Reportable Segment Information

9 Months Ended

Jun. 30, 2019

REPORTABLE SEGMENT INFORMATION

Valvoline manages and reports within the following three segments:

•Quick Lubes - services the passenger car and light truck quick lube market through company-owned and independent franchised retail quick lube service center stores and independent Express Care stores that service vehicles with Valvoline products, as well as through investment in a joint venture in China to pilot expansion of retail quick lube service center stores outside of North America.

•Core North America - sells engine and automotive maintenance products in the United States and Canada to retailers, installers, and heavy-duty customers to service vehicles and equipment.

•International - sells engine and automotive maintenance products in approximately 140 countries outside of the United States and Canada for the maintenance of consumer and commercial vehicles and equipment.

These segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker in assessing segment performance and in allocating the Company’s resources. Sales and operating income are the primary U.S. GAAP measures evaluated in assessing each reportable segment’s financial performance. Operating income by segment includes the allocation of shared corporate costs, which are allocated consistently based on each segment’s proportional contribution to various financial measures. Intersegment sales are not material, and assets are not allocated and included in the assessment of segment performance; consequently, these items are not disclosed by segment herein.

To maintain operating focus on business performance, certain corporate and non-operational items, including restructuring and related expenses, as well as adjustments related to legacy businesses that no longer are attributed to Valvoline, are excluded from the segment operating results utilized by the chief operating decision maker in evaluating segment performance and are separately delineated within Unallocated and other to reconcile to total reported Operating income as shown in the table below.

The following table presents sales and operating income for each reportable segment:


	Three months ended									Nine months ended
(In millions)	June 30									June 30
			2019			2018			2019			2018
Sales
Quick Lubes	$	211		$	167		$	600		$	479
Core North America	260			264			735			773
International	142			146			426			439
Consolidated sales	$	613		$	577		$	1,761		$	1,691

Operating income
Quick Lubes	$	48		$	38		$	130		$	111
Core North America	38			41			109			130
International	20			20			61			63
Total operating segments	106			99			300			304
Unallocated and other ^(a)	(4)			3			(15)			(14)
Consolidated operating income	$	102		$	102		$	285		$	290

(a) Unallocated and other includes Legacy and separation-related expenses, net, and restructuring and related expenses.