(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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47-5632014
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $1.00 per share
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New York Stock Exchange
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Yes
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x
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No
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o
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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Yes
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¨
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No
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x
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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.
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Yes
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x
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No
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¨
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).
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Yes
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x
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No
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¨
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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x
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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.
o
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||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
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Yes
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¨
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No
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x
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ITEM 16.
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||
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•
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“Versum,” “Versum Materials,” “we,” “our,” “us” and “the company” refer to Versum Materials, Inc. and its consolidated subsidiaries for periods subsequent to the Separation and Distribution completed on October 1, 2016;
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•
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“Air Products” refers to Air Products and Chemicals, Inc. and its consolidated subsidiaries, not including, for all periods following the Separation and Distribution, Versum.
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•
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References to the “Separation” refer to the October 1, 2016 legal separation resulting in the allocation, transfer and assignment to Versum of the assets, liabilities and operations of Air Products’ Electronic Materials business and the creation, as a result of the Distribution, of a separate, publicly traded company, Versum.
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•
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References to the “Distribution” refer to the distribution by Air Products to its stockholders completed on October 1, 2016, of 100% of the outstanding shares of Versum.
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•
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The continued drive for chip productivity through improved scaling which we expect to drive the shift to new nodes and the need for new enabling materials;
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•
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Strong bit demand growth which we expect will continue to fuel underlying growth in the memory market, first increasing the demand for legacy materials and then driving the need for new materials as structural complexity increases;
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•
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The “Internet of Things”, cloud computing, need for data monitoring and storage which we expect will continue to drive the demand for semiconductors especially impacting legacy materials demand; and
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•
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Semiconductor growth in China and ultimately in other parts of the world which we expect will drive increased demand for future innovation and materials.
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•
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Advanced deposition materials (“ADM”) products include high purity specialty gases and chemicals, such as organosilane and organometallic precursors that are used to deposit thin films which comprise an IC;
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•
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Planarization (“PLA”) products include CMP slurries and post CMP cleans that are used to prepare chips with deposited thin films for the next stage of fabrication; and
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•
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Surface prep and clean (“SP&C”) formulated products are designed to selectively etch and remove debris and contamination during many stages of the wafer fabrication process including the advanced packaging activity.
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Segment
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Key Products
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Applications
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End Uses
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|||
Materials
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CMP Slurries
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PLA via polishing
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Semiconductors
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Post-CMP Cleans
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Cleaning after polishing
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Semiconductors
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Organosilanes
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Thin film deposition
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Semiconductors
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Organometallics
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Thin film deposition
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Semiconductors
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Formulated Cleans
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Post-etch cleaning, advanced packaging
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Semiconductors
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High-Purity Gases for Deposition & Metallization
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Thin film deposition
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Semiconductors
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Chamber Cleaning & Etching Gases
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Residue removal from deposition chambers and etching high aspect ratio features
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Semiconductors and Displays
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Ion Implantation Gases
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Doping thin films to alter electrical properties
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Semiconductors and LED
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Delivery Systems
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Ultra-High Purity Gases and Chemical Supply Systems
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Safe storage and delivery of gases, liquids and solids
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Semiconductors, Displays and LEDs
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Slurry Delivery Systems
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Mixing and delivery of CMP slurries
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Semiconductors
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Raw Material
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Segment
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Principal Product Category
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Specialty Silanes
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Materials
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Advanced Materials
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Tungsten Powder
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Materials
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Process Materials
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Metallic Oxide Abrasives
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Materials
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Advanced Materials
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Controllers
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DS&S
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Equipment
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Hydrogen Chloride
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Materials
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Process Materials
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Hydrogen Fluoride
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Materials
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Process Materials
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Etchant Gases
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Materials
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Process Materials
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Nitrous Oxide
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Materials
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Process Materials
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Phosphine
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Materials
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Process Materials
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Ammonia
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Materials
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Process Materials
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•
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the United Kingdom’s formal trigger of the process for its exit from the European Union, and related negotiations, may cause instability in European economies and may negatively impact the outlook for the global economy;
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•
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political, economic and social instability, including hyperinflationary conditions, regional and international hostilities and regional and international responses to these hostilities;
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•
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unanticipated government actions, such as trade wars, nationalization of private enterprises and expropriation risk;
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•
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failure to maintain compliance with multiple legal and regulatory systems and increased difficulty in ensuring compliance by employees, agents, and contractors with the laws of multiple jurisdictions;
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•
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increased difficulty in controlling and maintaining foreign operations from the United States;
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•
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potential difficulties in protecting intellectual property;
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•
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controls on the investment, repatriation and exchange rates of capital;
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•
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potentially adverse tax consequences, including the possible imposition of new taxes, a new corporate tax regime, increased taxes on repatriation or other payments, or challenges to the taxation of the Separation from Air Products in connection with the spin-off in such countries; and
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•
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cancellation of contractual relationships within these jurisdictions without full compensation for loss.
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•
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We will need to use a substantial portion of our available cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities.
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•
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We may have difficulty obtaining financing in the future for working capital, capital expenditures, research and development, acquisitions or other purposes.
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•
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Our debt level increases our vulnerability to general economic downturns and adverse industry conditions.
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•
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Our debt level could limit our flexibility in planning for, or reacting to, changes in our business and in our industry in general.
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•
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If our foreign cash is needed to pay interest or principal on our U.S. debt, we may be required to accrue and pay material amounts of tax on repatriation of that cash.
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•
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A portion of our debt has a variable interest rate, and if interest rates increase, our interest expense could increase significantly, affecting earnings and reducing cash flow available for working capital, expenditures, acquisitions, and other purposes.
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•
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Our substantial amount of debt and the amount we need to pay to service our debt obligations could place us at a competitive disadvantage compared to any competitors that have less debt.
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•
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Our failure to comply with the financial and other restrictive covenants in our debt instruments which, among other things, may require us to maintain specified financial ratios and limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could cause our lenders to terminate commitments under our debt agreements, declare all amounts, including accrued interest, due and payable, and enforce their rights in respect of collateral.
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•
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the inability of our stockholders to act by written consent;
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•
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the inability of our stockholders to call special meetings;
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•
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rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;
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•
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the right of our board of directors to issue preferred stock without stockholder approval; and
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•
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the ability of our directors, and not stockholders, to fill vacancies (including those resulting from an enlargement of our board of directors) on our board of directors.
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•
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Prior to our Separation, our business was operated by Air Products as part of its broader corporate organization, rather than as an independent, publicly traded company. In addition, prior to our Separation, Air Products, or one of its affiliates, performed significant corporate functions for us, including information technology, accounting, tax, finance, legal, insurance, human resources, compliance and other administrative activities. Our historical financial statements reflect allocations of corporate expenses from Air Products for these and similar functions, which are not necessarily representative of the costs we will incur for similar services as an independent company. We are responsible for the additional costs associated with being an independent, publicly traded company, including costs related to corporate governance and external reporting;
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•
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Our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, historically have been satisfied as part of the company-wide cash management practices of Air Products. While our business historically has generated sufficient cash to finance our working capital and other cash requirements, we no longer have access to Air Products’ cash pool. We may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities or other arrangements; and
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•
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Other significant changes may occur in our cost structure, management, financing, tax profile and business operations as a result of our operating as a company separate from Air Products. The historical combined financial data include deferred tax assets and associated valuation allowances for U.S. and certain foreign net operating losses and tax credit carryforwards that were utilized against Air Products income and are not available as future deductions or credits on our tax returns.
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•
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entering into any transaction resulting in the acquisition of 40 percent or more of our stock or substantially all of our assets, whether by merger or otherwise;
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•
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merging, consolidating or liquidating;
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•
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issuing equity securities beyond certain thresholds;
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•
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repurchasing our capital stock;
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•
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ceasing to actively conduct our business; or
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•
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taking or failing to take any other action that would cause the Distribution or certain related transactions to fail to qualify as tax-free.
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Region
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Segment
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Location
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Owned/Leased
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Americas
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Materials
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Tempe, AZ
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Lease
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Carlsbad, CA
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Own
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Catoosa, OK
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Lease
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Allentown, PA
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Lease
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Dallas, TX
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Own
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Tamaqua, PA
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Own
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Indianapolis, IN
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Lease
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DS&S
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Allentown, PA
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Own
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Asia
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Materials
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Banwol, South Korea
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Own
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Siheung, South Korea
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Own
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Pyeongtaek, South Korea
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Own
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Ulsan, South Korea
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Own
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Nanke, Taiwan
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Own
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DS&S
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Ansan, South Korea
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Own
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Americas
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Materials
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Tempe, AZ
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Lease
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Carlsbad, CA
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Own
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Tamaqua, PA
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Own
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Allentown, PA
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Lease
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Indianapolis, IN
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Lease
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Asia
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Materials
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Hsinchu, Taiwan
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Lease
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Banwol, South Korea
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Lease
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High
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Low
|
||||
First quarter
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$
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28.72
|
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|
$
|
22.46
|
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Second quarter
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31.17
|
|
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26.78
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|
||
Third quarter
|
33.65
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28.91
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|
||
Fourth quarter
|
38.82
|
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|
31.35
|
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October 3, 2016
|
|
December 31, 2016
|
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
||||||||||
Versum Materials, Inc.
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
109
|
|
|
$
|
116
|
|
|
$
|
139
|
|
S&P 1500 Specialty Chemicals
|
100
|
|
|
97
|
|
|
106
|
|
|
111
|
|
|
113
|
|
|||||
S&P 400 Midcap Index
|
100
|
|
|
108
|
|
|
112
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|
|
113
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|
|
116
|
|
|||||
Philadelphia Semiconductor Index
|
100
|
|
|
109
|
|
|
122
|
|
|
125
|
|
|
141
|
|
|
As of and for the year ended September 30,
|
||||||||||||||||||
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2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
(In millions, except for per share data)
|
|
||||||||||||||||||
Operating Results
(A)
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|
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|
||||||||||
Sales
|
$
|
1,126.9
|
|
|
$
|
970.1
|
|
|
$
|
1,009.3
|
|
|
$
|
942.5
|
|
|
$
|
852.8
|
|
Operating income (loss)
|
300.1
|
|
|
278.9
|
|
|
222.0
|
|
|
161.2
|
|
|
(46.5
|
)
|
|||||
Net income (loss) attributable to Versum
|
193.0
|
|
|
212.0
|
|
|
184.1
|
|
|
123.6
|
|
|
(80.6
|
)
|
|||||
Non-GAAP Measure
(B)
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
|
371.6
|
|
|
326.9
|
|
|
301.5
|
|
|
223.7
|
|
|
145.1
|
|
|||||
Basic Earnings Per Share
(C)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Versum
|
1.78
|
|
|
1.95
|
|
|
1.69
|
|
|
1.14
|
|
|
(0.74
|
)
|
|||||
Basic shares
|
108.7
|
|
|
108.7
|
|
|
108.7
|
|
|
108.7
|
|
|
108.7
|
|
|||||
Diluted Earnings Per Share
(C)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Versum
|
1.76
|
|
|
1.95
|
|
|
1.69
|
|
|
1.14
|
|
|
(0.74
|
)
|
|||||
Diluted shares
|
109.4
|
|
|
108.7
|
|
|
108.7
|
|
|
108.7
|
|
|
108.7
|
|
|||||
Year-End Financial Position
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
(D)
|
1,246.8
|
|
|
1,043.8
|
|
|
887.4
|
|
|
1,034.0
|
|
|
1,112.8
|
|
|||||
Total debt
(E)
|
982.8
|
|
|
986.1
|
|
|
—
|
|
|
5.1
|
|
|
6.7
|
|
|||||
Other Financial Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Business separation, restructuring and cost reduction actions
|
25.5
|
|
|
0.9
|
|
|
21.6
|
|
|
1.3
|
|
|
132.6
|
|
|||||
Research and development
|
45.1
|
|
|
43.9
|
|
|
40.7
|
|
|
38.4
|
|
|
34.6
|
|
|||||
Depreciation and amortization
|
46.0
|
|
|
46.9
|
|
|
56.9
|
|
|
59.5
|
|
|
56.9
|
|
(A)
|
Unless otherwise stated, selected financial data is presented on a GAAP basis. Our operating results were impacted by certain items which management does not believe to be indicative of ongoing business trends and are excluded from the non-GAAP measure.
|
(B)
|
Refer to the reconciliation of net income to Adjusted EBITDA in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7, of this Annual Report on Form 10-K.
|
(C)
|
Versum earnings per share for 2016, 2015, 2014 and 2013 were calculated using the shares that were distributed to Air Products stockholders immediately following the Separation. For periods prior to the Separation it is assumed that there are no dilutive equity instruments as there were no Versum equity awards outstanding prior to the Separation.
|
(D)
|
Reflects adoption of guidance on the presentation of deferred income taxes on a retrospective basis as of September 30, 2016.
|
(E)
|
Total debt includes long-term debt, current portion of long-term debt, and short-term borrowings as of the end of the period shown above.
|
•
|
Sales of
$1,126.9 million
increased
$156.8 million
, or
16.2%
. Underlying sales, which excludes changes in currency, increased by
15%
due to higher volumes of
18%
offset by unfavorable price/mix of
3%
. The increase in sales was driven largely by strong volumes in both the Materials segment and the DS&S segment partially offset by unfavorable price/mix in the Materials segment primarily due to price pressure in specific Process Materials product lines. Currency changes had a favorable impact on sales of
1%
.
|
•
|
Operating income of
$300.1 million
increased
$21.2 million
, or
7.6%
, due to higher volumes of $88 million and favorable currency impacts of $8 million partially offset by unfavorable price/mix of $25 million, higher costs of $25 million including the increased cost of being a separate company and higher business separation, restructuring and cost reduction actions of $25 million. Operating income margin was
26.6%
,
down
210
basis points (“bp”).
|
•
|
Adjusted EBITDA of
$371.6 million
increased
$44.7 million
, or
13.7%
,
primarily due to higher volumes of $88 million and favorable currency impacts of $8 million partially offset by higher operating costs of $26 million and unfavorable price/mix of $25 million.
The major drivers of the improved performance were the strong volumes in both the Materials and DS&S segments, partially offset by expected higher operating and selling and administrative costs associated with
becoming an independent company and unfavorable price/mix in the Materials segment, primarily in Process Materials
.
Adjusted EBITDA margin was
33.0%
,
down
70
bp.
|
•
|
Cash flows from operations was
$262.5 million
, with cash used for capital spending of
$64.0 million
, including
$25.2 million
of capital spending related to one-time restructuring activities.
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Sales
|
$
|
1,126.9
|
|
|
$
|
970.1
|
|
|
$
|
1,009.3
|
|
Cost of sales
|
636.9
|
|
|
539.5
|
|
|
616.5
|
|
|||
Selling and administrative
|
125.7
|
|
|
109.8
|
|
|
109.6
|
|
|||
Research and development
|
45.1
|
|
|
43.9
|
|
|
40.7
|
|
|||
Business separation, restructuring and cost reduction actions
|
25.5
|
|
|
0.9
|
|
|
21.6
|
|
|||
Other (income) expense, net
|
(6.4
|
)
|
|
(2.9
|
)
|
|
(1.1
|
)
|
|||
Operating Income
|
300.1
|
|
|
278.9
|
|
|
222.0
|
|
|||
Equity affiliates’ income
|
—
|
|
|
0.2
|
|
|
1.0
|
|
|||
Interest expense
|
47.4
|
|
|
0.4
|
|
|
0.1
|
|
|||
Income Before Taxes
|
252.7
|
|
|
278.7
|
|
|
222.9
|
|
|||
Income tax provision
|
52.8
|
|
|
58.8
|
|
|
31.7
|
|
|||
Net Income
|
199.9
|
|
|
219.9
|
|
|
191.2
|
|
|||
Less: Net Income Attributable to Non-controlling Interests
|
6.9
|
|
|
7.9
|
|
|
7.1
|
|
|||
Net Income Attributable to Versum
|
$
|
193.0
|
|
|
$
|
212.0
|
|
|
$
|
184.1
|
|
Non-GAAP Basis
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
371.6
|
|
|
$
|
326.9
|
|
|
$
|
301.5
|
|
|
% Change from Prior Year
|
|
Sales
|
|
|
Underlying business
|
|
|
Volume
|
18
|
%
|
Price/mix
|
(3
|
)%
|
Currency
|
1
|
%
|
Total Versum Change
|
16
|
%
|
|
% Change from Prior Year
|
|
Sales
|
|
|
Underlying business
|
|
|
Volume
|
(5
|
)%
|
Price/mix
|
3
|
%
|
Currency
|
(2
|
)%
|
Total Versum Change
|
(4
|
)%
|
•
|
Our measures exclude expenses related to business separation, restructuring and cost reduction actions, as detailed in
Note 5
, “
Business Separation, Restructuring and Cost Reduction Actions
”, to our Annual Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which we do not consider to be representative of our underlying business operations. However, these disclosed items represent costs to Versum.
|
•
|
Though not business operating costs, interest expense and income tax provision represent ongoing costs of Versum.
|
•
|
Depreciation, amortization, and impairment charges represent the wear and tear or reduction in value of the plant, equipment, and intangible assets which permit us to manufacture and market our products.
|
•
|
Other companies may define non-GAAP measures differently than we do, limiting their usefulness as comparative measures.
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions, except percentages)
|
|
||||||||||
Net Income Attributable to Versum
|
$
|
193.0
|
|
|
$
|
212.0
|
|
|
$
|
184.1
|
|
Add: Interest expense
|
47.4
|
|
|
0.4
|
|
|
0.1
|
|
|||
Add: Income tax provision
|
52.8
|
|
|
58.8
|
|
|
31.7
|
|
|||
Add: Depreciation and amortization
|
46.0
|
|
|
46.9
|
|
|
56.9
|
|
|||
Add: Non-controlling interests
|
6.9
|
|
|
7.9
|
|
|
7.1
|
|
|||
Add: Business separation, restructuring and cost reduction actions
|
25.5
|
|
|
0.9
|
|
|
21.6
|
|
|||
Adjusted EBITDA
|
$
|
371.6
|
|
|
$
|
326.9
|
|
|
$
|
301.5
|
|
Adjusted EBITDA Margin
|
33.0
|
%
|
|
33.7
|
%
|
|
29.9
|
%
|
|||
Change from prior year
|
$
|
44.7
|
|
|
$
|
25.4
|
|
|
$
|
77.8
|
|
% change from prior year
|
13.7
|
%
|
|
8.4
|
%
|
|
34.8
|
%
|
Sales
|
|
|
|
|
|
||||||
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
||||||||||
Materials
|
$
|
829.7
|
|
|
$
|
756.7
|
|
|
$
|
743.4
|
|
DS&S
|
293.6
|
|
|
213.4
|
|
|
265.9
|
|
|||
Corporate
|
3.6
|
|
|
—
|
|
|
—
|
|
|||
Total Company Sales
|
$
|
1,126.9
|
|
|
$
|
970.1
|
|
|
$
|
1,009.3
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions, except percentages)
|
|
|
|
|
|
||||||
Materials
|
|
|
|
|
|
||||||
Operating income
|
$
|
274.4
|
|
|
$
|
252.3
|
|
|
$
|
213.7
|
|
Add: Depreciation and amortization
|
43.1
|
|
|
44.4
|
|
|
48.1
|
|
|||
Add: Equity affiliates’ income
|
—
|
|
|
0.2
|
|
|
1.0
|
|
|||
Segment Adjusted EBITDA
|
$
|
317.5
|
|
|
$
|
296.9
|
|
|
$
|
262.8
|
|
Segment Adjusted EBITDA margin
(A)
|
38.3
|
%
|
|
39.2
|
%
|
|
35.4
|
%
|
|||
DS&S
|
|
|
|
|
|
||||||
Operating income
|
$
|
71.7
|
|
|
$
|
50.8
|
|
|
$
|
49.1
|
|
Add: Depreciation and amortization
|
1.4
|
|
|
2.1
|
|
|
8.3
|
|
|||
Segment Adjusted EBITDA
|
$
|
73.1
|
|
|
$
|
52.9
|
|
|
$
|
57.4
|
|
Segment Adjusted EBITDA margin
(A)
|
24.9
|
%
|
|
24.8
|
%
|
|
21.6
|
%
|
|||
Corporate
|
|
|
|
|
|
||||||
Operating loss
|
$
|
(20.5
|
)
|
|
$
|
(23.3
|
)
|
|
$
|
(19.2
|
)
|
Add: Depreciation and amortization
|
1.5
|
|
|
0.4
|
|
|
0.5
|
|
|||
Segment Adjusted EBITDA
|
$
|
(19.0
|
)
|
|
$
|
(22.9
|
)
|
|
$
|
(18.7
|
)
|
|
|
|
|
|
|
||||||
Total Versum Adjusted EBITDA
|
$
|
371.6
|
|
|
$
|
326.9
|
|
|
$
|
301.5
|
|
(A)
|
Segment adjusted EBITDA margin is calculated by dividing segment Adjusted EBITDA by segment sales.
|
|
Year Ended September 30,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating Income
|
|
||||||||||
Segment total
|
$
|
325.6
|
|
|
$
|
279.8
|
|
|
$
|
243.6
|
|
Business separation, restructuring and cost reduction actions
|
(25.5
|
)
|
|
(0.9
|
)
|
|
(21.6
|
)
|
|||
Consolidated Total
|
$
|
300.1
|
|
|
$
|
278.9
|
|
|
$
|
222.0
|
|
|
% Change from Prior Year
|
||||
|
2017
|
|
2016
|
||
Sales
|
|
|
|
||
Underlying business
|
|
|
|
||
Volume
|
12
|
%
|
|
—
|
%
|
Price/mix
|
(3
|
)%
|
|
3
|
%
|
Currency
|
1
|
%
|
|
(1
|
)%
|
Total Materials Sales Change
|
10
|
%
|
|
2
|
%
|
|
% Change from Prior Year
|
||||
|
2017
|
|
2016
|
||
Sales
|
|
|
|
||
Underlying business
|
|
|
|
||
Volume
|
38
|
%
|
|
(19
|
)%
|
Price/mix
|
—
|
%
|
|
—
|
%
|
Currency
|
—
|
%
|
|
(1
|
)%
|
Total DS&S Sales Change
|
38
|
%
|
|
(20
|
)%
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
||||||||||
Operating activities
|
$
|
262.5
|
|
|
$
|
253.4
|
|
|
$
|
274.4
|
|
Investing activities
|
(73.6
|
)
|
|
(61.9
|
)
|
|
(19.7
|
)
|
|||
Financing activities
|
(24.7
|
)
|
|
(105.5
|
)
|
|
(285.3
|
)
|
|
|
|
Payments Due for Year Ending September 30,
|
||||||||||||||||||||||||
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||||
(In millions)
|
|
||||||||||||||||||||||||||
Operating leases
|
$
|
33.6
|
|
|
$
|
10.1
|
|
|
$
|
8.3
|
|
|
$
|
6.7
|
|
|
$
|
4.1
|
|
|
$
|
3.0
|
|
|
$
|
1.4
|
|
Unconditional purchase obligations
|
30.3
|
|
|
30.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Long-term debt obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt
|
994.3
|
|
|
5.8
|
|
|
5.8
|
|
|
5.8
|
|
|
5.8
|
|
|
5.8
|
|
|
965.3
|
|
|||||||
Expected interest payments on debt
|
275.3
|
|
|
43.7
|
|
|
42.0
|
|
|
41.8
|
|
|
41.7
|
|
|
41.5
|
|
|
64.6
|
|
|||||||
Total Contractual Obligations
|
$
|
1,333.5
|
|
|
$
|
89.9
|
|
|
$
|
56.1
|
|
|
$
|
54.3
|
|
|
$
|
51.6
|
|
|
$
|
50.3
|
|
|
$
|
1,031.3
|
|
|
Page No.
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions, except per share data)
|
|
|
|
|
|
||||||
Sales
|
$
|
1,126.9
|
|
|
$
|
970.1
|
|
|
$
|
1,009.3
|
|
Cost of sales
|
636.9
|
|
|
539.5
|
|
|
616.5
|
|
|||
Selling and administrative
|
125.7
|
|
|
109.8
|
|
|
109.6
|
|
|||
Research and development
|
45.1
|
|
|
43.9
|
|
|
40.7
|
|
|||
Business separation, restructuring and cost reduction actions
|
25.5
|
|
|
0.9
|
|
|
21.6
|
|
|||
Other (income) expense, net
|
(6.4
|
)
|
|
(2.9
|
)
|
|
(1.1
|
)
|
|||
Operating Income
|
300.1
|
|
|
278.9
|
|
|
222.0
|
|
|||
Equity affiliates’ income
|
—
|
|
|
0.2
|
|
|
1.0
|
|
|||
Interest expense
|
47.4
|
|
|
0.4
|
|
|
0.1
|
|
|||
Income Before Taxes
|
252.7
|
|
|
278.7
|
|
|
222.9
|
|
|||
Income tax provision
|
52.8
|
|
|
58.8
|
|
|
31.7
|
|
|||
Net Income
|
199.9
|
|
|
219.9
|
|
|
191.2
|
|
|||
Less: Net Income Attributable to Non-controlling Interests
|
6.9
|
|
|
7.9
|
|
|
7.1
|
|
|||
Net Income Attributable to Versum
|
$
|
193.0
|
|
|
$
|
212.0
|
|
|
$
|
184.1
|
|
Net income attributable to Versum per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.78
|
|
|
$
|
1.95
|
|
|
$
|
1.69
|
|
Diluted
|
$
|
1.76
|
|
|
$
|
1.95
|
|
|
$
|
1.69
|
|
Shares used in computing per common share amounts:
|
|
|
|
|
|
||||||
Basic
|
108.7
|
|
|
108.7
|
|
|
108.7
|
|
|||
Diluted
|
109.4
|
|
|
108.7
|
|
|
108.7
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Net Income
|
$
|
199.9
|
|
|
$
|
219.9
|
|
|
$
|
191.2
|
|
Other Comprehensive Income (Loss), net of tax
|
|
|
|
|
|
||||||
Translation adjustments, net of tax of $0, $0, and $0.7
|
(4.9
|
)
|
|
22.8
|
|
|
(48.4
|
)
|
|||
Pension activity, net of tax of $0.5, $0, and $0
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|||
Total Other Comprehensive Income (Loss)
|
(7.1
|
)
|
|
22.8
|
|
|
(48.4
|
)
|
|||
Comprehensive Income
|
192.8
|
|
|
242.7
|
|
|
142.8
|
|
|||
Net Income Attributable to Non-controlling Interests
|
6.9
|
|
|
7.9
|
|
|
7.1
|
|
|||
Other Comprehensive Loss Attributable to Non-controlling Interests
|
1.3
|
|
|
—
|
|
|
(2.1
|
)
|
|||
Comprehensive Income Attributable to Versum
|
$
|
184.6
|
|
|
$
|
234.8
|
|
|
$
|
137.8
|
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
(In millions, except share data)
|
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash items
|
$
|
271.4
|
|
|
$
|
105.6
|
|
Restricted cash
|
—
|
|
|
69.6
|
|
||
Trade receivables, net
|
145.3
|
|
|
130.0
|
|
||
Inventories
|
151.6
|
|
|
127.4
|
|
||
Contracts in progress, less progress billings
|
15.6
|
|
|
19.2
|
|
||
Prepaid expenses
|
12.2
|
|
|
3.8
|
|
||
Other current assets
|
10.8
|
|
|
12.4
|
|
||
Total Current Assets
|
606.9
|
|
|
468.0
|
|
||
Plant and equipment, net
|
330.3
|
|
|
296.5
|
|
||
Goodwill
|
182.6
|
|
|
180.1
|
|
||
Intangible assets, net
|
70.8
|
|
|
74.8
|
|
||
Other noncurrent assets
|
56.2
|
|
|
24.4
|
|
||
Total Non-current Assets
|
639.9
|
|
|
575.8
|
|
||
Total Assets
|
$
|
1,246.8
|
|
|
$
|
1,043.8
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Payables and accrued liabilities
|
$
|
120.8
|
|
|
$
|
85.8
|
|
Accrued income taxes
|
31.4
|
|
|
12.7
|
|
||
Current portion of long-term debt
|
5.8
|
|
|
5.8
|
|
||
Total Current Liabilities
|
158.0
|
|
|
104.3
|
|
||
Long-term debt
|
977.0
|
|
|
980.3
|
|
||
Deferred tax liabilities
|
37.3
|
|
|
42.8
|
|
||
Other noncurrent liabilities
|
49.9
|
|
|
19.8
|
|
||
Total Non-current Liabilities
|
1,064.2
|
|
|
1,042.9
|
|
||
Total Liabilities
|
1,222.2
|
|
|
1,147.2
|
|
||
Commitments and Contingencies - See Note 21
|
|
|
|
||||
Stockholders’ Equity (Deficit)
|
|
|
|
||||
Air Products’ net investment
|
—
|
|
|
(127.3
|
)
|
||
Common stock (par value $1 per share; 250,000,000 shares; outstanding 108,815,330)
|
108.8
|
|
|
—
|
|
||
Capital in excess of par
|
4.8
|
|
|
—
|
|
||
Accumulated deficit
|
(105.2
|
)
|
|
—
|
|
||
Accumulated other comprehensive income (loss)
|
(18.4
|
)
|
|
(10.0
|
)
|
||
Total Versum’s Stockholders’ Deficit
|
(10.0
|
)
|
|
(137.3
|
)
|
||
Non-controlling Interests
|
34.6
|
|
|
33.9
|
|
||
Total Stockholders’ Equity (Deficit)
|
24.6
|
|
|
(103.4
|
)
|
||
Total Liabilities and Stockholders’ Equity (Deficit)
|
$
|
1,246.8
|
|
|
$
|
1,043.8
|
|
|
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
199.9
|
|
|
$
|
219.9
|
|
|
$
|
191.2
|
|
Less: Net income attributable to non-controlling interests
|
6.9
|
|
|
7.9
|
|
|
7.1
|
|
|||
Net income attributable to Versum
|
193.0
|
|
|
212.0
|
|
|
184.1
|
|
|||
Adjustments to reconcile income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
46.0
|
|
|
46.9
|
|
|
56.9
|
|
|||
Deferred income taxes
|
2.8
|
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|||
Undistributed earnings of unconsolidated affiliates
|
—
|
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|||
Gain on sale of assets
|
(2.0
|
)
|
|
(1.0
|
)
|
|
(0.6
|
)
|
|||
Share-based compensation
|
8.3
|
|
|
5.0
|
|
|
4.7
|
|
|||
(Gain) loss on sale of long-lived assets associated with restructuring
|
—
|
|
|
(3.2
|
)
|
|
7.2
|
|
|||
Other adjustments
|
5.9
|
|
|
0.6
|
|
|
6.9
|
|
|||
Working capital changes that provided (used) cash:
|
|
|
|
|
|
||||||
Trade receivables
|
(16.3
|
)
|
|
(2.1
|
)
|
|
(3.4
|
)
|
|||
Inventories
|
(22.6
|
)
|
|
0.3
|
|
|
(0.7
|
)
|
|||
Contracts in progress, less progress billings
|
4.4
|
|
|
(9.2
|
)
|
|
20.7
|
|
|||
Payables and accrued liabilities
|
16.5
|
|
|
(5.1
|
)
|
|
4.1
|
|
|||
Accrued income taxes
|
5.9
|
|
|
11.0
|
|
|
(4.7
|
)
|
|||
Other working capital
|
20.6
|
|
|
(1.5
|
)
|
|
0.1
|
|
|||
Cash Provided by Operating Activities
|
262.5
|
|
|
253.4
|
|
|
274.4
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Additions to plant and equipment
|
(64.0
|
)
|
|
(35.8
|
)
|
|
(22.1
|
)
|
|||
Proceeds from sale of assets and investments
|
3.6
|
|
|
43.4
|
|
|
2.4
|
|
|||
Acquisition of business
|
(13.2
|
)
|
|
—
|
|
|
—
|
|
|||
Transfer to restricted cash
|
—
|
|
|
(69.5
|
)
|
|
—
|
|
|||
Cash Used for Investing Activities
|
(73.6
|
)
|
|
(61.9
|
)
|
|
(19.7
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
572.1
|
|
|
—
|
|
|||
Payments on long-term debt
|
(5.8
|
)
|
|
—
|
|
|
(5.1
|
)
|
|||
Debt issuance costs
|
(1.7
|
)
|
|
(9.3
|
)
|
|
—
|
|
|||
Net transfers to Air Products
|
—
|
|
|
(660.7
|
)
|
|
(270.4
|
)
|
|||
Dividends paid to shareholders
|
(10.9
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid to non-controlling interests
|
(7.6
|
)
|
|
(7.6
|
)
|
|
(9.8
|
)
|
|||
Other financing activities
|
1.3
|
|
|
—
|
|
|
—
|
|
|||
Cash Used for Financing Activities
|
(24.7
|
)
|
|
(105.5
|
)
|
|
(285.3
|
)
|
|||
Effect of Exchange Rate Changes on Cash
|
1.6
|
|
|
1.8
|
|
|
(1.2
|
)
|
|||
Increase (Decrease) in Cash and Cash Items
|
165.8
|
|
|
87.8
|
|
|
(31.8
|
)
|
|||
Cash and Cash items-Beginning of Year
|
105.6
|
|
|
17.8
|
|
|
49.6
|
|
|||
Cash and Cash items-End of Period
|
$
|
271.4
|
|
|
$
|
105.6
|
|
|
$
|
17.8
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid for interest on debt
|
$
|
43.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common Stock
|
|
Capital in Excess of Par
|
|
Accumulated Deficit
|
|
Air Products’ Net
Investment |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total Versum’s Stockholders’
Equity (Deficit) |
|
Non-controlling
Interests |
|
Total
|
||||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, September 30, 2014
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
822.5
|
|
|
$
|
13.5
|
|
|
$
|
836.0
|
|
|
$
|
37.4
|
|
|
$
|
873.4
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
184.1
|
|
|
—
|
|
|
184.1
|
|
|
7.1
|
|
|
191.2
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46.3
|
)
|
|
(46.3
|
)
|
|
(2.1
|
)
|
|
(48.4
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
||||||||
Dividends to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.8
|
)
|
|
(9.8
|
)
|
||||||||
Net transfers to Air Products
|
—
|
|
|
—
|
|
|
—
|
|
|
(269.8
|
)
|
|
—
|
|
|
(269.8
|
)
|
|
(0.6
|
)
|
|
(270.4
|
)
|
||||||||
Balance, September 30, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
741.5
|
|
|
$
|
(32.8
|
)
|
|
$
|
708.7
|
|
|
$
|
32.0
|
|
|
$
|
740.7
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
212.0
|
|
|
—
|
|
|
212.0
|
|
|
7.9
|
|
|
219.9
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.8
|
|
|
22.8
|
|
|
—
|
|
|
22.8
|
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
||||||||
Dividends to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
|
(7.6
|
)
|
||||||||
Net transfers to Air Products
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,085.8
|
)
|
|
—
|
|
|
(1,085.8
|
)
|
|
1.6
|
|
|
(1,084.2
|
)
|
||||||||
Balance, September 30, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(127.3
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
(137.3
|
)
|
|
$
|
33.9
|
|
|
$
|
(103.4
|
)
|
Net income
|
—
|
|
|
—
|
|
|
193.0
|
|
|
—
|
|
|
—
|
|
|
193.0
|
|
|
6.9
|
|
|
199.9
|
|
||||||||
Net transfers to Air Products
|
—
|
|
|
—
|
|
|
(298.2
|
)
|
|
135.4
|
|
|
(2.4
|
)
|
|
(165.2
|
)
|
|
0.1
|
|
|
(165.1
|
)
|
||||||||
Reclassification of Air Products' net investment to additional paid in capital
|
—
|
|
|
8.1
|
|
|
—
|
|
|
(8.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Cash dividend paid
|
—
|
|
|
(10.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.9
|
)
|
|
—
|
|
|
(10.9
|
)
|
||||||||
Issuance of common stock at separation
|
108.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108.7
|
|
|
—
|
|
|
108.7
|
|
||||||||
Issuance of common stock through shared based compensation plans
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
(6.0
|
)
|
|
1.3
|
|
|
(4.7
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
7.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|
—
|
|
|
7.6
|
|
||||||||
Dividends to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
|
(7.6
|
)
|
||||||||
Balance, September 30, 2017
|
$
|
108.8
|
|
|
$
|
4.8
|
|
|
$
|
(105.2
|
)
|
|
$
|
—
|
|
|
$
|
(18.4
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
34.6
|
|
|
$
|
24.6
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
3.6
|
|
Selling and administrative
|
—
|
|
|
16.8
|
|
|
17.8
|
|
|||
Research and development
|
—
|
|
|
1.0
|
|
|
1.4
|
|
|||
Business restructuring and cost reduction actions
|
—
|
|
|
0.7
|
|
|
3.5
|
|
|||
Total Allocated Costs
|
$
|
—
|
|
|
$
|
21.3
|
|
|
$
|
26.3
|
|
|
Severance and
Other Benefits
|
|
Asset
Actions/Other
|
|
Total
|
||||||
(In millions)
|
|
|
|
|
|
||||||
September 30, 2014
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
2015 Charge
|
14.4
|
|
|
7.2
|
|
|
21.6
|
|
|||
Cash payments
(A)
|
(11.2
|
)
|
|
—
|
|
|
(11.2
|
)
|
|||
Non-cash expenses
|
—
|
|
|
(7.2
|
)
|
|
(7.2
|
)
|
|||
September 30, 2015
|
$
|
4.1
|
|
|
$
|
—
|
|
|
$
|
4.1
|
|
2016 Charge
|
2.5
|
|
|
(3.2
|
)
|
|
(0.7
|
)
|
|||
Cash (payments) receipts
(A)
|
(6.0
|
)
|
|
4.2
|
|
|
(1.8
|
)
|
|||
Non-cash expenses
|
—
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|||
September 30, 2016
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
2017 Charge
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|||
Cash payments
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
|||
Non-cash expenses
|
—
|
|
|
—
|
|
|
—
|
|
|||
September 30, 2017
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
(A)
|
Cash payments include an allocation of severance and other benefits of Air Products’ employees within its Corporate and other segment which were paid by Air Products.
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
(In millions)
|
|
|
|
||||
Inventories at FIFO cost
|
|
|
|
||||
Finished goods
|
$
|
87.6
|
|
|
$
|
94.0
|
|
Work in process
|
20.3
|
|
|
12.3
|
|
||
Raw materials, supplies and other
|
52.5
|
|
|
29.4
|
|
||
|
160.4
|
|
|
135.7
|
|
||
Less: Excess of FIFO cost over LIFO cost
|
(8.8
|
)
|
|
(8.3
|
)
|
||
Inventories
|
$
|
151.6
|
|
|
$
|
127.4
|
|
|
September 30,
|
||||||||
|
Useful Life
in years
|
|
2017
|
|
2016
|
||||
(In millions, except useful life)
|
|
|
|
||||||
Land
|
|
|
$
|
21.8
|
|
|
$
|
21.9
|
|
Buildings
|
30
|
|
149.3
|
|
|
147.1
|
|
||
Machinery and Equipment
|
|
|
|
|
|
||||
Production facilities
|
10 to 15
|
|
479.9
|
|
|
433.6
|
|
||
Distribution and other
(A)
|
5 to 25
|
|
252.1
|
|
|
255.9
|
|
||
Total machinery and equipment
|
|
|
732.0
|
|
|
689.5
|
|
||
Construction in progress
|
|
|
52.1
|
|
|
26.2
|
|
||
Plant and equipment, at cost
|
|
|
955.2
|
|
|
884.7
|
|
||
Less: accumulated depreciation
|
|
|
624.9
|
|
|
588.2
|
|
||
Plant and equipment, net
|
|
|
$
|
330.3
|
|
|
$
|
296.5
|
|
(A)
|
The depreciable lives for various types of distribution equipment are
10
to
25
years for cylinders, depending on the nature and properties of the product, and generally
20
years for other distribution equipment such as tanks and trailers.
|
|
Materials
|
|
Delivery
Systems and
Services
|
|
Total
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Balance at September 30, 2015
|
$
|
150.6
|
|
|
$
|
16.4
|
|
|
$
|
167.0
|
|
Currency translation adjustment
|
12.0
|
|
|
1.1
|
|
|
13.1
|
|
|||
Balance at September 30, 2016
|
$
|
162.6
|
|
|
$
|
17.5
|
|
|
$
|
180.1
|
|
Acquisition (Note 23)
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|||
Currency translation adjustment
|
(2.3
|
)
|
|
(0.2
|
)
|
|
(2.5
|
)
|
|||
Balance at September 30, 2017
|
$
|
165.3
|
|
|
$
|
17.3
|
|
|
$
|
182.6
|
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
79.5
|
|
|
$
|
(22.7
|
)
|
|
$
|
56.8
|
|
|
$
|
80.4
|
|
|
$
|
(19.5
|
)
|
|
$
|
60.9
|
|
Patents and technology
|
50.3
|
|
|
(37.9
|
)
|
|
12.4
|
|
|
46.4
|
|
|
(34.2
|
)
|
|
12.2
|
|
||||||
Other
|
3.2
|
|
|
(1.6
|
)
|
|
1.6
|
|
|
3.2
|
|
|
(1.5
|
)
|
|
1.7
|
|
||||||
Total Intangible Assets
|
$
|
133.0
|
|
|
$
|
(62.2
|
)
|
|
$
|
70.8
|
|
|
$
|
130.0
|
|
|
$
|
(55.2
|
)
|
|
$
|
74.8
|
|
2018
|
$
|
7.2
|
|
2019
|
5.9
|
|
|
2020
|
5.8
|
|
|
2021
|
5.8
|
|
|
2022
|
4.9
|
|
|
Thereafter
|
41.2
|
|
|
Total
|
$
|
70.8
|
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
(In millions)
|
|
|
|
||||
Short-term borrowings
(A)
|
$
|
—
|
|
|
$
|
—
|
|
Current portion of long-term debt
|
5.8
|
|
|
5.8
|
|
||
Long-term debt
|
977.0
|
|
|
980.3
|
|
||
Total Debt
|
$
|
982.8
|
|
|
$
|
986.1
|
|
(A)
|
Represents borrowing under foreign lines of credit by non-U.S. subsidiaries which are short term in nature. Availability under these lines of credit at
September 30, 2017
is
$20.2 million
.
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
(In millions)
|
|
|
|
||||
Term loan facility under Credit Agreement
|
$
|
569.3
|
|
|
$
|
575.0
|
|
Revolving facility under Credit Agreement
|
—
|
|
|
—
|
|
||
5.500% Senior Notes due 2024
|
425.0
|
|
|
425.0
|
|
||
Total debt
|
994.3
|
|
|
1,000.0
|
|
||
Less debt discount
|
2.5
|
|
|
2.8
|
|
||
Less deferred debt costs
|
9.0
|
|
|
11.1
|
|
||
Less current portion of long-term debt
|
5.8
|
|
|
5.8
|
|
||
Long-term debt payable after one year
|
$
|
977.0
|
|
|
$
|
980.3
|
|
|
Total Debt
|
||
(In millions)
|
|
||
Payments due for the year ended September 30,
|
|
||
2018
|
$
|
5.8
|
|
2019
|
5.8
|
|
|
2020
|
5.8
|
|
|
2021
|
5.8
|
|
|
2022
|
5.8
|
|
|
Thereafter
|
965.3
|
|
|
Total
|
$
|
994.3
|
|
|
September 30, 2017
|
||||||
|
Fair Value
|
|
Carrying Value
|
||||
(In millions)
|
|
||||||
Assets
|
|
|
|
||||
Forward Exchange Contracts
|
$
|
0.9
|
|
|
$
|
0.9
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Forward Exchange Contracts
|
$
|
1.5
|
|
|
$
|
1.5
|
|
Long-term Debt
|
|
|
|
||||
Senior Notes
|
$
|
450.5
|
|
|
$
|
425.0
|
|
Term Loan Facility
|
575.7
|
|
|
569.3
|
|
||
Total Long-term debt
|
$
|
1,026.2
|
|
|
$
|
994.3
|
|
|
September 30, 2017
|
||||||||||
|
Balance Sheet Location
|
|
Amount
|
|
Balance Sheet Location
|
|
Amount
|
||||
(In millions)
|
|
|
|
|
|
|
|
||||
Forward exchange contracts
|
Other current assets
|
|
$
|
0.9
|
|
|
Payables and accrued liabilities
|
|
$
|
1.5
|
|
|
Year Ended September 30, 2017
|
||
(In millions)
|
|
||
Forward Exchange Contracts, net of tax:
|
|
||
Net loss recognized in other (income) expense, net
(A)
|
$
|
2.2
|
|
(A)
|
The impact of the non-designated hedges noted above was largely offset by gains and losses resulting from the impact of changes in exchange rates on recognized assets and liabilities denominated in nonfunctional currencies.
|
|
2017
|
||
(In millions)
|
|
||
Change in benefit obligation:
|
|
||
Benefit obligation at September 30, 2016
|
$
|
—
|
|
Converted on October 1, 2016
|
26.5
|
|
|
Service cost
|
2.3
|
|
|
Interest cost
|
0.6
|
|
|
Actuarial gain
|
(4.9
|
)
|
|
Benefits paid
|
(1.2
|
)
|
|
Foreign currency impact
|
(0.5
|
)
|
|
Benefit obligation at end of year
|
$
|
22.8
|
|
Change in plan assets:
|
|
||
Fair value of plan assets at September 30, 2016
|
$
|
—
|
|
Converted on October 1, 2016
|
3.0
|
|
|
Employer contributions
|
5.0
|
|
|
Benefits paid
|
(1.2
|
)
|
|
Fair value of plan assets at September 30, 2017
|
$
|
6.8
|
|
Funded status:
|
|
||
Plan assets less than benefit obligation - Net amount recognized
|
$
|
(16.0
|
)
|
|
2017
|
||
(In millions)
|
|
||
Non-current liabilities
|
$
|
(16.0
|
)
|
Accumulated other comprehensive loss, net of taxes
|
(2.2
|
)
|
|
2017
|
||
(In millions)
|
|
||
Balance at September 30, 2016
|
$
|
—
|
|
Converted on October 1, 2016
|
(6.2
|
)
|
|
Net loss amortized during the year
|
0.4
|
|
|
Net gain during the year
|
3.7
|
|
|
Non-controlling interest
|
(0.1
|
)
|
|
Balance at September 30, 2017
|
$
|
(2.2
|
)
|
|
2017
|
||
(In millions)
|
|
||
Service cost
|
$
|
2.3
|
|
Interest cost
|
0.6
|
|
|
Expected return on plan assets
|
(0.1
|
)
|
|
Actuarial loss amortization
|
0.5
|
|
|
Net periodic pension cost
|
$
|
3.3
|
|
|
2017
|
||
(In millions)
|
|
||
Other investments (Level 2)
|
$
|
4.1
|
|
Insurance contract (Level 3)
|
2.7
|
|
|
Total
|
$
|
6.8
|
|
|
Payments
|
||
(In millions)
|
|
||
2018
|
$
|
0.8
|
|
2019
|
0.9
|
|
|
2020
|
1.0
|
|
|
2021
|
1.1
|
|
|
2022
|
1.2
|
|
|
2023-2027
|
11.6
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Defined contribution expense
|
$
|
11.0
|
|
|
$
|
5.5
|
|
|
$
|
4.5
|
|
|
Year Ended September 30, 2017
|
||
(In millions)
|
|
||
Before-Tax Share-Based Compensation Award Cost
|
$
|
8.3
|
|
Income Tax Benefit
|
2.9
|
|
|
After-Tax Share-Based Compensation Award Cost
|
$
|
5.4
|
|
|
Year Ended September 30, 2017
|
||
(In millions)
|
|
||
Restricted stock units
|
$
|
7.5
|
|
Stock options
|
0.2
|
|
|
Director awards
|
0.6
|
|
|
Before-Tax Share-Based Compensation Cost
|
$
|
8.3
|
|
(In percentages)
|
|
|
Expected volatility
|
28.7
|
%
|
Risk-free interest rate
|
1.4
|
%
|
|
Shares
|
|
Weighted Average Grant-Date Fair Value
|
|||
(In millions, except weighted average)
|
|
|
|
|||
Outstanding, September 30, 2016
|
—
|
|
|
$
|
—
|
|
Converted on October 1, 2016
|
0.5
|
|
|
22.85
|
|
|
Granted
|
0.7
|
|
|
25.30
|
|
|
Paid out
|
(0.1
|
)
|
|
15.55
|
|
|
Forfeited/adjustments
|
—
|
|
|
—
|
|
|
Outstanding, September 30, 2017
|
1.1
|
|
|
$
|
25.30
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||
(In millions, except weighted average)
|
|
|
|
|||
Outstanding, September 30, 2016
|
—
|
|
|
$
|
—
|
|
Converted on October 1, 2016
|
0.5
|
|
|
18.37
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding, September 30, 2017
|
0.5
|
|
|
$
|
18.55
|
|
|
Weighted Average Remaining Contractual Terms (In years)
|
|
Aggregate Intrinsic Value
|
||
(In millions, except years)
|
|
|
|
||
Outstanding, September 30, 2017
|
5.6
|
|
$
|
9.6
|
|
Exercisable, September 30, 2017
|
5.6
|
|
9.3
|
|
|
Net loss on derivatives qualifying as hedges
|
|
Foreign currency translation adjustments
|
|
Pension and postretirement benefits
|
|
Total
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
Balance, September 30, 2016
|
$
|
(0.2
|
)
|
|
$
|
(9.8
|
)
|
|
$
|
—
|
|
|
$
|
(10.0
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(8.7
|
)
|
|
3.7
|
|
|
(5.0
|
)
|
||||
Net transfers from Air Products
|
—
|
|
|
3.8
|
|
|
(6.2
|
)
|
|
(2.4
|
)
|
||||
Amounts reclassified from AOCL
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||
Net current period other comprehensive loss
|
—
|
|
|
(4.9
|
)
|
|
(2.2
|
)
|
|
(7.1
|
)
|
||||
Other comprehensive loss attributable to non-controlling interest
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
||||
Balance, September 30, 2017
|
$
|
(0.2
|
)
|
|
$
|
(16.0
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(18.4
|
)
|
|
Year Ended September 30, 2017
|
||
(In millions)
|
|
||
Pension and Postretirement Benefits, net of tax
(A)
|
$
|
0.3
|
|
(A)
|
The components include actuarial loss amortization and are reflected in net periodic benefit cost. Refer to
Note 15
,
Retirement Benefits
, for further information.
|
|
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions, except per share data)
|
|
|
|
|
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net Income Attributable to Versum
|
$
|
193.0
|
|
|
$
|
212.0
|
|
|
$
|
184.1
|
|
Denominator
|
|
|
|
|
|
||||||
Weighted average number of common shares - Basic
|
108.7
|
|
|
108.7
|
|
|
108.7
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
||||||
Employee stock option and other award plans
|
0.7
|
|
|
—
|
|
|
—
|
|
|||
Weighted average number of common shares - Diluted
|
109.4
|
|
|
108.7
|
|
|
108.7
|
|
|||
|
|
|
|
|
|
||||||
Earnings Per Common Share Attributable to Versum
|
|
|
|
|
|
||||||
Net Income Attributable to Versum - Basic
|
$
|
1.78
|
|
|
$
|
1.95
|
|
|
$
|
1.69
|
|
Net Income Attributable to Versum - Diluted
|
1.76
|
|
|
1.95
|
|
|
1.69
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
||||||||||
Income Before Taxes
|
|
|
|
|
|
||||||
United States
|
$
|
28.8
|
|
|
$
|
61.6
|
|
|
$
|
41.7
|
|
Foreign
|
223.9
|
|
|
217.1
|
|
|
181.2
|
|
|||
Total
|
$
|
252.7
|
|
|
$
|
278.7
|
|
|
$
|
222.9
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
||||||||||
Current Tax Provision
|
|
|
|
|
|
||||||
Federal
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
0.6
|
|
|
0.6
|
|
|
0.5
|
|
|||
Foreign
|
47.0
|
|
|
58.3
|
|
|
31.6
|
|
|||
|
50.0
|
|
|
58.9
|
|
|
32.1
|
|
|||
Deferred Tax Provision
|
|
|
|
|
|
||||||
Federal
|
1.1
|
|
|
1.3
|
|
|
1.4
|
|
|||
State
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Foreign
|
1.6
|
|
|
(1.5
|
)
|
|
(1.9
|
)
|
|||
|
2.8
|
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|||
Income Tax Provision
|
$
|
52.8
|
|
|
$
|
58.8
|
|
|
$
|
31.7
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
||||||||||
U.S. federal tax
|
$
|
88.4
|
|
|
$
|
97.5
|
|
|
$
|
78.0
|
|
State taxes, net of federal benefit
|
0.5
|
|
|
2.2
|
|
|
1.3
|
|
|||
Foreign tax differentials
|
(34.7
|
)
|
|
(30.7
|
)
|
|
(37.4
|
)
|
|||
U.S. taxes on foreign earnings
|
(0.3
|
)
|
|
4.7
|
|
|
(2.0
|
)
|
|||
Other credit and incentives
|
(0.8
|
)
|
|
(0.8
|
)
|
|
(0.7
|
)
|
|||
Valuation allowance
|
0.9
|
|
|
(19.2
|
)
|
|
(6.2
|
)
|
|||
Other
|
(1.2
|
)
|
|
5.1
|
|
|
(1.3
|
)
|
|||
Income Tax Expense (Benefit)
|
$
|
52.8
|
|
|
$
|
58.8
|
|
|
$
|
31.7
|
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
(In millions)
|
|
|
|
||||
Gross Deferred Tax Assets
|
|
|
|
||||
Tax loss carryforwards
|
$
|
0.5
|
|
|
$
|
13.2
|
|
Tax credit carryforwards
|
0.9
|
|
|
64.2
|
|
||
Retirement benefits and compensation accruals
|
10.9
|
|
|
7.6
|
|
||
Reserves and accruals
|
1.6
|
|
|
8.4
|
|
||
Other
|
1.5
|
|
|
3.3
|
|
||
Valuation allowance
|
(0.9
|
)
|
|
(55.6
|
)
|
||
Deferred Tax Assets
|
14.5
|
|
|
41.1
|
|
||
Gross Deferred Tax Liabilities
|
|
|
|
||||
Intangible assets
|
9.1
|
|
|
41.0
|
|
||
Plant and equipment
|
22.9
|
|
|
22.2
|
|
||
Unremitted earnings of foreign entities
|
0.7
|
|
|
2.3
|
|
||
Partnership investments
|
0.8
|
|
|
1.3
|
|
||
Other
|
0.2
|
|
|
6.3
|
|
||
Deferred Tax Liabilities
|
33.7
|
|
|
73.1
|
|
||
Net Deferred Income Tax Liability
|
$
|
19.2
|
|
|
$
|
32.0
|
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
(In millions)
|
|
||||||
Other non-current assets
|
$
|
18.1
|
|
|
$
|
10.8
|
|
Deferred tax liabilities
|
37.3
|
|
|
42.8
|
|
||
Net Deferred Income Tax Liability
|
$
|
19.2
|
|
|
$
|
32.0
|
|
|
Year Ended September 30,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized Tax Benefits
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
12.9
|
|
|
$
|
10.3
|
|
|
$
|
16.0
|
|
Additions for tax positions for the current year
|
2.1
|
|
|
1.9
|
|
|
1.6
|
|
|||
Additions for tax positions of prior years
|
5.2
|
|
|
1.0
|
|
|
0.1
|
|
|||
Reductions for tax positions of prior years
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(4.7
|
)
|
|||
Statute of limitations expiration
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(2.7
|
)
|
|||
Balance at End of Year
|
$
|
19.9
|
|
|
$
|
12.9
|
|
|
$
|
10.3
|
|
|
September 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Payables and Accrued Liabilities
|
|
||||||
Trade creditors
|
$
|
56.0
|
|
|
$
|
41.6
|
|
Customer advances
|
5.3
|
|
|
4.0
|
|
||
Accrued payroll and employee benefits
|
41.2
|
|
|
33.9
|
|
||
Other costs associated with business separation, restructuring and cost reduction actions
|
7.9
|
|
|
0.6
|
|
||
Derivatives
|
1.5
|
|
|
—
|
|
||
Other
|
8.9
|
|
|
5.7
|
|
||
|
$
|
120.8
|
|
|
$
|
85.8
|
|
|
As of and for the year ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Sales
|
|
|
|
|
|
||||||
Materials
|
$
|
829.7
|
|
|
$
|
756.7
|
|
|
$
|
743.4
|
|
Delivery Systems and Services
|
293.6
|
|
|
213.4
|
|
|
265.9
|
|
|||
Corporate
|
3.6
|
|
|
—
|
|
|
—
|
|
|||
Combined Total
|
$
|
1,126.9
|
|
|
$
|
970.1
|
|
|
$
|
1,009.3
|
|
Operating Income (Loss)
|
|
|
|
|
|
||||||
Materials
|
$
|
274.4
|
|
|
$
|
252.3
|
|
|
$
|
213.7
|
|
Delivery Systems and Services
|
71.7
|
|
|
50.8
|
|
|
49.1
|
|
|||
Corporate
|
(20.5
|
)
|
|
(23.3
|
)
|
|
(19.2
|
)
|
|||
Segment Total
|
325.6
|
|
|
279.8
|
|
|
243.6
|
|
|||
Business separation, restructuring and cost reduction actions
|
(25.5
|
)
|
|
(0.9
|
)
|
|
(21.6
|
)
|
|||
Combined Total
|
$
|
300.1
|
|
|
$
|
278.9
|
|
|
$
|
222.0
|
|
Depreciation and Amortization
|
|
|
|
|
|
||||||
Materials
|
$
|
43.1
|
|
|
$
|
44.4
|
|
|
$
|
48.1
|
|
Delivery Systems and Services
|
1.4
|
|
|
2.1
|
|
|
8.3
|
|
|||
Corporate
|
1.5
|
|
|
0.4
|
|
|
0.5
|
|
|||
Combined Total
|
$
|
46.0
|
|
|
$
|
46.9
|
|
|
$
|
56.9
|
|
Equity Affiliates’ Income
|
|
|
|
|
|
||||||
Materials
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
1.0
|
|
Combined Total
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
1.0
|
|
Total Assets
|
|
|
|
|
|
||||||
Materials
|
$
|
773.8
|
|
|
$
|
733.4
|
|
|
$
|
754.8
|
|
Delivery Systems and Services
|
110.9
|
|
|
104.0
|
|
|
92.7
|
|
|||
Corporate
|
362.1
|
|
|
206.4
|
|
|
39.9
|
|
|||
Combined Total
|
$
|
1,246.8
|
|
|
$
|
1,043.8
|
|
|
$
|
887.4
|
|
Investment in Net Assets of and Advances to Equity Affiliates
|
|
|
|
|
|
||||||
Materials
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.5
|
|
Combined Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.5
|
|
Expenditures for Long-Lived Assets
|
|
|
|
|
|
||||||
Materials
|
$
|
45.7
|
|
|
$
|
34.4
|
|
|
$
|
21.2
|
|
Delivery Systems and Services
|
1.7
|
|
|
0.7
|
|
|
0.8
|
|
|||
Corporate
|
16.6
|
|
|
0.7
|
|
|
0.1
|
|
|||
Combined Total
|
$
|
64.0
|
|
|
$
|
35.8
|
|
|
$
|
22.1
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
||||||||||
Process Materials
|
$
|
401.8
|
|
|
$
|
387.4
|
|
|
$
|
387.3
|
|
Advanced Materials
|
427.9
|
|
|
369.3
|
|
|
356.1
|
|
|||
Equipment and Installations
|
235.4
|
|
|
150.8
|
|
|
208.3
|
|
|||
Site Services
|
58.2
|
|
|
62.6
|
|
|
57.6
|
|
|||
Corporate
|
3.6
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
1,126.9
|
|
|
$
|
970.1
|
|
|
$
|
1,009.3
|
|
|
Year Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Sales to External Customers
|
|
|
|
|
|
||||||
United States
|
$
|
375.7
|
|
|
$
|
349.4
|
|
|
$
|
361.3
|
|
Taiwan
|
242.8
|
|
|
230.8
|
|
|
236.3
|
|
|||
South Korea
|
304.1
|
|
|
217.2
|
|
|
220.3
|
|
|||
China
|
64.9
|
|
|
53.8
|
|
|
70.9
|
|
|||
Europe
|
63.1
|
|
|
57.8
|
|
|
69.2
|
|
|||
Asia, excluding China, Taiwan, and South Korea
|
76.3
|
|
|
61.1
|
|
|
51.3
|
|
|||
Total
|
$
|
1,126.9
|
|
|
$
|
970.1
|
|
|
$
|
1,009.3
|
|
|
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Long-Lived Assets
(A)
|
|
|
|
|
|
||||||
United States
|
$
|
170.3
|
|
|
$
|
138.3
|
|
|
$
|
139.9
|
|
South Korea
|
112.2
|
|
|
112.2
|
|
|
105.0
|
|
|||
Taiwan
|
38.2
|
|
|
36.8
|
|
|
39.7
|
|
|||
Asia, excluding Taiwan and South Korea
|
9.2
|
|
|
9.0
|
|
|
16.4
|
|
|||
Europe
|
0.4
|
|
|
0.2
|
|
|
0.1
|
|
|||
Total
|
$
|
330.3
|
|
|
$
|
296.5
|
|
|
$
|
301.1
|
|
(A)
|
Long-lived assets include plant and equipment, net.
|
|
Net Assets Acquired
|
||
(In millions)
|
|
||
Accounts receivable
|
$
|
1.0
|
|
Other current assets
|
0.1
|
|
|
Inventories
|
1.4
|
|
|
Properties and Equipment, net
|
2.4
|
|
|
Goodwill
|
5.0
|
|
|
Intangible assets
|
3.7
|
|
|
Other current liabilities
|
(0.4
|
)
|
|
Net assets acquired
|
$
|
13.2
|
|
|
Amount
|
|
Weighted Average Amortization Period
|
||
(In millions, except years)
|
|
|
|
||
Technology
|
$
|
2.8
|
|
|
7
|
Trademarks
|
0.9
|
|
|
5
|
|
Total
|
$
|
3.7
|
|
|
|
|
For the Quarter Ended
|
||||||||||||||||||
|
December 31, 2016
|
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
Total
|
||||||||||
(In millions)
|
|
||||||||||||||||||
Sales
|
$
|
270.8
|
|
|
$
|
270.8
|
|
|
$
|
290.8
|
|
|
$
|
294.5
|
|
|
$
|
1,126.9
|
|
Cost of sales
|
150.9
|
|
|
154.5
|
|
|
159.6
|
|
|
171.9
|
|
|
636.9
|
|
|||||
Selling and administrative
|
30.2
|
|
|
29.5
|
|
|
34.5
|
|
|
31.5
|
|
|
125.7
|
|
|||||
Research and development
|
10.3
|
|
|
10.9
|
|
|
11.9
|
|
|
12.0
|
|
|
45.1
|
|
|||||
Business separation, restructuring and cost reduction actions
|
3.2
|
|
|
6.1
|
|
|
6.0
|
|
|
10.2
|
|
|
25.5
|
|
|||||
Other (income) expense, net
|
(2.9
|
)
|
|
(0.1
|
)
|
|
(2.2
|
)
|
|
(1.2
|
)
|
|
(6.4
|
)
|
|||||
Operating Income
|
79.1
|
|
|
69.9
|
|
|
81.0
|
|
|
70.1
|
|
|
300.1
|
|
|||||
Equity affiliates’ income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense
|
11.5
|
|
|
11.6
|
|
|
11.9
|
|
|
12.4
|
|
|
47.4
|
|
|||||
Income Before Taxes
|
67.6
|
|
|
58.3
|
|
|
69.1
|
|
|
57.7
|
|
|
252.7
|
|
|||||
Income tax provision
|
15.3
|
|
|
11.5
|
|
|
14.4
|
|
|
11.6
|
|
|
52.8
|
|
|||||
Net Income
|
52.3
|
|
|
46.8
|
|
|
54.7
|
|
|
46.1
|
|
|
199.9
|
|
|||||
Less: Net Income Attributable to Non-controlling Interests
|
1.5
|
|
|
1.9
|
|
|
2.0
|
|
|
1.5
|
|
|
6.9
|
|
|||||
Net Income Attributable to Versum
|
$
|
50.8
|
|
|
$
|
44.9
|
|
|
$
|
52.7
|
|
|
$
|
44.6
|
|
|
$
|
193.0
|
|
|
For the Quarter Ended
|
||||||||||||||||||
|
December 31, 2015
|
|
March 31, 2016
|
|
June 30, 2016
|
|
September 30, 2016
|
|
Total
|
||||||||||
(In millions)
|
|
||||||||||||||||||
Sales
|
$
|
245.5
|
|
|
$
|
233.5
|
|
|
$
|
242.7
|
|
|
$
|
248.4
|
|
|
$
|
970.1
|
|
Cost of sales
|
132.4
|
|
|
132.5
|
|
|
135.9
|
|
|
138.7
|
|
|
539.5
|
|
|||||
Selling and administrative
|
23.6
|
|
|
25.7
|
|
|
27.3
|
|
|
33.2
|
|
|
109.8
|
|
|||||
Research and development
|
10.9
|
|
|
10.2
|
|
|
11.3
|
|
|
11.5
|
|
|
43.9
|
|
|||||
Business separation, restructuring and cost reduction actions
|
(0.9
|
)
|
|
(1.8
|
)
|
|
1.1
|
|
|
2.5
|
|
|
0.9
|
|
|||||
Other (income) expense, net
|
(1.1
|
)
|
|
(1.0
|
)
|
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(2.9
|
)
|
|||||
Operating Income
|
80.6
|
|
|
67.9
|
|
|
67.4
|
|
|
63.0
|
|
|
278.9
|
|
|||||
Equity affiliates’ income
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|||||
Income Before Taxes
|
80.8
|
|
|
67.9
|
|
|
67.4
|
|
|
62.6
|
|
|
278.7
|
|
|||||
Income tax provision
|
13.4
|
|
|
12.2
|
|
|
17.6
|
|
|
15.6
|
|
|
58.8
|
|
|||||
Net Income
|
67.4
|
|
|
55.7
|
|
|
49.8
|
|
|
47.0
|
|
|
219.9
|
|
|||||
Less: Net Income Attributable to Non-controlling Interests
|
2.2
|
|
|
1.9
|
|
|
2.0
|
|
|
1.8
|
|
|
7.9
|
|
|||||
Net Income Attributable to Versum
|
$
|
65.2
|
|
|
$
|
53.8
|
|
|
$
|
47.8
|
|
|
$
|
45.2
|
|
|
$
|
212.0
|
|
|
Balance at
Beginning of Period |
|
Change
Charged to Expense |
|
Other
Changes (A) |
|
Balance at
End of Period |
||||||
(In millions)
|
|
||||||||||||
Year Ended September 30, 2017
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
0.8
|
|
|
0.2
|
|
|
—
|
|
|
$
|
1.0
|
|
Allowance for deferred tax assets
|
$
|
55.6
|
|
|
0.9
|
|
|
(55.6
|
)
|
|
$
|
0.9
|
|
Year Ended September 30, 2016
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
0.8
|
|
|
—
|
|
|
—
|
|
|
$
|
0.8
|
|
Allowance for deferred tax assets
|
$
|
77.7
|
|
|
(20.8
|
)
|
|
(1.3
|
)
|
|
$
|
55.6
|
|
Year Ended September 30, 2015
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
2.2
|
|
|
0.1
|
|
|
(1.5
|
)
|
|
$
|
0.8
|
|
Allowance for deferred tax assets
|
$
|
83.3
|
|
|
(4.9
|
)
|
|
(0.7
|
)
|
|
$
|
77.7
|
|
(A)
|
For 2017, Other Changes primarily includes adjustments related to the Separation.
|
Exhibit No.
|
|
Exhibit
|
2.1
|
|
Separation Agreement by and between Air Products and Chemicals, Inc. and Versum Materials, Inc., dated September 29, 2016 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Versum Materials, Inc. (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Versum Materials, Inc., filed on December 21, 2016)
|
3.2
|
|
Amended and Restated By-Laws of Versum Materials, Inc. (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of Versum Materials, Inc., filed on December 21, 2016)
|
4.1
|
|
Indenture, dated September 30, 2016, among Versum Materials, Inc., the guarantors named therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
|
4.2
|
|
Form of 2024 Note (included in Exhibit 4.1 above)
|
10.1
|
|
Transition Services Agreement by and between Air Products and Chemicals, Inc. and Versum Materials, Inc., dated September 29, 2016 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
|
10.2
|
|
Tax Matters Agreement by and between Air Products and Chemicals, Inc. and Versum Materials, Inc., dated September 29, 2016 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
|
10.3
|
|
Employee Matters Agreement by and between Air Products and Chemicals, Inc. and Versum Materials, Inc., dated September 29, 2016 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
|
10.4
|
|
Intellectual Property Cross-License Agreement by and between Air Products and Chemicals, Inc. and Versum Materials U.S., LLC, dated September 29, 2016 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.5
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Credit Agreement, dated as of September 30, 2016, among Versum Materials, Inc., the lenders from time to time party thereto and Citibank, N.A., as administrative agent, collateral agent, swingline lender and an L/C issuer (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.6
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First Amendment to Credit Agreement, dated as of October 10, 2017, among Versum Materials, Inc., the lenders from time to time party thereto and Citibank, N.A., as administrative agent and collateral agent for the lenders (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 10, 2017)
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10.7
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Guarantee Agreement, dated as of September 30, 2016, among Versum Materials, Inc., the subsidiary guarantors party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.8
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Security Agreement, dated as of September 30, 2016, among Versum Materials, Inc., the subsidiary guarantors party thereto and Citibank, N.A., as collateral agent (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.9#
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Versum Materials, Inc. Short-Term Incentive Plan (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.10#
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Versum Materials, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.11#
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Versum Materials Deferred Compensation Plan (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.12#
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Form Employment Agreement - Designated Executive Officers (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.13#
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Form Employment Agreement - Other Executive Officers (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K of Versum Materials, Inc., filed on October 4, 2016)
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10.14#
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Form of Founders Grants Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Versum Materials, Inc., filed on November 4, 2016)
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10.17#
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Versum Materials Deferred Compensation Plan for Directors (incorporated by reference to Exhibit 10.16 to the Annual Report on Form 10-K of Versum Materials, Inc., filed on December 21, 2016)
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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VERSUM MATERIALS, INC.
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By:
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/s/ Guillermo Novo
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Guillermo Novo
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President and Chief Executive Officer
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Date:
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November 22, 2017
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Name
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Title
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Date
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/s/ Seifi Ghasemi
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Chairman of the Board of Directors
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November 22, 2017
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Seifi Ghasemi
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/s/ Guillermo Novo
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President and Chief Executive Officer and Director
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November 22, 2017
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Guillermo Novo
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(Principal Executive Officer)
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/s/ George G. Bitto
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Senior Vice President and Chief Financial Officer
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November 22, 2017
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George G. Bitto
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(Principal Financial Officer)
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/s/ Jessica Feather-Bowman
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Controller and Principal Accounting Officer
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November 22, 2017
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Jessica Feather-Bowman
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(Principal Accounting Officer)
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/s/ Jacques Croisetière
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Director
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November 22, 2017
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Jacques Croisetière
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/s/ Yi Hyon Paik
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Director
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November 22, 2017
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Yi Hyon Paik
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/s/ Thomas J. Riordan
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Director
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November 22, 2017
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Thomas J. Riordan
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/s/ Susan C. Schnabel
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Director
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November 22, 2017
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Susan C. Schnabel
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/s/ Alejandro D. Wolff
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Director
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November 22, 2017
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Alejandro D. Wolff
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Subsidiary
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Jurisdiction of Organization
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Showa Denko Versum Materials 2 Co., Ltd.
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Japan
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Showa Denko Versum Materials Co., Ltd.
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Japan
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Versum Materials (Dalian) Co., Ltd.
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China
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Versum Materials Germany GmbH
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Germany
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Versum Materials HYT Inc.
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Korea
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Versum Materials Ireland, Limited
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Ireland
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Versum Materials Israel, Ltd.
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Israel
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Versum Materials Italia S.r.l.
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Italy
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Versum Materials Japan Inc.
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Japan
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Versum Materials ADM Korea Inc.
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Korea
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Versum Materials Korea Inc.
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Korea
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Versum Materials Malaysia, Sdn Bhd
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Malaysia
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Versum Materials Netherlands B.V.
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Netherlands
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Versum Materials PM Korea, Inc.
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Korea
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Versum Materials (Shanghai) Co., Ltd.
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China
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Versum Materials Singapore Pte. Ltd.
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Singapore
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Versum Materials SPC Korea Limited
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Korea
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Versum Materials Taiwan Co. Ltd.
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Taiwan
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Versum Materials Technology, LLC (Taiwan Branch)
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Taiwan
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Versum Materials UK Ltd.
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England and Wales
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Versum Materials US, LLC
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Delaware
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1.
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I have reviewed this Annual Report on Form 10-K of Versum Materials, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Guillermo Novo
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Guillermo Novo
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President and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of Versum Materials, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ George G. Bitto
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George G. Bitto
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Senior Vice President and Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated:
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November 22, 2017
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/s/ Guillermo Novo
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Guillermo Novo
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President and Chief Executive Officer
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/s/ George G. Bitto
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George G. Bitto
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Senior Vice President and Chief Financial Officer
|
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