|
|
|
|
|
(Mark One)
|
|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
Large Accelerated Filer
þ
|
|
Accelerated Filer
o
|
|
Non-Accelerated Filer
o
|
|
Smaller Reporting Company
o
|
|
(Do not check if a smaller reporting company.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions except per share data - unaudited)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Sales
|
$
|
2,059
|
|
|
$
|
2,141
|
|
|
$
|
5,902
|
|
|
$
|
6,149
|
|
Cost of sales
|
1,479
|
|
|
1,514
|
|
|
4,217
|
|
|
4,426
|
|
||||
Gross profit
|
580
|
|
|
627
|
|
|
1,685
|
|
|
1,723
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense
|
363
|
|
|
349
|
|
|
1,047
|
|
|
1,092
|
|
||||
Research and development expense
|
35
|
|
|
30
|
|
|
106
|
|
|
91
|
|
||||
Equity and other income
|
28
|
|
|
15
|
|
|
59
|
|
|
46
|
|
||||
Operating income
|
210
|
|
|
263
|
|
|
591
|
|
|
586
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net interest and other financing expense
|
51
|
|
|
53
|
|
|
239
|
|
|
166
|
|
||||
Net (loss) gain on divestitures
|
(1
|
)
|
|
5
|
|
|
6
|
|
|
2
|
|
||||
Income from continuing operations before income taxes
|
158
|
|
|
215
|
|
|
358
|
|
|
422
|
|
||||
Income tax expense - Note J
|
41
|
|
|
55
|
|
|
84
|
|
|
112
|
|
||||
Income from continuing operations
|
117
|
|
|
160
|
|
|
274
|
|
|
310
|
|
||||
Income (loss) from discontinued operations (net of
|
|
|
|
|
|
|
|
||||||||
income taxes) - Note D
|
7
|
|
|
(9
|
)
|
|
4
|
|
|
(10
|
)
|
||||
Net income
|
$
|
124
|
|
|
$
|
151
|
|
|
$
|
278
|
|
|
$
|
300
|
|
|
|
|
|
|
|
|
|
||||||||
PER SHARE DATA
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share - Note M
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from continuing operations
|
$
|
1.49
|
|
|
$
|
2.04
|
|
|
$
|
3.48
|
|
|
$
|
3.97
|
|
Income (loss) from discontinued operations
|
0.09
|
|
|
(0.11
|
)
|
|
0.05
|
|
|
(0.13
|
)
|
||||
Net income
|
$
|
1.58
|
|
|
$
|
1.93
|
|
|
$
|
3.53
|
|
|
$
|
3.84
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share - Note M
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from continuing operations
|
$
|
1.47
|
|
|
$
|
2.00
|
|
|
$
|
3.42
|
|
|
$
|
3.90
|
|
Income (loss) from discontinued operations
|
0.08
|
|
|
(0.10
|
)
|
|
0.05
|
|
|
(0.13
|
)
|
||||
Net income
|
$
|
1.55
|
|
|
$
|
1.90
|
|
|
$
|
3.47
|
|
|
$
|
3.77
|
|
|
|
|
|
|
|
|
|
||||||||
DIVIDENDS PAID PER COMMON SHARE
|
$
|
0.340
|
|
|
$
|
0.225
|
|
|
$
|
0.790
|
|
|
$
|
0.575
|
|
|
|
|
|
|
|
|
|
||||||||
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
124
|
|
|
$
|
151
|
|
|
$
|
278
|
|
|
$
|
300
|
|
Other comprehensive (loss) income, net of tax - Note N
|
|
|
|
|
|
|
|
||||||||
Unrealized translation loss
|
(9
|
)
|
|
(190
|
)
|
|
(30
|
)
|
|
(217
|
)
|
||||
Pension and postretirement obligation adjustment
|
(4
|
)
|
|
(1
|
)
|
|
(11
|
)
|
|
(1
|
)
|
||||
Net change in interest rate hedges
|
—
|
|
|
(14
|
)
|
|
38
|
|
|
(20
|
)
|
||||
Other comprehensive loss
|
(13
|
)
|
|
(205
|
)
|
|
(3
|
)
|
|
(238
|
)
|
||||
Comprehensive income (loss)
|
$
|
111
|
|
|
$
|
(54
|
)
|
|
$
|
275
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
|
September 30
|
|
||
(In millions - unaudited)
|
2013
|
|
|
2012
|
|
||
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
377
|
|
|
$
|
523
|
|
Accounts receivable
(a)
|
1,512
|
|
|
1,481
|
|
||
Inventories - Note G
|
864
|
|
|
1,008
|
|
||
Deferred income taxes
|
157
|
|
|
116
|
|
||
Other assets
|
66
|
|
|
81
|
|
||
Total current assets
|
2,976
|
|
|
3,209
|
|
||
Noncurrent assets
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
||||
Cost
|
4,615
|
|
|
4,478
|
|
||
Accumulated depreciation and amortization
|
1,837
|
|
|
1,646
|
|
||
Net property, plant and equipment
|
2,778
|
|
|
2,832
|
|
||
Goodwill - Note H
|
3,348
|
|
|
3,342
|
|
||
Intangibles - Note H
|
1,840
|
|
|
1,936
|
|
||
Asbestos insurance receivable - Note L
|
439
|
|
|
449
|
|
||
Equity and other unconsolidated investments
|
225
|
|
|
217
|
|
||
Other assets
|
553
|
|
|
539
|
|
||
Total noncurrent assets
|
9,183
|
|
|
9,315
|
|
||
Total assets
|
$
|
12,159
|
|
|
$
|
12,524
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Short-term debt - Note I
|
$
|
456
|
|
|
$
|
344
|
|
Current portion of long-term debt - Note I
|
8
|
|
|
115
|
|
||
Trade and other payables
|
746
|
|
|
877
|
|
||
Accrued expenses and other liabilities
|
608
|
|
|
577
|
|
||
Total current liabilities
|
1,818
|
|
|
1,913
|
|
||
Noncurrent liabilities
|
|
|
|
|
|
||
Long-term debt - Note I
|
2,958
|
|
|
3,131
|
|
||
Employee benefit obligations - Note K
|
1,697
|
|
|
1,839
|
|
||
Asbestos litigation reserve - Note L
|
746
|
|
|
771
|
|
||
Deferred income taxes
|
264
|
|
|
208
|
|
||
Other liabilities
|
577
|
|
|
633
|
|
||
Total noncurrent liabilities
|
6,242
|
|
|
6,582
|
|
||
|
|
|
|
||||
Stockholders’ equity
|
4,099
|
|
|
4,029
|
|
||
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
12,159
|
|
|
$
|
12,524
|
|
|
|
|
|
(a)
|
Accounts receivable includes an allowance for doubtful accounts of
$18 million
and
$24 million
at
June 30, 2013
and
September 30, 2012
, respectively.
|
|
|
|
|
|
|
|
|
|
(In millions - unaudited)
|
Common
stock
|
|
|
Paid-in
capital
|
|
|
Retained
earnings
|
|
|
Accumulated
other
comprehensive
income
|
|
(a)
|
Total
|
|
|||||
BALANCE AT SEPTEMBER 30, 2012
|
$
|
1
|
|
|
$
|
647
|
|
|
$
|
3,163
|
|
|
$
|
218
|
|
|
$
|
4,029
|
|
Total comprehensive income (loss)
|
|
|
|
|
|
278
|
|
|
(3
|
)
|
|
275
|
|
||||||
Dividend on common stock, $.79 per share
|
|
|
|
|
|
|
(62
|
)
|
|
|
|
|
(62
|
)
|
|||||
Common shares issued under stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
incentive and other plans
(b)
|
|
|
|
7
|
|
|
|
|
|
|
|
|
7
|
|
|||||
Repurchase of common shares
(c)
|
|
|
(150
|
)
|
|
|
|
|
|
(150
|
)
|
||||||||
BALANCE AT JUNE 30, 2013
|
$
|
1
|
|
|
$
|
504
|
|
|
$
|
3,379
|
|
|
$
|
215
|
|
|
$
|
4,099
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
At
June 30, 2013
, the after-tax accumulated other comprehensive income of
$215 million
was comprised of unrecognized prior service credits as a result of certain employee benefit plan amendments of
$74 million
and net unrealized translation gains of
$141 million
.
|
(b)
|
Common shares issued were
280,136
for the
nine
months ended
June 30, 2013
.
|
(c)
|
Common shares repurchased were
1,737,744
for the
nine
months ended
June 30, 2013
.
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
||||||
|
June 30
|
||||||
(In millions - unaudited)
|
2013
|
|
|
2012
|
|
||
CASH FLOWS (USED) PROVIDED BY OPERATING ACTIVITIES FROM
|
|
|
|
||||
CONTINUING OPERATIONS
|
|
|
|
||||
Net income
|
$
|
278
|
|
|
$
|
300
|
|
(Income) loss from discontinued operations (net of income taxes)
|
(4
|
)
|
|
10
|
|
||
Adjustments to reconcile income from continuing operations to
|
|
|
|
|
|
||
cash flows from operating activities
|
|
|
|
|
|
||
Depreciation and amortization
|
318
|
|
|
320
|
|
||
Debt issuance cost amortization
|
62
|
|
|
18
|
|
||
Purchased in-process research and development impairment
|
4
|
|
|
—
|
|
||
Deferred income taxes
|
16
|
|
|
(2
|
)
|
||
Equity income from affiliates
|
(22
|
)
|
|
(24
|
)
|
||
Distributions from equity affiliates
|
9
|
|
|
3
|
|
||
Gain from sale of property and equipment
|
(1
|
)
|
|
(1
|
)
|
||
Stock based compensation expense
|
25
|
|
|
19
|
|
||
Net gain on divestitures
|
(6
|
)
|
|
(4
|
)
|
||
Inventory fair value adjustment related to ISP acquisition
|
—
|
|
|
28
|
|
||
Change in operating assets and liabilities
(a)
|
(186
|
)
|
|
(521
|
)
|
||
|
493
|
|
|
146
|
|
||
CASH FLOWS (USED) PROVIDED BY INVESTING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(188
|
)
|
|
(164
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
5
|
|
|
10
|
|
||
Proceeds from sale of operations or equity investments
|
2
|
|
|
41
|
|
||
Proceeds from sale of available-for-sale securities
|
—
|
|
|
4
|
|
||
|
(181
|
)
|
|
(109
|
)
|
||
CASH FLOWS (USED) PROVIDED BY FINANCING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
2,320
|
|
|
2
|
|
||
Repayment of long-term debt
|
(2,605
|
)
|
|
(79
|
)
|
||
Proceeds from/(repayment of) short-term debt
|
112
|
|
|
(38
|
)
|
||
Repurchase of common stock
|
(150
|
)
|
|
—
|
|
||
Debt issuance costs
|
(38
|
)
|
|
—
|
|
||
Cash dividends paid
|
(62
|
)
|
|
(45
|
)
|
||
Proceeds from exercise of stock options
|
1
|
|
|
2
|
|
||
Excess tax benefits related to share-based payments
|
5
|
|
|
5
|
|
||
|
(417
|
)
|
|
(153
|
)
|
||
CASH USED BY CONTINUING OPERATIONS
|
(105
|
)
|
|
(116
|
)
|
||
Cash used by discontinued operations
|
|
|
|
|
|
||
Operating cash flows
|
(43
|
)
|
|
(17
|
)
|
||
Investing cash flows
|
—
|
|
|
(1
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
2
|
|
|
(6
|
)
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(146
|
)
|
|
(140
|
)
|
||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
523
|
|
|
737
|
|
||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
377
|
|
|
$
|
597
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
(Loss) income from discontinued operations (net of tax)
|
|
|
|
|
|
|
|
||||||||
Distribution
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
Asbestos-related litigation reserves and receivables
|
4
|
|
|
(7
|
)
|
|
3
|
|
|
(1
|
)
|
||||
Gain (loss) on disposal of discontinued operations (net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
APAC
|
5
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total income (loss) from discontinued operations (net of tax)
|
$
|
7
|
|
|
$
|
(9
|
)
|
|
$
|
4
|
|
|
$
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility
|
|
|
|
|||||
(In millions)
|
Severance
|
|
|
costs
|
|
|
Total
|
|
|||
Balance as of September 30, 2012
|
$
|
29
|
|
|
$
|
15
|
|
|
$
|
44
|
|
Reserve adjustments
|
4
|
|
|
—
|
|
|
4
|
|
|||
Utilization (cash paid or otherwise settled)
|
(16
|
)
|
|
(7
|
)
|
|
(23
|
)
|
|||
Balance at June 30, 2013
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
25
|
|
|
|
|
|
|
|
||||||
Balance as of September 30, 2011
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
45
|
|
Restructuring reserve
|
21
|
|
|
20
|
|
|
41
|
|
|||
Utilization (cash paid or otherwise settled)
|
(27
|
)
|
|
(2
|
)
|
|
(29
|
)
|
|||
Balance at June 30, 2012
|
$
|
39
|
|
|
$
|
18
|
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
Carrying
value
|
|
|
Total
fair
value
|
|
|
Quoted prices
in active
markets for
identical
assets
Level 1
|
|
|
Significant
other
observable
inputs
Level 2
|
|
|
Significant
unobservable
inputs
Level 3
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
377
|
|
|
$
|
377
|
|
|
$
|
377
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred compensation investments
(a)
|
180
|
|
|
180
|
|
|
53
|
|
|
127
|
|
|
—
|
|
|||||
Investments of captive insurance company
(a)
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
561
|
|
|
$
|
561
|
|
|
$
|
433
|
|
|
$
|
128
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency derivatives
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.
|
(In millions)
|
Carrying
value
|
|
|
Total
fair
value
|
|
|
Quoted prices
in active
markets for
identical
assets
Level 1
|
|
|
Significant
other
observable
inputs
Level 2
|
|
|
Significant
unobservable
inputs
Level 3
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
523
|
|
|
$
|
523
|
|
|
$
|
523
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred compensation investments
(a)
|
176
|
|
|
176
|
|
|
56
|
|
|
120
|
|
|
—
|
|
|||||
Investments of captive insurance company
(a)
|
2
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
702
|
|
|
$
|
702
|
|
|
$
|
581
|
|
|
$
|
121
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate swap derivatives
(b)
|
$
|
62
|
|
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
62
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.
|
(b)
|
Included in accrued expense and other liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets. These interest rate swap liabilities were terminated during the March 2013 quarter.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Foreign currency derivative (loss) gain
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
3
|
|
|
June 30
|
|
|
September 30
|
|
||
(In millions)
|
2013
|
|
|
2012
|
|
||
Foreign currency derivative assets
|
$
|
1
|
|
|
$
|
1
|
|
Notional contract values
|
190
|
|
|
168
|
|
||
|
|
|
|
||||
Foreign currency derivative liabilities
(a)
|
$
|
3
|
|
|
$
|
—
|
|
Notional contract values
|
122
|
|
|
35
|
|
||
|
|
|
|
(a)
|
Fair values of liabilities of $0 denote values less than $1 million.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Change in unrealized loss in AOCI
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
3
|
|
|
$
|
49
|
|
Loss reclassified from AOCI to income
|
—
|
|
|
6
|
|
|
65
|
|
|
16
|
|
|
|
|
|
June 30
|
|
|
September 30
|
|
||
(In millions)
|
2013
|
|
|
2012
|
|
||
Finished products
|
$
|
605
|
|
|
$
|
675
|
|
Raw materials, supplies and work in process
|
291
|
|
|
376
|
|
||
LIFO reserve
|
(32
|
)
|
|
(43
|
)
|
||
|
$
|
864
|
|
|
$
|
1,008
|
|
|
Specialty
|
|
|
Water
|
|
|
Performance
|
|
|
Consumer
|
|
|
|
|
|||||
(In millions)
|
Ingredients
|
|
|
Technologies
|
|
|
Materials
|
|
|
Markets
|
|
|
Total
|
|
|||||
Balance at September 30, 2012
|
$
|
2,202
|
|
|
$
|
659
|
|
|
$
|
315
|
|
|
$
|
166
|
|
|
$
|
3,342
|
|
Other
(a)
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Currency translation adjustment
|
7
|
|
|
(13
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Balance at June 30, 2013
|
$
|
2,222
|
|
|
$
|
646
|
|
|
$
|
314
|
|
|
$
|
166
|
|
|
$
|
3,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
||||||||||
|
Gross
|
|
|
|
|
Net
|
|
||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|||
Trademarks and trade names
|
$
|
535
|
|
|
$
|
(45
|
)
|
|
$
|
490
|
|
Intellectual property
|
840
|
|
|
(172
|
)
|
|
668
|
|
|||
Customer relationships
|
831
|
|
|
(218
|
)
|
|
613
|
|
|||
IPR&D
|
69
|
|
|
—
|
|
|
69
|
|
|||
Other intangibles
|
35
|
|
|
(35
|
)
|
|
—
|
|
|||
Total intangible assets
|
$
|
2,310
|
|
|
$
|
(470
|
)
|
|
$
|
1,840
|
|
|
September 30, 2012
|
||||||||||
|
Gross
|
|
|
|
|
Net
|
|
||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|||
Trademarks and trade names
|
$
|
535
|
|
|
$
|
(39
|
)
|
|
$
|
496
|
|
Intellectual property
|
843
|
|
|
(136
|
)
|
|
707
|
|
|||
Customer relationships
|
833
|
|
|
(173
|
)
|
|
660
|
|
|||
IPR&D
|
73
|
|
|
—
|
|
|
73
|
|
|||
Other intangibles
|
35
|
|
|
(35
|
)
|
|
—
|
|
|||
Total intangible assets
|
$
|
2,319
|
|
|
$
|
(383
|
)
|
|
$
|
1,936
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
|
September 30
|
|
||
(In millions)
|
2013
|
|
|
2012
|
|
||
4.750% notes, due 2022
|
$
|
1,119
|
|
|
$
|
500
|
|
3.875% notes, due 2018
|
700
|
|
|
—
|
|
||
3.000% notes, due 2016
|
600
|
|
|
—
|
|
||
6.875% notes, due 2043
|
376
|
|
|
—
|
|
||
Term Loan A, due 2016
(a)
|
—
|
|
|
1,425
|
|
||
Term Loan B, due 2018
(a)
|
—
|
|
|
1,036
|
|
||
Accounts receivable securitization
|
350
|
|
|
300
|
|
||
6.50% junior subordinated notes, due 2029
|
131
|
|
|
129
|
|
||
Revolving credit facility
(b)
|
65
|
|
|
—
|
|
||
9.125% notes, due 2017
|
—
|
|
|
76
|
|
||
Other international loans, interest at a weighted-
|
|
|
|
|
|
||
average rate of 6.9% at June 30, 2013 (5.0% to 10.5%)
|
53
|
|
|
69
|
|
||
Medium-term notes, due 2013-2019, interest at a weighted-
|
|
|
|
|
|
||
average rate of 8.4% at June 30, 2013 (7.7% to 9.4%)
|
21
|
|
|
21
|
|
||
8.80% debentures, due 2012
|
—
|
|
|
20
|
|
||
Other
|
7
|
|
|
14
|
|
||
Total debt
|
3,422
|
|
|
3,590
|
|
||
Short-term debt
|
(456
|
)
|
|
(344
|
)
|
||
Current portion of long-term debt
|
(8
|
)
|
|
(115
|
)
|
||
Long-term debt (less current portion)
|
$
|
2,958
|
|
|
$
|
3,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other postretirement
|
||||||||||
|
Pension benefits
|
|
benefits
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Three months ended June 30
|
|
|
|
|
|
|
|
||||||||
Service cost
(a)
|
$
|
10
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
(b)
|
44
|
|
|
51
|
|
|
2
|
|
|
2
|
|
||||
Curtailment
(b)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
(b)
|
(60
|
)
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
(b)
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|
(3
|
)
|
||||
|
$
|
(7
|
)
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended June 30
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
(a)
|
$
|
32
|
|
|
$
|
28
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
(b)
|
132
|
|
|
149
|
|
|
5
|
|
|
9
|
|
||||
Curtailment
(b)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
(b)
|
(178
|
)
|
|
(170
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
(b)
|
(1
|
)
|
|
(1
|
)
|
|
(16
|
)
|
|
(10
|
)
|
||||
|
$
|
(15
|
)
|
|
$
|
5
|
|
|
$
|
(9
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
|||||||
|
June 30
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Open claims - beginning of period
|
66
|
|
|
72
|
|
|
72
|
|
|
83
|
|
|
100
|
|
New claims filed
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Claims settled
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Claims dismissed
|
(1
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(12
|
)
|
|
(18
|
)
|
Open claims - end of period
|
66
|
|
|
69
|
|
|
66
|
|
|
72
|
|
|
83
|
|
|
Nine months ended
|
|
|
|
|
|
|
||||||||||||
|
June 30
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||||
Asbestos reserve - beginning of period
|
$
|
522
|
|
|
$
|
543
|
|
|
$
|
543
|
|
|
$
|
537
|
|
|
$
|
543
|
|
Reserve adjustment
|
(28
|
)
|
|
11
|
|
|
11
|
|
|
41
|
|
|
28
|
|
|||||
Amounts paid
|
(25
|
)
|
|
(25
|
)
|
|
(32
|
)
|
|
(35
|
)
|
|
(34
|
)
|
|||||
Asbestos reserve - end of period
|
$
|
469
|
|
|
$
|
529
|
|
|
$
|
522
|
|
|
$
|
543
|
|
|
$
|
537
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
||||||||||||
|
June 30
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||||
Insurance receivable - beginning of period
|
$
|
423
|
|
|
$
|
431
|
|
|
$
|
431
|
|
|
$
|
421
|
|
|
$
|
422
|
|
Receivable adjustment
|
(3
|
)
|
|
19
|
|
|
19
|
|
|
42
|
|
|
36
|
|
|||||
Amounts collected
|
(11
|
)
|
|
(24
|
)
|
|
(27
|
)
|
|
(32
|
)
|
|
(37
|
)
|
|||||
Insurance receivable - end of period
|
$
|
409
|
|
|
$
|
426
|
|
|
$
|
423
|
|
|
$
|
431
|
|
|
$
|
421
|
|
|
Nine months ended
|
|
|
|
|
|
|
|||||||
|
June 30
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Open claims - beginning of period
|
21
|
|
|
21
|
|
|
21
|
|
|
20
|
|
|
21
|
|
New claims filed
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
—
|
|
Claims dismissed
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Open claims - end of period
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
|
|
||||||||||||
|
June 30
|
|
Years ended September 30
|
|||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
(a)
|
|||||
Asbestos reserve - beginning of period
|
$
|
320
|
|
|
$
|
311
|
|
|
$
|
311
|
|
|
$
|
375
|
|
|
$
|
484
|
|
|
Reserve adjustment
|
46
|
|
|
30
|
|
|
30
|
|
|
(48
|
)
|
|
(93
|
)
|
|
|||||
Amounts paid
|
(19
|
)
|
|
(15
|
)
|
|
(21
|
)
|
|
(16
|
)
|
|
(16
|
)
|
|
|||||
Asbestos reserve - end of period
|
$
|
347
|
|
|
$
|
326
|
|
|
$
|
320
|
|
|
$
|
311
|
|
|
$
|
375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
||||||
|
June 30
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
||
Reserve - beginning of period
|
$
|
228
|
|
|
$
|
246
|
|
Disbursements, net of cost recoveries
|
(35
|
)
|
|
(29
|
)
|
||
Revised obligation estimates and accretion
|
27
|
|
|
23
|
|
||
Foreign currency translation
|
1
|
|
|
(1
|
)
|
||
Reserve - end of period
|
$
|
221
|
|
|
$
|
239
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Environmental expense
|
$
|
20
|
|
|
$
|
12
|
|
|
$
|
25
|
|
|
$
|
20
|
|
Accretion
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Legal expense
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Total expense
|
20
|
|
|
14
|
|
|
28
|
|
|
25
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Insurance receivable
|
(3
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(5
|
)
|
||||
Total expense, net of receivable activity
(a)
|
$
|
17
|
|
|
$
|
12
|
|
|
$
|
24
|
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
(a)
|
Net expense of
$2 million
and
$4 million
, respectively, for the
three and nine
months ended
June 30, 2013
and
$5 million
and
$8 million
, respectively, for the
three and nine
months ended
June 30, 2012
relates to divested businesses which qualified for treatment as discontinued operations and for which the environmental liabilities were retained by Ashland. This amount is classified within the income (loss) from discontinued operations caption of the Statements of Consolidated Comprehensive Income.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions except per share data)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Numerator for basic and diluted EPS – Income
|
|
|
|
|
|
|
|
||||||||
from continuing operations
|
$
|
117
|
|
|
$
|
160
|
|
|
$
|
274
|
|
|
$
|
310
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|||||
Denominator for basic EPS – Weighted-average
|
|
|
|
|
|
|
|
|
|
|
|||||
common shares outstanding
|
79
|
|
|
78
|
|
|
79
|
|
|
78
|
|
||||
Share based awards convertible to common shares
|
1
|
|
|
2
|
|
|
1
|
|
|
2
|
|
||||
Denominator for diluted EPS – Adjusted weighted-
|
|
|
|
|
|
|
|
|
|
|
|||||
average shares and assumed conversions
|
80
|
|
|
80
|
|
|
80
|
|
|
80
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EPS from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
1.49
|
|
|
$
|
2.04
|
|
|
$
|
3.48
|
|
|
$
|
3.97
|
|
Diluted
|
1.47
|
|
|
2.00
|
|
|
3.42
|
|
|
3.90
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
|
|
Tax
|
|
|
|
|
|
|
Tax
|
|
|
|
||||||||||
|
Before
|
|
|
(expense)
|
|
|
Net of
|
|
|
Before
|
|
|
(expense)
|
|
|
Net of
|
|
||||||
(In millions)
|
tax
|
|
|
benefit
|
|
|
tax
|
|
|
tax
|
|
|
benefit
|
|
|
tax
|
|
||||||
Three months ended June 30
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized translation loss
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
(190
|
)
|
|
$
|
—
|
|
|
$
|
(190
|
)
|
Pension and postretirement obligation adjustment
|
(6
|
)
|
|
2
|
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Net change in interest rate hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
9
|
|
|
(14
|
)
|
||||||
Total other comprehensive income (loss)
|
$
|
(15
|
)
|
|
$
|
2
|
|
|
$
|
(13
|
)
|
|
$
|
(214
|
)
|
|
$
|
9
|
|
|
$
|
(205
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine months ended June 30
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized translation loss
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
|
$
|
(217
|
)
|
|
$
|
—
|
|
|
$
|
(217
|
)
|
Pension and postretirement obligation adjustment
|
(17
|
)
|
|
6
|
|
|
(11
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Net change in interest rate hedges
|
62
|
|
|
(24
|
)
|
|
38
|
|
|
(33
|
)
|
|
13
|
|
|
(20
|
)
|
||||||
Total other comprehensive income (loss)
|
$
|
15
|
|
|
$
|
(18
|
)
|
|
$
|
(3
|
)
|
|
$
|
(251
|
)
|
|
$
|
13
|
|
|
$
|
(238
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions - unaudited)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
SALES
|
|
|
|
|
|
|
|
||||||||
Specialty Ingredients
|
$
|
716
|
|
|
$
|
793
|
|
|
$
|
2,020
|
|
|
$
|
2,144
|
|
Water Technologies
|
435
|
|
|
427
|
|
|
1,281
|
|
|
1,302
|
|
||||
Performance Materials
|
395
|
|
|
404
|
|
|
1,113
|
|
|
1,191
|
|
||||
Consumer Markets
|
513
|
|
|
517
|
|
|
1,488
|
|
|
1,512
|
|
||||
|
$
|
2,059
|
|
|
$
|
2,141
|
|
|
$
|
5,902
|
|
|
$
|
6,149
|
|
OPERATING INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
92
|
|
|
$
|
156
|
|
|
$
|
251
|
|
|
$
|
341
|
|
Water Technologies
|
23
|
|
|
19
|
|
|
49
|
|
|
64
|
|
||||
Performance Materials
|
17
|
|
|
37
|
|
|
52
|
|
|
92
|
|
||||
Consumer Markets
|
77
|
|
|
59
|
|
|
222
|
|
|
162
|
|
||||
Unallocated and other
(a)
|
1
|
|
|
(8
|
)
|
|
17
|
|
|
(73
|
)
|
||||
|
$
|
210
|
|
|
$
|
263
|
|
|
$
|
591
|
|
|
$
|
586
|
|
|
|
|
|
|
|
|
|
(a)
|
For further information on the quantitative amounts of each component within this segment, see page
51
within Management’s Discussion and Analysis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||
|
June 30
|
|
June 30
|
||||||||
Sales by Geography
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
North America
(a)
|
51
|
%
|
|
54
|
%
|
|
51
|
%
|
|
53
|
%
|
Europe
|
28
|
%
|
|
26
|
%
|
|
28
|
%
|
|
27
|
%
|
Asia Pacific
|
14
|
%
|
|
13
|
%
|
|
14
|
%
|
|
13
|
%
|
Latin America & other
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||
|
June 30
|
|
June 30
|
||||||||
Sales by Business Segment
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Specialty Ingredients
|
35
|
%
|
|
37
|
%
|
|
34
|
%
|
|
35
|
%
|
Water Technologies
|
21
|
%
|
|
20
|
%
|
|
22
|
%
|
|
21
|
%
|
Performance Materials
|
19
|
%
|
|
19
|
%
|
|
19
|
%
|
|
19
|
%
|
Consumer Markets
|
25
|
%
|
|
24
|
%
|
|
25
|
%
|
|
25
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
June 30
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
||
Net income
|
$
|
124
|
|
|
$
|
151
|
|
Income tax expense
|
41
|
|
|
55
|
|
||
Net interest and other financing expense
|
51
|
|
|
53
|
|
||
Depreciation and amortization
|
106
|
|
|
107
|
|
||
EBITDA
|
322
|
|
|
366
|
|
||
(Income) loss from discontinued operations (net of income taxes)
|
(7
|
)
|
|
9
|
|
||
Settled claim
|
(13
|
)
|
|
—
|
|
||
Restructuring and other integration costs
|
7
|
|
|
3
|
|
||
Net loss on divestitures
|
—
|
|
|
(5
|
)
|
||
Environmental reserve adjustments
|
16
|
|
|
8
|
|
||
Adjusted EBITDA
|
$
|
325
|
|
|
$
|
381
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
||||||
|
June 30
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
||
Net income
|
$
|
278
|
|
|
$
|
300
|
|
Income tax expense
|
84
|
|
|
112
|
|
||
Net interest and other financing expense
|
239
|
|
|
166
|
|
||
Depreciation and amortization
(a)
|
316
|
|
|
319
|
|
||
EBITDA
|
917
|
|
|
897
|
|
||
(Income) loss from discontinued operations (net of income taxes)
|
(4
|
)
|
|
10
|
|
||
Restructuring and other integration costs
|
30
|
|
|
68
|
|
||
Settled claim
|
(13
|
)
|
|
—
|
|
||
Insurance settlement
|
(22
|
)
|
|
—
|
|
||
Environmental reserve adjustments
|
16
|
|
|
8
|
|
||
Impairment of IPR&D assets
|
4
|
|
|
—
|
|
||
Foreign tax assessment
|
2
|
|
|
—
|
|
||
Net gain on divestitures
|
—
|
|
|
(1
|
)
|
||
Inventory fair value adjustment
|
—
|
|
|
28
|
|
||
Accelerated depreciation
|
2
|
|
|
1
|
|
||
Adjusted EBITDA
|
$
|
932
|
|
|
$
|
1,011
|
|
|
|
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Sales
|
$
|
2,059
|
|
|
$
|
2,141
|
|
|
$
|
(82
|
)
|
|
$
|
5,902
|
|
|
$
|
6,149
|
|
|
$
|
(247
|
)
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Cost of sales
|
$
|
1,479
|
|
|
$
|
1,514
|
|
|
$
|
(35
|
)
|
|
$
|
4,217
|
|
|
$
|
4,426
|
|
|
$
|
(209
|
)
|
Gross profit as a percent of sales
|
28.2
|
%
|
|
29.3
|
%
|
|
|
|
|
28.5
|
%
|
|
28.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Selling, general and administrative
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
expense
|
$
|
363
|
|
|
$
|
349
|
|
|
$
|
14
|
|
|
$
|
1,047
|
|
|
$
|
1,092
|
|
|
$
|
(45
|
)
|
As a percent of sales
|
17.6
|
%
|
|
16.3
|
%
|
|
|
|
|
17.7
|
%
|
|
17.8
|
%
|
|
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Research and development expense
|
$
|
35
|
|
|
$
|
30
|
|
|
$
|
5
|
|
|
$
|
106
|
|
|
$
|
91
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Equity and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity income
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
(2
|
)
|
|
$
|
21
|
|
|
$
|
24
|
|
|
$
|
(3
|
)
|
Other income
|
20
|
|
|
5
|
|
|
15
|
|
|
38
|
|
|
22
|
|
|
16
|
|
||||||
|
$
|
28
|
|
|
$
|
15
|
|
|
$
|
13
|
|
|
$
|
59
|
|
|
$
|
46
|
|
|
$
|
13
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Net interest and other financing
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
expense (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
46
|
|
|
$
|
56
|
|
|
$
|
(10
|
)
|
|
$
|
231
|
|
|
$
|
170
|
|
|
$
|
61
|
|
Interest income
|
(1
|
)
|
|
(4
|
)
|
|
3
|
|
|
(2
|
)
|
|
(9
|
)
|
|
7
|
|
||||||
Other financing costs
|
6
|
|
|
1
|
|
|
5
|
|
|
10
|
|
|
5
|
|
|
5
|
|
||||||
|
$
|
51
|
|
|
$
|
53
|
|
|
$
|
(2
|
)
|
|
$
|
239
|
|
|
$
|
166
|
|
|
$
|
73
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Net (loss) gain on divestitures
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MAP Transaction adjustments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
6
|
|
|
(3
|
)
|
|
9
|
|
||||||
AWT middle market commercial accounts
|
—
|
|
|
5
|
|
|
(5
|
)
|
|
—
|
|
|
5
|
|
|
(5
|
)
|
||||||
|
$
|
(1
|
)
|
|
$
|
5
|
|
|
$
|
(6
|
)
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Income tax expense
|
$
|
41
|
|
|
$
|
55
|
|
|
$
|
(14
|
)
|
|
$
|
84
|
|
|
$
|
112
|
|
|
$
|
(28
|
)
|
Effective tax rate
|
25.9
|
%
|
|
25.6
|
%
|
|
|
|
|
23.5
|
%
|
|
26.5
|
%
|
|
|
|
|
Three months ended June 30
|
|
Nine months ended June 30
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
||||||
Income (loss) from discontinued
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
operations (net of income taxes)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distribution
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(9
|
)
|
|
$
|
6
|
|
Asbestos-related litigation reserves
|
4
|
|
|
(7
|
)
|
|
11
|
|
|
3
|
|
|
(1
|
)
|
|
4
|
|
||||||
APAC
|
5
|
|
|
—
|
|
|
5
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
|
$
|
7
|
|
|
$
|
(9
|
)
|
|
$
|
16
|
|
|
$
|
4
|
|
|
$
|
(10
|
)
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Sales
|
|
|
|
|
|
|
|
||||||||
Specialty Ingredients
|
$
|
716
|
|
|
$
|
793
|
|
|
$
|
2,020
|
|
|
$
|
2,144
|
|
Water Technologies
|
435
|
|
|
427
|
|
|
1,281
|
|
|
1,302
|
|
||||
Performance Materials
|
395
|
|
|
404
|
|
|
1,113
|
|
|
1,191
|
|
||||
Consumer Markets
|
513
|
|
|
517
|
|
|
1,488
|
|
|
1,512
|
|
||||
|
$
|
2,059
|
|
|
$
|
2,141
|
|
|
$
|
5,902
|
|
|
$
|
6,149
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
92
|
|
|
$
|
156
|
|
|
$
|
251
|
|
|
$
|
341
|
|
Water Technologies
|
23
|
|
|
19
|
|
|
49
|
|
|
64
|
|
||||
Performance Materials
|
17
|
|
|
37
|
|
|
52
|
|
|
92
|
|
||||
Consumer Markets
|
77
|
|
|
59
|
|
|
222
|
|
|
162
|
|
||||
Unallocated and other
|
1
|
|
|
(8
|
)
|
|
17
|
|
|
(73
|
)
|
||||
|
$
|
210
|
|
|
$
|
263
|
|
|
$
|
591
|
|
|
$
|
586
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
66
|
|
|
$
|
68
|
|
|
$
|
198
|
|
|
$
|
200
|
|
Water Technologies
|
18
|
|
|
18
|
|
|
54
|
|
|
54
|
|
||||
Performance Materials
|
13
|
|
|
12
|
|
|
40
|
|
|
37
|
|
||||
Consumer Markets
|
9
|
|
|
9
|
|
|
26
|
|
|
27
|
|
||||
Unallocated and other
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
|
$
|
106
|
|
|
$
|
107
|
|
|
$
|
318
|
|
|
$
|
320
|
|
Operating information
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales per shipping day
|
$
|
11.2
|
|
|
$
|
12.4
|
|
|
$
|
10.7
|
|
|
$
|
11.3
|
|
Metric tons sold (thousands)
|
108.7
|
|
|
104.3
|
|
|
298.3
|
|
|
298.9
|
|
||||
Gross profit as a percent of sales
(a)
|
28.5
|
%
|
|
34.7
|
%
|
|
29.9
|
%
|
|
32.6
|
%
|
||||
Water Technologies
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales per shipping day
|
$
|
6.8
|
|
|
$
|
6.7
|
|
|
$
|
6.8
|
|
|
$
|
6.9
|
|
Gross profit as a percent of sales
(a)
|
33.9
|
%
|
|
32.1
|
%
|
|
33.5
|
%
|
|
31.7
|
%
|
||||
Performance Materials
|
|
|
|
|
|
|
|
|
|
||||||
Sales per shipping day
|
$
|
6.2
|
|
|
$
|
6.3
|
|
|
$
|
5.9
|
|
|
$
|
6.3
|
|
Metric tons sold (thousands)
|
137.9
|
|
|
133.4
|
|
|
394.0
|
|
|
411.3
|
|
||||
Gross profit as a percent of sales
(a)
|
14.2
|
%
|
|
18.1
|
%
|
|
14.8
|
%
|
|
17.3
|
%
|
||||
Consumer Markets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lubricant sales gallons
|
41.3
|
|
|
40.8
|
|
|
117.6
|
|
|
118.2
|
|
||||
Premium lubricants (percent of U.S. branded volumes)
|
33.6
|
%
|
|
30.8
|
%
|
|
33.5
|
%
|
|
30.2
|
%
|
||||
Gross profit as a percent of sales
(a)
|
32.4
|
%
|
|
26.8
|
%
|
|
31.5
|
%
|
|
26.2
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Operating income
|
$
|
92
|
|
|
$
|
156
|
|
|
$
|
251
|
|
|
$
|
341
|
|
Depreciation and amortization
|
66
|
|
|
68
|
|
|
198
|
|
|
200
|
|
||||
EBITDA
|
158
|
|
|
224
|
|
|
449
|
|
|
541
|
|
||||
Settled claim
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
||||
Insurance settlement
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||
Inventory fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Impairment of IPR&D assets
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
145
|
|
|
$
|
224
|
|
|
$
|
418
|
|
|
$
|
569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Operating income
|
$
|
23
|
|
|
$
|
19
|
|
|
$
|
49
|
|
|
$
|
64
|
|
Depreciation and amortization
|
18
|
|
|
18
|
|
|
54
|
|
|
54
|
|
||||
EBITDA
|
41
|
|
|
37
|
|
|
103
|
|
|
118
|
|
||||
Severance
|
—
|
|
|
—
|
|
|
11
|
|
|
(2
|
)
|
||||
Adjusted EBITDA
|
$
|
41
|
|
|
$
|
37
|
|
|
$
|
114
|
|
|
$
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Operating income
|
$
|
17
|
|
|
$
|
37
|
|
|
$
|
52
|
|
|
$
|
92
|
|
Depreciation and amortization
(a)
|
13
|
|
|
12
|
|
|
38
|
|
|
37
|
|
||||
EBITDA
|
30
|
|
|
49
|
|
|
90
|
|
|
129
|
|
||||
Accelerated depreciation and other plant closure costs
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
30
|
|
|
$
|
49
|
|
|
$
|
92
|
|
|
$
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Operating income
|
$
|
77
|
|
|
$
|
59
|
|
|
$
|
222
|
|
|
$
|
162
|
|
Depreciation and amortization
|
9
|
|
|
9
|
|
|
26
|
|
|
27
|
|
||||
EBITDA
|
$
|
86
|
|
|
$
|
68
|
|
|
$
|
248
|
|
|
$
|
189
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
June 30
|
|
June 30
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Pension and other postretirement net periodic income
|
|
|
|
|
|
|
|
||||||||
(excluding service cost)
|
$
|
20
|
|
|
$
|
7
|
|
|
$
|
58
|
|
|
$
|
24
|
|
Restructuring activities (includes severance, integration
|
|
|
|
|
|
|
|
|
|
|
|
||||
and stranded divestiture costs)
|
(7
|
)
|
|
(3
|
)
|
|
(19
|
)
|
|
(81
|
)
|
||||
Environmental reserves for divested businesses
|
(16
|
)
|
|
(8
|
)
|
|
(20
|
)
|
|
(13
|
)
|
||||
Other income (expense)
|
4
|
|
|
(4
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||
Total unallocated income (expense)
|
$
|
1
|
|
|
$
|
(8
|
)
|
|
$
|
17
|
|
|
$
|
(73
|
)
|
|
Nine months ended
|
||||||
|
June 30
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
||
Cash provided (used) by:
|
|
|
|
||||
Operating activities from continuing operations
|
$
|
493
|
|
|
$
|
146
|
|
Investing activities from continuing operations
|
(181
|
)
|
|
(109
|
)
|
||
Financing activities from continuing operations
|
(417
|
)
|
|
(153
|
)
|
||
Discontinued operations
|
(43
|
)
|
|
(18
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
2
|
|
|
(6
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(146
|
)
|
|
$
|
(140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
||||||
|
June 30
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
||
Cash flows provided by operating activities from continuing operations
|
$
|
493
|
|
|
$
|
146
|
|
Adjustments:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(188
|
)
|
|
(164
|
)
|
||
Payment resulting from termination of interest rate swaps
(a)
|
52
|
|
|
—
|
|
||
ISP acquisition - change in control payment
(b)
|
—
|
|
|
92
|
|
||
Free cash flows
|
$
|
357
|
|
|
$
|
74
|
|
|
|
|
|
(a)
|
Since payment was generated as a result of financing activity, this amount has been included within this calculation.
|
(b)
|
Since payment was generated as a result of investment activity, this amount has been included within this calculation.
|
|
June 30
|
|
|
September 30
|
|
||
(In millions)
|
2013
|
|
|
2012
|
|
||
Cash and cash equivalents
|
$
|
377
|
|
|
$
|
523
|
|
|
|
|
|
||||
Unused borrowing capacity
|
|
|
|
|
|
||
Revolving credit facility
|
$
|
1,047
|
|
|
$
|
905
|
|
Accounts receivable securitization facility
|
$
|
—
|
|
|
$
|
50
|
|
|
June 30
|
|
|
September 30
|
|
||
(In millions)
|
2013
|
|
|
2012
|
|
||
Short-term debt
|
$
|
456
|
|
|
$
|
344
|
|
Long-term debt (including current portion)
|
2,966
|
|
|
3,246
|
|
||
Total debt
|
$
|
3,422
|
|
|
$
|
3,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
As of the end of the period covered by this quarterly report, Ashland, under the supervision and with the participation of its management, including Ashland’s Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of Ashland’s disclosure controls and procedures pursuant to Rule 13a-15(b) and 15d-15(b) promulgated under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective.
|
(b)
|
During the
nine
months ended
June 30, 2013
, there were no significant changes in Ashland’s internal control over financial reporting, or in other factors, that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, Ashland’s internal control over financial reporting.
|
|
Ashland Inc.
|
|
(Registrant)
|
August 1, 2013
|
/s/ J. Kevin Willis
|
|
J. Kevin Willis
|
|
Senior Vice President and Chief Financial Officer
(on behalf of the Registrant and as principal
financial officer)
|
Exhibit No.
|
|
Description
|
10.1*
|
|
Ashland Inc. Severance Pay Plan.
|
|
|
|
10.2*
|
|
First Amendment to Transfer and Administration Agreement, dated as of April 30, 2013, among Ashland Inc., CVG Capital III LLC, the Investors, Letter of Credit Issuers, Managing Agents and Administrators party thereto, and the Bank of Nova Scotia, as Agent for the Investors.
|
|
|
|
12*
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
31.1*
|
|
Certificate of James J. O’Brien, Chief Executive Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certificate of J. Kevin Willis, Chief Financial Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32*
|
|
Certificate of James J. O’Brien, Chief Executive Officer of Ashland, and J. Kevin Willis, Chief Financial Officer of Ashland pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS**
|
|
XBRL Instance Document.
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
1)
|
Ashland Inc. Severance Pay Plan (base salary grades 22 and above);
|
2)
|
Ashland Inc. Severance Pay Plan (base salary grades 21 and below); and
|
3)
|
Ashland Inc. Salary Continuation Plan.
|
INTRODUCTION ...................................................................................................................
|
1
|
|
|
PLAN INFORMATION ..........................................................................................................
|
1
|
Eligibility ..............................................................................................................................................................
|
1
|
Exclusions from Eligibility .................................................................................................................................
|
1
|
Conditions of Severance Payments ....................................................................................................................
|
1
|
Amount of Benefits .............................................................................................................................................
|
2
|
Continuous Service ............................................................................................................................................
|
2
|
Base Rate of Pay ................................................................................................................................................
|
3
|
Method of Payment ............................................................................................................................................
|
3
|
Payment to Specified Employees ......................................................................................................................
|
4
|
Duplication of Payments ....................................................................................................................................
|
4
|
Terminations Not Covered .................................................................................................................................
|
5
|
Deferred Terminations ........................................................................................................................................
|
5
|
|
|
CLAIM PROCEDURES ........................................................................................................
|
5
|
How to Apply for Benefits .................................................................................................................................
|
5
|
Notice of Claim Denial/Right of Appeal ...........................................................................................................
|
5
|
Initial Claim - Notice of Denial .........................................................................................................................
|
5
|
Appeal of Denied Claim .....................................................................................................................................
|
6
|
|
|
GENERAL INFORMATION ................................................................................................
|
7
|
Plan Sponsor/Administrator .............................................................................................................................
|
7
|
Plan Identification ..............................................................................................................................................
|
7
|
Plan Year .............................................................................................................................................................
|
7
|
Legal Service .......................................................................................................................................................
|
7
|
Method of Funding .............................................................................................................................................
|
7
|
Your Rights .........................................................................................................................................................
|
7
|
Plan Interpretations/Administration ................................................................................................................
|
8
|
Plan Documents ..................................................................................................................................................
|
8
|
Non-Assignments of Benefits .............................................................................................................................
|
8
|
Plan Amendment/Termination ..........................................................................................................................
|
9
|
Authority to Delegate .........................................................................................................................................
|
9
|
Elections and Notices .........................................................................................................................................
|
9
|
Applicable Law ...................................................................................................................................................
|
9
|
•
|
You are a regular, full-time employee of the company; and
|
•
|
You are working in a group designated by the plan sponsor as eligible for this plan.
|
•
|
You are covered by a collective bargaining agreement, unless the collective bargaining agreement provides you are eligible for the plan.
|
•
|
You have an agreement with the company that provides severance payments for one or more of the conditions for severance payments described in this plan.
|
•
|
You are in a classification of one or more employees designated in advance by the plan sponsor as exempted from participating in the plan or, you are employed in a division or subsidiary of the company that opted out of participating in the plan.
|
•
|
You are employed by a non-U.S. subsidiary of the company.
|
•
|
You reside and work outside of the United States and you are subject to a statutory severance or similar obligation required under the law of the foreign jurisdiction in which you work.
|
1.
|
the permanent closing of a location or plant;
|
2.
|
job discontinuance; or
|
3.
|
any circumstances in which your active employment is terminated at the company's initiative for reasons not excluded under the plan and the company, in conjunction with the plan sponsor, elects to provide benefits for such circumstances.
|
1.
|
If you are given advance notice, you must continue to work until you are officially released by the company; and
|
2.
|
You must sign and execute a Severance Agreement and Release prepared by appropriate company legal counsel, and the Severance Agreement and Release must become effective and irrevocable in accordance with its terms within 55 days after your termination of active employment.
|
Position/Base Salary Grade
|
Severance Benefit
|
Chief Executive Officer
|
104 weeks of base salary
|
Base Salary Grades 25-29
|
78 weeks of base salary
|
Base Salary Grades 22-24
|
52 weeks of base salary
|
•
|
your hire date;
|
•
|
your rehire date; or
|
•
|
your adjusted service date
|
•
|
Two times your annual base pay for the prior calendar year (adjusted for any increase that occurred during that year and that was expected to last indefinitely, but for the termination); or
|
•
|
Two times the maximum Internal Revenue Code section 401(a)(17) limit for the year of the termination ($510,000 in 2013, which is two times the 2013 limit of $255,000).
|
1.
|
Refusal to sign the Severance Agreement and Release provided by the company;
|
2.
|
Discharge for less than effective performance, absenteeism or misconduct;
|
3.
|
Voluntary resignations;
|
4.
|
Declining an offer by the company of equivalent employment as an alternative to termination, provided that a transfer to a new geographic location shall not be considered to be “equivalent employment;"
|
5.
|
Accepting an offer of employment by the company of non-equivalent employment;
|
6.
|
The sale, exchange or transfer of company property to another employer who assumes the operations of a company facility or business, unless such sale, exchange or transfer results in unemployment caused by reasons other than the employee's refusal to accept or continue employment with the new employer, as determined by the plan sponsor;
|
7.
|
When an employee is entitled to benefits under the “Ashland Inc. Salary Continuation Plan;”
|
8.
|
Death;
|
9.
|
Retirement (except for retirements which result from situations outlined under the
Condition of Severance Payments
section of this plan);
|
10.
|
Entitlement to severance or severance-related benefits under an employment agreement;
|
11.
|
Terminations while on a personal unpaid leave of absence or when reinstatement attempts following the expiration of such leave are unsuccessful; and
|
12.
|
Subject to certain terminations (refer to the section entitled
Deferred Terminations
), when an employee does not return to work following a period of disability.
|
•
|
The reasons for the denial.
|
•
|
Reference to the plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
|
•
|
A description of additional materials or information needed to process the claim. It will also explain why those materials or information are needed.
|
•
|
A description of the procedure to appeal the denial, including the time limits applicable to those procedures. It will also state that the claimant may file a civil action under Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA - §29 U.S.C. 1132). The claimant must complete the plan's appeal procedure before filing a civil action in court.
|
•
|
The reasons for the denial.
|
•
|
Reference to the plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
|
•
|
A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim.
|
•
|
A description of any voluntary procedure for an additional appeal, if there is such a procedure. It will also state that the claimant may file a civil action under Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA - §29 U.S.C. 1132).
|
•
|
The Employer Identification Number assigned by the IRS to Ashland Inc. is 20-0865835.
|
•
|
The plan number assigned to the plan is 541.
|
•
|
Examine, without charge, at the plan administrator's office and at various work sites, all plan documents, including insurance contracts, collective bargaining agreements, and copies of all documents filed by the plan with the U.S. Department of Labor, such as annual reports and plan descriptions.
|
•
|
Obtain copies of all plan documents and other plan information upon written request to the plan administrator. There will be a charge of 10 cents per page for these documents, and you will be required to furnish a personal check payable to Ashland Inc. covering the photocopying cost before receiving any copies.
|
•
|
Receive a summary of the plan's annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary financial report.
|
•
|
File suit in federal court, if any materials requested are not received within 30 days of your request, unless the materials were not sent because of matters beyond the control of the plan administrator. The court may require the plan administrator to pay you up to $110 for each day's delay until the materials are received.
|
INTRODUCTION ...................................................................................................................
|
1
|
|
|
PLAN INFORMATION ..........................................................................................................
|
1
|
Eligibility ..............................................................................................................................................................
|
1
|
Exclusions from Eligibility .................................................................................................................................
|
1
|
Conditions of Severance Payments ....................................................................................................................
|
1
|
Amount of Benefits .............................................................................................................................................
|
2
|
Continuous Service .............................................................................................................................................
|
2
|
Base Rate of Pay .................................................................................................................................................
|
3
|
Method of Payment .............................................................................................................................................
|
3
|
Duplication of Payments .....................................................................................................................................
|
4
|
Terminations Not Covered .................................................................................................................................
|
4
|
Deferred Terminations ........................................................................................................................................
|
5
|
|
|
CLAIM PROCEDURES .........................................................................................................
|
5
|
How to Apply for Benefits ..................................................................................................................................
|
5
|
Notice of Claim Denial/Right of Appeal ............................................................................................................
|
5
|
Initial Claim - Notice of Denial ..........................................................................................................................
|
5
|
Appeal of Denied Claim .....................................................................................................................................
|
5
|
|
|
GENERAL INFORMATION .................................................................................................
|
6
|
Plan Sponsor/Administrator ..............................................................................................................................
|
6
|
Plan Identification ...............................................................................................................................................
|
6
|
Plan Year ..............................................................................................................................................................
|
7
|
Legal Service ........................................................................................................................................................
|
7
|
Method of Funding .............................................................................................................................................
|
7
|
Your Rights ..........................................................................................................................................................
|
7
|
Plan Interpretations/Administration ................................................................................................................
|
7
|
Plan Documents ...................................................................................................................................................
|
8
|
Non-Assignments of Benefits .............................................................................................................................
|
8
|
Plan Amendment/Termination ...........................................................................................................................
|
8
|
Authority to Delegate ..........................................................................................................................................
|
8
|
Elections and Notices ..........................................................................................................................................
|
8
|
Applicable Law ...................................................................................................................................................
|
8
|
•
|
You are a regular, full-time employee of the company;
|
•
|
You have been working for the company for at least 12 weeks; and
|
•
|
You are working in a group designated by the plan sponsor as eligible for this plan.
|
•
|
You are covered by a collective bargaining agreement, unless the collective bargaining agreement provides you are eligible for the plan.
|
•
|
You have an agreement with the company that provides severance payments for one or more of the conditions for severance payments described in this plan.
|
•
|
You are in a classification of one or more employees designated in advance by the plan sponsor as exempted from participating in the plan or, you are employed in a division or subsidiary of the company that opted out of participating in the plan.
|
•
|
You are employed by a non-U.S. subsidiary of the company.
|
•
|
You reside and work outside of the United States and you are subject to a statutory severance or similar obligation required under the law of the foreign jurisdiction in which you work.
|
1.
|
the permanent closing of a location or plant;
|
2.
|
job discontinuance; or
|
3.
|
any circumstances in which your active employment is terminated at the company's initiative for reasons not excluded under the plan and the company, in conjunction with the plan sponsor, elects to provide benefits for such circumstances.
|
1.
|
If you are given advance notice, you must continue to work until you are officially released by the company; and
|
2.
|
You must sign and execute a Severance Agreement and Release prepared by appropriate company legal counsel, and the Severance Agreement and Release must become effective and irrevocable in accordance with its terms within 55 days after your termination of active employment.
|
•
|
your hire date;
|
•
|
your rehire date; or
|
•
|
your adjusted service date
|
1.
|
Refusal to sign the Severance Agreement and Release provided by the company;
|
2.
|
Discharge for less than effective performance, absenteeism or misconduct;
|
3.
|
Voluntary resignations;
|
4.
|
Declining an offer by the company of equivalent employment as an alternative to termination, provided that a transfer to a new geographic location shall not be considered to be “equivalent employment;"
|
5.
|
Accepting an offer of employment by the company of non-equivalent employment;
|
6.
|
The sale, exchange or transfer of company property to another employer who assumes the operations of a company facility or business, unless such sale, exchange or transfer results in unemployment caused by reasons other than the employee's refusal to accept or continue employment with the new employer, as determined by the plan sponsor;
|
7.
|
When an employee is entitled to benefits under the “Ashland Inc. Salary Continuation Plan;”
|
8.
|
Death;
|
9.
|
Retirement (except for retirements which result from situations outlined under the
Condition of Severance Payments
section of this plan);
|
10.
|
Entitlement to severance or severance-related benefits under an employment agreement;
|
11.
|
Terminations while on a personal unpaid leave of absence or when reinstatement attempts following the expiration of such leave are unsuccessful; and
|
12.
|
Subject to certain terminations (refer to the section entitled
Deferred Terminations
), when an employee does not return to work following a period of disability.
|
•
|
The reasons for the denial.
|
•
|
Reference to the plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
|
•
|
A description of additional materials or information needed to process the claim. It will also explain why those materials or information are needed.
|
•
|
A description of the procedure to appeal the denial, including the time limits applicable to those procedures. It will also state that the claimant may file a civil action under Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA - §29 U.S.C. 1132). The claimant must complete the plan's appeal procedure before filing a civil action in court.
|
•
|
The reasons for the denial.
|
•
|
Reference to the plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
|
•
|
A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim.
|
•
|
A description of any voluntary procedure for an additional appeal, if there is such a procedure. It will also state that the claimant may file a civil action under Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA - §29 U.S.C. 1132).
|
•
|
The Employer Identification Number assigned by the IRS to Ashland Inc. is 20-0865835.
|
•
|
The plan number assigned to the plan is 541.
|
•
|
Examine, without charge, at the plan administrator's office and at various work sites, all plan documents, including insurance contracts, collective bargaining agreements, and copies of all documents filed by the plan with the U.S. Department of Labor, such as annual reports and plan descriptions.
|
•
|
Obtain copies of all plan documents and other plan information upon written request to the plan administrator. There will be a charge of 10 cents per page for these documents, and you will be required to furnish a personal check payable to Ashland Inc. covering the photocopying cost before receiving any copies.
|
•
|
Receive a summary of the plan's annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary financial report.
|
•
|
File suit in federal court, if any materials requested are not received within 30 days of your request, unless the materials were not sent because of matters beyond the control of the plan administrator. The court may require the plan administrator to pay you up to $110 for each day's delay until the materials are received.
|
Base Salary Grade
|
Number of Calendar Months
|
22 and above
|
12
|
Exempt employees 21 and below
|
6
|
Non-exempt employees
|
1
|
|
CVG CAPITAL III LLC, as SPV
|
|
|
|
|
|
|
|
|
By:
|
/s/ Lynn P. Freeman
|
|
Name:
|
Lynn P. Freeman
|
|
Title:
|
Treasurer
|
|
ASHLAND INC., individually and as Master Servicer
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name:
|
Eric N. Boni
|
|
Title:
|
Vice President and Treasurer
|
|
ASHLAND INC., individually and as Originator
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name:
|
Eric N. Boni
|
|
Title:
|
Vice President and Treasurer
|
|
HERCULES INCORPORATED, as Originator
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name:
|
Eric N. Boni
|
|
Title:
|
Vice President - Finance
|
|
AQUALON COMPANY, as Originator
|
|
|
|
|
|
|
|
|
By:
|
/s/ Lynn P. Freeman
|
|
Name:
|
Lynn P. Freeman
|
|
Title:
|
Vice President/Assistant Secretary and
|
|
|
Treasurer
|
|
ISP TECHNOLOGIES INC., as Originator
|
|
|
|
|
|
|
|
|
By:
|
/s/ Lynn P. Freeman
|
|
Name:
|
Lynn P. Freeman
|
|
Title:
|
Treasurer
|
|
ISP SYNTHETIC ELASTOMERS LLC, as Originator
|
|
|
|
|
|
|
|
|
By:
|
/s/ Lynn P. Freeman
|
|
Name:
|
Lynn P. Freeman
|
|
Title:
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Treasurer
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LIBERTY STREET FUNDING LLC, as a Conduit Investor and Uncommitted Investor
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By:
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/s/ Jill A. Russo
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Name:
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Jill A. Russo
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Title:
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Vice President
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MARKET STREET FUNDING LLC, as a Conduit Investor and Uncommitted Investor
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By:
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/s/ Doris J. Hearn
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Name:
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Doris J. Hearn
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Title:
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Vice President
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GOTHAM FUNDING CORPORATION, as a Conduit Investor and Uncommitted Investor
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By:
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/s/ David V. DeAngelis
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Name:
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David V. DeAngelis
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Title:
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Vice President
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THE BANK OF NOVA SCOTIA, as Agent, as a Letter of Credit Issuer, as a Managing Agent, Administrator and Committed Investor for the Scotiabank Investor Group
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By:
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/s/ Darren Ward
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Name:
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Darren Ward
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Title:
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Director
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD, as a Managing Agent and Administrator for the BTMU Investor Group
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By:
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/s/ Eric Williams
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Name:
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Eric Williams
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Title:
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Director
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD, as a Letter of Credit Issuer and Committed Investor for the BTMU Investor Group
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By:
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/s/ Mark Campbell
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Name:
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Mark Campbell
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Title:
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Authorized Signatory
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PNC BANK, NATIONAL ASSOCIATION, as a Letter of Credit Issuer, Managing Agent, Administrator and Committed Investor for the PNC Investor Group
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By:
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/s/ Mark Falcione
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Name:
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Mark Falcione
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Title:
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Executive Vice President
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SUNTRUST BANK, as a Letter of Credit Issuer, a Committed Investor, the Managing Agent and Administrator for the SunTrust Investor Group
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By:
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/s/ Jason Meyer
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Name:
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Jason Meyer
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Title:
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First Vice President
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1.
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I have reviewed this quarterly report on Form 10-Q of Ashland 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 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 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/ James J. O’Brien
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James J. O’Brien
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Chairman and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Ashland 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 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 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/ J. Kevin Willis
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J. Kevin Willis
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Chief Financial Officer
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(Principal 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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/s/ James J. O'Brien
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James J. O'Brien
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Chief Executive Officer
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August 1, 2013
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/s/ J. Kevin Willis
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J. Kevin Willis
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Chief Financial Officer
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August 1, 2013
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