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(In millions) | June 30 2017 | September 30 2016 | |||||
Trade and other accounts receivable | $ | 408 | $ | 368 | |||
Less: Allowance for doubtful accounts | (5 | ) | (5 | ) | |||
$ | 403 | $ | 363 |
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(In millions) | June 30 2017 | September 30 2016 | |||||
Finished products | $ | 186 | $ | 149 | |||
Raw materials, supplies and work in process | 28 | 21 | |||||
LIFO reserves | (30 | ) | (29 | ) | |||
Obsolete inventory reserves | (3 | ) | (2 | ) | |||
$ | 181 | $ | 139 |
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(In millions) | Core North America | Quick Lubes | International | Total | |||||||||||
September 30, 2016 | $ | 89 | $ | 135 | $ | 40 | $ | 264 | |||||||
Acquisitions (a) | — | 65 | — | 65 | |||||||||||
June 30, 2017 | $ | 89 | $ | 200 | $ | 40 | $ | 329 | |||||||
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(In millions) | June 30 2017 | September 30 2016 | ||||||
Senior Notes | $ | 375 | $ | 375 | ||||
Term Loan A | 289 | 375 | ||||||
Accounts Receivable Securitization | 75 | — | ||||||
Revolver | — | — | ||||||
Other (a) | (6 | ) | (7 | ) | ||||
Total debt | $ | 733 | $ | 743 | ||||
Short-term debt | 75 | — | ||||||
Current portion of long-term debt | 15 | 19 | ||||||
Long-term debt | $ | 643 | $ | 724 | ||||
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Other postretirement benefits | ||||||||||||||||
Pension benefits | ||||||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Three months ended June 30 | ||||||||||||||||
Service cost | $ | 1 | $ | 3 | $ | — | $ | — | ||||||||
Interest cost | 22 | 6 | — | — | ||||||||||||
Expected return on plan assets | (36 | ) | (9 | ) | — | — | ||||||||||
Amortization of prior service credit | — | — | (3 | ) | — | |||||||||||
Net periodic benefit income | $ | (13 | ) | $ | — | $ | (3 | ) | $ | — | ||||||
Nine months ended June 30 | ||||||||||||||||
Service cost | $ | 2 | $ | 7 | $ | — | $ | — | ||||||||
Interest cost | 65 | 18 | 1 | 1 | ||||||||||||
Expected return on plan assets | (109 | ) | (27 | ) | — | — | ||||||||||
Amortization of prior service credit | — | — | (9 | ) | (2 | ) | ||||||||||
Curtailment gain | — | (12 | ) | — | (6 | ) | ||||||||||
Actuarial loss (gain) | — | 22 | (8 | ) | 1 | |||||||||||
Net periodic benefit (income) costs | $ | (42 | ) | $ | 8 | $ | (16 | ) | $ | (6 | ) |
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Three months ended | Nine months ended | |||||||
June 30 | June 30 | |||||||
(In millions) | 2017 | 2017 | ||||||
SARs | $ | 1 | $ | 2 | ||||
Nonvested stock awards | 1 | 4 | ||||||
Performance awards | 1 | 1 | ||||||
Total stock-based compensation expense, pre-tax | 3 | 7 | ||||||
Tax benefit | (1 | ) | (3 | ) | ||||
Total stock-based compensation expense, net of tax | $ | 2 | $ | 4 | ||||
Weighted average fair value per share of SARs | $ | 7.44 | ||
Assumptions (weighted average) | ||||
Risk-free interest rate (a) | 1.7 | % | ||
Expected dividend yield | 0.9 | % | ||
Expected volatility (b) | 22.8 | % | ||
Expected term (in years) (c) | 7.45 | |||
Number of Shares (in thousands) | Weighted Average Exercise Price Per Share | Weighted Average Remaining Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||
SARs outstanding at September 30, 2016 | — | $ | — | 0 years | $ | — | ||||||
Conversion of Ashland awards to awards in Valvoline stock | 1,896 | 17.53 | ||||||||||
Exercised (a) | (14 | ) | 19.22 | — | ||||||||
SARs outstanding at June 30, 2017 | 1,882 | $ | 17.52 | 7.4 years | $ | 12 | ||||||
SARs exercisable at June 30, 2017 | 1,007 | $ | 14.97 | 5.9 years | $ | 9 | ||||||
Number of Shares (in thousands) | Weighted Average Modified Grant Date Fair Value per Share | ||||||
Outstanding balance at September 30, 2016 | — | $ | — | ||||
Granted | 69 | 22.76 | |||||
Conversion of Ashland service-based awards to awards in Valvoline stock | 464 | 22.65 | |||||
Vested and distributed | (3 | ) | 23.66 | ||||
Outstanding shares at June 30, 2017 | 530 | $ | 22.66 | ||||
Assumptions (weighted average) | |||
Risk-free interest rate (a) | 1.2 | % | |
Expected dividend yield | 1.0 | % | |
Expected volatility (b) | 21.0 | % | |
Expected term (in years) | 1.9 |
Number of Shares (in thousands) | Weighted Average Modified Grant Date Fair Value per Share | ||||||
Outstanding balance at September 30, 2016 | — | $ | — | ||||
Conversion of Ashland performance-based awards to awards in Valvoline stock | 258 | 18.44 | |||||
Outstanding shares at June 30, 2017 | 258 | $ | 18.44 | ||||
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Declaration Date | Record Date | Payment Date | Dividend Per Common Share | Cash Outlay (in millions) | Cash Paid to Ashland (in millions) | |||||||||||
November 15, 2016 | December 5, 2016 | December 20, 2016 | $ | 0.049 | $ | 10 | $ | 8 | ||||||||
January 24, 2017 | March 1, 2017 | March 15, 2017 | $ | 0.049 | $ | 10 | $ | 8 | ||||||||
April 27, 2017 | June 1, 2017 | June 15, 2017 | $ | 0.049 | $ | 10 | $ | — | ||||||||
2017 | 2016 | ||||||||||||||||||||||
(In millions) | Before tax | Tax benefit (expense) | Net of tax | Before tax | Tax benefit (expense) | Net of tax | |||||||||||||||||
Three months ended June 30 | |||||||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Unrealized translation gain (loss) | $ | 6 | $ | — | $ | 6 | $ | (8 | ) | $ | — | $ | (8 | ) | |||||||||
Pension and other postretirement obligation adjustment: | |||||||||||||||||||||||
Amortization of unrecognized prior service credits included in net income (a) | (3 | ) | 1 | (2 | ) | — | — | — | |||||||||||||||
Total other comprehensive income (loss) | $ | 3 | $ | 1 | $ | 4 | $ | (8 | ) | $ | — | $ | (8 | ) | |||||||||
Nine months ended June 30 | |||||||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Unrealized translation gain (loss) | $ | 3 | $ | — | $ | 3 | $ | (3 | ) | $ | — | $ | (3 | ) | |||||||||
Pension and other postretirement obligation adjustment: | |||||||||||||||||||||||
Amortization of unrecognized prior service credits included in net income (a) | (9 | ) | 3 | (6 | ) | — | — | — | |||||||||||||||
Total other comprehensive (loss) income | $ | (6 | ) | $ | 3 | $ | (3 | ) | $ | (3 | ) | $ | — | $ | (3 | ) | |||||||
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Three months ended June 30 | Nine months ended June 30 | |||||||
(In millions) | 2016 | 2016 | ||||||
Information technology | $ | 5 | $ | 15 | ||||
Financial and accounting | 4 | 10 | ||||||
Building services | 2 | 8 | ||||||
Legal and environmental | 2 | 5 | ||||||
Human resources | 2 | 4 | ||||||
Shared services | — | 1 | ||||||
Other general and administrative | 4 | 17 | ||||||
Total | $ | 19 | $ | 60 |
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(In millions) | Three months ended June 30 | Nine months ended June 30 | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales | |||||||||||||||
Core North America | $ | 258 | $ | 251 | $ | 748 | $ | 740 | |||||||
Quick Lubes | 139 | 119 | 394 | 332 | |||||||||||
International | 137 | 129 | 395 | 363 | |||||||||||
$ | 534 | $ | 499 | $ | 1,537 | $ | 1,435 | ||||||||
Operating Income | |||||||||||||||
Core North America | $ | 48 | $ | 58 | $ | 156 | $ | 170 | |||||||
Quick Lubes | 34 | 32 | 94 | 84 | |||||||||||
International | 18 | 20 | 56 | 53 | |||||||||||
Total operating segments | $ | 100 | $ | 110 | $ | 306 | $ | 307 | |||||||
Unallocated and other (a) | 4 | 3 | 35 | 6 | |||||||||||
$ | 104 | $ | 113 | $ | 341 | $ | 313 | ||||||||
(a) | Unallocated and other includes a gain of $8 million during the nine months ended June 30, 2017 and a loss of $5 million during the nine months ended June 30, 2016 related to pension and other postretirement plan actuarial remeasurements. Unallocated and other also includes $2 million of benefit in the three and nine months ended June 30, 2017 related to the tax indemnity with Ashland, as well as Separation costs of $15 million and $27 million for the three and nine months ending June 30, 2017, respectively. |
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(In millions) | June 30 2017 | September 30 2016 | |||||
Trade and other accounts receivable | $ | 408 | $ | 368 | |||
Less: Allowance for doubtful accounts | (5 | ) | (5 | ) | |||
$ | 403 | $ | 363 |
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(In millions) | June 30 2017 | September 30 2016 | |||||
Finished products | $ | 186 | $ | 149 | |||
Raw materials, supplies and work in process | 28 | 21 | |||||
LIFO reserves | (30 | ) | (29 | ) | |||
Obsolete inventory reserves | (3 | ) | (2 | ) | |||
$ | 181 | $ | 139 |
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(In millions) | Core North America | Quick Lubes | International | Total | |||||||||||
September 30, 2016 | $ | 89 | $ | 135 | $ | 40 | $ | 264 | |||||||
Acquisitions (a) | — | 65 | — | 65 | |||||||||||
June 30, 2017 | $ | 89 | $ | 200 | $ | 40 | $ | 329 | |||||||
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(In millions) | June 30 2017 | September 30 2016 | ||||||
Senior Notes | $ | 375 | $ | 375 | ||||
Term Loan A | 289 | 375 | ||||||
Accounts Receivable Securitization | 75 | — | ||||||
Revolver | — | — | ||||||
Other (a) | (6 | ) | (7 | ) | ||||
Total debt | $ | 733 | $ | 743 | ||||
Short-term debt | 75 | — | ||||||
Current portion of long-term debt | 15 | 19 | ||||||
Long-term debt | $ | 643 | $ | 724 | ||||
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Other postretirement benefits | ||||||||||||||||
Pension benefits | ||||||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Three months ended June 30 | ||||||||||||||||
Service cost | $ | 1 | $ | 3 | $ | — | $ | — | ||||||||
Interest cost | 22 | 6 | — | — | ||||||||||||
Expected return on plan assets | (36 | ) | (9 | ) | — | — | ||||||||||
Amortization of prior service credit | — | — | (3 | ) | — | |||||||||||
Net periodic benefit income | $ | (13 | ) | $ | — | $ | (3 | ) | $ | — | ||||||
Nine months ended June 30 | ||||||||||||||||
Service cost | $ | 2 | $ | 7 | $ | — | $ | — | ||||||||
Interest cost | 65 | 18 | 1 | 1 | ||||||||||||
Expected return on plan assets | (109 | ) | (27 | ) | — | — | ||||||||||
Amortization of prior service credit | — | — | (9 | ) | (2 | ) | ||||||||||
Curtailment gain | — | (12 | ) | — | (6 | ) | ||||||||||
Actuarial loss (gain) | — | 22 | (8 | ) | 1 | |||||||||||
Net periodic benefit (income) costs | $ | (42 | ) | $ | 8 | $ | (16 | ) | $ | (6 | ) |
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Three months ended | Nine months ended | |||||||
June 30 | June 30 | |||||||
(In millions) | 2017 | 2017 | ||||||
SARs | $ | 1 | $ | 2 | ||||
Nonvested stock awards | 1 | 4 | ||||||
Performance awards | 1 | 1 | ||||||
Total stock-based compensation expense, pre-tax | 3 | 7 | ||||||
Tax benefit | (1 | ) | (3 | ) | ||||
Total stock-based compensation expense, net of tax | $ | 2 | $ | 4 | ||||
Assumptions (weighted average) | |||
Risk-free interest rate (a) | 1.2 | % | |
Expected dividend yield | 1.0 | % | |
Expected volatility (b) | 21.0 | % | |
Expected term (in years) | 1.9 |
Weighted average fair value per share of SARs | $ | 7.44 | ||
Assumptions (weighted average) | ||||
Risk-free interest rate (a) | 1.7 | % | ||
Expected dividend yield | 0.9 | % | ||
Expected volatility (b) | 22.8 | % | ||
Expected term (in years) (c) | 7.45 | |||
Number of Shares (in thousands) | Weighted Average Exercise Price Per Share | Weighted Average Remaining Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||
SARs outstanding at September 30, 2016 | — | $ | — | 0 years | $ | — | ||||||
Conversion of Ashland awards to awards in Valvoline stock | 1,896 | 17.53 | ||||||||||
Exercised (a) | (14 | ) | 19.22 | — | ||||||||
SARs outstanding at June 30, 2017 | 1,882 | $ | 17.52 | 7.4 years | $ | 12 | ||||||
SARs exercisable at June 30, 2017 | 1,007 | $ | 14.97 | 5.9 years | $ | 9 | ||||||
Number of Shares (in thousands) | Weighted Average Modified Grant Date Fair Value per Share | ||||||
Outstanding balance at September 30, 2016 | — | $ | — | ||||
Granted | 69 | 22.76 | |||||
Conversion of Ashland service-based awards to awards in Valvoline stock | 464 | 22.65 | |||||
Vested and distributed | (3 | ) | 23.66 | ||||
Outstanding shares at June 30, 2017 | 530 | $ | 22.66 | ||||
Number of Shares (in thousands) | Weighted Average Modified Grant Date Fair Value per Share | ||||||
Outstanding balance at September 30, 2016 | — | $ | — | ||||
Conversion of Ashland performance-based awards to awards in Valvoline stock | 258 | 18.44 | |||||
Outstanding shares at June 30, 2017 | 258 | $ | 18.44 | ||||
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Declaration Date | Record Date | Payment Date | Dividend Per Common Share | Cash Outlay (in millions) | Cash Paid to Ashland (in millions) | |||||||||||
November 15, 2016 | December 5, 2016 | December 20, 2016 | $ | 0.049 | $ | 10 | $ | 8 | ||||||||
January 24, 2017 | March 1, 2017 | March 15, 2017 | $ | 0.049 | $ | 10 | $ | 8 | ||||||||
April 27, 2017 | June 1, 2017 | June 15, 2017 | $ | 0.049 | $ | 10 | $ | — | ||||||||
2017 | 2016 | ||||||||||||||||||||||
(In millions) | Before tax | Tax benefit (expense) | Net of tax | Before tax | Tax benefit (expense) | Net of tax | |||||||||||||||||
Three months ended June 30 | |||||||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Unrealized translation gain (loss) | $ | 6 | $ | — | $ | 6 | $ | (8 | ) | $ | — | $ | (8 | ) | |||||||||
Pension and other postretirement obligation adjustment: | |||||||||||||||||||||||
Amortization of unrecognized prior service credits included in net income (a) | (3 | ) | 1 | (2 | ) | — | — | — | |||||||||||||||
Total other comprehensive income (loss) | $ | 3 | $ | 1 | $ | 4 | $ | (8 | ) | $ | — | $ | (8 | ) | |||||||||
Nine months ended June 30 | |||||||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Unrealized translation gain (loss) | $ | 3 | $ | — | $ | 3 | $ | (3 | ) | $ | — | $ | (3 | ) | |||||||||
Pension and other postretirement obligation adjustment: | |||||||||||||||||||||||
Amortization of unrecognized prior service credits included in net income (a) | (9 | ) | 3 | (6 | ) | — | — | — | |||||||||||||||
Total other comprehensive (loss) income | $ | (6 | ) | $ | 3 | $ | (3 | ) | $ | (3 | ) | $ | — | $ | (3 | ) | |||||||
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Three months ended June 30 | Nine months ended June 30 | |||||||
(In millions) | 2016 | 2016 | ||||||
Information technology | $ | 5 | $ | 15 | ||||
Financial and accounting | 4 | 10 | ||||||
Building services | 2 | 8 | ||||||
Legal and environmental | 2 | 5 | ||||||
Human resources | 2 | 4 | ||||||
Shared services | — | 1 | ||||||
Other general and administrative | 4 | 17 | ||||||
Total | $ | 19 | $ | 60 |
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(In millions) | Three months ended June 30 | Nine months ended June 30 | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales | |||||||||||||||
Core North America | $ | 258 | $ | 251 | $ | 748 | $ | 740 | |||||||
Quick Lubes | 139 | 119 | 394 | 332 | |||||||||||
International | 137 | 129 | 395 | 363 | |||||||||||
$ | 534 | $ | 499 | $ | 1,537 | $ | 1,435 | ||||||||
Operating Income | |||||||||||||||
Core North America | $ | 48 | $ | 58 | $ | 156 | $ | 170 | |||||||
Quick Lubes | 34 | 32 | 94 | 84 | |||||||||||
International | 18 | 20 | 56 | 53 | |||||||||||
Total operating segments | $ | 100 | $ | 110 | $ | 306 | $ | 307 | |||||||
Unallocated and other (a) | 4 | 3 | 35 | 6 | |||||||||||
$ | 104 | $ | 113 | $ | 341 | $ | 313 | ||||||||
(a) | Unallocated and other includes a gain of $8 million during the nine months ended June 30, 2017 and a loss of $5 million during the nine months ended June 30, 2016 related to pension and other postretirement plan actuarial remeasurements. Unallocated and other also includes $2 million of benefit in the three and nine months ended June 30, 2017 related to the tax indemnity with Ashland, as well as Separation costs of $15 million and $27 million for the three and nine months ending June 30, 2017, respectively. |
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