Supplemental Financial Information

12 Months Ended

Sep. 30, 2020

Supplemental Financial Information [Abstract]

Supplemental Balance Sheet Disclosures

SUPPLEMENTAL BALANCE SHEET INFORMATION

Cash, cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the totals shown within the Consolidated Statements of Cash Flows for the years ended September 30:

(In millions)	2020		2019		2018
Cash and cash equivalents	$	760	$	159	$	96
Restricted cash (a)	1		—		—
Total cash, cash equivalents and restricted cash	$	761	$	159	$	96

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

Accounts and other receivables

The following summarizes Valvoline’s accounts and other receivables in the Consolidated Balance Sheets as of September 30:

(In millions)	2020		2019
Current
Trade	$	409	$	394
Other	14		10
Notes receivable from franchisees	13		—
Receivables, gross	436		404
Allowance for doubtful accounts	(3)		(3)
Receivables, net	$	433	$	401
Non-current (a)
Notes receivable from franchisees	$	13	$	—
Other notes receivable	8		5
Noncurrent notes receivable, gross	21		5
Allowance for losses	(4)		(2)
Noncurrent notes receivable, net	$	17	$	3

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

Valvoline is party to an agreement to sell certain trade accounts receivable in the form of drafts or bills of exchange to a financial institution. Each draft constitutes an order to pay Valvoline for obligations of the customer arising from the sale of goods. The intention of the arrangement is to decrease the time accounts receivable is outstanding and increase cash flows. Valvoline sold $59 million and $75 million of accounts receivable to the financial institution during the years ended September 30, 2020 and 2019, respectively.

Inventories

Inventories are primarily carried at the lower of cost or net realizable value using the weighted average cost method. In addition, certain lubricants with a replacement cost of $99 million at September 30, 2020 and $107 million at September 30, 2019 are valued at the lower of cost or market using the LIFO method.

The following summarizes Valvoline’s inventories in the Consolidated Balance Sheets as of September 30:

(In millions)	2020		2019
Finished products	$	195	$	203
Raw materials, supplies and work in process	30		32
Reserve for LIFO cost valuation	(26)		(41)
Total inventories, net	$	199	$	194

Property, plant and equipment

The following table summarizes the various components of property, plant and equipment within the Consolidated Balance Sheets as of September 30:

(In millions)	2020		2019
Land (a)	$	96	$	58
Buildings (b)	412		348
Machinery and equipment	494		475
Construction in progress	101		72
Total property, plant and equipment	1,103		953
Accumulated depreciation (c)	(490)		(455)
Net property, plant and equipment	$	613	$	498

(a) Includes $34 million of finance lease assets as of September 30, 2020.

(b) Includes $43 million of finance lease assets and $61 million of assets under capital leases and financing obligations as of September 30, 2020 and 2019, respectively.

(c) Includes $10 million for finance lease assets and $11 million for assets under capital leases and financing obligations as of September 30, 2020 and 2019, respectively.

Non-cash accruals included in total property, plant and equipment were $51 million and $10 million during the years ended September 30, 2020 and 2019, respectively.

The following summarizes expense associated with property, plant and equipment recognized within the Consolidated Statements of Comprehensive Income for the years ended September 30:

(In millions)	2020		2019		2018
Depreciation (includes capital and financing leases)	$	56	$	52	$	49

Transactions with AshlandValvoline had total net obligations due to Valvoline's former parent company of $48 million and $78 million as of September 30, 2020 and 2019, respectively, which were primarily recorded in Other noncurrent liabilities in the Consolidated Balance Sheets. These liabilities relate to net obligations due under the Tax Matters Agreement as well as reimbursements payable for certain other contractual obligations, including those intended to transfer to Valvoline as part of the Distribution. Refer to Note 10 for additional details regarding the Tax Matters Agreement and related obligations.