Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2019 |
Sep. 30, 2019 |
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Statement of Financial Position [Abstract] | ||
Preferred stock authorized (shares) | 40,000,000 | 40,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (shares) | 400,000,000 | 400,000,000 |
Common stock issued (shares) | 188,000,000 | 188,000,000 |
Common stock outstanding (shares) | 188,000,000 | 188,000,000 |
Condensed Consolidated Statements of Stockholders' Deficit (Parenthetical) - $ / shares |
3 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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Statement of Stockholders' Equity [Abstract] | ||
Dividends paid per common share (usd per share) | $ 0.113 | $ 0.106 |
Basis of Presentation and Significant Accounting Policies |
3 Months Ended |
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Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared by Valvoline Inc. (“Valvoline” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Securities and Exchange Commission (“SEC”) regulations for interim financial reporting, which do not include all information and footnote disclosures normally included in annual financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with Valvoline’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates. In the opinion of management, the assumptions underlying the condensed consolidated financial statements for these interim periods are reasonable, and all adjustments considered necessary for a fair presentation have been made and are of a normal recurring nature unless otherwise disclosed herein. The results for interim periods are not necessarily indicative of those to be expected for the entire year. Certain prior period amounts have been reclassified to conform to the current presentation. 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 February 2016, the Financial Accounting Standards Board ("FASB") issued accounting guidance, which outlined a comprehensive lease accounting model that requires lessees to recognize a right-of-use asset and a corresponding lease liability on the balance sheet and superseded previous lease accounting guidance. Valvoline adopted this new lease accounting guidance on October 1, 2019 using the optional transition approach. Under this approach, the new lease accounting guidance has been applied prospectively from the date of adoption, while prior period financial statements continue to be reported in accordance with the previous guidance. Lease expense is recognized similar to prior accounting guidance with operating leases resulting in straight-line expense and finance leases resulting in accelerated expense recognition similar to the prior accounting for capital leases. The accounting for lessor arrangements is not significantly changed by the new guidance. Valvoline elected certain practical expedients permitted by the new guidance, including the package of practical expedients that allows for previous accounting conclusions regarding lease identification and classification to be carried forward for leases which commenced prior to adoption, as well as the practical expedient to not separate lease and non-lease components and account for them as a single lease component. The Company did not elect the hindsight or short-term lease practical expedients. As a result of adoption, the Company recognized operating lease assets and liabilities inclusive of a reclassified build-to-suit arrangement, derecognized assets and liabilities related to the build-to-suit arrangement, and carried forward existing capital leases as finance lease assets and liabilities. This resulted in a material impact on the Condensed Consolidated Balance Sheet and the recognition of total incremental lease assets, inclusive of prepaid lease balances and deferred rent liabilities, of $219 million and incremental lease liabilities of $214 million, with an immaterial cumulative effect adjustment to reduce Retained deficit as a result of the build-to-suit lease transition requirements. The impact of adoption was not material to the Condensed Consolidated Statements of Comprehensive Income, Cash Flows, or Stockholders’ Deficit, and did not impact the Company's compliance with any of its existing debt covenants. Refer to Note 2 for additional information regarding Valvoline's adoption of this new guidance. Issued but not yet adopted In June 2016, the FASB issued updated guidance that introduces a forward-looking approach based on expected losses, rather than incurred losses, to estimate credit losses on certain types of financial instruments including trade and other receivables. The new guidance will require entities to incorporate historical, current, and forecasted information into their estimates of expected credit losses. This guidance also includes expanded disclosure requirements and will become effective for Valvoline on October 1, 2020. The Company is evaluating the effect of adopting this new accounting guidance, including changes to its related processes, and does not currently expect adoption will have a material impact on its Condensed Consolidated Balance Sheet or Condensed Consolidated Statement of Comprehensive Income. The FASB issued other accounting guidance during the period that is not currently applicable or expected to have a material impact on Valvoline’s condensed consolidated financial statements, and therefore, is not described above.
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Leasing |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing | LEASING As described in Note 1, Valvoline adopted new lease accounting guidance effective October 1, 2019 and changed its policy for lease accounting prospectively for lease agreements entered into or reassessed from the date of adoption as described herein. Lessee arrangements Certain of the properties Valvoline utilizes, including quick-lube service center stores, offices, blending and warehouse facilities, in addition to certain equipment, are leased. 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, including those with an initial term of 12 months or less, the related lease assets and liabilities are recognized on the Condensed Consolidated Balance Sheet as either operating or finance leases at the commencement date. The lease liability is measured at the present value of future lease payments over the lease term, and the right-of-use asset is measured at the lease liability amount, adjusted for prepaid lease payments, lease incentives and the lessee’s initial direct costs (e.g., commissions). The lease term includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Fixed payments, including variable payments based on a rate or index, are included in the determination of the lease liability, while other variable payments are recognized in the the Condensed Consolidated Statements of Comprehensive Income in the period in which the obligation for those payments is incurred. Many leases contain lease components requiring rental payments and other components that require payment for 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. Otherwise, these other components are expensed as incurred and comprise the majority of Valvoline's variable lease costs. 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 commencement date, including lease term, interest rate yields for specific interest rate environments and the Company's credit spread. The following table presents the Company's lease balances:
The following table presents the components of total lease costs:
(a) Supply chain and retail-related amounts are included in Cost of sales. Other information related to the Company's leases follows:
(a) Included within the change in Other assets and liabilities within the Condensed Consolidated Statement 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 on the Condensed Consolidated Balance Sheet as of December 31, 2019:
As of December 31, 2019, Valvoline has additional leases primarily related to its quick lube service center stores that have not yet commenced with approximately $45 million in undiscounted future lease payments that are not included in the table above. These leases are expected to commence in fiscal 2020 and generally have lease terms of 15 years. In accordance with the previous lease accounting guidance, Valvoline's lease arrangements were previously classified as either capital, operating, or financing obligations. Previously classified capital leases are now considered finance leases under the new lease accounting guidance, while previous financing obligations have been derecognized and reclassified as operating leases. The classification of operating leases remains substantially unchanged under the new lease accounting guidance. The future minimum lease payments by fiscal year as determined prior to the adoption of the new lease accounting guidance under the previously designated capital, financing and operating leases as of the fiscal year ended September 30, 2019, were as follows:
(a) Future lease payments do not include fixed payments for executory costs, such as taxes, insurance, maintenance and operating expenses. The following table presents the weighted average remaining lease term and interest rate as of December 31, 2019:
Lessor arrangements Valvoline is the lessor in arrangements to sublease and lease certain properties and equipment. Activity associated with these leases is not material.
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Leasing | LEASING As described in Note 1, Valvoline adopted new lease accounting guidance effective October 1, 2019 and changed its policy for lease accounting prospectively for lease agreements entered into or reassessed from the date of adoption as described herein. Lessee arrangements Certain of the properties Valvoline utilizes, including quick-lube service center stores, offices, blending and warehouse facilities, in addition to certain equipment, are leased. 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, including those with an initial term of 12 months or less, the related lease assets and liabilities are recognized on the Condensed Consolidated Balance Sheet as either operating or finance leases at the commencement date. The lease liability is measured at the present value of future lease payments over the lease term, and the right-of-use asset is measured at the lease liability amount, adjusted for prepaid lease payments, lease incentives and the lessee’s initial direct costs (e.g., commissions). The lease term includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Fixed payments, including variable payments based on a rate or index, are included in the determination of the lease liability, while other variable payments are recognized in the the Condensed Consolidated Statements of Comprehensive Income in the period in which the obligation for those payments is incurred. Many leases contain lease components requiring rental payments and other components that require payment for 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. Otherwise, these other components are expensed as incurred and comprise the majority of Valvoline's variable lease costs. 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 commencement date, including lease term, interest rate yields for specific interest rate environments and the Company's credit spread. The following table presents the Company's lease balances:
The following table presents the components of total lease costs:
(a) Supply chain and retail-related amounts are included in Cost of sales. Other information related to the Company's leases follows:
(a) Included within the change in Other assets and liabilities within the Condensed Consolidated Statement 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 on the Condensed Consolidated Balance Sheet as of December 31, 2019:
As of December 31, 2019, Valvoline has additional leases primarily related to its quick lube service center stores that have not yet commenced with approximately $45 million in undiscounted future lease payments that are not included in the table above. These leases are expected to commence in fiscal 2020 and generally have lease terms of 15 years. In accordance with the previous lease accounting guidance, Valvoline's lease arrangements were previously classified as either capital, operating, or financing obligations. Previously classified capital leases are now considered finance leases under the new lease accounting guidance, while previous financing obligations have been derecognized and reclassified as operating leases. The classification of operating leases remains substantially unchanged under the new lease accounting guidance. The future minimum lease payments by fiscal year as determined prior to the adoption of the new lease accounting guidance under the previously designated capital, financing and operating leases as of the fiscal year ended September 30, 2019, were as follows:
(a) Future lease payments do not include fixed payments for executory costs, such as taxes, insurance, maintenance and operating expenses. The following table presents the weighted average remaining lease term and interest rate as of December 31, 2019:
Lessor arrangements Valvoline is the lessor in arrangements to sublease and lease certain properties and equipment. Activity associated with these leases is not material.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy:
(a) The Company had outstanding contracts with notional values of $128 million and $111 million as of December 31, 2019 and September 30, 2019, respectively. There were no material gains or losses recognized in earnings during the three months ended December 31, 2019 or 2018 related to these assets and liabilities. Long-term debt 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. Long-term debt is included in the Condensed Consolidated Balance Sheets at carrying value, rather than fair value, and is therefore excluded from the fair value table above. Carrying values shown in the following table are net of unamortized discounts and issuance costs.
Refer to Note 7 for more information on Valvoline’s other debt instruments that have variable interest rates, and accordingly, their carrying amounts approximate fair value.
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Acquisitions and Divestitures |
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Acquisitions and Divestitures | ACQUISITIONS AND DIVESTITURES Quick Lubes store acquisitions During the three months ended December 31, 2019, the Company acquired nine service center stores in single and multi-store transactions, including two former franchise service center stores, for a total of $6 million. During the three months ended December 31, 2018, the Company acquired 35 service center stores for a total of $30 million. The Company’s acquisitions are accounted for such that the assets acquired and liabilities assumed are recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. 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. A summary follows of the aggregate cash consideration paid and the total assets acquired and liabilities assumed for the three months ended December 31:
(a) Intangible assets acquired during the three months ended December 31, 2019 have a weighted average amortization period of 6 years. 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 currently expect any material changes to the preliminary purchase price allocations for acquisitions completed during the last twelve months. The incremental results of operations of the acquired stores, which were not material to the Company’s consolidated results, have been included in the condensed consolidated financial statements from the date of each acquisition, and accordingly, pro forma disclosure of financial information has not been presented. Dispositions During the first fiscal quarter of 2020, the Company sold six service center stores to a franchisee within the Quick Lubes reportable segment. Valvoline received proceeds of approximately $3 million, with no material gain or loss recognized.
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Goodwill and Other Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles | INTANGIBLE ASSETS The following table summarizes the changes in the carrying amount of goodwill by reportable segment and in total during the three months ended December 31, 2019:
(a) Refer to Note 4 for details regarding acquisitions and dispositions completed during the three months ended December 31, 2019.
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Restructuring Activities |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Activities | RESTRUCTURING ACTIVITIES During the second fiscal quarter of 2019, Valvoline outlined a broad-based restructuring and cost-savings program to reduce costs, simplify processes and focus the organization’s structure and resources on key growth initiatives. Part of this program includes employee separation actions, which were generally completed during 2019, with the associated termination benefits anticipated to be substantially paid by the end of 2020. Since program inception, Valvoline has recognized cumulative costs of $13 million, including $1 million during the three months ended December 31, 2019. These costs are for employee termination benefits, which include severance and other benefits provided to employees pursuant to the restructuring program. These expenses were recognized in Selling, general and administrative expenses within the Condensed Consolidated Statement of Comprehensive Income. The Company does not expect to incur material remaining costs from these actions. The results by segment, as disclosed in Note 12, do not include these restructuring expenses, which is consistent with the manner by which management assesses the performance and evaluates the results of each segment. Accordingly, these expenses are included in Unallocated and other. The following table presents the expenses recognized related to employee termination benefits during the three months ended December 31, 2019 and the estimated remaining liability, which is included in the Condensed Consolidated Balance Sheet within Accrued expenses and other liabilities:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT The following table summarizes Valvoline’s total debt:
(a) As of December 31, 2019 and September 30, 2019, other included debt issuance costs and discounts of $9 million and debt primarily acquired through acquisitions of $1 million. Senior Notes The Company’s outstanding fixed rate senior notes consist of 4.375% senior unsecured notes due 2025 with an aggregate principal amount of $400 million issued in August 2017 (the “2025 Notes”) and 5.500% senior unsecured notes due 2024 with an aggregate principal amount of $375 million issued in July 2016 (the “2024 Notes” and together with the 2025 Notes, the “Senior Notes”). Senior Credit Agreement As of December 31 and September 30, 2019, the term loan facility (“Term Loan”) under the senior credit agreement (“Senior Credit Agreement”) had an outstanding principal balance of $575 million. As of December 31 and September 30, 2019, there were no amounts outstanding under the $475 million revolving credit facility (“Revolver”) under the Senior Credit Agreement. There was no net borrowing activity under the Revolver during the three months ended December 31, 2019. As of December 31, 2019, the total borrowing capacity remaining under the Revolver was $466 million due to a reduction of $9 million for letters of credit outstanding. As of December 31, 2019, Valvoline was in compliance with all covenants under the Senior Credit Agreement. Trade Receivables Facility As of December 31 and September 30, 2019, there were no amounts outstanding under the $175 million trade receivables securitization facility (the “Trade Receivables Facility”). During the three months ended December 31, 2019, Valvoline had no net borrowing activity under the Trade Receivables Facility. Based on the availability of eligible receivables, the total borrowing capacity of the Trade Receivables Facility as of December 31, 2019 was $130 million. The financing subsidiary owned $220 million and $259 million of outstanding accounts receivable as of December 31 and September 30, 2019, respectively, which are included in Accounts receivable, net in the Company’s Condensed Consolidated Balance Sheets.
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES Income tax provisions for interim quarterly periods are based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual discrete items related specifically to interim periods. The following summarizes income tax expense and the effective tax rate in each interim period:
The increase in income tax expense over the prior year was principally driven by higher pre-tax earnings, and the lower effective tax rate is attributed to the current year benefit from favorable discrete items compared to unfavorable discrete items in the prior year.
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Employee Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The following table summarizes the components of pension and other postretirement benefit income:
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Litigation, Claims and Contingencies |
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Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Claims and Contingencies | LITIGATION, CLAIMS AND CONTINGENCIES From 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 condensed 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, Valvoline discloses 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 condensed 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 condensed consolidated financial statements.
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Earnings Per Share |
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Earnings Per Share | EARNINGS PER SHARE The following table summarizes basic and diluted earnings per share:
(a) Approximately 1 million and 2 million outstanding securities, primarily stock appreciation rights, were not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three months ended December 31, 2019 and 2018, respectively.
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Reportable Segment Information |
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Reportable Segment Information | REPORTABLE SEGMENT INFORMATION Valvoline manages and reports within the following three segments: •Quick Lubes - services the passenger car and light truck quick lube market through company-owned and independent franchised retail quick lube service center stores and independent Express Care stores that service vehicles with Valvoline products, as well as through investment in a joint venture in China to pilot expansion of retail quick lube service center stores outside of North America. •Core North America - sells engine and automotive maintenance products in the United States and Canada to retailers, installers, and heavy-duty customers to service vehicles and equipment. •International - sells engine and automotive maintenance products in more than 140 countries outside of the United States and Canada for the maintenance of consumer and commercial 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 assessing segment performance and in allocating the Company’s resources. Sales and operating income are the primary U.S. GAAP measures evaluated in assessing each reportable segment’s financial performance. Operating income by segment includes the allocation of shared corporate costs, which are allocated consistently based on each segment’s proportional contribution to various financial measures. Intersegment sales are not material, and assets are not allocated and included in the assessment of segment performance; consequently, these items are not disclosed by segment herein. To maintain operating focus on business performance, certain corporate and non-operational items, including restructuring and related expenses, as well as adjustments related to legacy businesses that no longer are attributed to Valvoline, are excluded from the segment operating results utilized by the chief operating decision maker in evaluating segment performance and are separately delineated within Unallocated and other to reconcile to total reported Operating income as shown in the table below. Segment financial results The following table presents sales and operating income for each reportable segment:
(a) Unallocated and other includes net legacy and separation-related income and restructuring and related expenses. Disaggregation of revenue The following table summarizes sales by primary customer channel for the Company’s reportable segments:
Sales by reportable segment disaggregated by geographic market follows:
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Supplemental Financial Information |
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Supplemental Financial Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | SUPPLEMENTAL FINANCIAL INFORMATION Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the totals shown within the Condensed Consolidated Statements of Cash Flows:
(a) Included in Prepaid expenses and other current assets within the Condensed Consolidated Balance Sheets. Accounts receivable The following table summarizes Valvoline’s accounts receivable in the Condensed Consolidated Balance Sheets:
During the three months ended December 31, 2019, Valvoline did not sell accounts receivable to a financial institution, while $28 million was sold during the three months ended December 31, 2018. 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. The following table summarizes Valvoline’s inventories in the Condensed Consolidated Balance Sheets:
Revenue recognition The following table disaggregates the Company’s sales by timing of revenue recognized:
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Guarantor Financial Information |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor Financial Information | GUARANTOR FINANCIAL INFORMATION The Senior Notes detailed in Note 7 are general unsecured senior obligations of Valvoline Inc. and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by the combined wholly-owned “Guarantor Subsidiaries.” Other subsidiaries (the “Non-Guarantor Subsidiaries”) largely represent the international operations of the Company, which do not guarantee the Senior Notes. The following tables present, on a consolidating basis, the condensed statements of comprehensive income, condensed balance sheets, and condensed statements of cash flows for the parent issuer of these Senior Notes, the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis, and the eliminations necessary to arrive at the Company’s consolidated results.
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Subsequent Events |
3 Months Ended |
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Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Trade Receivables Facility On January 31, 2020, the Company amended the Trade Receivables Facility to extend the maturity date to November 19, 2021. The capacity available and other relevant terms and conditions of Trade Receivables Facility were substantially unchanged under the amended facility. Dividend declared On January 29, 2020, the Board of Directors of Valvoline declared a quarterly cash dividend of $0.113 per share of Valvoline common stock. The dividend is payable on March 16, 2020 to shareholders of record on February 28, 2020.
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Basis of Presentation and Significant Accounting Policies (Policies) |
3 Months Ended |
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Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared by Valvoline Inc. (“Valvoline” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Securities and Exchange Commission (“SEC”) regulations for interim financial reporting, which do not include all information and footnote disclosures normally included in annual financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with Valvoline’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates. In the opinion of management, the assumptions underlying the condensed consolidated financial statements for these interim periods are reasonable, and all adjustments considered necessary for a fair presentation have been made and are of a normal recurring nature unless otherwise disclosed herein. The results for interim periods are not necessarily indicative of those to be expected for the entire year. Certain prior period amounts have been reclassified to conform to the current presentation.
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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 February 2016, the Financial Accounting Standards Board ("FASB") issued accounting guidance, which outlined a comprehensive lease accounting model that requires lessees to recognize a right-of-use asset and a corresponding lease liability on the balance sheet and superseded previous lease accounting guidance. Valvoline adopted this new lease accounting guidance on October 1, 2019 using the optional transition approach. Under this approach, the new lease accounting guidance has been applied prospectively from the date of adoption, while prior period financial statements continue to be reported in accordance with the previous guidance. Lease expense is recognized similar to prior accounting guidance with operating leases resulting in straight-line expense and finance leases resulting in accelerated expense recognition similar to the prior accounting for capital leases. The accounting for lessor arrangements is not significantly changed by the new guidance. Valvoline elected certain practical expedients permitted by the new guidance, including the package of practical expedients that allows for previous accounting conclusions regarding lease identification and classification to be carried forward for leases which commenced prior to adoption, as well as the practical expedient to not separate lease and non-lease components and account for them as a single lease component. The Company did not elect the hindsight or short-term lease practical expedients. As a result of adoption, the Company recognized operating lease assets and liabilities inclusive of a reclassified build-to-suit arrangement, derecognized assets and liabilities related to the build-to-suit arrangement, and carried forward existing capital leases as finance lease assets and liabilities. This resulted in a material impact on the Condensed Consolidated Balance Sheet and the recognition of total incremental lease assets, inclusive of prepaid lease balances and deferred rent liabilities, of $219 million and incremental lease liabilities of $214 million, with an immaterial cumulative effect adjustment to reduce Retained deficit as a result of the build-to-suit lease transition requirements. The impact of adoption was not material to the Condensed Consolidated Statements of Comprehensive Income, Cash Flows, or Stockholders’ Deficit, and did not impact the Company's compliance with any of its existing debt covenants. Refer to Note 2 for additional information regarding Valvoline's adoption of this new guidance. Issued but not yet adopted In June 2016, the FASB issued updated guidance that introduces a forward-looking approach based on expected losses, rather than incurred losses, to estimate credit losses on certain types of financial instruments including trade and other receivables. The new guidance will require entities to incorporate historical, current, and forecasted information into their estimates of expected credit losses. This guidance also includes expanded disclosure requirements and will become effective for Valvoline on October 1, 2020. The Company is evaluating the effect of adopting this new accounting guidance, including changes to its related processes, and does not currently expect adoption will have a material impact on its Condensed Consolidated Balance Sheet or Condensed Consolidated Statement of Comprehensive Income. The FASB issued other accounting guidance during the period that is not currently applicable or expected to have a material impact on Valvoline’s condensed consolidated financial statements, and therefore, is not described above.
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Leases, Codification Topic 842 (Policies) |
3 Months Ended |
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Dec. 31, 2019 | |
Leases [Abstract] | |
Lessee, Leases | Lessee arrangements Certain of the properties Valvoline utilizes, including quick-lube service center stores, offices, blending and warehouse facilities, in addition to certain equipment, are leased. 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, including those with an initial term of 12 months or less, the related lease assets and liabilities are recognized on the Condensed Consolidated Balance Sheet as either operating or finance leases at the commencement date. The lease liability is measured at the present value of future lease payments over the lease term, and the right-of-use asset is measured at the lease liability amount, adjusted for prepaid lease payments, lease incentives and the lessee’s initial direct costs (e.g., commissions). The lease term includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Fixed payments, including variable payments based on a rate or index, are included in the determination of the lease liability, while other variable payments are recognized in the the Condensed Consolidated Statements of Comprehensive Income in the period in which the obligation for those payments is incurred. Many leases contain lease components requiring rental payments and other components that require payment for 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. Otherwise, these other components are expensed as incurred and comprise the majority of Valvoline's variable lease costs. 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 commencement date, including lease term, interest rate yields for specific interest rate environments and the Company's credit spread.
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Leasing (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Balances on the Balance Sheet | The following table presents the Company's lease balances:
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Schedule of Lease Costs and Other Information | The following table presents the components of total lease costs:
(a) Supply chain and retail-related amounts are included in Cost of sales. Other information related to the Company's leases follows:
(a) Included within the change in Other assets and liabilities within the Condensed Consolidated Statement of Cash Flows offset by noncash operating lease asset amortization and liability accretion. The following table presents the weighted average remaining lease term and interest rate as of December 31, 2019:
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Schedule of Future Lease Payments under Finance Leases After Adoption | 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 on the Condensed Consolidated Balance Sheet as of December 31, 2019:
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Schedule of Future Lease Payments under Operating Leases After Adoption | 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 on the Condensed Consolidated Balance Sheet as of December 31, 2019:
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Schedule of Future Minimum Rental Payments for Operating Leases | The future minimum lease payments by fiscal year as determined prior to the adoption of the new lease accounting guidance under the previously designated capital, financing and operating leases as of the fiscal year ended September 30, 2019, were as follows:
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Schedule of Future Minimum Lease Payments for Operating, Capital and Other Financing Obligations | The future minimum lease payments by fiscal year as determined prior to the adoption of the new lease accounting guidance under the previously designated capital, financing and operating leases as of the fiscal year ended September 30, 2019, were as follows:
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Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities at Fair Value | The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy:
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Summary of Fair Value of Debt | Carrying values shown in the following table are net of unamortized discounts and issuance costs.
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Acquisitions and Divestitures (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Consideration Paid and Assets and Liabilities Acquired | :
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Goodwill and Other Intangibles (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill by reportable segment and in total during the three months ended December 31, 2019:
(a) Refer to Note 4 for details regarding acquisitions and dispositions completed during the three months ended December 31, 2019.
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Restructuring Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Related Liability |
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Total Debt | The following table summarizes Valvoline’s total debt:
(a) As of December 31, 2019 and September 30, 2019, other included debt issuance costs and discounts of $9 million and debt primarily acquired through acquisitions of $1 million.
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Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax Expense and Effective Tax Rate | The following summarizes income tax expense and the effective tax rate in each interim period:
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Employee Benefit Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Pension and Other Postretirement Benefit Income | The following table summarizes the components of pension and other postretirement benefit income:
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Earnings Per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes basic and diluted earnings per share:
(a) Approximately 1 million and 2 million outstanding securities, primarily stock appreciation rights, were not included in the computation of diluted earnings per share because their effect would have been antidilutive for the three months ended December 31, 2019 and 2018, respectively.
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Reportable Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information | The following table presents sales and operating income for each reportable segment:
(a) Unallocated and other includes net legacy and separation-related income and restructuring and related expenses.
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Schedule of Sales Disaggregated by Segment and Geographical Area | The following table summarizes sales by primary customer channel for the Company’s reportable segments:
Sales by reportable segment disaggregated by geographic market follows:
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Supplemental Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the totals shown within the Condensed Consolidated Statements of Cash Flows:
(a) Included in Prepaid expenses and other current assets within the Condensed Consolidated Balance Sheets.
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Summary of Accounts Receivable | The following table summarizes Valvoline’s accounts receivable in the Condensed Consolidated Balance Sheets:
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Summary of Inventory | The following table summarizes Valvoline’s inventories in the Condensed Consolidated Balance Sheets:
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Disaggregaton of Revenue by Timing of Revenue Table Text Block | The following table disaggregates the Company’s sales by timing of revenue recognized:
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Guarantor Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Income |
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Condensed Income Statement |
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Condensed Consolidating Balance Sheets |
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Condensed Consolidating Statements of Cash Flows |
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Basis of Presentation and Significant Accounting Policies (Details) - ASU 2016-02 $ in Millions |
Oct. 01, 2019
USD ($)
|
---|---|
Incremental Lease Assets | $ 219 |
Incremental Lease Liabilities | $ 214 |
Leasing - Schedule of Lease Balances on the Balance Sheet (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating lease assets | $ 253 | $ 0 |
Finance lease assets | 29 | |
Amortization of finance lease assets | 7 | |
Total leased assets | 275 | |
Operating lease liabilities, current | 30 | |
Finance lease liabilities, current | 1 | |
Operating lease liabilities, noncurrent | 224 | $ 0 |
Finance lease liabilities, noncurrent | 24 | |
Total lease liabilities | $ 279 |
Leasing - Schedule of Lease Costs (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 11 |
Finance lease costs | |
Amortization of lease assets | 0 |
Interest on lease liabilities | 1 |
Variable lease cost | 1 |
Sublease income | (1) |
Total lease cost | $ 12 |
Leasing - Schedule of Other Information Related to Leases (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating cash flows from operating leases (a) | $ 10 |
Operating cash flows from finance leases | 1 |
Financing cash flow from finance leases | 0 |
Leased assets obtained in exchange for operating leases | 15 |
Leased assets obtained in exchange for finance leases | $ 0 |
Leasing - Schedule of Future Lease Payments for Operating and Finance Leases After Adoption (Details) $ in Millions |
Dec. 31, 2019
USD ($)
|
---|---|
Operating leases | |
2020 | $ 30 |
2021 | 37 |
2022 | 35 |
2023 | 31 |
2024 | 28 |
Thereafter | 154 |
Total future lease payments | 315 |
Imputed interest | 61 |
Present value of lease liabilities | 254 |
Finance leases | |
2020 | 3 |
2021 | 4 |
2022 | 3 |
2023 | 4 |
2024 | 4 |
Thereafter | 26 |
Total future lease payments | 44 |
Imputed interest | 19 |
Present value of lease liabilities | 25 |
Undiscounted future lease payments for leases not yet commenced | $ 45 |
Term for leases that have not yet commenced | 15 years |
Leasing - Schedule of Weighted Average Remaining Lease Term and Interest Rates (Details) |
Dec. 31, 2019 |
---|---|
Leases [Abstract] | |
Weighted average remaining lease term, operating leases | 10 years |
Weighted average remaining lease term, finance leases | 10 years 8 months 12 days |
Weighted average discount rate, operating leases | 4.13% |
Weighted average discount rate, finance leases | 11.57% |
Leasing - Future Minimum Rental Payments Before Adoption (Details) $ in Millions |
Sep. 30, 2019
USD ($)
|
---|---|
Operating Leases | |
2020 | $ 36 |
2021 | 32 |
2022 | 29 |
2023 | 27 |
2024 | 23 |
Thereafter | 120 |
Total future lease payments (a) | 267 |
Capital Leases and Financing Obligations | |
2020 | 6 |
2021 | 7 |
2022 | 7 |
2023 | 7 |
2024 | 7 |
Thereafter | 50 |
Total future lease payments | 84 |
Imputed interest | 29 |
Present value of lease liabilities | $ 55 |
Fair Value Measurements - Schedule of Assets and Liabilities at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|
Other noncurrent assets | ||
Total assets at fair value | $ 84 | $ 79 |
Accrued expenses and other liabilities | ||
Total liabilities at fair value | 1 | 0 |
Level 1 | ||
Other noncurrent assets | ||
Non-qualified trust funds | 20 | 20 |
Level 1 | Money market funds | ||
Cash and cash equivalents | ||
Cash and cash equivalents | 1 | 0 |
Level 2 | ||
Prepaid expenses and other current assets | ||
Currency derivatives | 1 | 0 |
Accrued expenses and other liabilities | ||
Currency derivatives | 1 | 0 |
Level 2 | Time deposits | ||
Cash and cash equivalents | ||
Cash and cash equivalents | $ 62 | $ 59 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|
Foreign Exchange Contract | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding derivative contracts notional value | $ 128 | $ 111 |
Acquisitions and Divestitures - Narrative (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2019
USD ($)
service_center_store
|
Dec. 31, 2018
USD ($)
service_center_store
|
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Business Acquisition [Line Items] | ||
Number of service center stores acquired | service_center_store | 9 | 35 |
Consideration for acquisition | $ | $ 6 | $ 30 |
Finite-Lived Intangible Assets [Line Items] | ||
Gain on sale | $ | $ 0 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Business Disposition, Number of Service Centers Sold | service_center_store | 6 |
Acquisitions and Divestitures - Summary of Consideration Paid and Assets and Liabilities Acquired (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Business Acquisition [Line Items] | ||
Property, plant and equipment | $ 0 | $ 1 |
Goodwill | 5 | 21 |
Net assets acquired | $ 6 | 30 |
Weighted average amortization period | 6 years | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Proceeds from sale of operations | $ 3 | |
Reacquired franchise rights | ||
Business Acquisition [Line Items] | ||
Intangible assets | 0 | 3 |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets | 0 | 1 |
Trademarks and trade names | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 1 | $ 4 |
Goodwill and Other Intangibles - Summary of Goodwill by Segment (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 430 |
Acquisitions | 5 |
Goodwill, ending balance | 433 |
Currency translation | 1 |
Goodwill, Written off Related to Sale of Business Unit | 3 |
Quick Lubes | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 301 |
Acquisitions | 5 |
Goodwill, ending balance | 304 |
Currency translation | 1 |
Goodwill, Written off Related to Sale of Business Unit | 3 |
Core North America | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 89 |
Acquisitions | 0 |
Goodwill, ending balance | 89 |
Currency translation | 0 |
Goodwill, Written off Related to Sale of Business Unit | 0 |
International | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 40 |
Acquisitions | 0 |
Goodwill, ending balance | 40 |
Currency translation | 0 |
Goodwill, Written off Related to Sale of Business Unit | $ 0 |
Restructuring Activities - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Cumulative Restructuring Charges | $ 13 |
Employee Termination Benefits | |
Restructuring Cost and Reserve [Line Items] | |
Expenses recognized during the period | $ 1 |
Restructuring Activities - Schedule of Restructuring Activity (Details) - Employee Termination Benefits $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Balance at September 30, 2019 | $ 9 |
Expenses recognized during the period | 1 |
Payments | (2) |
Balance at December 31, 2019 | $ 8 |
Debt - Schedule of Short-Term Borrowings and Long Term Debt (Details) - USD ($) |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Other | $ (8,000,000) | $ (8,000,000) |
Total debt | 1,342,000,000 | 1,342,000,000 |
Current portion of long-term debt | 22,000,000 | 15,000,000 |
Long-term debt | 1,320,000,000 | 1,327,000,000 |
Debt issuance cost discounts | 9,000,000 | 9,000,000 |
Debt acquired through acquisitions | 1,000,000 | 1,000,000 |
2025 Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt gross | 400,000,000 | 400,000,000 |
2024 Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt gross | 375,000,000 | 375,000,000 |
Term Loan | Line of Credit | Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt gross | 575,000,000 | 575,000,000 |
Trade Receivables Facility | Line of Credit | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 0 |
Original principal amount of debt | $ 175,000,000 | |
Total borrowing capacity remaining | $ 130,000,000 |
Debt - Senior Notes (Details) - Senior Notes - USD ($) |
Aug. 31, 2017 |
Jul. 31, 2016 |
---|---|---|
2025 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate on senior unsecured notes | 4.375% | |
Aggregate principal amount | $ 400,000,000 | |
2024 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate on senior unsecured notes | 5.50% | |
Aggregate principal amount | $ 375,000,000 |
Debt - Senior Credit Agreement (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2019 |
Apr. 12, 2019 |
|
2019 Revolver | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding | $ 9,000,000 | |||
Secured Debt | 2019 Term Loans | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Original principal amount of debt | $ 575,000,000 | |||
Secured Debt | Trade Receivables Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Original principal amount of debt | $ 175,000,000 | |||
Revolvers | 2019 Revolver | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Original principal amount of debt | $ 475,000,000 | |||
Borrowings from revolving credit facility | 0 | |||
Repayments of long-term debt | 0 | $ 0 | ||
Total borrowing capacity remaining | $ 466,000,000 |
Debt - Trade Receivables Facility (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2019 |
|
Debt Instrument [Line Items] | |||
Proceeds from borrowings | $ 0 | $ 100,000,000 | |
Repayments of long-term debt | $ 101,000,000 | ||
Line of Credit | Trade Receivables Facility | Secured Debt | |||
Debt Instrument [Line Items] | |||
Original principal amount of debt | $ 175,000,000 | ||
Long-term debt outstanding amount | 0 | 0 | |
Line of Credit | Trade Receivables Facility | Secured Debt | Financing Subsidiary | |||
Debt Instrument [Line Items] | |||
Accounts receivable pledged as collateral | $ 220,000,000 | $ 259,000,000 |
Income Taxes - Schedule of Income Tax Expense and Effective Tax Rate (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 24 | $ 19 |
Effective tax rate percentage | 24.70% | 26.40% |
Employee Benefit Plans - Components of Pension and Other Postretirement Benefit Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Pension benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 0 |
Interest cost | 16 | 20 |
Expected return on plan assets | (22) | (20) |
Amortization of prior service credit | 0 | 0 |
Net periodic benefit income | (5) | 0 |
Other postretirement benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 0 | 1 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service credit | (3) | (3) |
Net periodic benefit income | $ (3) | $ (2) |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Numerator | ||
Net income | $ 73 | $ 53 |
Denominator | ||
Weighted-average common shares outstanding (shares) | 189 | 188 |
Effect of potentially dilutive securities (shares) | 0 | 1 |
Weighted average diluted shares outstanding (shares) | 189 | 189 |
Earnings per share | ||
Basic (usd per share) | $ 0.39 | $ 0.28 |
Diluted (usd per share) | $ 0.39 | $ 0.28 |
Shares excluded from diluted earnings per share calculation due to anti-dilutive effect (shares) | 1 | 2 |
Reportable Segment Information - Narrative (Details) |
Dec. 31, 2019
numberOfCountries
|
---|---|
Non-US | |
Segment Reporting Information [Line Items] | |
Number of countries where our products are sold | 140 |
Supplemental Financial Information - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
---|---|---|---|---|
Supplemental Financial Information [Abstract] | ||||
Restricted cash | $ 1 | $ 0 | $ 0 | |
Cash and cash equivalents | 162 | 159 | 99 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 163 | $ 159 | $ 99 | $ 96 |
Supplemental Financial Information - Summary of Accounts Receivable (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2019 |
|
Supplemental Financial Information [Abstract] | |||
Trade | $ 389,000,000 | $ 392,000,000 | |
Other | 13,000,000 | 15,000,000 | |
Trade | 402,000,000 | 407,000,000 | |
Accounts Receivable, Allowance for Credit Loss, Current | 7,000,000 | 6,000,000 | |
Accounts receivable, net | 395,000,000 | $ 401,000,000 | |
Accounts receivable sold to financial institutions | $ 0 | $ 28,000,000 |
Supplemental Financial Information - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Supplemental Financial Information [Abstract] | ||
Accounts receivable sold to financial institutions | $ 0 | $ 28,000,000 |
Supplemental Financial Information - Inventory (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|
Supplemental Financial Information [Abstract] | ||
Finished products | $ 197 | $ 203 |
Raw materials, supplies and work in process | 37 | 32 |
Inventory, LIFO Reserve | 40 | 41 |
Inventories, net | $ 194 | $ 194 |
Supplemental Financial Information - Revenue Recognition and Deferred Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Sales | $ 607 | $ 557 |
Sales at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Sales | 596 | 547 |
Franchised revenues transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Sales | $ 11 | $ 10 |
Subsequent Events (Details) |
Jan. 29, 2020
$ / shares
|
---|---|
Subsequent Events [Abstract] | |
Dividend per share (usd per share) | $ 0.113 |
Label | Element | Value |
---|---|---|
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (13,000,000) |