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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 10-Q
(Mark one)

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

For the quarterly period ended March 31, 2026
OR

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

For the transition period from _________ to ___________
Commission file number 001-37884
VALVOLINE INC.
(Exact name of registrant as specified in its charter)

Kentucky | 30-0939371
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

100 Valvoline Way, Suite 100
Lexington, Kentucky 40509
(Address of principal executive offices) (Zip Code)
Telephone Number (859) 357-7777
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common stock, par value $0.01 per share |  | VVV |  | New York Stock Exchange

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. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 filer | ☑ | Accelerated filer | ☐
Non-accelerated filer | ☐ | Smaller reporting company | ☐
|  | Emerging growth company | ☐

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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No þ
At May 1, 2026, there were 127,536,079 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS

| Page
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Unaudited) |
Condensed Consolidated Statements of Comprehensive Income | 3
Condensed Consolidated Balance Sheets | 4
Condensed Consolidated Statements of Cash Flows | 5
Condensed Consolidated Statements of Stockholders' Equity | 6
Notes to Condensed Consolidated Financial Statements | 7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 31
ITEM 4. CONTROLS AND PROCEDURES | 31
ITEM 5. OTHER INFORMATION | 33
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS | 34
ITEM 1A. RISK FACTORS | 34
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 34
ITEM 6. EXHIBITS | 34
SIGNATURE | 35

2

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Statements of Comprehensive Income

|  | Three months ended March 31 |  | Six months ended March 31
(In millions, except per share amounts - unaudited) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Net revenues |  | $ | 503.8 |  |  | $ | 403.2 |  |  | $ | 965.6 |  |  | $ | 817.5 |
Cost of sales |  | 316.8 |  |  | 252.7 |  |  | 606.1 |  |  | 514.1 |
Gross profit | 187.0 |  |  | 150.5 |  |  | 359.5 |  |  | 303.4 |
Selling, general and administrative expenses |  | 98.7 |  |  | 83.6 |  |  | 205.5 |  |  | 164.0 |
Net legacy and separation-related expenses |  | 0.9 |  |  | 0.8 |  |  | 6.1 |  |  | 1.2 |
Other loss (income), net |  | 1.4 |  |  | (0.8) |  |  | 43.6 |  |  | (72.5) |
Operating income | 86.0 |  |  | 66.9 |  |  | 104.3 |  |  | 210.7 |
Net pension and other postretirement plan income |  | (1.2) |  |  | (0.9) |  |  | (2.4) |  |  | (1.8) |
Net interest and other financing expenses |  | 27.7 |  |  | 16.9 |  |  | 53.2 |  |  | 34.4 |
Income before income taxes | 59.5 |  |  | 50.9 |  |  | 53.5 |  |  | 178.1 |
Income tax expense |  | 14.2 |  |  | 12.6 |  |  | 40.4 |  |  | 45.9 |
Income from continuing operations |  | 45.3 |  |  | 38.3 |  |  | 13.1 |  |  | 132.2 |
Loss from discontinued operations, net of tax |  | (0.5) |  |  | (0.7) |  |  | (1.1) |  |  | (3.0) |
Net income | $ | 44.8 |  |  | $ | 37.6 |  |  | $ | 12.0 |  |  | $ | 129.2 |
Net earnings per share |  |  |  |  |  |  |  |
Basic earnings (loss) per share |  |  |  |  |  |  |
Continuing operations | $ | 0.35 |  |  | $ | 0.30 |  |  | $ | 0.10 |  |  | $ | 1.03 |
Discontinued operations | — |  |  | (0.01) |  |  | (0.01) |  |  | (0.02) |
Basic earnings per share | $ | 0.35 |  |  | $ | 0.29 |  |  | $ | 0.09 |  |  | $ | 1.01 |
Diluted earnings (loss) per share |  |  |  |  |  |  |
Continuing operations | $ | 0.35 |  |  | $ | 0.30 |  |  | $ | 0.10 |  |  | $ | 1.02 |
Discontinued operations | — |  |  | (0.01) |  |  | (0.01) |  |  | (0.02) |
Diluted earnings per share | $ | 0.35 |  |  | $ | 0.29 |  |  | $ | 0.09 |  |  | $ | 1.00 |
Weighted average common shares outstanding |  |  |  |  |  |  |  |
Basic |  | 127.8 |  |  | 127.6 |  |  | 127.7 |  |  | 128.2 |
Diluted |  | 128.4 |  |  | 128.2 |  |  | 128.3 |  |  | 128.9 |
Comprehensive income |  |  |  |  |  |  |  |
Net income |  | $ | 44.8 |  |  | $ | 37.6 |  |  | $ | 12.0 |  |  | $ | 129.2 |
Other comprehensive loss, net of tax |  |  |  |  |  |  |  |
Currency translation adjustments |  | (1.7) |  |  | (0.1) |  |  | — |  |  | (6.6) |
Amortization of pension and other postretirement plan prior service credits |  | (0.4) |  |  | (0.4) |  |  | (0.8) |  |  | (0.8) |
Other comprehensive loss |  | (2.1) |  |  | (0.5) |  |  | (0.8) |  |  | (7.4) |
Comprehensive income |  | $ | 42.7 |  |  | $ | 37.1 |  |  | $ | 11.2 |  |  | $ | 121.8 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
3

Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Balance Sheets

(In millions, except per share amounts - unaudited) |  | March 31 2026 |  | September 30 2025
Assets
Current assets |  |  |  |
Cash and cash equivalents |  | $ | 84.7 |  |  | $ | 51.6 |
Receivables, net |  | 92.6 |  |  | 89.6 |
Inventories, net |  | 47.6 |  |  | 42.6 |
Prepaid expenses and other current assets |  | 47.4 |  |  | 59.9 |
Total current assets |  | 272.3 |  |  | 243.7 |
Noncurrent assets |  |  |  |
Property, plant and equipment, net |  | 1,246.4 |  |  | 1,134.6 |
Operating lease assets |  | 395.3 |  |  | 331.8 |
Goodwill and intangibles, net |  | 1,280.2 |  |  | 740.5 |
Other noncurrent assets |  | 226.9 |  |  | 219.8 |
Total noncurrent assets |  | 3,148.8 |  |  | 2,426.7 |
Total assets |  | $ | 3,421.1 |  |  | $ | 2,670.4 |
Liabilities and Stockholders’ Equity |  |  |  |
Current liabilities |  |  |  |
Current portion of long-term debt |  | $ | 31.2 |  |  | $ | 23.8 |
Trade and other payables |  | 112.7 |  |  | 118.9 |
Accrued expenses and other liabilities |  | 227.4 |  |  | 204.7 |
Total current liabilities |  | 371.3 |  |  | 347.4 |
Noncurrent liabilities |  |  |  |
Long-term debt |  | 1,626.5 |  |  | 1,050.2 |
Employee benefit obligations |  | 180.0 |  |  | 187.5 |
Operating lease liabilities |  | 371.0 |  |  | 315.3 |
Other noncurrent liabilities |  | 519.2 |  |  | 431.5 |
Total noncurrent liabilities |  | 2,696.7 |  |  | 1,984.5 |
Commitments and contingencies |  |  |  |
Stockholders' equity |  |  |  |
Preferred stock, no par value, 40.0 shares authorized; no shares issued and outstanding |  | — |  |  | — |
Common stock, par value $0.01 per share, 400.0 shares authorized; 127.5 and 127.1 shares issued and outstanding at March 31, 2026 and September 30, 2025, respectively |  | 1.3 |  |  | 1.3 |
Paid-in capital |  | 61.8 |  |  | 58.4 |
Retained earnings |  | 285.6 |  |  | 273.6 |
Accumulated other comprehensive income |  | 4.4 |  |  | 5.2 |
Stockholders' equity |  | 353.1 |  |  | 338.5 |
Total liabilities and stockholders’ equity |  | $ | 3,421.1 |  |  | $ | 2,670.4 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
4

Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Statements of Cash Flows

|  | Six months ended March 31 |
(In millions - unaudited) |  | 2026 |  | 2025 |
Cash flows from operating activities |  |  |  |  |
Net income |  | $ | 12.0 |  |  | $ | 129.2 |  |
Adjustments to reconcile net income to cash flows from operating activities: |  |  |  |  |
Loss from discontinued operations |  | 1.1 |  |  | 3.0 |  |
Loss (gain) on sale of operations |  | 43.6 |  |  | (71.7) |  |
Depreciation and amortization |  | 71.1 |  |  | 56.4 |  |
Deferred income taxes |  | 0.1 |  |  | — |  |
Stock-based compensation expense |  | 5.9 |  |  | 4.6 |  |
Other, net |  | 4.0 |  |  | 1.0 |  |
Change in operating assets and liabilities |  |  |  |  |
Receivables |  | 12.6 |  |  | (2.5) |  |
Inventories |  | (1.5) |  |  | (4.0) |  |
Payables and accrued liabilities |  | (18.4) |  |  | (22.6) |  |
Other assets and liabilities |  | 29.7 |  |  | (0.2) |  |
Operating cash flows from continuing operations |  | 160.2 |  |  | 93.2 |  |
Operating cash flows from discontinued operations |  | — |  |  | (4.8) |  |
Total cash provided by operating activities |  | 160.2 |  |  | 88.4 |  |
Cash flows from investing activities |  |  |  |  |
Additions to property, plant and equipment |  | (115.2) |  |  | (105.4) |  |
Acquisitions, net of cash acquired |  | (644.1) |  |  | (9.6) |  |
Proceeds from sale of operations |  | 63.6 |  |  | 121.0 |  |
Purchases of investments |  | (4.5) |  |  | (4.5) |  |
Proceeds from investments |  | — |  |  | 6.0 |  |
Other investing activities, net |  | 0.8 |  |  | 2.8 |  |
Total cash (used in) provided by investing activities |  | (699.4) |  |  | 10.3 |  |
Cash flows from financing activities |  |  |  |  |
Proceeds from borrowings |  | 755.0 |  |  | 75.0 |  |
Payments of debt issuance costs and discounts |  | (13.7) |  |  | (1.6) |  |
Repayments on borrowings |  | (158.7) |  |  | (91.9) |  |
Repurchases of common stock, including excise taxes of $16.4 in fiscal 2025 |  | — |  |  | (76.8) |  |
Other financing activities, net |  | (10.3) |  |  | (9.1) |  |
Total cash provided by (used in) financing activities |  | 572.3 |  |  | (104.4) |  |
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash |  | — |  |  | (0.7) |  |
Increase (decrease) in cash, cash equivalents and restricted cash |  | 33.1 |  |  | (6.4) |  |
Cash, cash equivalents and restricted cash - beginning of period |  | 51.6 |  |  | 68.7 |  |
Cash, cash equivalents and restricted cash - end of period |  | $ | 84.7 |  |  | $ | 62.3 |  |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
5

Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity

|  | Six months ended March 31, 2026
(In millions, except per share amounts - unaudited) |  | Common stock |  | Paid-in capital |  | Retained earnings |  | Accumulated other comprehensive income |  | Totals
Shares |  | Amount
Balance at September 30, 2025 |  | 127.1 |  |  | $ | 1.3 |  |  | $ | 58.4 |  |  | $ | 273.6 |  |  | $ | 5.2 |  |  | $ | 338.5 |
Net loss |  | — |  |  | — |  |  | — |  |  | (32.8) |  |  | — |  |  | (32.8) |
Stock-based compensation, net of issuances |  | 0.1 |  |  | — |  |  | 0.6 |  |  | — |  |  | — |  |  | 0.6 |
Other comprehensive income, net of tax |  | — |  |  | — |  |  | — |  |  | — |  |  | 1.3 |  |  | 1.3 |
Balance at December 31, 2025 |  | 127.2 |  |  | $ | 1.3 |  |  | $ | 59.0 |  |  | $ | 240.8 |  |  | $ | 6.5 |  |  | $ | 307.6 |
Net income |  | — |  |  | — |  |  | — |  |  | 44.8 |  |  | — |  |  | 44.8 |
Dividends paid |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock-based compensation, net of issuances |  | 0.3 |  |  | — |  |  | 2.8 |  |  | — |  |  | — |  |  | 2.8 |
Repurchases of common stock |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other comprehensive loss, net of tax |  | — |  |  | — |  |  | — |  |  | — |  |  | (2.1) |  |  | (2.1) |
Balance at March 31, 2026 |  | 127.5 |  |  | $ | 1.3 |  |  | $ | 61.8 |  |  | $ | 285.6 |  |  | $ | 4.4 |  |  | $ | 353.1 |
|  | Six months ended March 31, 2025
(In millions, except per share amounts - unaudited) |  | Common stock |  | Paid-in capital |  | Retained earnings |  | Accumulated other comprehensive income |  | Totals
| Shares |  | Amount
Balance at September 30, 2024 |  | 128.5 |  |  | $ | 1.3 |  |  | $ | 51.2 |  |  | $ | 123.2 |  |  | $ | 9.9 |  |  | $ | 185.6 |
Net income |  | — |  |  | — |  |  | — |  |  | 91.6 |  |  | — |  |  | 91.6 |
Stock-based compensation, net of issuances |  | 0.1 |  |  | — |  |  | (0.9) |  |  | — |  |  | — |  |  | (0.9) |
Repurchase of common stock |  | (1.0) |  |  | — |  |  | — |  |  | (39.6) |  |  | — |  |  | (39.6) |
Other comprehensive loss, net of tax |  | — |  |  | — |  |  | — |  |  | — |  |  | (6.9) |  |  | (6.9) |
Balance at December 31, 2024 |  | 127.6 |  |  | $ | 1.3 |  |  | $ | 50.3 |  |  | $ | 175.2 |  |  | $ | 3.0 |  |  | $ | 229.8 |
Net income |  | — |  |  | — |  |  | — |  |  | 37.6 |  |  | — |  |  | 37.6 |
Stock-based compensation, net of issuances |  | 0.1 |  |  | — |  |  | 2.5 |  |  | — |  |  | — |  |  | 2.5 |
Repurchases of common stock |  | (0.6) |  |  | — |  |  | — |  |  | (20.7) |  |  | — |  |  | (20.7) |
Other comprehensive loss, net of tax |  | — |  |  | — |  |  | — |  |  | — |  |  | (0.5) |  |  | (0.5) |
Balance at March 31, 2025 |  | 127.1 |  |  | $ | 1.3 |  |  | $ | 52.8 |  |  | $ | 192.1 |  |  | $ | 2.5 |  |  | $ | 248.7 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
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Index to Notes to Condensed Consolidated Financial Statements | Page
Note 1 - Basis of Presentation and Significant Accounting Policies | 8
Note 2 - Fair Value Measurements | 9
Note 3 - Acquisitions and Dispositions | 10
Note 4 - Intangible Assets | 13
Note 5 - Debt | 14
Note 6 - Income Taxes | 15
Note 7 - Employee Benefit Plans | 15
Note 8 - Litigation, Claims and Contingencies | 15
Note 9 - Earnings Per Share | 16
Note 10 - Reportable Segment Information | 16
Note 11 - Supplemental Financial Information | 17

7

Valvoline Inc. and Consolidated Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements have been prepared by Valvoline Inc. (“Valvoline” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Securities and Exchange Commission regulations for interim financial reporting, which do not include all information and footnote disclosures normally included in annual financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with Valvoline’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Certain prior period amounts have been reclassified to conform to the current presentation.
Use of estimates, risks and uncertainties
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent matters. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions.
Sale of Global Products business
On March 1, 2023, Valvoline completed the sale of its former Global Products reportable segment (“Global Products”) to Aramco Overseas Company B.V. The operating results and cash flows associated with and directly attributed to the Global Products disposal group are reflected as discontinued operations within these condensed consolidated financial statements. Unless otherwise noted, disclosures within these remaining Notes to Condensed Consolidated Financial Statements relate solely to the Company's continuing operations.
Recent accounting pronouncements
The following accounting guidance relevant to Valvoline was either issued or adopted in the current fiscal year or is expected to have a meaningful impact on Valvoline in future periods upon adoption.
Issued but not yet adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which enhances income tax disclosure requirements to include additional disaggregation within the effective tax rate reconciliation and income taxes paid. This guidance will be effective for Valvoline beginning with its fiscal 2026 annual financial statements, with early adoption permitted. The guidance must be applied prospectively, while retrospective application is permitted. The Company is continuing to assess the new guidance and is preparing for the related enhanced income tax disclosures in its fiscal 2026 annual financial statements. The Company expects that the adoption of this guidance will not result in any changes to its results of operations, cash flows, or financial condition.
In November 2024, the FASB issued guidance which requires enhanced disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the face of the income statement. This guidance will be effective for Valvoline beginning with its fiscal 2028 Form 10-K and interim periods beginning in fiscal 2029, with early adoption permitted, in addition to either prospective or retrospective application. The Company is currently evaluating this guidance to determine its adoption approach and the impact on the presentation and disclosure of its consolidated income statement and expenses. The Company anticipates its processes will be enhanced to address the disaggregation and disclosure requirements, though it does not expect adoption to impact its overall results from operations.
In September 2025, the FASB issued new guidance related to accounting for internal-use software costs. The new standard removes references to software development project stages, making the guidance easier to apply and neutral across different software development methods. The update is effective for fiscal years beginning after December 15, 2027, including interim periods within those years. Early adoption is permitted and the guidance can
8

be applied on a prospective transition approach, a retrospective transition approach, or a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption. Valvoline does not expect the adoption of this guidance to have a material impact on its consolidated financial statements, based on its existing practices and policies.
NOTE 2 - FAIR VALUE MEASUREMENTS
Recurring fair value measurements
The following tables set forth the Company’s financial assets and liabilities by level within the fair value hierarchy for those measured at fair value on a recurring basis:

|  | As of March 31, 2026
(In millions) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | NAV (a)
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 0.3 |  |  | $ | 0.3 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Time deposits |  | 2.7 |  |  | — |  |  | 2.7 |  |  | — |  |  | — |
Other noncurrent assets |  |  |  |  |  |  |  |  |  |
Non-qualified trust funds |  | 4.2 |  |  | — |  |  | — |  |  | — |  |  | 4.2 |
Deferred compensation investments |  | 19.1 |  |  | 19.1 |  |  | — |  |  | — |  |  | — |
Total assets at fair value |  | $ | 26.3 |  |  | $ | 19.4 |  |  | $ | 2.7 |  |  | $ | — |  |  | $ | 4.2 |
Other noncurrent liabilities |  |  |  |  |  |  |  |  |  |
Deferred compensation obligations |  | $ | 19.8 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 19.8 |
Total liabilities at fair value |  | $ | 19.8 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 19.8 |

|  | 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 |

(a)Funds measured at fair value using the net asset value ("NAV") per share practical expedient have not been classified in the fair value hierarchy.
Fair value disclosures
Long-term debt is reported in the Company’s Condensed 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 condensed consolidated financial statements on a recurring basis. The fair value of the Company's outstanding fixed rate senior notes shown below is based on recent trading values, which is considered a Level 2 input within the fair value hierarchy.
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|  | March 31, 2026 |  | September 30, 2025
(In millions) |  | Fair value |  | Carrying value (a) |  | Unamortized discounts and issuance costs |  | Fair value |  | Carrying value (a) |  | Unamortized discounts and issuance costs
2031 Notes |  | $ | 485.6 |  |  | $ | 531.2 |  |  | $ | (3.8) |  |  | $ | 491.0 |  |  | $ | 531.0 |  |  | $ | (4.0) |

(a)Carrying values shown are net of unamortized discounts and debt issuance costs.
Refer to Note 5 for details of the senior notes as well as Valvoline's other debt instruments that have variable interest rates with carrying amounts that approximate fair value.
NOTE 3 - ACQUISITIONS AND DISPOSITIONS
Store acquisitions
The transactions summarized herein were accounted for as business combinations and the operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition. The Company’s acquisitions are accounted for such that the assets acquired and liabilities assumed are recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. The fair values are preliminary for up to one year from the date of acquisition as they may be subject to measurement period adjustments if new information is obtained about facts and circumstances that existed as of the acquisition date.
Breeze Autocare
On December 1, 2025, the Company acquired 100% of the equity interests in Breeze Autocare (“Breeze”) for total cash consideration of $637.4 million, subject to certain customary post-closing adjustments. Breeze is a provider of automotive quick lube and other preventive maintenance services operating predominantly under the Oil Changers SM brand with stores in California, Texas, and the Midwest. The acquisition initially included 204 service center stores and aligns with the Company’s strategy to expand the store network in key markets. The Company funded the Breeze acquisition with an amendment to its Senior Credit Agreement to add a seven-year $740.0 million term loan facility (the “Term Loan B”) commensurate with the closing of the transaction with excess proceeds used to pay down outstanding debt. Refer to Note 5 for further discussion regarding the Term Loan B.
Fair values were determined by a third-party valuation firm that utilized management inputs, estimates, and assumptions through a combination of recognized valuation methodologies including the income, market and cost approaches. Property, plant, and equipment acquired was valued using a combination of cost and market approaches. Lease assets and liabilities and identifiable intangible assets were valued using an income approach, and the held for sale disposal group fair value was estimated using a market approach. Each of these approaches utilized unobservable Level 3 inputs, which included market prices observed in comparable transactions (market approach), replacement cost (cost approach), and estimates of future cash flows (income approach). Management ultimately oversees the third-party valuation firm to ensure that the transaction-specific assumptions are appropriate for the Company.
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The purchase consideration was allocated to the identifiable assets acquired and liabilities assumed based on their respective acquisition date fair values with the excess of the purchase consideration recognized as goodwill as shown below:

(In millions) |  | Breeze acquisition (a) |  |
Cash |  | $ | 4.6 |  |  |
Receivables |  | 15.4 |  |  |
Inventories |  | 4.0 |  |  |
Other current assets |  | 2.2 |  |  |
Property, plant and equipment (b) |  | 75.1 |  |  |
Operating lease assets |  | 72.9 |  |  |
Goodwill (c) |  | 524.2 |  |  |
Intangible assets (d) |  |  |  |
Customer relationships |  | 11.0 |  |  |
Trademarks and trade names |  | 8.0 |  |  |
Other noncurrent assets |  | 0.4 |  |  |
Net assets held for sale (e) |  | 90.0 |  |  |
Trade and other payables |  | (7.8) |  |  |
Accrued expenses and other liabilities |  | (14.5) |  |  |
Other current liabilities (b) |  | (14.8) |  |  |
Operating lease liabilities |  | (62.7) |  |  |
Other noncurrent liabilities (b) |  | (70.6) |  |  |
Total net assets acquired |  | $ | 637.4 |  |  |

(a)Includes measurement period adjustments recorded through March 31, 2026.
(b)Includes finance lease assets in property, plant and equipment and finance lease liabilities in other current and noncurrent liabilities. Finance lease assets acquired were $45.1 million and finance lease liabilities of $3.9 million and $57.0 million in other current and noncurrent liabilities, respectively.
(c)Goodwill is not deductible for income tax purposes and is assigned to the Company’s single reporting unit expected to benefit from the synergies of the acquisition. Goodwill is primarily attributed to the operational synergies and potential growth expected to result in economic benefits in the respective markets of the acquisition.
(d)Intangible assets acquired December 1, 2025 have a weighted average amortization period of 10 years.
(e)The disposal group met the criteria to be classified as held for sale and was measured as a unit of account at fair value less costs to sell as of the acquisition date. Net assets held for sale were disposed on December 1, 2025 in connection with the FTC-required divestiture and sale and are no longer held for sale as of March 31, 2026.
During the three months ended March 31, 2026, the Company recorded measurement period adjustments of $29.1 million, primarily consisting of a reduction in net deferred tax liabilities of $27.9 million included within Other noncurrent liabilities on the Condensed Consolidated Balance Sheets, with a corresponding offset to decrease goodwill. The adjustments to net deferred tax liabilities primarily relate to the partial release of a valuation allowance on interest deduction carryforwards.
The Company incurred $3.1 million and $15.6 million in third-party costs pertaining to the acquisition of Breeze, which are included in Selling, general and administration expenses in the Condensed Consolidated Statements of Comprehensive Income during the three and six months ended March 31, 2026, respectfully. Net revenues and Net income from the Breeze acquisition included in the Company's results since December 1, 2025, the date of the acquisition, are $66.3 million and $7.3 million, respectively.
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The following table presents the unaudited pro forma information summarizing the combined results of operations for Valvoline and Breeze, prepared as if the Breeze acquisition occurred on October 1, 2024:

|  | Three months ended March 31 | Six months ended March 31 |  |  |  |
(In millions) |  | 2026 |  | 2025 | 2026 |  | 2025 |  |  |  |
Net revenues |  | $ | 503.8 |  |  | $ | 450.8 |  | $ | 999.6 |  |  | $ | 912.7 |  |  |  |  |
Net income |  | 46.0 |  |  | 29.3 |  | 92.9 |  |  | 38.1 |  |  |  |  |

These pro forma amounts are calculated after applying the Company's accounting policies and adjusting the results to reflect the incremental amortization of acquired intangible assets and interest expense on acquisition-related debt. Material nonrecurring adjustments, such as the $15.6 million in transaction costs and the $57.9 million pre-tax loss on the sale of the divested locations have been included as if the Breeze acquisition had occurred on October 1, 2024. The pro forma net income amounts also incorporate adjustments to reflect the income tax effects of the pro forma adjustments described above.
The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have actually occurred had the acquisition been completed on the date assumed, nor is it intended to project future results. The unaudited pro forma results exclude the impact of any cost synergies or integration benefits.
Other acquisitions
In addition to the Breeze acquisition, the Company acquired thirteen service center stores in single and multi-store transactions, including four former Express Care locations converted to company-operated service center stores and four former franchise locations, for an aggregate purchase price of $11.3 million during the six months ended March 31, 2026. These acquisitions expand Valvoline's retail presence in key North American markets and contributed to growing the number of company-operated service center stores to 1,210 as of March 31, 2026.
Dispositions
Breeze disposal
Immediately following the Breeze acquisition, 45 of the acquired Breeze stores were sold in accordance with the Federal Trade Commission (“FTC”) Decision and Order that required the disposal of certain acquired locations for the Company to receive regulatory clearance to close the Breeze acquisition. The Company determined that these stores represented a disposal group and met the held-for-sale criteria as of the acquisition date; therefore, the Company measured the disposal group at fair value less costs to sell as a single unit of account, which was determined to be $90.0 million.
The Company determined that this disposal transaction was not orderly and the sale proceeds did not represent fair value of the disposal group due to the regulatory compulsion imposed by the FTC to sell the 45 stores under a compressed timeline, including FTC approval of the buyer and purchase agreement, and insufficient market exposure for the Company to conduct customary marketing activities for the sale of such stores. Accordingly, the fair value was estimated using a market approach, specifically the guideline merged and acquired company method, based on valuation multiples observed in comparable quick lube retail transactions. The selected valuation multiple reflected market participant assumptions and was adjusted for differences in scale, absence of brand and intellectual property, and other operational characteristics of the divested stores relative to the comparable transactions. The non-recurring fair value measurement of the disposal group has been categorized as Level 3 due to the unobservable inputs utilized in the valuation.
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The table below shows the components of the pre-tax loss on sale included within Other loss (income), net in the Condensed Consolidated Statement of Comprehensive Income for the six months ended March 31, 2026.

| (in millions)
Sale proceeds received | $ | 32.1 |
Less: Carrying amount of disposal group (a) | 90.0 |
Pre-tax loss | $ | (57.9) |

(a)Carrying amount of disposal group at disposition represents fair value less costs to sell. Note that costs to sell were de minimis and waived as immaterial for further consideration.
Other dispositions
Valvoline completed the sale of 10 company-operated service center stores to a franchisee during the first fiscal quarter of 2026 and completed the sale of 39 company-operated service center stores to a new franchisee during the first fiscal quarter of 2025. Valvoline recognized pre-tax gains on sale of $14.8 million and $74.2 million within Other loss (income), net in the Condensed Consolidated Statements of Comprehensive Income related to these transactions during the six months ended March 31, 2026 and 2025, respectively.
NOTE 4 - INTANGIBLE ASSETS
Goodwill
The following table summarizes changes in the carrying amount of goodwill during the six months ended March 31, 2026:

(In millions) |  |
Balance as of September 30, 2025 |  | $ | 658.0 |
Acquisitions (a) |  | 527.8 |
Dispositions |  | (3.4) |
Balance at March 31, 2026 |  | $ | 1,182.4 |
(a) Includes measurement period adjustments to reduce goodwill of $3.4 million for an acquisition that closed during fiscal 2025.

Other intangible assets
Valvoline’s purchased intangible assets were specifically identified when acquired, have finite lives, and are reported in Goodwill and intangibles, net within the Condensed Consolidated Balance Sheets. The following summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets:

|  | March 31, 2026 |  | September 30, 2025
(In millions) |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount
Definite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |
Trademarks and trade names |  | $ | 37.5 |  |  | $ | (14.4) |  |  | $ | 23.1 |  |  | $ | 29.5 |  |  | $ | (12.7) |  |  | $ | 16.8 |
Reacquired franchise rights |  | 126.1 |  |  | (69.0) |  |  | 57.1 |  |  | 122.3 |  |  | (63.9) |  |  | 58.4 |
Customer relationships |  | 25.7 |  |  | (9.2) |  |  | 16.5 |  |  | 14.7 |  |  | (8.5) |  |  | 6.2 |
Other intangible assets |  | 7.6 |  |  | (6.5) |  |  | 1.1 |  |  | 7.4 |  |  | (6.3) |  |  | 1.1 |
Total definite-lived intangible assets |  | $ | 196.9 |  |  | $ | (99.1) |  |  | $ | 97.8 |  |  | $ | 173.9 |  |  | $ | (91.4) |  |  | $ | 82.5 |

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The table that follows summarizes the actual and estimated amortization expense for the Company's current amortizable intangible assets:

|  | Actual |  | Estimated
|  | Six months ended March 31 |  | Years ended September 30
(In millions) |  | 2026 |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  | 2030 |  |
Amortization expense |  | $ | 7.6 |  |  | $ | 16.0 |  |  | $ | 16.2 |  |  | $ | 16.1 |  |  | $ | 13.8 |  |  | $ | 12.2 |  |  |

NOTE 5 - DEBT
The following table summarizes Valvoline’s total debt as of:

(In millions) |  | March 31 2026 |  | September 30 2025
2031 Notes |  | $ | 535.0 |  |  | $ | 535.0 |
Term Loan A |  | 403.8 |  |  | 415.6 |
Term Loan B |  | 738.2 |  |  | — |
Revolver (a) |  | — |  |  | 130.0 |
Debt issuance costs and discounts |  | (19.3) |  |  | (6.6) |
Total debt |  | 1,657.7 |  |  | 1,074.0 |
Current portion of long-term debt |  | 31.2 |  |  | 23.8 |
Long-term debt |  | $ | 1,626.5 |  |  | $ | 1,050.2 |

(a)As of March 31, 2026, the total borrowing capacity remaining under the $475.0 million revolving credit facility was $470.1 million due to a reduction of $4.9 million for letters of credit outstanding.
As of March 31, 2026, Valvoline was in compliance with all covenants under its long-term borrowings.
Term Loan B
Key terms and conditions
In December 2025, Valvoline amended its Senior Credit Agreement commensurate with closing the acquisition of Breeze to add a seven-year $740.0 million Term Loan B.
The principal balance of the Term Loan B is required to be repaid in quarterly installments of approximately $1.9 million beginning with the first full fiscal quarter after the acquisition of Breeze and the balance due at maturity with prepayment required in the amount of the net cash proceeds due from certain events. Amounts outstanding under the Term Loan B may be prepaid at any time, and from time to time, in whole or part, without premium or penalty. At Valvoline’s option, amounts outstanding under the Term Loan B bear interest at either the adjusted term Secured Overnight Financing Rate plus 2.000% per year or an alternate base rate plus 1.000% per year. The effective interest rate for the Term Loan B was 5.668% as of March 31, 2026.
Summary of activity
The net proceeds from the Term Loan B were used to fund the Breeze acquisition with the remaining proceeds used to pay down the outstanding balance on the revolving credit facility (“Revolver”).
Lease and franchisee guarantees
The Company guaranteed future payments related to certain leases assigned in connection with divesting retail stores and the Global Products business. Valvoline is obligated to perform if the buyers of the divested businesses default on the leases, which have remaining terms ranging from one to 17 years. The undiscounted maximum
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potential future payments under the lease guarantees were $87.0 million as of March 31, 2026. In addition, the Company guaranteed certain outstanding franchisee debt obligations that have remaining terms ranging from 8 months to five years and total $12.6 million as of March 31, 2026. The Company has not recorded a liability for these guarantees as the likelihood of making future payments is not considered probable.
NOTE 6 – INCOME TAXES
Income tax provisions for interim quarterly periods are based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual discrete items related specifically to interim periods. The following summarizes income tax expense and the effective tax rate in each interim period:

|  | Three months ended March 31 |  | Six months ended March 31
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Income tax expense |  | $ | 14.2 |  |  | $ | 12.6 |  |  | $ | 40.4 |  |  | $ | 45.9 |
Effective tax rate percentage |  | 23.9 | % |  | 24.8 | % |  | 75.5 | % |  | 25.8 | %

The year-over-year changes in the effective tax rate for the three and six months ended March 31, 2026 were primarily attributed to the Breeze acquisition and immediate divestiture required for 45 of the acquired stores. The pre-tax loss on divestiture did not generate a tax benefit; rather, nondeductible goodwill drove an unfavorable tax effect of $20.0 million and contributed to a taxable gain on the divestiture that resulted in $6.3 million of income tax expense in the six months ended March 31, 2026. Additionally, certain transaction costs became nondeductible in connection with the acquisition close and increased income tax expense by $4.8 million in the current year-to-date period.
NOTE 7 – EMPLOYEE BENEFIT PLANS
The following table summarizes the components of Net pension and other postretirement plan income within the Condensed Consolidated Statements of Comprehensive Income:

|  | Pension benefits |  | Other postretirement benefits
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Three months ended March 31 |  |  |  |  |  |  |  |
Interest cost |  | $ | 17.0 |  |  | $ | 17.5 |  |  | $ | 0.2 |  |  | $ | 0.2 |
Expected return on plan assets |  | (17.9) |  |  | (18.1) |  |  | — |  |  | — |
Amortization of prior service credits |  | — |  |  | — |  |  | (0.5) |  |  | (0.5) |
Net periodic benefit income |  | $ | (0.9) |  |  | $ | (0.6) |  |  | $ | (0.3) |  |  | $ | (0.3) |
Six months ended March 31 |  |  |  |  |  |  |  |
Interest cost |  | $ | 33.9 |  |  | $ | 34.9 |  |  | $ | 0.5 |  |  | $ | 0.5 |
Expected return on plan assets |  | (35.7) |  |  | (36.1) |  |  | — |  |  | — |
Amortization of prior service credits |  | — |  |  | — |  |  | (1.1) |  |  | (1.1) |
Net periodic benefit income |  | $ | (1.8) |  |  | $ | (1.2) |  |  | $ | (0.6) |  |  | $ | (0.6) |

NOTE 8 – LITIGATION, CLAIMS AND CONTINGENCIES
From time to time, Valvoline is party to lawsuits, claims and other legal proceedings that arise in the ordinary course of business. The Company establishes liabilities for the outcome of such matters where losses are determined to be probable and reasonably estimable. Where appropriate, the Company has recorded liabilities with respect to these matters, which were not material for the periods presented as reflected in the condensed consolidated financial statements herein. There are certain claims and legal proceedings pending where loss is not determined to be
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probable or reasonably estimable, and therefore, accruals have not been made. In addition, there are currently no matters for which management believes a material loss is at least reasonably possible.
In all instances, management has assessed each matter based on current information available and made a judgment concerning its potential outcome, giving due consideration to the amount and nature of the claim and the probability of success. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable.
Although the ultimate resolution of these matters cannot be predicted with certainty and there can be no assurances that the actual amounts required to satisfy liabilities from these matters will not exceed the amounts reflected in the condensed consolidated financial statements, based on information available at this time, it is the opinion of management that such pending claims or proceedings will not have a material adverse effect on its condensed consolidated financial statements.
NOTE 9 - EARNINGS PER SHARE
The following table summarizes basic and diluted earnings per share:

|  | Three months ended March 31 |  | Six months ended March 31
(In millions, except per share amounts) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Numerator |  |  |  |  |  |  |  |
Income from continuing operations |  | $ | 45.3 |  |  | $ | 38.3 |  |  | $ | 13.1 |  |  | $ | 132.2 |
Loss from discontinued operations, net of tax |  | (0.5) |  |  | (0.7) |  |  | (1.1) |  |  | (3.0) |
Net income |  | $ | 44.8 |  |  | $ | 37.6 |  |  | $ | 12.0 |  |  | $ | 129.2 |
Denominator |  |  |  |  |  |  |  |
Weighted average common shares outstanding |  | 127.8 |  |  | 127.6 |  |  | 127.7 |  |  | 128.2 |
Effect of potentially dilutive securities (a) |  | 0.6 |  |  | 0.6 |  |  | 0.6 |  |  | 0.7 |
Weighted average diluted shares outstanding |  | 128.4 |  |  | 128.2 |  |  | 128.3 |  |  | 128.9 |
Basic earnings (loss) per share |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.35 |  |  | $ | 0.30 |  |  | $ | 0.10 |  |  | $ | 1.03 |
Discontinued operations |  | — |  |  | (0.01) |  |  | (0.01) |  |  | (0.02) |
Basic earnings per share |  | $ | 0.35 |  |  | $ | 0.29 |  |  | $ | 0.09 |  |  | $ | 1.01 |
Diluted earnings (loss) per share |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.35 |  |  | $ | 0.30 |  |  | $ | 0.10 |  |  | $ | 1.02 |
Discontinued operations |  | — |  |  | (0.01) |  |  | (0.01) |  |  | (0.02) |
Diluted earnings per share |  | $ | 0.35 |  |  | $ | 0.29 |  |  | $ | 0.09 |  |  | $ | 1.00 |

(a)There were 0.6 million outstanding stock appreciation rights excluded from the computation of diluted earnings per share in the three and six months ended March 31, 2026, respectively, and 0.1 million in the three and six months ended March 31, 2025, respectively, because the effect would have been antidilutive.
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NOTE 10 - REPORTABLE SEGMENT INFORMATION
The Chief Executive Officer serves as Valvoline’s Chief Operating Decision Maker (“CODM”). The CODM evaluates financial performance and makes operating decisions, including the allocation of resources, based on financial data presented on a consolidated basis as the Company has determined that it operates as a single reportable segment.
Income from continuing operations, as reported in the Condensed Consolidated Statements of Comprehensive Income, is the primary measure used by the CODM to assess performance and guide operating decisions. In addition, the CODM uses Income from continuing operations to identify underlying trends in business performance and to monitor actual results against budget.
The following table presents the significant segment expenses and the Company’s measure of profit or loss:

|  | Three months ended March 31 |  | Six months ended March 31
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Net revenues |  | $ | 503.8 |  |  | $ | 403.2 |  |  | $ | 965.6 |  |  | $ | 817.5 |
Less: |  |  |  |  |  |  |  |
Labor cost |  | 123.5 |  |  | 98.3 |  |  | $ | 239.3 |  |  | $ | 205.0 |
Materials |  | 86.4 |  |  | 71.7 |  |  | $ | 164.8 |  |  | $ | 146.2 |
Other service delivery costs |  | 106.9 |  |  | 82.7 |  |  | $ | 202.0 |  |  | $ | 162.9 |
Advertising |  | 21.1 |  |  | 17.5 |  |  | $ | 41.2 |  |  | $ | 34.8 |
Payroll and related costs |  | 38.5 |  |  | 30.5 |  |  | $ | 74.2 |  |  | $ | 58.1 |
Other general and administrative |  | 39.1 |  |  | 35.6 |  |  | $ | 90.1 |  |  | $ | 71.1 |
Other segment items (a) |  | 43.0 |  |  | 28.6 |  |  | $ | 140.9 |  |  | $ | 7.2 |
Income from continuing operations |  | $ | 45.3 |  |  | $ | 38.3 |  |  | $ | 13.1 |  |  | $ | 132.2 |

(a)Other segment items primarily include items such as Net legacy and separation-related expenses, Other loss (income), net, Net pension and postretirement costs, Net interest and other financing expenses, and Income tax expense, which are included in the Company’s Condensed Consolidated Statements of Comprehensive Income.
NOTE 11 - SUPPLEMENTAL FINANCIAL INFORMATION
Cash, cash equivalents and restricted cash
The following provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Statements of Cash Flows to the Condensed Consolidated Balance Sheets:

(In millions) |  | March 31 2026 |  | September 30 2025 |  | March 31 2025
Cash and cash equivalents - continuing operations |  | $ | 84.7 |  |  | $ | 51.6 |  |  | $ | 61.9 |
Restricted cash - continuing operations (a) |  | — |  |  | — |  |  | 0.4 |
Total cash, cash equivalents and restricted cash |  | $ | 84.7 |  |  | $ | 51.6 |  |  | $ | 62.3 |

(a)Included in Prepaid expenses and other current assets within the Condensed Consolidated Balance Sheets.
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Accounts and other receivables
The following summarizes Valvoline’s accounts and other receivables in the Condensed Consolidated Balance Sheets as of:

(In millions) |  | March 31 2026 |  | September 30 2025
Current |  |  |  |
Trade |  | $ | 78.1 |  |  | $ | 82.0 |
Notes receivable from franchisees |  | 8.7 |  |  | 8.5 |
Other |  | 9.2 |  |  | 1.6 |
Receivables, gross |  | 96.0 |  |  | 92.1 |
Allowance for credit losses |  | (3.4) |  |  | (2.5) |
Receivables, net |  | $ | 92.6 |  |  | $ | 89.6 |
Non-current (a) |  |  |  |
Notes receivable |  | $ | 2.8 |  |  | $ | 2.7 |
Other |  | 4.6 |  |  | 4.4 |
Noncurrent notes receivable, gross |  | 7.4 |  |  | 7.1 |
Allowance for losses |  | (2.9) |  |  | (2.8) |
Noncurrent notes receivable, net |  | $ | 4.5 |  |  | $ | 4.3 |

(a)Included in Other noncurrent assets within the Condensed Consolidated Balance Sheets.
Revenue recognition
The following disaggregates the Company’s net revenues by timing of revenue recognized:

|  | Three months ended March 31 |  | Six months ended March 31
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Net revenues transferred at a point in time |  | $ | 479.7 |  |  | $ | 381.7 |  |  | $ | 918.9 |  |  | $ | 775.8 |
Franchised revenues transferred over time |  | 24.1 |  |  | 21.5 |  |  | 46.7 |  |  | 41.7 |
Net revenues |  | $ | 503.8 |  |  | $ | 403.2 |  |  | $ | 965.6 |  |  | $ | 817.5 |

The following table summarizes net revenues by category:

|  | Three months ended March 31 |  | Six months ended March 31
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Oil changes and related fees |  | $ | 368.4 |  |  | $ | 291.0 |  |  | $ | 706.1 |  |  | $ | 592.7 |
Non-oil changes and related fees |  | 110.6 |  |  | 89.9 |  |  | 211.1 |  |  | 181.3 |
Franchise fees and other |  | 24.8 |  |  | 22.3 |  |  | 48.4 |  |  | 43.5 |
Total |  | $ | 503.8 |  |  | $ | 403.2 |  |  | $ | 965.6 |  |  | $ | 817.5 |

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FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the acquisition of Breeze Autocare, including its Oil Changers stores, and the integration of the Breeze Autocare business and the anticipated benefits and synergies of the acquisition; executing on the growth strategy to create shareholder value by driving the full potential in Valvoline’s core business, delivering sustainable network growth and innovating to meet the changing needs of customers and the car parc; realizing the benefits from acquisitions and refranchising transactions; and future opportunities for the stand-alone retail business; and any other statements regarding Valvoline's future operations, financial or operating results, capital allocation, debt leverage ratio, anticipated business levels, dividend policy, anticipated growth, market opportunities, strategies, competition, and other expectations and targets for future periods. Valvoline has identified some of these forward-looking statements with words such as “anticipates,” “believes,” “expects,” “estimates,” “is likely,” “predicts,” “projects,” “forecasts,” “may,” “will,” “should,” and “intends,” and the negative of these words or other comparable terminology. These forward-looking statements are based on Valvoline’s current expectations, estimates, projections, and assumptions as of the date such statements are made and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures about Market Risk” in this Quarterly Report on Form 10-Q and Valvoline’s most recently filed Annual Report on Form 10-K. Valvoline assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future, unless required by law.
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Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations | Page
Business Overview | 20
Results of Operations - Consolidated Review | 23
Financial Position, Liquidity and Capital Resources | 29
New Accounting Pronouncements | 31
Critical Accounting Policies and Estimates | 31

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as well as the condensed consolidated financial statements and the accompanying Notes to Condensed Consolidated Financial Statements included in Item 1 of Part I in this Quarterly Report on Form 10-Q. Unless otherwise noted, disclosures within Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations relate solely to the Company's continuing operations.
BUSINESS OVERVIEW AND PURPOSE
As the quick, easy, trusted leader in automotive preventive maintenance, Valvoline Inc. (“Valvoline” or the “Company”) is creating shareholder value by driving the full potential of its core business, delivering sustainable network growth, and continuing to innovate to meet the evolving needs of customers and the car parc. With average customer ratings that indicate high levels of service satisfaction, Valvoline and the Company’s franchise partners simplify vehicle care so customers can do what drives them. This includes approximately 15-minute stay-in-your-car oil changes; battery, bulb and wiper replacements; tire rotations; and other manufacturer recommended maintenance services. The Company operates and franchises more than 2,400 service center locations through its Valvoline Instant Oil Change SM (“VIOC”), Valvoline Great Canadian Oil Change, and Oil Changers SM retail locations and supports over 240 locations through its Express Care TM platform.
BUSINESS STRATEGY
As a pure play automotive retail services provider and the trusted leader in preventive automotive maintenance, Valvoline is well positioned to create long-term shareholder value through executing the Company’s strategic initiatives, which include:
•Driving the full potential of the core business through strategic reinvestment and improving operational efficiency in existing stores by building on Valvoline’s strong foundation in marketing, technology, and data insights;
•Delivering sustainable network growth with company-operated store expansion and accelerating the momentum of franchisee store growth; and
•Innovating to meet the changing needs of customers and the car parc, targeting customer and service expansion with a focus on fleet business, and driving non-oil change service penetration.
RECENT DEVELOPMENTS
Breeze Autocare
On December 1, 2025, the Company acquired 100% of the equity interests in Breeze Autocare (“Breeze”) for total cash consideration of $637.4 million, subject to certain customary post-closing adjustments. Breeze is a provider of automotive quick lube and other preventive maintenance services operating predominantly under the Oil Changers SM brand with stores in California, Texas, and the Midwest. The acquisition initially included 204 service
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center stores and aligns with the Company’s strategy to expand the store network in key markets. The Company funded the Breeze acquisition with an amendment to its Senior Credit Agreement to add a seven-year $740.0 million term loan facility (the “Term Loan B”) commensurate with the closing of the transaction with excess proceeds used to pay down outstanding debt.
Dispositions
Immediately following the acquisition, 45 of the acquired Breeze stores were sold in accordance with the Federal Trade Commission (“FTC”) Decision and Order that required the disposal of certain acquired locations for the Company to receive regulatory clearance to close the Breeze acquisition. The fair value of the net assets divested was $90.0 million. As a result, the Company recognized a $57.9 million pre-tax loss on sale within Other loss (income), net in the Condensed Consolidated Statement of Comprehensive Income for the six months ended March 31, 2026.
Valvoline completed the sale of 10 company-operated service center stores to a franchisee during the first fiscal quarter of 2026 and completed the sale of 39 company-operated service center stores to a new franchisee during the first fiscal quarter of 2025. Valvoline recognized pre-tax gains on sale of $14.8 million and $74.2 million within Other loss (income), net in the Condensed Consolidated Statements of Comprehensive Income related to these transactions during the six months ended March 31, 2026 and 2025, respectively. These transactions, together with executed development agreements are expected to provide significant growth in the respective markets and deliver long-term value to shareholders. The impact of these dispositions on year-over-year comparability of financial results is discussed further herein.
SECOND FISCAL QUARTER 2026 OVERVIEW
The following were the significant events for the second fiscal quarter of 2026, each of which is discussed more fully in this Quarterly Report on Form 10-Q:
•Net revenues grew 25% compared to the prior year period, primarily driven by network expansion of 331 net store additions, including the impact of acquisitions and dispositions. The increase was further supported by system-wide same-store sales ("SSS") growth of 8.2%, as well as favorable service mix and pricing.
•Income from continuing operations grew 18% to $45.3 million and Diluted earnings per share increased 17% to $0.35 compared to the prior year period. The increase was primarily driven by profit expansion from operations, partially offset by investments in Selling, general, and administrative expenses and increased interest expense associated with the Term Loan B.
•Adjusted EBITDA increased 28% over the prior year period due to strong operational performance, including improvements in mix and pricing, along with contributions from network growth. This increase more than offset the impacts of dispositions and higher Selling, general, and administrative expenses to support growth.
Use of Non-GAAP Measures
To aid in the understanding of Valvoline’s ongoing business performance, certain items within this document are presented on an adjusted, non-GAAP basis. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation from, or as an alternative to, or more meaningful than, the financial statements presented in accordance with U.S. GAAP. The financial results presented in accordance with U.S. GAAP and reconciliations of non-GAAP measures included within this Quarterly Report on Form 10-Q should be carefully evaluated.
The following are the non-GAAP measures management has included and how management defines them:
•EBITDA - net income/loss, plus income tax expense/benefit, net interest and other financing expenses, and depreciation and amortization;
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•Adjusted EBITDA - EBITDA adjusted for the impacts of certain unusual, infrequent or non-operational activity not directly attributable to the underlying business, which management believes impacts the comparability of operational results between periods ("key items," as further described below);
•Free cash flow - cash flows from operating activities less total capital expenditures, comprised of growth and maintenance, further described below;
•Free cash flow excluding growth capital expenditures - cash flows from operating activities less maintenance capital expenditures; and
•Net debt - total debt less cash and cash equivalents.
Non-GAAP measures include adjustments from results based on U.S. GAAP that management believes enables comparison of certain financial trends and results between periods and provides a useful supplemental presentation of Valvoline's operating performance that allows for transparency with respect to key metrics used by management in operating the business and measuring performance. The manner used to compute non-GAAP information used by management may differ from the methods used by other companies and may not be comparable. For a reconciliation of the most comparable U.S. GAAP measures to the non-GAAP measures, refer to the “Results of Operations” and “Financial Position, Liquidity and Capital Resources” sections below.
Management believes EBITDA measures provide a meaningful supplemental presentation of Valvoline’s operating performance between periods on a comparable basis due to the depreciable assets associated with the nature of the Company’s operations as well as income tax and interest costs related to Valvoline’s tax and capital structures, respectively. Adjusted EBITDA measures enable comparison of financial trends and results between periods where certain items may not be reflective of the Company’s underlying and ongoing operations performance or vary independent of business performance.
Management uses free cash flow and free cash flow excluding growth capital expenditures as additional non-GAAP metrics of cash flow generation. By including capital expenditures, management is able to provide an indication of the ongoing cash being generated that is ultimately available for both debt and equity holders as well as other investment opportunities. Free cash flow includes the impact of capital expenditures, providing a supplemental view of cash generation. Free cash flow excluding growth capital expenditures includes maintenance capital expenditures, which are uses of cash that are necessary to maintain the Company's existing business operations, including its retail service center store network, service portfolio, and support functions. Free cash flow excluding growth capital expenditures provides a supplemental view of cash flow generation before investments in growth capital, which expand future business operations, including the opening or expansion of retail service center stores and service capabilities. Free cash flow and free cash flow excluding growth capital expenditures have certain limitations, including that they do not reflect adjustments for certain non-discretionary cash expenditures, such as mandatory debt repayments.
The non-GAAP measures used by management exclude key items. Key items are often related to legacy matters or market-driven events considered by management to not be reflective of the ongoing operating performance. Key items may consist of adjustments related to: legacy businesses, including the separation from Valvoline's former parent company, the sale of the former Global Products reportable segment, and the associated impacts of related activity and indemnities; non-service pension and other postretirement plan activity; restructuring-related matters, including organizational restructuring plans, significant acquisitions or divestitures, debt extinguishment and modification, and tax reform legislation; in addition to other matters that management considers non-operational, infrequent or unusual in nature.
Details with respect to the description and composition of key items recognized during the respective periods presented herein are set forth below in the “EBITDA and Adjusted EBITDA” section of “Results of Operations” that follows.
Key Business Measures
Valvoline tracks its operating performance and manages its business using certain key measures, including system-wide, company-operated and franchised store counts and system-wide SSS and store sales. Management believes these measures are useful to evaluating and understanding Valvoline's operating performance and should be
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considered as supplements to, not substitutes for, Valvoline's net revenues and operating income, as determined in accordance with U.S. GAAP.
Net revenues are influenced by the number of service center stores and the business performance of those stores. Stores are considered open upon acquisition or opening for business. Temporary store closings remain in the respective store counts with only permanent store closures reflected in the activity and end of period store counts. SSS is defined as net revenues of U.S. VIOC system-wide stores that have been in operation for at least 12 full months within the system, and beginning in fiscal 2026, mobile service net revenues in markets that leverage store marketing channels.
Net revenues are limited to sales at company-operated stores, in addition to royalties and other fees from independent franchised and Express Care stores. Although Valvoline does not recognize store-level sales from franchised stores as net revenues in its Statements of Condensed Consolidated Income, management believes system-wide and franchised SSS comparisons, store counts, and total system-wide store sales are useful to assess market position relative to competitors and overall store and operating performance.
RESULTS OF OPERATIONS
The following summarizes the results of the Company’s continuing operations for the periods ended March 31:

|  | Three months ended March 31 |  |  |  |  |  | Six months ended March 31
|  | 2026 |  | 2025 |  |  |  |  |  | 2026 |  | 2025
(In millions) |  | Amount |  | % of Net revenues |  | Amount |  | % of Net revenues |  |  |  | Amount |  | % of Net revenues |  | Amount |  | % of Net revenues
Net revenues |  | $ | 503.8 |  |  | 100.0% |  | $ | 403.2 |  |  | 100.0% |  |  |  |  |  | $ | 965.6 |  |  | 100.0% |  | $ | 817.5 |  |  | 100.0%
Gross profit |  | $ | 187.0 |  |  | 37.1% |  | $ | 150.5 |  |  | 37.3% |  |  |  |  |  | $ | 359.5 |  |  | 37.2% |  | $ | 303.4 |  |  | 37.1%
Net operating expenses |  | $ | 101.0 |  |  | 20.0% |  | $ | 83.6 |  |  | 20.7% |  |  |  |  |  | $ | 255.2 |  |  | 26.4% |  | $ | 92.7 |  |  | 11.3%
Operating income |  | $ | 86.0 |  |  | 17.1% |  | $ | 66.9 |  |  | 16.6% |  |  |  |  |  | $ | 104.3 |  |  | 10.8% |  | $ | 210.7 |  |  | 25.8%
Income from continuing operations |  | $ | 45.3 |  |  | 9.0% |  | $ | 38.3 |  |  | 9.5% |  |  |  |  |  | $ | 13.1 |  |  | 1.4% |  | $ | 132.2 |  |  | 16.2%
EBITDA (a) |  | $ | 124.8 |  |  | 24.8% |  | $ | 96.2 |  |  | 23.9% |  |  |  |  |  | $ | 177.8 |  |  | 18.4% |  | $ | 268.9 |  |  | 32.9%
Adjusted EBITDA (a) |  | $ | 133.6 |  |  | 26.5% |  | $ | 104.4 |  |  | 25.9% |  |  |  |  |  | $ | 251.0 |  |  | 26.0% |  | $ | 207.2 |  |  | 25.3%

(a)Refer to the “Use of Non-GAAP Measures” and “Continuing operations EBITDA and Adjusted EBITDA” for management’s definitions of the metrics presented above and reconciliation to the corresponding GAAP measures, where applicable.

|  | Three months ended March 31 |  |  |  | Six months ended March 31 |  |
2026 |  | 2025 |  |  | 2026 |  | 2025 |  |
Sales information |  |  |  |  |  |  |  |  |  |  |
Store sales - in millions |  |  |  |  |  |  |  |  |  |  |
Company-operated | $ | 450.7 |  |  | $ | 352.7 |  |  |  |  | $ | 859.0 |  |  | $ | 718.0 |  |  |
Franchised (a) | 535.9 |  |  | 472.8 |  |  |  |  | 1,051.2 |  |  | 927.8 |  |  |
System-wide store sales (a) | $ | 986.6 |  |  | $ | 825.5 |  |  |  |  | $ | 1,910.2 |  |  | $ | 1,645.8 |  |  |
Year-over-year growth (a) | 19.5 | % |  | 10.6 | % |  |  |  | 16.1 | % |  | 12.0 | % |  |
System-wide same-store sales growth (a)(b) | 8.2 | % |  | 5.8 | % |  |  |  | 7.0 | % |  | 6.9 | % |  |

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|  |  | Number of stores at end of period
|  |  | Second Quarter 2026 |  | First Quarter 2026 |  | Fourth Quarter 2025 |  | Third Quarter 2025 |  | Second Quarter 2025
Company-operated |  | 1,210 |  |  | 1,196 |  |  | 1,016 |  |  | 983 |  |  | 950 |
Franchised (a) |  | 1,199 |  |  | 1,184 |  |  | 1,164 |  |  | 1,141 |  |  | 1,128 |
Total system-wide stores (a) |  | 2,409 |  |  | 2,380 |  |  | 2,180 |  |  | 2,124 |  |  | 2,078 |
(a) | Measures include Valvoline franchisees, which are independent legal entities. Valvoline does not consolidate the results of operations of its franchisees.
(b) | Valvoline determines SSS growth as the year-over-year change in net revenues of U.S. VIOC system-wide same stores with same stores defined as those that have been in operation within the system for at least 12 full months, and beginning in fiscal 2026, mobile service net revenues in markets that leverage store marketing channels.

Net revenues
Net revenues increased $100.6 million, or 25.0% for the three months ended March 31, 2026 compared to the prior year period, primarily reflecting network growth of 331 net new system-wide stores, driven by the Breeze acquisition and other openings. System-wide SSS also increased 8.2%, supported by higher average ticket from net pricing benefits, ongoing premiumization, and non-oil change service penetration, along with favorable transaction trends. These increases were partially offset by lower net revenues due to disposition activity. The following reconciles the year-over-year change in net revenues:
For the six months ended March 31, 2026, Net revenues increased $148.1 million, or 18.1% compared to the prior year, driven primarily by network growth, including the Breeze acquisition, as well as improvements in service mix and pricing. System-wide SSS revenue grew 7.0%, reflecting higher average ticket from net pricing benefits, continued premiumization, and favorable transaction trends. These benefits were partially offset by the impact of disposition activity. The following reconciles the year-over-year change in year-to-date net revenues:
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Gross profit
Gross profit increased $36.5 million, or 24.3%, for the three months ended March 31, 2026 compared to the prior year period driven by contributions from acquired stores and service mix. These increases were partially offset by higher expenses associated with network expansion, including depreciation, as well as higher labor and other service delivery costs. The following reconciles the year-over-year change in gross profit:
Gross profit margin declined slightly in the three months ended March 31, 2026 compared to the prior year period, primarily reflecting higher store operating expenses, including depreciation related to new store growth, the impact of recent dispositions, and higher labor and other service delivery costs. These impacts were partially offset by improved product cost leverage.
Gross profit improved $56.1 million, or 18.5%, for the six months ended March 31, 2026 compared to the prior year period, primarily driven by volume growth, including contributions from acquired stores, service mix, and pricing. These increases were partially offset by higher expenses associated with network expansion, including depreciation from new stores and other store growth investments. The following reconciles the year-over-year change in year-to-date gross profit:
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Gross profit margin improved in the six months ended March 31, 2026 compared to the prior year period, primarily reflecting favorable product costs and labor efficiency, partially offset by higher store operating expenses related to new store growth and the impact of the recent dispositions.
Net operating expenses
Details of the components of net operating expenses are summarized below for the periods ended March 31:

|  | Three months ended March 31 |  | Six months ended March 31
|  | 2026 |  | 2025 |  | 2026 |  | 2025
(In millions) |  | Amount |  | % of Net revenues |  | Amount |  | % of Net revenues |  | Amount |  | % of Net revenues |  | Amount |  | % of Net revenues
Selling, general and administrative expenses |  | $ | 98.7 |  |  | 19.5 | % |  | $ | 83.6 |  |  | 20.7 | % |  | $ | 205.5 |  |  | 21.3 | % |  | $ | 164.0 |  |  | 20.1 | %
Net legacy and separation-related expenses |  | 0.9 |  |  | 0.2 | % |  | 0.8 |  |  | 0.2 | % |  | 6.1 |  |  | 0.6 | % |  | 1.2 |  |  | 0.1 | %
Other loss (income), net |  | 1.4 |  |  | 0.3 | % |  | (0.8) |  |  | (0.2) | % |  | 43.6 |  |  | 4.5 | % |  | (72.5) |  |  | (8.9) | %
Net operating expenses |  | $ | 101.0 |  |  | 20.0 | % |  | $ | 83.6 |  |  | 20.7 | % |  | $ | 255.2 |  |  | 26.4 | % |  | $ | 92.7 |  |  | 11.3 | %

Selling, general and administrative expenses increased by $15.1 million and $41.5 million for the three and six months ended March 31, 2026 compared to the prior year periods. The increases reflect continued investments to scale the business and support long-term growth. The primary contributors were outside services, talent, and advertising, which combined to increase expense by $8.3 million and $18.2 million in the three and six months ended March 31, 2026, respectively. Additionally, investment and divestiture activity increased selling, general and administrative expenses by $4.5 million and $18.9 million in the three and six months ended March 31, 2026, respectively primarily related to consulting fees and professional services to support legal, regulatory, diligence and integration efforts.
Net legacy and separation-related expenses increased $0.1 million and $4.9 million for the three and six months ended March 31, 2026, respectively, compared to the prior year primarily due to expenses associated with legacy businesses and an increase in estimated reserves related to certain obligations assumed from the Company’s former parent company.
Other loss (income), net was unfavorable by $2.2 million and $116.1 million for the three and six months ended March 31, 2026, respectively, compared to the prior year periods, primarily due to the Company’s disposition activity. For the six months ended March 31, 2026, the variance was due in large part to the $57.9 million pre-tax
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loss on the FTC-required divestiture of 45 Breeze stores immediately following the Breeze acquisition. Further, in the current year-to-date period, the Company recorded a $14.8 million gain on the sale of 10 company-operated stores, compared to a $74.2 million gain on the sale of 39 stores in the prior year.
Net pension and other postretirement plan activity
Net pension and other postretirement plan activity was favorable compared to the prior year by $0.3 million and $0.6 million for the three and six months ended March 31, 2026, respectively, due to lower interest costs attributed to the decline in discount rates, partially offset by lower recurring expected returns on plan assets as a result of the most recent annual remeasurement of the plans.
Net interest and other financing expenses
Net interest and other financing expenses increased $10.8 million and $18.8 million for the three and six months ended March 31, 2026, respectively, compared to the prior year periods. The increases were primarily driven by higher interest expense of $10.2 million and $12.8 million, respectively, largely attributable to the addition of the Term Loan B.
Additionally, during the six months ended March 31, 2026, the Company incurred $4.7 million of fees to maintain access to the Term Loan B and related financing in advance of the Breeze acquisition closing, at which time the Term Loan B became effective.
Income tax provision
The following table summarizes the income tax provision and the effective tax rate for the current and prior year periods:

|  | Three months ended March 31 |  | Six months ended March 31
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Income tax expense |  | $ | 14.2 |  |  | $ | 12.6 |  |  | $ | 40.4 |  |  | $ | 45.9 |
Effective tax rate percentage |  | 23.9 | % |  | 24.8 | % |  | 75.5 | % |  | 25.8 | %

The year-over-year changes in the effective tax rate for the three and six months ended March 31, 2026 were primarily attributed to the Breeze acquisition and immediate divestiture required for 45 of the acquired stores. The pre-tax loss on divestiture did not generate a tax benefit; rather, nondeductible goodwill drove an unfavorable tax effect of $20.0 million and contributed to a taxable gain on the divestiture that resulted in $6.3 million of income tax expense in the six months ended March 31, 2026. Additionally, certain transaction costs became nondeductible in connection with the acquisition close and increased income tax expense by $4.8 million in the current year-to-date period.
Loss from discontinued operations, net of tax
The following summarizes Loss from discontinued operations, net of tax for the current and prior year periods:

|  | Three months ended March 31 |  | Six months ended March 31
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025
Loss from discontinued operations, net of tax |  | $ | (0.5) |  |  | $ | (0.7) |  |  | $ | (1.1) |  |  | $ | (3.0) |

Loss from discontinued operations, net of tax decreased $0.2 million and $1.9 million in the three and six months ended March 31, 2026, respectively, compared to the prior year periods, primarily due to the reduced level of post-sale activity following the divestiture of the former Global Products business. As time has passed since the sale, separation activities have concluded, and the remaining expenses are largely limited to post-closing tax matters and indemnities.
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Continuing operations EBITDA and Adjusted EBITDA
The following table reconciles Income from continuing operations to EBITDA and Adjusted EBITDA for the current and prior year periods:

|  | Three months ended March 31 |  | Six months ended March 31 |
(In millions) |  | 2026 |  | 2025 |  | 2026 |  | 2025 |
Income from continuing operations |  | $ | 45.3 |  |  | $ | 38.3 |  |  | $ | 13.1 |  |  | $ | 132.2 |  |
Income tax expense |  | 14.2 |  |  | 12.6 |  |  | 40.4 |  |  | 45.9 |  |
Net interest and other financing expenses |  | 27.7 |  |  | 16.9 |  |  | 53.2 |  |  | 34.4 |  |
Depreciation and amortization |  | 37.6 |  |  | 28.4 |  |  | 71.1 |  |  | 56.4 |  |
EBITDA from continuing operations (a) |  | 124.8 |  |  | 96.2 |  |  | 177.8 |  |  | 268.9 |  |
Net pension and other postretirement plan income (b) |  | (1.2) |  |  | (0.9) |  |  | (2.4) |  |  | (1.8) |  |
Net legacy and separation-related expenses (c) |  | 0.9 |  |  | 0.8 |  |  | 6.1 |  |  | 1.2 |  |
Information technology costs (d) |  | 2.7 |  |  | 4.9 |  |  | 5.8 |  |  | 6.4 |  |
Investment and divestiture-related costs (income) (e) |  | 6.4 |  |  | 3.4 |  |  | 63.7 |  |  | (67.5) |  |
Adjusted EBITDA from continuing operations (a) |  | $ | 133.6 |  |  | $ | 104.4 |  |  | $ | 251.0 |  |  | $ | 207.2 |  |

(a) | EBITDA from continuing operations is defined as income from continuing operations, plus income tax expense, net interest and other financing expenses, and depreciation and amortization attributable to continuing operations. Adjusted EBITDA from continuing operations is EBITDA adjusted for key items attributable to continuing operations.
(b) | Includes several elements impacted by changes in plan assets and obligations that are primarily driven by the debt and equity markets, including remeasurement gains and losses, when applicable; and recurring non-service pension and other postretirement net periodic activity, which consists of interest cost, expected return on plan assets and amortization of prior service credits. Management considers these elements are more reflective of changes in current conditions in global markets (in particular, interest rates), outside the operational performance of the business, and are also legacy amounts that are not directly related to the underlying business and do not have an impact on the compensation and benefits provided to eligible employees for current service. Refer to Note 7 in the Notes to Condensed Consolidated Financial Statements in Item 1 of Part I in this Quarterly Report on Form 10-Q for further details.
(c) | Activity associated with legacy businesses, including the separation from Valvoline’s former parent company and its former Global Products reportable segment. This activity includes the recognition of and adjustments to indemnity obligations to its former parent company; certain legal, financial, professional advisory and consulting fees; and other expenses incurred by the continuing operations in connection with and directly related to these separation transactions and legacy matters. This incremental activity directly attributable to legacy matters and separation transactions is not considered reflective of the underlying operating performance of the Company’s continuing operations.
(d) | Consists of expenses incurred directly related to the Company’s information technology transitions, primarily efforts related to implementing stand-alone enterprise resource planning and human resource information systems that generally began in fiscal 2023 following the sale of the former Global Products reportable segment. These expenses include data conversion, training, redundant expenses incurred from duplicative technology platforms, and temporary support, which includes consulting fees and professional services to support certain enhanced manual procedures and material weakness remediation efforts. These incremental costs are directly associated with technology transitions and are not considered to be reflective of the ongoing expenses of operating the Company’s technology platforms.
(e) | Consists of activity directly associated with specific significant acquisitions, investments and divestitures, including professional and consulting fees for legal and advisory services, in addition to gains or losses recognized upon disposition, temporary financing costs directly associated with transactions, certain acquisition-related incentive compensation costs, amortization of Breeze acquired intangible assets, and expense recognized to reduce the carrying values of related assets determined to be impaired. This activity is not considered to be reflective of the underlying operating performance of the Company’s ongoing continuing operations.

Adjusted EBITDA from continuing operations increased $29.2 million and $43.8 million in the three and six months ended March 31, 2026, respectively, compared to the prior year periods. The increase was primarily driven by gross profit expansion, including higher volumes, contributions from network growth, and improvements in pricing and cost efficiency. These benefits more than offset the impacts of dispositions and higher selling, general, and administrative expenses.
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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Overview
The Company closely manages its liquidity and capital resources. Valvoline’s liquidity requirements depend on key variables, including the level of investment needed to support business strategies, the performance of the business, capital expenditures, borrowing arrangements, and working capital management. Capital expenditures, acquisitions, and share repurchases are components of the Company’s cash flow and capital management strategy, which to a large extent, can be adjusted in response to economic and other changes in the business environment. The Company has a disciplined approach to capital allocation, which focuses on investing in key priorities that support Valvoline’s business and growth strategies and returning capital to shareholders, while funding ongoing operations.
Continuing operations cash flows
Valvoline’s continuing operations cash flows as reflected in the Condensed Consolidated Statements of Cash Flows are summarized as follows for the six months ended March 31:

(In millions) |  | 2026 |  | 2025
Cash provided by (used in): |  |  |  |
Operating activities |  | $ | 160.2 |  |  | $ | 93.2 |
Investing activities |  | $ | (699.4) |  |  | $ | 10.3 |
Financing activities |  | $ | 572.3 |  |  | $ | (104.4) |

Operating activities
Cash flows provided by operating activities increased $67.0 million from the prior year period primarily driven by higher cash earnings and, to a lesser extent, lower spend on cloud computing implementation in the current year period.
Investing activities
The decrease in cash flows from investing activities of $709.7 million was primarily due to $634.5 million higher net cash consideration paid for acquisitions, mainly related to the Breeze acquisition. In addition, the Company received $57.4 million lower proceeds from sale of operations during the current year compared to proceeds received from disposition activity in the prior year. Finally, higher capital expenditures of $9.8 million from increased maintenance expenditures related to store technology upgrades.
Financing activities
Cash flows provided by financing activities increased $676.7 million from the prior year substantially driven by an increase in net borrowings, inclusive of payments for debt issuance costs, of $601.1 million. The current year activity is driven by the proceeds from the issuance of the Term Loan B offset by net repayments on the Revolver balance. In addition, the Company did not repurchase any shares of its common stock during the six months ended March 31, 2026 as the Company accelerates debt repayment following the Term Loan B issuance, which resulted in less cash used in financing activities of $76.8 million compared to the prior year.
Continuing operations free cash flow
The following table sets forth free cash flow and free cash flow excluding growth capital expenditures reconciled to cash flows from operating activities. As previously noted, these free cash flow measures have certain limitations, including that they do not reflect adjustments for certain non-discretionary cash expenditures, such as mandatory debt repayments. Refer to the “Use of Non-GAAP Measures” section included above in this Item 2 for additional information regarding these non-GAAP measures.
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|  | Six months ended March 31
(In millions) |  | 2026 |  | 2025
Cash flows provided by operating activities |  | $ | 160.2 |  |  | $ | 93.2 |
Less: Maintenance capital expenditures |  | (27.4) |  |  | (15.6) |
Free cash flow excluding growth capital expenditures |  | 132.8 |  |  | 77.6 |
Less: Growth capital expenditures |  | (87.8) |  |  | (89.8) |
Free cash flow |  | $ | 45.0 |  |  | $ | (12.2) |

The increase in free cash flow from continuing operations over the prior year was due to higher cash flows provided by operating activities as described above, partially offset by increased capital expenditures in the current period. The increase in capital expenditures compared to the prior year was primarily driven by higher maintenance expenditures related to store technology upgrades. The Company continues to focus the majority of its capital spend toward growth, which is expected to drive a high return on invested capital.
Debt
Approximately 32% of Valvoline's outstanding borrowings at March 31, 2026 had fixed interest rates, with the remainder bearing variable rates. As of March 31, 2026, Valvoline was in compliance with all covenants of its debt obligations and had borrowing capacity of $470.1 million remaining under its Revolver.
In December 2025, Valvoline amended its Senior Credit Agreement to add a seven-year $740.0 million Term Loan B. The proceeds of the Term Loan B were used to fund the Breeze acquisition with the remaining proceeds used to pay down the outstanding balance on the Revolver.
Refer to Note 5 of the Notes to Condensed Consolidated Financial Statements for additional details regarding the Company’s debt instruments.
Share repurchases
In July 2024, the Board approved a share repurchase authorization of $400.0 million (the “2024 Share Repurchase Authorization), which has no expiration date. During the six months ended March 31, 2026, the Company did not repurchase any shares of its common stock. As of March 31, 2026, $325.0 million remained available for share repurchases under the 2024 Share Repurchase Authorization.
The timing and amount of any repurchases of common stock will be solely at the discretion of the Company and is subject to general business and market conditions, as well as other factors. The share repurchase authorization is part of a broader capital allocation framework to deliver value to shareholders by first, driving profitable growth in the business, organically and through acquisitions and franchise development; second, to remain within a net debt to adjusted EBITDA leverage ratio of 1.5 to 2.5 times; and third, to continue returning excess capital to shareholders.
Valvoline announced in the second quarter of fiscal 2025 that it was pausing share repurchase activity to accelerate debt repayment in connection with a Term Loan B that was issued and effective commensurate with closing the Breeze acquisition.
Summary
Valvoline had cash and cash equivalents of $84.7 million, total debt of $1,657.7 million, and total remaining borrowing capacity of $470.1 million under its Revolver as of March 31, 2026. Valvoline’s ability to continue to generate positive cash flows from operations is dependent on general economic conditions, the competitive environment in the industry, and is subject to the business and other risk factors described in Item 1A of Part I of the Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
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Management believes that the Company has sufficient liquidity based on its current cash, cash equivalents, cash generated from business operations and existing financing to meet its pension and other postretirement plan, debt servicing, tax-related and other material cash and operating requirements for the next twelve months.
NEW ACCOUNTING PRONOUNCEMENTS
For a discussion and analysis of recently issued accounting pronouncements and the impacts on Valvoline, refer to Note 1 in the Notes to Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.
CRITICAL ACCOUNTING ESTIMATES
The Company’s critical accounting estimates are described in Item 7 of Part II in Valvoline’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Management reassessed the critical accounting estimates as disclosed in the Annual Report on Form 10-K, and determined there were no changes in the six months ended March 31, 2026.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company’s market risks are discussed in Item 7A of Part II in Valvoline's Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Management reassessed the quantitative and qualitative market risk disclosures as described in the Annual Report on Form 10-K and determined there were no material changes to market risks in the six months ended March 31, 2026.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) are designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to Valvoline’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
The Company completed the acquisition of Breeze on December 1, 2025 as described herein in Note 3 of the Notes to Condensed Consolidated Financial Statements. The scope of management’s assessment of the effectiveness of the Company’s disclosure controls and procedures did not include the internal control over financial reporting of Breeze. This exclusion is in accordance with the SEC Staff’s general guidance that an assessment of a recently acquired business may be omitted from the scope of management’s assessment for one year following the acquisition. Breeze represented approximately 7% of net revenues for the six months ended March 31, 2026. Total assets of the acquired business represented approximately 21% of total consolidated assets as of March 31, 2026, consisting principally of acquired intangible assets, including goodwill.
Valvoline’s CEO and CFO, with the assistance of management, have evaluated the effectiveness of the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), and based upon such evaluation, have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures were not effective at the reasonable assurance level due to a material weakness in internal control over financial reporting as described below.
Notwithstanding the conclusion that disclosure controls and procedures were not effective as of March 31, 2026 due to the material weakness, management continued performing additional analyses and other procedures, including
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certain enhanced manual procedures and controls intended to ensure the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are fairly presented in all material respects. The material weakness did not result in any identified material misstatements in the current or prior period consolidated financial statements. Accordingly, the Company believes there are no material inaccuracies or omissions of material fact in its condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and that such financial statements present fairly, in all material respects, the financial position, results of operations and cash flows as of and for each of the periods presented herein in accordance with U.S. GAAP.
Changes in internal control over financial reporting
As a result of the Breeze acquisition, the Company has incorporated internal controls over significant processes specific to the acquisition that management believes are appropriate and necessary in consideration of the level of related integration. As the post-closing integration continues, the Company will continue to evaluate the internal controls and processes of Breeze and implement changes, where necessary. The Company anticipates a scope exception that excludes the acquired Breeze business from its evaluation of internal control over financial reporting as of September 30, 2026 as permitted by the SEC guidance for newly acquired businesses.
Other than as described above with respect to the Breeze acquisition and the remediation efforts discussed below, there have been no significant changes in Valvoline’s internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, Valvoline’s internal control over financial reporting.
Material Weakness in Internal Control over Financial Reporting
The sale of the former Global Products reportable segment on March 1, 2023 resulted in material changes in the Company’s internal control over financial reporting, including the implementation of a new enterprise resource planning system (“ERP”) on January 1, 2024. A material weakness in internal control over financial reporting was initially reported during the quarter ended March 31, 2024 due to the ERP implementation and the aggregation of related deficiencies due to ineffective information technology general controls (“ITGCs”) and the design of certain business process controls. While management has made substantial progress with its planned remedial measures, including remediation of the ITGC deficiencies that contributed to the previously reported material weakness as of September 30, 2025, the material weakness continued to exist with respect to the aggregation of deficiencies in the design of business process controls, as of March 31, 2026.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Although management has performed procedures to gain comfort that the condensed consolidated financial statements are fairly stated in all material respects, these control deficiencies aggregate to allow for the possibility that material misstatements could impact most financial statement accounts and disclosures that may not be prevented or detected in a timely manner. Accordingly, these control deficiencies aggregate within the control activities component of the COSO framework and constitute a material weakness. The material weakness did not result in any identified material misstatements to the condensed consolidated financial statements.
Remedial measures
Management has been actively developing, executing, and enhancing its remedial efforts, subject to the oversight of the Audit Committee of the Board of Directors, which began during the quarter ended March 31, 2024 following the ERP implementation. The remedial efforts undertaken to-date related to the remaining aggregated deficiencies in the design of business process controls included the following:
•Continued execution of manual control activities, analyses, and procedures, which were enhanced by the remediation of ITGCs, to address certain business process control deficiencies primarily attributed to the inadequate initial ERP system design;
•Continuation of support from an outside consulting firm to enhance management’s remediation design and implementation efforts, including project management and advice regarding best practices for documentation, design and execution of related transactional level business process controls;
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•Employing a risk-based approach to prioritize business process control design and documentation that mitigates significant financial statement risk, including inventory and revenue controls;
•Training relevant personnel to enhance rigor and documentation supporting the design and execution of business process controls;
•Establishing a controls governance committee to oversee the completion of remedial measures;
•Hiring additional personnel with internal control expertise and experience; and
•Supplementing review controls with certain pre-existing and new preventative transaction-level controls, enhancing documentation of the design of key control attributes, and conducting walkthroughs to identify the points in the process for significant classes of transactions where reasonably possible risks of material misstatement exist to validate the design effectiveness of responsive controls.
Substantial progress towards the remediation of the material weakness has been made through the remediation of the ITGC deficiencies in fiscal 2025 and the continued efforts to enhance business process controls.
Management has made substantial progress with certain design assessment activities related to the business process controls that aggregate to the material weakness. Evaluation of the controls’ design and operating effectiveness is ongoing as of the quarter ended March 31, 2026. Remediation of the business process control design deficiencies will conclude once the controls and related documentation are consistently executed for a sufficient period of time and are determined to be effective, through formal testing, which is expected to be completed in fiscal 2026.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the three months ended March 31, 2026, no director or officer, as defined in Rule 16a-1(f), of Valvoline adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non Rule 10b5-1 trading arrangement” as defined in Item 408 of Regulation S-K.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, Valvoline is party to lawsuits, claims and other legal proceedings that arise in the ordinary course of business. For a description of Valvoline's legal proceedings, refer to Note 8 of the Notes to Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
ITEM 1A. RISK FACTORS
During the period covered by this report, there were no material changes to the Company’s risk factors previously disclosed in Item 1A of Part I in Valvoline’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 6. EXHIBITS

10.1* | Form of Non-Employee Director Restricted Stock Unit Award Agreement pursuant to the Valvoline Inc. 2026 Omnibus Incentive Plan
10.2* | Form of Restricted Stock Unit Award Agreement pursuant to the Valvoline Inc. 2026 Omnibus Incentive Plan
31.1* | Certification of Lori A. Flees, Chief Executive Officer of Valvoline, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* | Certification of J. Kevin Willis, Chief Financial Officer of Valvoline, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32** | Certification of Lori A. Flees, Chief Executive Officer of Valvoline, and J. Kevin Willis, Chief Financial Officer of Valvoline, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH | XBRL Taxonomy Extension Schema Document.
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB | XBRL Taxonomy Extension Label Linkbase Document.
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

* Filed herewith.
** Furnished herewith.
™ Trademark, Valvoline or its subsidiaries, registered in various countries.
SM Service mark, Valvoline or its subsidiaries, registered in various countries.
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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.

| VALVOLINE INC.
| (Registrant)
May 7, 2026 | By: | /s/ J. Kevin Willis
|  | J. Kevin Willis
|  | Chief Financial Officer

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