Employee Benefit Plans (Tables)

12 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Summary of the Components of Benefit Costs (Income)

The components of pension and other postretirement plans net periodic benefit (income) costs and the assumptions used in this determination are summarized below for the years ended September 30:

(In millions)	Pension benefits									Other postretirement benefits
	2021			2020			2019			2021			2020			2019
Net periodic benefit (income) costs
Service cost	$	2		$	3		$	2		$	—		$	—		$	—
Interest cost	43			61			81			1			1			2
Expected return on plan assets	(86)			(87)			(80)			—			—			—
Amortization of prior service credit (a)	—			—			—			(12)			(12)			(12)
Actuarial (gain) loss	(72)			(24)			61			—			2			8
Net periodic benefit (income) costs	$	(113)		$	(47)		$	64		$	(11)		$	(9)		$	(2)
Weighted-average plan assumptions (b)
Discount rate for service cost	1.55		%	1.49		%	2.92		%	3.03		%	3.12		%	3.98		%
Discount rate for interest cost	1.91		%	2.79		%	4.00		%	1.83		%	2.69		%	3.83		%
Rate of compensation increase	3.00		%	3.04		%	3.06		%	—			—			—
Expected long-term rate of return on plan assets	4.34		%	4.64		%	4.66		%	—			—			—

(a)Other postretirement plan amendments are amortized within this caption during all periods presented.

(b)The plan assumptions are a blended weighted-average rate for Valvoline’s U.S. and non-U.S. plans. The U.S. pension plans represented approximately 97% of the total pension projected benefit obligation as of September 30, 2021. Other postretirement benefit plans are in the U.S. and Canada, with the U.S. plan representing approximately 79% of the total other postretirement projected benefit obligation as of September 30, 2021. Non-U.S. plans use assumptions generally consistent with those of U.S. plans.

Schedule of Amortization of Prior Service Cost (Credit) Recognized in AOCI

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

(In millions)	Pension benefits						Other postretirement benefits
	2021		2020		2019		2021		2020		2019
Amortization of prior service credits recognized in Accumulated other comprehensive income	$	—	$	—	$	—	$	12	$	12	$	12
Net periodic benefit income	(113)		(47)		64		(11)		(9)		(2)
Total pre-tax amount recognized in comprehensive income	$	(113)	$	(47)	$	64	$	1	$	3	$	10

Schedule of Changes in Projected Benefit Obligations

Changes in benefit obligations and the fair value of plan assets, as well as key assumptions used to determine the benefit obligations, and the amounts in the Consolidated Balance Sheets for the Company’s pension and other postretirement benefit plans are summarized below as of September 30:

(In millions)	Pension benefits						Other postretirement benefits
	2021			2020			2021			2020
Change in benefit obligations
Benefit obligations as of October 1	$	2,321		$	2,287		$	52		$	55
Service cost	2			3			—			—
Interest cost	43			61			1			1
Benefits paid	(133)			(132)			(5)			(6)
Actuarial (gain) loss	(31)			107			—			2
Currency exchange rate changes	2			1			1			—
Transfers in	3			3			—			—
Settlements	(4)			(9)			—			—
Benefit obligations as of September 30	$	2,203		$	2,321		$	49		$	52
Change in plan assets
Fair value of plan assets as of October 1	$	2,045		$	1,943		$	—		$	—
Actual return on plan assets	128			218			—			—
Employer contributions	14			22			5			6
Benefits paid	(133)			(133)			(5)			(6)
Currency exchange rate changes	2			1			—			—
Settlements	(4)			(9)			—			—
Transfers in	3			3			—			—
Fair value of plan assets as of September 30	$	2,055		$	2,045		$	—		$	—
Unfunded status of the plans as of September 30	$	148		$	276		$	49		$	52
Amounts in the Consolidated Balance Sheets
Noncurrent benefit assets (a)	$	72		$	1		$	—		$	—
Current benefit liabilities (b)	9			10			5			5
Noncurrent benefit liabilities (c)	211			267			44			47
Total benefit liabilities	220			277			49			52
Net liabilities recognized	$	148		$	276		$	49		$	52
Balance in Accumulated other comprehensive loss
Prior service cost (credit)	$	1		$	1		$	(21)		$	(33)
Weighted-average plan assumptions
Discount rate	2.70		%	2.59		%	2.67		%	2.39		%
Rate of compensation increase	3.00		%	3.00		%	—			—
Healthcare cost trend rate (d)	—			—			6.4		%	6.7		%

Schedule of Pension Plans with a Benefit Obligation in Excess of Plan Assets

Information for pension plans with a benefit obligation in excess of the fair value of plan assets follows for the Company’s plans as of September 30:

(In millions)	2021				2020
	Benefit obligation		Plan assets		Benefit obligation		Plan assets
Plans with projected benefit obligation in excess of plan assets	$	1,607	$	1,386	$	2,275	$	1,998
Plans with accumulated benefit obligation in excess of plan assets	$	1,593	$	1,374	$	2,253	$	1,978

Schedule of Investment Categories for Pension Plan Assets

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

(In millions)	September 30, 2021
	Total fair value		Level 1		Level 2		Level 3		Assets measured at NAV
Cash and cash equivalents	$	136	$	136	$	—	$	—	$	—
U.S. government securities and futures	96		—		96		—		—
Other government securities	58		—		58		—		—
Corporate debt instruments	1,371		—		1,371		—		—
Insurance contracts	58		—		—		58		—
Private equity and hedge funds	11		—		—		—		11
Collective trust funds	316		—		—		—		316
Other investments	9		$	—	9		$	—	—
Total assets at fair value	$	2,055	$	136	$	1,534	$	58	$	327

(In millions)	September 30, 2020
	Total fair value		Level 1		Level 2		Level 3		Assets measured at NAV
Cash and cash equivalents	$	102	$	102	$	—	$	—	$	—
U.S. government securities and futures	172		—		172		—		—
Other government securities	47		—		47		—		—
Corporate debt instruments	1,201		—		1,201		—		—
Insurance contracts	12		—		—		12		—
Private equity and hedge funds	13		—		—		—		13
Collective trust funds	497		—		—		—		497
Other investments	1		—		1		—		—
Total assets at fair value	$	2,045	$	102	$	1,421	$	12	$	510

Schedule of Reconciliation of Level 3 Assets

The following reconciles the beginning and ending balances for Level 3 plan assets:

(In millions)	Total Level 3 assets
Balance at September 30, 2019	$	7
Purchases	4
Actual return on assets held at end of year	1
Balance at September 30, 2020	12
Purchases	48
Actual return on assets held at end of year	(2)
Balance at September 30, 2021	$	58

Schedule of Investments Measured at Fair Value Using NAV Per Share

The following summarizes investments for which fair value is measured using the NAV per share practical expedient as of September 30, 2021:

(In millions)	Fair value at NAV		Unfunded commitments		Redemption frequency (if currently eligible)	Redemption notice period
Long/short hedge funds	$	2	$	—	None (a)	None (a)
Relative value hedge funds	3		—		None (b)	None (b)
Event driven hedge funds	1		—		None (b)	None (b)
Collective trust funds	299		—		Daily	Up to 3 days
	9		—		Monthly	5 days
	8		—		N/A (c)	N/A (c)
Private equity	5		2		None (d)	None (d)
	$	327	$	2

(a)These hedge funds are in the process of liquidation over the next year.

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

(c)These assets are held in fund investments that include a diversified portfolio across various asset classes. The time period for redemption of these assets is not determinable.

(d)These private equity instruments are estimated to be liquidated over the next 1 to 5 years.

Schedule of Weighted-Average Asset Allocations And Plan Asset Allocations

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

	Target	2021		2020
Plan assets allocation
Equity securities	15-25%	11	%	18	%
Debt securities	65-85%	85	%	80	%
Other	0-20%	4	%	2	%
Total		100	%	100	%

Schedule of Expected Benefit Payments

The following benefit payments, which reflect future service expectations, are projected to be paid in each of the next five fiscal years ended September 30 and the five fiscal years thereafter in aggregate:

(In millions)	Pension benefits		Other postretirement benefits
2022	$	145	$	5
2023	145		4
2024	141		4
2025	139		3
2026	138		3
2027 - 2031	651		14
Total	$	1,359	$	33