non-company operations 359 292 291 Total Retail Services 1,221 883 822 Global Products Do-it-Yourself 626 571 558 Installer and other 1,134 899 1,010 Total Global Products 1,760 1,470 1,568 Consolidated sales $ 2,981 $ 2,353 $ 2,390 Valvoline did not have a single customer that represented 10% or more of consolidated sales in fiscal 2021, 2020 or 2019. Sales by reportable segment disaggregated by geographic region are summarized as follows: (In millions) Retail Services Global Products Totals Year ended September 30, 2021 North America (a) $ 1,221 $ 1,052 $ 2,273 Europe, Middle East and Africa ("EMEA") — 219 219 Asia Pacific — 358 358 Latin America (a) — 131 131 Total $ 1,221 $ 1,760 $ 2,981 Year ended September 30, 2020 North America (a) 883 $ 945 $ 1,828 EMEA — 169 169 Asia Pacific — 273 273 Latin America (a) — 83 83 Total $ 883 $ 1,470 $ 2,353 Year ended September 30, 2019 North America (a) $ 822 $ 994 $ 1,816 EMEA — 181 181 Asia Pacific — 285 285 Latin America (a) — 108 108 Total $ 822 $ 1,568 $ 2,390 (a) Valvoline includes the United States and Canada in its North America region. Mexico is included within the Latin America region. Entity-wide disclosures The following presents sales and net property, plant and equipment by geographic area for the years ended and as of September 30: Sales from external customers (a) Property, plant and equipment, net (b) (In millions) 2021 2020 2019 2021 2020 United States $ 2,209 $ 1,775 $ 1,766 $ 700 $ 512 International 772 578 624 117 101 Total $ 2,981 $ 2,353 $ 2,390 $ 817 $ 613 (a) Sales are attributed to the geographic area where solutions are delivered. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Sep. 30, 2021 | |
Supplemental Balance Sheet Information [Abstract] | |
Supplemental Balance Sheet Information | SUPPLEMENTAL BALANCE SHEET INFORMATION Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the totals shown within the Consolidated Statements of Cash Flows for the years ended September 30: (In millions) 2021 2020 2019 Cash and cash equivalents $ 230 $ 760 $ 159 Restricted cash (a) 1 1 — Total cash, cash equivalents and restricted cash $ 231 $ 761 $ 159 (a) Included in Prepaid expenses and other current assets within the Consolidated Balance Sheets. Accounts and other receivables The following summarizes Valvoline’s accounts and other receivables in the Consolidated Balance Sheets as of September 30: (In millions) 2021 2020 Current Trade $ 475 $ 409 Other 16 14 Notes receivable from franchisees 10 13 Receivables, gross 501 436 Allowance for credit losses (5) (3) Receivables, net $ 496 $ 433 Non-current (a) Notes receivable from franchisees $ — $ 13 Other notes receivable 3 8 Noncurrent notes receivable, gross 3 21 Allowance for losses (3) (4) Noncurrent notes receivable, net $ — $ 17 (a) Included in Other noncurrent assets within the Consolidated Balance Sheets. Valvoline is party to an agreement to sell certain trade accounts receivable in the form of drafts or bills of exchange to a financial institution. Each draft constitutes an order to pay Valvoline for obligations of the customer arising from the sale of goods. The intention of the arrangement is to decrease the time accounts receivable is outstanding and increase cash flows. Valvoline sold $15 million and $59 million of accounts receivable to the financial institution during the years ended September 30, 2021 and 2020, respectively. Inventories Inventories are primarily carried at the lower of cost or net realizable value using the weighted average cost method. In addition, certain lubricants with a replacement cost of $129 million a t September 30, 2021 and $99 million at September 30, 2020 are valued at the lower of cost or market using the LIFO method. The following summarizes Valvoline’s inventories within the Consolidated Balance Sheets as of September 30: (In millions) 2021 2020 Finished products $ 276 $ 195 Raw materials, supplies and work in process 49 30 Reserve for LIFO cost valuation (67) (26) Total inventories, net $ 258 $ 199 Property, plant and equipment The following table summarizes the various components of property, plant and equipment within the Consolidated Balance Sheets as of September 30: (In millions) 2021 2020 Land $ 130 $ 96 Buildings 607 412 Machinery and equipment 564 494 Construction in progress 71 101 Total property, plant and equipment 1,372 1,103 Accumulated depreciation (555) (490) Net property, plant and equipment $ 817 $ 613 The following summarizes finance lease assets included in net property, plant and equipment as of September 30: (In millions) 2021 2020 Land $ 64 $ 34 Buildings 134 43 Total finance lease assets 198 77 Accumulated depreciation (21) (10) Net finance lease assets $ 177 $ 67 Non-cash transactions, including finance leases, recognized within total property, plant and equipment were $119 million and $51 million during the years ended September 30, 2021 and 2020, respectively. The following summarizes expense associated with property, plant and equipment recognized within the Consolidated Statements of Comprehensive Income for the years ended September 30: (In millions) 2021 2020 2019 Depreciation (includes finance and capital leases) $ 76 $ 56 $ 52 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Strategic separation On October 12, 2021, Valvoline announced its intention to pursue a separation of its two reportable segments, Retail Services and Global Products. Valvoline is evaluating the alternatives to accomplish the separation, and consummation of the separation will be subject to final approval by Valvoline's Board of Directors (the "Board"). No timetable has currently been established for completion of the separation, which is expected to enable the two businesses to enhance focus on their distinct customer bases, strategies and operational needs. Dividend declaration On November 11, 2021, the Board approved a quarterly cash dividend of $0.125 per share of common stock. The dividend is payable December 15, 2021 to shareholders of record on November 29, 2021. Share repurchases The Company repurchased approximately 0.5 million shares for an aggregate amount of $16 million from October 1, 2021 through November 15, 2021 pursuant to the May 17, 2021 Board authorization to repurchase up to $300 million of common stock through September 30, 2024 (the "2021 Share Repurchase Authorization"). The Company has $257 million in aggregate share repurchase authority remaining under the 2021 Share Repurchase Authorization as of November 15, 2021. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Sep. 30, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | VALVOLINE INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS For the years ended September 30, 2021, 2020 and 2019 (In millions) (A) (B) (C) (D) (E) Additions Description Balance at beginning of period Charged to expenses Charged to other accounts Deductions Balance at end of period Current allowance for credit losses Year ended September 30, 2021 $ 3 $ 1 $ 1 $ — $ 5 Year ended September 30, 2020 $ 3 $ 1 $ (1) $ — $ 3 Year ended September 30, 2019 $ 4 $ — $ — $ (1) $ 3 Allowances for loan losses Year ended September 30, 2021 $ 4 $ 1 $ (2) $ — $ 3 Year ended September 30, 2020 $ 2 $ 1 $ 1 $ — $ 4 Year ended September 30, 2019 $ — $ — $ 2 $ — $ 2 Inventory excess and obsolete reserves Year ended September 30, 2021 $ 4 $ — $ — $ — $ 4 Year ended September 30, 2020 $ 3 $ 1 $ — $ — $ 4 Year ended September 30, 2019 $ 3 $ — $ — $ — $ 3 Deferred tax asset valuation allowance Year ended September 30, 2021 $ 30 $ 1 $ 1 $ — $ 32 Year ended September 30, 2020 $ 2 $ 29 $ — $ (1) $ 30 Year ended September 30, 2019 $ 7 $ — $ — $ (5) $ 2 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Securities and Exchange Commission (“SEC”) regulations. The financial statements are presented on a consolidated basis for all periods presented and include the operations of the Company and its majority-owned and controlled subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use of estimates, risks and uncertainties | Use of estimates, risks and uncertainties The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent matters. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. Valvoline has substantially maintained its operations throughout the novel coronavirus ("COVID-19") pandemic to-date and has continued precautionary measures to protect the Company's employees and customers and manage through the currently known impacts on its business. Given the unprecedented nature of the pandemic, the extent of future impacts cannot be reasonably estimated at this time due to numerous uncertainties, including the ultimate duration and severity of the pandemic. |
Cash and cash equivalents | Cash and cash equivalentsAll short-term, highly liquid investments having original maturities of three months or less are considered to be cash equivalents. |
Accounts receivable and allowance for doubtful accounts | Receivables and allowance for credit losses Valvoline invoices customers and recognizes a receivable within its Consolidated Balance Sheets once the Company performs a service or transfers control of a product, at which point its right to consideration becomes unconditional and only the passage of time is required before payment of that consideration is due. As the majority of the Company’s performance obligations are satisfied at a point in time and customers typically do not make material payments in advance, nor does Valvoline have a right to consideration in advance of control transfer, the Company has no contract assets or contract liabilities. Valvoline adopted guidance in fiscal 2021 that changes the recognition of credit losses from an incurred or probable loss methodology to a current expected credit loss model, which results in the immediate recognition of losses that are expected to occur over the life of the financial instruments, principally trade and other receivables. Allowances are maintained to estimate expected lifetime credit losses that are based on a broad range of reasonable and supportable information and factors, including the length of time receivables are past due, the financial health of its customers, macroeconomic conditions, and historical collection experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible receivables against the allowance when collection efforts have been exhausted and/or any legal action taken by the Company has concluded. |
Inventories | Inventories Inventories are primarily carried at the lower of cost or net realizable value using the weighted average cost method. In addition, certain lubricants are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method to provide matching of revenues with current costs. Inventory costs include materials, labor and manufacturing overhead related to the purchase and production of inventories. The Company regularly reviews inventory quantities on hand and the estimated utilization of inventory. Excess and obsolete reserves are established when inventory is estimated to not be usable based on forecasts, product demand, life cycle, or utility. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the assets. Buildings generally have useful lives of ten two thirty Property, plant and equipment carrying values are evaluated for recoverability at the lowest level of identifiable cash flows when impairment indicators are present. Such indicators could include, among other factors, operating losses, unused capacity, market value declines and technological obsolescence. Recorded values of asset groups of long-lived assets that are not expected to be recovered through undiscounted future net cash flows are written down to fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). |
Leases | Leases Certain of the properties Valvoline utilizes, including its retail service center stores, offices, blending and warehouse facilities, in addition to certain equipment, are leased, with a small portion subleased primarily to Valvoline's franchisees. In fiscal 2020, Valvoline adopted new guidance related to leases using the optional transition approach, with prospective application from adoption on October 1, 2019 and the financial statements prior to adoption reported in accordance with the previous guidance. Valvoline's policies under the new guidance are outlined below. Valvoline determines if an arrangement contains a lease at inception primarily based on whether or not the Company has the right to control the asset during the contract period. For all agreements where it is determined that a lease exists, the related lease assets and liabilities are recognized within the Consolidated Balance Sheets as either operating or finance leases at the commencement date. The lease liability is measured based on the present value of future payments over the lease term, and the right-of-use asset is measured as the lease liability, adjusted for prepaid lease payments, lease incentives, and initial direct costs (e.g., commissions). Valvoline's leases generally have terms ranging from less than one year to more than 20 years, and leases with an initial term of 12 months or less are included in the measurement of its right-of-use asset and lease liability balances. The lease term includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Fixed rental payments, including variable payments based on a rate or index, are included in the determination of the lease liability. Many leases also require the payment of taxes, insurance, operating expenses, and maintenance. In instances where these other components are fixed, they are included in the measurement of the lease liability due to Valvoline's election to combine lease and non-lease components and account for them as a single component. Otherwise, these components are recognized along with other variable lease payments in the Consolidated Statements of Comprehensive Income in the period in which the obligation for those payments is incurred. |
Business combinations | Business combinations The Company allocates the purchase consideration to the identifiable assets acquired and liabilities assumed in business combinations based on their acquisition-date fair values. The excess of the purchase consideration over the amounts assigned to the identifiable assets and liabilities is recognized as goodwill, or if the fair value of the net assets acquired exceeds the purchase consideration, a bargain purchase gain is recorded. Factors giving rise to goodwill generally include operational synergies that are anticipated as a result of the business combination and growth expected to result in economic benefits from access to new customers and markets. The fair values of identifiable intangible assets acquired in business combinations are generally determined using an income approach, requiring financial forecasts and estimates as well as market participant assumptions. |
Goodwill and other intangible assets | Goodwill and other intangible assets Valvoline evaluates goodwill for impairment annually as of July 1 or when events and circumstances indicate an impairment may have occurred. This assessment consists of evaluating each reporting unit’s fair value compared to its carrying value. Valvoline's historical reporting units were evaluated as a result of the realignment of its global operations during the third quarter of fiscal 2021. As a result, Valvoline determined its reporting units were Retail Services and Global Products, consistent with its realigned operating and reportable segments. In connection with the identification of its current operating and reportable segments and reporting units, goodwill balances and activity presented herein were reclassified to conform to the current presentation and were subject to assessment for goodwill impairment at the reporting unit level. In evaluating goodwill for impairment, Valvoline has the option to first perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, the Company is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Qualitative factors considered include macroeconomic conditions, industry and market conditions, cost factors, and overall financial performance, among others. Under the quantitative assessment, if the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, is measured as the excess of the carrying value of the reporting unit’s goodwill over its fair value, not to exceed the total goodwill allocated to the reporting unit. Fair values of the reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a discounted cash flow (“DCF”) analysis, and a number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market shares, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate, weighted average cost of capital, terminal values, and working capital changes. Several of these assumptions vary among reporting units, and the cash flow forecasts are generally based on approved strategic operating plans. The market approach is performed using the Guideline Public Companies method based on earnings multiple data. The Company also performs a reconciliation between market capitalization and the estimated aggregate fair value of the reporting units, including consideration of a control premium. Valvoline performed a quantitative assessment during fiscal 2021 and determined that the fair values of the Company's reporting units were substantially in excess of carrying values and no impairment existed. |
Equity method investments | Equity method investments Investments in companies, including joint ventures, where Valvoline has the ability to exert significant influence over, but not control, operating and financial policies of the investee are accounted for using the equity method of accounting. Judgment regarding the level of influence over each investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, and participation in policy-making decisions. The Company’s proportionate share of the net income or loss of these companies is included within Equity and other income, net in the Consolidated Statements of Comprehensive Income. The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. Factors considered by the Company when reviewing an equity method investment for other-than-temporary impairment include the length of time and extent to which the fair value of the equity method investment has been less than its carrying amount, the investee’s financial condition and near-term prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. |
Pension and other postretirement benefit plans | Pension and other postretirement benefit plans Valvoline sponsors defined benefit pension and other postretirement plans in the U.S and in certain other countries. The Company's U.S. pension plans are closed to new participants and the accrual of pension benefits has been frozen since September 30, 2016. In addition, most international pension plans are closed to new participants while those that remain open relate to areas where local laws require such plans. Valvoline also sponsors retiree healthcare and life insurance plans for certain qualifying participants with amendments effective in fiscal 2017 to limit annual per capita costs. Valvoline recognizes the funded status of each applicable plan within the Consolidated Balance Sheets whereby each unfunded plan is recognized as a liability and each funded plan is recognized as either an asset or liability based on its funded status. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation. Changes in the fair value of plan assets and net actuarial gains or losses are recognized upon remeasurement as of September 30, the annual measurement date, and whenever a remeasurement is triggered. The remaining components of pension and other postretirement benefits income or expense are recorded ratably throughout the year. The fair value of plan assets represents the current market value of assets held by irrevocable trust funds for the sole benefit of participants, and the benefit obligation is the actuarial present value of the benefits expected to be paid upon retirement, death, or other distributable event based on estimates. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain key assumptions that require significant judgment, including, but not limited to, estimates of discount rates, rate of compensation increases, interest rates and mortality rates. Actuarial gains and losses may be related to actual results that differ from assumptions as well as changes in assumptions, which may occur each year. |
Commitments and contingencies | Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Legal costs such as outside counsel fees and expenses are charged to expense in the period incurred and are recorded in Selling, general and administrative expenses |
Revenue recognition | Revenue recognition Revenue is recognized for the amount that reflects the consideration the Company is expected to be entitled to receive based on when control of the promised good or service is transferred to the customer. Revenue recognition is evaluated through the following five steps: (i) identification of the contract(s) with a customer; (ii) identification of the performance obligation(s) in the contract(s); (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligation(s) in the contract(s); and (v) recognition of revenue when or as a performance obligation is satisfied. Nature of goods and services Valvoline generates all revenues from contracts with customers, primarily as a result of the sale and service delivery of engine and automotive maintenance products to its customers. Valvoline derives its sales from its broad line of products and complementary services through the following three principal activities managed across its two reportable segments: (i) engine and automotive maintenance products, (ii) company-operated service center operations, and (iii) franchised service center operations. Valvoline’s sales are generally to mass market and auto parts retail, installer, industrial, distributor, franchise, and end consumers to facilitate vehicle and equipment preventive maintenance. Valvoline's sales are predominantly comprised of products and services sold at a point in time with approximately 98% recognized either through ship-and-bill performance obligations or company-operated service center operations. The remainder of the Company's sales generally relate to franchise fees, including royalties, transferred over time. The following table summarizes Valvoline's sales by timing of revenue recognized for the fiscal years ended September 30: (In millions) 2021 2020 2019 Sales at a point in time $ 2,931 $ 2,313 $ 2,347 Franchised revenues transferred over time 50 40 43 Total consolidated sales $ 2,981 $ 2,353 $ 2,390 Below is a summary of the key considerations for Valvoline's material revenue-generating activities: Engine and automotive maintenance products Engine and automotive maintenance products primarily include lubricants, antifreeze, chemicals, filters, and other complementary products for use across a wide array of vehicles and engines. The Company’s customers typically enter into a sales agreement which outlines a framework of terms and conditions that apply to all current and future purchase orders for the customer submitted under such sales agreement. In these situations, the Company’s contract with the customer is the sales agreement combined with the customer purchase order as specific products and quantities are not indicated until a purchase order is submitted. As the Company’s contract with the customer is typically for a single purchase order under the supply agreement to be delivered at a point in time, the duration of the contract is almost always one year or less. The Company’s products are distinct and separately identifiable on customer purchase orders, with each product sale representing a separate performance obligation that is generally delivered simultaneously. The Company has elected to not disclose information about remaining performance obligations as substantially all of the Company's product sales contracts have a duration of one year or less. Valvoline is the principal to these contracts as the Company has control of the products prior to transfer to the customer. Accordingly, revenue is recognized on a gross basis. The Company determines the point in time at which control is transferred and the performance obligation is satisfied by considering when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of the product, which generally coincides with the transfer of title and risk of loss to the customer and is typically determined based on delivery terms within the underlying contract. Customer payment terms vary by region and customer and are generally 30 to 60 days after delivery. Valvoline does not provide extended payment terms greater than one year and therefore, does not adjust the promised amount of consideration for the effects of a significant financing component. Company-operated service center operations Performance obligations related to company-operated service center operations primarily include the sale of engine and automotive maintenance products and related services. These performance obligations are distinct and are delivered simultaneously at a point in time. Accordingly, sales from company-operated service center operations is recognized when payment is tendered at the point of sale, which coincides with the completion of product and service delivery and the transfer of control and benefits from the performance obligations to the customer. Franchised service center operations The primary performance obligations related to franchised service center operations include product sales as described above and the license of intellectual property, which provides access to the Valvoline brand and proprietary information to operate service center stores over the term of a franchise agreement. Other franchise performance obligations do not result in material revenue. Each performance obligation is distinct, and franchisees generally receive and consume the benefits provided by the Company’s performance over the course of the franchise agreement, which typically ranges from 10 to 15 years. Billings and payments occur monthly. Variable consideration is not disclosed as remaining performance obligations qualify for the sales-based royalty and usage-based exemptions. In exchange for the license of Valvoline intellectual property, franchisees generally remit initial fees upon opening a service center store and royalties at a contractual rate of the applicable service center store sales over the term of the franchise agreement. The license provides access to the intellectual property over the term of the franchise agreement and is considered a right-to-access license of symbolic intellectual property as substantially all of its utility is derived from association with the Company’s past and ongoing activities. The license granted to operate each franchised service center store is the predominant item to which the royalties relate and represents a distinct performance obligation which is recognized over time as the underlying sales occur, as this is the most appropriate measure of progress toward complete satisfaction of the performance obligation. Variable consideration The Company only offers an assurance-type warranty with regard to the intended functionality of products sold, which does not represent a distinct performance obligation within the context of the contract. Product returns and refunds are generally not material and are not accepted unless the item is defective as manufactured. Estimated product returns are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience and is adjusted for known trends to arrive at the amount of consideration to which Valvoline expects to receive. The nature of Valvoline’s contracts with customers often give rise to variable consideration consisting primarily of promotional rebates and customer pricing discounts based on achieving certain levels of sales activity that generally decrease the transaction price. The Company determines the transaction price as the amount of consideration it expects to be entitled to in exchange for fulfilling the performance obligations, including the effects of any variable consideration, or amounts payable to the customer when there is a basis to reasonably estimate the amount and it is probable there will not be a significant reversal. Variable consideration is recorded as a reduction of the transaction price at the time of sale and is primarily estimated utilizing the most likely amount method that is expected to be earned as the Company is able to estimate the anticipated discounts within a sufficiently narrow range of possible outcomes based on its extensive historical experience with certain customers, similar programs and management’s judgment with respect to estimating customer participation and performance levels. Variable consideration is reassessed at each reporting date and adjustments are made, when necessary. The reduction of transaction price due to customer incentives was $402 million, $332 million, and $346 million in the Consolidated Statements of Comprehensive Income for the years ended September 30, 2021, 2020, and 2019, respectively. Reserves for these customer programs and incentives were $71 million and $64 million as of September 30, 2021 and 2020, respectively, and are recorded within Accrued expenses and other liabilities in the Consolidated Balance Sheets. Allocation of transaction price In each contract with multiple performance obligations, Valvoline allocates the transaction price, including variable consideration, to each performance obligation on a relative standalone selling price basis, which is generally determined based on the directly observable data of the Company’s standalone sales of the performance obligations in similar circumstances to similar customers. The amount allocated to each performance obligation is recognized as sales commensurate with the transfer of control to the customer. Shipping and handling activities that occur after the customer has obtained control are treated as fulfillment activities (i.e., an expense) rather than as a performance obligation. Accordingly, amounts billed for shipping and handling are a component of the transaction price included in net sales, while costs incurred are included in cost of sales. Shipping and handling costs recorded in sales were $10 million in fiscal 2021, $9 million in fiscal 2020, and $10 million in fiscal 2019. Furthermore, the Company excludes taxes collected from customers from sales, which are reflected in accrued expenses until remitted to the appropriate governmental authority. |
Cost of sales | Cost of sales are expensed as incurred and |
Selling, general and administrative expenses | Selling, general and administrative expenses are recognized as incurred and include sales and marketing costs, research and development costs, advertising, customer support, and other administrative costs. |
Stock-based compensation | Stock-based compensationThe Company recognizes expense related to stock-based compensation, net of actual forfeitures, over the requisite vesting period based on the grant date fair value of new or modified awards. The Company’s outstanding stock-based compensation awards are primarily classified as equity, with a small portion of liability-classified awards based on award terms and conditions. |
Income taxes | Income taxes Income tax expense is provided based on income before income taxes. The Company estimates its tax expense based on current tax laws in the statutory jurisdictions in which it operates. These estimates include judgments about the recognition and realization of deferred tax assets and liabilities resulting from the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled. As changes in tax laws or rates occur, deferred tax assets and liabilities are adjusted in the period changes are enacted through income tax expense. Valvoline records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Valvoline records estimated incremental withholding taxes on undistributed earnings to account for certain of its non-U.S. subsidiaries as being immediately subject to tax, while certain other outside basis differences restricted by regulations, operational or investing needs for non-U.S. subsidiaries are indefinitely reinvested. If these outside basis differences were no longer to be indefinitely reinvested in the future, the Company may be subject to additional income and withholding taxes, which are not practicable to estimate. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being sustained upon examination by authorities. Interest and penalties related to unrecognized tax benefits are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law and until such time that the related tax benefits are recognized. Interest and penalties were not material to any of the periods presented herein. |
Derivatives | Derivatives Valvoline’s derivative instruments consist of currency exchange and interest rate swap agreements, each of which is described further below. Currency derivatives The Company's currency exchange contracts are used to manage non-functional currency denominated balance sheet exposures and exchange on currency for another at a fixed rate on a future date of generally a month or less. These contracts are not designated as hedging instruments and are accounted for as either assets or liabilities in the Consolidated Balance Sheets at fair value with the resulting gains or losses recognized as adjustments to earnings within Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. Gains and losses are recognized as exchange rates change the fair value of these instruments and upon settlement to offset the remeasurement gain or loss on the related currency-denominated exposures in the same period. The Company classifies its cash flows related to currency exchange contracts as investing activities in the Consolidated Statements of Cash Flows. Interest rate swap agreements The Company's interest rate swap agreements effectively modify its exposure to interest rate risk by converting floating rate debt to a fixed rate for the term of the swap agreements, reducing the impact of interest rate changes on future interest expense. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. Valvoline's interest rate swap agreements are designated as cash flow hedges with effectiveness of the hedges assessed at inception and quarterly thereafter. To the extent the hedging relationship is highly effective, the unrealized gains or losses on the swaps are recorded in Accumulated other comprehensive income and reclassified into earnings within Net interest and other financing expenses when the payments occur. The Company classifies its cash flows related to interest rate swap agreements as operating activities in the Consolidated Statements of Cash Flows. The fair values of the interest rate swaps are reflected as an asset or liability in the Consolidated Balance Sheets and the change in fair value is reported in Accumulated other comprehensive income. The fair values of the interest rate swaps are estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date. The Company does not offset fair value amounts recognized in its Consolidated Balance Sheets for presentation purposes. |
Fair value measurements | Fair value measurements Fair value is defined as an exit price, representing an amount that would be received to sell an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance prioritizes the inputs used to measure fair value into the following three-tier fair value hierarchy for which an instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement: • Level 1 - Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3 - Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect the Valvoline's assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which may include the Company's own financial data, such as internally developed pricing models, DCF methodologies, as well as instruments for which the fair value determination requires significant management judgment. Certain investments which measure fair value using the net asset value (“NAV”) per share practical expedient are not classified within the fair value hierarchy and are separately disclosed. Valvoline measures its financial assets and financial liabilities at fair value based on one or more of the following three valuation techniques: • Market approach : Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities • Cost approach : Amount that would be required to replace the service capacity of an asset (replacement cost) • Income approach : Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option pricing and excess earnings models) The Company generally uses a market approach, when practicable, in valuing financial instruments. In certain instances, when observable market data is lacking, the Company uses valuation techniques consistent with the income approach whereby future cash flows are converted to a single discounted amount. The Company uses multiple sources of pricing as well as trading and other market data in its process of reporting fair values. The fair values of accounts receivables and accounts payable approximate their carrying values due to the relatively short-term nature of the instruments. Valvoline's notes receivable primarily consist of variable-rate interest term loans extended to franchisees to provide financial assistance as a response to the COVID-19 pandemic. These notes bear interest comparable with the market rates within Valvoline's variable rate borrowings, and accordingly, their carrying amounts approximate fair value. The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement. |
Currency translation | Currency translation Operations outside the United States are measured primarily using the local currency as the functional currency. Upon consolidation, the results of operations of the subsidiaries and affiliates whose functional currency is other than the U.S. dollar are translated into U.S. dollars at the average exchange rates for the year while assets and liabilities are translated at year-end exchange rates. Adjustments to translate assets and liabilities into U.S. dollars are recorded in the stockholders’ equity section of the Consolidated Balance Sheets as a component of Accumulated other comprehensive income and are included in net earnings only upon sale or substantial liquidation of the underlying non-U.S. subsidiary or affiliated company. |
Earnings per share | Earnings per share Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted-average number of common shares outstanding during the reported period. Diluted EPS is calculated similar to basic EPS, except that the weighted-average number of shares outstanding includes the number of shares that would have been outstanding had potentially dilutive common shares been issued. Potentially dilutive securities include stock appreciation rights and nonvested stock-based awards. Nonvested market and performance-based share awards are included in the weighted-average diluted shares outstanding each period if established market or performance criteria have been met at the end of the respective periods. |
Repurchase and Resale Agreements Policy | Share repurchasesShares that are repurchased are retired and returned to the status of authorized, unissued shares. The excess of the repurchase price over the par value of shares acquired is recognized in Retained earnings. |
Recent accounting pronouncements | Recent accounting pronouncements The following standards relevant to Valvoline were either issued or adopted in the current year, or are expected to have a meaningful impact on Valvoline in future periods. Recently adopted In June 2016, the Financial Accounting Standards Board ("FASB") issued updated guidance that changes the recognition of credit losses from an incurred or probable loss methodology to a current expected credit loss model that results in the immediate recognition of credit losses that are expected to occur over the life of the financial instruments that are within the scope of the guidance, principally trade and other receivables for Valvoline. The new credit loss guidance was adopted on October 1, 2020 using the required modified retrospective approach. Under this approach, the new accounting guidance is applied prospectively from the date of adoption through a cumulative effect adjustment in retained deficit, while prior period financial statements continue to be reported in accordance with the previous guidance. Adoption did not have a material impact on the Company's consolidated financial statements and resulted in a $2 million, net of tax, cumulative effect of accounting change that increased retained deficit and allowances for credit losses. Refer to Note 16 for additional information regarding the Company's trade and other receivables and its allowances for credit losses. Issued but not yet adopted In March 2020, the FASB issued guidance regarding the effects of reference rate reform on financial reporting. This guidance provides temporary optional expedients and exceptions to accounting guidance for certain contract modifications and hedging arrangements to ease financial reporting burdens as the market transitions from the London Interbank Offered Rate ("LIBOR") and other interbank reference rates to alternative reference rates. The Company has interest rate swap hedging arrangements and long-term debt as described in Notes 3 and 8 in the Notes to Consolidated Financial Statements, respectively, for which existing payments are LIBOR-based. This guidance is available to be adopted on a prospective basis through the end of calendar 2022 to simplify the accounting for arrangements modified for the transition to alternative reference rates. The Company expects to adopt this guidance to the extent its arrangements are modified for the underlying reference rate prior to the end of calendar 2022 and does not expect adoption will have a material impact on its condensed consolidated financial statements. The FASB issued other accounting guidance during the period that is not currently applicable or not expected to have a material impact on Valvoline’s financial statements, and therefore, is not described above. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Disaggregation of Sales by Timing of Revenue Recognized | The following table summarizes Valvoline's sales by timing of revenue recognized for the fiscal years ended September 30: (In millions) 2021 2020 2019 Sales at a point in time $ 2,931 $ 2,313 $ 2,347 Franchised revenues transferred over time 50 40 43 Total consolidated sales $ 2,981 $ 2,353 $ 2,390 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities at Fair Value | : As of September 30, 2021 (In millions) Total Level 1 Level 2 Level 3 NAV (a) Cash and cash equivalents Money market funds $ 13 $ 13 $ — $ — $ — Time deposits 87 — 87 — — Prepaid expenses and other current assets Currency derivatives 3 — 3 — — Other noncurrent assets Non-qualified trust funds 11 — 4 — 7 Interest rate swap agreements 2 2 Total assets at fair value $ 116 $ 13 $ 96 $ — $ 7 Accrued expenses and other liabilities Currency derivatives $ 3 $ — $ 3 $ — $ — Interest rate swap agreements 1 — 1 — — Other noncurrent liabilities Deferred compensation obligations 24 — — — 24 Total liabilities at fair value $ 28 $ — $ 4 $ — $ 24 As of September 30, 2020 (In millions) Total Level 1 Level 2 Level 3 NAV (a) Cash and cash equivalents Money market funds $ 296 $ 296 $ — $ — $ — Time deposits 139 — 139 — — Prepaid expenses and other current assets Currency derivatives 3 — 3 — — Other noncurrent assets Non-qualified trust funds 16 — 8 — 8 Total assets at fair value $ 454 $ 296 $ 150 $ — $ 8 Accrued expenses and other liabilities Currency derivatives $ 2 $ — $ 2 $ — $ — Interest rate swap agreements 1 — 1 — — Other noncurrent liabilities Deferred compensation obligations 25 — — — 25 Total liabilities at fair value $ 28 $ — $ 3 $ — $ 25 (a) Funds measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy. |
Summary of Fair Value of Debt | September 30, 2021 September 30, 2020 (In millions) Fair value Carrying value (a) Unamortized discounts and issuance costs Fair value Carrying value (a) Unamortized discounts and issuance costs 2025 Notes $ — $ — $ — $ 827 $ 790 $ (10) 2030 Notes 622 593 (7) 613 592 (8) 2031 Notes 531 529 (6) — — — Total $ 1,153 $ 1,122 $ (13) $ 1,440 $ 1,382 $ (18) |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Aggregate Cash Consideration and Total Assets Acquired and Liabilities Assumed | The following table summarizes the aggregate cash consideration paid and the total assets acquired and liabilities assumed for the years ended September 30: (In millions) 2021 2020 2019 Inventories $ 3 $ 1 $ — Other current assets 1 — — Property, plant and equipment (a) 99 6 19 Operating lease assets 38 1 — Goodwill (b) 207 17 50 Intangible assets (c) Reacquired franchise rights (d) 59 20 5 Customer relationships — — 6 Trademarks and trade names — — 1 Other 3 — 2 Other current liabilities (a) (9) (1) — Operating lease liabilities (35) — — Other noncurrent liabilities (a) (84) (4) (1) Net assets acquired 282 40 82 Bargain purchase gain (e) — — (4) Consideration transferred $ 282 $ 40 $ 78 (a) Includes $84 million of finance lease assets in property, plant and equipment and finance lease liabilities of $4 million and $80 million in other current and noncurrent liabilities, respectively, for leases acquired during the year ended September 30, 2021. (b) Goodwill is generally expected to be deductible for income tax purposes and is primarily attributed to the operational synergies and potential growth expected to result in economic benefits in the respective markets of the acquisitions. (c) Weighted average amortization period of intangible assets acquired in each period presented above is 10 years. (d) Prior to the acquisition of former franchise service center stores, Valvoline licensed the right to operate franchised quick lube service centers, including use of the Company’s trademarks and trade name. In connection with these acquisitions, Valvoline reacquired those rights and recognized separate definite-lived reacquired franchise rights intangible assets, which are being amortized on a straight-line basis over the weighted average remaining term of approximately 10 years for the rights reacquired in fiscal 2021 and 2020 and nine years for the rights reacquired in fiscal 2019. The effective settlement of these arrangements resulted in no settlement gain or loss as the contractual terms were at market. |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of Lease Balances on the Balance Sheet | The following table presents the Company's lease balances as of September 30: (In millions) Location in Consolidated Balance Sheets 2021 2020 Assets Operating lease assets Operating lease assets $ 307 $ 261 Finance lease assets Property, plant and equipment, net 198 77 Amortization of finance lease assets Property, plant and equipment, net (21) (10) Total leased assets $ 484 $ 328 Liabilities Current Operating lease liabilities Accrued expenses and other liabilities $ 38 $ 33 Finance lease liabilities Accrued expenses and other liabilities 9 3 Noncurrent Operating lease liabilities Operating lease liabilities 274 231 Finance lease liabilities Other noncurrent liabilities 178 70 Total lease liabilities $ 499 $ 337 |
Schedule of Maturity of Operating Lease Liability | The following table reconciles the undiscounted cash flows for the next five fiscal years ended September 30 and thereafter to the operating and finance lease liabilities recorded within the Consolidated Balance Sheet as of September 30, 2021: (In millions) Operating leases Finance leases 2022 $ 50 $ 18 2023 46 18 2024 42 18 2025 37 18 2026 31 19 Thereafter 174 166 Total future lease payments 380 257 Imputed interest 68 70 Present value of lease liabilities $ 312 $ 187 |
Lease, Cost | The following table presents the components of total lease costs for the years ended September 30: (In millions) Location in Consolidated Statements of Comprehensive Income 2021 2020 Operating lease cost Cost of sales and Selling, general and administrative expenses $ 52 $ 45 Finance lease costs Amortization of lease assets Cost of sales (a) 11 4 Interest on lease liabilities Net interest and other financing expenses 8 3 Variable lease cost Cost of sales and Selling, general and administrative expenses (a) 10 6 Sublease income Equity and other income, net (8) (6) Total lease cost $ 73 $ 52 Other information related to the Company's leases follows for the years ended September 30: (In millions) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (a) $ 50 $ 43 Operating cash flows from finance leases $ 8 $ 4 Financing cash flows from finance leases $ 6 $ 1 Lease assets obtained in exchange for lease obligations: Operating leases $ 83 $ 49 Finance leases $ 118 $ 49 (a) Included within the change in Other assets and liabilities within the Consolidated Statements of Cash Flows offset by noncash operating lease asset amortization and liability accretion. The weighted average remaining lease terms and interest rates as of September 30, 2021 were: Operating leases Finance leases Weighted average remaining lease term (in years) 9.6 13.7 Weighted average discount rate 3.98 % 5.20 % |
Schedule of Maturity of Finance Lease Liability | The following table reconciles the undiscounted cash flows for the next five fiscal years ended September 30 and thereafter to the operating and finance lease liabilities recorded within the Consolidated Balance Sheet as of September 30, 2021: (In millions) Operating leases Finance leases 2022 $ 50 $ 18 2023 46 18 2024 42 18 2025 37 18 2026 31 19 Thereafter 174 166 Total future lease payments 380 257 Imputed interest 68 70 Present value of lease liabilities $ 312 $ 187 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Summarized financial information for Valvoline’s equity method investments follows as of and for the years ended September 30: (In millions) 2021 2020 Financial position Current assets $ 162 $ 143 Current liabilities (89) (75) Working capital 73 68 Noncurrent assets 25 26 Noncurrent liabilities (5) (8) Stockholders’ equity $ 93 $ 86 (In millions) 2021 2020 2019 Results of operations (a) Sales $ 375 $ 273 $ 309 Income from operations $ 60 $ 50 $ 59 Net income $ 31 $ 25 $ 24 (a) Includes the results of equity method investments during the Company's period of ownership. The Company’s transactions with affiliate companies accounted for under the equity method were as follows for the years ended September 30: (In millions) 2021 2020 2019 Equity income (a) $ 15 $ 12 $ 12 Distributions received $ 14 $ 5 $ 9 Royalty income (a) $ 10 $ 8 $ 9 Sales to (b) $ 33 $ 7 $ 12 Purchases from (b) $ 14 $ 7 $ 4 (a) Equity and royalty income from affiliates accounted for under the equity method of accounting are recognized in Equity and other income, net in the Consolidated Statements of Comprehensive Income and are primarily related to the Global Products reportable segment. (b) Transactions with affiliates accounted for under the equity method of accounting are eliminated commensurate with Valvoline's ownership percentage until realized through sale to an independent third party. (In millions) 2021 2020 Accounts receivable (a) $ 13 $ 4 Notes receivable (b) $ — $ 5 Trade and other payables $ 1 $ 1 (a) Included in Receivables, net within the Consolidated Balance Sheets. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill by Segment | The following summarizes the changes in the carrying amount of goodwill for each reportable segment and in total during fiscal 2021 and 2020: (In millions) Retail Services Global Products Total Balance at September 30, 2019 (a) $ 301 $ 129 $ 430 Acquisitions 17 — 17 Currency translation 1 — 1 Dispositions (b) (3) — $ (3) Balance at September 30, 2020 (a) 316 129 445 Acquisitions (c) 205 2 207 Currency translation 2 — 2 Dispositions (b) (10) — (10) Balance at September 30, 2021 $ 513 $ 131 $ 644 (a) Goodwill balances as of September 30, 2019 and 2020 have been recast to conform to the current period presentation. Refer to Note 15 for further details regarding the Company's change in reportable segments during fiscal 2021. (b) Derecognition of goodwill as a result of the sale of service center stores to franchisees, which included 12 company-owned, franchise-operated locations in fiscal 2021 and six company-owned and operated locations in fiscal 2020. (c) Includes acquisitions within the Retail Services reportable segment of 120 service center stores and a former joint venture in the Global Products reportable segment. Refer to Note 4 for additional details. |
Summary of Finite-Lived Intangible Assets | The following summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets as of September 30: (In millions) 2021 2020 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Definite-lived intangible assets Trademarks and trade names $ 30 $ (8) $ 22 $ 30 $ (6) $ 24 Reacquired franchise rights 116 (25) 91 57 (14) 43 Customer relationships 23 (9) 14 22 (7) 15 Other intangible assets 6 (2) 4 3 (1) 2 Total definite-lived intangible assets $ 175 $ (44) $ 131 $ 112 $ (28) $ 84 |
Schedule of Actual and Estimated Amortization Expense | The table that follows summarizes amortization expense (actual and estimated) for the Company's current intangible assets for the years ended September 30: (In millions) Actual Estimated 2021 2022 2023 2024 2025 2026 Amortization expense $ 16 $ 17 $ 17 $ 16 $ 14 $ 11 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following table summarizes Valvoline’s debt as of September 30: (In millions) 2021 2020 2031 Notes $ 535 $ — 2030 Notes 600 600 2025 Notes — 800 Term Loan 475 475 Trade Receivables Facility 59 88 China Construction Facility 39 18 Debt issuance costs and discounts (14) (19) Total debt 1,694 1,962 Current portion of long-term debt 17 — Long-term debt $ 1,677 $ 1,962 |
Schedule of Maturities of Long-term Debt | The future maturities of debt outstanding as of September 30, 2021, excluding debt issuance costs and discounts, are as follows: (In millions) Years ending September 30 2022 $ 17 2023 61 2024 468 2025 27 2026 — Thereafter 1,135 Total $ 1,708 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | Income tax expense consisted of the following for the years ended September 30: (In millions) 2021 2020 2019 Current Federal $ 36 $ 16 $ 10 State 14 11 5 Non-U.S. 25 15 19 75 42 34 Deferred Federal 42 62 24 State 8 26 — Non-U.S. (2) 4 (1) 48 92 23 Income tax expense $ 123 $ 134 $ 57 |
Schedule and Reconciliation of the Statutory Federal Income Tax | The following presents pre-tax income and the principal components of the reconciliation between the effective tax rate and the U.S. federal statutory income tax rate in effect for the years ended September 30: (In millions) 2021 2020 2019 Income before income taxes United States $ 483 $ 399 $ 212 Non-U.S. 60 52 53 Total income before income taxes $ 543 $ 451 $ 265 U.S. statutory tax rate 21.0 % 21.0 % 21.0 % Income taxes computed at U.S. statutory tax rate $ 114 $ 95 $ 56 (Decrease) increase in amount computed resulting from: Unrecognized tax benefits (5) 1 5 State taxes, net of federal benefit 19 16 9 International rate differential 3 2 2 Permanent items (6) (4) (3) Remeasurement of net deferred taxes — 1 (4) Return-to-provision adjustments — (2) (6) Change in valuation allowances 1 29 (4) Tax Matters Agreement activity (6) (6) 1 Other 3 2 1 Income tax expense $ 123 $ 134 $ 57 Effective tax rate 22.7 % 29.7 % 21.5 % |
Schedule of Deferred Tax Assets and Liabilities | A summary of the deferred tax assets and liabilities included in the Consolidated Balance Sheets follows as of September 30: (In millions) 2021 2020 Deferred tax assets Non-U.S. net operating loss carryforwards (a) $ 2 $ 2 State net operating loss carryforwards (b) 18 18 Employee benefit obligations 46 79 Compensation accruals 29 26 Credit carryforwards (c) 12 11 Operating lease liabilities 98 69 Other 23 17 Valuation allowances (d) (32) (30) Net deferred tax assets 196 192 Deferred tax liabilities Goodwill and other intangibles 16 11 Property, plant and equipment 109 75 Operating lease assets 78 67 Undistributed earnings 5 6 Total deferred tax liabilities 208 159 Total net deferred tax (liabilities) assets (e) $ (12) $ 33 (a) Gross non-U.S. net operating loss carryforwards of $7 million expire in fiscal years 2023 to 2040. (b) Apportioned gross state net operating loss carryforwards of $361 million expire in fiscal year s 2023 through 2034. (c) Credit carryforwards consist primarily of U.S. tax credits that generally expire in fiscal years 2025 through 2036. (d) Valuation allowances at September 30, 2021 primarily relate t o state net operating loss carryforwards and certain other federal legacy tax attributes that are not expected to be realized or realizable. |
Schedule of Gross Unrecognized Tax Benefits | The aggregate changes in the balance of gross unrecognized tax benefits were as follows for the years ended September 30: (In millions) 2021 2020 2019 Gross unrecognized tax benefits as of October 1 $ 15 $ 14 $ 10 Increases related to tax positions from prior years 2 1 5 Decreases related to tax positions from prior years (1) — — Increases related to tax positions taken during the current year 1 1 — Settlements with tax authorities (4) — — Lapses of statutes of limitation (1) (1) (1) Gross unrecognized tax benefits as of September 30 (a) $ 12 $ 15 $ 14 (a) These unrecognized tax benefits would favorably impact the effective income tax rate, if recognized. Accruals for interest and penalties were $2 million as of September 30, 2021 and 2020. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Summary of the Components of Benefit Costs (Income) | The components of pension and other postretirement plans net periodic benefit (income) costs and the assumptions used in this determination are summarized below for the years ended September 30: (In millions) Pension benefits Other postretirement benefits 2021 2020 2019 2021 2020 2019 Net periodic benefit (income) costs Service cost $ 2 $ 3 $ 2 $ — $ — $ — Interest cost 43 61 81 1 1 2 Expected return on plan assets (86) (87) (80) — — — Amortization of prior service credit (a) — — — (12) (12) (12) Actuarial (gain) loss (72) (24) 61 — 2 8 Net periodic benefit (income) costs $ (113) $ (47) $ 64 $ (11) $ (9) $ (2) Weighted-average plan assumptions (b) Discount rate for service cost 1.55 % 1.49 % 2.92 % 3.03 % 3.12 % 3.98 % Discount rate for interest cost 1.91 % 2.79 % 4.00 % 1.83 % 2.69 % 3.83 % Rate of compensation increase 3.00 % 3.04 % 3.06 % — — — Expected long-term rate of return on plan assets 4.34 % 4.64 % 4.66 % — — — (a) Other postretirement plan amendments are amortized within this caption during all periods presented. (b) The plan assumptions are a blended weighted-average rate for Valvoline’s U.S. and non-U.S. plans. The U.S. pension plans represented approximately 97% of the total pension projected benefit obligation as of September 30, 2021. Other postretirement benefit plans are in the U.S. and Canada, with the U.S. plan representing approximately 79% of the total other postretirement projected benefit obligation as of September 30, 2021. Non-U.S. plans use assumptions generally consistent with those of U.S. plans. |
Schedule of Amortization of Prior Service Cost (Credit) Recognized in AOCI | The following table summarizes the net periodic benefit income and the amortization of prior service credits recognized during the years ended September 30: (In millions) Pension benefits Other postretirement benefits 2021 2020 2019 2021 2020 2019 Amortization of prior service credits recognized in Accumulated other comprehensive income $ — $ — $ — $ 12 $ 12 $ 12 Net periodic benefit income (113) (47) 64 (11) (9) (2) Total pre-tax amount recognized in comprehensive income $ (113) $ (47) $ 64 $ 1 $ 3 $ 10 |
Schedule of Changes in Projected Benefit Obligations | Changes in benefit obligations and the fair value of plan assets, as well as key assumptions used to determine the benefit obligations, and the amounts in the Consolidated Balance Sheets for the Company’s pension and other postretirement benefit plans are summarized below as of September 30: (In millions) Pension benefits Other postretirement benefits 2021 2020 2021 2020 Change in benefit obligations Benefit obligations as of October 1 $ 2,321 $ 2,287 $ 52 $ 55 Service cost 2 3 — — Interest cost 43 61 1 1 Benefits paid (133) (132) (5) (6) Actuarial (gain) loss (31) 107 — 2 Currency exchange rate changes 2 1 1 — Transfers in 3 3 — — Settlements (4) (9) — — Benefit obligations as of September 30 $ 2,203 $ 2,321 $ 49 $ 52 Change in plan assets Fair value of plan assets as of October 1 $ 2,045 $ 1,943 $ — $ — Actual return on plan assets 128 218 — — Employer contributions 14 22 5 6 Benefits paid (133) (133) (5) (6) Currency exchange rate changes 2 1 — — Settlements (4) (9) — — Transfers in 3 3 — — Fair value of plan assets as of September 30 $ 2,055 $ 2,045 $ — $ — Unfunded status of the plans as of September 30 $ 148 $ 276 $ 49 $ 52 Amounts in the Consolidated Balance Sheets Noncurrent benefit assets (a) $ 72 $ 1 $ — $ — Current benefit liabilities (b) 9 10 5 5 Noncurrent benefit liabilities (c) 211 267 44 47 Total benefit liabilities 220 277 49 52 Net liabilities recognized $ 148 $ 276 $ 49 $ 52 Balance in Accumulated other comprehensive loss Prior service cost (credit) $ 1 $ 1 $ (21) $ (33) Weighted-average plan assumptions Discount rate 2.70 % 2.59 % 2.67 % 2.39 % Rate of compensation increase 3.00 % 3.00 % — — Healthcare cost trend rate (d) — — 6.4 % 6.7 % |
Schedule of Pension Plans with a Benefit Obligation in Excess of Plan Assets | Information for pension plans with a benefit obligation in excess of the fair value of plan assets follows for the Company’s plans as of September 30: (In millions) 2021 2020 Benefit obligation Plan assets Benefit obligation Plan assets Plans with projected benefit obligation in excess of plan assets $ 1,607 $ 1,386 $ 2,275 $ 1,998 Plans with accumulated benefit obligation in excess of plan assets $ 1,593 $ 1,374 $ 2,253 $ 1,978 |
Schedule of Investment Categories for Pension Plan Assets | Pension plan asset investments and their level within the fair value hierarchy is summarized below as of: (In millions) September 30, 2021 Total fair value Level 1 Level 2 Level 3 Assets measured at NAV Cash and cash equivalents $ 136 $ 136 $ — $ — $ — U.S. government securities and futures 96 — 96 — — Other government securities 58 — 58 — — Corporate debt instruments 1,371 — 1,371 — — Insurance contracts 58 — — 58 — Private equity and hedge funds 11 — — — 11 Collective trust funds 316 — — — 316 Other investments 9 $ — 9 $ — — Total assets at fair value $ 2,055 $ 136 $ 1,534 $ 58 $ 327 (In millions) September 30, 2020 Total fair value Level 1 Level 2 Level 3 Assets measured at NAV Cash and cash equivalents $ 102 $ 102 $ — $ — $ — U.S. government securities and futures 172 — 172 — — Other government securities 47 — 47 — — Corporate debt instruments 1,201 — 1,201 — — Insurance contracts 12 — — 12 — Private equity and hedge funds 13 — — — 13 Collective trust funds 497 — — — 497 Other investments 1 — 1 — — Total assets at fair value $ 2,045 $ 102 $ 1,421 $ 12 $ 510 |
Schedule of Reconciliation of Level 3 Assets | The following reconciles the beginning and ending balances for Level 3 plan assets: (In millions) Total Level 3 assets Balance at September 30, 2019 $ 7 Purchases 4 Actual return on assets held at end of year 1 Balance at September 30, 2020 12 Purchases 48 Actual return on assets held at end of year (2) Balance at September 30, 2021 $ 58 |
Schedule of Investments Measured at Fair Value Using NAV Per Share | The following summarizes investments for which fair value is measured using the NAV per share practical expedient as of September 30, 2021: (In millions) Fair value at NAV Unfunded commitments Redemption frequency Redemption notice period Long/short hedge funds $ 2 $ — None (a) None (a) Relative value hedge funds 3 — None (b) None (b) Event driven hedge funds 1 — None (b) None (b) Collective trust funds 299 — Daily Up to 3 days 9 — Monthly 5 days 8 — N/A (c) N/A (c) Private equity 5 2 None (d) None (d) $ 327 $ 2 (a) These hedge funds are in the process of liquidation over the next year. (b) These hedge funds are in the process of liquidation and the timing is unknown. (c) These assets are held in fund investments that include a diversified portfolio across various asset classes. The time period for redemption of these assets is not determinable. (d) These private equity instruments are estimated to be liquidated over the next 1 to 5 years. |
Schedule of Weighted-Average Asset Allocations And Plan Asset Allocations | The weighted-average asset allocations for Valvoline’s plans by asset category follow as of September 30: Target 2021 2020 Plan assets allocation Equity securities 15-25% 11 % 18 % Debt securities 65-85% 85 % 80 % Other 0-20% 4 % 2 % Total 100 % 100 % |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect future service expectations, are projected to be paid in each of the next five fiscal years ended September 30 and the five fiscal years thereafter in aggregate: (In millions) Pension benefits Other postretirement benefits 2022 $ 145 $ 5 2023 145 4 2024 141 4 2025 139 3 2026 138 3 2027 - 2031 651 14 Total $ 1,359 $ 33 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The following summarizes stock-based compensation expense recognized by the Company during the years ended September 30: (In millions) 2021 2020 2019 Stock appreciation rights $ 1 $ 1 $ 1 Nonvested stock awards (a) 14 11 9 Total stock-based compensation expense, pre-tax 15 12 10 Tax benefit (4) (3) (2) Total stock-based compensation expense, net of tax $ 11 $ 9 $ 8 |
Summary of Nonvested Stock Award Activity | The following summarizes nonvested stock award activity during the year ended September 30, 2021: Number of shares Weighted average grant date fair value per share Unvested shares as of September 30, 2020 1,668 $ 20.89 Granted 520 $ 22.33 Performance adjustments (a) 126 $ 22.96 Vested (288) $ 22.69 Forfeited (58) $ 21.85 Unvested shares as of September 30, 2021 1,968 $ 21.50 |
Summary of Fair Value Assumptions Utilized in Monte Carlo Model to Determine Value of Awards | with the following key assumptions: 2021 2020 2019 Weighted average grant date fair value per share $ 21.81 $ 23.21 $ 21.22 Assumptions (weighted average) Risk-free interest rates (a) 0.2 % 1.6 % 2.8 % Expected dividend yield 2.3 % 2.1 % 1.3 % Expected volatility (b) 42.0 % 26.0 % 26.8 % Expected term (in years) 3.0 3.0 3.0 (a) Based on the U.S. Treasury yield curve in effect at the time of grant or modification for the expected term of the award. The range of risk-free interest rates used for performance awards was 0.13% to 0.23% in fiscal 2021, 1.55% to 1.59% in fiscal 2020, and 2.66% to 2.82% in fiscal 2019. |
Share-based Payment Arrangement, Nonvested Award, Cost and Weighted Avg Grant Date FV | The total grant date fair value of nonvested stock awards vested and the weighted average grant date fair value of nonvested stock awards granted follows for the years ended September 30: (In millions, except weighted average) 2021 2020 2019 Total grant date fair value of shares vested $ 7 $ 5 $ 12 Weighted average grant date fair value $ 22.33 $ 22.17 $ 20.72 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is the summary of basic and diluted EPS for the years ended September 30: (In millions, except per share data) 2021 2020 2019 Numerator Net income $ 420 $ 317 $ 208 Denominator Weighted average common shares outstanding 182 187 189 Effect of potentially dilutive securities (a) 1 1 — Weighted average diluted shares outstanding 183 188 189 Earnings per share Basic $ 2.30 $ 1.70 $ 1.10 Diluted $ 2.29 $ 1.69 $ 1.10 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Components of Other Comprehensive Income | hanges in Accumulated other comprehensive income by component for fiscal years 2021 and 2020 were as follows: (In millions) Unamortized benefit plan credits Currency translation adjustments Changes in fair value of cash flow hedges Total Balance as of September 30, 2019 $ 34 $ (23) $ — $ 11 Other comprehensive income (loss) before reclassification — 6 (1) 5 (Gain) loss reclassified out of accumulated other comprehensive income (12) 1 — (11) Tax expense 3 — — 3 Balance as of September 30, 2020 25 (16) (1) 8 Other comprehensive income before reclassification — 7 3 10 Gains reclassified out of accumulated other comprehensive income (12) — (1) (13) Tax expense 3 — — 3 Balance as of September 30, 2021 $ 16 $ (9) $ 1 $ 8 |
Schedule of Amounts Reclassified from Accumulated Other Comprehensive Income | Amounts reclassified from Accumulated other comprehensive income follow for the years ended September 30: (in millions) 2021 2020 2019 Amortization of pension and other postretirement plan prior service credits (a) $ (12) $ (12) $ (12) Loss (gain) on liquidation of subsidiaries (b) — 1 (1) Gain on cash flow hedges (c) (1) — — Tax effect of reclassifications 3 3 3 Total amounts reclassified, net of tax $ (10) $ (8) $ (10) (a) Amortization of unrecognized prior service credits included in net periodic benefit income for pension and other postretirement plans was reported in Net pension and other postretirement plan (income) expenses within the Consolidated Statements of Comprehensive Income. The Company releases the income tax effects from Accumulated other comprehensive income as benefit plan credits are amortized into earnings. (b) Represents the realization of cumulative translation adjustments in Equity and other income, net within the Consolidated Statements of Comprehensive Income as a result of the liquidation of certain non-U.S. subsidiaries. (c) Represents the realization of gains from cash flow hedges reported in Net interest and other financing expenses within the Consolidated Statements of Comprehensive Income. |
Reportable Segment Information
Reportable Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Information | The following table presents sales and adjusted EBITDA of each reportable segment for the years ended September 30: (In millions) 2021 2020 2019 Sales Retail Services $ 1,221 $ 883 $ 822 Global Products 1,760 1,470 1,568 Consolidated sales $ 2,981 $ 2,353 $ 2,390 Adjusted EBITDA Retail Services $ 382 $ 247 $ 239 Global Products 327 309 296 Total operating segments 709 556 535 Corporate (a) (75) (61) (57) Consolidated Adjusted EBITDA 634 495 478 Reconciliation to income before income taxes: Net interest and other financing expenses (111) (93) (73) Depreciation and amortization (92) (66) (61) Key items: (b) Net pension and other postretirement plan income (expenses) 126 59 (60) Net legacy and separation-related income (expenses) 24 30 (3) LIFO (charge) credit (41) 15 — Business interruption recovery (expenses) 3 2 (6) Compensated absences benefits change — 11 — Acquisition and divestiture-related (costs) income — (2) 4 Restructuring and related expenses — — (14) Income before income taxes $ 543 $ 451 $ 265 (a) Corporate includes the costs of corporate functions and certain other non-operational matters and corporate activity that is not directly attributable to a particular segment. (b) Key items represent adjustments to U.S. GAAP results and consist of non-operational matters, including pension and other postretirement plan non-service income and remeasurement adjustments, net legacy and separation-related activity, changes in the LIFO inventory reserve, and certain other corporate matters excluded from operating results, which management believes impacts the comparability of operational results between periods. |
Schedule of Sales by Product Category | The following table summarizes sales by category for each reportable segment for the years ended September 30: (In millions) 2021 2020 2019 Retail Services Company operations Oil changes $ 657 $ 450 $ 407 Non-oil changes 205 141 124 Non-company operations Franchise fees 50 40 43 Product sales 309 252 248 Total Retail Services $ 1,221 $ 883 $ 822 Global Products Lubricants $ 1,570 $ 1,287 $ 1,364 Antifreeze 119 104 121 Filters 13 13 12 Chemicals and other 58 66 71 Total Global Products $ 1,760 $ 1,470 $ 1,568 |
Schedule of Disaggregated Revenues | Sales by primary customer channel for the Company’s reportable segments are summarized below for the years ended September 30: (In millions) 2021 2020 2019 Retail Services Company operations $ 862 $ 591 $ 531 Non-company operations 359 292 291 Total Retail Services 1,221 883 822 Global Products Do-it-Yourself 626 571 558 Installer and other 1,134 899 1,010 Total Global Products 1,760 1,470 1,568 Consolidated sales $ 2,981 $ 2,353 $ 2,390 Valvoline did not have a single customer that represented 10% or more of consolidated sales in fiscal 2021, 2020 or 2019. |
Schedule of Sales Disaggregated by Segment and Geographical Area | Sales by reportable segment disaggregated by geographic region are summarized as follows: (In millions) Retail Services Global Products Totals Year ended September 30, 2021 North America (a) $ 1,221 $ 1,052 $ 2,273 Europe, Middle East and Africa ("EMEA") — 219 219 Asia Pacific — 358 358 Latin America (a) — 131 131 Total $ 1,221 $ 1,760 $ 2,981 Year ended September 30, 2020 North America (a) 883 $ 945 $ 1,828 EMEA — 169 169 Asia Pacific — 273 273 Latin America (a) — 83 83 Total $ 883 $ 1,470 $ 2,353 Year ended September 30, 2019 North America (a) $ 822 $ 994 $ 1,816 EMEA — 181 181 Asia Pacific — 285 285 Latin America (a) — 108 108 Total $ 822 $ 1,568 $ 2,390 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following presents sales and net property, plant and equipment by geographic area for the years ended and as of September 30: Sales from external customers (a) Property, plant and equipment, net (b) (In millions) 2021 2020 2019 2021 2020 United States $ 2,209 $ 1,775 $ 1,766 $ 700 $ 512 International 772 578 624 117 101 Total $ 2,981 $ 2,353 $ 2,390 $ 817 $ 613 (a) Sales are attributed to the geographic area where solutions are delivered. |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Supplemental Balance Sheet Information [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the totals shown within the Consolidated Statements of Cash Flows for the years ended September 30: (In millions) 2021 2020 2019 Cash and cash equivalents $ 230 $ 760 $ 159 Restricted cash (a) 1 1 — Total cash, cash equivalents and restricted cash $ 231 $ 761 $ 159 (a) Included in Prepaid expenses and other current assets within the Consolidated Balance Sheets. |
Summary of Accounts Receivable | Accounts and other receivables The following summarizes Valvoline’s accounts and other receivables in the Consolidated Balance Sheets as of September 30: (In millions) 2021 2020 Current Trade $ 475 $ 409 Other 16 14 Notes receivable from franchisees 10 13 Receivables, gross 501 436 Allowance for credit losses (5) (3) Receivables, net $ 496 $ 433 Non-current (a) Notes receivable from franchisees $ — $ 13 Other notes receivable 3 8 Noncurrent notes receivable, gross 3 21 Allowance for losses (3) (4) Noncurrent notes receivable, net $ — $ 17 |
Inventories | The following summarizes Valvoline’s inventories within the Consolidated Balance Sheets as of September 30: (In millions) 2021 2020 Finished products $ 276 $ 195 Raw materials, supplies and work in process 49 30 Reserve for LIFO cost valuation (67) (26) Total inventories, net $ 258 $ 199 |
Summary of Property, Plant and Equipment | (In millions) 2021 2020 Land $ 130 $ 96 Buildings 607 412 Machinery and equipment 564 494 Construction in progress 71 101 Total property, plant and equipment 1,372 1,103 Accumulated depreciation (555) (490) Net property, plant and equipment $ 817 $ 613 (In millions) 2021 2020 Land $ 64 $ 34 Buildings 134 43 Total finance lease assets 198 77 Accumulated depreciation (21) (10) Net finance lease assets $ 177 $ 67 (In millions) 2021 2020 2019 Depreciation (includes finance and capital leases) $ 76 $ 56 $ 52 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) - Sep. 30, 2021 | Service_Center | countries | location | numberOfFormerFranchiseCenters |
Related Party Transaction [Line Items] | ||||
Number of Stores | 1,600 | 1,600 | ||
Number of countries where our products are sold | countries | 140 | |||
Number of locations | location | 80,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021USD ($)numberOfSegmentsnumberOfPrincipalActivities | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of principal activities | numberOfPrincipalActivities | 3 | ||
Number of reportable segments | numberOfSegments | 2 | ||
Sales | $ 2,981 | $ 2,353 | $ 2,390 |
Customer incentives | 402 | 332 | 346 |
Reserves for customer programs and incentives | 71 | 64 | |
Shipping and handling costs recorded in sales | 10 | 9 | 10 |
Advertising costs | 90 | 72 | 73 |
Research and development costs | $ 15 | 13 | 13 |
Transferred at Point in Time [Member] | |||
Significant Accounting Policies [Line Items] | |||
Percentage of revenue recognized | 98.00% | ||
Sales | $ 2,931 | 2,313 | 2,347 |
Transferred over Time [Member] | |||
Significant Accounting Policies [Line Items] | |||
Sales | $ 50 | 40 | $ 43 |
Accounting Standards Update 2016-13 | |||
Significant Accounting Policies [Line Items] | |||
Accounts Receivable, Allowance for Credit Loss | $ 2 | ||
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Payment terms | 30 days | ||
Expected timing of satisfaction for revenue performance obligations | 10 years | ||
Minimum | Buildings | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of property, plant and equipment | 10 years | ||
Minimum | Machinery and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of property, plant and equipment | 2 years | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Payment terms | 60 days | ||
Expected timing of satisfaction for revenue performance obligations | 15 years | ||
Maximum | Buildings | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of property, plant and equipment | 25 years | ||
Maximum | Machinery and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of property, plant and equipment | 30 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Fair Value, Inputs, Level 1 [Member] | ||
Other noncurrent assets | ||
Total assets at fair value | $ 13 | $ 296 |
Accrued expenses and other liabilities | ||
Total liabilities at fair value | 0 | 0 |
Level 2 | ||
Other noncurrent assets | ||
Total assets at fair value | 96 | 150 |
Accrued expenses and other liabilities | ||
Total liabilities at fair value | 4 | 3 |
Assets measured at NAV | ||
Other noncurrent assets | ||
Non-qualified trust funds | 7 | 8 |
Accrued expenses and other liabilities | ||
Deferred compensation obligations | 24 | 25 |
Fair Value Measurement, Recurring | ||
Prepaid expenses and other current assets | ||
Foreign Currency Contract, Asset, Fair Value Disclosure | 3 | 3 |
Other noncurrent assets | ||
Non-qualified trust funds | 11 | 16 |
Interest rate swap agreements | 2 | |
Total assets at fair value | 116 | 454 |
Accrued expenses and other liabilities | ||
Currency derivatives | 3 | 2 |
Interest rate swap agreements | 1 | 1 |
Deferred compensation obligations | 24 | 25 |
Total liabilities at fair value | 28 | 28 |
Fair Value Measurement, Recurring | Fair Value, Inputs, Level 1 [Member] | ||
Other noncurrent assets | ||
Non-qualified trust funds | 0 | 0 |
Fair Value Measurement, Recurring | Level 2 | ||
Prepaid expenses and other current assets | ||
Foreign Currency Contract, Asset, Fair Value Disclosure | 3 | 3 |
Other noncurrent assets | ||
Non-qualified trust funds | 4 | 8 |
Interest rate swap agreements | 2 | |
Accrued expenses and other liabilities | ||
Currency derivatives | 3 | 2 |
Interest rate swap agreements | 1 | 1 |
Deferred compensation obligations | 0 | 0 |
Fair Value Measurement, Recurring | Assets measured at NAV | ||
Other noncurrent assets | ||
Non-qualified trust funds | 7 | 8 |
Accrued expenses and other liabilities | ||
Deferred compensation obligations | 24 | 25 |
Money Market Funds [Member] | Fair Value Measurement, Recurring | ||
Cash and cash equivalents | ||
Cash and cash equivalents | 13 | 296 |
Money Market Funds [Member] | Fair Value Measurement, Recurring | Fair Value, Inputs, Level 1 [Member] | ||
Cash and cash equivalents | ||
Cash and cash equivalents | 13 | 296 |
Time deposits | Fair Value Measurement, Recurring | ||
Cash and cash equivalents | ||
Cash and cash equivalents | 87 | 139 |
Time deposits | Fair Value Measurement, Recurring | Level 2 | ||
Cash and cash equivalents | ||
Cash and cash equivalents | $ 87 | $ 139 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment Owned, Foreign Currency Contract, Current Value | $ 137 | $ 149 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding derivative contracts notional amount | $ 350 | $ 350 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unamortized discounts and issuance costs | $ 14 | $ 19 |
Level 2 | Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 1,153 | 1,440 |
Level 2 | Fair value | Senior Notes | 2025 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 0 | 827 |
Level 2 | Fair value | Senior Notes | Senior Unsecured Notes Due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 622 | 613 |
Level 2 | Fair value | Senior Notes | Senior Unsecured Notes Due 2031 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 531 | 0 |
Level 2 | Carrying value (a) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 1,122 | 1,382 |
Unamortized discounts and issuance costs | (13) | (18) |
Level 2 | Carrying value (a) | Senior Notes | 2025 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 0 | 790 |
Unamortized discounts and issuance costs | 0 | (10) |
Level 2 | Carrying value (a) | Senior Notes | Senior Unsecured Notes Due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 593 | 592 |
Unamortized discounts and issuance costs | (7) | (8) |
Level 2 | Carrying value (a) | Senior Notes | Senior Unsecured Notes Due 2031 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt fair value | 529 | 0 |
Unamortized discounts and issuance costs | $ (6) | $ 0 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) $ in Millions | Apr. 30, 2021numberOfFormerFranchiseCenters | Dec. 11, 2020numberOfFormerFranchiseCentersservice_center_store | Oct. 30, 2020numberOfFormerFranchiseCenters | Oct. 15, 2020numberOfFormerFranchiseCenters | Oct. 01, 2020numberOfFormerFranchiseCenters | Oct. 31, 2018numberOfFranchiseServiceCenters | Sep. 30, 2021USD ($)Service_CenternumberOfFormerFranchiseCentersservice_center_storelocations | Sep. 30, 2020USD ($)service_center_storenumberOfFormerFranchiseCenters | Sep. 30, 2019USD ($)service_center_storenumberOfFormerFranchiseCenters | Sep. 30, 2021numberOfFormerFranchiseCenters |
Business Acquisition [Line Items] | ||||||||||
Number of service center stores | service_center_store | 11 | 35 | 60 | |||||||
Purchase price | $ | $ 282 | $ 40 | $ 78 | |||||||
Number of former franchise service center stores acquired | 16 | 13 | 23 | 5 | ||||||
Number of service center stores acquired in single and multi-store transactions | 134 | 24 | ||||||||
Business Disposition, Number of Service Centers Sold | 12 | 6 | ||||||||
Number of Stores | 1,600 | 1,600 | ||||||||
Number of Company Owned Stores | 700 | |||||||||
Business Acquisition, Number of Former Joint Venture Locations | locations | 14 | |||||||||
Oil Changers, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of franchise service center stores acquired | numberOfFranchiseServiceCenters | 31 | |||||||||
L&F Enterprises | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of service center stores | 12 | |||||||||
Car Wash Partners, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of service center stores | 27 | |||||||||
Number of franchise service center stores acquired | 12 | |||||||||
Number of service center stores acquired in single and multi-store transactions | 15 | |||||||||
Business Acquisition, Number of States in Which Service Center Stores Acquired | service_center_store | 7 | |||||||||
Kent Lubrication Centers Ltd. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of service center stores | 14 | |||||||||
Westco Lube, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of former franchise service center stores acquired | 21 | |||||||||
Express Care | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of service center stores | service_center_store | 6 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Schedule of Aggregate Cash Consideration and Total Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | |||
Inventories | $ 3 | $ 1 | $ 0 |
Other current assets | 1 | 0 | 0 |
Property, plant and equipment | 99 | 6 | 19 |
Operating lease assets | 38 | 1 | 0 |
Goodwill | 207 | 17 | 50 |
Other current liabilities | (9) | (1) | 0 |
Operating lease liabilities | (35) | 0 | 0 |
Other noncurrent liabilities | (84) | (4) | (1) |
Net assets acquired | 282 | 40 | 82 |
Bargain purchase gain | 0 | 0 | (4) |
Consideration transferred | $ 282 | 40 | 78 |
Weighted average useful life | 10 years | ||
Assets Held under Capital and Finance Leases | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired Assumed, Finance Lease Asset | $ 84 | ||
Capital Lease Obligations | |||
Business Acquisition [Line Items] | |||
Business combination Recognized Identifiable Liabilities Assumed, Finance Lease Obligation, Current | 4 | ||
Business Combination, Recognized Identifiable Asset Acquired and Liability Assumed, Lease Obligation | 80 | ||
Reacquired franchise rights | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 59 | $ 20 | $ 5 |
Weighted average useful life | 10 years | 10 years | 9 years |
Gain (Loss) on Contract Termination | $ 0 | ||
Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | 0 | $ 0 | $ 6 |
Trademarks and trade names | |||
Business Acquisition [Line Items] | |||
Intangible assets | 0 | 0 | 1 |
Other intangible assets | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 3 | $ 0 | $ 2 |
Lease Commitments - Schedule of
Lease Commitments - Schedule of Lease Balances on the Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Leases [Abstract] | ||
Operating lease assets | $ 307 | $ 261 |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 198 | 77 |
Finance Lease, Right-of-Use Asset, Accumulated Amortization | (21) | (10) |
Total Operating And Finance Lease, Right-Of-Use Asset | 484 | 328 |
Operating lease liabilities, current | 38 | 33 |
Finance lease liabilities, current | 9 | 3 |
Operating lease liabilities, noncurrent | 274 | 231 |
Finance lease liabilities, noncurrent | 178 | 70 |
Total Operating And Finance Lease, Liability | $ 499 | $ 337 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other noncurrent liabilities | Other noncurrent liabilities |
Lease Commitments - Schedule _2
Lease Commitments - Schedule of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 52 | $ 45 |
Lease, Cost [Abstract] | ||
Amortization of lease assets | 11 | 4 |
Interest on lease liabilities | 8 | 3 |
Variable lease cost | 10 | 6 |
Sublease income | (8) | (6) |
Total lease cost | $ 73 | $ 52 |
Lease Commitments - Schedule _3
Lease Commitments - Schedule of Other Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 50 | $ 43 |
Operating cash flows from finance leases | 8 | 4 |
Financing cash flows from finance leases | 6 | 1 |
Leased assets obtained in exchange for operating lease obligations | 83 | 49 |
Leased assets obtained in exchange for finance lease obligations | $ 118 | $ 49 |
Lease Commitments - Schedule _4
Lease Commitments - Schedule of Future Lease Payments for Operating and Finance Leases After Adoption (Details) $ in Millions | Sep. 30, 2021USD ($) |
Operating leases | |
2022 | $ 50 |
2023 | 46 |
2024 | 42 |
2025 | 37 |
2026 | 31 |
Thereafter | 174 |
Total future lease payments | 380 |
Imputed interest | 68 |
Present value of lease liabilities | 312 |
Finance leases | |
2022 | 18 |
2023 | 18 |
2024 | 18 |
2025 | 18 |
2026 | 19 |
Thereafter | 166 |
Total future lease payments | 257 |
Imputed interest | 70 |
Present value of lease liabilities | 187 |
Undiscounted future lease payments for leases not yet commenced | $ 101 |
Undiscounted future lease payments for leases not yet commenced, term of lease | 15 years |
Lease Commitments - Schedule _5
Lease Commitments - Schedule of Weighted Average Remaining Lease Term and Interest Rates (Details) | Sep. 30, 2021 |
Leases [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 9 years 7 months 6 days |
Finance Lease, Weighted Average Remaining Lease Term | 13 years 8 months 12 days |
Operating Lease, Weighted Average Discount Rate, Percent | 3.98% |
Finance Lease, Weighted Average Discount Rate, Percent | 5.20% |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 47 | $ 44 |
Undistributed earnings from affiliates | $ 42 | $ 39 |
Corporate Joint Venture | Cummins | ||
Schedule of Equity Method Investments [Line Items] | ||
Interest in joint ventures (in percent) | 50.00% |
Equity Method Investments - Sum
Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Amounts recorded by Valvoline | |||
Equity income | $ 15 | $ 12 | $ 12 |
Distributions received | 14 | 5 | 9 |
Royalty income | 10 | 8 | 9 |
Sales to (b) | 33 | 7 | 12 |
Purchases from (b) | 14 | 7 | 4 |
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Assets, Current | 1,037 | 1,438 | |
Liabilities, Current | (569) | (444) | |
Other noncurrent assets | 194 | 132 | |
Other noncurrent liabilities | 252 | 172 | |
Operating Income (Loss) | 528 | 485 | 398 |
Equity Method Investments | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Assets, Current | 162 | 143 | |
Liabilities, Current | (89) | (75) | |
Increase (Decrease) in Other Current Assets and Liabilities, Net | 73 | 68 | |
Other noncurrent assets | 25 | 26 | |
Other noncurrent liabilities | 5 | 8 | |
Stockholders' Equity, Period Increase (Decrease) | 93 | 86 | |
Revenues | 375 | 273 | 309 |
Operating Income (Loss) | 60 | 50 | 59 |
Investment Income, Net | 31 | 25 | $ 24 |
Outstanding receivable balances with affiliates | 13 | 4 | |
Due from Affiliate, Noncurrent | 0 | 5 | |
Due to Affiliate | $ 1 | $ 1 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Summary of Goodwill (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021USD ($)numberOfFormerFranchiseCenters | Sep. 30, 2020USD ($)numberOfFormerFranchiseCenters | Sep. 30, 2019USD ($)service_center_store | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 445 | $ 430 | |
Acquisitions | 207 | 17 | |
Goodwill, Foreign Currency Translation Gain (Loss) | 2 | 1 | |
Dispositions | (10) | (3) | |
Goodwill, ending balance | $ 644 | $ 445 | $ 430 |
Business Disposition, Number of Service Centers Sold | numberOfFormerFranchiseCenters | 12 | 6 | |
Number of service center stores acquired in single and multi-store transactions | 134 | 24 | |
Retail Services [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 316 | $ 301 | |
Acquisitions | 205 | 17 | |
Goodwill, Foreign Currency Translation Gain (Loss) | 2 | 1 | |
Dispositions | (10) | (3) | |
Goodwill, ending balance | 513 | 316 | $ 301 |
Global Products [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 129 | 129 | |
Acquisitions | 2 | 0 | |
Goodwill, Foreign Currency Translation Gain (Loss) | 0 | 0 | |
Dispositions | 0 | 0 | |
Goodwill, ending balance | $ 131 | $ 129 | $ 129 |
Retail Services [Member] | |||
Goodwill [Roll Forward] | |||
Number of service center stores acquired in single and multi-store transactions | numberOfFormerFranchiseCenters | 120 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 175 | $ 112 |
Accumulated amortization | (44) | (28) |
Net carrying amount | 131 | 84 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 30 | 30 |
Accumulated amortization | (8) | (6) |
Net carrying amount | 22 | 24 |
Reacquired franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 116 | 57 |
Accumulated amortization | (25) | (14) |
Net carrying amount | 91 | 43 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 23 | 22 |
Accumulated amortization | (9) | (7) |
Net carrying amount | 14 | 15 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 6 | 3 |
Accumulated amortization | (2) | (1) |
Net carrying amount | $ 4 | $ 2 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles - Actual and Estimated Amortization Expense (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2021USD ($) | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
2022 | $ 17 |
2023 | 17 |
2024 | 16 |
2025 | 14 |
2026 | 11 |
Amortization expense | $ 16 |
Debt - Schedule of Long Term De
Debt - Schedule of Long Term Debt (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 31, 2017 |
Debt Instrument [Line Items] | |||
Debt gross | $ 1,708,000,000 | ||
Debt issuance cost discounts | 14,000,000 | $ 19,000,000 | |
Total debt | 1,694,000,000 | 1,962,000,000 | |
Current portion of long-term debt | 17,000,000 | 0 | |
Long-term debt | 1,677,000,000 | 1,962,000,000 | |
Line of Credit | Secured Debt | |||
Debt Instrument [Line Items] | |||
Debt gross | 475,000,000 | ||
Line of Credit | Revolver | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 0 | |
Trade Accounts Receivable [Member] | Revolver | |||
Debt Instrument [Line Items] | |||
Long-term debt | 59,000,000 | 88,000,000 | |
Senior Unsecured Notes Due 2031 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 535,000,000 | 0 | |
Senior Unsecured Notes Due 2030 [Domain] | Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 600,000,000 | 600,000,000 | |
2025 Notes | Senior Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 800,000,000 | ||
Debt gross | 0 | 800,000,000 | |
Term Loan | Line of Credit | Secured Debt | |||
Debt Instrument [Line Items] | |||
Debt gross | 475,000,000 | 475,000,000 | |
Construction Loans [Member] | CHINA | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 39,000,000 | $ 18,000,000 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | Jun. 30, 2022 | Jan. 14, 2021 | Feb. 25, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Apr. 12, 2019 | Aug. 31, 2017 | Jul. 31, 2016 |
Debt Instrument [Line Items] | |||||||||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 26,000,000 | $ 15,000,000 | $ 0 | ||||||
Proceeds from borrowings | 555,000,000 | 1,558,000,000 | 752,000,000 | ||||||
Loss on extinguishment of debt | $ (36,000,000) | 36,000,000 | 19,000,000 | 0 | |||||
Repayments of Debt | 829,000,000 | 929,000,000 | $ 734,000,000 | ||||||
2023 | $ 61,000,000 | ||||||||
2025 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of Senior Debt | 840,000,000 | ||||||||
Redemption Premium | 26,000,000 | ||||||||
Senior Notes | Senior Unsecured Notes Due 2031 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt | 3.625% | ||||||||
Aggregate principal amount | $ 535,000,000 | 0 | |||||||
Proceeds from borrowings | $ 528,000,000 | ||||||||
Senior Notes | 2025 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt | 4.375% | ||||||||
Aggregate principal amount | $ 800,000,000 | ||||||||
Senior Notes | Senior Unsecured Notes Due 2030 [Domain] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt | 4.25% | ||||||||
Aggregate principal amount | $ 600,000,000 | $ 600,000,000 | |||||||
Proceeds from borrowings | $ 592,000,000 | ||||||||
Senior Notes | Senior Unsecured Notes Due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate of debt | 5.50% | ||||||||
Aggregate principal amount | $ 375,000,000 | ||||||||
Payment for Debt Extinguishment or Debt Prepayment Cost | 15,000,000 | ||||||||
Repayments of Senior Debt | $ 394,000,000 | ||||||||
Line of Credit | 2019 Term Loans | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of Debt | $ 100,000,000 | ||||||||
Principal amount of line of credit | $ 575,000,000 | ||||||||
Line of Credit | 2019 Term Loans | Secured Debt | Scenario, Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of Debt | $ 1,000,000 |
Debt - Senior Credit Agreement
Debt - Senior Credit Agreement (Details) | Jun. 30, 2022USD ($) | Apr. 12, 2019USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2022USD ($) |
Debt Instrument [Line Items] | ||||||
Debt gross | $ 1,708,000,000 | |||||
Repayments of Debt | 829,000,000 | $ 929,000,000 | $ 734,000,000 | |||
2023 | 61,000,000 | |||||
2022 | $ 17,000,000 | |||||
2019 Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of line of credit | $ 1,050,000,000 | |||||
2019 Credit Facilities | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum consolidated leverage ratio | 4.5 | |||||
Minimum consolidated interest coverage ratio | 3 | |||||
Secured Debt | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Debt gross | $ 475,000,000 | |||||
Secured Debt | Term Loan | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Debt gross | 475,000,000 | 475,000,000 | ||||
Secured Debt | 2019 Term Loans | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of line of credit | $ 575,000,000 | |||||
Term of debt | 5 years | |||||
Repayments of Debt | 100,000,000 | |||||
Secured Debt | 2019 Term Loans | Line of Credit | Scenario, Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of Debt | $ 1,000,000 | |||||
2022 | $ 14,000,000 | |||||
Revolver | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 0 | $ 0 | ||||
Revolver | 2019 Revolver | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of line of credit | $ 475,000,000 | |||||
Term of debt | 5 years | |||||
Line of credit, sublimit | $ 100,000,000 | |||||
Remaining borrowing capacity | 470,000,000 | |||||
Revolver | Term Loan | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Letters of credit outstanding | $ 5,000,000 | |||||
London Interbank Offered Rate (LIBOR) | Minimum | 2019 Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.375% | |||||
London Interbank Offered Rate (LIBOR) | Maximum | 2019 Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 2.00% | |||||
Base Rate | Minimum | 2019 Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.375% | |||||
Base Rate | Maximum | 2019 Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.00% |
Debt - Trade Receivables Facili
Debt - Trade Receivables Facility (Details) - Line of Credit - Trade Receivables Facility - Secured Debt - USD ($) | Apr. 27, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | |||
Principal amount of line of credit | $ 175,000,000 | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 33.00% | ||
Remaining borrowing capacity | $ 116,000,000 | ||
Weighted-average interest rate | 1.00% | 1.40% | |
Repayments on borrowings | $ 29,000,000 | ||
Financing Subsidiary | |||
Debt Instrument [Line Items] | |||
Accounts receivable pledged as collateral | $ 301,000,000 | $ 267,000,000 |
Debt - China Credit Facility (D
Debt - China Credit Facility (Details) - USD ($) $ in Millions | Nov. 16, 2020 | May 06, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Line of Credit Facility [Line Items] | ||||
2022 | $ 17 | |||
2023 | 61 | |||
2024 | 468 | |||
CHINA | Construction Loans [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Principal amount of line of credit | $ 40 | |||
Long-term debt | 39 | $ 18 | ||
Term of debt | 5 years | |||
CHINA | Working Capital Loan | ||||
Line of Credit Facility [Line Items] | ||||
Principal amount of line of credit | $ 23 | |||
Remaining borrowing capacity | 23 | |||
Long-term debt | $ 0 | |||
CHINA | Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate of debt | 4.35% | 4.35% | ||
CHINA | Revolver | ||||
Line of Credit Facility [Line Items] | ||||
Term of debt | 2 years | |||
Secured Debt | CHINA | Construction Loans [Member] | ||||
Line of Credit Facility [Line Items] | ||||
2022 | $ 2 | |||
2023 | 4 | |||
2024 | $ 7 |
Debt Debt - Schedule of Maturit
Debt Debt - Schedule of Maturities of Long-Term Debt (Details) $ in Millions | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 17 |
2023 | 61 |
2024 | 468 |
2025 | 27 |
2026 | 0 |
Thereafter | 1,135 |
Total | $ 1,708 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Current | |||
Federal | $ 36 | $ 16 | $ 10 |
State | 14 | 11 | 5 |
Non-U.S. | 25 | 15 | 19 |
Current income tax expense | 75 | 42 | 34 |
Deferred | |||
Federal | 42 | 62 | 24 |
State | 8 | 26 | 0 |
Non-U.S. | (2) | 4 | (1) |
Deferred income tax expense | 48 | 92 | 23 |
Income tax expense | $ 123 | $ 134 | $ 57 |
Income Taxes - Components of In
Income Taxes - Components of Income Before Income Taxes and Reconciliation of Statutory Federal Income Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income before income taxes | |||
United States | $ 483 | $ 399 | $ 212 |
Non-U.S. | 60 | 52 | 53 |
Income before income taxes | $ 543 | $ 451 | $ 265 |
U.S. statutory tax rate | 21.00% | 21.00% | 21.00% |
Income taxes computed at U.S. statutory tax rate | $ 114 | $ 95 | $ 56 |
(Decrease) increase in amount computed resulting from: | |||
Unrecognized tax benefits | (5) | 1 | 5 |
State taxes, net of federal benefit | 19 | 16 | 9 |
International rate differential | 3 | 2 | 2 |
Permanent items | (6) | (4) | (3) |
Remeasurement of net deferred taxes | 0 | 1 | (4) |
Return-to-provision adjustments | 0 | (2) | (6) |
Change in valuation allowances | 1 | 29 | (4) |
Tax Matters Agreement activity | (6) | (6) | 1 |
Other | 3 | 2 | 1 |
Income tax expense | $ 123 | $ 134 | $ 57 |
Effective tax rate | 22.70% | 29.70% | 21.50% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Ashland | Tax Matters Agreement | Affiliated Entity | ||
Income Tax Contingency [Line Items] | ||
Due to (from) related party | $ 1 | $ 34 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 28, 2016 | |
Deferred tax assets | |||||
Non-U.S. net operating loss carryforwards | $ 2 | $ 2 | |||
State net operating loss carryforwards | 18 | 18 | |||
Employee benefit obligations | 46 | 79 | |||
Compensation accruals | 29 | 26 | |||
Credit carryforwards | 12 | 11 | |||
Operating lease liabilities | 98 | 69 | |||
Other | 23 | 17 | |||
Valuation allowances | (32) | (30) | |||
Net deferred tax assets | 196 | 192 | |||
Deferred tax liabilities | |||||
Goodwill and other intangibles | 16 | 11 | |||
Property, plant and equipment | 109 | 75 | |||
Operating lease assets | 78 | 67 | |||
Undistributed earnings | 5 | 6 | |||
Total deferred tax liabilities | 208 | 159 | |||
Total net deferred tax (liabilities) assets (e) | (12) | ||||
Total net deferred tax (liabilities) assets (e) | 33 | ||||
Operating Loss Carryforwards [Line Items] | |||||
Deferred income taxes | 26 | 1 | |||
Deferred Tax Assets, Valuation Allowance | 32 | 30 | |||
Deferred Tax Assets, Tax Deferred Expense | 30 | ||||
Unrecognized Tax Benefits | 12 | 15 | $ 14 | $ 10 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 543 | 451 | 265 | ||
Income tax expense | $ 123 | $ 134 | $ 57 | ||
Common stock outstanding (in shares) | 180 | 185 | |||
Tax Matters Agreement | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized Tax Benefits | $ 33 | ||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 27 | ||||
Income tax expense | 6 | ||||
Majority Shareholder | |||||
Operating Loss Carryforwards [Line Items] | |||||
Ashland ownership percentage | 83.00% | ||||
Expiration Years 2023 Through 2040 | Foreign Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 7 | ||||
Expiration Years 2023 Through 2034 | State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | $ 361 |
Income Taxes - Schedule of Gros
Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning of period | $ 15 | $ 14 | $ 10 |
Increases related to tax positions from prior years | 2 | 1 | 5 |
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | (1) | 0 | 0 |
Increases related to tax positions taken during the current year | 1 | 1 | 0 |
Settlements with tax authorities | (4) | 0 | 0 |
Lapses of statutes of limitation | (1) | (1) | (1) |
Unrecognized tax benefits, end of period | 12 | 15 | $ 14 |
Accrual for tax interest and penalties | $ 2 | $ 2 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) | 12 Months Ended | ||
Sep. 30, 2021USD ($)multiemployer_plan | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligations | $ 2,200,000,000 | $ 2,300,000,000 | |
Remeasurement (gain) loss | (72,000,000) | (22,000,000) | $ 69,000,000 |
Contribution plan expense | $ 19,000,000 | 15,000,000 | 14,000,000 |
Number of multiemployer plans | multiemployer_plan | 2 | ||
Reserves for incentive plans | $ 49,000,000 | 39,000,000 | |
United States | Fixed securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 83.00% | ||
United States | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 17.00% | ||
Pension benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligations | $ 2,203,000,000 | 2,321,000,000 | 2,287,000,000 |
Remeasurement (gain) loss | (31,000,000) | 107,000,000 | |
Employer contributions | 14,000,000 | 22,000,000 | |
Expected future contribution | 12,000,000 | ||
Pension benefits | United States | Qualified Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected future contribution | $ 0 | ||
Other postretirement benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Ultimate pre-65 health care cost trend rate | 4.00% | ||
Accumulated benefit obligations | $ 49,000,000 | 52,000,000 | $ 55,000,000 |
Remeasurement (gain) loss | 0 | 2,000,000 | |
Employer contributions | 5,000,000 | 6,000,000 | |
Other various benefit plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Noncurrent postemployment benefits liability | $ 3,000,000 | $ 3,000,000 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension and Other Postretirement Benefit Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Weighted-average plan assumptions | |||
Accumulated benefit obligations | $ 2,200 | $ 2,300 | |
Pension benefits | |||
Net periodic benefit (income) costs | |||
Service cost | 2 | 3 | $ 2 |
Interest cost | 43 | 61 | 81 |
Expected return on plan assets | (86) | (87) | (80) |
Amortization of prior service credit | 0 | 0 | 0 |
Actuarial (gain) loss | (72) | (24) | 61 |
Net periodic benefit (income) costs | $ (113) | $ (47) | $ 64 |
Weighted-average plan assumptions | |||
Discount rate for service cost | 1.55% | 1.49% | 2.92% |
Discount rate for interest cost | 1.91% | 2.79% | 4.00% |
Rate of compensation increase | 3.00% | 3.04% | 3.06% |
Expected long-term rate of return on plan assets | 4.34% | 4.64% | 4.66% |
Accumulated benefit obligations | $ 2,203 | $ 2,321 | $ 2,287 |
Pension benefits | United States | Geographic Concentration Risk | Net Periodic Benefit Obligation | |||
Weighted-average plan assumptions | |||
Concentration risk | 97.00% | ||
Other postretirement benefits | |||
Net periodic benefit (income) costs | |||
Service cost | $ 0 | 0 | 0 |
Interest cost | 1 | 1 | 2 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of prior service credit | (12) | (12) | (12) |
Actuarial (gain) loss | 0 | 2 | 8 |
Net periodic benefit (income) costs | $ (11) | $ (9) | $ (2) |
Weighted-average plan assumptions | |||
Discount rate for service cost | 3.03% | 3.12% | 3.98% |
Discount rate for interest cost | 1.83% | 2.69% | 3.83% |
Rate of compensation increase | 0.00% | 0.00% | 0.00% |
Expected long-term rate of return on plan assets | 0.00% | 0.00% | 0.00% |
Accumulated benefit obligations | $ 49 | $ 52 | $ 55 |
Other postretirement benefits | United States | Geographic Concentration Risk | Net Periodic Benefit Obligation | |||
Weighted-average plan assumptions | |||
Concentration risk | 79.00% |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Amortization of Prior Service Cost (Credit) Recognized in AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Pension benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amortization of prior service credits recognized in Accumulated other comprehensive income | $ 0 | $ 0 | $ 0 |
Net periodic benefit income | (113) | (47) | 64 |
Total pre-tax amount recognized in comprehensive income | (113) | (47) | 64 |
Other postretirement benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amortization of prior service credits recognized in Accumulated other comprehensive income | 12 | 12 | 12 |
Net periodic benefit income | (11) | (9) | (2) |
Total pre-tax amount recognized in comprehensive income | $ 1 | $ 3 | $ 10 |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of Change in Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Change in benefit obligations | |||
Benefit obligations at beginning of period | $ 2,300 | ||
Actuarial (gain) loss | (72) | $ (22) | $ 69 |
Benefit obligations at end of period | 2,200 | 2,300 | |
Amounts in the Consolidated Balance Sheets | |||
Noncurrent benefit liabilities (c) | 258 | 317 | |
Pension benefits | |||
Change in benefit obligations | |||
Benefit obligations at beginning of period | 2,321 | 2,287 | |
Service cost | 2 | 3 | 2 |
Interest cost | 43 | 61 | 81 |
Benefits paid | (133) | (132) | |
Actuarial (gain) loss | (31) | 107 | |
Currency exchange rate changes | 2 | 1 | |
Transfers in | 3 | 3 | |
Settlements | (4) | (9) | |
Benefit obligations at end of period | 2,203 | 2,321 | 2,287 |
Change in plan assets | |||
Fair value of plan assets at beginning of period | 2,045 | 1,943 | |
Actual return on plan assets | 128 | 218 | |
Employer contributions | 14 | 22 | |
Benefits paid | (133) | (133) | |
Currency exchange rate changes | 2 | 1 | |
Settlements | (4) | (9) | |
Transfers in | 3 | 3 | |
Fair value of plan assets at end of period | 2,055 | 2,045 | 1,943 |
Unfunded status of the plans as of September 30 | 148 | 276 | |
Assets for Plan Benefits, Defined Benefit Plan | 72 | 1 | |
Amounts in the Consolidated Balance Sheets | |||
Current benefit liabilities (b) | 9 | 10 | |
Noncurrent benefit liabilities (c) | 211 | 267 | |
Net liabilities recognized | 220 | 277 | |
Balance in Accumulated other comprehensive loss | |||
Prior service cost (credit) | $ 1 | $ 1 | |
Weighted-average plan assumptions | |||
Discount rate | 2.70% | 2.59% | |
Rate of compensation increase | 3.00% | 3.00% | |
Pension benefits | Liability | |||
Amounts in the Consolidated Balance Sheets | |||
Net liabilities recognized | $ 148 | $ 276 | |
Other postretirement benefits | |||
Change in benefit obligations | |||
Benefit obligations at beginning of period | 52 | 55 | |
Service cost | 0 | 0 | 0 |
Interest cost | 1 | 1 | 2 |
Benefits paid | (5) | (6) | |
Actuarial (gain) loss | 0 | 2 | |
Currency exchange rate changes | 1 | 0 | |
Transfers in | 0 | 0 | |
Settlements | 0 | 0 | |
Benefit obligations at end of period | 49 | 52 | 55 |
Change in plan assets | |||
Fair value of plan assets at beginning of period | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 5 | 6 | |
Benefits paid | (5) | (6) | |
Currency exchange rate changes | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers in | 0 | 0 | |
Fair value of plan assets at end of period | 0 | 0 | $ 0 |
Unfunded status of the plans as of September 30 | 49 | 52 | |
Assets for Plan Benefits, Defined Benefit Plan | 0 | 0 | |
Amounts in the Consolidated Balance Sheets | |||
Current benefit liabilities (b) | 5 | 5 | |
Noncurrent benefit liabilities (c) | 44 | 47 | |
Net liabilities recognized | 49 | 52 | |
Balance in Accumulated other comprehensive loss | |||
Prior service cost (credit) | $ (21) | $ (33) | |
Weighted-average plan assumptions | |||
Discount rate | 2.67% | 2.39% | |
Rate of compensation increase | 0.00% | 0.00% | |
Assumed pre-65 health care cost trend rate | 6.40% | 6.70% |
Employee Benefit Plans - Sche_3
Employee Benefit Plans - Schedule of Pension Plans with a Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Plans with projected benefit obligation in excess of plan assets | ||
Plans with projected benefit obligation in excess of plan assets, benefit obligation | $ 1,607 | $ 2,275 |
Plans with projected benefit obligation in excess of plan assets, plan assets | 1,386 | 1,998 |
Plans with accumulated benefit obligation in excess of plan assets | ||
Plans with accumulated benefit obligation in excess of plan assets, benefit obligation | 1,593 | 2,253 |
Plans with accumulated benefit obligation in excess of plan assets, plan assets | $ 1,374 | $ 1,978 |
Employee Benefit Plans - Sche_4
Employee Benefit Plans - Schedule of Fair Values of Plan Assets by Investment Category (Details) - Pension benefits - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2,055 | $ 2,045 | $ 1,943 |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 136 | 102 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,534 | 1,421 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 58 | 12 | $ 7 |
Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 327 | 510 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 136 | 102 | |
Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 136 | 102 | |
Cash and cash equivalents | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Cash and cash equivalents | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Cash and cash equivalents | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
U.S. government securities and futures | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 96 | 172 | |
U.S. government securities and futures | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
U.S. government securities and futures | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 96 | 172 | |
U.S. government securities and futures | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
U.S. government securities and futures | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Other government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 58 | 47 | |
Other government securities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Other government securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 58 | 47 | |
Other government securities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Other government securities | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate debt instruments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,371 | 1,201 | |
Corporate debt instruments | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate debt instruments | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,371 | 1,201 | |
Corporate debt instruments | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate debt instruments | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Insurance contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 58 | 12 | |
Insurance contracts | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Insurance contracts | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Insurance contracts | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 58 | 12 | |
Insurance contracts | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Private equity and hedge funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 11 | 13 | |
Private equity and hedge funds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Private equity and hedge funds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Private equity and hedge funds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Private equity and hedge funds | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 11 | 13 | |
Collective trust funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 316 | 497 | |
Collective trust funds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Collective trust funds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Collective trust funds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Collective trust funds | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 316 | 497 | |
Other Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 9 | 1 | |
Other Investments [Member] | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Other Investments [Member] | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 9 | 1 | |
Other Investments [Member] | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Other Investments [Member] | Assets measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 0 | $ 0 |
Employee Benefit Plans - Sche_5
Employee Benefit Plans - Schedule of Level 3 Investments (Details) - Pension benefits - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets at beginning of period | $ 2,045 | $ 1,943 |
Fair value of plan assets at end of period | 2,055 | 2,045 |
Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Fair value of plan assets at beginning of period | 12 | 7 |
Purchases | 48 | 4 |
Actual return on assets held at end of year | (2) | 1 |
Fair value of plan assets at end of period | $ 58 | $ 12 |
Employee Benefit Plans - Sche_6
Employee Benefit Plans - Schedule of Investments Measured at Fair Value Using NAV Per Share (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Actuarial (gain) loss | $ (72) | $ (22) | $ 69 |
Fair value at NAV | 327 | ||
Unfunded commitments | $ 2 | ||
Debt securities | United States | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Target asset allocations | 83.00% | ||
Equity securities | United States | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Target asset allocations | 17.00% | ||
Minimum | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Period in which private equity investments are estimated to be liquidated | 1 year | ||
Minimum | Debt securities | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Target asset allocations | 65.00% | ||
Minimum | Equity securities | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Target asset allocations | 15.00% | ||
Maximum | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Period in which private equity investments are estimated to be liquidated | 5 years | ||
Maximum | Debt securities | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Target asset allocations | 85.00% | ||
Maximum | Equity securities | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Target asset allocations | 25.00% | ||
Long/short hedge funds | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair value at NAV | $ 2 | ||
Unfunded commitments | 0 | ||
Relative value hedge funds | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair value at NAV | 3 | ||
Unfunded commitments | 0 | ||
Event driven hedge funds | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair value at NAV | 1 | ||
Unfunded commitments | 0 | ||
Common collective trusts, daily redemption | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair value at NAV | 299 | ||
Unfunded commitments | $ 0 | ||
Redemption notice period | 3 days | ||
Common collective trusts, monthly redemption | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair value at NAV | $ 9 | ||
Unfunded commitments | $ 0 | ||
Redemption notice period | 5 days | ||
Collective trust funds | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair value at NAV | $ 8 | ||
Unfunded commitments | 0 | ||
Private equity | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Fair value at NAV | 5 | ||
Unfunded commitments | $ 2 |
Employee Benefit Plans - Sche_7
Employee Benefit Plans - Schedule of Weighted-Average Asset Allocations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average asset allocation (as a percent) | 100.00% | 100.00% | |
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | $ 72 | $ 22 | $ (69) |
Nonvested Stock Units | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Grant date fair values of shares vested | $ 7 | $ 5 | $ 12 |
Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average asset allocation (as a percent) | 11.00% | 18.00% | |
Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average asset allocation (as a percent) | 85.00% | 80.00% | |
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Weighted average asset allocation (as a percent) | 4.00% | 2.00% | |
Minimum | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 15.00% | ||
Minimum | Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 65.00% | ||
Minimum | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 0.00% | ||
Maximum | Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 25.00% | ||
Maximum | Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 85.00% | ||
Maximum | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations | 20.00% |
Employee Benefit Plans - Sche_8
Employee Benefit Plans - Schedule of Future Benefit Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligations | $ 2,200 | $ 2,300 | |
Pension benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2022 | 145 | ||
2023 | 145 | ||
2024 | 141 | ||
2025 | 139 | ||
2026 | 138 | ||
2027 - 2031 | 651 | ||
Total | 1,359 | ||
Employer contributions | 14 | 22 | |
Accumulated benefit obligations | 2,203 | 2,321 | $ 2,287 |
Expected future contribution | 12 | ||
Other postretirement benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
2022 | 5 | ||
2023 | 4 | ||
2024 | 4 | ||
2025 | 3 | ||
2026 | 3 | ||
2027 - 2031 | 14 | ||
Total | 33 | ||
Employer contributions | 5 | 6 | |
Accumulated benefit obligations | 49 | 52 | $ 55 |
Other various benefit plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Noncurrent postemployment benefits liability | $ 3 | $ 3 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stock appreciation rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unexercised SARs lapsing period | 10 years | ||
Stock appreciation rights | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Stock appreciation rights | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Nonvested Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs | $ 11 | ||
Unrecognized compensation costs weighted average period related to nonvested awards | 2 years 4 months 24 days | ||
Aggregate intrinsic value | $ 61 | ||
Nonvested Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Nonvested Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Nonvested Stock Units - Performance Based | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Minimum risk free interest rate | 0.13% | 1.55% | 2.66% |
Maximum risk free interest rate | 0.23% | 1.59% | 2.82% |
Valvoline Inc. Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized under the plan (in shares) | 21,000,000 | ||
Number of shares remaining under the plan (in shares) | 12,000,000 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense, pre-tax | $ 15 | $ 12 | $ 10 |
Tax benefit | (4) | (3) | (2) |
Total stock-based compensation expense, net of tax | 11 | 9 | 8 |
Cash Settled - Liability Classified | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense, pre-tax | 1 | 1 | 1 |
Stock appreciation rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense, pre-tax | 1 | 1 | 1 |
Nonvested Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense, pre-tax | $ 14 | $ 11 | $ 9 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Summary of Fair Value Assumptions Used for Share Based Awards (Details) - Nonvested Stock Units - Performance Based - $ / shares | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value per share (usd per share) | $ 21.81 | $ 23.21 | $ 21.22 |
Risk-free interest rate | 0.20% | 1.60% | 2.80% |
Expected dividend yield | 2.30% | 2.10% | 1.30% |
Expected volatility | 42.00% | 26.00% | 26.80% |
Expected term | 3 years | 3 years | 3 years |
Minimum risk free interest rate | 0.13% | 1.55% | 2.66% |
Maximum risk free interest rate | 0.23% | 1.59% | 2.82% |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Schedule of Nonvested Stock Award Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Nonvested Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Unvested shares, beginning balance (in shares) | 1,668 | ||
Granted (in shares) | 520 | ||
Expected performance adjustments | (126) | ||
Vested (in shares) | (288) | ||
Forfeitures (in shares) | (58) | ||
Unvested shares, ending balance (in shares) | 1,968 | 1,668 | |
Unvested shares ending balance, weighted average grant date fair value (usd per share) | $ 21.50 | $ 20.89 | |
Granted, weighted average grant date fair value (in usd per share) | 22.33 | $ 22.17 | $ 20.72 |
Share-based Compensation Arrangement by Share Based Award, Equity Instruments Other Than Options Performance Shares weighted Average | 22.96 | ||
Vested, weighted average grant date fair value (in usd per share) | 22.69 | ||
Forfeitures, weighted average grant date fair value (in usd per share) | $ 21.85 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Grant date fair values of shares vested | $ 7 | $ 5 | $ 12 |
Unvested shares beginning balance, weighted average grant date fair value (usd per share) | $ 20.89 | ||
Nonvested Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Award vesting period | 1 year | ||
Nonvested Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Award vesting period | 3 years | ||
Nonvested Stock Units - Performance Based | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Award vesting period | 3 years | ||
Minimum risk free interest rate | 0.13% | 1.55% | 2.66% |
Maximum risk free interest rate | 0.23% | 1.59% | 2.82% |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Schedule of Performance Award Activity (Details) - $ / shares | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Nonvested Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Granted, weighted average grant date fair value (in usd per share) | $ 22.33 | $ 22.17 | $ 20.72 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator | |||
Net income | $ 420 | $ 317 | $ 208 |
Denominator | |||
Weighted-average shares common shares outstanding (in shares) | 182,000 | 187,000 | 189,000 |
Effect of potentially dilutive securities (in shares) | 1,000 | 1,000 | 0 |
Weighted-average diluted shares outstanding (in shares) | 183,000 | 188,000 | 189,000 |
Earnings per share | |||
Earnings per share, basic (usd per share) | $ 2.30 | $ 1.70 | $ 1.10 |
Earnings per share, diluted (usd per share) | $ 2.29 | $ 1.69 | $ 1.10 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,000 | 1,000 |
Stockholders' Deficit - Other C
Stockholders' Deficit - Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ (76) | $ (258) |
Balance at end of period | 135 | (76) |
Unamortized benefit plan credits | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | 25 | 34 |
Other comprehensive income (loss) before reclassification | 0 | 0 |
Gains reclassified out of accumulated other comprehensive income | (12) | (12) |
Tax benefit (expense) | 3 | 3 |
Balance at end of period | 16 | 25 |
Currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (16) | (23) |
Other comprehensive income (loss) before reclassification | 7 | 6 |
Gains reclassified out of accumulated other comprehensive income | 0 | 1 |
Tax benefit (expense) | 0 | 0 |
Balance at end of period | (9) | (16) |
Changes in fair value of cash flow hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (1) | 0 |
Other comprehensive income (loss) before reclassification | 3 | (1) |
Gains reclassified out of accumulated other comprehensive income | (1) | 0 |
Tax benefit (expense) | 0 | 0 |
Balance at end of period | 1 | (1) |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | 8 | 11 |
Other comprehensive income (loss) before reclassification | 10 | 5 |
Gains reclassified out of accumulated other comprehensive income | (13) | (11) |
Tax benefit (expense) | 3 | 3 |
Balance at end of period | $ 8 | $ 8 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Reclassifications From Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Pension and other postretirement benefit plan remeasurement (gain) loss | $ (126) | $ (59) | $ 60 |
(Gain) loss on liquidation of subsidiary | (44) | (34) | (40) |
Income tax expense (benefit) | 123 | 134 | 57 |
Reclassification out of Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Pension and other postretirement benefit plan remeasurement (gain) loss | (12) | (12) | (12) |
(Gain) loss on liquidation of subsidiary | 0 | 1 | (1) |
Gain (Loss) on Hedging Activity | 1 | 0 | 0 |
Income tax expense (benefit) | 3 | 3 | 3 |
Other Comprehensive Income (Loss), Net of Tax | $ (10) | $ (8) | $ (10) |
Reportable Segment Informatio_2
Reportable Segment Information - Narrative (Details) | 12 Months Ended |
Sep. 30, 2021countriesnumberOfSegments | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | numberOfSegments | 2 |
Number of countries where our products are sold | countries | 140 |
Reportable Segment Informatio_3
Reportable Segment Information - Financial Information by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Sales | $ 2,981 | $ 2,353 | $ 2,390 |
Adjusted EBITDA | 634 | 495 | 478 |
Net interest and other financing expenses | (111) | (93) | (73) |
Net pension and other postretirement plan (income) expenses | (126) | (59) | 60 |
Net legacy and separation-related (income) expenses | (24) | (30) | 3 |
Compensated absences benefits change | 0 | 11 | 0 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 543 | 451 | 265 |
Retail Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,221 | 883 | 822 |
Global Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,760 | 1,470 | 1,568 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | 709 | 556 | 535 |
Net interest and other financing expenses | (111) | (93) | (73) |
Other Depreciation and Amortization | (92) | (66) | (61) |
Net pension and other postretirement plan (income) expenses | 126 | 59 | (60) |
Net legacy and separation-related (income) expenses | 24 | 30 | (3) |
Inventory, LIFO Reserve, Period Charge | (41) | 15 | 0 |
Business interruption recovery (expenses) | 3 | 2 | (6) |
Acquisition and divestiture-related (costs) income | 0 | (2) | 4 |
Restructuring and Related Cost, Incurred Cost | 0 | 0 | (14) |
Operating Segments | Retail Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,221 | 883 | 822 |
Adjusted EBITDA | 382 | 247 | 239 |
Operating Segments | Global Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,760 | 1,470 | 1,568 |
Adjusted EBITDA | 327 | 309 | 296 |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | $ (75) | $ (61) | $ (57) |
Reportable Segment Informatio_4
Reportable Segment Information - Sales by Geography as a Percentage of Consolidated Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Sales | $ 2,981 | $ 2,353 | $ 2,390 |
Retail Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,221 | 883 | 822 |
Global Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,760 | 1,470 | 1,568 |
North America | |||
Segment Reporting Information [Line Items] | |||
Sales | 2,273 | 1,828 | 1,816 |
North America | Retail Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,221 | 883 | 822 |
North America | Global Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 1,052 | 945 | 994 |
EMEA [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 219 | 169 | 181 |
EMEA [Member] | Retail Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 0 | 0 | 0 |
EMEA [Member] | Global Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 219 | 169 | 181 |
Asia Pacific [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 358 | 273 | 285 |
Asia Pacific [Member] | Retail Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 0 | 0 | 0 |
Asia Pacific [Member] | Global Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 358 | 273 | 285 |
Latin America | |||
Segment Reporting Information [Line Items] | |||
Sales | 131 | 83 | 108 |
Latin America | Retail Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 0 | 0 | 0 |
Latin America | Global Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | $ 131 | $ 83 | $ 108 |
Reportable Segment Informatio_5
Reportable Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Sales | $ 2,981 | $ 2,353 | $ 2,390 |
Retail Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,221 | 883 | 822 |
Retail Services [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,221 | 883 | 822 |
Global Products [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,760 | 1,470 | 1,568 |
Global Products [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,760 | 1,470 | 1,568 |
Oil Changes | Retail Services [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 657 | 450 | 407 |
Non-oil Changes | Retail Services [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 205 | 141 | 124 |
Company Owned [Member] | Retail Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 862 | 591 | 531 |
Non Company Owned [Member] | Retail Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 359 | 292 | 291 |
Non Company Owned [Member] | Retail Services [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 309 | 252 | 248 |
Retail [Member] | Global Products [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 626 | 571 | 558 |
Installer And Other [Member] | Global Products [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,134 | 899 | 1,010 |
Lubricants | Global Products [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 1,570 | 1,287 | 1,364 |
Antifreeze | Global Products [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 119 | 104 | 121 |
Filters | Global Products [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | 13 | 13 | 12 |
Chemicals and other | Global Products [Member] | Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Sales | $ 58 | $ 66 | $ 71 |
Reportable Segment Informatio_6
Reportable Segment Information - Sales and Property, Plant and Equipment by Geographical Area (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Sales | $ 2,981 | $ 2,353 | $ 2,390 |
Property, plant and equipment, net | 817 | 613 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Sales | 2,209 | 1,775 | 1,766 |
Property, plant and equipment, net | 700 | 512 | |
Non-US [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 772 | 578 | $ 624 |
Property, plant and equipment, net | $ 117 | $ 101 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Supplemental Balance Sheet Information [Abstract] | ||||
Cash and cash equivalents | $ 230 | $ 760 | $ 159 | |
Restricted Cash | 1 | 1 | 0 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 231 | $ 761 | $ 159 | $ 96 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Summary of Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Current | ||
Trade | $ 475 | $ 409 |
Other | 16 | 14 |
Notes receivable from franchisees | 10 | 13 |
Receivables, gross | 501 | 436 |
Allowance for credit losses | (5) | (3) |
Receivables, net | 496 | 433 |
Non-current | ||
Notes receivable from franchisees | 0 | 13 |
Other Notes Receivable non current | 3 | 8 |
Notes Receivable, Gross, Noncurrent | 3 | 21 |
Allowance for losses | (3) | (4) |
Noncurrent notes receivable, net | 0 | 17 |
Accounts Receivable, Factoring Agreement, Amount Of Receivables Sold | $ 15 | $ 59 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information - Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 |
Supplemental Balance Sheet Information [Abstract] | ||
Inventory, Finished Goods, Gross | $ 276 | $ 195 |
Raw materials, supplies and work in process | 49 | 30 |
Reserve for LIFO cost valuation | 67 | 26 |
Inventories, net | $ 258 | $ 199 |
Supplemental Balance Sheet In_6
Supplemental Balance Sheet Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Inventory [Line Items] | ||
Non-cash accruals | $ 119 | $ 51 |
Lubricants | ||
Inventory [Line Items] | ||
Finished products | $ 129 | $ 99 |
Supplemental Balance Sheet In_7
Supplemental Balance Sheet Information - Property, Plant, and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant, and Equipment | |||
Property, Plant and Equipment, Gross | $ 1,372 | $ 1,103 | |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 198 | 77 | |
Accumulated depreciation | (555) | (490) | |
Property, plant and equipment, net | 817 | 613 | |
Non-cash accruals | 119 | 51 | |
Depreciation | 76 | 56 | $ 52 |
Land | |||
Property, Plant, and Equipment | |||
Property, Plant and Equipment, Gross | 130 | 96 | |
Buildings | |||
Property, Plant, and Equipment | |||
Property, Plant and Equipment, Gross | 607 | 412 | |
Machinery and Equipment [Member] | |||
Property, Plant, and Equipment | |||
Property, Plant and Equipment, Gross | 564 | 494 | |
Construction in progress | |||
Property, Plant, and Equipment | |||
Property, Plant and Equipment, Gross | 71 | 101 | |
Assets Held under Capital and Finance Leases | |||
Property, Plant, and Equipment | |||
Property, Plant and Equipment, Gross | 134 | 43 | |
Land and Land Improvements | 64 | 34 | |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 198 | 77 | |
Accumulated depreciation | (21) | (10) | |
Property, plant and equipment, net | $ 177 | $ 67 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Nov. 11, 2021 | Nov. 15, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||||
Total cost | $ 127,000 | $ 60,000 | ||
Common stock | ||||
Subsequent Event [Line Items] | ||||
Shares repurchased (in shares) | 5,000 | 3,000 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Dividend per common share (usd per share) | $ 0.125 | |||
Subsequent Event | Common stock | ||||
Subsequent Event [Line Items] | ||||
Shares repurchased (in shares) | 500 | |||
Total cost | $ 16,000 | |||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 257,000 | |||
Authorized amount for repurchase | $ 300,000 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Current allowance for credit losses | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 3 | $ 3 | $ 4 |
Charged to expenses | 1 | 1 | 0 |
Charged to other accounts | 1 | (1) | 0 |
Deductions | 0 | 0 | (1) |
Balance at end of period | 5 | 3 | 3 |
Inventory excess and obsolete reserves | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 4 | 3 | 3 |
Charged to expenses | 0 | 1 | 0 |
Charged to other accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance at end of period | 4 | 4 | 3 |
Deferred tax asset valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 30 | 2 | 7 |
Charged to expenses | 1 | 29 | 0 |
Charged to other accounts | 1 | 0 | 0 |
Deductions | 0 | (1) | (5) |
Balance at end of period | 32 | 30 | 2 |
SEC Schedule, 12-09, Allowance, Notes Receivable | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 4 | 2 | 0 |
Charged to expenses | 1 | 1 | 0 |
Charged to other accounts | (2) | 1 | 2 |
Deductions | 0 | 0 | 0 |
Balance at end of period | $ 3 | $ 4 | $ 2 |