Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Sep. 30, 2024	Nov. 19, 2024	Mar. 31, 2024
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2024
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, Suite 100
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
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 5.7
Entity Common Stock, Shares Outstanding		128,373,010
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY
Entity Central Index Key	0001674910
Documents Incorporated by Reference	Portions of the registrant’s definitive proxy statement for its 2025 Annual Meeting of Shareholders (the “Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K and will be filed within 120 days of the registrant’s fiscal year end.

Audit Information	12 Months Ended
Audit Information	Sep. 30, 2024
Auditor Information [Abstract]
Auditor name	Ernst & Young LLP
Auditor location	Louisville, Kentucky
Auditor firm ID	42

Consolidated Statements of Comprehensive Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Net Income (Loss) Attributable to Parent [Abstract]
Net revenues	$ 1,619.0	$ 1,443.5	$ 1,236.1
Cost of sales	1,000.2	899.0	759.7
Gross profit	618.8	544.5	476.4
Selling, general and administrative expenses	305.1	264.5	244.7
Net legacy and separation-related (income) expenses	(0.7)	32.8	20.5
Other income, net	(52.8)	0.0	(9.1)
Operating income	367.2	247.2	220.3
Net pension and other postretirement plan expense (income)	11.7	(27.6)	6.9
Net interest and other financing expenses	71.9	38.3	69.3
Total income before income taxes	283.6	236.5	144.1
Income tax expense	69.1	37.1	34.7
Income from continuing operations	214.5	199.4	109.4
(Loss) income from discontinued operations, net of tax	(3.0)	1,220.3	314.9
Net income	$ 211.5	$ 1,419.7	$ 424.3
NET EARNINGS PER SHARE
Continuing operations, basic earnings per share (usd per share)	$ 1.65	$ 1.24	$ 0.61
Discontinued operations, basic earnings per share (usd per share)	(0.02)	7.55	1.76
Basic earnings per share (usd per share)	1.63	8.79	2.37
Continuing operations, diluted earnings per share (usd per share)	1.63	1.23	0.61
Discontinued operations, diluted earnings per share (usd per share)	(0.02)	7.50	1.74
Diluted earnings per share (usd per share)	$ 1.61	$ 8.73	$ 2.35
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Weighted average common shares outstanding, basic (in shares)	130.1	161.6	179.1
Weighted average common shares outstanding, diluted (in shares)	131.0	162.6	180.4
COMPREHENSIVE INCOME
Net income	$ 211.5	$ 1,419.7	$ 424.3
Other comprehensive income (loss), net of tax
Currency translation adjustments	4.2	43.7	(39.6)
Amortization of pension and other postretirement plan prior service credits	(1.7)	(1.7)	(1.7)
Unrealized (loss) gain on cash flow hedges	(5.8)	(7.5)	12.5
Other comprehensive (loss) income	(3.3)	34.5	(28.8)
Comprehensive income	$ 208.2	$ 1,454.2	$ 395.5

Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023
Current assets
Cash and cash equivalents	$ 68.3	$ 409.1
Receivables, net	86.4	81.3
Inventories, net	39.7	33.3
Prepaid expenses and other current assets	61.0	65.5
Short-term investments	0.0	347.5
Total current assets	255.4	936.7
Noncurrent assets
Property, plant and equipment, net	958.7	818.3
Operating lease assets	298.6	266.5
Goodwill and intangibles, net	705.6	680.6
Other noncurrent assets	220.4	187.8
Total noncurrent assets	2,183.3	1,953.2
Total assets	2,438.7	2,889.9
Current liabilities
Current portion of long-term debt	23.8	23.8
Trade and other payables	117.4	118.7
Accrued expenses and other liabilities	212.7	215.9
Current liabilities held for sale	0.0	3.9
Total current liabilities	353.9	362.3
Noncurrent liabilities
Long-term debt	1,070.0	1,562.3
Employee benefit obligations	176.2	168.0
Operating lease liabilities	279.7	247.3
Other noncurrent liabilities	373.3	346.8
Total noncurrent liabilities	1,899.2	2,324.4
Commitments and contingencies
Stockholders' Equity
Preferred stock, no par value, 40 shares authorized; no shares issued and outstanding	0.0	0.0
Common stock, par value $0.01 per share, 400.0 shares authorized, 128.5 and 134.8 shares issued and outstanding at September 30, 2024 and 2023, respectively	1.3	1.3
Paid-in capital	51.2	48.0
Retained earnings	123.2	140.7
Accumulated other comprehensive income	9.9	13.2
Stockholders' equity	185.6	203.2
Total liabilities and stockholders’ equity	$ 2,438.7	$ 2,889.9

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Sep. 30, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0	$ 0
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)	400,000,000.0	400,000,000.0
Common stock issued (in shares)	128,500,000	134,800,000
Common stock outstanding (in shares)	128,500,000	134,800,000

Consolidated Statements of Stockholders’ Equity (Deficit) - USD ($) shares in Millions, $ in Millions	Total	Common stock	Paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)
Common stock outstanding, beginning balance (in shares) at Sep. 30, 2021		180.3
Balance at beginning of period at Sep. 30, 2021	$ 134.5	$ 1.8	$ 35.2	$ 90.0	$ 7.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	424.3			424.3
Dividends paid	(89.2)		0.5	(89.7)
Stock-based compensation, net of issuances (in shares)		0.3
Stock-based compensation, net of issuances	8.4		8.4
Repurchase of common stock (in shares)		(4.5)
Repurchases of common stock	(142.6)			(142.6)
Other comprehensive loss, net of tax	(28.8)				(28.8)
Common stock outstanding, ending balance (in shares) at Sep. 30, 2022		176.1
Balance at end of period at Sep. 30, 2022	306.6	$ 1.8	44.1	282.0	(21.3)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,419.7			1,419.7
Dividends paid	(21.8)		0.1	(21.9)
Stock-based compensation, net of issuances (in shares)		0.5
Stock-based compensation, net of issuances	3.8		3.8
Repurchase of common stock (in shares)		(41.8)
Repurchases of common stock	(1,539.6)	$ (0.5)		(1,539.1)
Other comprehensive loss, net of tax	$ 34.5				34.5
Common stock outstanding, ending balance (in shares) at Sep. 30, 2023	134.8	134.8
Balance at end of period at Sep. 30, 2023	$ 203.2	$ 1.3	48.0	140.7	13.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	211.5			211.5
Stock-based compensation, net of issuances (in shares)		0.4
Stock-based compensation, net of issuances	3.2		3.2
Repurchase of common stock (in shares)		(6.7)
Repurchases of common stock	(229.0)			(229.0)
Other comprehensive loss, net of tax	$ (3.3)				(3.3)
Common stock outstanding, ending balance (in shares) at Sep. 30, 2024	128.5	128.5
Balance at end of period at Sep. 30, 2024	$ 185.6	$ 1.3	$ 51.2	$ 123.2	$ 9.9

Consolidated Statements of Stockholders’ Equity (Deficit) (Parenthetical) - $ / shares	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Dividends paid per common share (usd per share)	$ 0.125	$ 0.500

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net income	$ 211.5	$ 1,419.7	$ 424.3
Adjustments to reconcile net income to cash flows from operating activities:
Loss (income) from discontinued operations	3.0	(1,220.3)	(314.9)
Loss on extinguishment of debt	5.1	0.0	0.0
Gain on sale of operations	(41.8)	0.0	0.0
Depreciation and amortization	105.9	88.8	71.4
Deferred income taxes	23.5	33.6	18.0
(Gain) loss on pension and other postretirement plan remeasurements	(2.4)	(41.6)	43.9
Stock-based compensation expense	12.0	12.2	14.4
Other, net	(0.1)	11.9	4.2
Change in assets and liabilities
Receivables	(0.9)	26.4	(17.5)
Inventories	(7.7)	(3.3)	(5.4)
Payables and accrued liabilities	(6.4)	111.3	24.5
Other assets and liabilities	(18.8)	(85.7)	(128.5)
Operating cash flows from continuing operations	282.9	353.0	134.4
Operating cash flows from discontinued operations	(17.8)	(393.8)	149.8
Total cash provided by (used in) operating activities	265.1	(40.8)	284.2
Cash flows from investing activities
Additions to property, plant and equipment	(224.4)	(180.5)	(132.0)
Acquisitions of businesses	(52.7)	(36.3)	(50.7)
Proceeds from sale of operations, net of cash disposed	71.5	0.0	0.0
Purchases of investments	(3.5)	(440.4)	0.0
Proceeds from investments	350.0	80.0	0.0
Other investing activities, net	(4.1)	0.0	11.8
Investing cash flows from continuing operations	136.8	(577.2)	(170.9)
Investing cash flows from discontinued operations	0.0	2,620.9	(36.7)
Total cash provided by (used in) investing activities	136.8	2,043.7	(207.6)
Cash flows from financing activities
Proceeds from borrowings, net of issuance costs of $3.0 million in 2023	200.0	921.0	23.0
Repayments on borrowings	(698.8)	(920.9)	(38.1)
Repurchases of common stock	(226.8)	(1,524.8)	(142.6)
Cash dividends paid	0.0	(21.8)	(89.2)
Other financing activities	(20.7)	(19.0)	(16.0)
Financing cash flows from continuing operations	(746.3)	(1,565.5)	(262.9)
Financing cash flows from discontinued operations	0.0	(108.1)	44.0
Total cash used in financing activities	(746.3)	(1,673.6)	(218.9)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	0.0	(0.1)	(5.2)
(Decrease) increase in cash, cash equivalents and restricted cash	(344.4)	329.2	(147.5)
Cash, cash equivalents and restricted cash - beginning of year	413.1	83.9	231.4
Cash, cash equivalents and restricted cash - end of year	68.7	413.1	83.9
Interest paid	78.2	69.6	59.4
Income taxes paid	$ 31.3	$ 373.8	$ 73.9

Consolidated Statements of Cash Flows (Parenthetical) $ in Millions	12 Months Ended
	Sep. 30, 2023 USD ($)
Statement of Cash Flows [Abstract]
Issuance costs	$ 3.0

Description of Business and Basis of Presentation	12 Months Ended
Description of Business and Basis of Presentation	Sep. 30, 2024
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 leader in automotive preventive maintenance delivering convenient and trusted services in its retail stores throughout the United States (“U.S.”) and Canada. The Company operates and franchises more than 2,000 service center locations through its Valvoline Instant Oil ChangeSM (“VIOC”) and Valvoline Great Canadian Oil Change (“GCOC”) retail locations and supports nearly 270 locations through its Express CareTM platform. As the quick, easy, trusted leader in automotive preventive maintenance, Valvoline is creating shareholder value by driving the full potential of its core business, accelerating network growth and innovating to meet the needs of customers and the evolving car parc. With average customer ratings that indicate high levels of service satisfaction, Valvoline and the Company’s franchise partners keep customers moving with approximately 15-minute stay-in-your-car oil changes; battery, bulb and wiper replacements; tire rotations; and other manufacturer recommended maintenance services. For over 15 decades, Valvoline has consistently adapted to address changing technologies and customer needs and is well positioned to service evolving vehicle maintenance needs with its growing network of stores. Sale of Global Products business On March 1, 2023, Valvoline completed the sale of its former Global Products reportable segment (“Global Products”) to Aramco Overseas Company B.V. (the “Transaction”). The operating results and cash flows associated with and directly attributed to the Global Products disposal group are reflected as discontinued operations within these consolidated financial statements. Refer to Note 3 for additional information regarding the Global Products business, including income from discontinued operations. Unless otherwise noted, disclosures within these remaining Notes to Consolidated Financial Statements relate solely to the Company's continuing operations. 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. Certain prior period amounts have been reclassified in the accompanying consolidated financial statements and notes thereto to conform to the current period presentation.

Significant Accounting Policies

12 Months Ended

Sep. 30, 2024

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.

Held for sale and discontinued operations

The Company classifies assets and liabilities to be sold (disposal group) as held for sale in the period when all of the applicable criteria are met, including: (i) management commits to a plan to sell, (ii) the disposal group is available to sell in its present condition, (iii) there is an active program to locate a buyer, (iv) the disposal group is being actively marketed at a reasonable price in relation to its fair value, (v) significant changes to the plan to sell are unlikely, and (vi) the sale of the disposal group is generally probable of being completed within one year. Management performs an assessment at least quarterly or when events or changes in business circumstances indicate that a change in classification may be necessary.

Assets and liabilities held for sale are presented separately within the Consolidated Balance Sheets with any adjustments necessary to measure the disposal group at the lower of its carrying value or fair value less costs to sell. Depreciation of property, plant and equipment and amortization of intangible and right-of-use assets are not recorded while these assets are classified as held for sale. For each period the disposal group remains classified as held for sale, its recoverability is reassessed and any necessary adjustments are made to its carrying value.

The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that will have a major effect on its operations and financial results. The results of discontinued operations are reported as (Loss) income from discontinued operations, net of tax in the Consolidated Statements of Comprehensive Income for the current and prior periods commencing in the period in which the held for sale criteria are met. (Loss) income from discontinued operations, net of tax includes direct costs attributable to the divested business and excludes any cost allocations associated with any shared or corporate functions unless otherwise dedicated to the divested business. (Loss) income from discontinued operations, net of tax will include any gain or loss recognized upon disposition or from adjustment of the carrying amount to fair value less costs to sell while classified as held for sale.

Transactions between the businesses held for sale and businesses held for use that are expected to continue after the disposal are not eliminated in order to appropriately reflect the continuing operations as well as the activity to be disposed of. Interest costs are included as a component of (Loss) income from discontinued operations, net of tax for debt specifically attributable to the discontinued operation or debt that is obligated to be repaid in connection with the completion of the divestiture. Activity within comprehensive income directly associated with a divested business is not realized as a component of (Loss) income from discontinued operations, net of tax until completion of the sale or disposition.

Cash and cash equivalents

All short-term, highly liquid investments having original maturities of three months or less are considered to be cash equivalents.

Short-term investments

As part of the Company’s commitment to using proceeds from the sale of the Global Products business, the Company invested in U.S. treasury securities classified as short-term investments, which had maturities of greater than three months and less than one year. Valvoline determined the classification of these securities as trading, available for sale or held-to-maturity at the time of purchase and evaluated those determinations at each balance sheet date the investments were held for. The Company’s short-term investments were stated at amortized cost within the Consolidated Balance Sheet and classified as held-to-maturity based on the intent and ability to hold to these investments to maturity. These investments were held to maturity and used to complete the tender offer to repurchase the 4.250% senior unsecured notes due 2030 with an aggregate principal amount of $600.0 million (the “2030 Notes”) in fiscal 2024, which was the final step in utilizing the net proceeds from the sale of Global Products.

Receivables and allowance for credit losses

The majority of Valvoline’s sales are tendered at the point of service in its retail stores, and its receivables are generally limited to those with its fleet customers and independent store operators, in addition to credit card receivables. Valvoline recognizes a receivable within its Consolidated Balance Sheets once control is transferred, typically upon the completion of services, 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 generally have a right to consideration in advance of control transfer, the Company has no contract assets or material contract liabilities.

Valvoline recognizes credit losses following the 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 comprised of purchased finished goods that are carried at the lower of cost or net realizable value using the weighted average cost method. 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, 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 seven to 20 years and machinery and equipment typically have five to seven year useful lives, dependent on the nature and utility of the assets. Building and leasehold improvements are depreciated over the shorter of their estimated useful lives or the period from which the date the assets are placed in service to the end of the lease term, as appropriate. Depreciation expense is recognized in Cost of sales or Selling, general and administrative expenses within the Consolidated Statements of Comprehensive Income based on the function the underlying asset supports. Property, plant and equipment is relieved of the cost and related accumulated depreciation when assets are disposed of or otherwise retired. Gains or losses on the dispositions of property, plant and equipment are included in the Consolidated Statements of Comprehensive Income and generally reported in Other income, net.

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).

Cloud computing arrangements

The Company periodically enters into cloud computing arrangements to access and use third-party software in support of its operations. The Company assesses its cloud computing arrangements to determine whether the contract meets the definition of a service contract or conveys a software license. For cloud computing arrangements that meet the definition of a service contract, the Company capitalizes implementation costs incurred during the application development stage and amortizes the costs on a straight-line basis over the term of the service contract.

As of September 30, 2024, 2023 and 2022, the Company had capitalized implementation costs, net of amortization, of $33.1 million, $20.5 million, 21.9 million, respectively, included in Other noncurrent assets within the Consolidated Balance Sheets. Amortization expense for the implementation costs was $4.2 million, $3.3 million and $3.0 million for fiscal 2024, 2023 and 2022, respectively, and is included in Selling, general and administrative expenses within the Consolidated Statements of Comprehensive Income.

Leases

Certain of the properties Valvoline utilizes, including its retail service center stores, offices, and storage 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, 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 five to 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.

Lessor arrangements

Valvoline is the lessor in arrangements to sublease and lease certain properties and equipment. Sublease income is recognized in Other income, net within the Company’s Consolidated Statements of Comprehensive Income.

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 fair values 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 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 by monitoring for the existence of potential impairment indicators throughout the fiscal year. This assessment consists of evaluating a reporting unit’s fair value compared to its carrying value. Reporting units may be operating segments as a whole or an operation one level below an operating segment,

referred to as a component. Goodwill is assigned to reporting units for purposes of impairment testing based upon the relative fair value of the asset to reporting units. The Company determined that it has one reporting unit in fiscal 2024.

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 Market Capitalization Method utilizing the Company’s stock price to derive fair value and 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.

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.

Pension and other postretirement benefit plans

Valvoline sponsors defined benefit pension and other postretirement plans in the U.S. 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. 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. All

components of net periodic benefit income or costs 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.

The Company guaranteed future lease commitments related to certain facilities in connection with the sale and disposal of certain retail stores and the Global Products business. Valvoline is obligated to perform if the buyers of the divested businesses default on the leases under the guarantees, which extend through 2037. The undiscounted maximum potential future payments under the guarantees were $32.8 million as of September 30, 2024. The Company has not recorded a liability for these guarantees as the likelihood of making future payments is considered remote.

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 services

Valvoline generates all revenues from contracts with customers, primarily as a result of delivery of automotive maintenance services through the following two principal activities: (i) company-operated service center operations and (ii) independent service center operations. Valvoline’s revenues from delivering preventive vehicle maintenance and related services are from end consumers, independent franchisees and operators, and other end customers, including fleet managers and others that require service solutions to address light and medium-duty vehicles.

Valvoline's net revenues are predominantly derived at a point in time with approximately 95% recognized either through services delivered at company-operated service centers or fees for arranging product supply to independent store operators. The remainder of the Company's sales generally relate to 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)	2024		2023		2022
Net revenues transferred at a point in time	$	1,543.0	$	1,375.0	$	1,177.2
Franchised revenues transferred over time	76.0		68.5		58.9
Net revenues	$	1,619.0	$	1,443.5	$	1,236.1

Below is a summary of the key considerations for Valvoline's material revenue-generating activities:

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 at the completion of product and service delivery upon the transfer of control and benefits from the performance obligations to the customer, which generally coincides with the tender of payment at the point of sale.

Non-company operated service center operations

The primary performance obligations related to independent service center operations include arrangement of product supply 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 renewal or store opening 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 agreements 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.

Valvoline also receives development fees from franchisees in exchange for exclusive rights to territory development arrangements. In exchange for these fees, the Company provides its franchisees with assistance in identifying potential sites and targets within designated territories, in addition to operational support for new service center stores. The Company defers these fees as a contract liability and recognizes them as revenue on a straight-line basis over the term of the underlying agreements. All upfront fees from franchisees and the related contract liabilities are not material to any periods presented herein.

Valvoline is the agent in arranging product supply for its independent operators as the Company has no control of the products prior to transfer to the customer. Accordingly, revenue is recognized on a net basis for the fees charged for this service. The Company determines the point in time at which service delivery occurs 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 from the supplier to the independent operators.

Customer payment terms vary by customer and are generally 30 to 60 days after service 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.

Revenue disaggregation

The following table summarizes net revenues by category for the years ended September 30:


(In millions)	2024		2023		2022

Oil changes and related fees	$	1,188.7	$	1,074.3	$	913.4
Non-oil changes and related fees	350.1		297.6		248.3
Franchise fees and other (a)	80.2		71.6		74.4
Total	$	1,619.0	$	1,443.5	$	1,236.1

(a)Includes net revenues of $0.2 million, and $11.6 million for the years ended September 30, 2023, and 2022, respectively, associated with suspended operations of a former Global Products business that was sold in fiscal 2024.

The following presents net revenues by geographic area where services are delivered for the years ended September 30:



(In millions)	2024		2023		2022
United States	$	1,571.8	$	1,407.7	$	1,191.8
Non-U.S. (a)	47.2		35.8		44.3
Total	$	1,619.0	$	1,443.5	$	1,236.1

(a)Includes the amounts noted above in each fiscal year of net revenues associated with suspended operations of a former Global Products business which was not included in the sale.

Valvoline did not have a single customer that represented 10% or more of consolidated net revenues in fiscal 2024, 2023 or 2022.

Variable consideration

The nature of Valvoline’s transactions with its customers often gives rise to variable consideration consisting of customer discounts, incentives or rebates. The Company determines transaction price as the amount of consideration it expects to be entitled to in exchange for fulfilling the performance obligations, including variable consideration to the extent it is probable that a significant future reversal will not occur. 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 and similar programs. Variable consideration is reassessed at each reporting date and adjustments are made, when necessary.

The reduction of revenues due to customer incentives was $222.6 million, $190.3 million, and $176.5 million in the Consolidated Statements of Comprehensive Income for the years ended September 30, 2024, 2023, and 2022, respectively. Reserves for these customer programs and incentives were $3.4 million, $3.2 million, and $2.8 million as of September 30, 2024, 2023, and 2022 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 revenue commensurate with the transfer of control to the customer.

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 product, labor and benefits, store operating and occupancy, and depreciation expenses. Selling, general and administrative expenses are recognized as incurred and include sales and marketing costs, advertising, customer support, and other corporate and administrative costs. Advertising costs were $69.4 million in fiscal 2024, $60.5 million in fiscal 2023 and $54.8 million in fiscal 2022.

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. Substantially all of the awards granted

by the Company are routine annual grants. Management evaluates its award grants and modifications and will adjust the fair value if any are determined to be spring-loaded.

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.

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.

Once the consolidated income tax provision is computed, the tax effect of pre-tax income from continuing operations is determined without consideration of the current year pre-tax income or loss from other financial statement components, including discontinued operations. The portion of total income tax that remains after the attribution of tax to continuing operations is allocated to the remaining components.

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 expense 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 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 consist of fixed and variable-rate interest term loans extended to franchisees to provide financial assistance. 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

Operations outside the United States are measured generally 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

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.

Share repurchases

Shares 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

The following standards relevant to Valvoline were either issued or are expected to have a meaningful impact on Valvoline in future periods.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued new guidance to enhance reportable segment disclosures. This guidance requires the disclosure of significant reportable segment expenses and other items regularly provided to the Chief Operating Decision Maker (“CODM”) that are included in a segment’s profit or loss measures, inclusive of entities that operate in a single reportable segment. While the guidance requires enhanced disclosures regarding the Company’s CODM and the information regularly provided to the CODM, including significant expenses, the adoption of this guidance will not impact the Company’s operating results, financial condition, or cash flows. The Company plans to adopt this guidance and conform the applicable disclosures retrospectively when it becomes effective for the Annual Report on Form 10-K for the year ending September 30, 2025.

In December 2023, the FASB issued guidance which enhances income tax disclosure requirements to include additional disaggregation within the effective tax rate reconciliation and income taxes paid. This guidance will be effective for Valvoline beginning with its fiscal 2026 annual financial statements, with early adoption permitted. The guidance must be applied prospectively, while retrospective application is permitted. The Company is continuing to assess the new guidance which is expected to result in enhanced income tax disclosures but does not expect there will be any impact to its results of operations, cash flows, or financial condition.

In November 2024, the FASB issued new guidance which requires enhanced disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the face of the income statement. This guidance will be effective for Valvoline beginning with its fiscal 2028 Form 10-K and interim periods beginning in fiscal 2029, with early adoption permitted, in addition to either prospective or retrospective application. The Company is currently evaluating the new guidance

to determine its adoption approach and the impact on the presentation and disclosure of its consolidated income statement and expenses. The Company anticipates its processes will be enhanced to address the disaggregation and disclosure requirements, though it does not expect adoption to impact its overall results from operations.

Discontinued Operations

12 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

Sale of Global Products

Financial results

On March 1, 2023, Valvoline completed the sale of Global Products for a cash purchase price of $2.650 billion and recognized a pre-tax gain on the sale within Income from discontinued operations, net of tax, during the second quarter of fiscal 2023, coinciding with the completion of the sale. The Transaction was subject to customary closing settlements that were finalized in the third quarter of fiscal 2023 and resulted in the recognition of a pre-tax gain on sale of $1.572 billion during the fiscal year ended September 30, 2023.

The following table summarizes (Loss) income from discontinued operations, net of tax included in the Consolidated Statements of Comprehensive Income for the years ended September 30:



(In millions)	2024		2023		2022
Net revenues	$	—	$	1,174.4	$	2,695.2
Cost of sales	—		924.2		2,134.7
Gross profit	—		250.2		560.5

Selling, general and administrative expenses	—		124.9		304.3
Net legacy and separation-related expenses	14.1		53.7		7.0
Equity and other income, net	—		(14.2)		(33.4)
Operating (loss) income from discontinued operations	(14.1)		85.8		282.6
Net pension and other postretirement plan expense (income)	—		0.1		(3.4)
Net interest and other financing expenses	—		4.4		4.6
Gain on sale of discontinued operations (a)	—		(1,571.6)		—
(Loss) income before income taxes - discontinued operations	(14.1)		1,652.9		281.4
Income tax (benefit) expense (b)	(11.1)		432.6		(33.5)
(Loss) income from discontinued operations, net of tax	$	(3.0)	$	1,220.3	$	314.9

(a)The gain on sale realized in fiscal 2023 included the release of Accumulated other comprehensive income of $30.7 million associated with the realization of cumulative translation losses attributed to the Global Products business.

(b)During fiscal 2024, Valvoline recognized an adjustment to reduce income tax expense on the gain on sale by $5.2 million. During fiscal 2023, tax expense on the gain of $424.3 million was recognized, bringing total tax expense on the gain on sale to-date to $419.1 million.

Post-closing arrangements

Valvoline sources substantially all lubricant and certain ancillary products for its stores through a long-term supply agreement with Global Products. Net revenues within the results of Global Products above include product sales to the Company's continuing operations prior to the closing of the Transaction, which were considered to be effectively settled and were not eliminated. These transactions totaled $89.7 million and $218.1 million for fiscal 2023 and 2022, respectively.

Valvoline also entered into a Transition Services Agreement with Global Products, effective March 1, 2023, to provide and receive services including information technology, legal, finance, and human resources support. These transition services have lapsed periodically as business process transitions have occurred since the sale with limited IT transition services extending through early calendar year 2025. The income and costs associated with these services were not material during fiscal 2024 and 2023.

Fair Value Measurements

12 Months Ended

Sep. 30, 2024

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, 2024
(In millions)	Total		Level 1		Level 2		Level 3		NAV (a)
Cash and cash equivalents
Money market funds	$	0.3	$	0.3	$	—	$	—	$	—
Time deposits	2.6		—		2.6		—		—



Other noncurrent assets
Non-qualified trust funds	1.9		—		—		—		1.9

Deferred compensation investments	23.0		23.0		—		—		—
Total assets at fair value	$	27.8	$	23.3	$	2.6	$	—	$	1.9




Other noncurrent liabilities
Deferred compensation obligations	22.3		—		—		—		22.3
Total liabilities at fair value	$	22.3	$	—	$	—	$	—	$	22.3


	As of September 30, 2023
(In millions)	Total		Level 1		Level 2		Level 3		NAV (a)
Cash and cash equivalents
Money market funds	$	0.6	$	0.6	$	—	$	—	$	—
Time deposits	277.3		—		277.3		—		—
Prepaid expenses and other current assets
Currency derivatives	0.1		—		0.1		—		—
Interest rate swap agreements	7.8		—		7.8		—		—
Other noncurrent assets
Non-qualified trust funds	2.1		—		—		—		2.1
Deferred compensation investments	19.0		19.0		—		—		—
Total assets at fair value	$	306.9	$	19.6	$	285.2	$	—	$	2.1

Accrued expenses and other liabilities
Currency derivatives	$	0.1	$	—	$	0.1	$	—	$	—

Other noncurrent liabilities
Deferred compensation obligations	20.8		—		—		—		20.8
Total liabilities at fair value	$	20.9	$	—	$	0.1	$	—	$	20.8

(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 has utilized currency derivatives to manage certain non-functional currency denominated balance sheet exposures. As of September 30, 2024, no contracts were outstanding, while currency forward contracts with notional values of $29.7 million were outstanding as of September 30, 2023. The fair value of these outstanding contracts were 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 invested in mutual funds which are measured at fair value using the NAV per share practical expedient. There were no significant redemption restrictions or unfunded commitments on these mutual fund investments as of September 30, 2024. 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 periods presented herein.

Interest rate swap agreements

Interest rate swap agreements with a notional amount of $175.0 million matured during fiscal 2024. The Company currently does not have any outstanding interest rate swap agreements. The fair value of interest rate swap agreements represent 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 investments

The Company has an investment fund that is primarily comprised of mutual funds traded in active markets and valued using quoted (unadjusted) prices, which are Level 1 inputs. Gains and losses related to these investments are immediately recognized in the Consolidated Statement of Comprehensive Income within Selling, general and administrative expenses and were not material for the period ended September 30, 2024.

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, 2024. 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.

U.S. treasury securities

The Company had U.S. treasury securities which were fully matured as of March 31, 2024, and carried at amortized cost within the Consolidated Balance Sheet. They were classified as held-to-maturity based on the intent and ability of the Company to hold these investments to maturity. The fair value of these investments summarized below is determined utilizing quoted prices for identical securities from less active markets, which are considered Level 2 inputs within the fair value hierarchy.


	September 30, 2023
(In millions)	Amortized cost		Gross unrealized losses		Fair value
Cash and cash equivalents
U.S. treasuries (a)	$	2.2	$	—	$	2.2
Short-term investments
U.S. treasuries (b)	$	347.5	$	(0.5)	$	347.0

(a)U.S. treasury securities with original maturity dates of three months or less.

(b)U.S. treasury securities with original maturities greater than three months and less than 12 months.

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, 2024						September 30, 2023
(In millions)	Fair value		Carrying value (a)		Unamortized discounts and issuance costs		Fair value		Carrying value (a)		Unamortized discounts and issuance costs
2030 Notes	$	—	$	—	$	—	$	589.8	$	594.5	$	(5.5)
2031 Notes	478.5		530.4		(4.6)		416.6		529.9		(5.2)
Total	$	478.5	$	530.4	$	(4.6)	$	1,006.4	$	1,124.4	$	(10.7)

(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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Acquisitions and Dispositions

12 Months Ended

Sep. 30, 2024

Business Combinations [Abstract]

Acquisitions and Dispositions

ACQUISITIONS AND DISPOSITIONS

Acquisitions

Fiscal 2024

The Company acquired 36 service center stores in single and multi-store transactions, including five former franchise locations and two former Express Care locations that were converted to company-operated service center stores, for an aggregate purchase price of $53.3 million during the year ended September 30, 2024. These acquisitions expand Valvoline’s retail presence in key North American markets and contribute to growing the number of company-operated service center stores to 950 as of the year ended September 30, 2024.

Fiscal 2023

The Company acquired 31 service center stores in single and multi-store transactions for an aggregate purchase price of $36.3 million during the year ended September 30, 2023.

Fiscal 2022

The Company acquired 37 service center stores in single and multi-store transactions, including four former franchise locations and five former Express Care locations, which were converted to company-operated service stores, for an aggregate purchase price of $50.7 million during the year ended September 30, 2022.

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)	2024		2023		2022


Inventories	$	0.2	$	0.4	$	—
Other current assets	—		—		0.2
Property, plant and equipment (a)	5.0		6.4		10.0
Operating lease assets	23.2		9.7		9.6

Goodwill (b)	44.3		29.0		39.1
Intangible assets (c)
Reacquired franchise rights (d)	6.4		4.0		2.8


Other	0.5		0.3		0.4



Other current liabilities	(0.1)		(0.7)		(0.8)
Operating lease liabilities	(23.2)		(9.1)		(8.9)
Other noncurrent liabilities (a)	(3.0)		(3.7)		(1.7)
Total net assets acquired	$	53.3	$	36.3	$	50.7
Non-cash consideration	(0.6)		—		—
Total cash consideration transferred	$	52.7	$	36.3	$	50.7

(a)Includes finance lease assets in Property, plant and equipment and finance lease liabilities in Other current and noncurrent liabilities. During the years ended September 30, 2024, 2023 and 2022, finance lease assets acquired were $3.1 million, $3.8 million and $1.8 million, respectively; finance lease liabilities in Other current liabilities were $0.1 million, $0.2 million and $0.1 million, respectively; and finance lease liabilities in Other noncurrent liabilities were $3.0 million, $3.7 million and $1.7 million, respectively.

(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 is seven years for fiscal 2024, and nine years for fiscal 2023 and 2022.

(d)Prior to the acquisition of former franchise service center stores, Valvoline licensed the right to operate franchised 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 seven years for fiscal 2024, nine years for fiscal 2023, and 10 years for fiscal 2022. The effective settlement of these arrangements resulted in no settlement gain or loss as the contractual terms were at market.

The Company did not record any material measurement period adjustments and does not expect any material changes to the preliminary purchase price allocations summarized above for acquisitions completed during the last twelve months.

Dispositions

Sale of company-operated service center stores

During the fourth fiscal quarter of 2024, Valvoline entered into agreements and completed the sale of company-operated service center stores to franchisees. Upon completion of the transactions, Valvoline derecognized the net assets associated with the service center stores and recorded a gain of $41.8 million which was reported in Other income, net in the Consolidated Statements of Comprehensive Income during the year ended September 30, 2024.

Sale of former Global Products business

During the first quarter of fiscal 2024, Valvoline completed the sale of a former Global Products business whose operations were suspended in fiscal 2022. This business was not included in the Global Products disposal group and was classified as held for sale as of September 30, 2023. As a result, the Company evaluated the business for impairment and determined the carrying value of the disposal group was in excess of its fair value resulting in a pre-tax impairment loss of $8.1 million that was recognized within Other income, net in the Consolidated Statement of Comprehensive Income during the year ended September 30, 2023. Upon completion of the sale in fiscal 2024,

Valvoline derecognized the remaining net liabilities of $3.9 million inclusive of a cumulative translation loss attributable to the business.

Lease Commitments

12 Months Ended

Sep. 30, 2024

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	2024		2023
Assets
Operating lease assets	Operating lease assets	$	298.6	$	266.5
Finance lease assets	Property, plant and equipment, net	261.7		240.0
Amortization of finance lease assets	Property, plant and equipment, net	(67.4)		(50.0)
Total leased assets		$	492.9	$	456.5

Liabilities
Current
Operating lease liabilities	Accrued expenses and other liabilities	$	31.2	$	29.2
Finance lease liabilities	Accrued expenses and other liabilities	13.4		12.3
Noncurrent
Operating lease liabilities	Operating lease liabilities	279.7		247.3
Finance lease liabilities	Other noncurrent liabilities	207.3		198.9
Total lease liabilities		$	531.6	$	487.7

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	2024		2023
Operating lease cost	Cost of sales and Selling, general and administrative expenses	$	45.8	$	40.7
Finance lease costs
Amortization of lease assets	Cost of sales	17.4		15.8
Interest on lease liabilities	Net interest and other financing expenses	11.1		10.2
Variable lease cost	Cost of sales and Selling, general and administrative expenses	3.7		3.7

Sublease income	Other income, net	(9.3)		(7.6)
Total lease cost		$	68.7	$	62.8

Other information related to the Company's leases follows for the years ended September 30:


(In millions)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (a)	$	43.1	$	38.7
Operating cash flows from finance leases	$	11.1	$	10.2
Financing cash flows from finance leases	$	12.0	$	10.8
Lease assets obtained in exchange for lease obligations:
Operating leases	$	63.4	$	46.4
Finance leases	$	22.4	$	21.3

(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, 2024:


(In millions)	Operating leases		Finance leases
2025	$	45.9	$	24.1
2026	44.9		25.0
2027	42.6		25.1
2028	39.9		25.3
2029	37.2		25.1
Thereafter	193.1		171.5
Total future lease payments	403.6		296.1
Imputed interest	92.7		75.4
Present value of lease liabilities	$	310.9	$	220.7

As of September 30, 2024, Valvoline has additional leases primarily related to its retail service center stores that have not yet commenced with approximately $30.1 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, 2024 were:


	Operating leases		Finance leases
Weighted average remaining lease term (in years)	9.9		11.7
Weighted average discount rate	5.1	%	5.3	%

Lease Commitments

LEASE COMMITMENTS

The following table presents the Company's lease balances as of September 30:


(In millions)	Location in Consolidated Balance Sheets	2024		2023
Assets
Operating lease assets	Operating lease assets	$	298.6	$	266.5
Finance lease assets	Property, plant and equipment, net	261.7		240.0
Amortization of finance lease assets	Property, plant and equipment, net	(67.4)		(50.0)
Total leased assets		$	492.9	$	456.5

Liabilities
Current
Operating lease liabilities	Accrued expenses and other liabilities	$	31.2	$	29.2
Finance lease liabilities	Accrued expenses and other liabilities	13.4		12.3
Noncurrent
Operating lease liabilities	Operating lease liabilities	279.7		247.3
Finance lease liabilities	Other noncurrent liabilities	207.3		198.9
Total lease liabilities		$	531.6	$	487.7

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	2024		2023
Operating lease cost	Cost of sales and Selling, general and administrative expenses	$	45.8	$	40.7
Finance lease costs
Amortization of lease assets	Cost of sales	17.4		15.8
Interest on lease liabilities	Net interest and other financing expenses	11.1		10.2
Variable lease cost	Cost of sales and Selling, general and administrative expenses	3.7		3.7

Sublease income	Other income, net	(9.3)		(7.6)
Total lease cost		$	68.7	$	62.8

Other information related to the Company's leases follows for the years ended September 30:


(In millions)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (a)	$	43.1	$	38.7
Operating cash flows from finance leases	$	11.1	$	10.2
Financing cash flows from finance leases	$	12.0	$	10.8
Lease assets obtained in exchange for lease obligations:
Operating leases	$	63.4	$	46.4
Finance leases	$	22.4	$	21.3

(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, 2024:


(In millions)	Operating leases		Finance leases
2025	$	45.9	$	24.1
2026	44.9		25.0
2027	42.6		25.1
2028	39.9		25.3
2029	37.2		25.1
Thereafter	193.1		171.5
Total future lease payments	403.6		296.1
Imputed interest	92.7		75.4
Present value of lease liabilities	$	310.9	$	220.7

As of September 30, 2024, Valvoline has additional leases primarily related to its retail service center stores that have not yet commenced with approximately $30.1 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, 2024 were:


	Operating leases		Finance leases
Weighted average remaining lease term (in years)	9.9		11.7
Weighted average discount rate	5.1	%	5.3	%

Intangible Assets

12 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

INTANGIBLE ASSETS

Goodwill

The following summarizes the changes in the carrying amount of goodwill during fiscal 2024 and 2023:


(In millions)
Balance at September 30, 2022	$	548.2
Acquisitions	29.0
Currency translation	0.8

Balance at September 30, 2023	578.0
Acquisitions	44.3
Currency translation	(0.1)
Dispositions	(6.9)
Balance at September 30, 2024	$	615.3

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)	2024						2023
	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Definite-lived intangible assets
Trademarks and trade names	$	29.2	$	(11.4)	$	17.8	$	29.6	$	(10.5)	$	19.1
Reacquired franchise rights	122.2		(58.7)		63.5		122.1		(49.4)		72.7
Customer relationships	15.1		(7.9)		7.2		16.8		(8.3)		8.5
Other intangible assets	7.0		(5.2)		1.8		6.9		(4.6)		2.3
Total definite-lived intangible assets	$	173.5	$	(83.2)	$	90.3	$	175.4	$	(72.8)	$	102.6

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
(In millions)	2024		2025		2026		2027		2028		2029
Amortization expense	$	16.7	$	15.3	$	12.3	$	11.7	$	11.6	$	11.3

Debt

12 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

DEBT

The following table summarizes Valvoline’s debt as of September 30:


(In millions)	2024		2023
2031 Notes	$	535.0	$	535.0
2030 Notes	—		600.0

Term Loan	439.4		463.1
Revolver	125.0		—



Debt issuance costs and discounts	(5.6)		(12.0)
Total debt	1,093.8		1,586.1

Current portion of long-term debt	23.8		23.8
Long-term debt	$	1,070.0	$	1,562.3

Senior Notes

The Company's outstanding fixed rate senior notes as of September 30, 2024 consist of 3.625% senior unsecured notes due 2031 with an aggregate principal amount of $535.0 million (the “2031 Notes”). The 2031 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 2031 Notes from the holders thereof. The 2031 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. In April 2024, the Company repurchased the 2030 Notes described in more detail below.

2030 Notes

On April 16, 2024, Valvoline completed a tender offer (the “Debt Tender Offer”) with 99.7% of the outstanding principal amount tendered by the holders of the 2030 Notes. The Debt Tender Offer was made to comply with the requirements of the asset sale covenant under the indenture governing the 2030 Notes in connection with the sale of Global Products and Valvoline’s use of the related net proceeds. The Company used cash and cash equivalents on hand, in addition to borrowing $175.0 million on the Revolver to facilitate the $598.3 million purchase of the 2030 Notes at par, plus accrued and unpaid interest, and cancelled the 2030 Notes accepted for purchase. The Company elected to repurchase the remaining balance outstanding of $1.7 million on April 29, 2024 pursuant to the terms and conditions of the indenture governing the 2030 Notes. In connection with the completion of the Debt Tender Offer, Valvoline recognized a loss on extinguishment of the 2030 Notes of $5.1 million within Net interest and other financing expenses in the Consolidated Statements of Comprehensive Income during the year ended September 30, 2024, comprised of the write-off of related unamortized debt issuance costs and discounts.

Senior Credit Agreement

Key terms and conditions

In December 2022, Valvoline amended the Senior Credit Agreement, which became effective March 1, 2023 commensurate with the sale of Global Products. The Senior Credit Agreement provides an aggregate principal amount of $950.0 million in senior secured credit facilities comprised of (i) a five-year $475.0 million term loan facility (the “Term Loan”) and (ii) a five-year $475.0 million revolving credit facility (the “Revolver”), including a $100.0 million letter of credit sublimit.

The principal amount of the Term Loan under the Senior Credit Agreement is required to be repaid in quarterly installments of approximately $5.9 million beginning with the first fiscal quarter after the sale of Global Products, with the remainder due at maturity and prepayment required in the amount of the net cash proceeds 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 will bear interest at either the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate will fluctuate between SOFR plus 1.375% per year and SOFR plus 2.250% per year (or between the alternate base rate plus 0.375% per year and the alternate base rate plus 1.250% per year), based upon Valvoline’s consolidated total net leverage ratio.

Summary of activity

Proceeds from the Term Loan, in addition to a portion of the proceeds from the sale of Global Products, were used to pay in full the outstanding borrowings under the prior Credit Agreement, including the principal balance of the term loan facility of $445.6 million and outstanding borrowings under the revolving credit facility of $290.0 million, as well as accrued and unpaid interest and fees and expenses related to the amendment. The Company recognized $1.1 million of expense within Net interest and other financing expenses in the Consolidated Statements of Comprehensive Income during the year ended September 30, 2023 associated with the modification of the Credit Agreement, which included accelerated amortization of previously capitalized debt issuance costs.

As of September 30, 2024 and 2023, the Term Loan had an outstanding balance of $439.4 million and $463.1 million, respectively, and $125.0 million outstanding under the Revolver as of September 30, 2024 while there were no amounts outstanding under the Revolver as of September 30, 2023. Excluding the refinancing of the Term Loan

described above, Valvoline made payments on the Term Loan of $23.8 million and $11.9 million during fiscal 2024 and 2023, respectively. The total borrowing capacity remaining under the Revolver was $346.8 million as of September 30, 2024 due to reductions of $125.0 million and $3.2 million for outstanding borrowings and letters of credit, respectively.

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, 2024 and 2023, 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, 2024, excluding debt issuance costs and discounts, are as follows:


(In millions)
Years ending September 30
2025	$	23.8
2026	23.8
2027	23.7
2028	493.1
2029	—
Thereafter	535.0
Total	$	1,099.4

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Income Taxes

12 Months Ended

Sep. 30, 2024

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)	2024		2023		2022
Current
Federal	$	34.7	$	8.0	$	9.4
State	8.3		(5.5)		4.3
Non-U.S.	2.6		1.0		3.0
	45.6		3.5		16.7
Deferred
Federal	20.8		36.8		16.2
State	2.7		(3.2)		1.3
Non-U.S.	—		—		0.5
	23.5		33.6		18.0
Income tax expense	$	69.1	$	37.1	$	34.7

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)	2024			2023			2022
Income before income taxes
United States	$	286.5		$	242.7		$	119.1
Non-U.S.	(2.9)			(6.2)			25.0
Total income before income taxes	$	283.6		$	236.5		$	144.1

U.S. statutory tax rate	21		%	21		%	21		%
Income taxes computed at U.S. statutory tax rate	$	59.6		$	49.7		$	30.3
(Decrease) increase in amount computed resulting from:
Unrecognized tax benefits	0.1			0.1			0.1
State taxes, net of federal benefit	9.2			11.2			5.2
International rate differential	(0.1)			0.1			(0.4)
Permanent items	1.7			0.1			(1.0)
Remeasurement of net deferred taxes	(0.1)			(1.1)			(0.5)
Return-to-provision adjustments	(0.7)			(0.9)			(0.4)

Change in valuation allowances	(1.7)			(27.7)			1.8
Tax Matters Agreement activity	—			5.4			—
Other	1.1			0.2			(0.4)
Income tax expense	$	69.1		$	37.1		$	34.7
Effective tax rate	24.4		%	15.7		%	24.1		%

The higher effective tax rate in fiscal 2024 is primarily due to more normalized activity compared to the prior year period, which included a $29.0 million income tax benefit. This benefit resulted from the release of a valuation allowance due to the change in expectations regarding the utilization of certain legacy tax attributes as a result of the terms of the amended tax matters agreement with Valvoline’s former parent company. Higher pre-tax income in fiscal 2023 compared to fiscal 2022 led to increased tax expense, which was more than offset by the benefit from the valuation allowance release, driving a lower effective tax rate in fiscal 2023.

Deferred taxes

A summary of the deferred tax assets and liabilities included in the Consolidated Balance Sheets follows as of September 30:


(In millions)	2024		2023
Deferred tax assets
Non-U.S. net operating loss carryforwards (a)	$	2.9	$	1.1
State net operating loss carryforwards (b)	6.9		8.2
Employee benefit obligations	33.9		34.6
Compensation accruals	15.8		17.9
Credit carryforwards (c)	0.3		0.3
Operating lease liabilities	107.9		95.2

Other	10.3		12.4
Valuation allowances (d)	(1.0)		(3.0)
Net deferred tax assets	177.0		166.7
Deferred tax liabilities
Goodwill and other intangibles	25.9		19.1
Property, plant and equipment	154.1		134.7
Operating lease assets	75.4		68.1
Other	0.2		0.3
Total deferred tax liabilities	255.6		222.2
Total net deferred tax liabilities (e)	$	(78.6)	$	(55.5)

(a)Gross non-U.S. net operating loss carryforwards of $10.6 million expire in fiscal years 2039 to 2044.

(b)Apportioned gross state net operating loss carryforwards of $130.2 million expire in fiscal years 2029 through 2037.

(c)Credit carryforwards consist primarily of state tax credits that generally expire in fiscal years 2025 through 2032.

(d)Valuation allowances at September 30, 2024 primarily relate to nondeductible executive compensation and state net operating loss carryforwards 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 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 pro 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

An agreement (the "Tax Matters Agreement") was entered into in September 2016 between Valvoline and Ashland, that 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 expenses (income), with any resulting impacts to Valvoline's stand-alone income tax provision recorded in Income tax expense within the Consolidated Statements of Comprehensive Income.

During fiscal 2023, Valvoline recognized an income tax benefit of $29.0 million in connection with releasing its valuation allowance. Additionally, Valvoline recognized $25.7 million of expense within Net legacy and separation-related expenses in the Consolidated Statement of Comprehensive Income during fiscal 2023 to reflect its increased estimated indemnity obligation to its former parent as a result of the terms of the amended Tax Matters Agreement.

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 $9.0 million and $10.8 million as of September 30, 2024 and 2023, respectively. 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 2018.

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)	2024		2023		2022
Gross unrecognized tax benefits as of October 1	$	35.7	$	8.2	$	8.7
Increases related to tax positions from prior years	0.1		0.6		0.1
Decreases related to tax positions from prior years	(2.1)		(0.6)		(0.6)
Increases related to tax positions taken during the current year	—		27.7		0.8

Lapses of statutes of limitation	(0.6)		(0.2)		(0.8)
Gross unrecognized tax benefits as of September 30 (a)	$	33.1	$	35.7	$	8.2

(a)These unrecognized tax benefits would favorably impact the continuing operations and discontinued operations effective income tax rates, if recognized. Accruals for interest and penalties were $1.8 million as of September 30, 2024 and 2023, respectively.

In connection with the sale of Global Products, Valvoline established reserves of $27.1 million for gross unrecognized tax benefits as of September 30, 2024. If realized, these unrecognized tax benefits would favorably impact the discontinued operations effective income tax rate.

The Company's U.S. federal income tax returns remain open to examination from fiscal 2019 forward and Canada from fiscal 2020 and forward. Fiscal years including and after 2018 remain open to examination by certain U.S. state jurisdictions.

Because Valvoline is routinely under examination by various taxing authorities, it is reasonably possible that the amount of unrecognized tax benefits will change during fiscal 2025. Due to the complexity and number of open years, it is not practical to estimate the amount or range of such change at this time. Based on current information available, management does not expect a material change to the Company's gross unrecognized tax benefits within fiscal 2025.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Employee Benefit Plans

12 Months Ended

Sep. 30, 2024

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 costs (income) and the assumptions used in this determination are summarized below for the years ended September 30:


(In millions)	Pension benefits									Other postretirement benefits
	2024			2023			2022			2024			2023			2022
Net periodic benefit costs (income)

Interest cost	$	83.4		$	81.8		$	43.0		$	1.2		$	1.2		$	0.7
Expected return on plan assets	(68.4)			(66.9)			(78.6)			—			—			—
Amortization of prior service cost (credit)	0.1			0.1			0.1			(2.2)			(2.2)			(2.2)
Actuarial (gain) loss	(5.1)			(35.0)			49.5			2.7			(6.6)			(5.6)
Net periodic benefit costs (income)	$	10.0		$	(20.0)		$	14.0		$	1.7		$	(7.6)		$	(7.1)
Weighted-average plan assumptions

Discount rate for interest cost	5.92		%	5.45		%	2.10		%	5.92		%	5.41		%	1.92		%

Expected long-term rate of return on plan assets	5.30		%	4.90		%	4.10		%	—			—			—

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 expense (income) in the Consolidated Statements of Comprehensive Income and included a gain of $2.4 million for the year ended September 30, 2024, a gain of $41.6 million for the year ended September 30, 2023, and a loss of $43.9 million for the year ended September 30, 2022.

The fiscal 2024 gain was primarily attributed to lower discounts rates, partially offset by higher-than-expected returns on plan assets. The fiscal 2023 gain was primarily attributed to an increase in discount rates, partially offset by lower-than-expected returns on plan assets. The fiscal 2022 loss was primarily attributed to lower-than-expected returns on plan assets, partially offset by higher discount rates.

The following table summarizes the net periodic benefit loss (income) and the amortization of prior service credits recognized during the years ended September 30:


(In millions)	Pension benefits						Other postretirement benefits
	2024		2023		2022		2024		2023		2022
Amortization of prior service credits recognized in Accumulated other comprehensive income	$	(0.1)	$	(0.1)	$	(0.1)	$	2.2	$	2.2	$	2.2
Net periodic benefit loss (income)	10.0		(20.0)		14.0		1.7		(7.6)		(7.1)
Total pre-tax amount recognized in comprehensive loss (income)	$	9.9	$	(20.1)	$	13.9	$	3.9	$	(5.4)	$	(4.9)

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
	2024			2023			2024			2023
Change in benefit obligations
Benefit obligations as of October 1	$	1,478.1		$	1,585.2		$	22.3		$	30.7


Interest cost	83.4			81.8			1.2			1.2

Benefits paid	(130.6)			(130.4)			(2.4)			(3.0)
Actuarial loss (gain)	140.0			(52.7)			2.7			(6.6)

Transfers in	1.6			4.4			—			—
Settlements	(6.8)			(10.2)			—			—
Benefit obligations as of September 30	$	1,565.7		$	1,478.1		$	23.8		$	22.3
Change in plan assets
Fair value of plan assets as of October 1	$	1,361.0		$	1,438.1		$	—		$	—

Actual return on plan assets	213.5			41.3			—			—
Employer contributions	14.2			17.8			2.4			3.0

Benefits paid	(130.6)			(130.4)			(2.4)			(3.0)

Settlements	(6.8)			(10.2)			—			—
Transfers in	1.6			4.4			—			—
Fair value of plan assets as of September 30	$	1,452.9		$	1,361.0		$	—		$	—

Unfunded status of the plans as of September 30	$	112.8		$	117.1		$	23.8		$	22.3

(In millions)	Pension benefits						Other postretirement benefits
	2024			2023			2024			2023
Amounts in the Consolidated Balance Sheets
Noncurrent benefit assets (a)	$	49.0		$	38.6		$	—		$	—

Current benefit liabilities (b)	7.1			7.7			2.7			2.6
Noncurrent benefit liabilities (c)	154.7			148.0			21.1			19.7
Total benefit liabilities	161.8			155.7			23.8			22.3

Net liabilities recognized	$	112.8		$	117.1		$	23.8		$	22.3

Balance in Accumulated other comprehensive loss
Prior service cost (credit)	$	1.1		$	1.1		$	(14.4)		$	(16.7)


Weighted-average plan assumptions
Discount rate	4.94		%	5.98		%	4.89		%	5.98		%

Healthcare cost trend rate (d)	—			—			7.2		%	5.5		%

(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 2049 and thereafter.

Accumulated benefit obligation

The accumulated benefit obligation for all pension plans was $1.6 billion and $1.5 billion as of September 30, 2024 and 2023, respectively. Pension plans with projected and accumulated benefit obligations in excess of the fair value of plan assets follows for the Company’s plans as of September 30:


(In millions)	2024				2023
	Benefit obligation		Plan assets		Benefit obligation		Plan assets
Plans with projected and accumulated benefit obligations in excess of plan assets	$	1,146.0	$	984.1	$	1,101.7	$	946.0

Plan assets

Pension plan asset investments and their level within the fair value hierarchy is summarized below as of:


(In millions)	September 30, 2024
	Total fair value		Level 1		Level 2		Level 3		Assets measured at NAV
Cash and cash equivalents	$	25.4	$	25.4	$	—	$	—	$	—
U.S. government securities and futures	49.6		—		49.6		—		—
Other government securities	42.1		—		42.1		—		—
Corporate debt instruments	1,108.4		—		1,108.4		—		—

Private equity and hedge funds	1.2		—		—		—		1.2
Collective trust funds	216.0		—		—		—		216.0
Other investments	10.2		—		10.2		—		—
Total assets at fair value	$	1,452.9	$	25.4	$	1,210.3	$	—	$	217.2


(In millions)	September 30, 2023
	Total fair value		Level 1		Level 2		Level 3		Assets measured at NAV
Cash and cash equivalents	$	21.5	$	21.5	$	—	$	—	$	—
U.S. government securities and futures	63.1		—		63.1		—		—
Other government securities	33.1		—		33.1		—		—
Corporate debt instruments	1,055.4		—		1,055.4		—		—

Private equity and hedge funds	4.4		—		—		—		4.4
Collective trust funds	176.9		—		—		—		176.9
Other investments	6.6		—		6.6		—		—
Total assets at fair value	$	1,361.0	$	21.5	$	1,158.2	$	—	$	181.3

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.

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.

Other investments

Other investments are primarily comprised of swaps that are valued using closing market swap curves and market derived inputs.

The following summarizes investments for which fair value is measured using the NAV per share practical expedient as of September 30, 2024:


(In millions)	Fair value at NAV		Unfunded commitments		Redemption frequency (if currently eligible)	Redemption notice period

Relative value hedge funds	$	0.1	$	—	None (a)	None (a)

Event driven hedge funds	0.3		—		None (a)	None (a)
Collective trust funds	216.0		—		Daily	Up to 3 days


Private equity	0.8		1.6		None (b)	None (b)
Total	$	217.2	$	1.6

(a)These hedge funds are in the process of liquidation and the timing is unknown.

(b)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 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 plans is 90% fixed income securities and 10% 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.

The weighted-average asset allocations for Valvoline’s plans by asset category follow as of September 30:


	Target	2024		2023
Plan assets allocation
Equity securities	3-10%	7	%	7	%
Debt securities	80-100%	92	%	92	%
Other	0-10%	1	%	1	%
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 $14.2 million and $17.8 million to its pension plans during fiscal 2024 and 2023, respectively. Valvoline does not plan to contribute to its qualified pension plans in fiscal 2025 and expects to contribute approximately $7.1 million to its non-qualified 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
2025	$	136.3	$	2.6
2026	135.1		2.3
2027	133.1		2.1
2028	130.0		2.1
2029	128.7		2.0
2028 - 2032	592.5		8.7
Total	$	1,255.7	$	19.8

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 $14.1 million in fiscal 2024, $12.5 million in fiscal 2023 and $15.9 million in fiscal 2022.

Valvoline also sponsors a long-term disability benefit plan. Total liabilities associated with this plan were $0.6 million and $1.0 million as of September 30, 2024 and 2023, respectively.

Incentive plans

Reserves for incentive plans were $15.8 million and $16.4 million as of September 30, 2024 and 2023, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
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-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

Litigation, Claims and Contingencies	12 Months Ended
Litigation, Claims and Contingencies	Sep. 30, 2024
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 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

12 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

STOCK-BASED COMPENSATION PLANS

Valvoline has approved stock-based incentive plans that authorize 21.0 million shares of common stock to be issued, with approximately 8.8 million shares of common stock remaining available for issuance as of September 30, 2024. 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. The following summarizes stock-based compensation expense recognized by the Company during the years ended September 30:


(In millions)	2024		2023		2022
Stock appreciation rights	$	1.1	$	1.2	$	1.5
Nonvested stock awards	10.9		12.6		8.4

Total stock-based compensation expense, pre-tax	12.0		13.8		9.9
Tax benefit	(3.0)		(3.5)		(2.5)
Total stock-based compensation expense, net of tax	$	9.0	$	10.3	$	7.4

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 to three years and are subject to pre-vesting forfeiture upon service termination. Unexercised SARs generally lapse ten years after the grant date. Stock-based compensation expense for SARs is determined using the Black-Scholes option-pricing model to estimate the grant date fair value of new or modified awards.

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 to three-year period and are subject to forfeiture upon termination of service prior to vesting. Nonvested stock awards are primarily granted as RSUs that settle in shares upon vesting, while RSAs result in share issuance at grant, entitling the award holders to voting rights, though the shares are restricted until vesting. Nonvested stock awards with service-only vesting conditions receive dividend equivalents in the form of additional units or shares, which are subject to vesting and forfeiture provisions.

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, 2024:


	Number of shares (in thousands)	Weighted average grant date fair value per share
Unvested shares as of September 30, 2023	1,350.6	$	33.35
Granted	315.6	$	36.59
Performance adjustments (a)	22.0	$	38.32
Vested	(468.9)	$	35.53
Forfeited	(51.6)	$	35.95

Unvested shares as of September 30, 2024	1,167.7	$	32.74

(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:


	2024			2023			2022
Weighted average grant date fair value per share	$	38.32		$	35.94		$	33.98
Assumptions (weighted average)
Risk-free interest rates (a)	4.6		%	4.3		%	1.6		%
Expected dividend yield	—		%	—		%	1.8		%
Expected volatility (b)	28.5		%	43.0		%	41.5		%
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 4.54% to 4.83% in fiscal 2024, 4.24% to 4.78% in fiscal 2023, and 1.14% to 1.88% in fiscal 2022.

(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.

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:


	2024		2023		2022
Total grant date fair value of shares vested	$	17.1	$	15.7	$	11.2
Weighted average grant date fair value	$	36.59	$	33.98	$	35.32

As of September 30, 2024, there was $6.9 million of total unrecognized compensation costs related to nonvested stock awards, which is expected to be recognized over a weighted average period of 1.9 years. The aggregate intrinsic value of nonvested stock awards as of September 30, 2024 is $38.2 million.

Earnings Per Share

12 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The following summarizes basic and diluted EPS for the years ended September 30:


(In millions, except per share data)	2024		2023		2022
Numerator
Income from continuing operations	$	214.5	$	199.4	$	109.4
(Loss) income from discontinued operations, net of tax	(3.0)		1,220.3		314.9
Net income	$	211.5	$	1,419.7	$	424.3

Denominator
Weighted average common shares outstanding	130.1		161.6		179.1
Effect of potentially dilutive securities (a)	0.9		1.0		1.3
Weighted average diluted shares outstanding	131.0		162.6		180.4

Basic earnings per share
Continuing operations	$	1.65	$	1.24	$	0.61
Discontinued operations	(0.02)		7.55		1.76
Basic earnings per share	$	1.63	$	8.79	$	2.37

Diluted earnings per share
Continuing operations	$	1.63	$	1.23	$	0.61
Discontinued operations	(0.02)		7.50		1.74
Diluted earnings per share	$	1.61	$	8.73	$	2.35

(a)There were 0.1 million outstanding securities, primarily SARs, not included in the computation of diluted earnings per share in the year ended September 30, 2024 because the effect would have been antidilutive and 0.2 million for each of the years ended September 30, 2023 and 2022.

Stockholders' Equity

12 Months Ended

Sep. 30, 2024

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS' EQUITY

Modified “Dutch auction” tender offer

During fiscal 2023, Valvoline completed a modified “Dutch auction” tender offer and accepted 27.0 million shares for an aggregate purchase price of $1.024 billion, excluding fees and related expenses. Valvoline incurred $16.4 million in fees and expenses, which included $10.2 million for excise taxes on share repurchases. These costs were recognized within Retained earnings during the year ended September 30, 2023 as costs to repurchase the Company’s common stock. Shares repurchased were retired and returned to the status of authorized, unissued shares.

Accumulated other comprehensive income (loss)

Changes in Accumulated other comprehensive income (loss) by component for fiscal years 2024 and 2023 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, 2022	$	15.1	$	(49.7)	$	13.3	$	(21.3)
Other comprehensive income before reclassification (loss)	—		13.1		(22.8)		(9.7)
(Gain) loss reclassified out of accumulated other comprehensive income	(2.2)		30.7		12.7		41.2
Tax benefit (expense)	0.5		(0.1)		2.6		3.0
Balance as of September 30, 2023	13.4		(6.0)		5.8		13.2
Other comprehensive income before reclassification (loss)	—		(0.4)		(10.0)		(10.4)
(Gain) loss reclassified out of accumulated other comprehensive income	(2.1)		4.4		2.3		4.6
Tax benefit	0.4		0.2		1.9		2.5
Balance as of September 30, 2024	$	11.7	$	(1.8)	$	—	$	9.9

Amounts reclassified from Accumulated other comprehensive income (loss) follow for the years ended September 30:


(in millions)	2024		2023		2022
Amortization of pension and other postretirement plan prior service credits (a)	$	(2.1)	$	(2.1)	$	(2.1)
Business disposal (b)	4.4		30.6		—
Loss (gain) on cash flow hedges (c)	2.3		12.7		1.4
Tax effect of reclassifications	2.5		3.0		(3.4)


Total amounts reclassified, net of tax	$	7.1	$	44.2	$	(4.1)

(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 expense (income) 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)Reflects the realization of $4.4 million of currency translation losses included in the net assets held for sale upon completing the sale of a former Global Products business in the first quarter of fiscal 2024. Additionally, includes the realization of $30.7 million in currency translation losses and $0.1 million in unamortized pension prior service credits both recognized within (Loss) income from discontinued operations, net of tax in the Consolidated Statement of Comprehensive Income for fiscal 2023.

(c)Represents the realization of gains from cash flow hedges reported in Net interest and other financing expense within the Consolidated Statements of Comprehensive Income.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 16
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-16

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Supplemental Balance Sheet Information

12 Months Ended

Sep. 30, 2024

Supplemental Balance Sheet Information [Abstract]

Supplemental Balance Sheet Information

SUPPLEMENTAL BALANCE SHEET INFORMATION

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)	2024		2023		2022
Cash and cash equivalents - continuing operations	$	68.3	$	409.1	$	23.4
Cash and cash equivalents - held for sale (a)	—		4.0		—
Cash and cash equivalents - discontinued operations	—		—		59.0
Restricted cash - continuing operations (b)	0.4		—		—
Restricted cash - discontinued operations (c)	—		—		1.5
Total cash, cash equivalents and restricted cash	$	68.7	$	413.1	$	83.9

(a)Refer to Note 3 for additional information regarding the asset group classified as held for sale at September 30, 2023.

(b)Included in Prepaid expenses and other current assets within the Consolidated Balance Sheets.

(c)Included in Current assets held for sale with 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)	2024		2023
Current
Trade	$	73.2	$	64.0
Other	9.1		16.3
Notes receivable from franchisees	5.4		1.6
Receivables, gross	87.7		81.9
Allowance for credit losses	(1.3)		(0.6)
Receivables, net	$	86.4	$	81.3

Non-current (a)
Notes receivable	$	2.5	$	2.3
Other	4.4		7.5
Noncurrent notes receivable, gross	6.9		9.8
Allowance for losses	(2.6)		(2.4)
Noncurrent notes receivable, net	$	4.3	$	7.4

(a) Included in Other noncurrent assets within the Consolidated Balance Sheets.

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)	2024		2023
Land	$	160.1	$	148.5
Buildings	869.5		725.1
Machinery and equipment	348.7		302.6
Construction in progress	72.1		57.6
Total property, plant and equipment	1,450.4		1,233.8
Accumulated depreciation	(491.7)		(415.5)
Net property, plant and equipment	$	958.7	$	818.3

The following table summarizes finance lease assets included in net property, plant and equipment as of September 30:


(In millions)	2024		2023
Land	$	96.1	$	85.4
Buildings	165.6		154.6
Total finance lease assets	261.7		240.0
Accumulated depreciation	(67.4)		(50.0)
Net finance lease assets	$	194.3	$	190.0

Non-cash transactions, including finance leases, recognized within total property, plant and equipment were $18.3 million and $17.5 million during the years ended September 30, 2024 and 2023, 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)	2024		2023		2022
Depreciation (includes finance leases)	$	89.2	$	72.0	$	54.7

Long-lived assets

The following presents long-lived assets comprised of net property, plant and equipment and operating lease assets by geographic area in which the assets physically reside for the years ended September 30:


	Property, plant and equipment, net				Operating lease assets
(In millions)	2024		2023		2024		2023
United States	$	909.1	$	774.4	$	281.6	$	247.2
Non-U.S.	49.6		43.9		17.0		19.3
Total	$	958.7	$	818.3	$	298.6	$	266.5

Subsequent Events	12 Months Ended
Subsequent Events	Sep. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	SUBSEQUENT EVENTS Assets held for sale In October 2024, the Company entered into a definitive agreement to sell 38 company-owned service center stores to a new franchise partner. The transaction is subject to standard closing conditions and is expected to close in early fiscal 2025. The underlying net assets associated with the transaction were classified as held for sale beginning in October 2024 and will be classified as such until the closing of the sale.

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Sep. 30, 2024

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, 2024, 2023 and 2022
(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, 2024	$	0.6	$	0.6	$	0.1		$	—	$	1.3
Year ended September 30, 2023	$	4.6	$	(0.6)	$	(3.4)	(a)	$	—	$	0.6
Year ended September 30, 2022	$	0.3	$	4.5	$	(0.2)		$	—	$	4.6
Allowances for loan losses
Year ended September 30, 2024	$	2.4	$	—	$	0.2		$	—	$	2.6
Year ended September 30, 2023	$	2.2	$	—	$	0.2		$	—	$	2.4
Year ended September 30, 2022	$	2.1	$	—	$	0.1		$	—	$	2.2
Inventory excess and obsolete reserves
Year ended September 30, 2024	$	1.1	$	0.2	$	—		$	—	$	1.3
Year ended September 30, 2023	$	2.0	$	(0.3)	$	(0.6)	(a)	$	—	$	1.1
Year ended September 30, 2022	$	0.8	$	1.2	$	—		$	—	$	2.0
Deferred tax asset valuation allowance
Year ended September 30, 2024	$	3.0	$	(2.0)	$	—		$	—	$	1.0
Year ended September 30, 2023	$	33.3	$	(30.3)	$	—		$	—	$	3.0
Year ended September 30, 2022	$	31.8	$	1.5	$	—		$	—	$	33.3

(a) Includes currency translation and balances reclassified to held for sale within the Consolidated Balance Sheet.

Pay vs Performance Disclosure - USD ($) $ in Millions	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net income	$ 211.5	$ 1,419.7	$ 424.3

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Name Accounting Standards Codification
-Section 50
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+ Details

Insider Trading Arrangements	3 Months Ended	12 Months Ended
Insider Trading Arrangements	Sep. 30, 2024 shares	Sep. 30, 2024 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Mr. R. Travis Dobbins [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On August 27, 2024, Mr. R. Travis Dobbins, the Company’s Senior Vice President and Chief Technology Officer entered into a Rule 10b5-1 Trading Plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Mr. Dobbins’ plan covers the sale of 100% of the net shares (after withholding of applicable taxes) of Valvoline common stock received in settlement of any earned performance share units (2,080 at target) for the fiscal 2022 to fiscal 2024 performance period. Mr. Dobbins’ Rule 10b5-1 Trading Plan expires upon the earlier of January 31, 2025, or the date all transactions pursuant to such trading plan are executed.
Name	Mr. R. Travis Dobbins
Title	Senior Vice President and Chief Technology Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 27, 2024
Arrangement Duration	157 days
Aggregate Available	2,080	2,080

Insider Trading Policies and Procedures	12 Months Ended
Insider Trading Policies and Procedures	Sep. 30, 2024
Insider Trading Policies and Procedures [Line Items]
Insider Trading Policies and Procedures Adopted	true

Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

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.

Certain prior period amounts have been reclassified in the accompanying consolidated financial statements and notes thereto to conform to the current period presentation.

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.

Held for sale and discontinued operations

The Company classifies assets and liabilities to be sold (disposal group) as held for sale in the period when all of the applicable criteria are met, including: (i) management commits to a plan to sell, (ii) the disposal group is available to sell in its present condition, (iii) there is an active program to locate a buyer, (iv) the disposal group is being actively marketed at a reasonable price in relation to its fair value, (v) significant changes to the plan to sell are unlikely, and (vi) the sale of the disposal group is generally probable of being completed within one year. Management performs an assessment at least quarterly or when events or changes in business circumstances indicate that a change in classification may be necessary.

Assets and liabilities held for sale are presented separately within the Consolidated Balance Sheets with any adjustments necessary to measure the disposal group at the lower of its carrying value or fair value less costs to sell. Depreciation of property, plant and equipment and amortization of intangible and right-of-use assets are not recorded while these assets are classified as held for sale. For each period the disposal group remains classified as held for sale, its recoverability is reassessed and any necessary adjustments are made to its carrying value.

The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that will have a major effect on its operations and financial results. The results of discontinued operations are reported as (Loss) income from discontinued operations, net of tax in the Consolidated Statements of Comprehensive Income for the current and prior periods commencing in the period in which the held for sale criteria are met. (Loss) income from discontinued operations, net of tax includes direct costs attributable to the divested business and excludes any cost allocations associated with any shared or corporate functions unless otherwise dedicated to the divested business. (Loss) income from discontinued operations, net of tax will include any gain or loss recognized upon disposition or from adjustment of the carrying amount to fair value less costs to sell while classified as held for sale.

Transactions between the businesses held for sale and businesses held for use that are expected to continue after the disposal are not eliminated in order to appropriately reflect the continuing operations as well as the activity to be disposed of. Interest costs are included as a component of (Loss) income from discontinued operations, net of tax for debt specifically attributable to the discontinued operation or debt that is obligated to be repaid in connection with the completion of the divestiture. Activity within comprehensive income directly associated with a divested business is not realized as a component of (Loss) income from discontinued operations, net of tax until completion of the sale or disposition.

Cash and cash equivalents

All short-term, highly liquid investments having original maturities of three months or less are considered to be cash equivalents.

Short-term investments

As part of the Company’s commitment to using proceeds from the sale of the Global Products business, the Company invested in U.S. treasury securities classified as short-term investments, which had maturities of greater than three months and less than one year. Valvoline determined the classification of these securities as trading, available for sale or held-to-maturity at the time of purchase and evaluated those determinations at each balance sheet date the investments were held for. The Company’s short-term investments were stated at amortized cost within the Consolidated Balance Sheet and classified as held-to-maturity based on the intent and ability to hold to these investments to maturity. These investments were held to maturity and used to complete the tender offer to repurchase the 4.250% senior unsecured notes due 2030 with an aggregate principal amount of $600.0 million (the “2030 Notes”) in fiscal 2024, which was the final step in utilizing the net proceeds from the sale of Global Products.

Receivables and allowance for credit losses

The majority of Valvoline’s sales are tendered at the point of service in its retail stores, and its receivables are generally limited to those with its fleet customers and independent store operators, in addition to credit card receivables. Valvoline recognizes a receivable within its Consolidated Balance Sheets once control is transferred, typically upon the completion of services, 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 generally have a right to consideration in advance of control transfer, the Company has no contract assets or material contract liabilities.

Valvoline recognizes credit losses following the 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 comprised of purchased finished goods that are carried at the lower of cost or net realizable value using the weighted average cost method. 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, 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 seven to 20 years and machinery and equipment typically have five to seven year useful lives, dependent on the nature and utility of the assets. Building and leasehold improvements are depreciated over the shorter of their estimated useful lives or the period from which the date the assets are placed in service to the end of the lease term, as appropriate. Depreciation expense is recognized in Cost of sales or Selling, general and administrative expenses within the Consolidated Statements of Comprehensive Income based on the function the underlying asset supports. Property, plant and equipment is relieved of the cost and related accumulated depreciation when assets are disposed of or otherwise retired. Gains or losses on the dispositions of property, plant and equipment are included in the Consolidated Statements of Comprehensive Income and generally reported in Other income, net.

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).

Cloud computing arrangements

The Company periodically enters into cloud computing arrangements to access and use third-party software in support of its operations. The Company assesses its cloud computing arrangements to determine whether the contract meets the definition of a service contract or conveys a software license. For cloud computing arrangements that meet the definition of a service contract, the Company capitalizes implementation costs incurred during the application development stage and amortizes the costs on a straight-line basis over the term of the service contract.

Leases

Certain of the properties Valvoline utilizes, including its retail service center stores, offices, and storage 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, 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 five to 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.

Lessor arrangements

Valvoline is the lessor in arrangements to sublease and lease certain properties and equipment. Sublease income is recognized in Other income, net within the Company’s Consolidated Statements of Comprehensive Income.

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 fair values 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 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 by monitoring for the existence of potential impairment indicators throughout the fiscal year. This assessment consists of evaluating a reporting unit’s fair value compared to its carrying value. Reporting units may be operating segments as a whole or an operation one level below an operating segment,

referred to as a component. Goodwill is assigned to reporting units for purposes of impairment testing based upon the relative fair value of the asset to reporting units. The Company determined that it has one reporting unit in fiscal 2024.

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 Market Capitalization Method utilizing the Company’s stock price to derive fair value and 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.

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.

Pension and other postretirement benefit plans

Valvoline sponsors defined benefit pension and other postretirement plans in the U.S. 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. 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. All

components of net periodic benefit income or costs 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.

The Company guaranteed future lease commitments related to certain facilities in connection with the sale and disposal of certain retail stores and the Global Products business. Valvoline is obligated to perform if the buyers of the divested businesses default on the leases under the guarantees, which extend through 2037. The undiscounted maximum potential future payments under the guarantees were $32.8 million as of September 30, 2024. The Company has not recorded a liability for these guarantees as the likelihood of making future payments is considered remote.

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 services

Valvoline generates all revenues from contracts with customers, primarily as a result of delivery of automotive maintenance services through the following two principal activities: (i) company-operated service center operations and (ii) independent service center operations. Valvoline’s revenues from delivering preventive vehicle maintenance and related services are from end consumers, independent franchisees and operators, and other end customers, including fleet managers and others that require service solutions to address light and medium-duty vehicles.

Valvoline's net revenues are predominantly derived at a point in time with approximately 95% recognized either through services delivered at company-operated service centers or fees for arranging product supply to independent store operators. The remainder of the Company's sales generally relate to 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)	2024		2023		2022
Net revenues transferred at a point in time	$	1,543.0	$	1,375.0	$	1,177.2
Franchised revenues transferred over time	76.0		68.5		58.9
Net revenues	$	1,619.0	$	1,443.5	$	1,236.1

Below is a summary of the key considerations for Valvoline's material revenue-generating activities:

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 at the completion of product and service delivery upon the transfer of control and benefits from the performance obligations to the customer, which generally coincides with the tender of payment at the point of sale.

Non-company operated service center operations

The primary performance obligations related to independent service center operations include arrangement of product supply 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 renewal or store opening 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 agreements 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.

Valvoline also receives development fees from franchisees in exchange for exclusive rights to territory development arrangements. In exchange for these fees, the Company provides its franchisees with assistance in identifying potential sites and targets within designated territories, in addition to operational support for new service center stores. The Company defers these fees as a contract liability and recognizes them as revenue on a straight-line basis over the term of the underlying agreements. All upfront fees from franchisees and the related contract liabilities are not material to any periods presented herein.

Valvoline is the agent in arranging product supply for its independent operators as the Company has no control of the products prior to transfer to the customer. Accordingly, revenue is recognized on a net basis for the fees charged for this service. The Company determines the point in time at which service delivery occurs 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 from the supplier to the independent operators.

Customer payment terms vary by customer and are generally 30 to 60 days after service 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.

Revenue disaggregation

The following table summarizes net revenues by category for the years ended September 30:


(In millions)	2024		2023		2022

Oil changes and related fees	$	1,188.7	$	1,074.3	$	913.4
Non-oil changes and related fees	350.1		297.6		248.3
Franchise fees and other (a)	80.2		71.6		74.4
Total	$	1,619.0	$	1,443.5	$	1,236.1

(a)Includes net revenues of $0.2 million, and $11.6 million for the years ended September 30, 2023, and 2022, respectively, associated with suspended operations of a former Global Products business that was sold in fiscal 2024.

The following presents net revenues by geographic area where services are delivered for the years ended September 30:



(In millions)	2024		2023		2022
United States	$	1,571.8	$	1,407.7	$	1,191.8
Non-U.S. (a)	47.2		35.8		44.3
Total	$	1,619.0	$	1,443.5	$	1,236.1

(a)Includes the amounts noted above in each fiscal year of net revenues associated with suspended operations of a former Global Products business which was not included in the sale.

Valvoline did not have a single customer that represented 10% or more of consolidated net revenues in fiscal 2024, 2023 or 2022.

Variable consideration

The nature of Valvoline’s transactions with its customers often gives rise to variable consideration consisting of customer discounts, incentives or rebates. The Company determines transaction price as the amount of consideration it expects to be entitled to in exchange for fulfilling the performance obligations, including variable consideration to the extent it is probable that a significant future reversal will not occur. 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 and similar programs. Variable consideration is reassessed at each reporting date and adjustments are made, when necessary.

The reduction of revenues due to customer incentives was $222.6 million, $190.3 million, and $176.5 million in the Consolidated Statements of Comprehensive Income for the years ended September 30, 2024, 2023, and 2022, respectively. Reserves for these customer programs and incentives were $3.4 million, $3.2 million, and $2.8 million as of September 30, 2024, 2023, and 2022 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 revenue commensurate with the transfer of control to the customer.

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.

Cost of sales

Cost of sales are expensed as incurred and include product, labor and benefits, store operating and occupancy, and depreciation expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses are recognized as incurred and include sales and marketing costs, advertising, customer support, and other corporate and administrative costs.