10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to            

Commission File Number: 001-36477

NEXEO SOLUTIONS, INC.

(Exact name of registrant as specified in its charter) 

Delaware	46-5188282
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3 Waterway Square Place, Suite 1000 The Woodlands, Texas	77380
(Address of principal executive offices)	(Zip Code)

(281) 297-0700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YesýNoo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YesýNoo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filero	Accelerated filerx
Non-accelerated filero (Do not check if a smaller reporting company)	Smaller reporting companyo
	Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YesoNoý

As of February 2, 2018, there were 89,741,309 shares of the Company’s common stock outstanding.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION
Forward-Looking Statements		6
Item 1. Financial Statements (unaudited)		7
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Operations	8
	Condensed Consolidated Statements of Comprehensive Income (Loss)	9
	Condensed Consolidated Statement of Equity	10
	Condensed Consolidated Statements of Cash Flows	11
	Notes to Condensed Consolidated Financial Statements	12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		39
Item 3. Quantitative and Qualitative Disclosures About Market Risk		52
Item 4. Controls and Procedures		54
PART II—OTHER INFORMATION		55
Item 1. Legal Proceedings		55
Item 1A. Risk Factors		56
Item 2. Unregistered Sales of Equity Securities And Use of Proceeds		56
Item 3. Defaults Upon Senior Securities		56
Item 4. Mine Safety Disclosures		56
Item 5. Other Information		56
Item 6. Exhibits		57

2

Glossary

The following terms and abbreviations appearing in the text of this report have the meanings indicated below.

2016 LTIP	The Nexeo Solutions, Inc. 2016 Long Term Incentive Plan
ABL Borrowers	Holdings, Sub Holding and Solutions together with Nexeo Solutions Canada Corporation
ABL Facility	The asset-based credit facility pursuant to that certain asset-based credit agreement by and among the ABL Borrowers, Bank of America, N.A., as administrative agent and the lenders party thereto and the other parties thereto
ADA Purchase Agreement	The Ashland Distribution Acquisition purchase agreement
ASC	The FASB Accounting Standards Codification
Ashland	Ashland Global Holdings Inc. and its subsidiaries
ASU	Accounting Standards Update issued by the FASB
Blocker	TPG Accolade Delaware, L.P.
Blocker Merger	The merger of Blocker Merger Sub into Blocker on June 9, 2016, immediately following the Company Merger, with Blocker continuing as the surviving entity
Blocker Merger Sub	Neon Acquisition Company LLC, which was a wholly-owned subsidiary of WLRH at the time of the Blocker Merger
Business Combination	The business combination between WLRH and Holdings pursuant to the Merger Agreement, which was consummated on the Closing Date
CAD	Canadian dollar
Canadian Tranche	Canadian tranche of the ABL Facility
Closing Date	June 9, 2016
Company / Successor	Nexeo Solutions, Inc. (f/k/a WL Ross Holding Corp.) and its consolidated subsidiaries
Company Merger	The merger of Company Merger Sub with and into Holdings consummated on June 9, 2016, with Holdings continuing as the surviving entity
Company Merger Sub	Neon Holding Company LLC, which was a wholly-owned subsidiary of WLRH at the time of the Company Merger
Credit Facilities	The ABL Facility and the Term Loan Facility, collectively
Deferred Cash Consideration	The deferred payment to be made in cash to the Selling Equityholders pursuant to the Merger Agreement, where such deferred cash payments will generally be in an amount equal to the Company’s prevailing stock price at the time that the Company pays such deferred cash payments multiplied by the number of Excess Shares or as otherwise set forth in the Merger Agreement
Distribution Business	The global distribution business purchased by the Predecessor from Ashland
DTSC	California Department of Toxic Substances Control
EBITDA	Earnings before interest, tax, depreciation and amortization
EMEA	Europe, Middle East and Africa
ERP	Enterprise resource planning
Excess Shares	The 5,178,642 shares of Company common stock used to calculate the Deferred Cash Consideration payable to the Selling Equityholders pursuant to the Merger Agreement
Exchange Act	U.S. Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FILO Tranche	$30.0 million tranche within the ABL Facility for non-Canadian foreign subsidiaries to issue loans and letters of credit
Founder Shares	The 12,506,250 shares of Company common stock issued to the Sponsor at the time of the IPO
GDP	Gross domestic product
Holdings	Nexeo Solutions Holdings, LLC

3

IPO	The initial public offering of WLRH, consummated on June 11, 2014
Merger Agreement	Agreement and Plan of Merger, as amended, by and among WLRH, Blocker Merger Sub, Company Merger Sub, Holdings, Blocker, and New Holdco dated as of March 21, 2016
Mergers	The Company Merger and the Blocker Merger, collectively
Montgomery Lease	The Company’s leased facility in Montgomery, Illinois commencing in the first fiscal quarter of 2017
NASDAQ	NASDAQ Stock Market
New Holdco	Nexeo Holdco, LLC
NLRB	U.S. National Labor Relations Board
Other Retained Remediation Liabilities	Under the ADA Purchase Agreement, Ashland agreed to retain other environmental remediation liabilities unknown at the closing of the Ashland Distribution Acquisition related to the Distribution Business for which Ashland receives notice prior to the fifth anniversary of the closing
Peso	Mexican peso
Predecessor	Holdings and its subsidiaries for the periods prior to the Closing Date
PSLRA	U.S. Private Securities Litigation Reform Act of 1995
PSU	Performance share unit issued under the 2016 LTIP
RCRA	U.S. Resource Conservation and Recovery Act
Retained Remediation Liabilities	Under the ADA Purchase Agreement, collectively, the Retained Specified Remediation Liabilities and the Other Retained Remediation Liabilities
RMB	Chinese renminbi
RSU	Restricted stock unit issued under the 2016 LTIP
Ryder	Ryder Truck Rental, Inc.
Ryder Lease	Lease agreement entered into by and between the Predecessor and Ryder in May 2015 for certain transportation equipment
SAFE	People’s Republic of China State Administration of Foreign Exchange
SEC	U.S. Securities and Exchange Commission
Secured Net Leverage Ratio	The ratio of Consolidated Total Indebtedness divided by EBITDA (terms as defined in the Term Loan Facility agreement)
Securities Act	U.S. Securities Act of 1933, as amended
Selling Equityholders	The holders of equity interests in Holdings (other than Blocker) and the holders of equity interests in Blocker, in each case, as of the time immediately prior to the Business Combination
Solutions	Nexeo Solutions, LLC
Sponsor	WL Ross Sponsor LLC, the sponsor entity of WLRH prior to the Business Combination
Sub Holding	Nexeo Solutions Sub Holding Corp.
Tax Act	The comprehensive tax legislation enacted by the U.S. government on December 22, 2017, commonly referred to as the Tax Cuts and Jobs Act.
Term Loan Facility	Term loan credit facility pursuant to that certain credit agreement by and among Holdings, Solutions, Sub Holding, Bank of America, N.A., as administrative and collateral agent, the other agents party thereto and the lenders party thereto
TLB Amendment No. 2	The amendment to the Term Loan Facility dated December 19, 2017
TPG	TPG Capital, L.P. together with its affiliates, including TPG Accolade
TPG Accolade	TPG Accolade, L.P.
TPG Restricted Stock Grants	Restricted stock agreements entered into between TPG and certain of the Company’s officers and employees
TRA	The Tax Receivable Agreement entered into in connection with the Business Combination, by and between the Company and the Selling Equityholders, dated as of June 9, 2016

4

Ultra Chem Acquisition	The April 3, 2017 acquisition of the equity interests of the Mexico City, Mexico based chemicals distribution business of the Ultra Chem Group pursuant to the Ultra Chem Stock Purchase Agreement
Ultra Chem Closing Date	April 3, 2017
Ultra Chem Group	The Mexico City, Mexico based chemicals distribution business of Ultra Chem, S. de R.L. de C.V. and its related entities
Ultra Chem Stock Purchase Agreement	The Stock Purchase Agreement dated March 9, 2017 related to the purchase of the equity interests of Ultra Chem Group
U.S.	United States of America
USD	U.S. Dollar
U.S. GAAP	U.S. Generally accepted accounting principles
U.S. Tranche	U.S. Tranche of the ABL Facility
WLRH	WL Ross Holding Corp.

5

Forward-Looking Statements

Certain information and statements contained in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of the PSLRA codified at Section 27A of the Securities Act, and Section 21E of the Exchange Act. This statement is included for purposes of complying with the safe harbor provisions of the PSLRA. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical facts. These statements may be identified, without limitation, by the use of forward-looking terminology such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “could,” “would” and similar expressions. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties, and we urge you not to place undue reliance on any forward-looking statements, which reflect management’s current expectations and assumptions about future events, and which are based on currently available information as to the timing and outcome of future events. Certain forward-looking statements are included in this Quarterly Report on Form 10-Q, principally in the section captioned “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on December 7, 2017.

These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Unless otherwise indicated or the context otherwise requires, comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could have material adverse effects on our future results. Our future results will depend upon various other risks and uncertainties, including those described in the section captioned “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on December 7, 2017. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement.

6

PART I

Item 1. Financial Statements

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited, in millions, except share amounts and par value)

	December 31, 2017			September 30, 2017
Current Assets
Cash and cash equivalents	$	41.4		$	53.9
Accounts and notes receivable (net of allowance for doubtful accounts of $2.2 million as of December 31, 2017 and September 30, 2017)	562.0			597.4
Inventories	367.2			315.5
Income taxes receivable	3.2			3.4
Other current assets	21.3			19.8
Total current assets	995.1			990.0
Non-Current Assets
Property, plant and equipment, net	306.8			316.1
Goodwill	703.9			703.0
Other intangible assets, net of amortization	224.8			231.5
Deferred income taxes	2.3			2.3
Other non-current assets	11.6			10.6
Total non-current assets	1,249.4			1,263.5
Total Assets	$	2,244.5		$	2,253.5
Current Liabilities
Short-term borrowings, current portion of long-term debt and capital lease obligations	$	48.4		$	51.1
Accounts payable	325.1			384.2
Accrued expenses and other liabilities	45.8			58.4
Due to related party pursuant to contingent consideration obligations	8.5			12.5
Income taxes payable	3.0			3.2
Total current liabilities	430.8			509.4
Non-Current Liabilities
Long-term debt and capital lease obligations, less current portion, net	852.6			794.0
Deferred income taxes	33.9			34.9
Due to related party pursuant to contingent consideration obligations	108.9			127.7
Other non-current liabilities	9.5			9.9
Total non-current liabilities	1,004.9			966.5
Total Liabilities	1,435.7			1,475.9
Commitments and Contingencies (see Note 13)
Equity
Preferred stock, $0.0001 par value (1,000,000 shares authorized, none issued and outstanding as of December 31, 2017 and September 30, 2017)	—			—
Common stock, $0.0001 par value (300,000,000 shares authorized; 89,753,662 shares issued and 89,741,309 shares outstanding as of December 31, 2017 and 89,353,641 shares issued and 89,344,065 shares outstanding as of September 30, 2017)	—			—
Additional paid-in capital	766.1			764.4
Retained earnings	31.3			4.8
Accumulated other comprehensive income	11.5			8.5
Treasury stock, at cost: 12,353 and 9,576 shares as of December 31, 2017 and September 30, 2017	(0.1		)	(0.1		)
Total equity	808.8			777.6
Total Liabilities and Equity	$	2,244.5		$	2,253.5

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

7

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited, in millions, except share and per share data) 

	Three Months Ended December 31,
	2017			2016
Sales and operating revenues	$	929.6		$	794.8
Cost of sales and operating expenses	822.7			710.4
Gross profit	106.9			84.4
Selling, general and administrative expenses	84.8			74.5
Transaction related costs	0.1			0.8
Change in fair value of contingent consideration obligations	(18.6		)	10.6
Operating income (loss)	40.6			(1.5		)
Other income, net	0.1			2.4
Interest income (expense)
Interest income	0.1			0.1
Interest expense	(13.0		)	(12.0		)
Net income (loss) before income taxes	27.8			(11.0		)
Income tax expense (benefit)	1.3			(2.7		)
Net income (loss) attributable to Nexeo Solutions, Inc.	$	26.5		$	(8.3	)
Net income (loss) per share available to common stockholders
Basic	$	0.35		$	(0.11	)
Diluted	$	0.34		$	(0.11	)
Weighted average number of common shares outstanding
Basic	76,793,518			76,746,168
Diluted	77,139,236			76,746,168

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

8

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, in millions) 

	Three Months Ended December 31,
	2017		2016
Net income (loss)	$	26.5	$	(8.3	)
Unrealized foreign currency translation gain (loss), net of tax (1)	1.1		(12.7		)
Unrealized gain on interest rate hedges, net of tax	1.9		—
Other comprehensive income (loss), net of tax	3.0		(12.7		)
Total comprehensive income (loss), net of tax attributable to Nexeo Solutions, Inc.	$	29.5	$	(21.0	)

⁽¹⁾ Tax effects are not material.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

9

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Statement of Equity

(Unaudited, in millions, except share amounts)

	Common Stock				Treasury Stock				Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
	Shares		Amount		Shares	Amount
Balance at September 30, 2017	89,344,065		$	—	9,576	$	(0.1	)	$	764.4	$	4.8	$	8.5	$	777.6
Issuance of restricted stock	415,867		—		—	—			—		—		—		—
Vesting of restricted stock units	8,162		—		—	—			—		—		—		—
Forfeiture of restricted stock award	(24,008	)	—		—	—			—		—		—		—
Shares associated with employee tax withholding for vesting of certain equity awards	(2,777	)	—		2,777	—			—		—		—		—
Equity-based compensation	—		—		—	—			1.7		—		—		1.7
Comprehensive income:
Net income	—		—		—	—			—		26.5		—		26.5
Other comprehensive income	—		—		—	—			—		—		3.0		3.0
Balance at December 31, 2017	89,741,309		$	—	12,353	$	(0.1	)	$	766.1	$	31.3	$	11.5	$	808.8

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
	Shares	Amount		Shares	Amount
Balance at September 30, 2016	89,286,936	$	—	—	$	—	$	758.9	$	(9.6	)	$	(4.5	)	$	744.8
Equity-based compensation	—	—		—	—		1.4		—			—			1.4
Comprehensive loss:					—
Net loss	—	—		—	—		—		(8.3		)	—			(8.3		)
Other comprehensive loss	—	—		—	—		—		—			(12.7		)	(12.7		)
Balance at December 31, 2016	89,286,936	$	—	—	$	—	$	760.3	$	(17.9	)	$	(17.2	)	$	725.2

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

10

Nexeo Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited, in millions)

	Three Months Ended December 31,
	2017			2016
Cash flows from operations
Net income (loss)	$	26.5		$	(8.3	)
Adjustments to reconcile to cash flows from operations:
Depreciation and amortization	19.5			16.8
Debt issuance costs amortization, debt issuance costs write-offs and original issue discount amortization	1.1			1.0
Provision for bad debt	0.3			(0.4		)
Deferred income taxes	(1.8		)	(4.3		)
Equity-based compensation expense	1.7			1.4
Change in fair value of contingent consideration obligations	(18.6		)	10.6
Gain on sale of property and equipment	—			0.1
Gain related to reimbursements of certain capital expenditures incurred	—			(2.5		)
Changes in assets and liabilities:
Accounts and notes receivable	36.9			15.2
Inventories	(50.5		)	10.1
Other current assets	(1.6		)	(0.6		)
Accounts payable	(60.8		)	(38.6		)
Accrued expenses and other liabilities	(12.6		)	(9.7		)
Changes in other operating assets and liabilities, net	0.7			(0.6		)
Net cash used in operating activities	(59.2		)	(9.8		)
Cash flows from investing activities
Additions to property and equipment	(4.1		)	(6.6		)
Proceeds from the disposal of property and equipment	0.6			—
Proceeds from reimbursement of certain capital expenditures incurred	—			2.8
Cash paid for asset acquisition	—			(5.1		)
Net cash used in investing activities	(3.5		)	(8.9		)
Cash flows from financing activities
Cash paid to TPG related to TRA	(4.2		)	—
Proceeds from short-term debt	27.9			15.9
Repayments of short-term debt	(31.6		)	(14.3		)
Proceeds from issuance of long-term debt	231.7			165.1
Repayments of long-term debt and capital lease obligations	(172.9		)	(161.4		)
Payment of debt issuance costs	(0.8		)	—
Net cash provided by financing activities	50.1			5.3
Effect of exchange rate changes on cash and cash equivalents	0.1			(0.8		)
Decrease in cash and cash equivalents	(12.5		)	(14.2		)
Cash and cash equivalents at the beginning of the period	53.9			47.5
Cash and cash equivalents at the end of the period	$	41.4		$	33.3
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	14.0		$	11.1
Cash paid during the period for taxes (net of refunds)	$	1.6		$	0.7
Supplemental disclosure of non-cash investing activities:
Non-cash capital expenditures	$	1.4		$	16.4
Non-cash intangible assets acquired	$	—		$	3.4
Supplemental disclosure of non-cash financing activities:
Non-cash capital lease obligations, net	$	—		$	13.4

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

11

Nexeo Solutions, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited, currencies in millions, except per share amounts)

1. Basis of Presentation and Nature of Operations

Basis of Presentation

           The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. As such, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments, except as disclosed herein) considered necessary for a fair statement have been included. Results of operations for the three months ended December 31, 2017 are not necessarily indicative of results to be expected for the fiscal year ending September 30, 2018. Quarterly financial data should be read in conjunction with the consolidated financial statements and accompanying notes for the fiscal year ended September 30, 2017 included in the Company's Annual Report on Form 10-K filed with the SEC on December 7, 2017.

           The consolidated financial data as of September 30, 2017 presented in these unaudited condensed consolidated financial statements were derived from the Company’s audited consolidated financial statements, but do not include all disclosures required by U.S. GAAP.

Nature of Operations

The Company is a global distributor of chemicals products in North America and Asia and a global distributor of plastics in North America, EMEA and Asia. In North America, primarily in the U.S., the Company provides on-site and off-site environmental services, including waste collection, recovery, disposal services and recycling. The Company offers its customers products used in a broad cross-section of end markets including household, industrial and institutional, lubricants, performance coatings (including architectural coatings, adhesives, sealants and elastomers), automotive, healthcare, personal care, oil and gas and construction. In connection with the distribution of chemicals products, the Company provides value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. 

2. Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The amendments in this ASU require an entity to measure inventory at the lower of cost or net realizable value, whereas guidance previously required an assessment of market value of inventory, with different possibilities for determining market value. This ASU is effective for fiscal years beginning after December 15, 2016 and interim periods within those years, and early adoption is permitted. The Company adopted this standard as of October 1, 2017, and it did not have a material effect on the Company’s financial position or results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The updated guidance simplifies several aspects of accounting for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. This ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. The Company adopted this standard as of October 1, 2017 and it did not have a material effect on the Company’s financial position or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718). This ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modified award. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications.  The amendments in this ASU will be applied prospectively to awards modified on or after the adoption date. The Company adopted this standard as of October 1, 2017 and it did not have a material effect on the Company’s financial position or results of operations.

12

New Accounting Pronouncements Not Yet Adopted

The Company continues the evaluation of the potential effects on its financial position or results of operations of the accounting pronouncements disclosed in its consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on December 7, 2017, including ASU 2014-09, Revenue from Contracts with Customers, and ASU 2016-02, Leases. With regards to ASU 2014-09, the Company continues to work on the identification, design and implementation of changes to its accounting systems, policies and internal controls to support the recognition and disclosure requirements under the new revenue recognition standard. The Company expects to utilize the modified retrospective method of adoption by recognizing the cumulative effect of the adoption change as an adjustment to beginning of period retained earnings for the first quarter of fiscal 2019.

13

3. Acquisitions

Ultra Chem Acquisition

On April 3, 2017, the Company completed the Ultra Chem Acquisition for $56.7 million, net of cash acquired of $0.5 million, pursuant to the Ultra Chem Stock Purchase Agreement.  Of the purchase price, $9.7 million may remain in escrow for a period of up to five years and relates to indemnification obligations under the Ultra Chem Stock Purchase Agreement. The escrow amount will be released pursuant to the terms of the Ultra Chem Stock Purchase Agreement and related documentation. The Ultra Chem Acquisition was financed with approximately $58.0 million of borrowings under the ABL Facility. There is no contingent consideration related to the Ultra Chem Acquisition.

Preliminary Purchase Price Allocation

The Ultra Chem Acquisition is accounted for under the acquisition method, which requires the Company to perform an allocation of the preliminary purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the preliminary purchase consideration over the estimated fair values is recorded as goodwill. The following table summarizes the Company’s preliminary allocation of the preliminary purchase consideration to assets acquired and liabilities assumed at the Ultra Chem Closing Date:

	Preliminary Purchase Consideration Allocation
Accounts receivable	$	13.7
Inventory	9.1
Other current assets	2.4
Property and equipment	0.4
Customer-related intangible	24.0
Trade name	0.3
Non-compete agreements	3.9
Other non-current assets	2.5
Goodwill	28.0
Total assets acquired	84.3
Short-term borrowings	0.9
Accounts payable	12.1
Other current liabilities	4.1
Deferred tax liability — non-current	8.4
Other non-current liabilities	2.1
Total liabilities assumed	27.6
Net assets acquired	$	56.7

The total purchase consideration allocation above is preliminary as the Company has not yet completed the necessary fair value assessments, including the assessments of inventory, intangible assets, certain assets and liabilities and the related tax impacts associated with these items. Any changes within the measurement period may change the amount of the purchase consideration allocable to goodwill. The fair value and tax impact assessments are to be completed within twelve months of the Ultra Chem Closing Date and could have a material impact on the components of the total purchase consideration allocation.

Transaction costs incurred by the Company associated with the Ultra Chem Acquisition were approximately $0.1 million during the three months ended December 31, 2017, and there were no transaction costs incurred by the Company associated with the Ultra Chem Acquisition during the three months ended December 31, 2016.

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A summary and description of the acquired assets and assumed liabilities fair valued in conjunction with applying the acquisition method of accounting follows:

Accounts Receivable

Accounts and notes receivable consisted of receivables related to the customers of the acquired business, as well as various other miscellaneous receivables. The accounts receivable and other miscellaneous receivables were recorded at their approximate fair value based on expected collections of Ultra Chem. Accordingly, accounts receivable included an adjustment of $1.5 million to reduce gross receivables to their net value after consideration of expected uncollectable amounts at the Ultra Chem Closing Date.

Inventory

Inventory consisted primarily of finished products to be distributed to the acquired business’s customers. The fair value of inventory was established through application of the income approach, using estimates of selling prices and costs such as selling and marketing expenses to be incurred in order to dispose of the finished products and arriving at the future profitability expected to be generated once the inventory is sold (net realizable value). The inventory fair value step up of $1.0 million was recognized in income during the fiscal year ended September 30, 2017, which is included in Cost of sales and operating expenses in the condensed consolidated statement of operations. The Company’s assessment of the fair value of inventory is preliminary, and will be completed within twelve months of the Ultra Chem Closing Date.

Other Current Assets

Other current assets consisted primarily of prepaid expenses and did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value. Other current assets also include indemnification assets recorded in connection with the recognition of tax-related contingent liabilities assumed. The indemnification assets represent the reimbursement the Company would reasonably expect to receive from funds initially held in escrow pursuant to the purchase agreement if the liabilities were asserted by the relevant tax authority.

Property and Equipment

Property and equipment acquired consists primarily of leasehold improvements, computer and office equipment as well as furniture and fixtures. The preliminary purchase price allocation for property and equipment was based on the carrying value of such assets as it was determined to approximate fair value. The Company's assessment of fair value of the property and equipment is preliminary and will be completed within twelve months of the Ultra Chem Closing Date.

Customer-Related Intangible

Customer relationships were valued through the application of the income approach. Under this approach, revenue, operating expenses and other costs associated with existing customers were estimated in order to derive cash flows attributable to the existing customer relationships. The resulting estimated cash flows were then discounted to present value to arrive at the fair value of existing customer relationships as of the valuation date. The value associated with customer relationships will be amortized on a straight-line basis over a ten-year period, which represents the approximate point in the projection period in which a majority of the asset’s cash flows are expected to be realized based on assumed attrition rates. The Company recognized $24.0 million for these intangible assets as part of the preliminary allocation of the purchase consideration. The Company's assessment of the expected future cash flows related to the customer intangibles is preliminary, and will be completed within twelve months of the Ultra Chem Closing Date.

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Trade Name

The "Ultra Chem" trade name was valued through application of the income approach, involving the estimation of likely future sales and an estimated royalty rate reflective of the rate that a market participant would pay to use the "Ultra Chem" name. The fair value of this asset will be amortized on a straight-line basis over a two-year period, estimated based on the period in which the Company would expect a market participant to use the name prior to rebranding. The Company recognized $0.3 million for this intangible asset as part of the preliminary allocation of the purchase consideration. The Company's assessment of the estimated future cash flows from the "Ultra Chem" trade name is preliminary and will be completed within twelve months of the Ultra Chem Closing Date.

Non-Compete Agreements

In connection with the Ultra Chem Acquisition, the former equityholders of the Ultra Chem Group agreed to non-compete agreements. The terms of the non-compete agreements prohibit the equityholders from competing in the chemical distribution space for three years after the Ultra Chem Closing Date. The income approach was used to value the non-compete agreements through a comparative discounted cash flow analysis based on the impact of competition absent these agreements. The Company recognized $3.9 million for this intangible asset as part of the preliminary allocation of the purchase consideration. This intangible is amortized on a straight-line basis over a three-year period. The Company's assessment of the comparative future cash flows associated with the non-compete agreements is preliminary and will be completed within twelve months of the Ultra Chem Closing Date.

Other Non-Current Assets

Other non-current assets acquired represented certain long-term deposits and other assets, which did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value. Other non-current assets also included indemnification assets recorded in connection with the recognition of tax-related contingent liabilities assumed, and the expected value of certain assets pledged as a guarantee to the Ultra Chem Group in connection with transactions with a particular customer. The indemnification assets represent the reimbursement the Company reasonably expects to receive from funds initially held in escrow pursuant to the purchase agreement if the related liabilities were asserted by the relevant tax authority.

Goodwill

Goodwill represents the excess of the total purchase price over the fair value of the underlying net assets, largely arising from synergies expected as a result of the Ultra Chem Acquisition. Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually, absent any indicators of impairment. The Company does not expect any goodwill from the Ultra Chem Acquisition to be deductible for tax purposes. As the fair value assessments of the acquired assets and liabilities are finalized within twelve months of the Ultra Chem Closing Date, the amount of goodwill recognized as of the Ultra Chem Closing Date is subject to change.

Short-Term Borrowings

Short-term borrowings included short-term borrowings of the Ultra Chem Group prior to the Ultra Chem Acquisition, which did not have a fair value adjustment as part of acquisition accounting as their carrying value approximated fair value. As reflected in "—Preliminary Purchase Consideration Allocation" above, the balance was paid off immediately after the closing of the Ultra Chem Acquisition.

Accounts Payable

Accounts payable represented short-term obligations owed to the vendors of the acquired business, which were assumed in the Ultra Chem Acquisition. These obligations did not have a fair value adjustment as part of acquisition accounting as their carrying value approximated fair value.

Other Current Liabilities

Other current liabilities represented primarily accrued expenses, including accrued payroll, certain accrued taxes, the current portion of assumed tax-related contingent liabilities and various other liabilities arising out of the normal operations of the acquired business. The majority of these liabilities did not have a fair value adjustment as their carrying value approximated fair value.

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Other Non-Current Liabilities

Other non-current liabilities represent assumed tax-related contingent liabilities, and the expected value of certain assets pledged as a guarantee to the Ultra Chem Group which would have to be returned to the third party under certain circumstances. The Company's assessment of the fair value of these liabilities is preliminary, and will be completed within twelve months of the Ultra Chem Closing Date.

Deferred Taxes

Deferred tax assets and liabilities are attributable to the difference between the estimated fair values allocated to inventory, property and equipment and identified intangibles acquired for financial reporting purposes and the amounts determined for tax reporting purposes and give rise to temporary differences.  The deferred tax assets and liabilities will reverse in future periods or have reversed as the related tangible and intangible assets are amortized, acquired inventory is sold, or if goodwill is impaired. The estimates of deferred taxes are preliminary as the fair value assessments of the acquired assets and liabilities have not been fully completed.

Impact of the Ultra Chem Acquisition on the Company’s Condensed Consolidated Financial Information

For the three months ended December 31, 2017, the Company’s consolidated sales and operating revenues and net income include $20.6 million and $0.1 million, respectively, related to the operations of the acquired business.

Asset Acquisitions

In December 2016, the Company acquired customer contracts and a customer list. Additionally, in connection with this transaction, the Company entered into a supply agreement and a licensing agreement granting the Company the non-exclusive use of a certain trademark. The total consideration associated with this transaction was $8.5 million, of which $5.1 million was paid at closing. Of the remaining consideration, the Company paid $1.7 million in January 2018 and the remaining $1.7 million will be paid in January 2019. At December 31, 2017, these amounts are included in Accrued expenses and other liabilities and Other non-current liabilities, respectively,on the Company’s condensed consolidated balance sheet. In connection with this transaction, the Company recognized intangible assets totaling $8.5 million which are included in Other intangible assets, net of amortization on the Company’s condensed consolidated balance sheets. The acquired intangible assets will be fully amortized over estimated useful lives ranging between 10 and 13 years.

Unaudited Consolidated Pro Forma Financial Information

The unaudited consolidated pro forma results presented below include the effects of the Ultra Chem Acquisition as if it had occurred as of October 1, 2015, the beginning of the fiscal year prior to the date the Ultra Chem Acquisition occurred.  The unaudited consolidated pro forma results reflect certain adjustments related to this acquisition, primarily reflecting a full period of Ultra Chem Group’s results of operations for each period presented, amortization expense associated with estimates for the acquired intangible assets, the effects of inventory step up from the acquisition, transaction costs, interest expense and income taxes.

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The unaudited consolidated pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the Ultra Chem Acquisition occurred on October 1, 2015.

	Three Months Ended December 31,
	2017		2016
Sales and operating revenues	$	929.6	$	811.8
Operating income (loss)	$	40.7	$	(0.6	)
Net income (loss) from continuing operations	$	26.6	$	(7.9	)
Net income (loss)	$	26.6	$	(7.9	)
Basic net income (loss) per share	$	0.35	$	(0.10	)
Diluted net income (loss) per share	$	0.34	$	(0.10	)
Pro forma weighted average number of common shares outstanding
Basic	76,793,518		76,746,168
Diluted	77,139,236		76,746,168

4. Certain Balance Sheet Information

Cash and Cash Equivalents

Cash and cash equivalents were $41.4 million as of December 31, 2017 and $53.9 million as of September 30, 2017. These amounts included the following:

	December 31, 2017		September 30, 2017
Cash held by foreign subsidiaries	$	37.1	$	36.8
Non-USD denominated currency held by foreign subsidiaries	$	27.7	$	31.1
Currency denominated in RMB	$	7.8	$	8.5

Non-USD denominated currency held by foreign subsidiaries was primarily in euros and RMB. While the RMB is convertible into USD, foreign exchange transactions are subject to approvals from SAFE. The Company does not anticipate any significant adverse impact to overall liquidity from potential limitations on the transfer or conversion of cash and cash equivalents.

Inventories

Inventories at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017		September 30, 2017
Finished products	$	362.5	$	310.6
Supplies	4.7		4.9
Total	$	367.2	$	315.5

The Company’s inventories in the U.S. and Canada are collateral under the Credit Facilities.

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Other Non-Current Assets

Other non-current assets at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017		September 30, 2017
Debt issuance costs of the ABL Facility	$	4.8	$	5.1
Indemnification receivable	1.4		1.4
Deposits	2.7		2.8
Interest rate swap	1.9		0.3
Other	0.8		1.0
Total	$	11.6	$	10.6

Other non-current assets as of December 31, 2017 includes approximately $1.4 million of assets related to indemnification assets associated with the recognition of tax-related contingent liabilities assumed and $0.7 million for the expected value of certain assets pledged as a guarantee to the Ultra Chem Group in connection with transactions with a particular customer. The purchase price allocation of the Ultra Chem Acquisition is preliminary and the initial fair value assessments of these items may change within the twelve month measurement period. See Note 3.

Amortization of debt issuance costs related to the ABL Facility recorded in Interest expense in the condensed consolidated statements of operations was $0.3 million for the three months ended December 31, 2017 and December 31, 2016.

Due to Related Party Pursuant to ContingentConsideration Obligations

Contingent Consideration - Deferred Cash Consideration

The contingent consideration associated with the Deferred Cash Consideration willbe an amount in cash equal to the prevailing price of the Company’s common stock at the time that the Company pays such deferred cash payment multiplied by the number of Excess Shares (5,178,642 Excess Shares as of December 31, 2017).  Based on the terms of the Excess Shares, certain circumstances require the Company to pay all or a portion of the Deferred Cash Consideration to the Selling Equityholders, where such cash amount is calculated as set forth in the Merger Agreement, including (i) where the volume weighted average trading price of the Company’s common stock for any period of 20 trading days in any 30 trading day period exceeds $15.00 per share, and (ii) if any Excess Shares remain on June 30, 2021. If any Excess Shares remain on June 30, 2021, the Company must elect to either (i) within five business days of such date, pay the Selling Equityholders an amount in cash equal to the product of the number of remaining Excess Shares multiplied by the volume weighted-average trading price for the 20 trading day period immediately preceding such date or (ii) use reasonable best efforts to sell such shares to a third party in a primary offering and pay the gross proceeds thereof (less any underwriting discounts and commissions) to the Selling Equityholders. However, to the extent the number of shares issued in such offerings does not equal the full amount of Excess Shares remaining at the time of the offering, the Company’s obligations with respect to any remaining Excess Shares, including the obligation to continue to complete any necessary additional offerings, shall continue.

In order to estimate the fair value of the Deferred Cash Consideration, the Company estimates the value of the Excess Shares using a Monte Carlo simulation model. The estimated fair value of the Deferred Cash Consideration liability was $45.2 million and $35.1 millionas of December 31, 2017 and September 30, 2017, respectively. See Note 9.

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Contingent Consideration - TRA

Concurrent with the completion of the Business Combination, the Company incurred the liability for contingent consideration related to the TRA, which reflects amounts owed to the Selling Equityholders. This liability generally provides for the payment by the Company to the Selling Equityholders of 85% of the net cash savings, if any, in U.S. federal, state and local income taxes that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the Closing Date as a result of (i) certain increases in tax basis resulting from the Company Merger, (ii) certain tax attributes of Holdings existing prior to the Mergers, (iii) net operating losses and certain other tax attributes of Blocker available to the Company as a result of the Blocker Merger and (iv) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, payments the Company makes under the TRA. The Company will retain the benefit of the remaining 15% of the net cash savings, if any. The Company estimated the fair value of the TRA liability based on a discounted cash flow model which incorporates assumptions of projected taxable income, projected income tax liabilities and an estimate of tax benefits expected to be realized as a result of the Business Combination. The current undiscounted cash flows associated with the TRA liability were estimated to be approximately $134.0 million over the time period during which the tax benefits are expected to be realized, currently estimated at over 20 years. The estimated fair value of the TRA liability is $72.2 million and $105.1 million as of December 31, 2017 and September 30, 2017, respectively. See Note 9. The decrease in the liability is reflective of the provisional impact associated with the Tax Act enacted in December 2017 (see Note 15), which lowers the Company’s projected income tax liabilities, the estimate of tax benefits expected to be realized as a result of the Business Combination and the ultimate amount expected to be paid by the Company to the Selling Equityholders.

The amount and timing of any payments due under the TRA will vary depending upon a number of factors, including the amount and timing of the taxable income the Company generates in the future and the U.S. federal, state and local income tax rates then applicable. In addition, payments made under the TRA will give rise to additional tax benefits for the Company and therefore additional potential payments due under the TRA. The term of the TRA commenced upon the consummation of the Mergers and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless the Company exercises its right to terminate the TRA early. If the Company elects to terminate the TRA early, its obligations under the TRA would accelerate and it generally would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by it under the TRA, calculated in accordance with certain valuation assumptions set forth in the TRA.

5. Property, Plant and Equipment

Property, plant and equipment at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017			September 30, 2017
Land	$	51.0		$	51.0
Plants and buildings(1)	107.1			106.5
Machinery and equipment (2)	153.5			152.8
Software and computer equipment	63.9			63.3
Construction in progress	6.0			5.0
Total	381.5			378.6
Less accumulated depreciation (3)	(74.7		)	(62.5		)
Property, plant and equipment, net	$	306.8		$	316.1

⁽¹⁾ Includes $13.7 million related to facilities acquired under capital leases.

⁽²⁾ Includes $27.2 million related to equipment acquired under capital leases.

⁽³⁾ Includes $5.8 million and $4.9 million, respectively, related to facilities and equipment acquired under capital leases.

Depreciation expense recognized on the property, plant and equipment described above was as follows:

	Three Months Ended December 31,
	2017		2016
Depreciation expense	$	12.6	$	11.2

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Included in the carrying value of property, plant and equipment in the Company’s condensed consolidated balance sheets are certain closed facilities located in the U.S., which collectively have a carrying value of $1.1 million as of December 31, 2017 and September 30, 2017. The facilities do not currently meet the criteria for held-for-sale classification; accordingly, they remain classified as held and used.

During the fourth quarter of fiscal year 2017, the Company entered into a purchase agreement to buy land currently leased at one of the Company's distribution centers. The purchase is expected to be finalized during the first half of fiscal year 2019 for approximately $10.8 million.

Facility Lease

As a result of the sale in September 2016 of the Company’s Franklin Park facility to the Illinois Tollway Authority under an eminent domain proceeding, the Company relocated operations to a new leased facility in Montgomery, Illinois. During the three months ended December 31, 2016, the Company recorded a gain of $2.5 million related to capital expenditures incurred in connection with the relocation and reimbursed by the Illinois Tollway Authority, which is included in Other Income on the condensed consolidated statement of operations.

6. Goodwill and Other Intangibles

Goodwill

The following is a progression of goodwill by reportable segment: 

	Chemicals		Plastics		Other		Total
Balance at September 30, 2017	$	362.8	$	276.7	$	63.5	$	703.0
Foreign currency translation	—		0.9		—		0.9
Balance at December 31, 2017	$	362.8	$	277.6	$	63.5	$	703.9

Goodwill amounts by reportable segment at December 31, 2017 include the preliminary allocation of the purchase consideration of the Ultra Chem Acquisition as of the Ultra Chem Closing Date. Accordingly, the amounts allocated to goodwill from the Ultra Chem Acquisition are subject to adjustments to reflect the completion of the purchase price allocation, which will be completed within twelve months of the Ultra Chem Closing Date and could have a material impact on total goodwill and goodwill for the Chemicals reportable segment. See Note 3.

Goodwill Impairment Test

Goodwill is tested for impairment annually as of March 31 and whenever events or circumstances make it more likely than not that an impairment may have occurred. Goodwill is reviewed for impairment at the reporting unit level, or operating segment, for the Company. The Company performed an impairment test as of September 30, 2017, and concluded that goodwill was not impaired. For purposes of the impairment testing of the Company's recognized goodwill, fair value measurements are determined using the income approach, based largely on inputs that are not observable to active markets, which would be deemed Level 3 fair value measurements as defined in Note 9.

The evaluation of goodwill requires the use of estimates about future operating results of each reporting unit to determine its estimated fair value. Changes in forecasted operations can materially affect these estimates, which could materially affect the Company’s results of operations. The estimate of fair value requires significant judgment and is based on management’s fair value estimates on assumptions that are believed to be reasonable; but that are unpredictable and inherently uncertain, including: estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment for the reporting units. There can be no assurance that these estimates and assumptions made for purposes of the goodwill testing as of the time of testing will prove to be accurate. If assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, the Company may be required to record goodwill impairment charges in future periods, whether in connection with future annual impairment testing, or earlier, if an indicator of an impairment is present prior to the next annual evaluation.

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Other Intangible Assets

Definite-lived intangible assets at December 31, 2017 and September 30, 2017 consisted of the following:

		December 31, 2017							September 30, 2017
	Estimated Useful Life (years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer-related	5-13	$	234.9	$	(28.8	)	$	206.1	$	234.6	$	(23.7	)	$	210.9
Supplier-related	10	1.5		(0.2		)	1.3		1.5		(0.1		)	1.4
Trade name	2-10	22.3		(8.4		)	13.9		22.3		(7.0		)	15.3
Below-market leases	1-7	0.7		(0.4		)	0.3		0.7		(0.3		)	0.4
Non-compete agreements	3-10	4.2		(1.0		)	3.2		4.2		(0.7		)	3.5
Total		$	263.6	$	(38.8	)	$	224.8	$	263.3	$	(31.8	)	$	231.5

Amortization expense recognized on the intangible assets described above was as follows:

	Three Months Ended December 31,
	2017		2016
Amortization expense	$	6.9	$	5.6

7. Debt

Short-term borrowings outstanding and the current portion of long-term debt and capital lease obligations at December 31, 2017 and September 30, 2017 are summarized below:

	December 31, 2017		September 30, 2017
Short-term borrowings	$	38.0	$	40.8
Current portion of long-term debt and capital lease obligations	10.4		10.3
Total short-term borrowings and current portion of long-term debt and capital lease obligations, net	$	48.4	$	51.1

Long-term debt outstanding at December 31, 2017 and September 30, 2017 is summarized below:

	December 31, 2017			September 30, 2017
ABL Facility	$	200.2		$	139.3
Term Loan Facility	645.2			646.9
Capital lease obligations (1)	37.0			37.5
Total long-term debt	882.4			823.7
Less: unamortized debt discount (2)	(2.6		)	(2.7		)
Less: debt issuance costs (3)	(16.8		)	(16.7		)
Less: current portion of long-term debt and capital lease obligations	(10.4		)	(10.3		)
Long-term debt and capital lease obligations, less current portion, net	$	852.6		$	794.0

⁽¹⁾  Capital lease obligations exclude executory costs and interest payments associated with the underlying leases. See “Capital Lease Obligations” below.

⁽²⁾  The unamortized debt discount is related to the Term Loan Facility and amortized to interest expense over the life of the instrument using the effective interest rate method.

⁽³⁾  See discussion below under Term Loan Facility and Debt Issuance Cost Amortization.

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Short-Term Borrowings

The Company’s short-term borrowings are associated with the Company’s operations in China and are summarized below:

	Facility Limit		Outstanding Borrowings Balance		Weighted Average Interest Rate on Borrowings		Outstanding LOC and Bankers’ Acceptance Bills		Remaining Availability
December 31, 2017
Bank of America - China (1)	$	24.3	$	24.2	4.4	%	$	—	$	0.1
Bank of Communications - China (2)	23.1		13.8		5.4	%	8.6		0.7
Total	$	47.4	$	38.0			$	8.6	$	0.8
September 30, 2017
Bank of America - China (1)	$	24.3	$	23.8	4.3	%	$	—	$	0.5
Bank of Communications - China (2)	22.5		17.0		5.3	%	5.3		0.2
Total	$	46.8	$	40.8			$	5.3	$	0.7

⁽¹⁾   The borrowing limit of this facility is denominated in USD. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 110% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance. The Company has the ability to provide additional capacity under these lines of credit, if needed.

⁽²⁾ The borrowing limit of this facility is denominated in RMB. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 100% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance.

Long-Term Debt

ABL Facility

The ABL Facility provides for committed revolving credit financing including a U.S. Tranche of up to $505.0 million, a Canadian Tranche of up to the USD equivalent of $40.0 million and a FILO Tranche up to $30.0 million. Provided no default or event of default, the ABL Borrowers have the option to request that the ABL Facility be increased by an aggregate amount, when included with any incremental borrowings issued under the Term Loan Facility, not to exceed $175.0 million.

The weighted average interest rate on borrowings under the ABL Facility was 2.92% at December 31, 2017. The Company had the USD equivalent of $74.2 million in outstanding letters of credit under the ABL Facility at December 31, 2017. The collective credit availability under the U.S. and Canadian Tranches of the ABL Facility was the U.S. equivalent of $211.6 million at December 31, 2017. There was $5.0 million availability under the FILO Tranche at December 31, 2017. The ABL Facility matures on June 9, 2021.

Obligations under the ABL Facility are secured by a first priority lien on all ABL Facility first lien collateral, including eligible inventory and accounts receivable of the ABL Borrowers, and a second priority lien on all Term Loan Facility first lien collateral including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, in each case, subject to certain limitations; provided, that no ABL Facility first lien collateral or Term Loan Facility first lien collateral owned by the Canadian Borrower secure the obligations owing under the U.S. tranche of the ABL Facility. These accounts receivable and inventory totaled $664.6 million in the aggregate as of December 31, 2017.

As of December 31, 2017, the ABL Borrowers were in compliance with the covenants of the ABL Facility.

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Term Loan Facility

The Term Loan Facility provides secured debt financing in an aggregate principal amount of up to $655.0 million and the right, at the Company’s option, to request additional tranches of term loans in an aggregate principal amount, when included with any incremental borrowings issued under the ABL Facility, of up to $175.0 million, plus unlimited additional amounts such that the aggregate principal amount of indebtedness outstanding at the time of incurrence does not cause the Secured Net Leverage Ratio, calculated on a pro forma basis, to exceed 4.1 to 1.0. Availability of such additional tranches of term loans is subject to the absence of any default and, among other things, the receipt of commitments by existing or additional financial institutions.

On December 19, 2017, the Company completed TLB Amendment No. 2 amending the Term Loan Facility. TLB Amendment No. 2 reduced the interest rate margin applicable to outstanding term loans by 50 basis points from 3.75% to 3.25% for LIBOR loans and from 2.75% to 2.25% for base rate loans. TLB Amendment No. 2 also provides for a soft call premium equal to 1% of the amount of the term loans that are subject to certain repricing transactions occurring on or prior to twelve months from the effective date of TLB Amendment No. 2. As a result of TLB Amendment No. 2, the Company paid debt issuance costs of $0.8 million during the three months ended December 31, 2017, which will be amortized throughout the remaining life of the Term Loan Facility.

The Company is required to make scheduled quarterly payments in an aggregate annual amount equal to 1.0% of the aggregate principal amount of the outstanding term loans as of the Closing Date of the TLB Amendment No. 2, with the balance due at maturity. The average interest rate for the Term Loan Facility was 5.03% at December 31, 2017. The Company amortized $0.1 million and $0.2 million of debt discount to interest expense during the three months ended December 31, 2017 and December 31, 2016, respectively. The Term Loan Facility matures on June 9, 2023.

Additionally, the Term Loan Facility requires the Company to make mandatory principal payments on an annual basis, commencing with the fiscal year ending September 30, 2017, if cash flows for the year, as defined in the Term Loan Facility, exceed certain levels specified in the Term Loan Facility. The Company was not required to make such mandatory principal payment for the fiscal year ended September 30, 2017. The Company generally has the right to prepay loans in whole or in part, without incurring any penalties for early payment.

Obligations under the Term Loan Facility are secured by a first priority lien on all Term Loan Facility first lien collateral, including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, and a second priority lien on all ABL Facility first lien collateral, including accounts receivable and inventory of the loan parties under the Term Loan Facility, subject to certain limitations.

As of December 31, 2017, the Company was in compliance with the covenants of the Term Loan Facility.

Debt Issuance Cost Amortization

Amortization expense included in interest expense related to debt issuance costs of the Term Loan Facility was $0.7 million and $0.5 million for the three months ended December 31, 2017 and December 31, 2016, respectively.

Capital Lease Obligations

The capital lease obligation balance of $37.0 million as of December 31, 2017 is primarily associated with the Ryder Lease and the Montgomery Lease. The Ryder Lease obligation excludes decreasing annual interest payments ranging from $0.9 million to $0.1 million, for aggregate interest payments totaling $3.5 million. The Montgomery Lease obligation excludes decreasing annual interest payments ranging from $1.0 million to $0.1 million, for aggregate interest payments of $13.4 million. See Note 5.

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8. Derivatives

During the three months ended March 31, 2017, the Company entered into four interest rate swap agreements with a combined notional amount of $300.0 million to help mitigate interest rate risk related to the variable-rate Term Loan Facility. The swap agreements expire at various dates from February 2020 through March 2022 and are accounted for as cash flow hedges. Gains or losses resulting from changes in the fair value of the swaps are recorded in other comprehensive income. Gains and losses recorded in other comprehensive income are reclassified into and recognized in income when the interest expense on the Term Loan Facility is recognized.

Derivative assets and liabilities at December 31, 2017 and September 30, 2017 consisted of the following:

	Recorded to	December 31, 2017		September 30, 2017
Short-term derivative asset	Other current assets	$	0.1	$	—
Long-term derivative asset	Other non-current assets	$	1.9	$	0.3
Short-term derivative liability	Accrued expenses and other liabilities	$	0.4	$	1.1
Long-term derivative liability	Other non-current liabilities	$	—	$	0.2
Other Comprehensive Income(1)	Accumulated other comprehensive income	$	1.9	$	—

⁽¹⁾ Other Comprehensive Income for the fiscal year ended September 30, 2017 was less than $0.1 million

Gains and losses (net of reclassifications into income, including any ineffective portion) related to the interest rate swaps were as follows:

		Three Months Ended December 31,
	Recorded to	2017		2016
Realized loss	Interest expense	$	0.4	$	—
Unrealized gain, net of tax	Other comprehensive income	$	1.9	$	—

Unrealized losses related to the interest-rate swaps for the three months ended December 31, 2017 were net of a tax benefit impact of $0.6 million. At December 31, 2017, less than $0.1 million in unrealized gains were expected to be realized and recognized in income within the next twelve months. There were no derivative instruments outstanding as of December 31, 2016.

See Note 9 for additional information on the Company’s fair value of the derivative instruments.

9. Fair Value Measurements

The accounting standard for fair value measurements establishes a framework for measuring fair value that is based on the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The fair value hierarchy is as follows:

• Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

• Level 2—Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3—Prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

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The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions a third party would use in pricing an asset or liability based on the best information available under the circumstances. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Fair value of financial instruments

The carrying values of cash and cash equivalents, accounts and notes receivable, accounts payable and short-term borrowings approximate their fair value due to the short-term maturity of those instruments.

The carrying values of borrowings outstanding under the Credit Facilities approximate fair value at December 31, 2017 and September 30, 2017, primarily due to their variable interest rate. The estimated fair value of these instruments is classified by the Company as a Level 3 measurement within the fair value hierarchy due to the varying interest rate parameters as outlined in the respective loan agreements.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

In addition to the financial instruments that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a non-recurring basis as required by U.S. GAAP. Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges or as part of a business combination. As discussed in Note 3, during the fiscal year ended September 30, 2017, the Company recorded non-recurring fair value measurements related to the Ultra Chem Acquisition and its asset acquisitions. These fair value measurements were classified as Level 3 within the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Contingent Consideration

The fair value of the contingent consideration related to the Deferred Cash Consideration as discussed in Note 4 was $45.2 million and $35.1 million as of December 31, 2017 and September 30, 2017, respectively. The increase in the liability was largely driven by the increase in the Company’s stock price. The measurement of the contingent consideration related to the Deferred Cash Consideration is classified by the Company as a Level 3 measurement within the fair value hierarchy. In order to estimate the fair value of the Deferred Cash Consideration, the Company estimates the value of the Excess Shares using a Monte Carlo simulation model with the market price of the Company’s common stock at each valuation date being a significant input to this model. Unobservable inputs to the valuation are the expected volatility during the applicable period as well as a marketability discount to reflect the illiquidity of the Excess Shares given their terms. An increase in the market price of the Company’s common stock has the same directional effect on the value of the liability related to the Deferred Cash Consideration. An increase in the volatility and marketability discount will lower the value of the liability related to the Deferred Cash Consideration.

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The fair value of the liability for the contingent consideration related to the TRA as discussed in Note 4 was $72.2 million and $105.1 million as of December 31, 2017 and September 30, 2017, respectively. The decrease in the liability is reflective of the provisional impact associated with the Tax Act enacted in December 2017 (see Note 15), which lowers the Company’s projected income tax liabilities, the estimate of tax benefits expected to be realized as a result of the Business Combination and the ultimate amount expected to be paid by the Company to the Selling Equityholders. The liability for the contingent consideration related to the TRA is classified by the Company as a Level 3 measurement within the fair value hierarchy. The Company estimates the fair value of the liability for the contingent consideration related to the TRA based on a discounted cash flow model which incorporates assumptions of projected taxable income, projected income tax liabilities and an estimate of tax benefits expected to be realized as a result of the Business Combination. Key inputs to the valuation are prevailing tax rates and market interest rates impacting the discount rate. A 100 basis point increase in the discount rate compared to the discount rate used at the December 31, 2017 valuation would have resulted in a decrease of approximately $0.5 million in the value of the liability for the contingent consideration related to the TRA. Additionally, this cash flow model is sensitive to changes in prevailing tax rates. A 100 basis point increase in the tax rate compared to the tax rate used at the December 31, 2017 valuation would have resulted in an increase of approximately $2.3 million in the value of the liability for the contingent consideration related to the TRA.

Changes in the fair value of the contingent consideration obligations for the three months endedDecember 31, 2017 were as follows:

	TRA			Deferred Cash Consideration		Total Fair Value
Contingent consideration as of September 30, 2017	$	105.1		$	35.1	$	140.2
Cash paid to TPG	(4.2		)	—		(4.2		)
Change in fair value of contingent consideration(1)	(28.7		)	10.1		(18.6		)
Contingent consideration as of December 31, 2017	$	72.2		$	45.2	$	117.4

⁽¹⁾Included in Operating income (loss) in the condensed consolidated statement of operations.

Significant changes in the estimates and inputs used in determining the fair value of the contingent consideration could have a material impact on the amounts recognized as a component of Operating income (loss) in future periods.

Interest Rate Swaps

The Company classifies interest rate swaps within Level 2. During the three months ended March 31, 2017, the Company entered into four interest rate swap agreements to help mitigate interest rate risk related to the variable-rate Term Loan Facility. The agreements expire at various dates through March 2022. At December 31, 2017, the Company recorded $0.1 millionto Othercurrentassets, $1.9 million in Other non-current assets and$0.4 million in Accrued expenses and other liabilities in the condensed consolidated balance sheet related to these instruments.

During the three months endedDecember 31, 2017 and 2016, the Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements.

10. Share-based Compensation and Employee Benefit Plans

On June 8, 2016, the Company’s stockholders approved the 2016 LTIP, with an effective date of March 30, 2016, covering approximately a ten-year period. No awards may be granted under the 2016 LTIP after March 20, 2026. The 2016 LTIP permits the grant of up to 9,000,000 shares of the Company's common stock for various types of awards to employees, directors and consultants of the Company or its subsidiaries, including incentive and non-incentive stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, stock awards, conversion awards and performance awards.

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During the three months endedDecember 31, 2017, the Company granted 193,667 PSUs to employees under the 2016 LTIP. These awards will vest on September 30, 2020, entitling the recipient to receive a certain number of shares of the Company’s common stock, based on the Company’s achievement of the performance goals included in the PSUs, which are based on a return on invested capital calculation. Depending on the calculation as of the vesting date, a recipient is entitled to receive between 0% and 200% of the initial award. The awards are accounted for as equity instruments, and the fair value of these awards was determined by the closing price of the Company's common stock on the date of grant.

During the fiscal years ended September 30, 2017 and 2016, the Company granted 212,000 and 1,557,500 PSU awards to employees, respectively, under the 2016 LTIP. The recipient can receive between 0% and 200% of the initial award, based on the Company’s total stockholder return during approximate three-year performance period, or a cumulative Adjusted EBITDA target if a specified total stockholder return is not met. The Company used the Monte Carlo simulation model to estimate the fair value of the PSU awards at the grant date, factoring in the market-based vesting condition and considering the probability of satisfying the various performance criteria. The resulting grant date fair value is recognized as expense on a straight-line basis from the grant date through the end of the performance period. The assumptions used in the Monte Carlo simulation model for PSUs included an expected stock price volatility between 35% and 40% based on a peer group of similar companies, an expected dividend yield of 0%, an expected term of two to three years, and a risk-free interest rate of between 0.9% and 1.3%.

The following table summarizes all PSU activity during the three months endedDecember 31, 2017:

	PSUs	Average Grant Date Fair Value Per Unit
Unvested PSUs at September 30, 2017	1,524,000	$	8.92
Grants	193,667	7.50
Vested	—	—
Forfeited/Canceled	—	—
Unvested PSUs at December 31, 2017	1,717,667	$	8.76

As of December 31, 2017, the Company may issue up to 3,435,334 shares of common stock related to the outstanding PSU awards described above under the 2016 LTIP. The PSU awards are accounted for as equity instruments, and the Company recognized compensation cost of $1.2 million and $1.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations for the three months ended December 31, 2017 and 2016, respectively, related to the PSUs. As of December 31, 2017, the outstanding PSUs had a weighted-average remaining contract life of 1.6 years. As of December 31, 2017, there was $7.7 million of total unrecognized compensation cost related to unvested PSUs.

In November 2017, the Company granted 415,867 shares of restricted stock to employees under the 2016 LTIP. The restricted stock awards vest equally on the anniversary of the grant date over a three year period provided that the recipients of such grants continue their employment with the Company. The awards are accounted for as equity instruments, and the fair value of the restricted stock awards was determined by the closing price of the Company's common stock on the date of grant. During the fiscal years ended September 30, 2017 and 2016, the Company granted restricted stock awards to certain of the Company’s non-employee directors under the 2016 LTIP that vest over a one year period from the date of grant.

The following table summarizes all restricted stock activity during the three months endedDecember 31, 2017:

	Shares of Restricted Stock		Average Grant Date Fair Value Per Unit
Restricted stock at September 30, 2017	77,458		$	8.26
Grants	415,867		7.50
Vested	—		—
Forfeited/Canceled	(24,008	)	8.20
Restricted stock at December 31, 2017	469,317		$	7.59

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The restricted stock awards are accounted for as equity instruments, and the Company recognized compensation expense of $0.3 million and $0.2 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three months ended December 31, 2017 and 2016, respectively, related to the restricted stock. As of December 31, 2017, there was $3.0 million of total unrecognized compensation expense related to restricted stock, and a weighted average remaining life of 2.6 years.

During the fiscal year ended September 30, 2016, the TPG Restricted Stock Grants were awarded with respect to 100,000 shares of Company common stock owned by TPG. These awards vest in equal amounts over a three-year period provided that the recipients of such grants continue their employment with the Company. During the three months ended December 31, 2017, 11,673 shares were transferred back to TPG due to forfeiture. During the fiscal year ended September 30, 2017, 33,333 shares of these awards vested and 9,576 shares were transferred to the Company (reflected as treasury stock) to satisfy the officers’ and employees’ tax withholding obligations in connection with the vesting. The Company recognized compensation cost of $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations for each of the three months ended December 31, 2017 and 2016 related to these awards. As of December 31, 2017, there was $0.4 million of total unrecognized compensation cost related to these awards and a weighted average remaining life of 1.4 years. While these awards were not made pursuant to the 2016 LTIP, they constitute equity-based compensation and therefore will count against the 2016 LTIP's share reserve to the extent the awards vest.

During the three months endedDecember 31, 2017, the Company granted 999,492 stock options to employees under the 2016 LTIP. The awards vest in equal amounts over a three-year period provided that the recipients of such grants continue their employment with the Company. The Company used the Black-Scholes Merton model to estimate the fair value of the option awards at the grant date. The resulting grant date fair value is recognized as expense on a straight-line basis over the vesting period. The assumptions used in the Black-Scholes Merton model for the options included an expected term of six years, an expected stock price volatility of 35.0% based on a peer group of similar companies, an expected dividend yield of 0.0% and a risk-free interest rate of 2.1%.

The following table summarizes stock option activity during the three months endedDecember 31, 2017:

	Stock Options	Average Grant Date Fair Value Per Unit		Weighted Average Exercise Price
Stock Options at September 30, 2017	—	$	—	$	—
Grants	999,492	2.84		7.42
Exercised	—	—		—
Forfeited/Canceled	—	—		—
Stock Options at December 31, 2017	999,492	$	2.84	$	7.42

The stock options are accounted for as equity instruments, and the Company recognized compensation expense of $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statement of operations during the three months ended December 31, 2017 related to the restricted stock. As of December 31, 2017, there was $2.6 million of total unrecognized compensation expense related to stock options, and a weighted average remaining contractual life of 9.8 years. The outstanding stock options as of December 31, 2017 had an aggregate intrinsic value of $1.7 million. No stock options were exercisable as of December 31, 2017.

During the three months ended December 31, 2016, the Company granted certain employees a total of 28,000 RSUs under the 2016 LTIP that vest equally over a three-year period on the anniversary of the grant date provided the employee remains employed by the Company. Upon vesting, the recipients will receive a share of common stock in the Company for each RSU awarded. The fair value of these RSUs was determined based on the closing price of the Company’s stock on the grant date.

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The following table summarizes RSU award activity during the three months endedDecember 31, 2017:

	RSUs		Average Grant Date Fair Value Per Unit
Unvested RSUs at September 30, 2017	24,500		$	7.28
Grants	—		—
Vested	(8,162	)	7.28
Forfeited/Canceled	—		—
Unvested RSUs at December 31, 2017	16,338		$	7.28

The RSUs are accounted for as equity instruments, and the Company recognized compensation cost of less than $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three months ended December 31, 2017 and 2016 related to the RSUs. During the three months ended December 31, 2017, 8,162 RSUs vested, and 2,777 shares were transferred to the Company (reflected as treasury stock) to satisfy the employees’ tax withholding obligations in connection with the vesting. As of December 31, 2017, there was $0.1 million of total unrecognized compensation cost related to the RSUs, and a weighted average remaining life of 1.9 years.

During the three months ended December 31, 2016, the Company also awarded 10,500 phantom RSUs and 10,000 phantom PSUs to certain non-U.S. employees under the 2016 LTIP. The phantom RSUs vest equally over a three-year period on the anniversary of the grant date while the phantom PSUs vest under the same conditions as the PSU awards described above. During the fiscal year ended September 30, 2017, 3,500 of the phantom RSUs were forfeited and all of the phantom PSUs were forfeited. Upon vesting and provided the employee remains employed by the Company at that time, the awards will be settled in cash. In accordance with ASC 718, the remaining phantom RSU awards are accounted for as a liability, with the awards re-measured at the end of each reporting period based on the closing price of the Company’s common stock or using a Monte Carlo simulation model, as applicable. Compensation expense is recognized ratably on a straight-line basis over the requisite service period. An immaterial amount of compensation expense was recognized during the three months ended December 31, 2017 and 2016 related to these awards.

As of December 31, 2017, there were 3,922,265 shares of the Company’s common stock available for issuance under the 2016 LTIP, assuming the PSU awards vest at their maximum target.

Defined Contribution Plans

Qualifying employees of the Company are eligible to participate in the Company’s 401(k) Plan. The 401(k) Plan is a defined contribution plan which allows employees to make tax deferred contributions as well as company contributions, designed to assist employees of the Company and its affiliates in providing for their retirement. The Company matches 100% of employee contributions up to 4.0%. The Company makes an additional contribution to the 401(k) Plan of 1.5%, 3.0%, or 4.5%, based upon years of service of one to ten years, eleven to twenty years and twenty-one years or more, respectively. A version of the 401(k) Plan is also available for qualifying employees of the Company in its foreign subsidiaries.

The following summarizes contributions to the plans described above:

	Three Months Ended December 31,
	2017		2016
Contributions recorded as a component of cost of sales and operating expenses	$	1.0	$	1.0
Contributions recorded as a component of selling, general and administrative expenses	1.5		1.6
Total contributions	$	2.5	$	2.6

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11. Equity

Common Stock

The authorized common stock of the Company consists of 300,000,000 shares. Holders of the Company’s common stock are entitled to one vote for each share of common stock. As of December 31, 2017, there were 89,753,662 shares of common stock issued and 89,741,309 shares of common stock outstanding, which includes the 12,476,250 Founder Shares. The Company has units outstanding which consist of one share of common stock and one warrant which are included in the respective totals.

Founder Shares

As of December 31, 2017 there were 12,476,250 Founder Shares. These Founder Shares are subject to forfeiture on the tenth anniversary of the Closing Date unless:

• with respect to 50% of such Founder Shares, the last sale price of the Company’s common stock as quoted on NASDAQ equals or exceeds $12.50 per share (as adjusted for stock splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period; and

• with respect to the remaining 50% of such Founder Shares, the last sale price of the Company’s common stock equals or exceeds $15.00 per share (as adjusted for stock splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period; or

• the post-combination company completes a liquidation, merger, stock exchange or other similar transaction that results in all or substantially all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property or any transaction involving a consolidation, merger, proxy contest, tender offer or similar transaction in which the post-combination company is the surviving entity which results in a change in the majority of the Company’s board of directors or management team or the Company’s post-combination stockholders immediately prior to such transaction ceasing to own a majority of the surviving entity immediately after such transaction.

The Founder Shares will not participate in dividends or other distributions with respect to the shares prior to these targets being met, whereupon the Founder Shares shall be entitled to all dividends and distributions paid on the common stock after the Business Combination as if they had been holders of record entitled to receive distributions on the applicable record date.

Warrants

As of December 31, 2017 there were 50,025,000 warrants outstanding to purchase 25,012,500 shares of common stock at an exercise price of $11.50 per share.

Preferred Stock

The authorized preferred stock of the Company consists of 1,000,000 shares. As of December 31, 2017, there were no shares of preferred stock issued and outstanding.

Treasury Stock

During the three months ended December 31, 2017, in connection with the vesting of RSUs, 2,777 shares of common stock were transferred to the Company to satisfy the employees’ tax withholding obligations in connection with the vesting. Following the transfer, these shares were not canceled and are therefore classified as treasury stock. Total treasury stock as of December 31, 2017 is 12,353 shares.

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12. Earnings per Share

A reconciliation of the numerators and denominators of the basic and diluted per share computation follows.

	Three Months Ended December 31,
	2017		2016
Basic:
Net income (loss)	$	26.5	$	(8.3	)
Weighted average number of common shares outstanding during the period	76,793,518		76,746,168
Net income (loss) per common share - basic	$	0.35	$	(0.11	)
Diluted:
Net income (loss)	$	26.5	$	(8.3	)
Denominator for diluted earnings per share:
Weighted average number of common shares outstanding during the period	76,793,518		76,746,168
Incremental common shares attributable to outstanding unvested restricted stock and unvested restricted stock units	345,718		—
Denominator for diluted earnings per common share	77,139,236		76,746,168
Net income (loss) per common share - diluted	$	0.34	$	(0.11	)

Dilutive computations during the current period contain additional incremental common shares which are attributable to the outstanding unvested restricted stock awards issued to directors and employees and restricted stock units awards to employees; the outstanding stock options were not included as the result would have been anti-dilutive. During the three months ended December 31, 2016, the outstanding restricted stock awards and restricted stock unit awards were not included as their impact on the Company’s net loss would have been anti-dilutive. For the three months ended December 31, 2017 and 2016, there were 12,476,250 Founder Shares excluded from the basic and diluted computations because such shares were subject to forfeiture, and PSU awards, which were not included in the computation of diluted shares outstanding because performance targets and/or market conditions were not yet met for these awards. Diluted shares outstanding also did not include 25,012,500 shares of common stock issuable on the exercise of 50,025,000 warrants because the warrants were out-of-the-money for the three months ended December 31, 2017 and 2016.

13. Commitments, Contingencies and Litigation

Operating Leases

The Company is a lessee of office buildings, transportation equipment, warehouses and storage facilities, other equipment, facilities and properties under operating lease agreements that expire at various dates. Rent expense (including rentals under short-term leases) was $6.5 million and $6.4 million for the three months ended December 31, 2017 and 2016, respectively.

Future minimum non-cancellable rental payments as of December 31, 2017 are as follows:

2018	$	15.2
2019	11.1
2020	7.3
2021	6.1
2022	4.5
Thereafter	2.6
Total	$	46.8

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Capital Leases

The Company leases certain equipment and facilities under capital lease agreements. As of December 31, 2017 future minimum lease payments under capital leases were as follows:

2018	$	8.5
2019	7.5
2020	7.2
2021	7.0
2022	13.7
Thereafter	27.1
Total minimum capital lease payments	71.0
Less amount representing executory costs	(16.8		)
Less amount representing interest	(17.1		)
Present value of net minimum capital lease payments	$	37.1

Environmental Remediation

Due to the nature of its business, the Company is subject to various laws and regulations pertaining to the environment and to the sale, handling, transportation and disposal of chemicals and hazardous materials. These laws pertain to air and water, the management of solid and hazardous wastes, transportation and human health and safety.

On March 31, 2011, the Predecessor purchased certain assets of the global distribution business (the "Distribution Business") from Ashland (the "Ashland Distribution Acquisition"), evidenced by the ADA Purchase Agreement.  In the ADA Purchase Agreement, Ashland agreed to retain all known environmental remediation liabilities ("the Retained Specified Remediation Liabilities") and other environmental remediation liabilities unknown at the closing of the Ashland Distribution Acquisition related to the Distribution Business for which Ashland received notice prior to the fifth anniversary of the closing (the "Other Retained Remediation Liabilities") (collectively, the "Retained Remediation Liabilities").  Ashland’s liability for the Retained Remediation Liabilities is not subject to any claim thresholds or deductibles other than expenses the Predecessor incurs arising out of the Other Retained Remediation Liabilities. Had the Predecessor incurred expenses arising out of the Other Retained Remediation Liabilities, Ashland’s indemnification obligation would have been subject to an individual claim threshold of $0.2 million and an aggregate claim deductible of $5.0 million. Ashland’s indemnification obligations under the ADA Purchase Agreement as described above terminated as of March 31, 2016, other than for the Retained Remediation Liabilities. 

In July 2014, Ashland filed a lawsuit numbered Ashland Inc. v. Nexeo Solutions, LLC, Case No. N14C-07-243 JTV CCLD, in the Superior Court for the State of Delaware in and for New Castle County.  In the suit, Ashland seeks a declaration that, pursuant to the ADA Purchase Agreement, Solutions is obligated to indemnify Ashland for losses Ashland incurs pertaining to the Other Retained Remediation Liabilities, up to the amount of the aggregate $5.0 million deductible applicable for expenses incurred by Solutions, whether or not Solutions incurs any expenses or obtains any indemnity from Ashland.  Ashland further alleges that Solutions has breached duties related to the ADA Purchase Agreement by not having so indemnified Ashland for amounts Ashland has incurred for Other Retained Remediation Liabilities at sites where Ashland disposed of wastes prior to the Ashland Distribution Acquisition, and on that basis seeks unspecified compensatory damages, costs and attorney’s fees.  On June 21, 2017, the Company’s Motion for Summary Judgment for this lawsuit was granted. Ashland appealed the ruling on July 20, 2017. On January 31, 2018, the Delaware Supreme Court affirmed the lower court’s grant of the Company’s Motion for Summary Judgment. In the event Ashland requests rehearing of the ruling, the Company will continue to vigorously defend the lawsuit. The Company does not currently have any environmental or remediation reserves for matters covered under the ADA Purchase Agreement.

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The Company’s reserves will be subject to numerous uncertainties that affect its ability to accurately estimate its costs, or its share of costs if multiple parties are responsible. These uncertainties involve the legal, regulatory and enforcement parameters governing environmental assessment and remediation, the nature and extent of contamination, the extent of required remediation efforts, the choice of remediation methodology, availability of insurance coverage and, in the case of sites with multiple responsible parties, the number and financial strength of other potentially responsible parties.

Other Legal Proceedings

The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities, including product liability claims. Management believes that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the Company.

Other Contingencies

In June 2014, the Predecessor self-disclosed to the DTSC that an inventory of its Fairfield facility had revealed potential violations of RCRA and the California Health and Safety Code. Although no formal proceeding has been initiated, the Company expects the DTSC to seek payment of fines or other penalties for non-compliance. The Company does not expect the amount of any such fine or other penalty to have a material adverse effect on its business, financial position or results of operations.

14. Related Party Transactions

The tables below summarize activity recorded during the respective periods for related party transactions:

	Three Months Ended December 31,
	2017		2016
Sales to related entities:
TPG	$	1.6	$	0.7
Purchases from related entities:
Entities related to members of the Board of Directors	$	3.4	$	—

	December 31, 2017		September 30, 2017
Accounts receivable from related entities:
TPG	$	1.1	$	0.7
Accounts payable to related entities:
Entities related to members of the Board of Directors	$	0.3	$	0.1

Contingent Consideration Obligations Pursuant to the TRA and the Merger Agreement

Subsequent to the Business Combination, TPG beneficially owns approximately 35% of the Company’s common stock, including Founder Shares, and is considered a related party of the Company. In connection with the Business Combination, TPG became a party to the TRA and obtained the right to receive the Deferred Cash Consideration pursuant to the Merger Agreement. The fair value of these contingent consideration liabilities was as follows:

	December 31, 2017		September 30, 2017
Due to related party pursuant to contingent consideration obligations:
Current liability	$	8.5	$	12.5
Non-current liability	108.9		127.7
Total fair value	$	117.4	$	140.2

During the three months endedDecember 31, 2017 the Company paid $4.2 million to TPG related to the TRA. See Note 4 and Note 9.

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15. Income Taxes

For all periods, the Company computed the provision for income taxes based on the actual year-to-date effective tax rate by applying the discrete method.  Use of the annual effective tax rate, which relies on accurate projections by legal entity of income earned and taxed in foreign jurisdictions, as well as accurate projections by legal entity of permanent and temporary differences, was not considered a reliable estimate for purposes of calculating year-to-date income tax expense.

The Tax Act significantly revises future U.S. corporate income taxes by, among other things, lowering U.S. corporate income tax rates and implementing a modified territorial tax system. Because the Company has a September 30 fiscal year end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 24.3% for the Company’s fiscal year ending September 30, 2018 and 21.0% for subsequent fiscal years. The Tax Act also provided for certain transition impacts. As part of the transition to the new modified territorial tax system, the Tax Act imposes a one-time repatriation tax on deemed repatriation of historical earnings of foreign subsidiaries. The Company does not currently anticipate an impact from the repatriation tax charge.

For the three months ended December 31, 2017, the impact of the Tax Act resulted in a net tax benefit of approximately $4.5 million, related solely to the remeasurement of the Company’s net deferred tax liabilities at the lower enacted corporate tax rates.

In accordance with recently issued SEC guidance, the estimated net income tax benefit of $4.5 million is considered provisional representing the Company’s current best estimate based on interpretation of the provisions of the Tax Act, as data continues to be accumulated in order to finalize the underlying calculations. In addition, due to the broad and complex changes contained in the Tax Act, the Company’s current estimate of the impact may be influenced by, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act and any changes in accounting standards for income taxes or related interpretations issued in response to the Tax Act. The Company anticipates finalizing and recording any resulting adjustments by the end of its current fiscal year ending September 30, 2018.

Income tax expense for the three months ended December 31, 2017 was $1.3 million on pre-tax income of $27.8 million compared to the income tax benefit of $2.7 million on pre-tax loss of $11.0 million for the three months ended December 31, 2016. The current period tax expense was largely attributable to current year income. The expense generated in the U.S. was partially offset by a current period benefit on deferred tax liabilities as a result of the impact of the Tax Act. The prior period tax benefit was largely attributed to income tax benefits on U.S. operations related to deferred taxes.

At December 31, 2017 and September 30, 2017, the valuation allowance was $3.0 million and $3.1 million, respectively, primarily related to operations in Asia. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon management’s expectations at December 31, 2017, management believes it is more likely than not that it will realize the majority of its deferred tax assets.

Uncertain Tax Positions

During the fiscal year ended September 30, 2017, the Company recorded income tax-related uncertainties associated with the purchase of Ultra Chem totaling $1.4 million, inclusive of interest and penalties. Additionally, the Company also recognized indemnification assets related to certain of these income tax-related uncertainties. The indemnification assets were included in Other current assets and Other non-current assets in the condensed consolidated balance sheets, representing the reimbursement the Company reasonably expected to receive from funds held in escrow pursuant to the purchase agreement.  The purchase price allocation of the Ultra Chem Acquisition is preliminary and the initial fair value assessment of these items may change within the twelve month measurement period. See Note 3.

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The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of Income tax expense in the condensed consolidated statements of operations. There was an insignificant amount of interest and penalties recognized during all periods. As of December 31, 2017 and September 30, 2017, the Company had $1.8 million related to uncertain tax positions, including related accrued interest and penalties.

16. Segment and Geographic Data

The Company operates through three lines of business, or operating segments: Chemicals, Plastics and Environmental Services, which market to different sets of customers operating in an array of industries, with various end markets and customer segments within those industries. For segment presentation and disclosure purposes, the Chemicals and Plastics lines of business constitute separate reportable segments, while the Environmental Services line of business, which does not meet the materiality threshold for separate disclosure, is included in an "Other" segment.

Each line of business represents unique products and suppliers, and each line of business focuses on specific end markets within its industry based on a variety of factors, including supplier or customer opportunities, expected growth and prevailing economic conditions. Across the Chemicals and Plastics lines of business there are numerous industry segments, end markets and sub markets that the Company may choose to focus on. These end markets may change from year to year depending on the underlying market economics, supplier focus, expected profitability and the Company’s strategic agenda.

The Chemicals, Plastics and Environmental Services lines of business compete with national, regional and local companies throughout North America. Additionally, the Chemicals and Plastics lines of business compete with other distribution companies in Asia. The Plastics line of business also competes with other distribution companies in EMEA. Competition within each line of business is based primarily on the diversity of the product portfolio, service offerings, reliability of services and supply, technical support, price and delivery capabilities. The accounting policies used to account for transactions in each of the lines of business are the same as those used to account for transactions at the corporate level.

The Chemicals and Plastics lines of business are distribution businesses, while the Environmental Services line of business provides hazardous and non-hazardous waste collection, recovery, recycling and disposal services.

A brief description of each segment follows:

Chemicals. The Chemicals line of business distributes specialty and industrial chemicals, additives and solvents to industrial users via railcars, barges, bulk tanker trucks and as packaged goods in trucks. The Company’s chemical products are distributed in more than 50 countries worldwide, primarily in North America and Asia. In connection with the distribution of chemicals products, the Company provides value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. While the Chemicals line of business serves multiple end markets, key end markets within the industrial space are household, industrial and institutional, performance coatings (including architectural coatings, adhesives, sealants and elastomers), lubricants, oil and gas and personal care.

Plastics. The Plastics line of business distributes a broad product line consisting of commodity polymer products and prime engineering resins to plastics processors engaged in blow molding, extrusion, injection molding and rotation molding via railcars, bulk trucks, truckload boxes and mixed truckloads or less-than-truckload quantities. The Company's plastics products are distributed in more than 50 countries worldwide, primarily in North America, EMEA and Asia. The Plastics line of business serves a broad cross section of industrial segments with a current focus on the automotive and healthcare end markets.

Other. The Environmental Services line of business, in connection with certain waste disposal service companies, provides customers with comprehensive on-site and off-site hazardous and non-hazardous waste collection, recovery, disposal services or recycling in North America, primarily in the U.S. These environmental services are offered through the Company’s network of distribution facilities used as transfer facilities and through a staff of dedicated on-site waste professionals. The Environmental Services line of business serves multiple end markets such as aerospace and defense, automotive, chemical manufacturing, industrial manufacturing and oil and gas.

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The Chief Executive Officer is the Chief Operating Decision Maker. The Chief Operating Decision Maker reviews operating results in order to make decisions, assess performance and allocate resources to each line of business. In order to maintain the focus on line of business performance, certain expenses are excluded from the line of business results utilized by the Company’s Chief Operating Decision Maker in evaluating line of business performance. These expenses include depreciation and amortization, selling, general and administrative expense and corporate items including transaction related costs, interest and income tax expense. These items are separately delineated to reconcile to reported net income. One customer accounted for more than 10% of revenues for the Environmental Services line of business during the three months ended December 31, 2017. No single customer accounted for more than 10% of revenues for any line of business during the three months ended December 31, 2016. Intersegment revenues were insignificant.

Certain assets are aggregated at the line of business level. The assets attributable to the Company’s lines of business, that are reviewed by the Chief Operating Decision Maker, consist of trade accounts receivable, inventories, goodwill and any specific assets that are otherwise directly associated with a line of business. The Company’s inventory of packaging materials and containers, as well as property, plant and equipment, are generally not allocated to a line of business and are included in unallocated assets.

Summarized financial information relating to the Company’s lines of business is as follows:

	Three Months Ended December 31,
	2017			2016
Sales and operating revenues
Chemicals	$	431.9		$	352.4
Plastics	462.2			412.5
Other	35.5			29.9
Total sales and operating revenues	$	929.6		$	794.8
Gross profit
Chemicals	$	58.4		$	42.7
Plastics	41.9			36.0
Other	6.6			5.7
Total gross profit	$	106.9		$	84.4
Selling, general & administrative expenses	84.8			74.5
Transaction related costs	0.1			0.8
Change in fair value related to contingent consideration obligations	(18.6		)	10.6
Operating income (loss)	40.6			(1.5		)
Other income	0.1			2.4
Interest income (expense)
Interest income	0.1			0.1
Interest expense	(13.0		)	(12.0		)
Income (loss) before income taxes	$	27.8		$	(11.0	)

	December 31, 2017		September 30, 2017
IDENTIFIABLE ASSETS
Chemicals	$	796.4	$	793.6
Plastics	772.8		762.7
Other	93.7		91.0
Total identifiable assets by reportable segment	1,662.9		1,647.3
Unallocated assets	581.6		606.2
Total assets	$	2,244.5	$	2,253.5

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Goodwill amounts by reportable segment at December 31, 2017 include the preliminary allocation of the purchase consideration of the Ultra Chem Acquisition as of the Ultra Chem Closing Date. Accordingly, the amounts allocated to goodwill from the Ultra Chem Acquisition are subject to adjustments to reflect the completion of the purchase price allocation, which will be completed within twelve months of the Ultra Chem Closing Date and could have a material impact on total goodwill and goodwill for the Chemicals reportable segment. See Note 3.

Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale, are presented below:

	Three Months Ended December 31,
	2017		2016
U.S.	$	668.1	$	587.4
Canada	42.5		36.9
Other North America	33.0		12.5
Total North America Operations	743.6		636.8
EMEA	127.2		96.9
Asia	58.8		61.1
Total	$	929.6	$	794.8

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Company’s financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on December 7, 2017. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q. 

The terms “the Company,” “us,” “our” and “we” and similar terms in this report refer to Nexeo Solutions, Inc. and its consolidated subsidiaries.

Overview

We are a global chemicals distributor in North America and Asia and a global plastics distributor in North America, EMEA and Asia. In connection with the distribution of chemicals products, we provide value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. We also provide on-site and off-site environmental services, including waste collection, recovery, disposal services and recycling in North America, primarily in the U.S.

We have long-standing relationships with major chemicals and plastics producers and suppliers, a strong geographic presence and supply chain network and a balanced customer base that benefits from the service and distribution value we provide. The products we distribute are used in various end markets and customer segments within a broad cross section of manufacturing industries, including household, industrial and institutional, lubricants, performance coatings (including architectural coatings, adhesives, sealants and elastomers), automotive, healthcare, personal care, oil and gas and construction end markets.

We distribute our product portfolio through a global supply chain consisting of owned, leased or third-party warehouses, rail terminals and tank terminals. We have a private fleet of tractors and trailers, primarily in North America.

Segment Overview

We operate through three lines of business, or operating segments: Chemicals, Plastics and Environmental Services. Our lines of business market to different sets of customers operating in an array of different industries, with various end markets and customer segments within those industries. For segment presentation and disclosure purposes, our Chemicals and Plastics lines of business constitute separate reportable segments, while our Environmental Services line of business, which does not meet the materiality threshold for separate disclosure, is included in an "Other" category.

A brief description of each of our lines of business follows:

Chemicals. Our Chemicals line of business distributes specialty and industrial chemicals, additives and solvents to industrial users via railcars, barges, bulk tanker trucks and as packaged goods in trucks. Our chemicals products are distributed in more than 50 countries worldwide, primarily in North America and Asia. In connection with the distribution of chemicals products, we provide value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. While our Chemicals line of business serves multiple end markets, the key end markets within the industrial space are household, industrial and institutional, performance coatings (including architectural coatings, adhesives, sealants and elastomers), lubricants, oil and gas and personal care.

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Plastics. Our Plastics line of business distributes a broad product line consisting of commodity polymer products and prime engineering resins to plastics processors engaged in blow molding, extrusion, injection molding and rotation molding via railcars, bulk trucks, truckload boxes and mixed truckloads or less-than-truckload quantities. We distribute plastics products in more than 50 countries worldwide, primarily in North America, EMEA and Asia. Our Plastics line of business serves a broad cross section of industrial segments with a current focus on automotive and healthcare end markets.

Other. Our Environmental Services line of business, in connection with certain waste disposal service companies, provides customers with comprehensive on-site and off-site hazardous and non-hazardous waste collection, recovery, disposal services or recycling in North America, primarily in the U.S. These environmental services are offered through our network of distribution facilities used as transfer facilities and through a staff of dedicated on-site waste professionals. Our Environmental Services line of business serves multiple end markets such as aerospace and defense, automotive, chemical manufacturing, industrial manufacturing and oil and gas.

Key Factors Affecting our Results of Operations and Financial Condition

General and regional economic conditions. Consumption of chemicals and plastics in the industries and markets we serve are generally affected by the global economy and amplified by regional conditions. Although we manage our cost structure in line with general economic conditions, our volumes and profitability are ultimately correlated with the underlying demand for the end-products of the industries we serve. The first fiscal quarter of 2018 experienced an improvement in industrial market demand.

Price fluctuations. Selling prices of the products we distribute within our Chemicals and Plastics lines of business fluctuate with changes in the prices we pay for products.  Product costs are largely driven by global and regional economic conditions affecting the prices of two primary raw materials of production: crude oil (primarily naphtha) and natural gas (primarily ethane).  These two raw materials are used in the production of propylene and ethylene, the key feedstocks used in over 90% of organic-based commodity and specialty chemicals, as well as in the subsequent production of the intermediate plastics products we distribute.  The prices of these feedstocks are also affected by other factors, including choices made by producers for uses of feedstocks (e.g., as an ingredient in gasoline versus a feedstock to the chemical industry) and the capacity devoted to production and other macroeconomic factors that impact the producers.  As a distributor, the prices of these feedstocks are not in our control.  We are generally able to adjust finished good prices in accordance with the fluctuations in our product costs and transportation-related costs (e.g., fuel costs).  As a result, movements in our sales revenue and cost of sales tend to correspond with changes in our product prices.  Through the first fiscal quarter of 2018, we continued to execute on effective pricing initiatives and managed supply constraints through efficient inventory management.

As capacity or demand patterns change, there can be a corresponding volatility in the selling prices of the products we distribute.  Gross profit margins generally decrease in deflationary price environments and increase during inflationary pricing environments, although the extent to which profitability increases or decreases depends on the rate at which selling prices adjust relative to inventory costs.  As a logistics provider, oil prices affect our transportation and delivery costs, along with changes in driver regulations, supply of drivers and common carrier rates.

Volume-based pricing. We generally procure chemicals and plastics raw materials through purchase orders rather than under long-term contracts with firm commitments. Our arrangements with key producers and suppliers are typically embodied in agreements that we refer to as framework supply agreements. We work to develop strong relationships with a select group of producers and suppliers that complement our strategy based on a number of factors, including price, breadth of product offering, quality, market recognition, delivery terms and schedules, continuity of supply and each producer’s strategic positioning. Our framework supply agreements with producers and suppliers typically renew annually and, while they generally do not provide for specific product pricing, some, primarily those related to our Chemicals line of business, include volume-based financial incentives through supplier rebates, which we earn by meeting or exceeding target purchase volumes.

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Inflation. Our average selling prices generally rise in inflationary price environments as producers and suppliers raise the market prices of the products that we distribute. During inflationary periods our customers maximize the amount of inventory they carry in anticipation of even higher prices. Consequently, this environment of excess demand favorably impacts our volumes sold, revenues and gross profit due to the lag between rising prices and our cost of goods sold. The reverse is true in deflationary price environments. Deflationary forces create an environment of overcapacity, driving market prices of products downward, and we must quickly adjust inventories and buying patterns to respond to price declines. Our primary objective is to replace inventories at lower costs while maintaining or enhancing unit profitability.

Some of our assets and liabilities, primarily cash, receivables, inventories and accounts payable, are impacted by commodity price inflation because they are indirectly affected by market prices of the raw materials that are used to manufacture our products. 

Currency exchange rate fluctuations. We conduct our business on an international basis, in multiple currencies.  A portion of our sales and costs of sales transactions are denominated in currencies other than the functional currency of our subsidiaries.  Further, we have exposure to foreign exchange fluctuations arising from the remeasurement of certain foreign operations where the USD is the functional currency but accounting records are maintained in local currency. Strengthening/weakening of our subsidiaries’ functional currency relative to the other currencies in which some transactions are denominated or recorded creates foreign currency gains/losses, which we include in Selling, general and administrative expenses. Additionally, we report our consolidated results in USD and the results of operations and the financial position of our local international operations are translated into USD at the applicable exchange rates for inclusion in our condensed consolidated financial statements.  Strengthening of the USD relative to our subsidiaries’ functional currencies causes a negative impact on sales but a positive impact on costs.

Outlook

General. We have operations in North America, EMEA and Asia and are subject to broad, global and regional macroeconomic factors. These factors include:

• the general state of the economy, specifically inflationary or deflationary trends, GDP growth rates and commodity/feedstock price movements;

• unemployment levels;

• government regulation and geopolitical changes;

• fiscal and monetary policies of governments, including import and export tariffs, duties and other taxes;

• general income growth and the consumption rates of products; and

• technological change in the industries we serve.

We monitor these factors routinely for both strategic and operational impacts.

Our operations are most impacted by regional market price fluctuations of the primary feedstock materials, including crude oil and natural gas, and the downstream derivatives of these primary raw materials. Market price fluctuations of these primary raw materials directly impact the decisions of our suppliers, specifically the manufacturing capacity made available for production of the products we distribute. As capacity or demand patterns change, we may experience a corresponding change in the average selling prices of the products we distribute.

The global markets showed growth during the first quarter of fiscal year 2018 reflected by increases in GDP, oil prices and U.S. Industrial Production Index.

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The following is a summary of GDP, oil price and U.S. Industrial Production Index fluctuations in our various regions of operations by fiscal quarter:

	Q1 18 v Q1 17		Q4 17 v Q4 16		Q3 17 v Q3 16		Q2 17 v Q2 16
North America
U.S. GDP Growth	2.5%		2.3	%	2.2	%	2.0	%
U.S. Industrial Production Index	3.5	%	1.6	%	2.1	%	0.6	%
West Texas Intermediate Crude Oil Average Price Increase (Decrease)	12.2	%	7.2	%	5.5	%	54.0	%
EMEA
Euro Area GDP Growth	2.7	%	2.8	%	2.4	%	2.1	%
Brent Crude Oil Average Price Increase (Decrease)	20.3	%	11.0	%	8.0	%	55.1	%
Asia
China GDP Growth (1)	6.9	%	6.9	%	6.9	%	6.9	%

⁽¹⁾ As reported by the Chinese government.

Overall GDP growth has increased in many of the countries in which we operate. As a result we have experienced an increase in sales volumes. In terms of currency, the USD has weakened over the prior comparable period against most other currencies in which we transact. As a result of these factors, reported dollar revenues and gross profit have been positively impacted in many of our regional operations.

North America

The North American economic environment continued to improve during the first quarter of fiscal year 2018. U.S. GDP increased in the first fiscal quarter of 2018 as compared to first fiscal quarter of 2017, and the inflation rate remained relatively stable at 2.1% in the first fiscal quarter of 2018 compared to the same period in the prior year.

In terms of currency, the CAD strengthened when compared against the USD for the first fiscal quarter of 2018 following declines during fiscal year 2017, which positively affected, among other items, the reported dollar revenues and gross profit from our operations in Canada. Additionally, the Peso strengthened in value against the USD in the first quarter of fiscal year 2018.

EMEA

In Europe, we conduct business primarily in the Western European countries. As evidenced by their increases in GDP, the economic environment in the countries in which we operate in Europe has continued to improve.

In terms of currency, the euro and the majority of other European currencies strengthened versus the USD in the first fiscal quarter of 2018 following declines during fiscal year 2017, which positively affected, among other items, the reported dollar revenues and gross profit from our European operations.

The market price for the products we sell in Europe typically correlate to the market price of Brent Crude as these operations are primarily based on the distribution of commodity plastics products which are sourced in Europe. Consistent with the increase in oil prices through fiscal year 2017 and the first fiscal quarter of 2018, we have experienced an increase in average selling price for the products we distribute in Europe.

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Asia

Our operations in Asia are concentrated mainly in China. Recent GDP growth in China, as reported by the Chinese government, has remained steady through the past four fiscal quarters.

In terms of currency, the RMB strengthened against the USD during the first fiscal quarter of 2018 following declines during fiscal year 2017, which positively affected, among other items, the reported dollar revenues and gross profit from our operations in China.

Certain Factors Affecting Comparability to Prior Period Financial Results

In April 2017, we completed the Ultra Chem Acquisition. Accordingly, the results of the acquired operations since the Ultra Chem Closing Date are included in our condensed consolidated results of operations, including the results for the first fiscal quarter of 2018. The acquired operations are primarily included in our Chemicals line of business. See Note 3 to our condensed consolidated financial statements.

Results of Operations

Three Months Ended December 31, 2017 compared with Three Months Ended December 31, 2016

												Percentage of Sales and Operating Revenues For the
	Three Months Ended   December 31,						Difference					Three Months Ended   December 31,
(in millions)	2017			2016			$ Change			% Change		2017		2016
Sales and operating revenues
Chemicals	$	431.9		$	352.4		$	79.5		22.6	%	46.5	%	44.3	%
Plastics	462.2			412.5			49.7			12.0	%	49.7	%	51.9	%
Other	35.5			29.9			5.6			18.7	%	3.8	%	3.8	%
Total sales and operating revenues	$	929.6		$	794.8		$	134.8		17.0	%	100.0	%	100.0	%
Gross profit
Chemicals	$	58.4		$	42.7		$	15.7		36.8	%	13.5	%	12.1	%
Plastics	41.9			36.0			5.9			16.4	%	9.1	%	8.7	%
Other	6.6			5.7			0.9			15.8	%	18.6	%	19.1	%
Total gross profit	$	106.9		$	84.4		$	22.5		26.7	%	11.5	%	10.6	%
Selling, general and administrative expenses	84.8			74.5			10.3			13.8	%	9.1	%	9.4	%
Transaction related costs	0.1			0.8			(0.7		)	(87.5	)%	—	%	0.1	%
Change in fair value of contingent consideration obligations	(18.6		)	10.6			(29.2		)	(275.5	)%	(2.0	)%	1.3	%
Operating income (loss)	40.6			(1.5		)	42.1			2,806.7	%	4.4	%	(0.2	)%
Other income	0.1			2.4			(2.3		)	(95.8	)%	—	%	0.3	%
Interest expense, net	(12.9		)	(11.9		)	(1.0		)	(8.4	)%	(1.4	)%	(1.5	)%
Income (loss) before income taxes	27.8			(11.0		)	38.8			352.7	%	3.0	%	(1.4	)%
Income tax expense (benefit)	1.3			(2.7		)	4.0			148.1	%	0.1	%	(0.3	)%
Net income (loss)	$	26.5		$	(8.3	)	$	34.8		419.3	%	2.9	%	(1.0	)%

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Sales and operating revenues

Sales and operating revenues for the three months ended December 31, 2017increased$134.8 million, or 17.0%, as compared to the three months ended December 31, 2016. Excluding $20.6 million in revenues from Ultra Chem or 2.2%, the increase in revenues was primarily attributable to an increase in volumes of 2.1% primarily in the Chemicals line of business due to increased demand and an increase in overall average selling prices of 11.9% across all segments in all regions. Approximately $12.6 million of the increase was a result of the strengthening of the exchange rates of various currencies versus the USD as compared to the same period in the prior fiscal year.

Chemicals

Sales and operating revenues for the Chemicals line of business for the three months ended December 31, 2017increased$79.5 million, or 22.6%, as compared to the three months ended December 31, 2016. Excluding $20.5 million in revenues from Ultra Chem, the revenue increase was primarily attributable to a 12.2% increase in average selling prices and an increase in volumes of 4.0% across multiple product lines. Volume and average selling price performance was a result of the increased industrial demand and continued recovery in the oil and gas industry, partially offset by volume decreases in Asia.

Plastics

Sales and operating revenues for the Plastics line of business for the three months ended December 31, 2017increased$49.7 million, or 12.0%, as compared to the three months ended December 31, 2016. The revenue increase was primarily attributable to a 12.3% increase in average selling prices resulting from supply constraints in various product lines in North America and line card expansion in EMEA. Overall, volumes were essentially flat compared to the three months ended December 31, 2016. Approximately $11.6 million of the increase was a result of the strengthening of the exchange rates of various currencies versus the USD compared to the same period in the prior fiscal year.

Other

Sales and operating revenues for the Other segment for the three months ended December 31, 2017increased$5.6 million, or 18.7%, as compared to the three months ended December 31, 2016. The increase in revenues was primarily due to growth in service offerings to existing customers.

Gross profit

Gross profit increased$22.5 million, or 26.7%, for the three months ended December 31, 2017 as compared to the three months ended December 31, 2016. Gross profit as a percentage of sales for the three months ended December 31, 2017 was 11.5% as compared to 10.6% for the three months ended December 31, 2016. Our centralized platform allowed us to effectively manage supply constraints affecting various product lines. Additionally, our specialty mix increased in both the Chemicals and Plastics lines of business. Approximately $1.0 million of the increase to gross profit was due to the impact of the strengthening of exchange rates of various currencies versus the USD as compared to the same period in the prior fiscal year.

Chemicals

Gross profit for the Chemicals line of business increased$15.7 million, or 36.8%, for the three months ended December 31, 2017 as compared to the three months ended December 31, 2016. Gross profit as a percentage of sales for the Chemicals line of business for the three months ended December 31, 2017 was 13.5% as compared to 12.1% for the three months ended December 31, 2016. The increase was driven primarily by improved specialty mix compared to the same period in the prior fiscal year. Additionally, gross profit increased due to our strong execution leveraging our centralized pricing platform to effectively manage supply constraints.

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Plastics

Gross profit for the Plastics line of business increased$5.9 million, or 16.4%, for the three months ended December 31, 2017 as compared to the three months ended December 31, 2016. Gross profit as a percentage of sales for the Plastics line of business for the three months ended December 31, 2017 was 9.1% as compared to 8.7% for the three months ended December 31, 2016. The increase was driven primarily by organic supplier growth in EMEA and strong commercial execution strengthened by leveraging our centralized platform to effectively manage supply constraints affecting various product lines. Approximately $0.9 million of the increase in gross profit was due to the impact of the strengthening of exchange rates of various currencies versus the USD as compared to the same period in the prior fiscal year.

Other

Gross profit for the Other segment increased$0.9 million, or 15.8%, for the three months ended December 31, 2017 as compared to the three months ended December 31, 2016. Gross profit as a percentage of sales for the Other segment for the three months ended December 31, 2017 was 18.6% as compared to 19.1% for the three months ended December 31, 2016. The decrease was primarily due to higher transportation costs in the current fiscal quarter.

Selling, general and administrative expenses

									Percentage of Sales and Operating Revenues For the
	Three Months Ended   December 31,				Difference				Three Months Ended   December 31,
(in millions)	2017		2016		$ Change		% Change		2017		2016
Selling, general and administrative expenses	$	84.8	$	74.5	$	10.3	13.8	%	9.1	%	9.4	%

Selling, general and administrative expenses for the three months ended December 31, 2017increased$10.3 million, or 13.8%, as compared to the three months ended December 31, 2016. This increase was primarily driven by increased employee costs of $6.9 million primarily as a result of increased incentive and stock-based compensation cost of $5.5 million and increased costs of $0.9 million associated with the Ultra Chem Acquisition. Additionally, contributing to the increase was higher depreciation and amortization expense of $2.2 million mainly as a result of the amortization of intangible assets acquired in the Ultra Chem Acquisition. Furthermore, foreign exchange losses increased by approximately $1.3 million, driven primarily by fluctuations in the RMB compared to the USD.

Transaction related costs

										Percentage of Sales and Operating Revenues For the
	Three Months Ended   December 31,				Difference					Three Months Ended   December 31,
(in millions)	2017		2016		$ Change			% Change		2017		2016
Transaction related costs	$	0.1	$	0.8	$	(0.7	)	(87.5	)%	—	%	0.1	%

We incurred transaction related costs of $0.1 million in the three months ended December 31, 2017 and $0.8 million in the three months ended December 31, 2016 primarily related to the Ultra Chem Acquisition and Business Combination, respectively.

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Changes in fair value of contingent consideration

											Percentage of Sales and Operating Revenues For the
	Three Months Ended   December 31,					Difference					Three Months Ended   December 31,
(in millions)	2017			2016		$ Change			% Change		2017		2016
Change in fair value of contingent consideration obligations	$	(18.6	)	$	10.6	$	(29.2	)	(275.5	)%	(2.0	)%	1.3	%

We incurred a gain of $18.6 million and a loss of $10.6 million in the three months ended December 31, 2017 and 2016, respectively. The gain in the current fiscal quarter was primarily related to the TRA liability gain of $28.7 million which reflects the provisional impact of the Tax Act (see Note 15 to our condensed consolidated financial statements), partially offset by the loss in Deferred Cash Consideration driven primarily by the increase in our stock price during the three months ended December 31, 2017. The loss for the three months ended December 31, 2016 was primarily due to a decrease in the fair value of both the TRA and Deferred Cash Consideration. See Notes 4 and 9 to our condensed consolidated financial statements.

Other income

										Percentage of Sales and Operating Revenues For the
	Three Months Ended   December 31,				Difference					Three Months Ended   December 31,
(in millions)	2017		2016		$ Change			% Change		2017		2016
Other income	$	0.1	$	2.4	$	(2.3	)	(95.8	)%	—	%	0.3	%

Other income for the three months ended December 31, 2017 was $0.1 million. Other income for the three months ended December 31, 2016 was $2.4 million primarily due to the gain related to reimbursements received for certain capital expenditures incurred in connection with the relocation of certain operations. See Note 5 to our condensed consolidated financial statements.

Interest expense, net

												Percentage of Sales and Operating Revenues For the
	Three Months Ended   December 31,						Difference					Three Months Ended   December 31,
(in millions)	2017			2016			$ Change			% Change		2017		2016
Interest expense, net	$	(12.9	)	$	(11.9	)	$	(1.0	)	(8.4	)%	(1.4	)%	(1.5	)%

Interest expense, net was $12.9 million and $11.9 million for the three months ended December 31, 2017 and 2016, respectively, related to the Credit Facilities, along with the amortization of debt issuance costs. Interest expense increased due to the increased balance outstanding on the ABL Facility, interest rate expense on interest rate swaps and increased capital lease obligations, partially offset by lower interest on the Term Loan Facility.

Income tax expense

										Percentage of Sales and Operating Revenues For the
	Three Months Ended   December 31,					Difference				Three Months Ended   December 31,
(in millions)	2017		2016			$ Change		% Change		2017		2016
Income tax expense (benefit)	$	1.3	$	(2.7	)	$	4.0	148.1	%	0.1	%	(0.3	)%

Income tax expense for the three months ended December 31, 2017 was $1.3 million attributable to current year income. The expense generated in the U.S. was partially offset by a current period benefit on deferred tax liabilities as a result of the impact of the Tax Act, which resulted in a decrease in income tax expense of $4.5 million. Income tax benefit for the three months ended December 31, 2016 was $2.7 million and is primarily attributable to U.S. operations related to deferred tax positions.

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Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash flows generated from our operations and borrowing availability under the ABL Facility. Cash flows generated from operations are influenced by seasonal patterns of our business and other timing circumstances that can result in increases or decreases in working capital requirements for any given period during the course of our fiscal year. Our ability to generate sufficient cash flows from operating activities will continue to be primarily dependent on purchasing and distributing chemical and plastic materials. Additionally, our ability to generate cash flows in the normal course of business can be significantly influenced by changing global and regional macroeconomic conditions. Borrowing availability under the ABL Facility is subject to a borrowing base generally comprised of eligible inventory, accounts receivable and cash and cash equivalents held in certain accounts and certain subsidiaries. Our availability under the ABL Facility is, therefore, potentially subject to fluctuations, depending on the value of the eligible assets in the borrowing base on a given valuation date. An inability to borrow under the ABL Facility may adversely affect our liquidity, results of operations and financial condition. 

Our operating cash requirements consist principally of inventory purchases, trade credit extended to customers, labor, occupancy costs and transportation and delivery costs. Non-operating cash requirements include debt service requirements, acquisition-related costs and capital expenditures.

Capital Expenditures

Cash capital expenditures for the three months endedDecember 31, 2017 were $4.1 million and related primarily to facility improvements and additional information technology investments. We expect our aggregate capital expenditures for fiscal year 2018 (excluding acquisitions and any assets acquired via capital leases) to be approximately $35.0 million. Capital expenditures are expected to be primarily related to fixed asset and equipment replacements, and improvements to our information technology infrastructure.

Credit Facilities

ABL Facility

The ABL Facility provides for committed revolving credit financing including a U.S. Tranche of up to $505.0 million, a Canadian Tranche of up to the USD equivalent of $40.0 million, and a FILO Tranche up to $30.0 million. The ABL Facility matures on June 9, 2021. Provided no default or event of default then exists or would arise therefrom, the ABL Borrowers have the option, at the beginning of each quarter, to request that the ABL Facility be increased by an aggregate amount, when included with any incremental borrowings issued under the Term Loan Facility, not to exceed $175.0 million.

The ABL Facility includes a letter of credit sub-facility, which permits up to $200.0 million of letters of credit under the U.S. Tranche (which may be denominated in USD, euros or other currencies approved by the administrative agent and the issuing bank) and up to the USD equivalent of $10.0 million of letters of credit under the Canadian Tranche (which may be denominated in CAD only). The ABL Facility also contains a FILO Tranche which can be used by any non-Canadian foreign subsidiary for loans or letters of credit up to an aggregate amount not to exceed $30.0 million.

Obligations under the ABL Facility are secured by a first priority lien on all ABL Facility first lien collateral, including eligible inventory and accounts receivable of the ABL Borrowers, and a second priority lien on all Term Loan Facility first lien collateral including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, in each case, subject to certain limitations; provided, that no ABL Facility first lien collateral or Term Loan Facility first lien collateral owned by the Canadian Borrower secure the obligations owing under the U.S. tranche of the ABL Facility.

At December 31, 2017, we had $200.2 million in borrowings outstanding under the ABL Facility. Interest expense related to the ABL Facility, excluding amortization of debt issuance costs, was $1.9 million and $1.3 million for the three months ended December 31, 2017 and 2016, respectively.

As of December 31, 2017, we were in compliance with the covenants of the ABL Facility.

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Term Loan Facility

The Term Loan Facility provides secured debt financing in an aggregate principal amount of up to $655.0 million and the right, at our option, to request additional tranches of term loans in an aggregate principal amount, when included with any incremental borrowings issued under the ABL Facility, amount up to $175.0 million, plus unlimited additional amounts such that the aggregate principal amount of indebtedness outstanding at the time of incurrence does not cause the Secured Net Leverage Ratio, calculated on a pro forma basis, to exceed 4.1 to 1.0. Availability of such additional tranches of term loans is subject to the absence of any default, and among other things, the receipt of commitments by existing or additional financial institutions. The Term Loan Facility matures on June 9, 2023.

On December 19, 2017, we completed TLB Amendment No. 2 amending the Term Loan Facility. TLB Amendment No. 2 reduced the interest rate margin applicable to outstanding term loans by 50 basis points from 3.75% to 3.25% for LIBOR loans and from 2.75% to 2.25% for base rate loans. TLB Amendment No. 2 also provides for a soft call premium equal to 1% of the amount of the term loans that are subject to certain repricing transactions occurring on or prior to twelve months from the effective date of TLB Amendment No. 2. As a result of TLB Amendment No. 2, we paid debt issuance costs of $0.8 million during the three months ended December 31, 2017, which will be amortized throughout the remaining life of the Term Loan Facility. TLB Amendment No. 2 will result in an estimated $3.2 million reduction to our annual cash interest expense for each of the next five years, while all other terms of the Term Loan Facility remain unchanged. There were no changes to the total or secured leverage ratios.

Obligations under the Term Loan Facility are secured by a first priority lien on all Term Loan Facility first lien collateral, including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, and a second priority lien on all ABL Facility first lien collateral, including accounts receivable and inventory of the loan parties under the Term Loan Facility, subject to certain limitations.

At December 31, 2017, we had $645.2 million in borrowings outstanding under the Term Loan Facility. We are required to make mandatory principal payments on an annual basis, commencing with the fiscal year ending September 30, 2017, if cash flows for the year, as defined in the agreement, exceed certain levels specified in the agreement. We were not required to make such principal payment for fiscal year 2017. Interest expense related to the Term Loan Facility, excluding original issue discount amortization and amortization of debt issuance costs, was $8.3 million and $8.8 million for the three months ended December 31, 2017 and 2016, respectively.

As of December 31, 2017, we were in compliance with the covenants of the Term Loan Facility.

Liquidity

The following table summarizes our liquidity position as of December 31, 2017 and September 30, 2017:

	December 31, 2017		September 30, 2017
Cash and cash equivalents	$	41.4	$	53.9
ABL Facility availability	211.6		277.8
Total liquidity	$	253.0	$	331.7

Cash and Cash Equivalents

At December 31, 2017, we had $41.4 million in cash and cash equivalents of which $37.1 million was held by foreign subsidiaries, $27.7 million of which was denominated in currencies other than the USD, primarily in euros, and $7.8 million in China denominated in RMB. While the RMB is convertible into USD, foreign exchange transactions are subject to approvals from the SAFE. We do not anticipate any significant adverse impact to overall liquidity from potential limitations on the transfer or conversion of cash and cash equivalents.

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ABL Facility

Under the ABL Facility, if as of any date of determination when Trigger Event Excess Availability (as defined in the ABL Facility) is below certain thresholds or upon certain defaults, we will be required to deposit cash on a daily basis from certain depository accounts in a collection account maintained with the administrative agent, which will be used to repay outstanding loans and cash collateralized letters of credit. Such requirement will be deemed continuing until the Trigger Event Excess Availability exceeds such threshold amount for 20 consecutive days. At December 31, 2017, Trigger Event Excess Availability under the ABL Facility was $211.6 million, which was $165.5 million in excess of the $46.1 million threshold that would trigger the foregoing requirements.

Based on current and anticipated levels of operations, capital spending projections and conditions in our markets, we believe that cash on hand, together with cash flows from operations and borrowings available under the ABL Facility, are adequate to meet our working capital and capital expenditure needs as well as any debt service and other cash requirements for at least twelve months.

In addition to operating and non-operating cash requirements previously described, our longer-term liquidity needs are primarily related to our final maturity debt payments due in 2021 and 2023. Depending on market conditions and other factors, we may also consider alternative financing options, including, but not limited to, issuance of equity, issuance of debt or refinancing of our existing debt obligations.

Cash Flows

The following table sets forth the major categories of our cash flows for the three months endedDecember 31, 2017 and 2016:

Major Categories of Cash Flows
(in millions)	Three Months Ended December 31, 2017			Three Months Ended December 31, 2016
Net cash used in operating activities	$	(59.2	)	$	(9.8	)
Net cash used in investing activities	(3.5		)	(8.9		)
Net cash provided by financing activities	50.1			5.3
Effect of exchange rate changes on cash and cash equivalents	0.1			(0.8		)
Decrease in cash and cash equivalents	(12.5		)	(14.2		)
Cash and cash equivalents at the beginning of period	53.9			47.5
Cash and cash equivalents at the end of period	$	41.4		$	33.3

Three Months EndedDecember 31, 2017 Compared to Three Months EndedDecember 31, 2016

Cash flows from operating activities

Net cash used in operating activities for the three months endedDecember 31, 2017 was $59.2 million. Net income of $26.5 million, adjusted for significant non-cash items such as depreciation and amortization expenses, amortization of debt issuance costs, provision for bad debt, deferred income taxes, equity based compensation expense, and changes relating to contingent consideration liabilities collectively totaling $2.2 million, resulted in cash inflows of $28.7 million during the three months endedDecember 31, 2017. Net cash used by operating activities was impacted by the items specified below:

• Accounts and notes receivable decreased $36.9 million primarily driven by lower sales volumes experienced during the period. There were no significant changes in billing terms during the current period.

• Inventories increased $50.5 million primarily due to replenishment of inventory and supply becoming available in the Plastics line of business.

• Accounts payable decreased $60.8 million primarily driven by timing of payments during the three months endedDecember 31, 2017.

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• Accrued expenses and other liabilities decreased $12.6 million which included the payment of the annual employee incentive compensation.

• Other current assets and other assets and liabilities were impacted by $0.9 million.

Net cash used in operating activities for the three months endedDecember 31, 2016 was $9.8 million. Net loss of $8.3 million, adjusted for the gain related to reimbursement for certain capital expenditures incurred in connection with the relocation of certain operations and significant non-cash items such as depreciation and amortization expenses, amortization of debt issuance costs, provision for bad debt, deferred income taxes, equity based compensation expense, and changes relating to contingent consideration liabilities, collectively totaling $22.7 million, resulted in cash inflows of $14.4 million during the three months ended December 31, 2016. Net cash used by operating activities was impacted by the items specified below:

• Accounts and notes receivable decreased $15.2 million primarily driven by lower sales volumes and selling prices experienced during the period as well as timing of collections at period end. There were no significant changes in billing terms or collection processes during the three months endedDecember 31, 2016.

• Accounts payable decreased $38.6 million. The decrease in accounts payable was driven by lower volumes and purchase prices during the three months endedDecember 31, 2016.

• There was a decrease in inventories of $10.1 million during the three months endedDecember 31, 2016, which reflected the impact of improved inventory management and lower prices for inventory purchases.

• Accrued expenses and other liabilities decreased $9.7 million which included the payment of the annual employee incentive compensation.

• Other current assets increased $0.6 million primarily driven by prepayments on certain inventory purchases.

• Other long-term liabilities decreased $0.6 million.

Cash flows from investing activities

Investing activities used$3.5 million of cash during the three months endedDecember 31, 2017, due to the additions of property and equipment of $4.1 million mainly related to facility improvements and additional information technology investments, partially offset by $0.6 million of proceeds from the disposal of property and equipment.

Investing activities used$8.9 million of cash during the three months endedDecember 31, 2016, primarily due to $5.1 million paid to effect asset acquisitions, and the additions of property and equipment of $6.6 million mainly related to facility improvements and additional information technology investments, partially offset by $2.8 million of cash proceeds related to the reimbursement for certain capital expenditures incurred in connection with the relocation of certain operations.

Cash flows from financing activities

Financing activities provided$50.1 million of cash during the three months endedDecember 31, 2017, primarily as a result of net borrowings on the ABL Facility of $60.9 million partially offset by net payments on short-term debt of $3.7 million, payments on the Term Loan Facility of $1.6 million, capital lease payments of $0.5 million, and the payment of debt issuance costs of $0.8 million related to TLB Amendment No. 2. In addition, in October 2017, $4.2 million was paid to TPG related to the TRA liability.

Financing activities provided$5.3 million of cash during the three months endedDecember 31, 2016, primarily as a result of net borrowings on the ABL Facility of $6.0 million and net borrowings on short-term debt of $1.6 million, partially offset by payments on the Term Loan Facility of $1.6 million and capital lease payments of $0.7 million.

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Contractual Obligations and Commitments

As of December 31, 2017, amounts due under our contractual commitments were as follows: 

	Payments Due by Period (in millions)
	Less than 1 Year		1-3 Years		4-5 Years		Morethan 5Years		Total
Short-term and long-term debt obligations (1)	$	44.4	$	13.0	$	213.2	$	612.8	$	883.4
Estimated interest payments on long-term debt obligations (2)	38.8		78.5		64.5		15.4		197.2
Capital lease obligations (3)	8.5		14.7		20.7		27.1		71.0
Operating lease obligations (4)	15.2		18.4		10.6		2.6		46.8
Employee benefit obligations	—		—		—		3.0		3.0
Contingent consideration (5)	9.2		34.0		65.3		72.5		181.0
Other obligations (6)	6.6		1.4		1.3		1.3		10.6
Total	$	122.7	$	160.0	$	375.6	$	734.7	$	1,393.0

⁽¹⁾  Short-term obligations primarily include the payment of $38.0 million outstanding under credit facilities available to our operations in China and $6.4 million in principal installment payments under our Term Loan Facility. Long-term debt obligations include (i) the payment of $200.2 million in outstanding principal (as of December 31, 2017) under our ABL Facility and (ii) the payment of $638.8 million in outstanding principal under our Term Loan Facility. See Note 7 to our condensed consolidated financial statements.

⁽²⁾  Estimated interest payments include cash interest payments and estimated commitment fees on long-term debt obligations. Variable rate interest payments were estimated using interest rates as of December 31, 2017 held constant to maturity.

⁽³⁾  Capital lease obligations represent future payments on capital lease agreements, including lease payments on all tractors under the Ryder Lease and the Montgomery Lease. The amounts above include executory costs of $2.4 million per year, for aggregate executory costs totaling $16.8 million. Additionally, the amounts include decreasing annual interest payments ranging from $2.1 million to $0.1 million, for aggregate interest payments totaling $17.1 million on all capital leases. We are permitted to terminate the lease of an individual tractor under the Ryder Lease on the anniversary of its delivery date, provided that certain conditions are met. In the event we terminate the lease of an individual tractor in accordance with the terms of the Ryder Lease, we may elect to purchase the individual tractor at a predetermined residual value or return the tractor to Ryder, subject to an adjustment based on the then-current market value of the individual tractor. See Note 7 to our condensed consolidated financial statements.

⁽⁴⁾  Operating lease obligations represent payments for a variety of facilities and equipment under non-cancellable operating lease agreements, including office buildings, transportation equipment, warehouses and storage facilities and other equipment.

⁽⁵⁾  Liabilities for contingent consideration are related (i) to the TRA that we entered into in connection with the Business Combination and (ii) the Deferred Cash Consideration that will be paid to Selling Equityholders pursuant to the Merger Agreement. The amount included in the table above for the Deferred Cash Consideration is based on the undiscounted expected value of the payment and is currently included in the 4-5 Years column based on the final payment date of June 9, 2021 as defined in the Merger Agreement. However, as further defined in the Merger Agreement, payments could be required to be made by the Company prior to June 9, 2021. The timing of payments associated with the liability for the contingent consideration related to the TRA is based on expected undiscounted cash flows in future periods, and may change based on actual results. See Notes 4 and 9 to our condensed consolidated financial statements.

(6) Other obligations are related to (i) non-cancellable equipment orders, (ii) certain IT-related contracts and (iii) remaining payments related to the asset acquisitions completed during the fiscal year ended September 30, 2017 (see Note 3 to our condensed consolidated financial statements).

Not included in the table above is $10.8 million for a planned land acquisition during fiscal year 2019. The consummation of this purchase agreement is subject to customary closing conditions.

Off Balance Sheet Arrangements

We had no off balance sheet arrangements, as defined in Item 303(a) (4) (ii) of Regulation S-K at December 31, 2017.

Recent Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Commodity and Product Price Risk

Our business model is to buy and sell products at current market prices in quantities approximately equal to estimated customer demand. Energy costs are a significant component of raw materials that are included in our product costs. Rising or volatile raw material prices for our suppliers, especially those of hydrocarbon derivatives, may cause our costs to increase or may result in volatility in our profitability. Although we do not speculate on changes in the prices of the products we sell, because we maintain inventories in order to serve the needs of our customers, we are subject to the risk of reductions in market prices for products we hold in inventory. We do not use derivatives to manage our commodity price risk because of the large number of products we sell and the large variety of raw materials used in the production of those products. Inventory management practices are focused on managing product price risk by generally purchasing our inventories via our ERP system which helps us forecast customer demand based on historical practices. Global inventory balances can fluctuate based on variations in regional customer demand forecasts. We collaborate directly with customers in all regions to enhance the ongoing accuracy of these forecasts in order to reduce the number of days sales held in inventories, as well as lower the amount of any slow moving and older inventories. In addition, we are generally able to pass on price increases to our customers, subject to market conditions, such as declining or otherwise volatile market prices for feedstocks, the presence of competitors in particular geographic and product markets and prevailing pricing mechanisms in customer contracts. We believe that these risk management practices reduce our exposure to changes in product selling prices or costs; however, significant unanticipated changes in market conditions or commodity prices could adversely affect our results of operations, financial condition and cash flows, as the prices of the products we purchase and sell are volatile.

Credit Risk

We are subject to the risk of loss arising from the credit risk related to the possible inability of our customers to pay for the products we resell and distribute to them. We attempt to limit our credit risk by monitoring the creditworthiness of our customers to whom we extend credit and establish credit limits in accordance with our credit policy. We perform credit evaluations on substantially all customers requesting credit and we will not extend credit to customers for whom we have substantial concerns and will deal with those customers on a cash basis. With the exception of our operations in China, we generally do not require collateral with respect to credit extended to customers; however, we will not extend credit to customers for whom we have substantial concerns and will deal with those customers on a cash basis. Our operations in China offer billing terms that allow certain customers to remit payment during a period of time ranging from 30 days to nine months. These notes receivable ($8.3 million at December 31, 2017) are supported by banknotes issued by large banks in China on behalf of their customers.

At December 31, 2017, no individual customer represented greater than 5.0% of the outstanding accounts receivable balance.

Interest Rate Risk

Interest rate risks can occur due to changes in market interest rates. This risk results from changes in the fair values of fixed-interest rate financial instruments or from changes in the cash flows of variable-interest rate financial instruments. The optimal structure of variable and fixed interest rates is determined as part of interest rate risk management. It is not possible to simultaneously minimize both kinds of interest rate risk. We take steps to mitigate interest rate risk in part by entering into interest rate swap agreements as described under “Fair Value Measurements” below. Also, see Note 8 to our condensed consolidated financial statements.

Borrowings under our ABL Facility bear interest at a variable rate, which was a weighted average rate of 2.92% for the three months endedDecember 31, 2017. For each $100.0 million drawn on the ABL Facility, a 100 basis point increase in the interest rate would result in a $1.0 million increase in annual interest expense.

On December 19, 2017, we completed TLB Amendment No. 2 amending the Term Loan Facility. TLB Amendment No. 2 reduced the interest rate margin applicable to outstanding term loans by 50 basis points from 3.75% to 3.25% for LIBOR loans and from 2.75% to 2.25% for base rate loans. TLB Amendment No. 2 also provides for a soft call premium equal to 1% of the amount of the term loans that are subject to certain repricing transactions occurring on or prior to twelve months from the effective date of TLB Amendment No. 2.

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Changes in market interest rates will have an effect on the Term Loan Facility interest expense. A 100 basis point increase/decrease in the interest rate would result in an increase/decrease of $6.5 million in annual interest expense based on the Term Loan Facility balance.

Fair Value Measurements

Contingent Consideration

As a result of the Business Combination, we incurred liabilities related to contingent consideration payable to the Selling Equityholders, which are required to be adjusted to fair value at each reporting period. These measurements are considered Level 3 measurements within the fair value hierarchy. Projected taxable income, current interest rates, current tax rates and the market price of our common stock are key inputs used to estimate the fair value of these liabilities. As a result, any changes in these inputs will impact the fair value of these liabilities and could materially impact the amount of income or expense recorded each reporting period.

The fair value of the liability for the contingent consideration related to the TRA was $72.2 million as of December 31, 2017. The calculation of the liability for the contingent consideration related to the TRA uses a cash flow model which incorporates current interest rates in the discount rate used to discount the obligation to present value. A 100 basis point increase in the discount rate compared to the discount rate used at the December 31, 2017 valuation would have resulted in a decrease of approximately $0.5 million in the value of the liability for the contingent consideration related to the TRA. Additionally, this cash flow model is sensitive to changes in applicable tax rates. A 100 basis point increase in the tax rate compared to the tax rate used at the December 31, 2017 valuation would have resulted in an increase of approximately $2.3 million in the value of the liability for the contingent consideration related to the TRA.

The fair value of the liability for the contingent consideration related to Deferred Cash Consideration was $45.2 million as of December 31, 2017. The liability for the contingent consideration related to the Deferred Cash Consideration is highly sensitive to the price of our common stock at each valuation date. A $1.00 increase/decrease in the price of our common stock from its December 31, 2017 price would have increased/decreased the fair value of the liability for the Deferred Cash Consideration by approximately $5.0 million.

Derivatives

During the three months ended March 31, 2017, we entered into four interest rate swap agreements with a combined notional amount of $300.0 million to help mitigate interest rate risk related to the variable-rate Term Loan Facility. The swap agreements expire at various dates from February 2020 through March 2022 and are accounted for as cash flow hedges. Gains or losses resulting from changes in the fair value of the swaps are recorded in other comprehensive income. Gains and losses recorded in other comprehensive income are reclassified into and recognized in income when the interest expense on the Term Loan Facility is recognized. At December 31, 2017, we recorded a net asset of $1.6 million in the condensed consolidated balance sheet related to these instruments.

During the three months endedDecember 31, 2017, we reclassified into income and recognized a realized loss on the interest rate swaps of $0.4 million, which was recorded in interest expense. During the three months endedDecember 31, 2017, we recorded an unrealized gain on the interest rate swaps (net of taxes and reclassifications into income) of $1.9 million, which was recorded in other comprehensive income. As of December 31, 2017, less than $0.1 million in unrealized gains were expected to be realized and recognized in income within the next twelve months.

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Foreign Currency Risk

We may be adversely affected by foreign exchange rate fluctuations since we conduct our business on an international basis in multiple currencies. A portion of our sales and costs of sales are denominated in currencies other than the functional currency of our subsidiaries, exposing us to currency transaction risk.  Additionally, because we report our consolidated results in USD, the results of operations and the financial position of our local international operations, which are generally reported in the relevant local currencies, are translated into USD at the applicable exchange rates for inclusion in our condensed consolidated financial statements, exposing us to currency translation risk.  Further, we have exposure to foreign exchange fluctuations arising from the remeasurement of certain foreign operations where the USD is the functional currency but accounting records are kept in local currency. In this respect, we are vulnerable to currency remeasurement gains and losses to the extent that monetary assets and liabilities denominated in local currency do not offset each other when remeasured into USD.

We currently do not utilize financial derivatives to manage our foreign currency risk, but we continue to monitor our exposure to foreign currency risk, employ operational strategies where practical and may consider utilizing financial derivatives in the future to mitigate losses associated with these foreign currency risks.

Included in our condensed consolidated statement of operations for the three months endedDecember 31, 2017 is a $0.5 million net gain related to foreign exchange rate fluctuations, including a $0.3 million net remeasurement loss. The most significant currency exposures during this period were to the RMB, CAD and the Peso versus the USD. These currencies fluctuated to various degrees but such fluctuations did not exceed 5% from their respective values since September 30, 2017. Assuming the same directional fluctuations as occurred during the three months endedDecember 31, 2017, a hypothetical 10.0% weakening/strengthening in the average exchange rates of these currencies from that date would have generated a net loss/gain of $6.4 million in our condensed consolidated statement of operations for the three months endedDecember 31, 2017.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures 

As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based on the evaluation performed, our management, including the principal executive officer and principal financial officer, concluded that the disclosure controls and procedures were effective as of December 31, 2017.

Changes in Internal Control over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer evaluated the changes in our internal control over financial reporting that occurred during the quarterly period covered by this Quarterly Report on Form 10-Q. Based on their evaluation, it is concluded that there had been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2017 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

Item 1. Legal Proceedings

We are not currently a party to any legal proceedings that, if determined adversely against us, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations or cash flows.     

In July 2014, Ashland filed a lawsuit -- Ashland Inc. v. Nexeo Solutions, LLC, Case No. N14C-07-243 JTV CCLD, in the Superior Court for the State of Delaware in and for New Castle County. In the suit, Ashland seeks a declaration that Solutions is obligated to indemnify Ashland for losses Ashland incurs pertaining to the Other Retained Remediation Liabilities, up to the amount of a $5.0 million deductible, which Ashland contends applies pursuant to the ADA Purchase Agreement. Ashland further alleges that Solutions has breached duties related to that agreement by not having so indemnified Ashland for amounts Ashland has incurred for the Other Retained Remediation Liabilities at sites where Ashland disposed of wastes prior to the Ashland Distribution Acquisition, and on that basis seeks unspecified compensatory damages, costs and attorney’s fees. On June 21, 2017 the Company’s Motion for Summary Judgment in this lawsuit was granted. Ashland appealed the ruling on July 20, 2017. On January 31, 2018, the Delaware Supreme Court affirmed the lower court’s grant of the Company’s Motion for Summary Judgment. In the event Ashland requests rehearing of the ruling, the Company will continue to vigorously defend the lawsuit.

In June 2014, we self-disclosed to the DTSC that an inventory of our Fairfield facility had revealed potential violations of RCRA and the California Health and Safety Code. Although no formal proceeding has been initiated, we expect the DTSC to seek payment of fines or other penalties for non-compliance. We do not expect the amount of any such fine or penalty to have a material adverse effect on our business, financial position or results of operations.

From time to time, we are party to ongoing legal proceedings in the ordinary course of business. While the outcome of these proceedings cannot be predicted with certainty, we do not believe the results of these proceedings, other than as is disclosed elsewhere in this Quarterly Report on Form 10-Q, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operation or liquidity.

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Item 1A. Risk Factors

We are subject to certain risks and hazards due to the nature of the business activities we conduct. For a discussion of these risks, see “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on December 7, 2017. These risks could materially and adversely affect our business, financial condition, cash flows and result of operations. There have been no material changes to the risk factors described in the Form 10-K described above. We may experience additional risks and uncertainties not currently known to us or, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The table below provides information concerning our repurchase of shares of our common stock during the three months endedDecember 31, 2017:

	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchase as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
November 8, 2017	2,777	$	7.90	—	—
Total	2,777	$	7.90	—	—

⁽¹⁾ Shares transferred to the Company to satisfy employees tax withholding obligations in connection with the vesting of the RSUs.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Exhibit Index

Exhibit Number	Description
3.1	Second Amended and Restated Certificate of Incorporation of Nexeo Solutions, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated June 9, 2016)
3.2	Amended and Restated Bylaws of Nexeo Solutions, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K dated June 9, 2016)
4.1	Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Company's S-1 Registration Statement (Commission File No. 333-195854)
4.2	Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.2 to the Company's S-1 Registration Statement (Commission File No. 333-195854)
4.3	Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Company's S-1 Registration Statement (Commission File No. 333-195854)
4.4	Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant (incorporated by reference to Exhibit 4.4 to the Company's S-1 Registration Statement (Commission File No. 333-195854)
4.5	Shareholders' and Registration Rights Agreement, dated as of March 21, 2016, by and among TPG Capital LLC, WL Ross Sponsor LLC and WL Ross Holding Corp. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 21, 2016)
4.6	Amendment No. 1 to Shareholders' and Registration Rights Agreement, dated June 6, 2016, by and among WL Ross Holding Corp., WL Ross Sponsor LLC and Nexeo Holdco, LLC (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K dated June 6, 2016)
4.7	Form of Joinder to Shareholders' and Registration Rights Agreement (incorporated by reference to Exhibit 10.10 to the Company's Current Report on Form 8-K dated June 9, 2016)
4.8	Waiver and Consent Agreement made as of September 13, 2017 by and among Nexeo Solutions, Inc. and Nexeo Holdco, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated September 13, 2017)
10.1†t	Form of Non-Statutory Stock Option Agreement under the Nexeo Solutions, Inc. 2016 Long-Term Incentive Plan
10.2†t	Form of Restricted Stock Agreement under the Nexeo Solutions, Inc. 2016 Long-Term Incentive Plan
10.3	Amendment No. 2, dated December 19, 2017, among Nexeo Solutions Holdings, LLC, Nexeo Solutions, LLC, Nexeo Solutions Sub Holding Corp., the other loan parties identified therein, Bank of America, N.A., as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current report on Form 8-K dated December 19, 2017)

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31.1†	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2†	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1††	Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Interactive data files pursuant to Rule 405 of Regulation S-T.

† Filed herewith.

††Furnished herewith.

tManagement contract or compensatory plan or arrangement.

* Pursuant to Rule 406T of Regulation S-T, the interactive data files included in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Nexeo Solutions, Inc.
February 8, 2018	By:	/s/ Ross J. Crane
		Ross J. Crane
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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EX-10.1

Exhibit 10.1

NEXEO SOLUTIONS, INC.

2016 LONG TERM INCENTIVE PLANNONSTATUTORY STOCK OPTION AGREEMENT

This Agreement is made and entered into as of [Date] (the “Date of Grant”), by and between Nexeo Solutions, Inc., a Delaware corporation (the “Company”), and [Employee] (the “Grantee” or “you”);

WHEREAS, the Company, in order to induce you to continue to dedicate services to the Company and its Subsidiaries, and to materially contribute to the success of the Company and its Subsidiaries, agrees to grant you this stock option award;

WHEREAS, the Company has adopted the Nexeo Solutions, Inc. 2016 Long Term Incentive Plan, as the same may be amended from time to time (the “Plan”), under which the Company is authorized to grant options to certain employees of the Company and its subsidiaries;

WHEREAS, a copy of the Plan has been furnished to you and shall be deemed a part of this stock option grant and Nonstatutory Stock Option Agreement (the “Agreement”) as if fully set forth herein; and

WHEREAS, you desire to accept the stock option award made pursuant to this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other valuable consideration hereinafter set forth, the parties agree as follows:

1.The Grant.

(a) Subject to the conditions set forth below, the Company hereby grants to you, effective as of the Date of Grant, as a matter of separate inducement but not in lieu of any salary or other compensation for your services for the Company, and subject to the terms of the Plan and this Agreement, an award consisting of the right and option (the “Option”) to purchase an aggregate number of [Grant] shares of common stock, par value $0.0001 per share, of the Company (“Stock”) at the Exercise Price indicated below, in accordance with the terms and conditions set forth herein and in the Plan (the “Award”); provided, however, that the ultimate portion of this Option that may be exercised pursuant to Section 5 hereof shall be determined in accordance with the vesting provisions of Section 6 and 7. This Option shall be treated as a “Nonstatutory Stock Option” under the Plan and shall be subject to all of the terms and provisions of the Plan. Except with respect to capitalized terms defined in this Agreement with meanings other than those given the same terms in the Plan, to the extent that any provision of this Agreement conflicts with the expressly applicable terms of the Plan, you acknowledge and agree that those terms of the Plan shall control, and, if necessary, the applicable terms of this Agreement shall be deemed amended so as to carry out the purpose and intent of the Plan. Capitalized terms that are not otherwise defined in this Agreement shall have the meanings given to them in the Plan.

(b) This Option shall not be treated as an incentive stock option within the meaning of Section 422(b) of the Code.

(c) The purchase price of each share of Stock to be paid by you upon the exercise of this Option shall equal [$__.__], which is the closing sale price per share for Nexeo Solutions, Inc. as reported on the National Association of Securities Dealers Automated Quotations (“Nasdaq”) exchange on the Date of Grant (the “Exercise Price”).

2.No Shareholder Rights. The Option granted pursuant to this Agreement does not and shall not entitle you to any rights of a holder of Stock prior to the date shares of Stock are issued to you upon exercise of the Award. Your rights with respect to the Option shall remain forfeitable at all times prior to the date on which rights become vested and the restrictions with respect to the Option lapse in accordance with Section 6 or 7 of this Agreement.

3.Dividends. This Option does not entitle to you any dividends or other distributions declared by the Company and paid prior to the date you exercise the Option pursuant to Section 5 (the “Exercise Date”). After the Exercise Date, you will be entitled to receive all dividends or other distributions the Company declares and pays after and following such Exercise Date on the number of shares of Stock you are issued pursuant to exercise of the Option under this Agreement. You are not entitled to vote any shares of Stock by reason of the granting of this Award prior to the date that you are issued shares of Stock pursuant to exercise of the Option under this Agreement.

4.Forfeiture. This Option is subject to forfeiture and may not be sold, transferred, or otherwise alienated or hypothecated until shares of Stock are issued to you as contemplated in this Agreement.

5.Exercise and Issuance of Stock. No shares of Stock shall be issued to you prior to the date on which the Option vests and becomes exercisable in accordance with Section 6 or 7 of this Agreement. Subject to further provisions of this Agreement, provided that you satisfy all other vesting conditions described in Section 6 or 7 below, you may exercise this Option for the number of shares of Stock determined in accordance with Section 6 below, by providing notice of exercise in the manner specified by the Company from time to time following the dates set forth below (as applicable, each date being a “Vesting Date”).

This Option shall not be exercisable in any event after the expiration of ten years from the Date of Grant (the “Expiration Date”) notwithstanding any provision of this Agreement. Unless you elect to pay the Exercise Price in cash, the Company shall withhold (or “net”) such number of whole shares of Stock otherwise deliverable to you upon exercise of the Option having a Fair Market Value on the Exercise Date equal to the Exercise Price of the aggregate number of Options exercised. No delivery of shares of Stock shall be made pursuant to this Agreement until you have paid or made arrangements approved by the Company to satisfy in full the Exercise Price. No fraction of a share of Stock shall be issued by the Company upon exercise of this Option or accepted by the Company in payment of the Exercise Price thereof; rather, the Company shall make a cash payment to you equal to the value of a fractional share of Stock withheld that exceeds the aggregate Exercise Price due.

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6.Vesting and Exercisability of Options. Subject to the terms and conditions of this Agreement and the Plan, the Option will vest and become exercisable in accordance with the following schedule provided that Grantee has been continuously employed by the Company from the Date of Grant through the applicable Vesting Date:

Percentage of Total Number

of Options Which Vests and

Vesting DateBecome Exercisable

1^st Anniversary of Date of Grant    33.3%

2^nd Anniversary of Date of Grant    33.3%

3^rd Anniversary of Date of Grant    33.4%

7.Termination of Employment; Change of Control.

(a)Effect of Termination of Employment.

(i)Termination Generally. Subject to Sections 6(a)(ii) and (b) below, if your employment with the Company or any of its Subsidiaries is terminated for any reason (including a termination for “Cause,” as defined in Section 6(a)(iii) below), the Option granted hereunder shall become null and void and immediately forfeited to the Company in its entirety without payment of consideration therefor to the Grantee, and the Grantee shall not be entitled to any shares of Stock or cash under this Agreement.

(ii)Post-Terminations Exercise Periods.

(A) If your employment is terminated by the Company without Cause or by you due to Good Reason (as defined below), this Option may be exercised by you at any time during the period of 30 days following such termination, or by your estate (or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of your death) during a six-month period following your death if you die during such 30-day period, but in each case only as to the number of shares of Stock you were entitled to purchase hereunder, as determined in accordance with Section 6, upon exercise of this Option as of the date your employment so terminates.

(B) If your employment terminates due to your death or “disability” (as such term is defined in the Company’s long-term disability plan), this Option may be exercised by you (or your estate or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of your death) at any time during the period ending on the earlier of the Expiration Date (as defined above) or the third anniversary of the date of termination of your employment but only as to the number of shares of Stock you were entitled to purchase on the date of such termination in accordance with the schedule set forth in Section 6.

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(C)If your employment with the Company terminates by reason of normal retirement at or after age 65, as determined by the Committee in its sole discretion, this Option may be exercised by you (or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of your death) at any time during the period ending on the earlier of the Expiration Date or the third anniversary of the date of your retirement, but only as to the number of shares of Stock you were entitled to purchase on the date of such retirement in accordance with the schedule set forth in Section 6. In connection with the termination of your employment with the Company by reason of early retirement, applicable management of the Company and/or business unit/group may recommend to the Committee or its delegate, as applicable, that this Option be retained. In such event, the Committee or its delegate, as the case may be, shall consider such recommendation and may, in the Committee’s or such delegate’s sole discretion, approve the retention of this Option following such early retirement, in which case the Option may be exercised by you (or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of your death) at any time during the period ending on the earlier of the Expiration Date or the third anniversary of the date of your early retirement, but only as to the number of shares of Stock you were entitled to purchase on the date of your early retirement in accordance with the schedule set forth in Section 6.

(iii)Definition of Cause. For purposes of this Agreement, if the Grantee is subject to an effective, written employment agreement with the Company or any of its subsidiaries, “Cause” shall have the meaning given such term in the employment agreement, and if the Grantee is not subject to such an employment agreement but is a participant in the Nexeo Solutions, Inc. Severance Plan for U.S. Officers and Executives (the “Severance Plan”), “Cause” shall have the meaning given such term in such plan. If neither of the foregoing are applicable to the Grantee, then “Cause” shall mean: (A) nonperformance of, or gross negligence, or gross incompetence in the performance of Grantee’s duties with respect to the Company or any of its affiliates, as reasonably determined by the Company, (B) commission by Grantee of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company or any of its affiliates or other conduct harmful or potentially harmful to the Company’s or any of its affiliate’s best interests, as reasonably determined by the Company, (C) a material breach by Grantee of any restrictive covenants that exist between Grantee and the Company or its affiliates, (D) Grantee’s conviction, plea of no contest or nolo contendere, deferred adjudication, or unadjudicated probation for any felony or any crime involving moral turpitude, (E) the failure of Grantee to carry out, or comply with, in any material respect, any lawful directive of the Board (which the Board, in its sole discretion, may give Grantee notice of, and an opportunity to remedy) or of the Grantee’s supervisor, or (F) Grantee’s unlawful use (including being under the influence) or possession of illegal drugs. For purposes of clause (B), no act or failure to act on Grantee’s part shall be deemed “willful” unless done, or omitted to be done, by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in the best interest of the Company.

(b)Effect of Change of Control. Notwithstanding the vesting provisions set forth above, in the event a Change of Control (as defined in this Section 6(b)) occurs and, within two years after the date such Change of Control occurs the Company involuntarily terminates your employment without Cause or you voluntarily terminate your employment for Good Reason (as defined below), this Option will become fully vested and exercisable immediately as of the date of

4

your termination of employment. For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following events:

(i)A “change in the ownership of the Company” which shall occur on the date that any one person, or more than one person acting as a group, acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; however, if any one person or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons will not be considered a “change in the ownership of the Company” (or to cause a “change in the effective control of the Company” within the meaning of Section 7(b)(ii) below), and an increase of the effective percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph; provided, further, however, that for purposes of this Section 7(b)(i), any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company shall not constitute a Change of Control. This Section 7(b)(i) applies only when there is a transfer of the stock of the Company (or issuance of stock), and stock in the Company remains outstanding after the transaction.

(ii)A “change in the effective control of the Company” which shall occur on the date that either (1) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company, except for any acquisition (i) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (ii) by any shareholder of the Company that beneficially owns at least five percent (5%) of the outstanding stock of the Company as of immediately following the closing of the Merger (as such term is defined in the Severance Plan); or (2) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of a “change in the effective control of the Company,” if any one person, or more than one person acting as a group, is considered to effectively control the Company within the meaning of this Section 7(b)(ii), the acquisition of additional control of the Company by the same person or persons is not considered a “change in the effective control of the Company,” or to cause a “change in the ownership of the Company” within the meaning of Section 7.3(b)(i) above.

(iii)A “change in the ownership of a substantial portion of the Company’s assets” which shall occur on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) assets of the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Any transfer of assets to an entity that

5

is controlled by the shareholders of the Company immediately after the transfer, as provided in guidance issued pursuant to the Nonqualified Deferred Compensation Rules shall not constitute a Change of Control.

For purposes of this Section 7(b), the terms “ownership,” “own,” or “owned” shall refer to “beneficial ownership” as that term is used in Rule 13d-3 and Rule 13d-5 (or any successor provisions) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the terms “person” and “group” shall mean such terms as used in section 13(d)(3) or section 14(d)(2) of the Exchange Act (or any successor provisions). In addition, for purposes of this Section 7(b), “Company” includes (i) the Company and (ii) the entity for whom the Grantee performs the services for which this Award is granted. Notwithstanding anything in this Section 7(b) to the contrary, none of the following transactions shall constitute a Change of Control for purposes of this Agreement (a) any transaction commonly known as a Reverse Morris Trust transaction, as determined in good faith by the Board, or (b) the acquisition by TPG VI Neon I, L.P., TPG VI Neon II, L.P., TPG VI FOF Neon, L.P., or any of their respective affiliates of additional (x) shares of the Company, (y) voting power with respect to the Company, or (z) assets of the Company.

For purposes of this Section 7(b), if the Grantee is subject to an effective, written employment agreement with the Company or any of its subsidiaries, “Good Reason” shall have the meaning given such term in the employment agreement, and if the Grantee is not subject to such an employment agreement “Good Reason” shall have the meaning given such term in the Severance Plan. If neither of the foregoing are applicable to Grantee, then “Good Reason” shall mean the occurrence of any of the following events: (i) a material reduction in the Grantee’s position or duties, (ii) a material and adverse change in the Grantee’s compensation, which shall be deemed to include any reduction in the Grantee’s base salary or target bonus percentage, other than in connection with a reduction in the salaries or target bonus percentages applicable to all employees of the Company of the same employment level or grade as Grantee, or (iii) a requirement that the Grantee regularly perform the required duties of his or her employment from a location that is [•] miles or more from the location of his or her employment immediately preceding the Change of Control. Notwithstanding the foregoing, any assertion by the Grantee of a termination for Good Reason shall not be effective unless all of the following are satisfied: (a) the condition described in the foregoing clauses giving rise to the Grantee’s termination of employment must have arisen without the Grantee’s consent, (b) the Grantee must provide written notice to the Company of the condition the Grantee claim constitutes Good Reason within 30 days of the initial existence of the condition, (c) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company, and (d) the date of the Grantee’s termination of employment must occur within 90 days of the initial existence of the condition specified in such notice.

8.Leave of Absence. With respect to this Award, the Company or its employing Subsidiary may, in its sole discretion, determine that if you are on leave of absence for any reason, you will be considered to still be in the employ of the Company or its applicable employing Subsidiary, provided that no “separation from service” has occurred, as such term is defined in Section 409A of the Code and the regulations and guidance issued thereunder.

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9.Payment of Taxes. To the extent that the receipt or vesting of this Option or the issuance of shares of Stock with respect to this Option results in the receipt of compensation by you with respect to which the Company or a Subsidiary has a tax withholding obligation pursuant to applicable law, unless you elect to pay the amount of such obligations to the Company in cash, the Company or such Subsidiary shall withhold (or “net”) such number of shares of Stock otherwise payable to you as required to meet its withholding obligations under such applicable law. If such tax obligations are satisfied through the withholding of shares of Stock that are otherwise issuable to you pursuant to this Award (or through the surrender of shares of Stock by you to the Company), the number of shares of Stock that may be so withheld (or surrendered) by the Company or applicable Subsidiary shall be the maximum number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such tax liabilities, determined based on the greatest withholding rates for federal, state, foreign, and/or local tax purposes, including payroll taxes, that may be utilized without causing an Award otherwise classified as an equity award under ASC Topic 718 to be classified as a liability award under ASC Topic 718. No delivery of shares of Stock shall be made pursuant to this Agreement until you have paid or made arrangements approved by the Company or the Subsidiary to satisfy in full the applicable tax withholding requirements of the Company or Subsidiary.

10.Compliance with Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuance of Stock under this Agreement will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed. No Stock will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, Stock will not be issued hereunder unless 1.%2. a registration statement under the Securities Act is, at the time of issuance, in effect with respect to the shares issued or 2.%2. in the opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. YOU ARE CAUTIONED THAT ISSUANCE OF STOCK UPON THE EXERCISE OF THE OPTION GRANTED PURSUANT TO THIS AGREEMENT MAY NOT OCCUR UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the award will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company may require you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Company. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessary and appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons to make shares of Stock available for issuance.

11.Right of the Company or Subsidiaries to Terminate Services. Nothing in this Agreement confers upon you the right to continue in the employ of or performing services for the

7

Company or any Subsidiary, or interfere in any way with the rights of the Company or any subsidiary to terminate your employment or service relationship at any time.

12.Furnish Information. You agree to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or regulation.

13.No Liability for Good Faith Determinations. The Company and the members of the Committee shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Option granted hereunder.

14.Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Stock or other property to you or to your legal representative, heir, legatee, or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such Persons under this Agreement. To effectuate the foregoing, the Company may require you or your legal representative, heir, legatee, or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form but consistent with the preceding sentence, as it shall determine.

15.No Guarantee of Interests. Neither the Committee nor the Company guarantee the Stock of the Company from loss or depreciation.

16.Company Records. Records of the Company or its subsidiaries regarding your period of service, termination of service and the reason(s) therefor, and other matters shall be conclusive for all purposes hereunder unless determined by the Company to be incorrect.

17.Notice. All notices required or permitted under this Agreement must be in writing and personally delivered or sent by mail and shall be deemed to be delivered on the date on which it is actually received by the person to whom it is properly addressed or if earlier the date it is sent via certified United States mail. Notwithstanding the foregoing, any person entitled to notice hereunder may waive such notice in writing.

18.Successors. This Agreement shall be binding upon you, your legal representatives, heirs, legatees, and distributees and upon the Company, its successors, and assigns.

19.Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.

20.Company Action. Any action required of the Company shall be by resolution of the Board or by a person or entity authorized to act by resolution of the Board.

21.Headings. The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof.

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22.Governing Law. All questions arising with respect to the provisions of this Agreement shall be determined by application of the laws of Delaware, without giving any effect to any conflict of law provisions thereof, except to the extent Delaware state law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.

23.Amendment. Except as provided below, this Agreement may not be modified in any respect by any oral statement, representation, or agreement by any employee, officer, or representative of the Company or by any written agreement which materially adversely affects your rights hereunder unless signed by you and by an officer of the Company who is expressly authorized by the Company to execute such document. This Agreement may, however, be amended as permitted by the terms of the Plan, as in effect on the date of this Agreement. Notwithstanding anything in the Plan or this Agreement to the contrary, if the Committee determines that the terms of this grant do not, in whole or in part, satisfy the requirements of Section 409A of the Code, the Committee, in its sole discretion, may unilaterally modify this Agreement in such manner as it deems appropriate to comply with such section and any regulations or guidance issued thereunder.

24.Clawback. Notwithstanding any provisions in this Agreement to the contrary, any compensation, payments, or benefits provided hereunder, whether in the form of cash or otherwise, shall be subject to a clawback to the extent necessary to comply with the requirements of any applicable law, including but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, section 304 of the Sarbanes Oxley Act of 2002, or any regulations promulgated thereunder, or any policy adopted by the Employer pursuant to any such law (whether in existence as of the Effective Date or later adopted).

25.Entire Agreement. This Agreement is subject to all the terms, conditions, limitations, and restrictions contained in the Plan. This Agreement, together with the Plan and any employment agreement between the Grantee and the Company or its Subsidiaries, (a) represents the entire agreement between the parties hereto respecting the matters within its scope and (b) supersedes all prior and contemporaneous discussions, agreements, and understanding of every nature related thereto.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer thereunto duly authorized, and the Grantee has set his/her hand as of the date and year first above written.

NEXEO SOLUTIONS, INC.

By:    

Name:     

Title:     

[EMPLOYEE]

__________________________________________

GRANTEE

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EX-10.2

Exhibit 10.2

NEXEO SOLUTIONS, INC.

2016 LONG TERM INCENTIVE PLANRESTRICTED STOCK AGREEMENT

This Agreement is made and entered into as of [Date] (the “Date of Grant”), by and between Nexeo Solutions, Inc., a Delaware corporation (the “Company”), and [Employee] (the “Grantee” or “you”);

WHEREAS, the Company, in order to induce you to continue to dedicate services to the Company and its Subsidiaries, and to materially contribute to the success of the Company and its Subsidiaries, agrees to grant you this restricted stock award;

WHEREAS, the Company has adopted the Nexeo Solutions, Inc. 2016 Long Term Incentive Plan, as the same may be amended from time to time (the “Plan”), under which the Company is authorized to grant restricted stock to certain employees of the Company and its subsidiaries;

WHEREAS, a copy of the Plan has been furnished to you and shall be deemed a part of this Restricted Stock Agreement (the “Agreement”) as if fully set forth herein; and

WHEREAS, you desire to accept the restricted stock award made pursuant to this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other valuable consideration hereinafter set forth, the parties agree as follows:

1.The Grant. Subject to the conditions set forth below, the Company hereby grants to you, effective as of the Date of Grant, as a matter of separate inducement but not in lieu of any salary or other compensation for your services for the Company, and subject to the terms of the Plan and this Agreement, an award (the “Restricted Stock”) consisting of an aggregate number of [Grant] shares of common stock, par value $0.0001 per share, of the Company (“Stock”) in accordance with the terms and conditions set forth herein and in the Plan (the “Award”); provided, however, that the ultimate number of Restricted Stock that may be settled pursuant to Section 5 hereof shall be determined in accordance with the vesting provisions of Section 6 and 7 hereof. This award of Restricted Stock shall be treated as a “Restricted Stock” award under the Plan and shall be subject to all of the terms and provisions of the Plan.

2.Shareholder Rights. During the period that the Forfeiture Restrictions (as defined below) are applicable to the Restricted Stock, the Grantee will be entitled to all the rights of absolute ownership of the Restricted Stock, including the right to vote those shares, unless and until forfeiture thereof.

3.Dividends. During the period that the Forfeiture Restrictions are applicable to the Restricted Stock, the Grantee will be entitled to receive any cash dividends or distributions paid with respect thereto unless and until forfeiture thereof. Any dividend or distribution payable with

respect to shares of Restricted Stock shall be subject to the terms and conditions of this Award to the same extent and in the same manner as the Restricted Stock is subject.

4.Forfeiture. The Restricted Stock is restricted in that the shares may not be sold, transferred, or otherwise alienated or hypothecated until these restrictions are removed or expire as contemplated in Sections 6 or 7 of this Agreement. The Restricted Stock is also restricted in the sense that the shares may be forfeited to the Company in accordance with Section 7(a) of this Agreement (the “Forfeiture Restrictions”).

5.Escrow of Restricted Stock; Transfer of Stock.

(a)Escrow of Restricted Stock. The Company shall issue in the Grantee’s name the Restricted Stock in the manner that it deems appropriate, including, without limitation, in electronic, book entry account (“Account”) held for the Grantee by the Company’s transfer agent with a notation that the shares are subject to restrictions. The Restricted Stock shall be held subject to restrictions as provided in this Agreement until such time as the Forfeiture Restrictions with respect to the Restricted Stock have lapsed. If part or all of the Restricted Stock are forfeited pursuant to this Agreement, the Company shall have the right to direct the Company’s transfer agent to cancel such forfeited shares or, at the Company’s election, transfer such Restricted Stock to the Company or to any designee of the Company.

(b)Transfer of Stock. No shares of Stock shall be transferrable by you prior to the date on which the Restricted Stock vests and the restrictions, including the Forfeiture Restrictions, with respect to the Restricted Stock lapse, in accordance with Section 6 or 7 of this Agreement. A breach of the terms of this Agreement shall cause a forfeiture of the Restricted Stock. Subject to further provisions of this Agreement, provided that you satisfy all vesting conditions described in Section 6 or 7 below, the Company will release the restrictions on the number of shares of Stock in your Account determined in accordance with Section 6 below, as soon as administratively feasible, but no later than 30 days following the dates set forth in Section 6 (as applicable, each date being a “Vesting Date”) or such earlier date as applicable pursuant to Section 7.

6.Vesting and Expiration of Forfeiture Restrictions. Subject to the terms and conditions of this Agreement and the Plan, the Forfeiture Restrictions will lapse and the restrictions on Stock in the Grantee’s Account will be released in accordance with the following schedule provided that the Grantee has been continuously employed by the Company from the Date of Grant through the applicable Vesting Date:

Percentage of Total Number

of Restricted Stock as to Which

Vesting DateForfeiture Restrictions Lapse

1^st Anniversary of Date of Grant    33.3%

2^nd Anniversary of Date of Grant    33.3%

3^rd Anniversary of Date of Grant    33.4%

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7.Termination of Employment; Change of Control.

(a)Effect of Termination of Employment. Subject to Section 7(b) below, if your employment with the Company or any of its Subsidiaries is terminated for any reason (including a termination for “Cause,” as defined in Section 7(c) below), then any Restricted Stock with respect to which the Forfeiture Restrictions have not lapsed in accordance with Section 6 (and any associated dividends or other distributions) shall be immediately forfeited to the Company for no consideration to you, as of the date you cease to serve as an employee, and you shall not be entitled to any shares of Stock or cash under this Agreement other than those released from restrictions pursuant to Section 5(b) prior to the date your employment with the Company terminates.

(b)Effect of Change of Control. Notwithstanding the vesting provisions set forth above, in the event a Change of Control (as defined in this Section 7(b)) occurs and, within two years after the date such Change of Control occurs the Company involuntarily terminates your employment without Cause (as defined in Section 7(c) below) or you voluntarily terminate your employment for Good Reason (as defined in Section 7(c) below), all Forfeiture Restrictions will lapse and all unvested Restricted Stock will vest immediately as of the date of your termination of employment. For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following events:

(i)A “change in the ownership of the Company” which shall occur on the date that any one person, or more than one person acting as a group, acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; however, if any one person or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons will not be considered a “change in the ownership of the Company” (or to cause a “change in the effective control of the Company” within the meaning of Section 7(b)(ii) below), and an increase of the effective percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph; provided, further, however, that for purposes of this Section 7(b)(i), any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company shall not constitute a Change of Control. This Section 7(b)(i) applies only when there is a transfer of the stock of the Company (or issuance of stock), and stock in the Company remains outstanding after the transaction.

(ii)A “change in the effective control of the Company” which shall occur on the date that either (1) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company, except for any acquisition (i) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (ii) by any shareholder of the Company that beneficially owns at least five percent (5%) of the outstanding stock of the Company as of immediately following the closing of the Merger

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(as such term is defined in the Severance Plan); or (2) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of a “change in the effective control of the Company,” if any one person, or more than one person acting as a group, is considered to effectively control the Company within the meaning of this Section 7(b)(ii), the acquisition of additional control of the Company by the same person or persons is not considered a “change in the effective control of the Company,” or to cause a “change in the ownership of the Company” within the meaning of Section 7.3(b)(i) above.

(iii)A “change in the ownership of a substantial portion of the Company’s assets” which shall occur on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) assets of the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Any transfer of assets to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided in guidance issued pursuant to the Nonqualified Deferred Compensation Rules shall not constitute a Change of Control.

For purposes of this Section 7(b), the terms “ownership,” “own,” or “owned” shall refer to “beneficial ownership” as that term is used in Rule 13d-3 and Rule 13d-5 (or any successor provisions) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the terms “person” and “group” shall mean such terms as used in section 13(d)(3) or section 14(d)(2) of the Exchange Act (or any successor provisions). In addition, for purposes of this Section 7(b), “Company” includes (i) the Company and (ii) the entity for whom the Grantee performs the services for which this Award is granted. Notwithstanding anything in this Section 7(b) to the contrary, none of the following transactions shall constitute a Change of Control for purposes of this Agreement (a) any transaction commonly known as a Reverse Morris Trust transaction, as determined in good faith by the Board, or (b) the acquisition by TPG VI Neon I, L.P., TPG VI Neon II, L.P., TPG VI FOF Neon, L.P., or any of their respective affiliates of additional (x) shares of the Company, (y) voting power with respect to the Company, or (z) assets of the Company.

(c)Definitions. For purposes of this Agreement:

(i)If the Grantee is subject to an effective, written employment agreement with the Company or any of its subsidiaries, “Cause” shall have the meaning given such term in the employment agreement, and if the Grantee is not subject to such an employment agreement but is a participant in the Nexeo Solutions, Inc. Severance Plan for U.S. Officers and Executives (the “Severance Plan”), “Cause” shall have the meaning given such term in such plan. If neither of the foregoing are applicable to the Grantee, then “Cause” shall mean: (A) nonperformance of, or gross negligence, or gross incompetence in the performance of Grantee’s duties with respect to the Company or any of its affiliates, as reasonably determined by the Company, (B) commission by Grantee of an act of fraud, embezzlement, misappropriation, willful misconduct,

4

or breach of fiduciary duty against the Company or any of its affiliates or other conduct harmful or potentially harmful to the Company’s or any of its affiliate’s best interests, as reasonably determined by the Company, (C) a material breach by Grantee of any restrictive covenants that exist between Grantee and the Company or its affiliates, (D) Grantee’s conviction, plea of no contest or nolo contendere, deferred adjudication, or unadjudicated probation for any felony or any crime involving moral turpitude, (E) the failure of Grantee to carry out, or comply with, in any material respect, any lawful directive of the Board (which the Board, in its sole discretion, may give Grantee notice of, and an opportunity to remedy) or of the Grantee’s supervisor, or (F) Grantee’s unlawful use (including being under the influence) or possession of illegal drugs. For purposes of clause (B), no act or failure to act on Grantee’s part shall be deemed “willful” unless done, or omitted to be done, by Grantee not in good faith and without reasonable belief that Grantee’s action or omission was in the best interest of the Company.

(ii)If the Grantee is subject to an effective, written employment agreement with the Company or any of its subsidiaries, “Good Reason” shall have the meaning given such term in the employment agreement, and if the Grantee is not subject to such an employment agreement “Good Reason” shall have the meaning given such term in the Severance Plan. If neither of the foregoing are applicable to Grantee, then “Good Reason” shall mean the occurrence of any of the following events: (i) a material reduction in the Grantee’s position or duties, (ii) a material and adverse change in the Grantee’s compensation, which shall be deemed to include any reduction in the Grantee’s base salary or target bonus percentage, other than in connection with a reduction in the salaries or target bonus percentages applicable to all employees of the Company of the same employment level or grade as Grantee, or (iii) a requirement that the Grantee regularly perform the required duties of his or her employment from a location that is [•] miles or more from the location of his or her employment immediately preceding the Change of Control. Notwithstanding the foregoing, any assertion by the Grantee of a termination for Good Reason shall not be effective unless all of the following are satisfied: (a) the condition described in the foregoing clauses giving rise to the Grantee’s termination of employment must have arisen without the Grantee’s consent, (b) the Grantee must provide written notice to the Company of the condition the Grantee claim constitutes Good Reason within 30 days of the initial existence of the condition, (c) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company, and (d) the date of the Grantee’s termination of employment must occur within 90 days of the initial existence of the condition specified in such notice.

8.Leave of Absence. With respect to this Award, the Company or its employing Subsidiary may, in its sole discretion, determine that if you are on leave of absence for any reason, you will be considered to still be in the employ of the Company or its applicable employing Subsidiary, provided that no “separation from service” has occurred, as such term is defined in Section 409A of the Code and the regulations and guidance issued thereunder.

9.Payment of Taxes. To the extent that the receipt or vesting of Restricted Stock (or dividends or distributions) results in the receipt of compensation by you with respect to which the Company or a Subsidiary has a tax withholding obligation pursuant to applicable law, unless you elect to pay the amount of such obligations to the Company in cash, the Company or such Subsidiary shall withhold (or “net”) such number of shares of Stock otherwise payable to you as required to

5

meet its withholding obligations under such applicable law. If such tax obligations are satisfied through the withholding of shares of Stock that are otherwise issuable to you pursuant to this Award (or through the surrender of shares of Stock by you to the Company), the number of shares of Stock that may be so withheld (or surrendered) by the Company or applicable Subsidiary shall be the maximum number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such tax liabilities, determined based on the greatest withholding rates for federal, state, foreign, and/or local tax purposes, including payroll taxes, that may be utilized without causing an Award otherwise classified as an equity award under ASC Topic 718 to be classified as a liability award under ASC Topic 718. Notwithstanding the foregoing, to the extent any cash payments are made to you under this Agreement, tax withholding obligations related thereto will be withheld from such payments. No delivery of shares of Stock or other payment shall be made pursuant to this Agreement until you have paid or made arrangements approved by the Company or the Subsidiary to satisfy in full the applicable tax withholding requirements of the Company or Subsidiary.

10.Compliance with Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuance of Stock under this Agreement will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed. No Stock will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, Stock will not be issued hereunder unless 1.%2. a registration statement under the Securities Act is, at the time of issuance, in effect with respect to the shares issued or 2.%2. in the opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. YOU ARE CAUTIONED THAT ISSUANCE OF STOCK UPON THE VESTING OF RESTRICTED STOCK GRANTED PURSUANT TO THIS AGREEMENT MAY NOT OCCUR UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the award will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company may require you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Company. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessary and appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons to make shares of Stock available for issuance.

11.Legends. The Company may at any time place legends referencing any restrictions imposed on the shares pursuant to this Agreement on all certificates (or the equivalent thereof) representing shares issued with respect to this Award.

6

12.Right of the Company or Subsidiaries to Terminate Services. Nothing in this Agreement confers upon you the right to continue in the employ of or performing services for the Company or any Subsidiary, or interfere in any way with the rights of the Company or any subsidiary to terminate your employment or service relationship at any time.

13.Furnish Information. You agree to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or regulation.

14.No Liability for Good Faith Determinations. The Company and the members of the Committee shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Restricted Stock granted hereunder.

15.Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Stock or other property to you or to your legal representative, heir, legatee, or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such Persons under this Agreement. To effectuate the foregoing, the Company may require you or your legal representative, heir, legatee, or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form but consistent with the preceding sentence, as it shall determine.

16.No Guarantee of Interests. Neither the Committee nor the Company guarantee the Stock of the Company from loss or depreciation.

17.Company Records. Records of the Company or its subsidiaries regarding your period of service, termination of service and the reason(s) therefor, and other matters shall be conclusive for all purposes hereunder unless determined by the Company to be incorrect.

18.Notice. All notices required or permitted under this Agreement must be in writing and personally delivered or sent by mail and shall be deemed to be delivered on the date on which it is actually received by the person to whom it is properly addressed or if earlier the date it is sent via certified United States mail. Notwithstanding the foregoing, any person entitled to notice hereunder may waive such notice in writing.

19.Successors. This Agreement shall be binding upon you, your legal representatives, heirs, legatees, and distributees and upon the Company, its successors, and assigns.

20.Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.

21.Company Action. Any action required of the Company shall be by resolution of the Board or by a person or entity authorized to act by resolution of the Board.

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22.Headings. The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof.

23.Governing Law. All questions arising with respect to the provisions of this Agreement shall be determined by application of the laws of Delaware, without giving any effect to any conflict of law provisions thereof, except to the extent Delaware state law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.

24.Amendment. Except as provided below, this Agreement may not be modified in any respect by any oral statement, representation, or agreement by any employee, officer, or representative of the Company or by any written agreement which materially adversely affects your rights hereunder unless signed by you and by an officer of the Company who is expressly authorized by the Company to execute such document. This Agreement may, however, be amended as permitted by the terms of the Plan, as in effect on the date of this Agreement. Notwithstanding anything in the Plan or this Agreement to the contrary, if the Committee determines that the terms of this grant do not, in whole or in part, satisfy the requirements of Section 409A of the Code, the Committee, in its sole discretion, may unilaterally modify this Agreement in such manner as it deems appropriate to comply with such section and any regulations or guidance issued thereunder.

25.Clawback. Notwithstanding any provisions in this Agreement to the contrary, any compensation, payments, or benefits provided hereunder, whether in the form of cash or otherwise, shall be subject to a clawback to the extent necessary to comply with the requirements of any applicable law, including but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, section 304 of the Sarbanes Oxley Act of 2002, or any regulations promulgated thereunder, or any policy adopted by the Employer pursuant to any such law (whether in existence as of the Effective Date or later adopted).

26.Entire Agreement. This Agreement is subject to all the terms, conditions, limitations, and restrictions contained in the Plan. This Agreement, together with the Plan and any employment agreement between the Grantee and the Company or its Subsidiaries, (a) represents the entire agreement between the parties hereto respecting the matters within its scope and (b) supersedes all prior and contemporaneous discussions, agreements, and understanding of every nature related thereto. Except with respect to capitalized terms defined in this Agreement with meanings other than those given the same terms in the Plan, to the extent that any provision of this Agreement conflicts with the expressly applicable terms of the Plan, you acknowledge and agree that those terms of the Plan shall control, and, if necessary, the applicable terms of this Agreement shall be deemed amended so as to carry out the purpose and intent of the Plan. Capitalized terms that are not otherwise defined in this Agreement shall have the meanings given to them in the Plan.

27.Section 83(b) Election Not Permitted. The Grantee shall not be permitted to make an election under Section 83(b) of the Code with respect to the Restricted Stock granted pursuant to this Award.

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[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer thereunto duly authorized, and the Grantee has set his/her hand as of the date and year first above written.

NEXEO SOLUTIONS, INC.

By:    

Name:     

Title:     

[EMPLOYEE]

__________________________________________

GRANTEE

9

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, David A. Bradley, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2017 of Nexeo Solutions, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 8, 2018	By:	/s/ David A. Bradley
		Name:	David A. Bradley
		Title:	Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Ross J. Crane, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2017 of Nexeo Solutions, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 8, 2018	By:	/s/ Ross J. Crane
		Name:	Ross J. Crane
		Title:	Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2001, 18 U.S.C. § 1350

In connection with the Quarterly Report of Nexeo Solutions, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2017, as filed with the Securities and Exchange Commission on February 8, 2018 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, David A. Bradley, Chief Executive Officer, Nexeo Solutions, Inc., and Ross J. Crane, Chief Financial Officer, Nexeo Solutions, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(a) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 8, 2018	By:	/s/ David A. Bradley
		Name:	David A. Bradley
		Title:	Chief Executive Officer (Principal Executive Officer)

Date:	February 8, 2018	By:	/s/ Ross J. Crane
		Name:	Ross J. Crane
		Title:	Chief Financial Officer (Principal Financial Officer)

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Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2017	Feb. 02, 2018
Document and Entity Information
Entity Registrant Name	Nexeo Solutions, Inc.
Entity Central Index Key	0001604416
Current Fiscal Year End Date	--09-30
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		89,741,309

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Current Assets
Cash and cash equivalents	$ 41.4	$ 53.9
Accounts and notes receivable (net of allowance for doubtful accounts of $2.2 million as of December 31, 2017 and September 30, 2017)	562.0	597.4
Inventories	367.2	315.5
Income taxes receivable	3.2	3.4
Other current assets	21.3	19.8
Total current assets	995.1	990.0
Non-Current Assets
Property, plant and equipment, net	306.8	316.1
Goodwill	703.9	703.0
Other intangible assets, net of amortization	224.8	231.5
Deferred income taxes	2.3	2.3
Other non-current assets	11.6	10.6
Total non-current assets	1,249.4	1,263.5
Total Assets	2,244.5	2,253.5
Current Liabilities
Short-term borrowings, current portion of long-term debt and capital lease obligations	48.4	51.1
Accounts payable	325.1	384.2
Accrued expenses and other liabilities	45.8	58.4
Due to related party pursuant to contingent consideration obligations	8.5	12.5
Income taxes payable	3.0	3.2
Total current liabilities	430.8	509.4
Non-Current Liabilities
Long-term debt and capital lease obligations, less current portion, net	852.6	794.0
Deferred income taxes	33.9	34.9
Due to related party pursuant to contingent consideration obligations	108.9	127.7
Other non-current liabilities	9.5	9.9
Total non-current liabilities	1,004.9	966.5
Total Liabilities	1,435.7	1,475.9
Commitments and contingencies
Equity
Preferred stock, $0.0001 par value (1,000,000 shares authorized, none issued and outstanding as of December 31, 2017 and September 30, 2017)	0.0	0.0
Common stock, $0.0001 par value (300,000,000 shares authorized; 89,753,662 shares issued and 89,741,309 shares outstanding as of December 31, 2017 and 89,353,641 shares issued and 89,344,065 shares outstanding as of September 30, 2017)	0.0	0.0
Additional paid-in capital	766.1	764.4
Retained earnings	31.3	4.8
Accumulated other comprehensive income	11.5	8.5
Treasury stock, at cost: 12,353 and 9,576 shares as of December 31, 2017 and September 30, 2017	(0.1)	(0.1)
Total equity	808.8	777.6
Total Liabilities and Equity	$ 2,244.5	$ 2,253.5

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 2.2	$ 2.2
Preferred stock, par value (USD per share)	$ 0.0001	$ 0.0001
Preferred shares authorized (in shares)	1,000,000	1,000,000
Preferred shares issued (in shares)	0	0
Preferred shares outstanding (in shares)	0	0
Common stock, par value (USD per share)	$ 0.0001	$ 0.0001
Shares authorized (in shares)	300,000,000	300,000,000
Shares issued (in shares)	89,753,662	89,353,641
Shares outstanding (in shares)	89,741,309	89,344,065
Treasury stock (in shares)	12,353	9,576

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Condensed Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Sales and operating revenues	$ 929.6	$ 794.8
Cost of sales and operating expenses	822.7	710.4
Gross profit	106.9	84.4
Selling, general and administrative expenses	84.8	74.5
Transaction related costs	0.1	0.8
Change in fair value of contingent consideration obligations	(18.6)	10.6
Operating income (loss)	40.6	(1.5)
Other income, net	0.1	2.4
Interest income (expense)
Interest income	0.1	0.1
Interest expense	(13.0)	(12.0)
Net income (loss) before income taxes	27.8	(11.0)
Income tax expense (benefit)	1.3	(2.7)
Net income (loss) attributable to Nexeo Solutions, Inc.	$ 26.5	$ (8.3)
Net income (loss) per share available to common stockholders
Basic (USD per share)	$ 0.35	$ (0.11)
Diluted (USD per share)	$ 0.34	$ (0.11)
Weighted average number of common shares outstanding
Basic (in shares)	76,793,518	76,746,168
Diluted (in shares)	77,139,236	76,746,168

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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions		3 Months Ended
		Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income (loss)		$ 26.5	$ (8.3)
Unrealized foreign currency translation gain (loss), net of tax	[1]	1.1	(12.7)
Unrealized gain on interest rate hedges, net of tax		1.9	0.0
Other comprehensive income (loss), net of tax		3.0	(12.7)
Total comprehensive income (loss), net of tax attributable to Nexeo Solutions, Inc.		$ 29.5	$ (21.0)

[1] Tax effects are not material.

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Condensed Consolidated Statement of Equity - USD ($) $ in Millions	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Sep. 30, 2016		89,286,936	0
Beginning balance at Sep. 30, 2016	$ 744.8	$ 0.0	$ 0.0	$ 758.9	$ (9.6)	$ (4.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	1.4			1.4
Comprehensive income:
Net income	(8.3)				(8.3)
Other comprehensive income	(12.7)					(12.7)
Ending balance (in shares) at Dec. 31, 2016		89,286,936	0
Ending balance at Dec. 31, 2016	725.2	$ 0.0	$ 0.0	760.3	(17.9)	(17.2)
Beginning balance (in shares) at Sep. 30, 2016		89,286,936	0
Beginning balance at Sep. 30, 2016	744.8	$ 0.0	$ 0.0	758.9	(9.6)	(4.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares associated with employee tax withholding for vesting of certain equity awards (in shares)			9,576
Ending balance (in shares) at Sep. 30, 2017		89,344,065	9,576
Ending balance at Sep. 30, 2017	777.6	$ 0.0	$ (0.1)	764.4	4.8	8.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of restricted stock (in shares)		415,867
Vesting of restricted stock units (in shares)		8,162
Forfeiture of restricted stock awards (in shares)		(24,008)
Shares associated with employee tax withholding for vesting of certain equity awards (in shares)		(2,777)	2,777
Shares associated with employee tax withholding for vesting of certain equity awards	0.0		$ 0.0
Equity-based compensation	1.7			1.7
Comprehensive income:
Net income	26.5				26.5
Other comprehensive income	3.0					3.0
Ending balance (in shares) at Dec. 31, 2017		89,741,309	12,353
Ending balance at Dec. 31, 2017	$ 808.8	$ 0.0	$ (0.1)	$ 766.1	$ 31.3	$ 11.5

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operations
Net income (loss)	$ 26.5	$ (8.3)
Adjustments to reconcile to cash flows from operations:
Depreciation and amortization	19.5	16.8
Debt issuance costs amortization, debt issuance costs write-offs and original issue discount amortization	1.1	1.0
Provision for bad debt	0.3	(0.4)
Deferred income taxes	(1.8)	(4.3)
Equity-based compensation expense	1.7	1.4
Change in fair value of contingent consideration obligations	(18.6)	10.6
Gain on sale of property and equipment	0.0	0.1
Gain related to reimbursements of certain capital expenditures incurred	0.0	(2.5)
Changes in assets and liabilities:
Accounts and notes receivable	36.9	15.2
Inventories	(50.5)	10.1
Other current assets	(1.6)	(0.6)
Accounts payable	(60.8)	(38.6)
Accrued expenses and other liabilities	(12.6)	(9.7)
Changes in other operating assets and liabilities, net	0.7	(0.6)
Net cash used in operating activities	(59.2)	(9.8)
Cash flows from investing activities
Additions to property and equipment	(4.1)	(6.6)
Proceeds from the disposal of property and equipment	0.6	0.0
Proceeds from reimbursement of certain capital expenditures incurred	0.0	2.8
Cash paid for asset acquisition	0.0	(5.1)
Net cash used in investing activities	(3.5)	(8.9)
Cash flows from financing activities
Cash paid to TPG related to TRA	(4.2)	0.0
Proceeds from short-term debt	27.9	15.9
Repayments of short-term debt	(31.6)	(14.3)
Proceeds from issuance of long-term debt	231.7	165.1
Repayments of long-term debt and capital lease obligations	(172.9)	(161.4)
Payment of debt issuance costs	(0.8)	0.0
Net cash provided by financing activities	50.1	5.3
Effect of exchange rate changes on cash and cash equivalents	0.1	(0.8)
Decrease in cash and cash equivalents	(12.5)	(14.2)
Cash and cash equivalents at the beginning of the period	53.9	47.5
Cash and cash equivalents at the end of the period	41.4	33.3
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	14.0	11.1
Cash paid during the period for taxes (net of refunds)	1.6	0.7
Supplemental disclosure of non-cash investing and non-cash financing activities
Non-cash capital expenditures	1.4	16.4
Non-cash intangible assets acquired	0.0	3.4
Non-cash capital lease obligations, net	$ 0.0	$ 13.4

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Basis of Presentation and Nature of Operations

3 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Nature of Operations

Basis of Presentation and Nature of Operations

Basis of Presentation

           The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. As such, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments, except as disclosed herein) considered necessary for a fair statement have been included. Results of operations for the three months ended December 31, 2017 are not necessarily indicative of results to be expected for the fiscal year ending September 30, 2018. Quarterly financial data should be read in conjunction with the consolidated financial statements and accompanying notes for the fiscal year ended September 30, 2017 included in the Company's Annual Report on Form 10-K filed with the SEC on December 7, 2017.

           The consolidated financial data as of September 30, 2017 presented in these unaudited condensed consolidated financial statements were derived from the Company’s audited consolidated financial statements, but do not include all disclosures required by U.S. GAAP.

Nature of Operations

The Company is a global distributor of chemicals products in North America and Asia and a global distributor of plastics in North America, EMEA and Asia. In North America, primarily in the U.S., the Company provides on-site and off-site environmental services, including waste collection, recovery, disposal services and recycling. The Company offers its customers products used in a broad cross-section of end markets including household, industrial and institutional, lubricants, performance coatings (including architectural coatings, adhesives, sealants and elastomers), automotive, healthcare, personal care, oil and gas and construction. In connection with the distribution of chemicals products, the Company provides value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development.

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Recent Accounting Pronouncements

3 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The amendments in this ASU require an entity to measure inventory at the lower of cost or net realizable value, whereas guidance previously required an assessment of market value of inventory, with different possibilities for determining market value. This ASU is effective for fiscal years beginning after December 15, 2016 and interim periods within those years, and early adoption is permitted. The Company adopted this standard as of October 1, 2017, and it did not have a material effect on the Company’s financial position or results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The updated guidance simplifies several aspects of accounting for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. This ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. The Company adopted this standard as of October 1, 2017 and it did not have a material effect on the Company’s financial position or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718). This ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modified award. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications.  The amendments in this ASU will be applied prospectively to awards modified on or after the adoption date. The Company adopted this standard as of October 1, 2017 and it did not have a material effect on the Company’s financial position or results of operations.

New Accounting Pronouncements Not Yet Adopted

The Company continues the evaluation of the potential effects on its financial position or results of operations of the accounting pronouncements disclosed in its consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on December 7, 2017, including ASU 2014-09, Revenue from Contracts with Customers, and ASU 2016-02, Leases. With regards to ASU 2014-09, the Company continues to work on the identification, design and implementation of changes to its accounting systems, policies and internal controls to support the recognition and disclosure requirements under the new revenue recognition standard. The Company expects to utilize the modified retrospective method of adoption by recognizing the cumulative effect of the adoption change as an adjustment to beginning of period retained earnings for the first quarter of fiscal 2019.

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Acquisitions

3 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Acquisitions

Acquisitions

Ultra Chem Acquisition

On April 3, 2017, the Company completed the Ultra Chem Acquisition for $56.7 million, net of cash acquired of $0.5 million, pursuant to the Ultra Chem Stock Purchase Agreement.  Of the purchase price, $9.7 million may remain in escrow for a period of up to five years and relates to indemnification obligations under the Ultra Chem Stock Purchase Agreement. The escrow amount will be released pursuant to the terms of the Ultra Chem Stock Purchase Agreement and related documentation. The Ultra Chem Acquisition was financed with approximately $58.0 million of borrowings under the ABL Facility. There is no contingent consideration related to the Ultra Chem Acquisition.

Preliminary Purchase Price Allocation

The Ultra Chem Acquisition is accounted for under the acquisition method, which requires the Company to perform an allocation of the preliminary purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the preliminary purchase consideration over the estimated fair values is recorded as goodwill. The following table summarizes the Company’s preliminary allocation of the preliminary purchase consideration to assets acquired and liabilities assumed at the Ultra Chem Closing Date:

	Preliminary Purchase Consideration Allocation
Accounts receivable	$	13.7
Inventory	9.1
Other current assets	2.4
Property and equipment	0.4
Customer-related intangible	24.0
Trade name	0.3
Non-compete agreements	3.9
Other non-current assets	2.5
Goodwill	28.0
Total assets acquired	84.3
Short-term borrowings	0.9
Accounts payable	12.1
Other current liabilities	4.1
Deferred tax liability — non-current	8.4
Other non-current liabilities	2.1
Total liabilities assumed	27.6
Net assets acquired	$	56.7

The total purchase consideration allocation above is preliminary as the Company has not yet completed the necessary fair value assessments, including the assessments of inventory, intangible assets, certain assets and liabilities and the related tax impacts associated with these items. Any changes within the measurement period may change the amount of the purchase consideration allocable to goodwill. The fair value and tax impact assessments are to be completed within twelve months of the Ultra Chem Closing Date and could have a material impact on the components of the total purchase consideration allocation.

Transaction costs incurred by the Company associated with the Ultra Chem Acquisition were approximately $0.1 million during the three months ended December 31, 2017, and there were no transaction costs incurred by the Company associated with the Ultra Chem Acquisition during the three months ended December 31, 2016.

A summary and description of the acquired assets and assumed liabilities fair valued in conjunction with applying the acquisition method of accounting follows:

Accounts Receivable

Accounts and notes receivable consisted of receivables related to the customers of the acquired business, as well as various other miscellaneous receivables. The accounts receivable and other miscellaneous receivables were recorded at their approximate fair value based on expected collections of Ultra Chem. Accordingly, accounts receivable included an adjustment of $1.5 million to reduce gross receivables to their net value after consideration of expected uncollectable amounts at the Ultra Chem Closing Date.

Inventory

Inventory consisted primarily of finished products to be distributed to the acquired business’s customers. The fair value of inventory was established through application of the income approach, using estimates of selling prices and costs such as selling and marketing expenses to be incurred in order to dispose of the finished products and arriving at the future profitability expected to be generated once the inventory is sold (net realizable value). The inventory fair value step up of $1.0 million was recognized in income during the fiscal year ended September 30, 2017, which is included in Cost of sales and operating expenses in the condensed consolidated statement of operations. The Company’s assessment of the fair value of inventory is preliminary, and will be completed within twelve months of the Ultra Chem Closing Date.

Other Current Assets

Other current assets consisted primarily of prepaid expenses and did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value. Other current assets also include indemnification assets recorded in connection with the recognition of tax-related contingent liabilities assumed. The indemnification assets represent the reimbursement the Company would reasonably expect to receive from funds initially held in escrow pursuant to the purchase agreement if the liabilities were asserted by the relevant tax authority.

Property and Equipment

Property and equipment acquired consists primarily of leasehold improvements, computer and office equipment as well as furniture and fixtures. The preliminary purchase price allocation for property and equipment was based on the carrying value of such assets as it was determined to approximate fair value. The Company's assessment of fair value of the property and equipment is preliminary and will be completed within twelve months of the Ultra Chem Closing Date.

Customer-Related Intangible

Customer relationships were valued through the application of the income approach. Under this approach, revenue, operating expenses and other costs associated with existing customers were estimated in order to derive cash flows attributable to the existing customer relationships. The resulting estimated cash flows were then discounted to present value to arrive at the fair value of existing customer relationships as of the valuation date. The value associated with customer relationships will be amortized on a straight-line basis over a ten-year period, which represents the approximate point in the projection period in which a majority of the asset’s cash flows are expected to be realized based on assumed attrition rates. The Company recognized $24.0 million for these intangible assets as part of the preliminary allocation of the purchase consideration. The Company's assessment of the expected future cash flows related to the customer intangibles is preliminary, and will be completed within twelve months of the Ultra Chem Closing Date.

Trade Name

The "Ultra Chem" trade name was valued through application of the income approach, involving the estimation of likely future sales and an estimated royalty rate reflective of the rate that a market participant would pay to use the "Ultra Chem" name. The fair value of this asset will be amortized on a straight-line basis over a two-year period, estimated based on the period in which the Company would expect a market participant to use the name prior to rebranding. The Company recognized $0.3 million for this intangible asset as part of the preliminary allocation of the purchase consideration. The Company's assessment of the estimated future cash flows from the "Ultra Chem" trade name is preliminary and will be completed within twelve months of the Ultra Chem Closing Date.

Non-Compete Agreements

In connection with the Ultra Chem Acquisition, the former equityholders of the Ultra Chem Group agreed to non-compete agreements. The terms of the non-compete agreements prohibit the equityholders from competing in the chemical distribution space for three years after the Ultra Chem Closing Date. The income approach was used to value the non-compete agreements through a comparative discounted cash flow analysis based on the impact of competition absent these agreements. The Company recognized $3.9 million for this intangible asset as part of the preliminary allocation of the purchase consideration. This intangible is amortized on a straight-line basis over a three-year period. The Company's assessment of the comparative future cash flows associated with the non-compete agreements is preliminary and will be completed within twelve months of the Ultra Chem Closing Date.

Other Non-Current Assets

Other non-current assets acquired represented certain long-term deposits and other assets, which did not have a fair value adjustment as part of acquisition accounting since their carrying value approximated fair value. Other non-current assets also included indemnification assets recorded in connection with the recognition of tax-related contingent liabilities assumed, and the expected value of certain assets pledged as a guarantee to the Ultra Chem Group in connection with transactions with a particular customer. The indemnification assets represent the reimbursement the Company reasonably expects to receive from funds initially held in escrow pursuant to the purchase agreement if the related liabilities were asserted by the relevant tax authority.

Goodwill

Goodwill represents the excess of the total purchase price over the fair value of the underlying net assets, largely arising from synergies expected as a result of the Ultra Chem Acquisition. Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually, absent any indicators of impairment. The Company does not expect any goodwill from the Ultra Chem Acquisition to be deductible for tax purposes. As the fair value assessments of the acquired assets and liabilities are finalized within twelve months of the Ultra Chem Closing Date, the amount of goodwill recognized as of the Ultra Chem Closing Date is subject to change.

Short-Term Borrowings

Short-term borrowings included short-term borrowings of the Ultra Chem Group prior to the Ultra Chem Acquisition, which did not have a fair value adjustment as part of acquisition accounting as their carrying value approximated fair value. As reflected in "—Preliminary Purchase Consideration Allocation" above, the balance was paid off immediately after the closing of the Ultra Chem Acquisition.

Accounts Payable

Accounts payable represented short-term obligations owed to the vendors of the acquired business, which were assumed in the Ultra Chem Acquisition. These obligations did not have a fair value adjustment as part of acquisition accounting as their carrying value approximated fair value.

Other Current Liabilities

Other current liabilities represented primarily accrued expenses, including accrued payroll, certain accrued taxes, the current portion of assumed tax-related contingent liabilities and various other liabilities arising out of the normal operations of the acquired business. The majority of these liabilities did not have a fair value adjustment as their carrying value approximated fair value.

Other Non-Current Liabilities

Other non-current liabilities represent assumed tax-related contingent liabilities, and the expected value of certain assets pledged as a guarantee to the Ultra Chem Group which would have to be returned to the third party under certain circumstances. The Company's assessment of the fair value of these liabilities is preliminary, and will be completed within twelve months of the Ultra Chem Closing Date.

Deferred Taxes

Deferred tax assets and liabilities are attributable to the difference between the estimated fair values allocated to inventory, property and equipment and identified intangibles acquired for financial reporting purposes and the amounts determined for tax reporting purposes and give rise to temporary differences.  The deferred tax assets and liabilities will reverse in future periods or have reversed as the related tangible and intangible assets are amortized, acquired inventory is sold, or if goodwill is impaired. The estimates of deferred taxes are preliminary as the fair value assessments of the acquired assets and liabilities have not been fully completed.

Impact of the Ultra Chem Acquisition on the Company’s Condensed Consolidated Financial Information

For the three months ended December 31, 2017, the Company’s consolidated sales and operating revenues and net income include $20.6 million and $0.1 million, respectively, related to the operations of the acquired business.

Asset Acquisitions

In December 2016, the Company acquired customer contracts and a customer list. Additionally, in connection with this transaction, the Company entered into a supply agreement and a licensing agreement granting the Company the non-exclusive use of a certain trademark. The total consideration associated with this transaction was $8.5 million, of which $5.1 million was paid at closing. Of the remaining consideration, the Company paid $1.7 million in January 2018 and the remaining $1.7 million will be paid in January 2019. At December 31, 2017, these amounts are included in Accrued expenses and other liabilities and Other non-current liabilities, respectively,on the Company’s condensed consolidated balance sheet. In connection with this transaction, the Company recognized intangible assets totaling $8.5 million which are included in Other intangible assets, net of amortization on the Company’s condensed consolidated balance sheets. The acquired intangible assets will be fully amortized over estimated useful lives ranging between 10 and 13 years.

Unaudited Consolidated Pro Forma Financial Information

The unaudited consolidated pro forma results presented below include the effects of the Ultra Chem Acquisition as if it had occurred as of October 1, 2015, the beginning of the fiscal year prior to the date the Ultra Chem Acquisition occurred.  The unaudited consolidated pro forma results reflect certain adjustments related to this acquisition, primarily reflecting a full period of Ultra Chem Group’s results of operations for each period presented, amortization expense associated with estimates for the acquired intangible assets, the effects of inventory step up from the acquisition, transaction costs, interest expense and income taxes.

The unaudited consolidated pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the Ultra Chem Acquisition occurred on October 1, 2015.

	Three Months Ended December 31,
	2017		2016
Sales and operating revenues	$	929.6	$	811.8
Operating income (loss)	$	40.7	$	(0.6	)
Net income (loss) from continuing operations	$	26.6	$	(7.9	)
Net income (loss)	$	26.6	$	(7.9	)
Basic net income (loss) per share	$	0.35	$	(0.10	)
Diluted net income (loss) per share	$	0.34	$	(0.10	)
Pro forma weighted average number of common shares outstanding
Basic	76,793,518		76,746,168
Diluted	77,139,236		76,746,168

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Certain Balance Sheet Information

3 Months Ended

Dec. 31, 2017

Certain Balance Sheet Information [Abstract]

Certain Balance Sheet Information

Certain Balance Sheet Information

Cash and Cash Equivalents

Cash and cash equivalents were $41.4 million as of December 31, 2017 and $53.9 million as of September 30, 2017. These amounts included the following:

	December 31, 2017		September 30, 2017
Cash held by foreign subsidiaries	$	37.1	$	36.8
Non-USD denominated currency held by foreign subsidiaries	$	27.7	$	31.1
Currency denominated in RMB	$	7.8	$	8.5

Non-USD denominated currency held by foreign subsidiaries was primarily in euros and RMB. While the RMB is convertible into USD, foreign exchange transactions are subject to approvals from SAFE. The Company does not anticipate any significant adverse impact to overall liquidity from potential limitations on the transfer or conversion of cash and cash equivalents.

Inventories

Inventories at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017		September 30, 2017
Finished products	$	362.5	$	310.6
Supplies	4.7		4.9
Total	$	367.2	$	315.5

The Company’s inventories in the U.S. and Canada are collateral under the Credit Facilities.

Other Non-Current Assets

Other non-current assets at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017		September 30, 2017
Debt issuance costs of the ABL Facility	$	4.8	$	5.1
Indemnification receivable	1.4		1.4
Deposits	2.7		2.8
Interest rate swap	1.9		0.3
Other	0.8		1.0
Total	$	11.6	$	10.6

Other non-current assets as of December 31, 2017 includes approximately $1.4 million of assets related to indemnification assets associated with the recognition of tax-related contingent liabilities assumed and $0.7 million for the expected value of certain assets pledged as a guarantee to the Ultra Chem Group in connection with transactions with a particular customer. The purchase price allocation of the Ultra Chem Acquisition is preliminary and the initial fair value assessments of these items may change within the twelve month measurement period. See Note 3.

Amortization of debt issuance costs related to the ABL Facility recorded in Interest expense in the condensed consolidated statements of operations was $0.3 million for the three months ended December 31, 2017 and December 31, 2016.

Due to Related Party Pursuant to ContingentConsideration Obligations

Contingent Consideration - Deferred Cash Consideration

The contingent consideration associated with the Deferred Cash Consideration willbe an amount in cash equal to the prevailing price of the Company’s common stock at the time that the Company pays such deferred cash payment multiplied by the number of Excess Shares (5,178,642 Excess Shares as of December 31, 2017).  Based on the terms of the Excess Shares, certain circumstances require the Company to pay all or a portion of the Deferred Cash Consideration to the Selling Equityholders, where such cash amount is calculated as set forth in the Merger Agreement, including (i) where the volume weighted average trading price of the Company’s common stock for any period of 20 trading days in any 30 trading day period exceeds $15.00 per share, and (ii) if any Excess Shares remain on June 30, 2021. If any Excess Shares remain on June 30, 2021, the Company must elect to either (i) within five business days of such date, pay the Selling Equityholders an amount in cash equal to the product of the number of remaining Excess Shares multiplied by the volume weighted-average trading price for the 20 trading day period immediately preceding such date or (ii) use reasonable best efforts to sell such shares to a third party in a primary offering and pay the gross proceeds thereof (less any underwriting discounts and commissions) to the Selling Equityholders. However, to the extent the number of shares issued in such offerings does not equal the full amount of Excess Shares remaining at the time of the offering, the Company’s obligations with respect to any remaining Excess Shares, including the obligation to continue to complete any necessary additional offerings, shall continue.

In order to estimate the fair value of the Deferred Cash Consideration, the Company estimates the value of the Excess Shares using a Monte Carlo simulation model. The estimated fair value of the Deferred Cash Consideration liability was $45.2 million and $35.1 millionas of December 31, 2017 and September 30, 2017, respectively. See Note 9.

Contingent Consideration - TRA

Concurrent with the completion of the Business Combination, the Company incurred the liability for contingent consideration related to the TRA, which reflects amounts owed to the Selling Equityholders. This liability generally provides for the payment by the Company to the Selling Equityholders of 85% of the net cash savings, if any, in U.S. federal, state and local income taxes that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the Closing Date as a result of (i) certain increases in tax basis resulting from the Company Merger, (ii) certain tax attributes of Holdings existing prior to the Mergers, (iii) net operating losses and certain other tax attributes of Blocker available to the Company as a result of the Blocker Merger and (iv) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, payments the Company makes under the TRA. The Company will retain the benefit of the remaining 15% of the net cash savings, if any. The Company estimated the fair value of the TRA liability based on a discounted cash flow model which incorporates assumptions of projected taxable income, projected income tax liabilities and an estimate of tax benefits expected to be realized as a result of the Business Combination. The current undiscounted cash flows associated with the TRA liability were estimated to be approximately $134.0 million over the time period during which the tax benefits are expected to be realized, currently estimated at over 20 years. The estimated fair value of the TRA liability is $72.2 million and $105.1 million as of December 31, 2017 and September 30, 2017, respectively. See Note 9. The decrease in the liability is reflective of the provisional impact associated with the Tax Act enacted in December 2017 (see Note 15), which lowers the Company’s projected income tax liabilities, the estimate of tax benefits expected to be realized as a result of the Business Combination and the ultimate amount expected to be paid by the Company to the Selling Equityholders.

The amount and timing of any payments due under the TRA will vary depending upon a number of factors, including the amount and timing of the taxable income the Company generates in the future and the U.S. federal, state and local income tax rates then applicable. In addition, payments made under the TRA will give rise to additional tax benefits for the Company and therefore additional potential payments due under the TRA. The term of the TRA commenced upon the consummation of the Mergers and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless the Company exercises its right to terminate the TRA early. If the Company elects to terminate the TRA early, its obligations under the TRA would accelerate and it generally would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by it under the TRA, calculated in accordance with certain valuation assumptions set forth in the TRA.

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Property, Plant and Equipment

3 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017			September 30, 2017
Land	$	51.0		$	51.0
Plants and buildings(1)	107.1			106.5
Machinery and equipment (2)	153.5			152.8
Software and computer equipment	63.9			63.3
Construction in progress	6.0			5.0
Total	381.5			378.6
Less accumulated depreciation (3)	(74.7		)	(62.5		)
Property, plant and equipment, net	$	306.8		$	316.1

⁽¹⁾ Includes $13.7 million related to facilities acquired under capital leases.

⁽²⁾ Includes $27.2 million related to equipment acquired under capital leases.

⁽³⁾ Includes $5.8 million and $4.9 million, respectively, related to facilities and equipment acquired under capital leases.

Depreciation expense recognized on the property, plant and equipment described above was as follows:

	Three Months Ended December 31,
	2017		2016
Depreciation expense	$	12.6	$	11.2

Included in the carrying value of property, plant and equipment in the Company’s condensed consolidated balance sheets are certain closed facilities located in the U.S., which collectively have a carrying value of $1.1 million as of December 31, 2017 and September 30, 2017. The facilities do not currently meet the criteria for held-for-sale classification; accordingly, they remain classified as held and used.

During the fourth quarter of fiscal year 2017, the Company entered into a purchase agreement to buy land currently leased at one of the Company's distribution centers. The purchase is expected to be finalized during the first half of fiscal year 2019 for approximately $10.8 million.

Facility Lease

As a result of the sale in September 2016 of the Company’s Franklin Park facility to the Illinois Tollway Authority under an eminent domain proceeding, the Company relocated operations to a new leased facility in Montgomery, Illinois. During the three months ended December 31, 2016, the Company recorded a gain of $2.5 million related to capital expenditures incurred in connection with the relocation and reimbursed by the Illinois Tollway Authority, which is included in Other Income on the condensed consolidated statement of operations.

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Goodwill and Other Intangibles

3 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

Goodwill and Other Intangibles

Goodwill

The following is a progression of goodwill by reportable segment: 

	Chemicals		Plastics		Other		Total
Balance at September 30, 2017	$	362.8	$	276.7	$	63.5	$	703.0
Foreign currency translation	—		0.9		—		0.9
Balance at December 31, 2017	$	362.8	$	277.6	$	63.5	$	703.9

Goodwill amounts by reportable segment at December 31, 2017 include the preliminary allocation of the purchase consideration of the Ultra Chem Acquisition as of the Ultra Chem Closing Date. Accordingly, the amounts allocated to goodwill from the Ultra Chem Acquisition are subject to adjustments to reflect the completion of the purchase price allocation, which will be completed within twelve months of the Ultra Chem Closing Date and could have a material impact on total goodwill and goodwill for the Chemicals reportable segment. See Note 3.

Goodwill Impairment Test

Goodwill is tested for impairment annually as of March 31 and whenever events or circumstances make it more likely than not that an impairment may have occurred. Goodwill is reviewed for impairment at the reporting unit level, or operating segment, for the Company. The Company performed an impairment test as of September 30, 2017, and concluded that goodwill was not impaired. For purposes of the impairment testing of the Company's recognized goodwill, fair value measurements are determined using the income approach, based largely on inputs that are not observable to active markets, which would be deemed Level 3 fair value measurements as defined in Note 9.

The evaluation of goodwill requires the use of estimates about future operating results of each reporting unit to determine its estimated fair value. Changes in forecasted operations can materially affect these estimates, which could materially affect the Company’s results of operations. The estimate of fair value requires significant judgment and is based on management’s fair value estimates on assumptions that are believed to be reasonable; but that are unpredictable and inherently uncertain, including: estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment for the reporting units. There can be no assurance that these estimates and assumptions made for purposes of the goodwill testing as of the time of testing will prove to be accurate. If assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, the Company may be required to record goodwill impairment charges in future periods, whether in connection with future annual impairment testing, or earlier, if an indicator of an impairment is present prior to the next annual evaluation.

Other Intangible Assets

Definite-lived intangible assets at December 31, 2017 and September 30, 2017 consisted of the following:

		December 31, 2017							September 30, 2017
	Estimated Useful Life (years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer-related	5-13	$	234.9	$	(28.8	)	$	206.1	$	234.6	$	(23.7	)	$	210.9
Supplier-related	10	1.5		(0.2		)	1.3		1.5		(0.1		)	1.4
Trade name	2-10	22.3		(8.4		)	13.9		22.3		(7.0		)	15.3
Below-market leases	1-7	0.7		(0.4		)	0.3		0.7		(0.3		)	0.4
Non-compete agreements	3-10	4.2		(1.0		)	3.2		4.2		(0.7		)	3.5
Total		$	263.6	$	(38.8	)	$	224.8	$	263.3	$	(31.8	)	$	231.5

Amortization expense recognized on the intangible assets described above was as follows:

	Three Months Ended December 31,
	2017		2016
Amortization expense	$	6.9	$	5.6

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Debt

3 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Debt

Debt

Short-term borrowings outstanding and the current portion of long-term debt and capital lease obligations at December 31, 2017 and September 30, 2017 are summarized below:

	December 31, 2017		September 30, 2017
Short-term borrowings	$	38.0	$	40.8
Current portion of long-term debt and capital lease obligations	10.4		10.3
Total short-term borrowings and current portion of long-term debt and capital lease obligations, net	$	48.4	$	51.1

Long-term debt outstanding at December 31, 2017 and September 30, 2017 is summarized below:

	December 31, 2017			September 30, 2017
ABL Facility	$	200.2		$	139.3
Term Loan Facility	645.2			646.9
Capital lease obligations (1)	37.0			37.5
Total long-term debt	882.4			823.7
Less: unamortized debt discount (2)	(2.6		)	(2.7		)
Less: debt issuance costs (3)	(16.8		)	(16.7		)
Less: current portion of long-term debt and capital lease obligations	(10.4		)	(10.3		)
Long-term debt and capital lease obligations, less current portion, net	$	852.6		$	794.0

⁽¹⁾  Capital lease obligations exclude executory costs and interest payments associated with the underlying leases. See “Capital Lease Obligations” below.

⁽²⁾  The unamortized debt discount is related to the Term Loan Facility and amortized to interest expense over the life of the instrument using the effective interest rate method.

⁽³⁾  See discussion below under Term Loan Facility and Debt Issuance Cost Amortization.

Short-Term Borrowings

The Company’s short-term borrowings are associated with the Company’s operations in China and are summarized below:

	Facility Limit		Outstanding Borrowings Balance		Weighted Average Interest Rate on Borrowings		Outstanding LOC and Bankers’ Acceptance Bills		Remaining Availability
December 31, 2017
Bank of America - China (1)	$	24.3	$	24.2	4.4	%	$	—	$	0.1
Bank of Communications - China (2)	23.1		13.8		5.4	%	8.6		0.7
Total	$	47.4	$	38.0			$	8.6	$	0.8
September 30, 2017
Bank of America - China (1)	$	24.3	$	23.8	4.3	%	$	—	$	0.5
Bank of Communications - China (2)	22.5		17.0		5.3	%	5.3		0.2
Total	$	46.8	$	40.8			$	5.3	$	0.7

⁽¹⁾   The borrowing limit of this facility is denominated in USD. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 110% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance. The Company has the ability to provide additional capacity under these lines of credit, if needed.

⁽²⁾ The borrowing limit of this facility is denominated in RMB. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 100% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance.

Long-Term Debt

ABL Facility

The ABL Facility provides for committed revolving credit financing including a U.S. Tranche of up to $505.0 million, a Canadian Tranche of up to the USD equivalent of $40.0 million and a FILO Tranche up to $30.0 million. Provided no default or event of default, the ABL Borrowers have the option to request that the ABL Facility be increased by an aggregate amount, when included with any incremental borrowings issued under the Term Loan Facility, not to exceed $175.0 million.

The weighted average interest rate on borrowings under the ABL Facility was 2.92% at December 31, 2017. The Company had the USD equivalent of $74.2 million in outstanding letters of credit under the ABL Facility at December 31, 2017. The collective credit availability under the U.S. and Canadian Tranches of the ABL Facility was the U.S. equivalent of $211.6 million at December 31, 2017. There was $5.0 million availability under the FILO Tranche at December 31, 2017. The ABL Facility matures on June 9, 2021.

Obligations under the ABL Facility are secured by a first priority lien on all ABL Facility first lien collateral, including eligible inventory and accounts receivable of the ABL Borrowers, and a second priority lien on all Term Loan Facility first lien collateral including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, in each case, subject to certain limitations; provided, that no ABL Facility first lien collateral or Term Loan Facility first lien collateral owned by the Canadian Borrower secure the obligations owing under the U.S. tranche of the ABL Facility. These accounts receivable and inventory totaled $664.6 million in the aggregate as of December 31, 2017.

As of December 31, 2017, the ABL Borrowers were in compliance with the covenants of the ABL Facility.

Term Loan Facility

The Term Loan Facility provides secured debt financing in an aggregate principal amount of up to $655.0 million and the right, at the Company’s option, to request additional tranches of term loans in an aggregate principal amount, when included with any incremental borrowings issued under the ABL Facility, of up to $175.0 million, plus unlimited additional amounts such that the aggregate principal amount of indebtedness outstanding at the time of incurrence does not cause the Secured Net Leverage Ratio, calculated on a pro forma basis, to exceed 4.1 to 1.0. Availability of such additional tranches of term loans is subject to the absence of any default and, among other things, the receipt of commitments by existing or additional financial institutions.

On December 19, 2017, the Company completed TLB Amendment No. 2 amending the Term Loan Facility. TLB Amendment No. 2 reduced the interest rate margin applicable to outstanding term loans by 50 basis points from 3.75% to 3.25% for LIBOR loans and from 2.75% to 2.25% for base rate loans. TLB Amendment No. 2 also provides for a soft call premium equal to 1% of the amount of the term loans that are subject to certain repricing transactions occurring on or prior to twelve months from the effective date of TLB Amendment No. 2. As a result of TLB Amendment No. 2, the Company paid debt issuance costs of $0.8 million during the three months ended December 31, 2017, which will be amortized throughout the remaining life of the Term Loan Facility.

The Company is required to make scheduled quarterly payments in an aggregate annual amount equal to 1.0% of the aggregate principal amount of the outstanding term loans as of the Closing Date of the TLB Amendment No. 2, with the balance due at maturity. The average interest rate for the Term Loan Facility was 5.03% at December 31, 2017. The Company amortized $0.1 million and $0.2 million of debt discount to interest expense during the three months ended December 31, 2017 and December 31, 2016, respectively. The Term Loan Facility matures on June 9, 2023.

Additionally, the Term Loan Facility requires the Company to make mandatory principal payments on an annual basis, commencing with the fiscal year ending September 30, 2017, if cash flows for the year, as defined in the Term Loan Facility, exceed certain levels specified in the Term Loan Facility. The Company was not required to make such mandatory principal payment for the fiscal year ended September 30, 2017. The Company generally has the right to prepay loans in whole or in part, without incurring any penalties for early payment.

Obligations under the Term Loan Facility are secured by a first priority lien on all Term Loan Facility first lien collateral, including outstanding equity interests of the Borrower and certain of the other subsidiaries of Holdings, and a second priority lien on all ABL Facility first lien collateral, including accounts receivable and inventory of the loan parties under the Term Loan Facility, subject to certain limitations.

As of December 31, 2017, the Company was in compliance with the covenants of the Term Loan Facility.

Debt Issuance Cost Amortization

Amortization expense included in interest expense related to debt issuance costs of the Term Loan Facility was $0.7 million and $0.5 million for the three months ended December 31, 2017 and December 31, 2016, respectively.

Capital Lease Obligations

The capital lease obligation balance of $37.0 million as of December 31, 2017 is primarily associated with the Ryder Lease and the Montgomery Lease. The Ryder Lease obligation excludes decreasing annual interest payments ranging from $0.9 million to $0.1 million, for aggregate interest payments totaling $3.5 million. The Montgomery Lease obligation excludes decreasing annual interest payments ranging from $1.0 million to $0.1 million, for aggregate interest payments of $13.4 million. See Note 5.

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Derivatives

3 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

During the three months ended March 31, 2017, the Company entered into four interest rate swap agreements with a combined notional amount of $300.0 million to help mitigate interest rate risk related to the variable-rate Term Loan Facility. The swap agreements expire at various dates from February 2020 through March 2022 and are accounted for as cash flow hedges. Gains or losses resulting from changes in the fair value of the swaps are recorded in other comprehensive income. Gains and losses recorded in other comprehensive income are reclassified into and recognized in income when the interest expense on the Term Loan Facility is recognized.

Derivative assets and liabilities at December 31, 2017 and September 30, 2017 consisted of the following:

	Recorded to	December 31, 2017		September 30, 2017
Short-term derivative asset	Other current assets	$	0.1	$	—
Long-term derivative asset	Other non-current assets	$	1.9	$	0.3
Short-term derivative liability	Accrued expenses and other liabilities	$	0.4	$	1.1
Long-term derivative liability	Other non-current liabilities	$	—	$	0.2
Other Comprehensive Income(1)	Accumulated other comprehensive income	$	1.9	$	—

⁽¹⁾ Other Comprehensive Income for the fiscal year ended September 30, 2017 was less than $0.1 million

Gains and losses (net of reclassifications into income, including any ineffective portion) related to the interest rate swaps were as follows:

		Three Months Ended December 31,
	Recorded to	2017		2016
Realized loss	Interest expense	$	0.4	$	—
Unrealized gain, net of tax	Other comprehensive income	$	1.9	$	—

Unrealized losses related to the interest-rate swaps for the three months ended December 31, 2017 were net of a tax benefit impact of $0.6 million. At December 31, 2017, less than $0.1 million in unrealized gains were expected to be realized and recognized in income within the next twelve months. There were no derivative instruments outstanding as of December 31, 2016.

See Note 9 for additional information on the Company’s fair value of the derivative instruments.

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Fair Value Measurements

3 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The accounting standard for fair value measurements establishes a framework for measuring fair value that is based on the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The fair value hierarchy is as follows:

• Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

• Level 2—Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

• Level 3—Prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions a third party would use in pricing an asset or liability based on the best information available under the circumstances. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Fair value of financial instruments

The carrying values of cash and cash equivalents, accounts and notes receivable, accounts payable and short-term borrowings approximate their fair value due to the short-term maturity of those instruments.

The carrying values of borrowings outstanding under the Credit Facilities approximate fair value at December 31, 2017 and September 30, 2017, primarily due to their variable interest rate. The estimated fair value of these instruments is classified by the Company as a Level 3 measurement within the fair value hierarchy due to the varying interest rate parameters as outlined in the respective loan agreements.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

In addition to the financial instruments that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a non-recurring basis as required by U.S. GAAP. Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges or as part of a business combination. As discussed in Note 3, during the fiscal year ended September 30, 2017, the Company recorded non-recurring fair value measurements related to the Ultra Chem Acquisition and its asset acquisitions. These fair value measurements were classified as Level 3 within the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Contingent Consideration

The fair value of the contingent consideration related to the Deferred Cash Consideration as discussed in Note 4 was $45.2 million and $35.1 million as of December 31, 2017 and September 30, 2017, respectively. The increase in the liability was largely driven by the increase in the Company’s stock price. The measurement of the contingent consideration related to the Deferred Cash Consideration is classified by the Company as a Level 3 measurement within the fair value hierarchy. In order to estimate the fair value of the Deferred Cash Consideration, the Company estimates the value of the Excess Shares using a Monte Carlo simulation model with the market price of the Company’s common stock at each valuation date being a significant input to this model. Unobservable inputs to the valuation are the expected volatility during the applicable period as well as a marketability discount to reflect the illiquidity of the Excess Shares given their terms. An increase in the market price of the Company’s common stock has the same directional effect on the value of the liability related to the Deferred Cash Consideration. An increase in the volatility and marketability discount will lower the value of the liability related to the Deferred Cash Consideration.

The fair value of the liability for the contingent consideration related to the TRA as discussed in Note 4 was $72.2 million and $105.1 million as of December 31, 2017 and September 30, 2017, respectively. The decrease in the liability is reflective of the provisional impact associated with the Tax Act enacted in December 2017 (see Note 15), which lowers the Company’s projected income tax liabilities, the estimate of tax benefits expected to be realized as a result of the Business Combination and the ultimate amount expected to be paid by the Company to the Selling Equityholders. The liability for the contingent consideration related to the TRA is classified by the Company as a Level 3 measurement within the fair value hierarchy. The Company estimates the fair value of the liability for the contingent consideration related to the TRA based on a discounted cash flow model which incorporates assumptions of projected taxable income, projected income tax liabilities and an estimate of tax benefits expected to be realized as a result of the Business Combination. Key inputs to the valuation are prevailing tax rates and market interest rates impacting the discount rate. A 100 basis point increase in the discount rate compared to the discount rate used at the December 31, 2017 valuation would have resulted in a decrease of approximately $0.5 million in the value of the liability for the contingent consideration related to the TRA. Additionally, this cash flow model is sensitive to changes in prevailing tax rates. A 100 basis point increase in the tax rate compared to the tax rate used at the December 31, 2017 valuation would have resulted in an increase of approximately $2.3 million in the value of the liability for the contingent consideration related to the TRA.

Changes in the fair value of the contingent consideration obligations for the three months endedDecember 31, 2017 were as follows:

	TRA			Deferred Cash Consideration		Total Fair Value
Contingent consideration as of September 30, 2017	$	105.1		$	35.1	$	140.2
Cash paid to TPG	(4.2		)	—		(4.2		)
Change in fair value of contingent consideration(1)	(28.7		)	10.1		(18.6		)
Contingent consideration as of December 31, 2017	$	72.2		$	45.2	$	117.4

⁽¹⁾Included in Operating income (loss) in the condensed consolidated statement of operations.

Significant changes in the estimates and inputs used in determining the fair value of the contingent consideration could have a material impact on the amounts recognized as a component of Operating income (loss) in future periods.

Interest Rate Swaps

The Company classifies interest rate swaps within Level 2. During the three months ended March 31, 2017, the Company entered into four interest rate swap agreements to help mitigate interest rate risk related to the variable-rate Term Loan Facility. The agreements expire at various dates through March 2022. At December 31, 2017, the Company recorded $0.1 millionto Othercurrentassets, $1.9 million in Other non-current assets and$0.4 million in Accrued expenses and other liabilities in the condensed consolidated balance sheet related to these instruments.

During the three months endedDecember 31, 2017 and 2016, the Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements.

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Share-based Compensation and Employee Benefit Plans

3 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation and Employee Benefit Plans

Share-based Compensation and Employee Benefit Plans

On June 8, 2016, the Company’s stockholders approved the 2016 LTIP, with an effective date of March 30, 2016, covering approximately a ten-year period. No awards may be granted under the 2016 LTIP after March 20, 2026. The 2016 LTIP permits the grant of up to 9,000,000 shares of the Company's common stock for various types of awards to employees, directors and consultants of the Company or its subsidiaries, including incentive and non-incentive stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, stock awards, conversion awards and performance awards.

During the three months endedDecember 31, 2017, the Company granted 193,667 PSUs to employees under the 2016 LTIP. These awards will vest on September 30, 2020, entitling the recipient to receive a certain number of shares of the Company’s common stock, based on the Company’s achievement of the performance goals included in the PSUs, which are based on a return on invested capital calculation. Depending on the calculation as of the vesting date, a recipient is entitled to receive between 0% and 200% of the initial award. The awards are accounted for as equity instruments, and the fair value of these awards was determined by the closing price of the Company's common stock on the date of grant.

During the fiscal years ended September 30, 2017 and 2016, the Company granted 212,000 and 1,557,500 PSU awards to employees, respectively, under the 2016 LTIP. The recipient can receive between 0% and 200% of the initial award, based on the Company’s total stockholder return during approximate three-year performance period, or a cumulative Adjusted EBITDA target if a specified total stockholder return is not met. The Company used the Monte Carlo simulation model to estimate the fair value of the PSU awards at the grant date, factoring in the market-based vesting condition and considering the probability of satisfying the various performance criteria. The resulting grant date fair value is recognized as expense on a straight-line basis from the grant date through the end of the performance period. The assumptions used in the Monte Carlo simulation model for PSUs included an expected stock price volatility between 35% and 40% based on a peer group of similar companies, an expected dividend yield of 0%, an expected term of two to three years, and a risk-free interest rate of between 0.9% and 1.3%.

The following table summarizes all PSU activity during the three months endedDecember 31, 2017:

	PSUs	Average Grant Date Fair Value Per Unit
Unvested PSUs at September 30, 2017	1,524,000	$	8.92
Grants	193,667	7.50
Vested	—	—
Forfeited/Canceled	—	—
Unvested PSUs at December 31, 2017	1,717,667	$	8.76

As of December 31, 2017, the Company may issue up to 3,435,334 shares of common stock related to the outstanding PSU awards described above under the 2016 LTIP. The PSU awards are accounted for as equity instruments, and the Company recognized compensation cost of $1.2 million and $1.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations for the three months ended December 31, 2017 and 2016, respectively, related to the PSUs. As of December 31, 2017, the outstanding PSUs had a weighted-average remaining contract life of 1.6 years. As of December 31, 2017, there was $7.7 million of total unrecognized compensation cost related to unvested PSUs.

In November 2017, the Company granted 415,867 shares of restricted stock to employees under the 2016 LTIP. The restricted stock awards vest equally on the anniversary of the grant date over a three year period provided that the recipients of such grants continue their employment with the Company. The awards are accounted for as equity instruments, and the fair value of the restricted stock awards was determined by the closing price of the Company's common stock on the date of grant. During the fiscal years ended September 30, 2017 and 2016, the Company granted restricted stock awards to certain of the Company’s non-employee directors under the 2016 LTIP that vest over a one year period from the date of grant.

The following table summarizes all restricted stock activity during the three months endedDecember 31, 2017:

	Shares of Restricted Stock		Average Grant Date Fair Value Per Unit
Restricted stock at September 30, 2017	77,458		$	8.26
Grants	415,867		7.50
Vested	—		—
Forfeited/Canceled	(24,008	)	8.20
Restricted stock at December 31, 2017	469,317		$	7.59

The restricted stock awards are accounted for as equity instruments, and the Company recognized compensation expense of $0.3 million and $0.2 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three months ended December 31, 2017 and 2016, respectively, related to the restricted stock. As of December 31, 2017, there was $3.0 million of total unrecognized compensation expense related to restricted stock, and a weighted average remaining life of 2.6 years.

During the fiscal year ended September 30, 2016, the TPG Restricted Stock Grants were awarded with respect to 100,000 shares of Company common stock owned by TPG. These awards vest in equal amounts over a three-year period provided that the recipients of such grants continue their employment with the Company. During the three months ended December 31, 2017, 11,673 shares were transferred back to TPG due to forfeiture. During the fiscal year ended September 30, 2017, 33,333 shares of these awards vested and 9,576 shares were transferred to the Company (reflected as treasury stock) to satisfy the officers’ and employees’ tax withholding obligations in connection with the vesting. The Company recognized compensation cost of $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations for each of the three months ended December 31, 2017 and 2016 related to these awards. As of December 31, 2017, there was $0.4 million of total unrecognized compensation cost related to these awards and a weighted average remaining life of 1.4 years. While these awards were not made pursuant to the 2016 LTIP, they constitute equity-based compensation and therefore will count against the 2016 LTIP's share reserve to the extent the awards vest.

During the three months endedDecember 31, 2017, the Company granted 999,492 stock options to employees under the 2016 LTIP. The awards vest in equal amounts over a three-year period provided that the recipients of such grants continue their employment with the Company. The Company used the Black-Scholes Merton model to estimate the fair value of the option awards at the grant date. The resulting grant date fair value is recognized as expense on a straight-line basis over the vesting period. The assumptions used in the Black-Scholes Merton model for the options included an expected term of six years, an expected stock price volatility of 35.0% based on a peer group of similar companies, an expected dividend yield of 0.0% and a risk-free interest rate of 2.1%.

The following table summarizes stock option activity during the three months endedDecember 31, 2017:

	Stock Options	Average Grant Date Fair Value Per Unit		Weighted Average Exercise Price
Stock Options at September 30, 2017	—	$	—	$	—
Grants	999,492	2.84		7.42
Exercised	—	—		—
Forfeited/Canceled	—	—		—
Stock Options at December 31, 2017	999,492	$	2.84	$	7.42

The stock options are accounted for as equity instruments, and the Company recognized compensation expense of $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statement of operations during the three months ended December 31, 2017 related to the restricted stock. As of December 31, 2017, there was $2.6 million of total unrecognized compensation expense related to stock options, and a weighted average remaining contractual life of 9.8 years. The outstanding stock options as of December 31, 2017 had an aggregate intrinsic value of $1.7 million. No stock options were exercisable as of December 31, 2017.

During the three months ended December 31, 2016, the Company granted certain employees a total of 28,000 RSUs under the 2016 LTIP that vest equally over a three-year period on the anniversary of the grant date provided the employee remains employed by the Company. Upon vesting, the recipients will receive a share of common stock in the Company for each RSU awarded. The fair value of these RSUs was determined based on the closing price of the Company’s stock on the grant date.

The following table summarizes RSU award activity during the three months endedDecember 31, 2017:

	RSUs		Average Grant Date Fair Value Per Unit
Unvested RSUs at September 30, 2017	24,500		$	7.28
Grants	—		—
Vested	(8,162	)	7.28
Forfeited/Canceled	—		—
Unvested RSUs at December 31, 2017	16,338		$	7.28

The RSUs are accounted for as equity instruments, and the Company recognized compensation cost of less than $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three months ended December 31, 2017 and 2016 related to the RSUs. During the three months ended December 31, 2017, 8,162 RSUs vested, and 2,777 shares were transferred to the Company (reflected as treasury stock) to satisfy the employees’ tax withholding obligations in connection with the vesting. As of December 31, 2017, there was $0.1 million of total unrecognized compensation cost related to the RSUs, and a weighted average remaining life of 1.9 years.

During the three months ended December 31, 2016, the Company also awarded 10,500 phantom RSUs and 10,000 phantom PSUs to certain non-U.S. employees under the 2016 LTIP. The phantom RSUs vest equally over a three-year period on the anniversary of the grant date while the phantom PSUs vest under the same conditions as the PSU awards described above. During the fiscal year ended September 30, 2017, 3,500 of the phantom RSUs were forfeited and all of the phantom PSUs were forfeited. Upon vesting and provided the employee remains employed by the Company at that time, the awards will be settled in cash. In accordance with ASC 718, the remaining phantom RSU awards are accounted for as a liability, with the awards re-measured at the end of each reporting period based on the closing price of the Company’s common stock or using a Monte Carlo simulation model, as applicable. Compensation expense is recognized ratably on a straight-line basis over the requisite service period. An immaterial amount of compensation expense was recognized during the three months ended December 31, 2017 and 2016 related to these awards.

As of December 31, 2017, there were 3,922,265 shares of the Company’s common stock available for issuance under the 2016 LTIP, assuming the PSU awards vest at their maximum target.

Defined Contribution Plans

Qualifying employees of the Company are eligible to participate in the Company’s 401(k) Plan. The 401(k) Plan is a defined contribution plan which allows employees to make tax deferred contributions as well as company contributions, designed to assist employees of the Company and its affiliates in providing for their retirement. The Company matches 100% of employee contributions up to 4.0%. The Company makes an additional contribution to the 401(k) Plan of 1.5%, 3.0%, or 4.5%, based upon years of service of one to ten years, eleven to twenty years and twenty-one years or more, respectively. A version of the 401(k) Plan is also available for qualifying employees of the Company in its foreign subsidiaries.

The following summarizes contributions to the plans described above:

	Three Months Ended December 31,
	2017		2016
Contributions recorded as a component of cost of sales and operating expenses	$	1.0	$	1.0
Contributions recorded as a component of selling, general and administrative expenses	1.5		1.6
Total contributions	$	2.5	$	2.6

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Equity

3 Months Ended

Dec. 31, 2017

Equity [Abstract]

Equity

Equity

Common Stock

The authorized common stock of the Company consists of 300,000,000 shares. Holders of the Company’s common stock are entitled to one vote for each share of common stock. As of December 31, 2017, there were 89,753,662 shares of common stock issued and 89,741,309 shares of common stock outstanding, which includes the 12,476,250 Founder Shares. The Company has units outstanding which consist of one share of common stock and one warrant which are included in the respective totals.

Founder Shares

As of December 31, 2017 there were 12,476,250 Founder Shares. These Founder Shares are subject to forfeiture on the tenth anniversary of the Closing Date unless:

• with respect to 50% of such Founder Shares, the last sale price of the Company’s common stock as quoted on NASDAQ equals or exceeds $12.50 per share (as adjusted for stock splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period; and

• with respect to the remaining 50% of such Founder Shares, the last sale price of the Company’s common stock equals or exceeds $15.00 per share (as adjusted for stock splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period; or

• the post-combination company completes a liquidation, merger, stock exchange or other similar transaction that results in all or substantially all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property or any transaction involving a consolidation, merger, proxy contest, tender offer or similar transaction in which the post-combination company is the surviving entity which results in a change in the majority of the Company’s board of directors or management team or the Company’s post-combination stockholders immediately prior to such transaction ceasing to own a majority of the surviving entity immediately after such transaction.

The Founder Shares will not participate in dividends or other distributions with respect to the shares prior to these targets being met, whereupon the Founder Shares shall be entitled to all dividends and distributions paid on the common stock after the Business Combination as if they had been holders of record entitled to receive distributions on the applicable record date.

Warrants

As of December 31, 2017 there were 50,025,000 warrants outstanding to purchase 25,012,500 shares of common stock at an exercise price of $11.50 per share.

Preferred Stock

The authorized preferred stock of the Company consists of 1,000,000 shares. As of December 31, 2017, there were no shares of preferred stock issued and outstanding.

Treasury Stock

During the three months ended December 31, 2017, in connection with the vesting of RSUs, 2,777 shares of common stock were transferred to the Company to satisfy the employees’ tax withholding obligations in connection with the vesting. Following the transfer, these shares were not canceled and are therefore classified as treasury stock. Total treasury stock as of December 31, 2017 is 12,353 shares.

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Earnings per Share

3 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

A reconciliation of the numerators and denominators of the basic and diluted per share computation follows.

	Three Months Ended December 31,
	2017		2016
Basic:
Net income (loss)	$	26.5	$	(8.3	)
Weighted average number of common shares outstanding during the period	76,793,518		76,746,168
Net income (loss) per common share - basic	$	0.35	$	(0.11	)
Diluted:
Net income (loss)	$	26.5	$	(8.3	)
Denominator for diluted earnings per share:
Weighted average number of common shares outstanding during the period	76,793,518		76,746,168
Incremental common shares attributable to outstanding unvested restricted stock and unvested restricted stock units	345,718		—
Denominator for diluted earnings per common share	77,139,236		76,746,168
Net income (loss) per common share - diluted	$	0.34	$	(0.11	)

Dilutive computations during the current period contain additional incremental common shares which are attributable to the outstanding unvested restricted stock awards issued to directors and employees and restricted stock units awards to employees; the outstanding stock options were not included as the result would have been anti-dilutive. During the three months ended December 31, 2016, the outstanding restricted stock awards and restricted stock unit awards were not included as their impact on the Company’s net loss would have been anti-dilutive. For the three months ended December 31, 2017 and 2016, there were 12,476,250 Founder Shares excluded from the basic and diluted computations because such shares were subject to forfeiture, and PSU awards, which were not included in the computation of diluted shares outstanding because performance targets and/or market conditions were not yet met for these awards. Diluted shares outstanding also did not include 25,012,500 shares of common stock issuable on the exercise of 50,025,000 warrants because the warrants were out-of-the-money for the three months ended December 31, 2017 and 2016.

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Commitments, Contingencies and Litigation

3 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Litigation

Commitments, Contingencies and Litigation

Operating Leases

The Company is a lessee of office buildings, transportation equipment, warehouses and storage facilities, other equipment, facilities and properties under operating lease agreements that expire at various dates. Rent expense (including rentals under short-term leases) was $6.5 million and $6.4 million for the three months ended December 31, 2017 and 2016, respectively.

Future minimum non-cancellable rental payments as of December 31, 2017 are as follows:

2018	$	15.2
2019	11.1
2020	7.3
2021	6.1
2022	4.5
Thereafter	2.6
Total	$	46.8

Capital Leases

The Company leases certain equipment and facilities under capital lease agreements. As of December 31, 2017 future minimum lease payments under capital leases were as follows:

2018	$	8.5
2019	7.5
2020	7.2
2021	7.0
2022	13.7
Thereafter	27.1
Total minimum capital lease payments	71.0
Less amount representing executory costs	(16.8		)
Less amount representing interest	(17.1		)
Present value of net minimum capital lease payments	$	37.1

Environmental Remediation

Due to the nature of its business, the Company is subject to various laws and regulations pertaining to the environment and to the sale, handling, transportation and disposal of chemicals and hazardous materials. These laws pertain to air and water, the management of solid and hazardous wastes, transportation and human health and safety.

On March 31, 2011, the Predecessor purchased certain assets of the global distribution business (the "Distribution Business") from Ashland (the "Ashland Distribution Acquisition"), evidenced by the ADA Purchase Agreement.  In the ADA Purchase Agreement, Ashland agreed to retain all known environmental remediation liabilities ("the Retained Specified Remediation Liabilities") and other environmental remediation liabilities unknown at the closing of the Ashland Distribution Acquisition related to the Distribution Business for which Ashland received notice prior to the fifth anniversary of the closing (the "Other Retained Remediation Liabilities") (collectively, the "Retained Remediation Liabilities").  Ashland’s liability for the Retained Remediation Liabilities is not subject to any claim thresholds or deductibles other than expenses the Predecessor incurs arising out of the Other Retained Remediation Liabilities. Had the Predecessor incurred expenses arising out of the Other Retained Remediation Liabilities, Ashland’s indemnification obligation would have been subject to an individual claim threshold of $0.2 million and an aggregate claim deductible of $5.0 million. Ashland’s indemnification obligations under the ADA Purchase Agreement as described above terminated as of March 31, 2016, other than for the Retained Remediation Liabilities. 

In July 2014, Ashland filed a lawsuit numbered Ashland Inc. v. Nexeo Solutions, LLC, Case No. N14C-07-243 JTV CCLD, in the Superior Court for the State of Delaware in and for New Castle County.  In the suit, Ashland seeks a declaration that, pursuant to the ADA Purchase Agreement, Solutions is obligated to indemnify Ashland for losses Ashland incurs pertaining to the Other Retained Remediation Liabilities, up to the amount of the aggregate $5.0 million deductible applicable for expenses incurred by Solutions, whether or not Solutions incurs any expenses or obtains any indemnity from Ashland.  Ashland further alleges that Solutions has breached duties related to the ADA Purchase Agreement by not having so indemnified Ashland for amounts Ashland has incurred for Other Retained Remediation Liabilities at sites where Ashland disposed of wastes prior to the Ashland Distribution Acquisition, and on that basis seeks unspecified compensatory damages, costs and attorney’s fees.  On June 21, 2017, the Company’s Motion for Summary Judgment for this lawsuit was granted. Ashland appealed the ruling on July 20, 2017. On January 31, 2018, the Delaware Supreme Court affirmed the lower court’s grant of the Company’s Motion for Summary Judgment. In the event Ashland requests rehearing of the ruling, the Company will continue to vigorously defend the lawsuit. The Company does not currently have any environmental or remediation reserves for matters covered under the ADA Purchase Agreement.

The Company’s reserves will be subject to numerous uncertainties that affect its ability to accurately estimate its costs, or its share of costs if multiple parties are responsible. These uncertainties involve the legal, regulatory and enforcement parameters governing environmental assessment and remediation, the nature and extent of contamination, the extent of required remediation efforts, the choice of remediation methodology, availability of insurance coverage and, in the case of sites with multiple responsible parties, the number and financial strength of other potentially responsible parties.

Other Legal Proceedings

The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities, including product liability claims. Management believes that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the Company.

Other Contingencies

In June 2014, the Predecessor self-disclosed to the DTSC that an inventory of its Fairfield facility had revealed potential violations of RCRA and the California Health and Safety Code. Although no formal proceeding has been initiated, the Company expects the DTSC to seek payment of fines or other penalties for non-compliance. The Company does not expect the amount of any such fine or other penalty to have a material adverse effect on its business, financial position or results of operations.

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Related Party Transactions

3 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The tables below summarize activity recorded during the respective periods for related party transactions:

	Three Months Ended December 31,
	2017		2016
Sales to related entities:
TPG	$	1.6	$	0.7
Purchases from related entities:
Entities related to members of the Board of Directors	$	3.4	$	—

	December 31, 2017		September 30, 2017
Accounts receivable from related entities:
TPG	$	1.1	$	0.7
Accounts payable to related entities:
Entities related to members of the Board of Directors	$	0.3	$	0.1

Contingent Consideration Obligations Pursuant to the TRA and the Merger Agreement

Subsequent to the Business Combination, TPG beneficially owns approximately 35% of the Company’s common stock, including Founder Shares, and is considered a related party of the Company. In connection with the Business Combination, TPG became a party to the TRA and obtained the right to receive the Deferred Cash Consideration pursuant to the Merger Agreement. The fair value of these contingent consideration liabilities was as follows:

	December 31, 2017		September 30, 2017
Due to related party pursuant to contingent consideration obligations:
Current liability	$	8.5	$	12.5
Non-current liability	108.9		127.7
Total fair value	$	117.4	$	140.2

During the three months endedDecember 31, 2017 the Company paid $4.2 million to TPG related to the TRA. See Note 4 and Note 9.

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Income Taxes

3 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For all periods, the Company computed the provision for income taxes based on the actual year-to-date effective tax rate by applying the discrete method.  Use of the annual effective tax rate, which relies on accurate projections by legal entity of income earned and taxed in foreign jurisdictions, as well as accurate projections by legal entity of permanent and temporary differences, was not considered a reliable estimate for purposes of calculating year-to-date income tax expense.

The Tax Act significantly revises future U.S. corporate income taxes by, among other things, lowering U.S. corporate income tax rates and implementing a modified territorial tax system. Because the Company has a September 30 fiscal year end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 24.3% for the Company’s fiscal year ending September 30, 2018 and 21.0% for subsequent fiscal years. The Tax Act also provided for certain transition impacts. As part of the transition to the new modified territorial tax system, the Tax Act imposes a one-time repatriation tax on deemed repatriation of historical earnings of foreign subsidiaries. The Company does not currently anticipate an impact from the repatriation tax charge.

For the three months ended December 31, 2017, the impact of the Tax Act resulted in a net tax benefit of approximately $4.5 million, related solely to the remeasurement of the Company’s net deferred tax liabilities at the lower enacted corporate tax rates.

In accordance with recently issued SEC guidance, the estimated net income tax benefit of $4.5 million is considered provisional representing the Company’s current best estimate based on interpretation of the provisions of the Tax Act, as data continues to be accumulated in order to finalize the underlying calculations. In addition, due to the broad and complex changes contained in the Tax Act, the Company’s current estimate of the impact may be influenced by, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act and any changes in accounting standards for income taxes or related interpretations issued in response to the Tax Act. The Company anticipates finalizing and recording any resulting adjustments by the end of its current fiscal year ending September 30, 2018.

Income tax expense for the three months ended December 31, 2017 was $1.3 million on pre-tax income of $27.8 million compared to the income tax benefit of $2.7 million on pre-tax loss of $11.0 million for the three months ended December 31, 2016. The current period tax expense was largely attributable to current year income. The expense generated in the U.S. was partially offset by a current period benefit on deferred tax liabilities as a result of the impact of the Tax Act. The prior period tax benefit was largely attributed to income tax benefits on U.S. operations related to deferred taxes.

At December 31, 2017 and September 30, 2017, the valuation allowance was $3.0 million and $3.1 million, respectively, primarily related to operations in Asia. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon management’s expectations at December 31, 2017, management believes it is more likely than not that it will realize the majority of its deferred tax assets.

Uncertain Tax Positions

During the fiscal year ended September 30, 2017, the Company recorded income tax-related uncertainties associated with the purchase of Ultra Chem totaling $1.4 million, inclusive of interest and penalties. Additionally, the Company also recognized indemnification assets related to certain of these income tax-related uncertainties. The indemnification assets were included in Other current assets and Other non-current assets in the condensed consolidated balance sheets, representing the reimbursement the Company reasonably expected to receive from funds held in escrow pursuant to the purchase agreement.  The purchase price allocation of the Ultra Chem Acquisition is preliminary and the initial fair value assessment of these items may change within the twelve month measurement period. See Note 3.

The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of Income tax expense in the condensed consolidated statements of operations. There was an insignificant amount of interest and penalties recognized during all periods. As of December 31, 2017 and September 30, 2017, the Company had $1.8 million related to uncertain tax positions, including related accrued interest and penalties.

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Segment and Geographic Data

3 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment and Geographic Data

Segment and Geographic Data

The Company operates through three lines of business, or operating segments: Chemicals, Plastics and Environmental Services, which market to different sets of customers operating in an array of industries, with various end markets and customer segments within those industries. For segment presentation and disclosure purposes, the Chemicals and Plastics lines of business constitute separate reportable segments, while the Environmental Services line of business, which does not meet the materiality threshold for separate disclosure, is included in an "Other" segment.

Each line of business represents unique products and suppliers, and each line of business focuses on specific end markets within its industry based on a variety of factors, including supplier or customer opportunities, expected growth and prevailing economic conditions. Across the Chemicals and Plastics lines of business there are numerous industry segments, end markets and sub markets that the Company may choose to focus on. These end markets may change from year to year depending on the underlying market economics, supplier focus, expected profitability and the Company’s strategic agenda.

The Chemicals, Plastics and Environmental Services lines of business compete with national, regional and local companies throughout North America. Additionally, the Chemicals and Plastics lines of business compete with other distribution companies in Asia. The Plastics line of business also competes with other distribution companies in EMEA. Competition within each line of business is based primarily on the diversity of the product portfolio, service offerings, reliability of services and supply, technical support, price and delivery capabilities. The accounting policies used to account for transactions in each of the lines of business are the same as those used to account for transactions at the corporate level.

The Chemicals and Plastics lines of business are distribution businesses, while the Environmental Services line of business provides hazardous and non-hazardous waste collection, recovery, recycling and disposal services.

A brief description of each segment follows:

Chemicals. The Chemicals line of business distributes specialty and industrial chemicals, additives and solvents to industrial users via railcars, barges, bulk tanker trucks and as packaged goods in trucks. The Company’s chemical products are distributed in more than 50 countries worldwide, primarily in North America and Asia. In connection with the distribution of chemicals products, the Company provides value-added services such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. While the Chemicals line of business serves multiple end markets, key end markets within the industrial space are household, industrial and institutional, performance coatings (including architectural coatings, adhesives, sealants and elastomers), lubricants, oil and gas and personal care.

Plastics. The Plastics line of business distributes a broad product line consisting of commodity polymer products and prime engineering resins to plastics processors engaged in blow molding, extrusion, injection molding and rotation molding via railcars, bulk trucks, truckload boxes and mixed truckloads or less-than-truckload quantities. The Company's plastics products are distributed in more than 50 countries worldwide, primarily in North America, EMEA and Asia. The Plastics line of business serves a broad cross section of industrial segments with a current focus on the automotive and healthcare end markets.

Other. The Environmental Services line of business, in connection with certain waste disposal service companies, provides customers with comprehensive on-site and off-site hazardous and non-hazardous waste collection, recovery, disposal services or recycling in North America, primarily in the U.S. These environmental services are offered through the Company’s network of distribution facilities used as transfer facilities and through a staff of dedicated on-site waste professionals. The Environmental Services line of business serves multiple end markets such as aerospace and defense, automotive, chemical manufacturing, industrial manufacturing and oil and gas.

The Chief Executive Officer is the Chief Operating Decision Maker. The Chief Operating Decision Maker reviews operating results in order to make decisions, assess performance and allocate resources to each line of business. In order to maintain the focus on line of business performance, certain expenses are excluded from the line of business results utilized by the Company’s Chief Operating Decision Maker in evaluating line of business performance. These expenses include depreciation and amortization, selling, general and administrative expense and corporate items including transaction related costs, interest and income tax expense. These items are separately delineated to reconcile to reported net income. One customer accounted for more than 10% of revenues for the Environmental Services line of business during the three months ended December 31, 2017. No single customer accounted for more than 10% of revenues for any line of business during the three months ended December 31, 2016. Intersegment revenues were insignificant.

Certain assets are aggregated at the line of business level. The assets attributable to the Company’s lines of business, that are reviewed by the Chief Operating Decision Maker, consist of trade accounts receivable, inventories, goodwill and any specific assets that are otherwise directly associated with a line of business. The Company’s inventory of packaging materials and containers, as well as property, plant and equipment, are generally not allocated to a line of business and are included in unallocated assets.

Summarized financial information relating to the Company’s lines of business is as follows:

	Three Months Ended December 31,
	2017			2016
Sales and operating revenues
Chemicals	$	431.9		$	352.4
Plastics	462.2			412.5
Other	35.5			29.9
Total sales and operating revenues	$	929.6		$	794.8
Gross profit
Chemicals	$	58.4		$	42.7
Plastics	41.9			36.0
Other	6.6			5.7
Total gross profit	$	106.9		$	84.4
Selling, general & administrative expenses	84.8			74.5
Transaction related costs	0.1			0.8
Change in fair value related to contingent consideration obligations	(18.6		)	10.6
Operating income (loss)	40.6			(1.5		)
Other income	0.1			2.4
Interest income (expense)
Interest income	0.1			0.1
Interest expense	(13.0		)	(12.0		)
Income (loss) before income taxes	$	27.8		$	(11.0	)

	December 31, 2017		September 30, 2017
IDENTIFIABLE ASSETS
Chemicals	$	796.4	$	793.6
Plastics	772.8		762.7
Other	93.7		91.0
Total identifiable assets by reportable segment	1,662.9		1,647.3
Unallocated assets	581.6		606.2
Total assets	$	2,244.5	$	2,253.5

Goodwill amounts by reportable segment at December 31, 2017 include the preliminary allocation of the purchase consideration of the Ultra Chem Acquisition as of the Ultra Chem Closing Date. Accordingly, the amounts allocated to goodwill from the Ultra Chem Acquisition are subject to adjustments to reflect the completion of the purchase price allocation, which will be completed within twelve months of the Ultra Chem Closing Date and could have a material impact on total goodwill and goodwill for the Chemicals reportable segment. See Note 3.

Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale, are presented below:

	Three Months Ended December 31,
	2017		2016
U.S.	$	668.1	$	587.4
Canada	42.5		36.9
Other North America	33.0		12.5
Total North America Operations	743.6		636.8
EMEA	127.2		96.9
Asia	58.8		61.1
Total	$	929.6	$	794.8

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Recent Accounting Pronouncements (Policies)

3 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

           The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. As such, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments, except as disclosed herein) considered necessary for a fair statement have been included. Results of operations for the three months ended December 31, 2017 are not necessarily indicative of results to be expected for the fiscal year ending September 30, 2018. Quarterly financial data should be read in conjunction with the consolidated financial statements and accompanying notes for the fiscal year ended September 30, 2017 included in the Company's Annual Report on Form 10-K filed with the SEC on December 7, 2017.

           The consolidated financial data as of September 30, 2017 presented in these unaudited condensed consolidated financial statements were derived from the Company’s audited consolidated financial statements, but do not include all disclosures required by U.S. GAAP.

Recent Accounting Pronouncements Adopted and New Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Adopted

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The amendments in this ASU require an entity to measure inventory at the lower of cost or net realizable value, whereas guidance previously required an assessment of market value of inventory, with different possibilities for determining market value. This ASU is effective for fiscal years beginning after December 15, 2016 and interim periods within those years, and early adoption is permitted. The Company adopted this standard as of October 1, 2017, and it did not have a material effect on the Company’s financial position or results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The updated guidance simplifies several aspects of accounting for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. This ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. The Company adopted this standard as of October 1, 2017 and it did not have a material effect on the Company’s financial position or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718). This ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modified award. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications.  The amendments in this ASU will be applied prospectively to awards modified on or after the adoption date. The Company adopted this standard as of October 1, 2017 and it did not have a material effect on the Company’s financial position or results of operations.

New Accounting Pronouncements Not Yet Adopted

The Company continues the evaluation of the potential effects on its financial position or results of operations of the accounting pronouncements disclosed in its consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on December 7, 2017, including ASU 2014-09, Revenue from Contracts with Customers, and ASU 2016-02, Leases. With regards to ASU 2014-09, the Company continues to work on the identification, design and implementation of changes to its accounting systems, policies and internal controls to support the recognition and disclosure requirements under the new revenue recognition standard. The Company expects to utilize the modified retrospective method of adoption by recognizing the cumulative effect of the adoption change as an adjustment to beginning of period retained earnings for the first quarter of fiscal 2019.

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Acquisitions (Tables)

3 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

	Preliminary Purchase Consideration Allocation
Accounts receivable	$	13.7
Inventory	9.1
Other current assets	2.4
Property and equipment	0.4
Customer-related intangible	24.0
Trade name	0.3
Non-compete agreements	3.9
Other non-current assets	2.5
Goodwill	28.0
Total assets acquired	84.3
Short-term borrowings	0.9
Accounts payable	12.1
Other current liabilities	4.1
Deferred tax liability — non-current	8.4
Other non-current liabilities	2.1
Total liabilities assumed	27.6
Net assets acquired	$	56.7

Schedule of Consolidated Pro Forma Financial Information

	Three Months Ended December 31,
	2017		2016
Sales and operating revenues	$	929.6	$	811.8
Operating income (loss)	$	40.7	$	(0.6	)
Net income (loss) from continuing operations	$	26.6	$	(7.9	)
Net income (loss)	$	26.6	$	(7.9	)
Basic net income (loss) per share	$	0.35	$	(0.10	)
Diluted net income (loss) per share	$	0.34	$	(0.10	)
Pro forma weighted average number of common shares outstanding
Basic	76,793,518		76,746,168
Diluted	77,139,236		76,746,168

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Certain Balance Sheet Information (Tables)

3 Months Ended

Dec. 31, 2017

Certain Balance Sheet Information [Abstract]

Schedule of Cash and Cash Equivalents

These amounts included the following:

	December 31, 2017		September 30, 2017
Cash held by foreign subsidiaries	$	37.1	$	36.8
Non-USD denominated currency held by foreign subsidiaries	$	27.7	$	31.1
Currency denominated in RMB	$	7.8	$	8.5

Summary of Inventories

Inventories at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017		September 30, 2017
Finished products	$	362.5	$	310.6
Supplies	4.7		4.9
Total	$	367.2	$	315.5

Schedule of Other Non-Current Assets

Other non-current assets at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017		September 30, 2017
Debt issuance costs of the ABL Facility	$	4.8	$	5.1
Indemnification receivable	1.4		1.4
Deposits	2.7		2.8
Interest rate swap	1.9		0.3
Other	0.8		1.0
Total	$	11.6	$	10.6

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Property, Plant and Equipment (Tables)

3 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Summary of Property, Plant and Equipment

Property, plant and equipment at December 31, 2017 and September 30, 2017 consisted of the following:

	December 31, 2017			September 30, 2017
Land	$	51.0		$	51.0
Plants and buildings(1)	107.1			106.5
Machinery and equipment (2)	153.5			152.8
Software and computer equipment	63.9			63.3
Construction in progress	6.0			5.0
Total	381.5			378.6
Less accumulated depreciation (3)	(74.7		)	(62.5		)
Property, plant and equipment, net	$	306.8		$	316.1

⁽¹⁾ Includes $13.7 million related to facilities acquired under capital leases.

⁽²⁾ Includes $27.2 million related to equipment acquired under capital leases.

⁽³⁾ Includes $5.8 million and $4.9 million, respectively, related to facilities and equipment acquired under capital leases.

Depreciation expense recognized on the property, plant and equipment described above was as follows:

	Three Months Ended December 31,
	2017		2016
Depreciation expense	$	12.6	$	11.2

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Goodwill and Other Intangibles (Tables)

3 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Progression of Goodwill by Reportable Segment

The following is a progression of goodwill by reportable segment: 

	Chemicals		Plastics		Other		Total
Balance at September 30, 2017	$	362.8	$	276.7	$	63.5	$	703.0
Foreign currency translation	—		0.9		—		0.9
Balance at December 31, 2017	$	362.8	$	277.6	$	63.5	$	703.9

Schedule of Finite-Lived Intangible Assets

Definite-lived intangible assets at December 31, 2017 and September 30, 2017 consisted of the following:

		December 31, 2017							September 30, 2017
	Estimated Useful Life (years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer-related	5-13	$	234.9	$	(28.8	)	$	206.1	$	234.6	$	(23.7	)	$	210.9
Supplier-related	10	1.5		(0.2		)	1.3		1.5		(0.1		)	1.4
Trade name	2-10	22.3		(8.4		)	13.9		22.3		(7.0		)	15.3
Below-market leases	1-7	0.7		(0.4		)	0.3		0.7		(0.3		)	0.4
Non-compete agreements	3-10	4.2		(1.0		)	3.2		4.2		(0.7		)	3.5
Total		$	263.6	$	(38.8	)	$	224.8	$	263.3	$	(31.8	)	$	231.5

Schedule of Amortization Expense

Amortization expense recognized on the intangible assets described above was as follows:

	Three Months Ended December 31,
	2017		2016
Amortization expense	$	6.9	$	5.6

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Debt (Tables)

3 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Summary of Short-Term Borrowings Outstanding and the Current Portion of Long-Term Debt and Capital Lease Obligations

Short-term borrowings outstanding and the current portion of long-term debt and capital lease obligations at December 31, 2017 and September 30, 2017 are summarized below:

	December 31, 2017		September 30, 2017
Short-term borrowings	$	38.0	$	40.8
Current portion of long-term debt and capital lease obligations	10.4		10.3
Total short-term borrowings and current portion of long-term debt and capital lease obligations, net	$	48.4	$	51.1

Summary of Long-Term Debt Outstanding

Long-term debt outstanding at December 31, 2017 and September 30, 2017 is summarized below:

	December 31, 2017			September 30, 2017
ABL Facility	$	200.2		$	139.3
Term Loan Facility	645.2			646.9
Capital lease obligations (1)	37.0			37.5
Total long-term debt	882.4			823.7
Less: unamortized debt discount (2)	(2.6		)	(2.7		)
Less: debt issuance costs (3)	(16.8		)	(16.7		)
Less: current portion of long-term debt and capital lease obligations	(10.4		)	(10.3		)
Long-term debt and capital lease obligations, less current portion, net	$	852.6		$	794.0

⁽¹⁾  Capital lease obligations exclude executory costs and interest payments associated with the underlying leases. See “Capital Lease Obligations” below.

⁽²⁾  The unamortized debt discount is related to the Term Loan Facility and amortized to interest expense over the life of the instrument using the effective interest rate method.

⁽³⁾  See discussion below under Term Loan Facility and Debt Issuance Cost Amortization.

Short-Term Borrowings Associated with Operations in China

The Company’s short-term borrowings are associated with the Company’s operations in China and are summarized below:

	Facility Limit		Outstanding Borrowings Balance		Weighted Average Interest Rate on Borrowings		Outstanding LOC and Bankers’ Acceptance Bills		Remaining Availability
December 31, 2017
Bank of America - China (1)	$	24.3	$	24.2	4.4	%	$	—	$	0.1
Bank of Communications - China (2)	23.1		13.8		5.4	%	8.6		0.7
Total	$	47.4	$	38.0			$	8.6	$	0.8
September 30, 2017
Bank of America - China (1)	$	24.3	$	23.8	4.3	%	$	—	$	0.5
Bank of Communications - China (2)	22.5		17.0		5.3	%	5.3		0.2
Total	$	46.8	$	40.8			$	5.3	$	0.7

⁽¹⁾   The borrowing limit of this facility is denominated in USD. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 110% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance. The Company has the ability to provide additional capacity under these lines of credit, if needed.

⁽²⁾ The borrowing limit of this facility is denominated in RMB. This line of credit is secured by a standby letter of credit drawn on the ABL Facility covering at least 100% of the facility’s borrowing limit amount. Borrowings under the line of credit are payable in full within 12 months of the date of the advance.

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Derivatives (Tables)

3 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Assets and Liabilities

Derivative assets and liabilities at December 31, 2017 and September 30, 2017 consisted of the following:

	Recorded to	December 31, 2017		September 30, 2017
Short-term derivative asset	Other current assets	$	0.1	$	—
Long-term derivative asset	Other non-current assets	$	1.9	$	0.3
Short-term derivative liability	Accrued expenses and other liabilities	$	0.4	$	1.1
Long-term derivative liability	Other non-current liabilities	$	—	$	0.2
Other Comprehensive Income(1)	Accumulated other comprehensive income	$	1.9	$	—

⁽¹⁾ Other Comprehensive Income for the fiscal year ended September 30, 2017 was less than $0.1 million

Summary of Gains and Losses (Net of Reclassifications Into Income)

Gains and losses (net of reclassifications into income, including any ineffective portion) related to the interest rate swaps were as follows:

		Three Months Ended December 31,
	Recorded to	2017		2016
Realized loss	Interest expense	$	0.4	$	—
Unrealized gain, net of tax	Other comprehensive income	$	1.9	$	—

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Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Changes in Fair Value of Contingent Consideration

Changes in the fair value of the contingent consideration obligations for the three months endedDecember 31, 2017 were as follows:

	TRA			Deferred Cash Consideration		Total Fair Value
Contingent consideration as of September 30, 2017	$	105.1		$	35.1	$	140.2
Cash paid to TPG	(4.2		)	—		(4.2		)
Change in fair value of contingent consideration(1)	(28.7		)	10.1		(18.6		)
Contingent consideration as of December 31, 2017	$	72.2		$	45.2	$	117.4

⁽¹⁾Included in Operating income (loss) in the condensed consolidated statement of operations.

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Share-based Compensation and Employee Benefit Plans (Tables)

3 Months Ended

Dec. 31, 2017

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of Non-Vested Equity Plan Units

The following table summarizes all restricted stock activity during the three months endedDecember 31, 2017:

	Shares of Restricted Stock		Average Grant Date Fair Value Per Unit
Restricted stock at September 30, 2017	77,458		$	8.26
Grants	415,867		7.50
Vested	—		—
Forfeited/Canceled	(24,008	)	8.20
Restricted stock at December 31, 2017	469,317		$	7.59

Schedule of Stock Option Activity

The following table summarizes stock option activity during the three months endedDecember 31, 2017:

	Stock Options	Average Grant Date Fair Value Per Unit		Weighted Average Exercise Price
Stock Options at September 30, 2017	—	$	—	$	—
Grants	999,492	2.84		7.42
Exercised	—	—		—
Forfeited/Canceled	—	—		—
Stock Options at December 31, 2017	999,492	$	2.84	$	7.42

Schedule of Plan Contributions

The following summarizes contributions to the plans described above:

	Three Months Ended December 31,
	2017		2016
Contributions recorded as a component of cost of sales and operating expenses	$	1.0	$	1.0
Contributions recorded as a component of selling, general and administrative expenses	1.5		1.6
Total contributions	$	2.5	$	2.6

PSUs

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Compensation Activity

The following table summarizes all PSU activity during the three months endedDecember 31, 2017:

	PSUs	Average Grant Date Fair Value Per Unit
Unvested PSUs at September 30, 2017	1,524,000	$	8.92
Grants	193,667	7.50
Vested	—	—
Forfeited/Canceled	—	—
Unvested PSUs at December 31, 2017	1,717,667	$	8.76

RSU

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Compensation Activity

The following table summarizes RSU award activity during the three months endedDecember 31, 2017:

	RSUs		Average Grant Date Fair Value Per Unit
Unvested RSUs at September 30, 2017	24,500		$	7.28
Grants	—		—
Vested	(8,162	)	7.28
Forfeited/Canceled	—		—
Unvested RSUs at December 31, 2017	16,338		$	7.28

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Earnings per Share (Tables)

3 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Schedule of Earnings per Share

A reconciliation of the numerators and denominators of the basic and diluted per share computation follows.

	Three Months Ended December 31,
	2017		2016
Basic:
Net income (loss)	$	26.5	$	(8.3	)
Weighted average number of common shares outstanding during the period	76,793,518		76,746,168
Net income (loss) per common share - basic	$	0.35	$	(0.11	)
Diluted:
Net income (loss)	$	26.5	$	(8.3	)
Denominator for diluted earnings per share:
Weighted average number of common shares outstanding during the period	76,793,518		76,746,168
Incremental common shares attributable to outstanding unvested restricted stock and unvested restricted stock units	345,718		—
Denominator for diluted earnings per common share	77,139,236		76,746,168
Net income (loss) per common share - diluted	$	0.34	$	(0.11	)

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Commitments, Contingencies and Litigation (Tables)

3 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Non-Cancellable Rental Payments

Future minimum non-cancellable rental payments as of December 31, 2017 are as follows:

2018	$	15.2
2019	11.1
2020	7.3
2021	6.1
2022	4.5
Thereafter	2.6
Total	$	46.8

Schedule of Future Minimum Capital Lease Payments

As of December 31, 2017 future minimum lease payments under capital leases were as follows:

2018	$	8.5
2019	7.5
2020	7.2
2021	7.0
2022	13.7
Thereafter	27.1
Total minimum capital lease payments	71.0
Less amount representing executory costs	(16.8		)
Less amount representing interest	(17.1		)
Present value of net minimum capital lease payments	$	37.1

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Related Party Transactions (Tables)

3 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Schedule of Related Party Activity

The tables below summarize activity recorded during the respective periods for related party transactions:

	Three Months Ended December 31,
	2017		2016
Sales to related entities:
TPG	$	1.6	$	0.7
Purchases from related entities:
Entities related to members of the Board of Directors	$	3.4	$	—

	December 31, 2017		September 30, 2017
Accounts receivable from related entities:
TPG	$	1.1	$	0.7
Accounts payable to related entities:
Entities related to members of the Board of Directors	$	0.3	$	0.1

The fair value of these contingent consideration liabilities was as follows:

	December 31, 2017		September 30, 2017
Due to related party pursuant to contingent consideration obligations:
Current liability	$	8.5	$	12.5
Non-current liability	108.9		127.7
Total fair value	$	117.4	$	140.2

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Segment and Geographic Data (Tables)

3 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Summary of Financial Information

Summarized financial information relating to the Company’s lines of business is as follows:

	Three Months Ended December 31,
	2017			2016
Sales and operating revenues
Chemicals	$	431.9		$	352.4
Plastics	462.2			412.5
Other	35.5			29.9
Total sales and operating revenues	$	929.6		$	794.8
Gross profit
Chemicals	$	58.4		$	42.7
Plastics	41.9			36.0
Other	6.6			5.7
Total gross profit	$	106.9		$	84.4
Selling, general & administrative expenses	84.8			74.5
Transaction related costs	0.1			0.8
Change in fair value related to contingent consideration obligations	(18.6		)	10.6
Operating income (loss)	40.6			(1.5		)
Other income	0.1			2.4
Interest income (expense)
Interest income	0.1			0.1
Interest expense	(13.0		)	(12.0		)
Income (loss) before income taxes	$	27.8		$	(11.0	)

	December 31, 2017		September 30, 2017
IDENTIFIABLE ASSETS
Chemicals	$	796.4	$	793.6
Plastics	772.8		762.7
Other	93.7		91.0
Total identifiable assets by reportable segment	1,662.9		1,647.3
Unallocated assets	581.6		606.2
Total assets	$	2,244.5	$	2,253.5

Schedule of Revenues by Geographic Location

Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale, are presented below:

	Three Months Ended December 31,
	2017		2016
U.S.	$	668.1	$	587.4
Canada	42.5		36.9
Other North America	33.0		12.5
Total North America Operations	743.6		636.8
EMEA	127.2		96.9
Asia	58.8		61.1
Total	$	929.6	$	794.8

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Acquisitions - Narrative (Details) - USD ($)			1 Months Ended		3 Months Ended
	Jan. 01, 2019	Apr. 03, 2017	Jan. 31, 2018	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Cash paid for business acquisition					$ 0	$ 5,100,000
Transaction related costs					$ 100,000	800,000
Non-compete agreements | Minimum
Business Acquisition [Line Items]
Weighted average useful life					3 years
Non-compete agreements | Maximum
Business Acquisition [Line Items]
Weighted average useful life					10 years
Ultra Chem
Business Acquisition [Line Items]
Cash paid for business acquisition		$ 56,700,000
Cash acquired from acquisition		500,000
Purchase price held in escrow		$ 9,700,000
Maximum holding period in escrow		5 years
Contingent consideration		$ 0
Transaction related costs					$ 100,000	0
Reduction in gross receivables acquired					1,500,000
Increase (decrease) in inventory					1,000,000
Sales and operating revenue from acquiree					20,600,000
Net income from acquiree					$ 100,000
Ultra Chem | Customer-related intangible
Business Acquisition [Line Items]
Intangible asset, amortization period		10 years
Finite-lived intangible assets		$ 24,000,000
Ultra Chem | Trade names
Business Acquisition [Line Items]
Intangible asset, amortization period		2 years
Finite-lived intangible assets		$ 300,000
Ultra Chem | Non-compete agreements
Business Acquisition [Line Items]
Intangible asset, amortization period		3 years
Finite-lived intangible assets		$ 3,900,000
Ultra Chem | ABL Facility
Business Acquisition [Line Items]
Borrowings used for acquisition		$ 58,000,000
Other Intangible Assets
Business Acquisition [Line Items]
Payment for intangible assets				$ 5,100,000
Recognized intangible assets				8,500,000		$ 8,500,000
Total consideration				$ 8,500,000
Other Intangible Assets | Minimum
Business Acquisition [Line Items]
Weighted average useful life				10 years
Other Intangible Assets | Maximum
Business Acquisition [Line Items]
Weighted average useful life				13 years
Subsequent event
Business Acquisition [Line Items]
Contingent consideration paid			$ 1,700,000
Forecast
Business Acquisition [Line Items]
Contingent consideration paid	$ 1,700,000

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Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017	Apr. 03, 2017
Business Acquisition [Line Items]
Goodwill	$ 703.9	$ 703.0
Ultra Chem
Business Acquisition [Line Items]
Accounts receivable			$ 13.7
Inventory			9.1
Other current assets			2.4
Property, plant and equipment			0.4
Other non-current assets			2.5
Goodwill			28.0
Total assets acquired			84.3
Short-term borrowings			0.9
Accounts payable			12.1
Other current liabilities			4.1
Deferred tax liability — non-current			8.4
Other non-current liabilities			2.1
Total liabilities assumed			27.6
Net assets acquired			56.7
Ultra Chem | Customer-related intangible
Business Acquisition [Line Items]
Finite-lived intangible assets			24.0
Ultra Chem | Trade name
Business Acquisition [Line Items]
Finite-lived intangible assets			0.3
Ultra Chem | Non-compete agreements
Business Acquisition [Line Items]
Finite-lived intangible assets			$ 3.9

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Acquisitions - Schedule of Consolidated Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Diluted net income (loss) per share (USD per share)	$ 0.34	$ (0.10)
Nexeo Solutions Inc.
Business Acquisition [Line Items]
Sales and operating revenues	$ 929.6	$ 811.8
Operating income (loss)	40.7	(0.6)
Net income (loss) from continuing operations	26.6	(7.9)
Net income (loss)	$ 26.6	$ (7.9)
Basic net income (loss) per share (USD per share)	$ 0.35	$ (0.10)
Pro forma weighted average number of common shares outstanding
Basic (in shares)	76,793,518	76,746,168
Diluted (in shares)	77,139,236	76,746,168

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Certain Balance Sheet Information - Cash and Cash Equivalents (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 41.4	$ 53.9
Currency denominated in RMB
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	7.8	8.5
Subsidiaries
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	37.1	36.8
Subsidiaries | Non-USD denominated currency held by foreign subsidiaries
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 27.7	$ 31.1

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Certain Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Certain Balance Sheet Information [Abstract]
Finished products	$ 362.5	$ 310.6
Supplies	4.7	4.9
Total	$ 367.2	$ 315.5

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Certain Balance Sheet Information - Other Non-Current Assets (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Certain Balance Sheet Information [Abstract]
Debt issuance costs of the ABL Facility	$ 4.8	$ 5.1
Indemnification receivable	1.4	1.4
Deposits	2.7	2.8
Interest rate swap	1.9	0.3
Other	0.8	1.0
Other non-current assets	$ 11.6	$ 10.6

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Certain Balance Sheet Information - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Jun. 09, 2016	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Line of Credit Facility [Line Items]
Indemnification receivable		$ 1.4		$ 1.4
Cash and cash equivalents		41.4		53.9
Ultra Chem
Line of Credit Facility [Line Items]
Pledged assets		$ 0.7
Nexeo Solutions Inc.
Line of Credit Facility [Line Items]
Excess shares (in shares)		5,178,642
Number of days to elect excess shares provision	5 days
Contingent consideration - Fair value of deferred cash consideration		$ 45.2		35.1
Payment by the company to selling equityholders of percentage of net cash tax savings	85.00%
Percentage of net cash tax savings retained by the Company	15.00%
Contingent consideration - Fair value of TRA		134.0
Expected benefit period of TRA	20 years
Contingent consideration - Fair value of TRA		72.2		$ 105.1
ABL Facility
Line of Credit Facility [Line Items]
Amortization of financing costs		$ 0.3	$ 0.3
Selling equityholders | Nexeo Solutions Inc.
Line of Credit Facility [Line Items]
Number of trading days to meet condition one	20 days
Number of consecutive trading days	30 days
Share price (USD per share)	$ 15.00

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Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 381.5	$ 378.6
Less accumulated depreciation	(74.7)	(62.5)
Property, plant and equipment, net	306.8	316.1
Accumulated depreciation related to facilities and equipment acquired under capital leases	5.8	4.9
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	51.0	51.0
Plants and buildings
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	107.1	106.5
Facilities and equipment acquired under capital leases	13.7	13.7
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	153.5	152.8
Facilities and equipment acquired under capital leases	27.2	27.2
Software and computer equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	63.9	63.3
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 6.0	$ 5.0

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Property, Plant and Equipment - Depreciation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation	$ 12.6	$ 11.2

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Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Property, Plant and Equipment [Line Items]
Carrying value property, plant and equipment, net	$ 306.8		$ 316.1
Land under purchase options not yet recorded	10.8
Gain related to capital expenditures incurred to date	0.0	$ (0.1)
Montgomery Lease
Property, Plant and Equipment [Line Items]
Gain related to capital expenditures incurred to date		$ 2.5
Closed Facilities | U.S.
Property, Plant and Equipment [Line Items]
Carrying value property, plant and equipment, net	$ 1.1		$ 1.1

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Goodwill and Other Intangibles - Goodwill by Reportable Segment (Details) $ in Millions	3 Months Ended
	Dec. 31, 2017 USD ($)
Goodwill
Beginning balance	$ 703.0
Foreign currency translation	0.9
Ending balance	703.9
Chemicals
Goodwill
Beginning balance	362.8
Foreign currency translation	0.0
Ending balance	362.8
Plastics
Goodwill
Beginning balance	276.7
Foreign currency translation	0.9
Ending balance	277.6
Other
Goodwill
Beginning balance	63.5
Foreign currency translation	0.0
Ending balance	$ 63.5

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Goodwill and Other Intangibles - Definite-Lived Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 263.6	$ 263.3
Accumulated Amortization	(38.8)	(31.8)
Net Carrying Amount	224.8	231.5
Customer-related
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	234.9	234.6
Accumulated Amortization	(28.8)	(23.7)
Net Carrying Amount	$ 206.1	210.9
Customer-related | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	5 years
Customer-related | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	13 years
Supplier-related
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	10 years
Gross Carrying Amount	$ 1.5	1.5
Accumulated Amortization	(0.2)	(0.1)
Net Carrying Amount	1.3	1.4
Trademarks and trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	22.3	22.3
Accumulated Amortization	(8.4)	(7.0)
Net Carrying Amount	$ 13.9	15.3
Trademarks and trade names | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	2 years
Trademarks and trade names | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	10 years
Below-market leases
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 0.7	0.7
Accumulated Amortization	(0.4)	(0.3)
Net Carrying Amount	$ 0.3	0.4
Below-market leases | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	1 year
Below-market leases | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	7 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 4.2	4.2
Accumulated Amortization	(1.0)	(0.7)
Net Carrying Amount	$ 3.2	$ 3.5
Non-compete agreements | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	3 years
Non-compete agreements | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life (years)	10 years

XML

Goodwill and Other Intangibles - Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 6.9	$ 5.6

XML

Goodwill and Other Intangibles - Narrative (Details)	12 Months Ended
	Sep. 30, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment	$ 0

XML

Debt - Summary of Debt (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Debt Disclosure [Abstract]
Short-term borrowings	$ 38.0	$ 40.8
Current portion of long-term debt and capital lease obligations	10.4	10.3
Total short-term borrowings and current portion of long-term debt and capital lease obligations, net	$ 48.4	$ 51.1

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Debt - Summary Long-Term Debt Outstanding (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Total long-term debt	$ 882.4	$ 823.7
Less: unamortized debt discount	(2.6)	(2.7)
Less: debt issuance costs	(16.8)	(16.7)
Less: current portion of long-term debt and capital lease obligations	(10.4)	(10.3)
Long-term debt and capital lease obligations, less current portion, net	852.6	794.0
Capital lease obligations
Debt Instrument [Line Items]
Total long-term debt	37.0	37.5
ABL Facility
Debt Instrument [Line Items]
Total long-term debt	200.2	139.3
Term Loan Facility
Debt Instrument [Line Items]
Total long-term debt	$ 645.2	$ 646.9

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Debt - Short-term Borrowings Associated with Operations in China (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Facility Limit	$ 47.4	$ 46.8
Outstanding Borrowings Balance	38.0	40.8
Remaining Availability	0.8	0.7
Bank of America - China
Debt Instrument [Line Items]
Facility Limit	24.3	24.3
Outstanding Borrowings Balance	$ 24.2	$ 23.8
Weighted Average Interest Rate on Borrowings	4.40%	4.30%
Remaining Availability	$ 0.1	$ 0.5
Bank of Communications - China
Debt Instrument [Line Items]
Facility Limit	23.1	22.5
Outstanding Borrowings Balance	$ 13.8	$ 17.0
Weighted Average Interest Rate on Borrowings	5.40%	5.30%
Remaining Availability	$ 0.7	$ 0.2
Outstanding LOC and Bankers’ Acceptance Bills
Debt Instrument [Line Items]
Outstanding LOC and Bankers’ Acceptance Bills	8.6	5.3
Outstanding LOC and Bankers’ Acceptance Bills | Bank of America - China
Debt Instrument [Line Items]
Outstanding LOC and Bankers’ Acceptance Bills	0.0	0.0
Outstanding LOC and Bankers’ Acceptance Bills | Bank of Communications - China
Debt Instrument [Line Items]
Outstanding LOC and Bankers’ Acceptance Bills	$ 8.6	$ 5.3
ABL Facility | Bank of America - China
Debt Instrument [Line Items]
Line of credit facility collateral coverage (at least)	110.00%
ABL Facility | Bank of Communications - China
Debt Instrument [Line Items]
Line of credit facility collateral coverage (at least)	100.00%

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Debt - ABL Facility (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 47,400,000	$ 46,800,000
Remaining availability	$ 800,000	$ 700,000
ABL Facility
Debt Instrument [Line Items]
Weighted average rate of interest	2.92%
Outstanding letters of credit	$ 74,200,000
Amount as collateral to the banking institution	664,600,000
ABL Facility | US Tranche
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	505,000,000.0
ABL Facility | Canadian Tranche
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	40,000,000.0
ABL Facility | FILO Tranche
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	30,000,000.0
Remaining availability	5,000,000
ABL Facility | U.S. and Canadian Tranches
Debt Instrument [Line Items]
Remaining availability	211,600,000
Term Loan Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	655,000,000
Line of credit facility, increase in maximum borrowing capacity	$ 175,000,000.0

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Debt - Term Loan Facility (Details)			3 Months Ended
	Dec. 19, 2017	Dec. 18, 2017	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			$ 47,400,000		$ 46,800,000
Term Loan Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity			655,000,000
Line of credit facility, increase in maximum borrowing capacity			$ 175,000,000.0
Net leverage ratio of available amount			4.1
Percentage of aggregate annual amount to be paid every quarter			1.00%
Interest rate for term loan facility			5.03%
Amortization of debt discount			$ 100,000	$ 200,000
Secured debt | Term Loan Facility | LIBOR
Debt Instrument [Line Items]
Basis spread		3.75%
Secured debt | Term Loan Facility | Base Rate
Debt Instrument [Line Items]
Basis spread		2.75%
TLB Amendment No. 2 | Secured debt | Term Loan Facility
Debt Instrument [Line Items]
Decrease in basis spread	0.005%
TLB Amendment No. 2 | Secured debt | Term Loan Facility | LIBOR
Debt Instrument [Line Items]
Basis spread	3.25%
Prepayment premium	1.00%
TLB Amendment No. 2 | Secured debt | Term Loan Facility | Base Rate
Debt Instrument [Line Items]
Basis spread	2.25%

XML

Debt - Debt Issuance Cost Amortization (Details) - Term Loan Facility - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Amortization of financing costs	$ 0.7	$ 0.5
TLB Amendment No. 2
Debt Instrument [Line Items]
Amortization of financing costs	$ 0.8

XML

Debt - Capital Lease Obligations (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Capital lease obligation balance	$ 882.4	$ 823.7
Annual interest payments	17.1
Capital lease obligations
Debt Instrument [Line Items]
Capital lease obligation balance	37.0	$ 37.5
2015 Ryder Lease | Ryder
Debt Instrument [Line Items]
Capital lease, aggregate future interest payments	3.5
2015 Ryder Lease | Ryder | Maximum
Debt Instrument [Line Items]
Annual interest payments	0.9
2015 Ryder Lease | Ryder | Minimum
Debt Instrument [Line Items]
Annual interest payments	0.1
Montgomery Lease
Debt Instrument [Line Items]
Capital lease, aggregate future interest payments	13.4
Montgomery Lease | Maximum
Debt Instrument [Line Items]
Annual interest payments	1.0
Montgomery Lease | Minimum
Debt Instrument [Line Items]
Annual interest payments	$ 0.1

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Derivatives - Narrative (Details) - Interest Rate Swap - Cash Flow Hedging	3 Months Ended
	Dec. 31, 2017 USD ($)	Mar. 31, 2017 USD ($) interest_rate_swap
Derivative Instruments, Gain (Loss) [Line Items]
Number of new swaps entered into to manage interest rate exposure | interest_rate_swap		4
Combined notional amount	$ 100,000	$ 300,000,000
Unrealized loss	$ 600,000

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Derivatives - Summary of Derivative Assets and Liabilities (Details) - Cash Flow Hedging - Interest Rate Swap - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Accumulated other comprehensive income
Derivatives, Fair Value [Line Items]
Other comprehensive income/loss	$ 1.9	$ 0.0
Level 2 | Other current assets
Derivatives, Fair Value [Line Items]
Interest rate swap	0.1	0.0
Level 2 | Other non-current assets
Derivatives, Fair Value [Line Items]
Interest rate swap	1.9	0.3
Level 2 | Accrued expenses and other liabilities
Derivatives, Fair Value [Line Items]
Derivative liability	0.4	1.1
Level 2 | Other non-current liabilities
Derivatives, Fair Value [Line Items]
Derivative liability	$ 0.0	0.2
Maximum | Accumulated other comprehensive income
Derivatives, Fair Value [Line Items]
Other comprehensive income/loss		$ 0.1

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Derivatives - Summary of Gains and Losses (Net of Reclassifications Into Income) (Details) - Interest Rate Swap - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Interest expense
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain (loss) on derivative instruments	$ (0.4)	$ 0.0
Other comprehensive income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain (loss) on derivative instruments	$ 1.9	$ 0.0

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Fair Value Measurements - Narrative (Details) $ in Millions	3 Months Ended
	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Mar. 31, 2017 interest_rate_swap
Cash Flow Hedging | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Number of new swaps entered into to manage interest rate exposure | interest_rate_swap			4
Level 2 | Cash Flow Hedging | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Number of new swaps entered into to manage interest rate exposure | interest_rate_swap			4
Level 2 | Cash Flow Hedging | Interest Rate Swap | Other non-current assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Interest rate swap	$ 1.9	$ 0.3
Level 2 | Cash Flow Hedging | Interest Rate Swap | Accrued expenses and other liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivative liability	0.4	1.1
Level 2 | Cash Flow Hedging | Interest Rate Swap | Other non-current liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivative liability	0.0	0.2
TRA Liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Measurement period adjustment	0.5
Estimated adjustment to contingent consideration liability	2.3
Nexeo Solutions Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent consideration - Fair value of deferred cash consideration	45.2	35.1
Contingent consideration - Fair value of TRA	134.0
Contingent consideration - Fair value of TRA	$ 72.2	$ 105.1

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Fair Value Measurements - Changes in Fair Value of Contingent Consideration (Details) $ in Millions	3 Months Ended
	Dec. 31, 2017 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration as of September 30, 2017	$ 140.2
Cash paid to TPG related to TRA	(4.2)
Change in fair value of contingent consideration	(18.6)
Contingent consideration as of December 31, 2017	117.4
TRA
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration as of September 30, 2017	105.1
Cash paid to TPG related to TRA	(4.2)
Change in fair value of contingent consideration	(28.7)
Contingent consideration as of December 31, 2017	72.2
Deferred Cash Consideration
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration as of September 30, 2017	35.1
Cash paid to TPG related to TRA	0.0
Change in fair value of contingent consideration	10.1
Contingent consideration as of December 31, 2017	$ 45.2

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Share-based Compensation and Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 08, 2016	Nov. 30, 2017	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017	Sep. 30, 2016
Treasury Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares associated with employee tax withholding for vesting of certain equity awards (in shares)			2,777		9,576
TPG
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted shares awarded by related party (in shares)						100,000
Forfeited shares transferred to TPG (in shares)			11,673
TPG | Treasury Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares associated with employee tax withholding for vesting of certain equity awards (in shares)			2,777
2016 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Effective period of plan	10 years
Number of shares available for grant	9,000,000
Expected dividend yield			0.00%
Shares available for issuance (in shares)			3,922,265
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for issuance (up to) (in shares)			3,435,334
Weighted average remaining contractual term			1 year 7 months
Unrecognized compensation cost related to non-vested performance share units			$ 7.7
Forfeited shares transferred to TPG (in shares)			0
Shares vested (in shares)			0
PSUs | Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			$ 1.2	$ 1.1
PSUs | 2016 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			193,667
PSU's granted (in shares)					212,000	1,557,500
Expected dividend yield			0.00%
PSUs | 2016 LTIP | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Entitled percentage of common shares to recipient			0.00%		0.00%
Expected life (in years)			2 years
Expected stock price volatility			35.00%
Risk-free interest rate			0.90%
PSUs | 2016 LTIP | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Entitled percentage of common shares to recipient			200.00%		200.00%
Performance period					3 years
Expected life (in years)			3 years
Expected stock price volatility			40.00%
Risk-free interest rate			1.30%
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			415,867
Weighted average remaining contractual term			2 years 7 months
Unrecognized compensation cost related to non-vested performance share units			$ 3.0
Forfeited shares transferred to TPG (in shares)			24,008
Shares vested (in shares)			0
Restricted Stock | Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			$ 0.3	0.2
Restricted Stock | TPG
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining contractual term			1 year 5 months
Unrecognized compensation cost related to non-vested performance share units			$ 0.4
Shares vested (in shares)					33,333
Restricted Stock | TPG | Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			0.1	$ 0.1
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			$ 0.1
Weighted average remaining contractual term			9 years 10 months
Unrecognized compensation cost related to non-vested performance share units			$ 2.6
Outstanding options aggregate intrinsic value			$ 1.7
Exercisable stock options			0
Employee Stock Option | 2016 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Grants (in shares)			999,492
Expected life (in years)			6 years
Expected stock price volatility			35.00%
Risk-free interest rate			2.10%
Phantom RSU | 2016 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		415,867
Forfeited shares transferred to TPG (in shares)					3,500
Awards issued to certain non-U.S employees (in shares)				10,500
Phantom PSU | 2016 LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards issued to certain non-U.S employees (in shares)				10,000
RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			0	28,000
Performance period				3 years
Compensation cost			$ 0.1	$ 0.1
Weighted average remaining contractual term			1 year 11 months
Unrecognized compensation cost related to non-vested performance share units			$ 0.1
Forfeited shares transferred to TPG (in shares)			0
Shares vested (in shares)			8,162

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Share-based Compensation and Employee Benefit Plans - PSU Activity (Details) - PSUs	3 Months Ended
	Dec. 31, 2017 $ / shares shares
Non-Vested Equity Plan Units
Outstanding at the beginning of the period (in shares) | shares	1,524,000
Vested (in shares) | shares	0
Forfeited/Canceled (in shares) | shares	0
Outstanding at the end of the period (in shares) | shares	1,717,667
Non-Vested Equity Plan, Average Grant Date Fair Value Per Unit
Outstanding at the beginning of the period (in USD per share)	$ 8.92
Granted (in USD per share)	7.50
Vested (in USD per share)	0.00
Forfeited/Canceled (in USD per share)	0.00
Outstanding at the end of the period (in USD per share)	$ 8.76

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Share-based Compensation and Employee Benefit Plans - Restricted Stock Activity (Details) - Restricted Stock	3 Months Ended
	Dec. 31, 2017 $ / shares shares
Shares
Outstanding at the beginning of the period (in shares) | shares	77,458
Granted (in shares) | shares	415,867
Vested (in shares) | shares	0
Forfeited/Canceled (in shares) | shares	(24,008)
Outstanding at the end of the period (in shares) | shares	469,317
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in USD per share) | $ / shares	$ 8.26
Granted (in USD per share) | $ / shares	7.50
Vested (in USD per share) | $ / shares	0.00
Forfeited/Canceled (in USD per share) | $ / shares	8.20
Outstanding at the end of the period (in USD per share) | $ / shares	$ 7.59

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Share-based Compensation and Employee Benefit Plans - Summary of Stock Options (Details) - Employee Stock Option	3 Months Ended
	Dec. 31, 2017 $ / shares shares
Stock Options
Stock options, beginning (in shares) | shares	0
Exercised (in shares) | shares	0
Forfeited/canceled (in shares) | shares	0
Stock options, ending (in shares) | shares	999,492
Average Grant Date Fair Value Per Unit
Average grant date fair value per unit, grants in period (USD per share)	$ 2.84
Average grant date fair value per unit (USD per share)	2.84
Weighted Average Exercise Price
Stock options, weighted average exercise price, beginning (USD per share)	0.00
Grants, weighted average exercise price, (USD per share)	7.42
Exercised, weighted average exercise price, (USD per share)	0.00
Forfeited/canceled, weighted average exercise price, (USD per share)	0.00
Stock options, weighted average exercise price, ending (USD per share)	$ 7.42

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Share-based Compensation and Employee Benefit Plans - Restricted Stock Unit Activity (Details) - RSU - $ / shares	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Shares
Outstanding at the beginning of the period (in shares)	24,500
Granted (in shares)	0	28,000
Vested (in shares)	(8,162)
Forfeited/Canceled (in shares)	0
Outstanding at the end of the period (in shares)	16,338
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in USD per share)	$ 7.28
Granted (in USD per share)	0.00
Vested (in USD per share)	7.28
Forfeited/Canceled (in USD per share)	0.00
Outstanding at the end of the period (in USD per share)	$ 7.28

XML

Share-based Compensation and Employee Benefit Plans - Defined Contribution Plans (Details)	3 Months Ended
	Dec. 31, 2017
Defined Contribution Plan Disclosure [Line Items]
Company matching contribution of employee contributions up to 4% (as a percent)	100.00%
Portion of employee contribution eligible for company match, percentage of pay	4.00%
Service of one to 10 years
Defined Contribution Plan Disclosure [Line Items]
Company contribution percentage based on years of service	1.50%
Service of 11 to 20 years
Defined Contribution Plan Disclosure [Line Items]
Company contribution percentage based on years of service	3.00%
Service of 21 years and over
Defined Contribution Plan Disclosure [Line Items]
Company contribution percentage based on years of service	4.50%
Service period	21 years
Minimum | Service of one to 10 years
Defined Contribution Plan Disclosure [Line Items]
Service period	1 year
Minimum | Service of 11 to 20 years
Defined Contribution Plan Disclosure [Line Items]
Service period	11 years
Maximum | Service of one to 10 years
Defined Contribution Plan Disclosure [Line Items]
Service period	10 years
Maximum | Service of 11 to 20 years
Defined Contribution Plan Disclosure [Line Items]
Service period	20 years

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Share-based Compensation and Employee Benefit Plans - Cost of Defined Contribution Plan (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Contributions	$ 2.5	$ 2.6
Cost of sales and operating expense
Defined Benefit Plan Disclosure [Line Items]
Contributions	1.0	1.0
Selling, general and administrative expenses
Defined Benefit Plan Disclosure [Line Items]
Contributions	$ 1.5	$ 1.6

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Equity - Common Stock (Details)	3 Months Ended
	Dec. 31, 2017 vote shares	Sep. 30, 2017 shares
Class of Stock [Line Items]
Shares authorized (in shares)	300,000,000	300,000,000
Number of votes per common share (in vote) | vote	1
Shares issued (in shares)	89,753,662	89,353,641
Shares outstanding (in shares)	89,741,309	89,344,065
Common stock outstanding, unit (in shares)	1
Warrant, unit (in shares)	1
Founders Shares
Class of Stock [Line Items]
Shares issued (in shares)	12,476,250

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Equity - Founder Shares (Details) - Founders Shares	3 Months Ended
	Dec. 31, 2017 $ / shares shares
Class of Stock [Line Items]
Shares issued (in shares) | shares	12,476,250
Percentage of shares subject to condition one	50.00%
Sale price equals or exceeds, condition one (USD per share)	$ 12.50
Number of trading days to meet condition one	20 days
Number of consecutive trading days	30 days
Percentage of shares subject to condition two	50.00%
Sale price equals or exceeds, condition two (USD per share)	$ 15.00

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Equity - Warrants (Details) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Equity [Abstract]
Warrants outstanding (in shares)	50,025,000	50,025,000
Common stock to be purchased through warrants (in shares)	25,012,500
Strike price of warrants (USD per share)	$ 11.50

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Equity - Preferred Stock (Details) - shares	Dec. 31, 2017	Sep. 30, 2017
Equity [Abstract]
Preferred shares authorized (in shares)	1,000,000	1,000,000
Preferred shares issued (in shares)	0	0

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Equity - Treasury Stock (Details) - shares	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Class of Stock [Line Items]
Treasury stock acquired (in shares)	2,777
Treasury Stock
Class of Stock [Line Items]
Shares issued (in shares)	12,353	9,576	0	0

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Earnings per Share - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Basic:
Net income (loss)	$ 26.5	$ (8.3)
Weighted average number of common shares outstanding during the period (in shares)	76,793,518	76,746,168
Net income (loss) per common share - basic (USD per share)	$ 0.35	$ (0.11)
Diluted:
Net income (loss)	$ 26.5	$ (8.3)
Denominator for diluted earnings per share:
Weighted average number of common shares outstanding during the period (in shares)	76,793,518	76,746,168
Incremental common shares attributable to outstanding dilutive options and unvested restricted shares (in shares)	345,718	0
Denominator for diluted earnings per common share (in shares)	77,139,236	76,746,168
Net income (loss) per common share - diluted (USD per share)	$ 0.34	$ (0.11)

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Earnings per Share - Narrative (Details) - shares	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Warrants outstanding (in shares)	50,025,000	50,025,000
Founders Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	12,476,250	12,476,250
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	25,012,500	25,012,500

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Commitments, Contingencies and Litigation - Narrative (Details) - USD ($) $ in Millions		3 Months Ended
	Mar. 31, 2011	Dec. 31, 2017	Dec. 31, 2016
Environmental Remediation
Rent expense		$ 6.5	$ 6.4
Ashland | Other Retained Remediation Liabilities
Environmental Remediation
Remediation indemnification obligation resulting from breach of any representation, warranty or covenant individual claim threshold	$ 0.2
Remediation indemnification obligation resulting from breach of any representation, warranty or covenant aggregate claim deductible	$ 5.0

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Commitments, Contingencies and Litigation - Schedule of Non-Cancelable Rental Payments (Details) $ in Millions	Dec. 31, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018	$ 15.2
2019	11.1
2020	7.3
2021	6.1
2022	4.5
Thereafter	2.6
Total	$ 46.8

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Commitments, Contingencies and Litigation - Schedule of Future Minimum Capital Lease Payments (Details) $ in Millions	Dec. 31, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018	$ 8.5
2019	7.5
2020	7.2
2021	7.0
2022	13.7
Thereafter	27.1
Total minimum capital lease payments	71.0
Less amount representing executory costs	(16.8)
Less amount representing interest	(17.1)
Present value of net minimum capital lease payments	$ 37.1

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Related Party Transactions - Schedule of Related Party Activity (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Accounts payable to related entities:
Due to related party pursuant to contingent consideration obligations	$ 8.5		$ 12.5
TPG
Sales to related entities:
Sales to related entities	1.6	$ 0.7
Accounts receivable from related entities:
Amount due from TPG related entities	1.1		0.7
Entities related to members of the Board of Directors
Purchases from related entities:
Entities related to members of the Board of Directors	3.4	$ 0.0
Accounts payable to related entities:
Due to related party pursuant to contingent consideration obligations	$ 0.3		$ 0.1

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Related Party Transactions - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Jun. 09, 2016
Related Party Transaction [Line Items]
Repayments of Related Party Debt	$ 4.2	$ 0.0
Cash paid to TPG related to TRA	$ (4.2)
TPG
Related Party Transaction [Line Items]
Ownership interest by related party			35.00%

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Related Party Transactions - Contingent Consideration Obligations (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Related Party Transactions [Abstract]
Due to related party pursuant to contingent consideration obligations, current	$ 8.5	$ 12.5
Due to related party pursuant to contingent consideration obligations, noncurrent	108.9	127.7
Total fair value	$ 117.4	$ 140.2

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2018	Sep. 30, 2017
Income Tax Contingency [Line Items]
Provisional income tax expense (benefit)	$ 4.5
Income tax expense (benefit)	1.3	$ (2.7)
Pre-tax income (loss)	27.8	$ (11.0)
Valuation allowance	3.0			$ 3.1
Increase in uncertain tax positions related to acquisition	1.4
Interest and penalties	$ 1.8			$ 1.8
Forecast
Income Tax Contingency [Line Items]
Federal income tax rate			24.30%

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Segment and Geographic Data - Narrative (Details)	3 Months Ended
	Dec. 31, 2017 segment country
Segment and Geographic Data
Number of operating segments | segment	3
Chemicals
Segment and Geographic Data
Number of countries products distributed in (more than)	50
Plastics
Segment and Geographic Data
Number of countries products distributed in (more than)	50

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Segment and Geographic Data - Summarized Financial Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Summarized financial information
Sales and operating revenues	$ 929.6	$ 794.8
Gross profit	106.9	84.4
Selling, general & administrative expenses	84.8	74.5
Transaction related costs	0.1	0.8
Change in fair value of contingent consideration obligations	(18.6)	10.6
Operating income (loss)	40.6	(1.5)
Other income	0.1	2.4
Interest income	0.1	0.1
Interest expense	(13.0)	(12.0)
Net income (loss) before income taxes	27.8	(11.0)
Segment assets
Assets	2,244.5		$ 2,253.5
Operating Segments
Segment assets
Assets	1,662.9		1,647.3
Unallocated
Segment assets
Assets	581.6		606.2
Chemicals
Summarized financial information
Sales and operating revenues	431.9	352.4
Gross profit	58.4	42.7
Chemicals | Operating Segments
Segment assets
Assets	796.4		793.6
Plastics
Summarized financial information
Sales and operating revenues	462.2	412.5
Gross profit	41.9	36.0
Plastics | Operating Segments
Segment assets
Assets	772.8		762.7
Other
Summarized financial information
Sales and operating revenues	35.5	29.9
Gross profit	6.6	$ 5.7
Other | Operating Segments
Segment assets
Assets	$ 93.7		$ 91.0

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Segment and Geographic Data - Schedule of Revenues by Geographic Location (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale
Revenues	$ 929.6	$ 794.8
U.S.
Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale
Revenues	668.1	587.4
Canada
Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale
Revenues	42.5	36.9
Other North America
Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale
Revenues	33.0	12.5
Total North America Operations
Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale
Revenues	743.6	636.8
EMEA
Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale
Revenues	127.2	96.9
Asia
Revenues by geographic location, based on the jurisdiction of the subsidiary entity receiving revenue credit for the sale
Revenues	$ 58.8	$ 61.1