VALVOLINE INCVVV
VALVOLINE INC Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Recurring fair value measurements
The Company’s financial assets and liabilities accounted for at fair value on a recurring basis are summarized below by level within the fair value hierarchy:
As of September 30, 2025 | ||||||||||||||||||||||||||||||||
| (In millions) | Total | Level 1 | Level 2 | Level 3 | NAV (a) | |||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||||
| Money market funds | $ | 0.8 | $ | 0.8 | $ | — | $ | — | $ | — | ||||||||||||||||||||||
| Time deposits | 2.6 | — | 2.6 | — | — | |||||||||||||||||||||||||||
| Other noncurrent assets | ||||||||||||||||||||||||||||||||
| Non-qualified trust funds | 2.2 | — | — | — | 2.2 | |||||||||||||||||||||||||||
| Deferred compensation investments | 19.2 | 19.2 | — | — | — | |||||||||||||||||||||||||||
| Total assets at fair value | $ | 24.8 | $ | 20.0 | $ | 2.6 | $ | — | $ | 2.2 | ||||||||||||||||||||||
| Other noncurrent liabilities | ||||||||||||||||||||||||||||||||
| Deferred compensation obligations | 20.4 | — | — | — | 20.4 | |||||||||||||||||||||||||||
| Total liabilities at fair value | $ | 20.4 | $ | — | $ | — | $ | — | $ | 20.4 | ||||||||||||||||||||||
As of September 30, 2024 | ||||||||||||||||||||||||||||||||
| (In millions) | Total | Level 1 | Level 2 | Level 3 | NAV (a) | |||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||||
| Money market funds | $ | 0.3 | $ | 0.3 | $ | — | $ | — | $ | — | ||||||||||||||||||||||
| Time deposits | 2.6 | — | 2.6 | — | — | |||||||||||||||||||||||||||
| Other noncurrent assets | ||||||||||||||||||||||||||||||||
| Non-qualified trust funds | 1.9 | — | — | — | 1.9 | |||||||||||||||||||||||||||
| Deferred compensation investments | 23.0 | 23.0 | — | — | — | |||||||||||||||||||||||||||
| Total assets at fair value | $ | 27.8 | $ | 23.3 | $ | 2.6 | $ | — | $ | 1.9 | ||||||||||||||||||||||
| Other noncurrent liabilities | ||||||||||||||||||||||||||||||||
| Deferred compensation obligations | 22.3 | — | — | — | 22.3 | |||||||||||||||||||||||||||
| Total liabilities at fair value | $ | 22.3 | $ | — | $ | — | $ | — | $ | 22.3 | ||||||||||||||||||||||
(a)Funds measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy.
Money market funds
Money market funds trade in an active market and are valued using quoted market prices, which are Level 1 inputs.
Time deposits
Time deposits are balances held with financial institutions at face value plus accrued interest, which approximates fair value and are categorized as Level 2.
Non-qualified trust funds
The Company maintains a non-qualified trust that is utilized to fund benefit payments for certain of its U.S. non-qualified pension plans. This trust is invested in mutual funds which are measured at fair value using the NAV per share practical expedient. There were no significant redemption restrictions or unfunded commitments on these mutual fund investments as of September 30, 2025. Gains and losses related to these investments are immediately
recognized within Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income and were not material in any periods presented herein.
Deferred compensation investments
The Company has an investment fund that is primarily comprised of mutual funds traded in active markets and valued using quoted (unadjusted) prices, which are Level 1 inputs. Gains and losses related to these investments are immediately recognized in the Consolidated Statement of Comprehensive Income within Selling, general and administrative expenses and were not material in any periods presented herein.
Deferred compensation obligations
The Company has an unfunded deferred compensation plan that is valued based on the underlying participant-directed investments. The fair value of underlying investments in collective trust funds is determined using the NAV provided by the administrator of the fund as a practical expedient. The NAV is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less its liabilities, divided by outstanding units. There were no significant redemption restrictions or unfunded commitments on these investments as of September 30, 2025. Changes in the fair values are recognized in the Consolidated Statements of Comprehensive Income within Selling, general and administrative expenses and were not material in any periods presented herein.
Fair value of long-term debt
Long-term debt is reported in the Consolidated Balance Sheets at carrying value, rather than fair value, and is therefore excluded from the disclosure above of financial assets and liabilities measured at fair value within the consolidated financial statements on a recurring basis. The fair values of the Company's outstanding fixed rate senior notes shown in the table below are based on recent trading values, which are considered Level 2 inputs within the fair value hierarchy.
| September 30, 2025 | September 30, 2024 | |||||||||||||||||||||||||||||||||||||
| (In millions) | Fair value | Carrying value (a) | Unamortized discounts and issuance costs | Fair value | Carrying value (a) | Unamortized discounts and issuance costs | ||||||||||||||||||||||||||||||||
| 2031 Notes | $ | 491.0 | $ | 531.0 | $ | (4.0) | $ | 478.5 | $ | 530.4 | $ | (4.6) | ||||||||||||||||||||||||||
(a)Carrying values shown are net of unamortized discounts and issuance costs.
Refer to Note 8 for details of these notes as well as Valvoline's other debt instruments that have variable interest rates with carrying amounts that approximate fair value.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 21, 2025 | Showing above |
| 2024 | Nov 22, 2024 | |
| 2023 | Nov 20, 2023 | |
| 2021 | Nov 19, 2021 | |
| 2020 | Nov 24, 2020 | |
| 2019 | Nov 22, 2019 | |
| 2018 | Nov 21, 2018 | |
| 2017 | Nov 17, 2017 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.