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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Kentucky
(State or other jurisdiction of incorporation or organization)
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20-0865835
(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 $.01 per share
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New York Stock Exchange
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Large Accelerated Filer
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Accelerated Filer
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Non-Accelerated Filer
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Smaller Reporting Company
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(Do not check if a smaller reporting company)
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Page
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PART I
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Item 1.
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Business
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1
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General
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1
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Ashland Specialty Ingredients
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2
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Ashland Water Technologies
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3
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Ashland Performance Materials
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4
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Ashland Consumer Markets
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5
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Miscellaneous
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6
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Item 1A.
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Risk Factors
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9
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Item 1B.
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Unresolved Staff Comments
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13
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Item 2.
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Properties
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13
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Item 3.
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Legal Proceedings
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14
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Item 4.
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Mine Safety Disclosures
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15
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Item X.
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Executive Officers of Ashland
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15
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder
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Matters and Issuer Purchases of Equity Securities
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17
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Five-Year Total Return Performance Graph
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17
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Item 6.
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Selected Financial Data
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17
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Item 7.
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Management’s Discussion and Analysis of Financial
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Condition and Results of Operation
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18
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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18
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Item 8.
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Financial Statements and Supplementary Data
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18
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Item 9.
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Changes in and Disagreements with Accountants
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on Accounting and Financial Disclosure
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18
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Item 9A.
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Controls and Procedures
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18
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Item 9B.
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Other Information
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19
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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19
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Item 11.
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Executive Compensation
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20
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Item 12.
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Security Ownership of Certain Beneficial Owners
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and Management and Related Stockholder Matters
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20
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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21
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Item 14.
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Principal Accounting Fees and Services
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21
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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21
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•
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Oral Care – Specialty Ingredients’ portfolio of oral care products delivers active ingredients in toothpaste and mouthwashes; provides bioadhesive functionality for dentures; delivers flavor, texture and other functional properties; and provides product binding to ensure form and function throughout product lifecycle.
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•
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Hair Care – Specialty Ingredients’ portfolio of hair care products includes advanced styling polymers, fixatives, conditioning polymers, emulsifiers, preservatives and rheology modifiers.
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•
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Skin Care – Specialty Ingredients’ portfolio of skin care products helps to firm, nourish, revitalize and smooth skin. The Skin Care line also provides sun care products, including UV filters, water-resistant agents and thickeners. Emulsifiers, emollients, preservatives and rheology modifiers complete the Skin Care product line.
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•
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Home Care – Specialty Ingredients’ portfolio of products and technologies is used in many types of cleaning applications, including fabric care, home care and dishwashing. Specialty Ingredients’ products are used in a variety of applications for viscosity enhancement, particle suspension, rheology modification and stabilization.
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•
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Pharmaceutical – Specialty Ingredients is a leading supplier of excipients and tablet coating systems to the pharmaceutical and nutraceutical industries. The excipients business offers a comprehensive range of polymers for use as tablet binders, superdisintegrants, sustained-release agents and drug solubilizers, as well as a portfolio of fully formulated, one-step tablet coating systems for immediate-, sustained- and delayed-release applications.
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•
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Food and Beverage – Specialty Ingredients’ portfolio provides functional benefits in areas such as thickening, texture control, thermal gelation, structure enhancement, water binding, clarification and stabilization. Its core products include leading positions in cellulose gums and vinyl pyrrolidone polymers which are used in a wide range of offerings for bakery, beverage, dairy, desserts, meat products, pet food, prepared foods, sauces and savory products.
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•
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The Coatings Specialties business is a recognized leader in rheology solutions for waterborne architectural paint and coatings. Products include hydroxyethylcellulose (HEC), which provides thickening and application properties for interior and exterior paints, and nonionic synthetic associative thickeners (NSATs), which are APEO-free liquid synthetics for high-performance paint and industrial coatings. The Coatings Specialties business complements its rheology offering with a broad portfolio of performance foam-control agents, surfactants and wetting agents, dispersants and pH neutralizers. In addition, the Coatings Specialties business offers a comprehensive line of biocides and preservatives for paint, coatings and wood care.
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•
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The Construction Specialties business is a major producer and supplier of cellulose ethers and companion products for the construction industry. These products control properties such as water retention, open time, workability, adhesion, stabilization, pumping, sag resistance, rheology, strength, appearance and performance in dry-mortar formulations.
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•
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requiring Ashland to dedicate a substantial portion of its cash flow from operations to pay principal and interest on its debt, which would reduce the availability of Ashland’s cash flow to fund working capital, capital expenditures, acquisitions, execution of its growth strategy and other general corporate purposes;
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•
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limiting Ashland’s ability to borrow additional amounts to fund working capital, capital expenditures, acquisitions, debt service requirements, execution of its growth strategy and other purposes;
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•
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making Ashland more vulnerable to adverse changes in general economic, industry and regulatory conditions and in its business by limiting Ashland’s flexibility in planning for, and making it more difficult for Ashland to react quickly to, changing conditions;
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•
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placing Ashland at a competitive disadvantage compared with those of its competitors that have less debt and lower debt service requirements;
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•
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making Ashland more vulnerable to increases in interest rates since some of its indebtedness is subject to variable rates of interest; and
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•
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making it more difficult for Ashland to satisfy its financial obligations.
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2008
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2009
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2010
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2011
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2012
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2013
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Ashland
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100
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151
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172
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157
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258
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338
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S&P 500
†
(large-cap)
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100
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93
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102
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104
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135
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161
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S&P MidCap 400
†
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100
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97
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114
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113
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145
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184
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Peer Group - Materials
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100
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96
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108
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101
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132
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154
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•
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Peer Group – Materials:
S&P 500
†
Materials (large-cap) and S&P MidCap 400
†
Materials. As of
September 30, 2013
, this peer group consisted of
60
companies.
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Equity Compensation Plan Information
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Plan Category
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Number of securities to be issued upon exercise of outstanding options, warrants and rights
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Weighted-average exercise price of outstanding options, warrants and rights
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Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
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(a)
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(b)
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(c)
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Equity compensation plans approved by security
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holders........................................................................
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1,840,414
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(1)
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$
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55.84
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(2)
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2,541,034
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(3)
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Equity compensation plans not approved by security
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holders........................................................................
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214,547
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(4)
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—
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708,277
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(5)
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Total.......................................................................
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2,054,961
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$
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55.84
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(2)
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3,249,311
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(1)
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This figure includes (a) 44,610 stock options outstanding under the Amended and Restated Ashland Inc. Incentive Plan (“Amended Plan”) and (b) 10,326 stock options outstanding under the Hercules Incorporated Amended and Restated Long Term Incentive Compensation Plan. This figure also includes 37,019 net shares that could be issued under stock-settled SARs under the Amended Plan, 573,300 net shares that could be issued under stock-settled SARs under the 2006 Ashland Inc. Incentive Plan (“2006 Incentive Plan”) and 412,491 net shares that could be issued under stock-settled SARs under the Amended and Restated 2011 Ashland Inc. Incentive Plan (the “2011 Incentive Plan”), based upon the closing price of Ashland Common Stock on the NYSE as of September 30, 2013 of $92.48. Additionally, this figure includes 243,054 restricted shares granted under the Amended Plan and deferred, 142,414 performance share units for the fiscal 2011-2013 performance period, 166,850 performance share units for the fiscal 2012-2014 performance period, and 121,144 performance share units for the fiscal 2013-2015 performance period, payable in Ashland Common Stock under the 2006 Incentive Plan, 2011 Incentive Plan and 2011 Incentive Plan, respectively, estimated assuming target performance is achieved. Also included in the figure are 61,181 shares to be issued under the pre-2005 Deferred Compensation Plan for Employees and 28,025 shares to be issued under the pre-2005 Deferred Compensation Plan for Non-Employee Directors, payable in Ashland Common Stock upon termination of employment or service with Ashland.
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(2)
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The weighted-average exercise price excludes shares in Ashland Common Stock which may be distributed under the deferred compensation plans and the deferred restricted stock and performance share units which may be distributed under the Amended Plan, the 2006 Incentive Plan and the 2011 Incentive Plan, as described in footnotes (1) and (4) in this table.
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(3)
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This figure includes 2,094,024 shares available for issuance under the 2011 Incentive Plan, 148,027 shares available for issuance under the pre-2005 Deferred Compensation Plan for Employees and 285,969 shares available for issuance under the pre-2005 Deferred Compensation Plan for Non-Employee Directors.
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(4)
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This figure includes 45,968 shares to be issued under the Deferred Compensation Plan for Employees (2005), which is described in the “Non-Qualified Deferred Compensation - Ashland Inc. Employees’ Deferral Plan” section of Ashland’s proxy statement, and 168,579 shares to be issued under the Deferred Compensation Plan for Non-Employee Directors (2005), which is described in the “Compensation of Directors - Annual Retainer” and “Compensation of Directors - Restricted Shares/Units” sections of Ashland’s proxy statement, payable in Ashland Common Stock upon termination of employment or service with Ashland. Because these plans are not equity compensation plans as defined by the rules of the NYSE, neither plan required approval by Ashland’s shareholders.
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(5)
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This figure includes 400,347 shares available for issuance under the Deferred Compensation Plan for Employees (2005) and 307,930 shares available for issuance under the Deferred Compensation Plan for Non-Employee Directors (2005). Because these plans are not equity compensation plans as defined by the rules of the NYSE, neither plan required approval by Ashland’s shareholders.
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3.1
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–
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Third Restated Articles of Incorporation of Ashland and amendment thereto effective February 3, 2009 (filed as Exhibit 3.1 to Ashland’s Form 10-Q for the quarter ended December 31, 2008 (SEC File No. 001-32532), and incorporated herein by reference).
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3.2**
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–
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By-laws of Ashland, effective as of June 30, 2005.
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3.3**
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–
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Amendment to By-laws of Ashland, effective as of October 25, 2013.
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4.1
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–
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Ashland agrees to provide the SEC, upon request, copies of instruments defining the rights of holders of long-term debt of Ashland and all of its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed with the SEC.
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4.2
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Indenture, dated as of August 15, 1989, as amended and restated as of August 15, 1990, between Ashland Inc. and Citibank, N.A., as Trustee (filed as Exhibit 4.2 to Ashland’s Form 10-K for the fiscal year ended September 30, 2008 (SEC File No. 001-32532), and incorporated herein by reference).
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4.3
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–
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Agreement of Resignation, Appointment and Acceptance, dated as of November 30, 2006, by and among Ashland Inc., Wilmington Trust Company (Wilmington) and Citibank, N.A. (Citibank) whereby Wilmington replaced Citibank as Trustee under the Indenture dated as of August 15, 1989, as amended and restated as of August 15, 1990, between Ashland Inc. and Citibank (filed as Exhibit 4 to Ashland’s Form 10-Q for the quarter ended December 31, 2006 (SEC File No. 001-32532), and incorporated herein by reference).
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4.4
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–
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Indenture, dated May 27, 2009, by and among Ashland Inc., the Guarantors and U.S. Bank National Association (filed as Exhibit 4.1 to Ashland’s Form 10-Q for the quarter ended June 30, 2009 (SEC File No. 001-32532), and incorporated herein by reference).
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4.5
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–
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Warrant Agreement dated July 27, 1999 between Hercules and The Chase Manhattan Bank, as warrant agent (filed as Exhibit 4.4 to Hercules’ Form 8-K filed on July 28, 1999 (SEC File No. 001-00496), and incorporated herein by reference).
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4.6
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–
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Form of Series A Junior Subordinated Deferrable Interest Debentures (filed as Exhibit 4.5 to Hercules’ Form 8-K filed on July 28, 1999 (SEC File No. 001-00496), and incorporated herein by reference).
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4.7
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–
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Form of CRESTS
SM
Unit (filed as Exhibit 4.7 to Hercules’ Form 8-K filed on July 28, 1999 (SEC File No. 001-00496), and incorporated herein by reference).
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4.8
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–
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Form of Warrant (filed as Exhibit 4.8 to Hercules’ Form 8-K filed on July 28, 1999 (SEC File No. 001-00496), and incorporated herein by reference).
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4.9
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–
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Indenture, dated as of August 7, 2012, between Ashland Inc. and U.S. Bank N.A., as Trustee (filed as Exhibit 4.1 to Ashland’s Form 8-K filed on September 21, 2012 (SEC File No. 001-32532), and incorporated herein by reference).
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4.10
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–
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Registration Rights Agreement, dated as of August 7, 2012, between Ashland Inc. and Citigroup Global Markets Inc., as representative of the several Initial Purchasers (filed as Exhibit 4.2 to Ashland’s Form 8-K filed on September 21, 2012 (SEC File No. 001-32532), and incorporated herein by reference).
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4.11**
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–
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First Supplemental Indenture, dated as of February 26, 2013, between Ashland Inc. and U.S. Bank National Association, as Trustee, in respect of the senior notes due 2022.
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4.12
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–
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Registration Rights Agreement, dated as of February 26, 2013, among Ashland Inc. and Citigroup Global Markets Inc., as representative of the Initial Purchasers, in respect of the additional senior notes due 2022 (filed as Exhibit 4.2 to Ashland’s Form 8-K filed on February 27, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
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4.13
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–
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Indenture, dated as of February 26, 2013, between Ashland Inc. and U.S. Bank National Association, as Trustee (filed as Exhibit 4.3 to Ashland’s Form 8-K filed on February 27, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
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4.14
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–
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First Supplemental Indenture, dated as of February 26, 2013, between Ashland Inc. and U.S. Bank National Association, as Trustee, in respect of the senior notes due 2016, 2018 and 2043 (filed as Exhibit 4.4 to Ashland’s Form 8-K filed on February 27, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
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4.15
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–
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Registration Rights Agreement, dated as of February 26, 2013, among Ashland Inc. and Citigroup Global Markets Inc., as representative of the Initial Purchasers, in respect of the senior notes due 2016, 2018 and 2043 (filed as Exhibit 4.1 to Ashland’s Form 8-K filed on February 27, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
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4.16
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–
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Registration Rights Agreement, dated as of March 14, 2013, between Ashland Inc. and Citigroup Global Markets Inc., as Initial Purchaser, in respect of the senior notes due 2043 (filed as Exhibit 4.1 to Ashland’s Form 8-K filed on March 18, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
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4.17
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Second Supplemental Indenture, dated as of March 14, 2013, between Ashland Inc. and U.S. Bank National Association, as Trustee, in respect of the senior notes due 2043 (filed as Exhibit 4.2 to Ashland’s Form 8-K filed on March 18, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
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10.1
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–
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Ashland Inc. Deferred Compensation Plan for Non-Employee Directors and Amendment No. 1 (filed as Exhibit 10.5 to Ashland’s Form 10-Q for the quarter ended December 31, 2004 (SEC File No. 001-02918), and incorporated herein by reference).
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10.2
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Ashland Inc. Deferred Compensation Plan and Amendment No. 1 (filed as Exhibit 10.3 to Ashland’s Form 10-Q for the quarter ended December 31, 2004 (SEC File No. 001-02918), and incorporated herein by reference).
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10.3
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Amended and Restated Ashland Inc. Deferred Compensation Plan for Employees (2005) (filed as Exhibit 10.3 to Ashland’s Form 10-K for the fiscal year ended September 30, 2008 (SEC File No. 001-32532), and incorporated herein by reference).
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10.4
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Amended and Restated Ashland Inc. Deferred Compensation Plan for Non-Employee Directors (2005) (filed as Exhibit 10.4 to Ashland’s Form 10-K for the fiscal year ended September 30, 2008 (SEC File No. 001-32532), and incorporated herein by reference).
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10.5
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Amended and Restated Ashland Inc. Supplemental Early Retirement Plan for Certain Employees (filed as Exhibit 10.5 to Ashland’s Form 10-K for the fiscal year ended September 30, 2010 (SEC File No. 001-32532), and incorporated herein by reference).
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10.6
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Ashland Supplemental Defined Contribution Plan for Certain Employees (filed as Exhibit 10.3 to Ashland’s Form 10-Q for the quarter ended March 31, 2011 (SEC File No. 001-32532), and incorporated herein by reference).
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10.7
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Amended and Restated Ashland Inc. Nonqualified Excess Benefit Pension Plan (filed as Exhibit 10.6 to Ashland’s Form 10-K for the fiscal year ended September 30, 2008 (SEC File No. 001-32532), and incorporated herein by reference).
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10.8
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–
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Hercules Incorporated Employee Pension Restoration Plan (filed as Exhibit 10.9 to Ashland’s Form 10- K for the fiscal year ended September 30, 2010 (SEC File No. 001-32532), and incorporated herein by reference).
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10.9
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–
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Form of Chief Executive Officer Change in Control Agreement (filed as Exhibit 10.1 to Ashland’s Form 8-K filed on January 7, 2009 (SEC File No. 001-32532), and incorporated herein by reference).
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10.10
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Form of Executive Officer Change in Control Agreement (filed as Exhibit 10.2 to Ashland’s Form 8-K filed on January 7, 2009 (SEC File No. 001-32532), and incorporated herein by reference).
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10.11
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Form of Executive Officer Change in Control Agreement, effective for agreements entered into after July 2009 (filed as Exhibit 10.11 to Ashland’s Form 10-K for the fiscal year ended September 30, 2009 (SEC File No. 001-32532), and incorporated herein by reference).
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10.12
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–
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Ashland Inc. Severance Pay Plan (filed as Exhibit 10.1 to Ashland’s Form 10-Q for the quarter ended June 30, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
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10.13
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–
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Form of Indemnification Agreement between Ashland and members of its Board of Directors (filed as Exhibit 10.10 to Ashland’s annual report on Form 10-K for fiscal year ended September 30, 2005 (SEC File No. 001-32532), and incorporated herein by reference).
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10.14
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–
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Amended and Restated Ashland Inc. Incentive Plan (filed as Exhibit 10.17 to Ashland’s Form 10-K for the fiscal year ended September 30, 2009 (SEC File No. 001-32532), and incorporated herein by reference).
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10.15
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–
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2006 Ashland Inc. Incentive Plan (filed as Exhibit 10 to Ashland’s Form 10-Q for the quarter ended December 31, 2005 (SEC File No. 001-32532), and incorporated herein by reference).
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10.16
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–
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Form of Stock Appreciation Rights Award Agreement (filed as Exhibit 10.4 to Ashland’s Form 10-Q for the quarter ended March 31, 2011 (SEC File No. 001-32532), and incorporated herein by reference).
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10.17
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–
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Form of Performance Unit (LTIP) Award Agreement (filed as Exhibit 10.5 to Ashland’s Form 10-Q for the quarter ended March 31, 2011 (SEC File No. 001-32532), and incorporated herein by reference).
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10.18
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–
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Form of Restricted Stock Award Agreement (filed as Exhibit 10.6 to Ashland’s Form 10-Q for the quarter ended March 31, 2011 (SEC File No. 001-32532), and incorporated herein by reference).
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10.19
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–
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Form of Restricted Stock Unit Agreement (filed as Exhibit 10.22 to Ashland’s Form 10-K for the fiscal year ended September 30, 2011 (SEC File No. 001-32532), and incorporated herein by reference).
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10.20
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–
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Amendment to 2011 Ashland Inc. Incentive Plan (filed as Exhibit 10.1 to Ashland’s Form 8-K filed on February 1, 2013 (SEC File No. 001-32532) and incorporated herein by reference).
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10.21
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–
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Amended and Restated 2011 Ashland Inc. Incentive Plan (filed as Exhibit 10.1 to Ashland’s Form 8-K filed on February 1, 2013 (SEC File No. 001-32532) and incorporated herein by reference).
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10.22**
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–
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Letter Agreement between Ashland and Luis Fernandez-Moreno dated July 29, 2013.
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10.23**
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–
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Letter Agreement between Ashland and Luis Fernandez-Moreno dated November 4, 2013.
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10.24
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–
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Letter Agreement between Ashland and John E. Panichella dated November 13, 2013 (filed as Exhibit 10.1 to Ashland's Form 8-K filed on November 15, 2013 (SEC File No. 001-32532) and incorporated herein by reference).
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10.25
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–
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Master Formation Agreement dated July 15, 2010, among Ashland, Süd-Chemie Aktiengesellschaft and Ashland-Südchemie-Kernfest GmbH filed as Exhibit 10.26 to Ashland’s Form 10-K for the fiscal year ended September 30, 2010 (SEC File No. 001-32532), and incorporated herein by reference).
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10.26
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–
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Master Contribution and Sale Agreement dated July 15, 2010, among Ashland, Ashland International Holdings, Inc., Süd-Chemie Aktiengesellschaft, Tecpro Holding Corporation Inc. and Ashland- Südchemie-Kernfest GmbH (filed as Exhibit 10.27 to Ashland’s Form 10-K for the fiscal year ended September 30, 2010 (SEC File No. 001-32532), and incorporated herein by reference).
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10.27
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–
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Shareholders’ Agreement effective November 30, 2010 by and between Süd-Chemie Aktiengesellschaft and Süd-Chemie Finance GmbH and Ashland and Ashland International Holdings, Inc. (filed as Exhibit 10 to Ashland’s Form 10-Q for the quarter ended December 31, 2010 (SEC File No. 001-32532), and incorporated herein by reference).
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10.28
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–
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Stock Purchase Agreement dated as of May 30, 2011, entered into by and among The Samuel J. Heyman 1981 Continuing Trust for Lazarus S. Heyman, The Samuel J. Heyman 1981 Continuing Trust for Eleanor S. Heyman, The Samuel J. Heyman 1981 Continuing Trust for Jennifer L. Heyman, The Samuel J. Heyman 1981 Continuing Trust for Elizabeth D. Heyman, The Lazarus S. Heyman Age 50 Trust for Assets Appointed Under Will of Lazarus S. Heyman, The Eleanor S. Heyman Age 50 Trust for Assets Appointed Under Will of Lazarus S. Heyman, The Jennifer L. Heyman Age 50 Trust for Assets Appointed Under Will of Lazarus S. Heyman, The Elizabeth D. Heyman Age 50 Trust for Assets Appointed Under Will of Lazarus S. Heyman, The Horizon Holdings Residual Trust, RFH Investment Holdings LLC, Ashland and Ronnie F. Heyman, as representative of the Seller Parties (filed as Exhibit 2.1 to Ashland’s Form 8-K filed on May 31, 2011 (SEC File No. 001-32532), and incorporated herein by reference).
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10.29
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–
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Transfer and Administration Agreement, dated as of August 31, 2012, among CVG Capital III LLC, Ashland Inc., Hercules Incorporated, Aqualon Company, ISP Technologies Inc., ISP Synthetic Elastomers LLC, and each other entity from time to time party thereto as an Originator, as Originators, Ashland Inc., as initial Master Servicer, each of Liberty Street Funding LLC, Market Street Funding LLC and Gotham Funding Corporation, as Conduit Investors and Uncommitted Investors, The Bank of Nova Scotia, as the Agent, a Letter of Credit Issuer, a Managing Agent, an Administrator and a Committed Investor, and the Letter of Credit Issuers, Managing Agents, Administrators, Uncommitted Investors and Committed Investors parties thereto from time to time (filed as Exhibit 10.1 to Ashland’s Form 8-K filed on September 7, 2012 (SEC File No. 001-32532), and incorporated herein by reference).
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10.30
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–
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Sale Agreement, dated as of August 31, 2012, among Ashland Inc., Hercules Incorporated, Aqualon Company, ISP Technologies Inc., ISP Synthetic Elastomers LLC and CVG Capital III LLC (filed as Exhibit 10.2 to Ashland’s Form 8-K filed on September 7, 2012 (SEC File No. 001-32532), and incorporated herein by reference).
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10.31
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–
|
Parent Undertaking, dated as of August 31, 2012, by Ashland Inc. in favor of The Bank of Nova Scotia and the Secured Parties (filed as Exhibit 10.3 to Ashland’s Form 8-K filed on September 7, 2012 (SEC File No. 001-32532), and incorporated herein by reference).
|
10.32
|
–
|
Credit Agreement dated as of March 14, 2013, among Ashland Inc., as Borrower, The Bank of Nova Scotia, as Administrative Agent, Swing Line Lender and an L/C Issuer, Citibank, N.A., as Syndication Agent, Bank of America, N.A., Deutsche Bank Securities Inc. and PNC Bank, National Association, as Co-Documentation Agents, and the Lenders from time to time party thereto (filed as Exhibit 10.1to Ashland’s Form 8-K filed on March 15, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
|
10.33
|
–
|
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 (filed as Exhibit 10.2 to Ashland’s Form 10-Q for the quarter ended June 30, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
|
10.34**
|
–
|
Omnibus Amendment to Transfer and Administration Agreement, dated as of August 21, 2013, among Ashland Inc., CVG Capital III LLC, the Originators, the Investors, Letter of Credit Issuers, Managing Agents and Administrators party thereto, and the Bank of Nova Scotia, as Agent for the Investors.
|
10.35**
|
–
|
Third Amendment to Transfer and Administration Agreement, dated as of October 15, 2013, among Ashland Inc., CVG Capital III LLC, the Originators, the Investors, Letter of Credit Issuers, Managing Agents and Administrators party thereto, and the Bank of Nova Scotia, as Agent for the Investors.
|
11**
|
–
|
Computation of Earnings Per Share (appearing in Note A of Notes to Consolidated Financial Statements in this annual report on Form 10-K).
|
12**
|
–
|
Computation of Ratio of Earnings to Fixed Charges.
|
21**
|
–
|
List of Subsidiaries.
|
23.1**
|
–
|
Consent of PricewaterhouseCoopers LLP.
|
23.2**
|
–
|
Consent of Hamilton, Rabinovitz & Associates, Inc.
|
24**
|
–
|
Power of Attorney.
|
31.1**
|
–
|
Certification of James J. O’Brien, Chief Executive Officer of Ashland, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2**
|
–
|
Certification of J. Kevin Willis, Chief Financial Officer of Ashland, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32**
|
–
|
Certification 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.
|
|
ASHLAND INC.
|
|
(Registrant)
|
|
By:
|
|
/s/ J. Kevin Willis
|
|
J. Kevin Willis
|
|
Senior Vice President and Chief Financial Officer
|
|
Date: November 27, 2013
|
Signatures
|
|
Capacity
|
/s/ James J. O’Brien
|
|
Chairman of the Board, Chief Executive Officer and Director
|
James J. O’Brien
|
|
(Principal Executive Officer)
|
/s/ J. Kevin Willis
|
|
Senior Vice President and Chief Financial Officer
|
J. Kevin Willis
|
|
(Principal Financial Officer)
|
/s/ J. William Heitman
|
|
Vice President and Controller
|
J. William Heitman
|
|
(Principal Accounting Officer)
|
|
|
|
*
|
|
Director
|
Brendan M. Cummins
|
|
|
*
|
|
Director
|
Roger W. Hale
|
|
|
*
|
|
Director
|
Stephen F. Kirk
|
|
|
*
|
|
Director
|
Kathleen Ligocki
|
|
|
*
|
|
Director
|
Vada O. Manager
|
|
|
*
|
|
Director
|
Barry W. Perry
|
|
|
*
|
|
Director
|
Mark C. Rohr
|
|
|
*
|
|
Director
|
George A. Schaefer, Jr.
|
|
|
*
|
|
Director
|
Janice J. Teal
|
|
|
*
|
|
Director
|
John F. Turner
|
|
|
*
|
|
Director
|
Michael J. Ward
|
|
|
*By:
|
/s/ Peter J. Ganz
|
|
Peter J. Ganz
|
|
Attorney-in-Fact
|
|
|
Date:
|
November 27, 2013
|
Sales by Geography
|
2013
|
|
|
2012
|
|
|
2011
|
|
(a)
|
North America
(b)
|
51
|
%
|
|
53
|
%
|
|
54
|
%
|
|
Europe
|
28
|
%
|
|
27
|
%
|
|
26
|
%
|
|
Asia Pacific
|
14
|
%
|
|
13
|
%
|
|
13
|
%
|
|
Latin America & other
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Sales by Business Segment
|
2013
|
|
|
2012
|
|
|
2011
|
|
(a)
|
Specialty Ingredients
|
33
|
%
|
|
35
|
%
|
|
20
|
%
|
|
Water Technologies
|
22
|
%
|
|
21
|
%
|
|
29
|
%
|
|
Performance Materials
|
19
|
%
|
|
19
|
%
|
|
21
|
%
|
|
Consumer Markets
|
26
|
%
|
|
25
|
%
|
|
30
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Net income
|
$
|
683
|
|
|
$
|
26
|
|
|
$
|
414
|
|
Income tax expense (benefit)
|
274
|
|
|
(52
|
)
|
|
(53
|
)
|
|||
Net interest and other financing expense
|
282
|
|
|
317
|
|
|
121
|
|
|||
Depreciation and amortization
(a)
|
423
|
|
|
423
|
|
|
280
|
|
|||
EBITDA
|
1,662
|
|
|
714
|
|
|
762
|
|
|||
(Income) loss from discontinued operations (net of income taxes)
|
(6
|
)
|
|
12
|
|
|
(358
|
)
|
|||
Actuarial (gain) loss on pension and other postretirement plan remeasurement
(b)
|
(498
|
)
|
|
493
|
|
|
318
|
|
|||
Restructuring and other integration costs
|
44
|
|
|
85
|
|
|
36
|
|
|||
Insurance settlement
|
(22
|
)
|
|
—
|
|
|
—
|
|
|||
Settled claim
|
(13
|
)
|
|
—
|
|
|
—
|
|
|||
Environmental reserve adjustments
|
16
|
|
|
8
|
|
|
19
|
|
|||
Impairment of IPR&D assets
|
41
|
|
|
13
|
|
|
—
|
|
|||
Net loss (gain) on acquisitions and divestitures
|
14
|
|
|
(1
|
)
|
|
5
|
|
|||
Asset impairment and accelerated depreciation
|
2
|
|
|
7
|
|
|
19
|
|
|||
Inventory fair value adjustment
|
—
|
|
|
28
|
|
|
16
|
|
|||
Results of the ISP business prior to acquisition
|
—
|
|
|
—
|
|
|
339
|
|
|||
Other
|
2
|
|
|
—
|
|
|
3
|
|
|||
Adjusted EBITDA
|
$
|
1,242
|
|
|
$
|
1,359
|
|
|
$
|
1,159
|
|
|
|
|
|
|
|
(a)
|
Excludes
$2 million
,
$7 million
and
$19 million
of asset impairment and accelerated depreciation during
2013
,
2012
and
2011
, respectively.
|
(b)
|
For supplemental information on the components of this adjustment, see page M-32 within the MD&A - Critical Accounting Policies - Employee benefit obligations.
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Sales
|
$
|
7,813
|
|
|
$
|
8,206
|
|
|
$
|
6,502
|
|
|
$
|
(393
|
)
|
|
$
|
1,704
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Cost of sales
|
$
|
5,419
|
|
|
$
|
6,025
|
|
|
$
|
4,890
|
|
|
$
|
(606
|
)
|
|
$
|
1,135
|
|
Gross profit as a percent of sales
|
30.6
|
%
|
|
26.6
|
%
|
|
24.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Selling, general and administrative expense
|
$
|
1,044
|
|
|
$
|
1,800
|
|
|
$
|
1,451
|
|
|
$
|
(756
|
)
|
|
$
|
349
|
|
As a percent of sales
|
13.4
|
%
|
|
21.9
|
%
|
|
22.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Research and development expense
|
$
|
178
|
|
|
$
|
137
|
|
|
$
|
80
|
|
|
$
|
41
|
|
|
$
|
57
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Equity and other income
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity income
|
$
|
27
|
|
|
$
|
35
|
|
|
$
|
17
|
|
|
$
|
(8
|
)
|
|
$
|
18
|
|
Other income
|
42
|
|
|
23
|
|
|
32
|
|
|
19
|
|
|
(9
|
)
|
|||||
|
$
|
69
|
|
|
$
|
58
|
|
|
$
|
49
|
|
|
$
|
11
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Net interest and other financing expense (income)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
273
|
|
|
$
|
251
|
|
|
$
|
131
|
|
|
$
|
22
|
|
|
$
|
120
|
|
Interest income
|
(4
|
)
|
|
(8
|
)
|
|
(16
|
)
|
|
4
|
|
|
8
|
|
|||||
Other financing costs
|
13
|
|
|
74
|
|
|
6
|
|
|
(61
|
)
|
|
68
|
|
|||||
|
$
|
282
|
|
|
$
|
317
|
|
|
$
|
121
|
|
|
$
|
(35
|
)
|
|
$
|
196
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Net (loss) gain on acquisitions and divestitures
|
|
|
|
|
|
|
|
|
|
||||||||||
PVAc divestiture
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
Süd-Chemie joint venture
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
(23
|
)
|
|||||
ISP acquisition transaction costs
|
—
|
|
|
(2
|
)
|
|
(21
|
)
|
|
2
|
|
|
19
|
|
|||||
MAP Transaction adjustments
|
(8
|
)
|
|
(8
|
)
|
|
(3
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Pentaerythritol divestiture
|
—
|
|
|
3
|
|
|
(7
|
)
|
|
(3
|
)
|
|
10
|
|
|||||
Other
|
(1
|
)
|
|
6
|
|
|
3
|
|
|
(7
|
)
|
|
3
|
|
|||||
|
$
|
(8
|
)
|
|
$
|
1
|
|
|
$
|
(5
|
)
|
|
$
|
(9
|
)
|
|
$
|
6
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Income tax expense (benefit)
|
$
|
274
|
|
|
$
|
(52
|
)
|
|
$
|
(53
|
)
|
|
$
|
326
|
|
|
$
|
1
|
|
Effective tax rate
|
28.8
|
%
|
|
371.4
|
%
|
|
1,766.7
|
%
|
|
|
|
|
|
|
|||||
Effective tax rate (excluding key items)
|
24.6
|
%
|
|
25.8
|
%
|
|
27.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
change
|
|
|
change
|
|
|||||
Income (loss) from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
(net of income taxes)
|
|
|
|
|
|
|
|
|
|
||||||||||
Distribution
|
$
|
(6
|
)
|
|
$
|
(11
|
)
|
|
$
|
333
|
|
|
$
|
5
|
|
|
$
|
(344
|
)
|
Asbestos-related litigation reserves
|
2
|
|
|
(1
|
)
|
|
20
|
|
|
3
|
|
|
(21
|
)
|
|||||
APAC
|
10
|
|
|
—
|
|
|
3
|
|
|
10
|
|
|
(3
|
)
|
|||||
Electronic Chemicals
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(2
|
)
|
|||||
|
$
|
6
|
|
|
$
|
(12
|
)
|
|
$
|
358
|
|
|
$
|
18
|
|
|
$
|
(370
|
)
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Sales
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
2,616
|
|
|
$
|
2,878
|
|
|
$
|
1,256
|
|
Water Technologies
|
1,722
|
|
|
1,734
|
|
|
1,902
|
|
|||
Performance Materials
|
1,479
|
|
|
1,560
|
|
|
1,373
|
|
|||
Consumer Markets
|
1,996
|
|
|
2,034
|
|
|
1,971
|
|
|||
|
$
|
7,813
|
|
|
$
|
8,206
|
|
|
$
|
6,502
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
281
|
|
|
$
|
457
|
|
|
$
|
171
|
|
Water Technologies
|
80
|
|
|
72
|
|
|
93
|
|
|||
Performance Materials
|
68
|
|
|
99
|
|
|
37
|
|
|||
Consumer Markets
|
295
|
|
|
236
|
|
|
213
|
|
|||
Unallocated and other
|
517
|
|
|
(562
|
)
|
|
(384
|
)
|
|||
|
$
|
1,241
|
|
|
$
|
302
|
|
|
$
|
130
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
263
|
|
|
$
|
265
|
|
|
$
|
113
|
|
Water Technologies
|
73
|
|
|
75
|
|
|
85
|
|
|||
Performance Materials
|
54
|
|
|
52
|
|
|
59
|
|
|||
Consumer Markets
|
35
|
|
|
36
|
|
|
38
|
|
|||
Unallocated and other
|
—
|
|
|
2
|
|
|
4
|
|
|||
|
$
|
425
|
|
|
$
|
430
|
|
|
$
|
299
|
|
Operating information
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
(a) (b)
|
|
|
|
|
|
|
|
|
|||
Sales per shipping day
|
$
|
10.3
|
|
|
$
|
11.4
|
|
|
$
|
4.3
|
|
Metric tons sold (thousands)
|
392.1
|
|
|
395.5
|
|
|
174.6
|
|
|||
Gross profit as a percent of sales
|
30.1
|
%
|
|
33.0
|
%
|
|
32.9
|
%
|
|||
Water Technologies
(a)
|
|
|
|
|
|
|
|
|
|||
Sales per shipping day
|
$
|
6.8
|
|
|
$
|
6.9
|
|
|
$
|
7.5
|
|
Gross profit as a percent of sales
|
33.7
|
%
|
|
31.7
|
%
|
|
30.8
|
%
|
|||
Performance Materials
(a) (b)
|
|
|
|
|
|
|
|
|
|||
Sales per shipping day
|
$
|
5.8
|
|
|
$
|
6.2
|
|
|
$
|
5.2
|
|
Metric tons sold (thousands)
|
527.3
|
|
|
543.9
|
|
|
493.8
|
|
|||
Gross profit as a percent of sales
|
14.9
|
%
|
|
16.6
|
%
|
|
13.1
|
%
|
|||
Consumer Markets
(a)
|
|
|
|
|
|
|
|
|
|||
Lubricant sales gallons
|
158.4
|
|
|
158.7
|
|
|
171.3
|
|
|||
Premium lubricants (percent of U.S. branded volumes)
|
33.6
|
%
|
|
30.3
|
%
|
|
31.3
|
%
|
|||
Gross profit as a percent of sales
|
31.6
|
%
|
|
27.1
|
%
|
|
27.3
|
%
|
|||
|
|
|
|
|
|
(a)
|
Sales are defined as sales and operating revenues. Gross profit is defined as sales, less cost of sales.
|
(b)
|
All statistical information presented for 2011 excludes activity related to ISP, which was acquired on August 23, 2011.
|
|
September 30
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Operating income
|
$
|
281
|
|
|
$
|
457
|
|
|
$
|
171
|
|
Depreciation and amortization
|
263
|
|
|
265
|
|
|
113
|
|
|||
EBITDA
|
544
|
|
|
722
|
|
|
284
|
|
|||
Settled claim
|
(13
|
)
|
|
—
|
|
|
—
|
|
|||
Insurance settlement
|
(22
|
)
|
|
—
|
|
|
—
|
|
|||
Inventory fair value adjustment
|
—
|
|
|
28
|
|
|
16
|
|
|||
Impairment of IPR&D assets
|
41
|
|
|
13
|
|
|
—
|
|
|||
Results of the ISP business prior to acquisition, excluding Elastomers business
|
—
|
|
|
—
|
|
|
308
|
|
|||
Adjusted EBITDA
|
$
|
550
|
|
|
$
|
763
|
|
|
$
|
608
|
|
|
September 30
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Operating income
|
$
|
80
|
|
|
$
|
72
|
|
|
$
|
93
|
|
Depreciation and amortization
(a)
|
73
|
|
|
72
|
|
|
81
|
|
|||
EBITDA
|
153
|
|
|
144
|
|
|
174
|
|
|||
Severance
|
11
|
|
|
2
|
|
|
9
|
|
|||
Environmental charges
|
—
|
|
|
—
|
|
|
7
|
|
|||
Accelerated depreciation
|
—
|
|
|
3
|
|
|
4
|
|
|||
Adjusted EBITDA
|
$
|
164
|
|
|
$
|
149
|
|
|
$
|
194
|
|
|
|
|
|
|
|
(a)
|
Excludes accelerated depreciation of $3 million and $4 million in 2012 and 2011, respectively.
|
|
September 30
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Operating income
|
$
|
68
|
|
|
$
|
99
|
|
|
$
|
37
|
|
Depreciation and amortization
(a)
|
52
|
|
|
49
|
|
|
44
|
|
|||
EBITDA
|
120
|
|
|
148
|
|
|
81
|
|
|||
Severance
|
—
|
|
|
7
|
|
|
1
|
|
|||
Accelerated depreciation and other plant closure costs
|
2
|
|
|
4
|
|
|
15
|
|
|||
Results of ISP Elastomers business prior to acquisition
|
—
|
|
|
—
|
|
|
34
|
|
|||
Casting Solutions joint venture start-up costs
|
—
|
|
|
—
|
|
|
2
|
|
|||
Adjusted EBITDA
|
$
|
122
|
|
|
$
|
159
|
|
|
$
|
133
|
|
|
|
|
|
|
|
(a)
|
Excludes $2 million, $3 million and $15 million of accelerated depreciation during
2013
,
2012
and
2011
, respectively.
|
|
September 30
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Operating income
|
$
|
295
|
|
|
$
|
236
|
|
|
$
|
213
|
|
Depreciation and amortization
|
35
|
|
|
36
|
|
|
38
|
|
|||
EBITDA
|
$
|
330
|
|
|
$
|
272
|
|
|
$
|
251
|
|
|
September 30
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Actuarial gain (loss) on pension and other postretirement plan remeasurement
|
$
|
498
|
|
|
$
|
(493
|
)
|
|
$
|
(318
|
)
|
Pension and other postretirement net periodic income
(a)
|
79
|
|
|
32
|
|
|
14
|
|
|||
Restructuring activities (includes severance, integration and stranded divestiture costs)
|
(34
|
)
|
|
(85
|
)
|
|
(60
|
)
|
|||
Environmental reserves for divested businesses
|
(22
|
)
|
|
(14
|
)
|
|
(18
|
)
|
|||
Other expense
|
(4
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Total unallocated income (expense)
|
$
|
517
|
|
|
$
|
(562
|
)
|
|
$
|
(384
|
)
|
|
|
|
|
|
|
(a)
|
Amounts exclude service costs of $45 million, $38 million and $42 million during
2013
,
2012
and
2011
, respectively, which are allocated to Ashland’s business segments.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash provided (used) by:
|
|
|
|
|
|
||||||
Operating activities from continuing operations
|
$
|
791
|
|
|
$
|
385
|
|
|
$
|
243
|
|
Investing activities from continuing operations
|
(320
|
)
|
|
(241
|
)
|
|
(2,102
|
)
|
|||
Financing activities from continuing operations
|
(592
|
)
|
|
(317
|
)
|
|
1,212
|
|
|||
Discontinued operations
|
(58
|
)
|
|
(32
|
)
|
|
957
|
|
|||
Effect of currency exchange rate changes on cash and cash equivalents
|
2
|
|
|
(9
|
)
|
|
10
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(177
|
)
|
|
$
|
(214
|
)
|
|
$
|
320
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash flows (used) provided by operating activities from continuing operations
|
|
|
|
|
|
||||||
Net income
|
$
|
683
|
|
|
$
|
26
|
|
|
$
|
414
|
|
(Income) loss from discontinued operations (net of income taxes)
|
(6
|
)
|
|
12
|
|
|
(358
|
)
|
|||
Adjustments to reconcile income from continuing operations
|
|
|
|
|
|
|
|
|
|||
to cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
425
|
|
|
430
|
|
|
299
|
|
|||
Debt issuance cost amortization
|
65
|
|
|
54
|
|
|
26
|
|
|||
Purchased in-process research and development impairment
|
41
|
|
|
13
|
|
|
—
|
|
|||
Deferred income taxes
|
194
|
|
|
(154
|
)
|
|
(57
|
)
|
|||
Equity income from affiliates
|
(27
|
)
|
|
(35
|
)
|
|
(17
|
)
|
|||
Distributions from equity affiliates
|
12
|
|
|
3
|
|
|
5
|
|
|||
Gain from sale of property and equipment
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Stock based compensation expense - Note P
|
30
|
|
|
28
|
|
|
16
|
|
|||
Stock contributions to qualified savings plans
|
—
|
|
|
—
|
|
|
13
|
|
|||
Net loss (gain) on acquisitions and divestitures - Notes B and C
|
8
|
|
|
(3
|
)
|
|
5
|
|
|||
Inventory fair value adjustment related to ISP acquisition
|
—
|
|
|
28
|
|
|
16
|
|
|||
Actuarial (gain) loss on pension and postretirement plan remeasurement
|
(498
|
)
|
|
493
|
|
|
318
|
|
|||
Change in operating assets and liabilities
(a)
|
(134
|
)
|
|
(509
|
)
|
|
(435
|
)
|
|||
Total cash flows provided by operating activities from continuing operations
|
$
|
791
|
|
|
$
|
385
|
|
|
$
|
243
|
|
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash flows (used) provided by investing activities from continuing operations
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
$
|
(314
|
)
|
|
$
|
(298
|
)
|
|
$
|
(201
|
)
|
Proceeds from disposal of property, plant and equipment
|
5
|
|
|
6
|
|
|
14
|
|
|||
Purchase of operations - net of cash acquired
|
—
|
|
|
—
|
|
|
(2,002
|
)
|
|||
Proceeds from sale of available-for-sale securities
|
—
|
|
|
10
|
|
|
11
|
|
|||
Proceeds (uses) from sale of operations or equity investments
|
(11
|
)
|
|
41
|
|
|
76
|
|
|||
Total cash flows used by investing activities from continuing operations
|
$
|
(320
|
)
|
|
$
|
(241
|
)
|
|
$
|
(2,102
|
)
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash flows (used) provided by financing activities from continuing operations
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
$
|
2,320
|
|
|
$
|
502
|
|
|
$
|
2,910
|
|
Repayment of long-term debt
|
(2,613
|
)
|
|
(1,023
|
)
|
|
(1,513
|
)
|
|||
(Repayments of)/proceeds from short-term debt, net
|
(36
|
)
|
|
261
|
|
|
12
|
|
|||
Repurchase of common stock
|
(150
|
)
|
|
—
|
|
|
(71
|
)
|
|||
Debt issuance costs
|
(38
|
)
|
|
(10
|
)
|
|
(82
|
)
|
|||
Cash dividends paid
|
(88
|
)
|
|
(63
|
)
|
|
(51
|
)
|
|||
Proceeds from exercise of stock options
|
1
|
|
|
4
|
|
|
3
|
|
|||
Excess tax benefits related to share-based payments
|
12
|
|
|
12
|
|
|
4
|
|
|||
Total cash flows (used) provided by financing activities from continuing operations
|
$
|
(592
|
)
|
|
$
|
(317
|
)
|
|
$
|
1,212
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash (used) provided by discontinued operations
|
|
|
|
|
|
||||||
Operating cash flows
|
$
|
(58
|
)
|
|
$
|
(31
|
)
|
|
$
|
2
|
|
Investing cash flows
|
—
|
|
|
(1
|
)
|
|
955
|
|
|||
Total cash flows (used) provided by discontinued operations
|
$
|
(58
|
)
|
|
$
|
(32
|
)
|
|
$
|
957
|
|
|
September 30
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash flows provided by operating activities from continuing operations
|
$
|
791
|
|
|
$
|
385
|
|
|
$
|
243
|
|
Less:
|
|
|
|
|
|
|
|
|
|||
Additions to property, plant and equipment
|
(314
|
)
|
|
(298
|
)
|
|
(201
|
)
|
|||
Payment resulting from termination of interest rate swaps
(b)
|
52
|
|
|
—
|
|
|
—
|
|
|||
ISP acquisition - change in control payment
(a)
|
—
|
|
|
92
|
|
|
—
|
|
|||
Premium paid for early redemption of 9.125% senior notes
(b)
|
—
|
|
|
67
|
|
|
—
|
|
|||
Free cash flows
|
$
|
529
|
|
|
$
|
246
|
|
|
$
|
42
|
|
|
|
|
|
|
|
(a)
|
Since payment was generated from investing activity, this amount has been included within this calculation.
|
(b)
|
Since payment was generated from financing activity, this amount has been included within this calculation.
|
|
September 30
|
||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash and cash equivalents
|
$
|
346
|
|
|
$
|
523
|
|
|
$
|
737
|
|
|
|
|
|
|
|
||||||
Unused borrowing capacity
|
|
|
|
|
|
|
|
|
|||
Revolving credit facility
|
$
|
1,119
|
|
|
$
|
905
|
|
|
$
|
914
|
|
Accounts receivable securitization facility
|
$
|
80
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
September 30
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
||
Short-term debt
|
$
|
308
|
|
|
$
|
344
|
|
Long-term debt (including current portion)
|
2,959
|
|
|
3,246
|
|
||
Total debt
|
$
|
3,267
|
|
|
$
|
3,590
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Specialty Ingredients
|
$
|
145
|
|
|
$
|
125
|
|
|
$
|
74
|
|
Water Technologies
|
50
|
|
|
56
|
|
|
49
|
|
|||
Performance Materials
|
42
|
|
|
54
|
|
|
32
|
|
|||
Consumer Markets
|
41
|
|
|
40
|
|
|
34
|
|
|||
Unallocated and other
|
36
|
|
|
23
|
|
|
12
|
|
|||
Total capital expenditures
|
$
|
314
|
|
|
$
|
298
|
|
|
$
|
201
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Capital employed
(a)
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
5,884
|
|
|
$
|
6,005
|
|
|
$
|
5,763
|
|
Water Technologies
|
1,577
|
|
|
1,587
|
|
|
1,646
|
|
|||
Performance Materials
|
1,042
|
|
|
1,087
|
|
|
1,205
|
|
|||
Consumer Markets
|
702
|
|
|
688
|
|
|
676
|
|
|||
|
|
|
|
|
|
(a)
|
Excludes the assets and liabilities classified within the unallocated and other segment and primarily includes debt and other long-term liabilities such as asbestos and pension. The net liability in this segment was
$4,652 million
,
$5,338 million
and
$5,155 million
as of
September 30, 2013
,
2012
and
2011
, respectively.
|
|
|
|
Less than
|
|
|
1-3
|
|
|
3-5
|
|
|
More than
|
|
||||||
(In millions)
|
Total
|
|
|
1 year
|
|
|
years
|
|
|
years
|
|
|
5 years
|
|
|||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Raw material and service contract purchase obligations
(a)
|
$
|
635
|
|
|
$
|
138
|
|
|
$
|
247
|
|
|
$
|
128
|
|
|
$
|
122
|
|
Employee benefit obligations
(b)
|
381
|
|
|
62
|
|
|
70
|
|
|
76
|
|
|
173
|
|
|||||
Operating lease obligations
(c)
|
217
|
|
|
43
|
|
|
72
|
|
|
34
|
|
|
68
|
|
|||||
Debt
(d)
|
3,423
|
|
|
50
|
|
|
879
|
|
|
700
|
|
|
1,794
|
|
|||||
Debt interest payments
(e)
|
1,938
|
|
|
164
|
|
|
316
|
|
|
268
|
|
|
1,190
|
|
|||||
Unrecognized tax benefits
(f)
|
133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133
|
|
|||||
Total contractual obligations
|
$
|
6,727
|
|
|
$
|
457
|
|
|
$
|
1,584
|
|
|
$
|
1,206
|
|
|
$
|
3,480
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other commitments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Letters of credit
(g)
|
$
|
81
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes raw material and service contracts where minimal committed quantities and prices are fixed.
|
(b)
|
Includes estimated funding of Ashland’s qualified U.S. and non-U.S. pension plans for 2014, as well as projected benefit payments through 2023 under Ashland’s unfunded pension and other postretirement benefit plans. Excludes the benefit payments from the pension plan trust funds. See Note M of Notes to Consolidated Financial Statements for additional information.
|
(c)
|
Includes leases for office buildings, retail outlets, transportation equipment, warehouses and storage facilities and other equipment. For further information, see Note K of Notes to Consolidated Financial Statements.
|
(d)
|
Capitalized lease obligations are not significant and are included within this caption. For further information, see Note I of Notes to Consolidated Financial Statements.
|
(e)
|
Includes interest expense on both variable and fixed rate debt assuming no prepayments. Variable interest rates have been assumed to remain constant through the end of the term at rates that existed as of September 30, 2013.
|
(f)
|
Due to uncertainties in the timing of the effective settlement of tax positions with respect to taxing authorities, Ashland is unable to determine the timing of payments related to noncurrent unrecognized tax benefits, including interest and penalties. Therefore, these amounts were included in the “More than 5 years” column.
|
(g)
|
Ashland issues various types of letters of credit as part of its normal course of business. For further information, see Note I of Notes to Consolidated Financial Statements.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Actuarial (gain) loss on pension and other postretirement plan remeasurement:
|
|
|
|
|
|
||||||
Change in discount rate and other actuarial assumptions
(a)
|
$
|
(575
|
)
|
|
$
|
624
|
|
|
$
|
178
|
|
Actual return on plan assets
(a)
|
(161
|
)
|
|
(357
|
)
|
|
(121
|
)
|
|||
Expected return on plan assets
(a)
|
238
|
|
|
226
|
|
|
226
|
|
|||
Total actuarial (gain) loss on pension and other postretirement plan
|
|
|
|
|
|
||||||
remeasurement
|
(498
|
)
|
|
493
|
|
|
283
|
|
|||
Less: Actuarial gain recognized in discontinued operations
|
—
|
|
|
—
|
|
|
(35
|
)
|
|||
Total actuarial (gain) loss on pension and other postretirement plan
|
|
|
|
|
|
||||||
remeasurement from continuing operations
|
$
|
(498
|
)
|
|
$
|
493
|
|
|
$
|
318
|
|
|
|
|
|
|
|
(a)
|
For additional information on key assumptions and actual plan asset performance in each year, see the “Actuarial assumptions” discussion within this section.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Increase in pension costs from
|
|
|
|
|
|
||||||
Decrease in the discount rate
|
$
|
557
|
|
|
$
|
707
|
|
|
$
|
498
|
|
Increase in the salary adjustment rate
|
44
|
|
|
54
|
|
|
50
|
|
|||
Increase in other postretirement costs from
|
|
|
|
|
|
|
|
|
|||
Decrease in the discount rate
|
20
|
|
|
26
|
|
|
27
|
|
|
Page
|
Report of independent registered public accounting firm
|
F-2
|
Consolidated Financial Statements:
|
|
Statements of Consolidated Comprehensive Income
|
F-3
|
Consolidated Balance Sheets
|
F-4
|
Statements of Consolidated Stockholders’ Equity
|
F-5
|
Statements of Consolidated Cash Flows
|
F-6
|
Notes to Consolidated Financial Statements
|
F-7
|
Quarterly financial information
|
F-50
|
Consolidated financial schedule:
|
|
Schedule II – Valuation and qualifying accounts
|
F-51
|
Five-year selected financial information
|
F-52
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
||||||
Statements of Consolidated Comprehensive Income
|
|
|
|
|
|
||||||
Years Ended September 30
|
|
|
|
|
|
||||||
(In millions except per share data)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Sales
|
$
|
7,813
|
|
|
$
|
8,206
|
|
|
$
|
6,502
|
|
Cost of sales
|
5,419
|
|
|
6,025
|
|
|
4,890
|
|
|||
Gross profit
|
2,394
|
|
|
2,181
|
|
|
1,612
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expense
|
1,044
|
|
|
1,800
|
|
|
1,451
|
|
|||
Research and development expense
|
178
|
|
|
137
|
|
|
80
|
|
|||
Equity and other income - Notes A and E
|
69
|
|
|
58
|
|
|
49
|
|
|||
Operating income
|
1,241
|
|
|
302
|
|
|
130
|
|
|||
|
|
|
|
|
|
||||||
Net interest and other financing expense - Note I
|
282
|
|
|
317
|
|
|
121
|
|
|||
Net (loss) gain on acquisitions and divestitures - Notes B and C
|
(8
|
)
|
|
1
|
|
|
(5
|
)
|
|||
Other expense
|
—
|
|
|
—
|
|
|
1
|
|
|||
Income (loss) from continuing operations before income taxes
|
951
|
|
|
(14
|
)
|
|
3
|
|
|||
Income tax expense (benefit) - Note L
|
274
|
|
|
(52
|
)
|
|
(53
|
)
|
|||
Income from continuing operations
|
677
|
|
|
38
|
|
|
56
|
|
|||
Income (loss) from discontinued operations (net of income taxes) - Note D
|
6
|
|
|
(12
|
)
|
|
358
|
|
|||
Net income
|
$
|
683
|
|
|
$
|
26
|
|
|
$
|
414
|
|
|
|
|
|
|
|
||||||
PER SHARE DATA - NOTE A
|
|
|
|
|
|
|
|
|
|||
Basic earnings per share
|
|
|
|
|
|
|
|
|
|||
Income from continuing operations
|
$
|
8.64
|
|
|
$
|
0.49
|
|
|
$
|
0.72
|
|
Income (loss) from discontinued operations
|
0.07
|
|
|
(0.16
|
)
|
|
4.56
|
|
|||
Net income
|
$
|
8.71
|
|
|
$
|
0.33
|
|
|
$
|
5.28
|
|
|
|
|
|
|
|
|
|
|
|||
Diluted earnings per share
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
8.50
|
|
|
$
|
0.48
|
|
|
$
|
0.70
|
|
Income (loss) from discontinued operations
|
0.07
|
|
|
(0.15
|
)
|
|
4.47
|
|
|||
Net income
|
$
|
8.57
|
|
|
$
|
0.33
|
|
|
$
|
5.17
|
|
|
|
|
|
|
|
||||||
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Net income
|
$
|
683
|
|
|
$
|
26
|
|
|
$
|
414
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||
Unrealized translation gain (loss)
|
37
|
|
|
(87
|
)
|
|
(18
|
)
|
|||
Pension and postretirement obligation adjustment
|
(5
|
)
|
|
24
|
|
|
33
|
|
|||
Net change in interest rate hedges
|
38
|
|
|
(26
|
)
|
|
(12
|
)
|
|||
Other comprehensive (loss) income
|
70
|
|
|
(89
|
)
|
|
3
|
|
|||
Comprehensive income (loss)
|
$
|
753
|
|
|
$
|
(63
|
)
|
|
$
|
417
|
|
See Notes to Consolidated Financial Statements.
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
||||
Consolidated Balance Sheets
|
|
|
|
||||
At September 30
|
|
|
|
||||
(In millions)
|
2013
|
|
|
2012
|
|
||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
346
|
|
|
$
|
523
|
|
Accounts receivable
(less allowance for doubtful accounts of $17 million in 2013 and $24 million in 2012)
|
1,471
|
|
|
1,481
|
|
||
Inventories - Note A
|
899
|
|
|
1,008
|
|
||
Deferred income taxes - Note L
|
107
|
|
|
116
|
|
||
Other assets
|
50
|
|
|
81
|
|
||
Total current assets
|
2,873
|
|
|
3,209
|
|
||
Noncurrent assets
|
|
|
|
|
|
||
Property, plant and equipment - Note A
|
|
|
|
|
|
||
Cost
|
4,765
|
|
|
4,478
|
|
||
Accumulated depreciation and amortization
|
1,923
|
|
|
1,646
|
|
||
Net property, plant and equipment
|
2,842
|
|
|
2,832
|
|
||
Goodwill - Note H
|
3,366
|
|
|
3,342
|
|
||
Intangibles - Note H
|
1,791
|
|
|
1,936
|
|
||
Asbestos insurance receivable (noncurrent portion) - Note N
|
437
|
|
|
449
|
|
||
Equity and other unconsolidated investments
|
218
|
|
|
217
|
|
||
Other assets - Note J
|
561
|
|
|
539
|
|
||
Total noncurrent assets
|
9,215
|
|
|
9,315
|
|
||
Total assets
|
$
|
12,088
|
|
|
$
|
12,524
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Short-term debt - Note I
|
$
|
308
|
|
|
$
|
344
|
|
Current portion of long-term debt - Note I
|
12
|
|
|
115
|
|
||
Trade and other payables
|
885
|
|
|
877
|
|
||
Accrued expenses and other liabilities
|
522
|
|
|
577
|
|
||
Total current liabilities
|
1,727
|
|
|
1,913
|
|
||
Noncurrent liabilities
|
|
|
|
|
|
||
Long-term debt (noncurrent portion) - Note I
|
2,947
|
|
|
3,131
|
|
||
Employee benefit obligations - Note M
|
1,174
|
|
|
1,839
|
|
||
Asbestos litigation reserve (noncurrent portion) - Note N
|
735
|
|
|
771
|
|
||
Deferred income taxes - Note L
|
401
|
|
|
208
|
|
||
Other liabilities - Note J
|
551
|
|
|
633
|
|
||
Total noncurrent liabilities
|
5,808
|
|
|
6,582
|
|
||
Stockholders’ equity
- Notes O and P
|
|
|
|
|
|
||
Common stock, par value $.01 per share, 200 million shares authorized
|
|
|
|
|
|
||
Issued 77 million shares in 2013 and 79 million shares in 2012
|
1
|
|
|
1
|
|
||
Paid-in capital
|
506
|
|
|
647
|
|
||
Retained earnings
|
3,758
|
|
|
3,163
|
|
||
Accumulated other comprehensive income
|
288
|
|
|
218
|
|
||
Total stockholders’ equity
|
4,553
|
|
|
4,029
|
|
||
Total liabilities and stockholders’ equity
|
$
|
12,088
|
|
|
$
|
12,524
|
|
See Notes to Consolidated Financial Statements.
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
|
|
|
|||||||||||
Statements of Consolidated Stockholders’ Equity
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|||||||||
|
|
|
|
|
|
|
other
|
|
|
|
|||||||||
|
Common
|
|
|
Paid-in
|
|
|
Retained
|
|
|
comprehensive
|
|
|
|
||||||
(In millions)
|
stock
|
|
|
capital
|
|
|
earnings
|
|
|
income (loss)
|
|
(a)
|
Total
|
|
|||||
Balance at September 30, 2010
|
$
|
1
|
|
|
$
|
665
|
|
|
$
|
2,837
|
|
|
$
|
304
|
|
|
$
|
3,807
|
|
Total comprehensive income
|
|
|
|
|
|
|
414
|
|
|
3
|
|
|
417
|
|
|||||
Regular dividends, $.65 per common share
|
|
|
|
|
|
|
(51
|
)
|
|
|
|
|
(51
|
)
|
|||||
Common shares issued under stock incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
and other plans
(b) (c)
|
|
|
|
33
|
|
|
|
|
|
|
|
|
33
|
|
|||||
Repurchase of common shares
(d)
|
|
|
(71
|
)
|
|
|
|
|
|
(71
|
)
|
||||||||
Balance at September 30, 2011
|
1
|
|
|
627
|
|
|
3,200
|
|
|
307
|
|
|
4,135
|
|
|||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
26
|
|
|
(89
|
)
|
|
(63
|
)
|
|||||
Regular dividends, $.80 per common share
|
|
|
|
|
|
|
(63
|
)
|
|
|
|
|
(63
|
)
|
|||||
Common shares issued under stock incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
and other plans
(b) (c)
|
|
|
|
20
|
|
|
|
|
|
|
|
|
20
|
|
|||||
Balance at September 30, 2012
|
1
|
|
|
647
|
|
|
3,163
|
|
|
218
|
|
|
4,029
|
|
|||||
Total comprehensive income
|
|
|
|
|
|
|
683
|
|
|
70
|
|
|
753
|
|
|||||
Regular dividends, $1.13 per common share
|
|
|
|
|
|
|
(88
|
)
|
|
|
|
|
(88
|
)
|
|||||
Common shares issued under stock incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
and other plans
(b) (c)
|
|
|
|
9
|
|
|
|
|
|
|
|
|
9
|
|
|||||
Repurchase of common shares
(d)
|
|
|
(150
|
)
|
|
|
|
|
|
(150
|
)
|
||||||||
Balance at September 30, 2013
|
$
|
1
|
|
|
$
|
506
|
|
|
$
|
3,758
|
|
|
$
|
288
|
|
|
$
|
4,553
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
At
September 30, 2013
and
2012
, the accumulated other comprehensive income of
$288 million
for
2013
and
$218 million
for
2012
was comprised of unrecognized prior service credits as a result of certain plan amendments of
$80 million
for
2013
and
$85 million
for
2012
, net unrealized translation gains of
$208 million
for
2013
and
$171 million
for
2012
, and net unrealized losses on interest rate hedges of
$38 million
for
2012
.
|
(b)
|
Includes income tax benefits resulting from the exercise of stock options of
$1 million
in
2013
,
$16 million
in
2012
and
$9 million
in
2011
.
|
(c)
|
Common shares issued were
415,351
,
729,484
and
484,161
for
2013
,
2012
and
2011
, respectively.
|
(d)
|
Common shares repurchased were
1,737,744
and
1,207,406
for
2013
and
2011
, respectively.
No
shares were repurchased in
2012
.
|
See Notes to Consolidated Financial Statements.
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
||||||
Statements of Consolidated Cash Flows
|
|
|
|
|
|
||||||
Years Ended September 30
|
|
|
|
|
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Cash flows (used) provided by operating activities from continuing operations
|
|
|
|
|
|
||||||
Net income
|
$
|
683
|
|
|
$
|
26
|
|
|
$
|
414
|
|
(Income) loss from discontinued operations (net of income taxes)
|
(6
|
)
|
|
12
|
|
|
(358
|
)
|
|||
Adjustments to reconcile income from continuing operations
|
|
|
|
|
|
|
|
|
|||
to cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
425
|
|
|
430
|
|
|
299
|
|
|||
Debt issuance cost amortization
|
65
|
|
|
54
|
|
|
26
|
|
|||
Purchased in-process research and development impairment
|
41
|
|
|
13
|
|
|
—
|
|
|||
Deferred income taxes
|
194
|
|
|
(154
|
)
|
|
(57
|
)
|
|||
Equity income from affiliates
|
(27
|
)
|
|
(35
|
)
|
|
(17
|
)
|
|||
Distributions from equity affiliates
|
12
|
|
|
3
|
|
|
5
|
|
|||
Gain from sale of property and equipment
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Stock based compensation expense - Note P
|
30
|
|
|
28
|
|
|
16
|
|
|||
Stock contributions to qualified savings plans
|
—
|
|
|
—
|
|
|
13
|
|
|||
Net loss (gain) on acquisitions and divestitures - Notes B and C
|
8
|
|
|
(3
|
)
|
|
5
|
|
|||
Inventory fair value adjustment related to ISP acquisition
|
—
|
|
|
28
|
|
|
16
|
|
|||
Actuarial (gain) loss on pension and postretirement plan remeasurement
|
(498
|
)
|
|
493
|
|
|
318
|
|
|||
Change in operating assets and liabilities
(a)
|
(134
|
)
|
|
(509
|
)
|
|
(435
|
)
|
|||
Total cash flows provided by operating activities from continuing operations
|
791
|
|
|
385
|
|
|
243
|
|
|||
Cash flows (used) provided by investing activities from continuing operations
|
|
|
|
|
|
|
|
|
|||
Additions to property, plant and equipment
|
(314
|
)
|
|
(298
|
)
|
|
(201
|
)
|
|||
Proceeds from disposal of property, plant and equipment
|
5
|
|
|
6
|
|
|
14
|
|
|||
Purchase of operations - net of cash acquired
|
—
|
|
|
—
|
|
|
(2,002
|
)
|
|||
Proceeds from sale of available-for-sale securities
|
—
|
|
|
10
|
|
|
11
|
|
|||
Proceeds (uses) from sale of operations or equity investments
|
(11
|
)
|
|
41
|
|
|
76
|
|
|||
Total cash flows used by investing activities from continuing operations
|
(320
|
)
|
|
(241
|
)
|
|
(2,102
|
)
|
|||
Cash flows (used) provided by financing activities from continuing operations
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
2,320
|
|
|
502
|
|
|
2,910
|
|
|||
Repayment of long-term debt
|
(2,613
|
)
|
|
(1,023
|
)
|
|
(1,513
|
)
|
|||
(Repayments of)/proceeds from short-term debt, net
|
(36
|
)
|
|
261
|
|
|
12
|
|
|||
Repurchase of common stock
|
(150
|
)
|
|
—
|
|
|
(71
|
)
|
|||
Debt issuance costs
|
(38
|
)
|
|
(10
|
)
|
|
(82
|
)
|
|||
Cash dividends paid
|
(88
|
)
|
|
(63
|
)
|
|
(51
|
)
|
|||
Proceeds from exercise of stock options
|
1
|
|
|
4
|
|
|
3
|
|
|||
Excess tax benefits related to share-based payments
|
12
|
|
|
12
|
|
|
4
|
|
|||
Total cash flows (used) provided by financing activities from continuing operations
|
(592
|
)
|
|
(317
|
)
|
|
1,212
|
|
|||
Cash (used) provided by continuing operations
|
(121
|
)
|
|
(173
|
)
|
|
(647
|
)
|
|||
Cash (used) provided by discontinued operations
|
|
|
|
|
|
|
|
|
|||
Operating cash flows
|
(58
|
)
|
|
(31
|
)
|
|
2
|
|
|||
Investing cash flows
|
—
|
|
|
(1
|
)
|
|
955
|
|
|||
Effect of currency exchange rate changes on cash and cash equivalents
|
2
|
|
|
(9
|
)
|
|
10
|
|
|||
(Decrease) increase in cash and cash equivalents
|
(177
|
)
|
|
(214
|
)
|
|
320
|
|
|||
Cash and cash equivalents - beginning of year
|
523
|
|
|
737
|
|
|
417
|
|
|||
Cash and cash equivalents - end of year
|
$
|
346
|
|
|
$
|
523
|
|
|
$
|
737
|
|
Decrease (increase) in operating assets
(a)
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
$
|
12
|
|
|
$
|
20
|
|
|
$
|
(40
|
)
|
Inventories
|
106
|
|
|
(105
|
)
|
|
(133
|
)
|
|||
Other current and noncurrent assets
|
(183
|
)
|
|
183
|
|
|
246
|
|
|||
Increase (decrease) in operating liabilities
(a)
|
|
|
|
|
|
|
|
|
|||
Trade and other payables
|
(5
|
)
|
|
(111
|
)
|
|
(65
|
)
|
|||
Pension contributions
|
(128
|
)
|
|
(170
|
)
|
|
(50
|
)
|
|||
Other current and noncurrent liabilities
|
64
|
|
|
(326
|
)
|
|
(393
|
)
|
|||
Change in operating assets and liabilities
|
$
|
(134
|
)
|
|
$
|
(509
|
)
|
|
$
|
(435
|
)
|
Supplemental disclosures
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
182
|
|
|
$
|
202
|
|
|
$
|
109
|
|
Income taxes paid
|
69
|
|
|
88
|
|
|
97
|
|
|||
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
See Notes to Consolidated Financial Statements.
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Finished products
|
$
|
610
|
|
|
$
|
675
|
|
Raw materials, supplies and work in process
|
310
|
|
|
376
|
|
||
LIFO carrying values
|
(21
|
)
|
|
(43
|
)
|
||
|
$
|
899
|
|
|
$
|
1,008
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Depreciation
(a)
|
$
|
309
|
|
|
$
|
313
|
|
|
$
|
225
|
|
Capitalized interest
|
1
|
|
|
1
|
|
|
1
|
|
|||
|
|
|
|
|
|
(a)
|
Includes
$2 million
,
$7 million
and
$19 million
of asset impairment and accelerated depreciation during
2013
,
2012
and
2011
, respectively.
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Land
|
$
|
285
|
|
|
$
|
298
|
|
Buildings
|
767
|
|
|
710
|
|
||
Machinery and equipment
|
3,417
|
|
|
3,222
|
|
||
Construction in progress
|
296
|
|
|
248
|
|
||
Total property, plant and equipment (gross)
|
4,765
|
|
|
4,478
|
|
||
Accumulated depreciation and amortization
|
(1,923
|
)
|
|
(1,646
|
)
|
||
Total property, plant and equipment (net)
|
$
|
2,842
|
|
|
$
|
2,832
|
|
(In millions except per share data)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Numerator
|
|
|
|
|
|
||||||
Numerator for basic and diluted EPS -
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
677
|
|
|
$
|
38
|
|
|
$
|
56
|
|
Denominator
|
|
|
|
|
|
|
|
|
|||
Denominator for basic EPS - Weighted-average
|
|
|
|
|
|
|
|
|
|||
common shares outstanding
|
78
|
|
|
78
|
|
|
78
|
|
|||
Share based awards convertible to common shares
|
2
|
|
|
2
|
|
|
2
|
|
|||
Denominator for diluted EPS - Adjusted weighted-
|
|
|
|
|
|
|
|||||
average shares and assumed conversions
|
80
|
|
|
80
|
|
|
80
|
|
|||
EPS from continuing operations
|
|
|
|
|
|
|
|||||
Basic
|
$
|
8.64
|
|
|
$
|
0.49
|
|
|
$
|
0.72
|
|
Diluted
|
8.50
|
|
|
0.48
|
|
|
0.70
|
|
|
At
|
|
|
|
August 23,
|
|
|
Purchase price allocation (in millions)
|
2011
|
|
|
Assets:
|
|
||
Cash
|
$
|
186
|
|
Accounts receivable
|
286
|
|
|
Inventory
|
381
|
|
|
Other current assets
|
50
|
|
|
Intangible assets
|
1,052
|
|
|
Goodwill
|
1,288
|
|
|
Property, plant and equipment
|
1,137
|
|
|
Other noncurrent assets
|
85
|
|
|
Liabilities:
|
|
|
|
Accounts payable
|
(175
|
)
|
|
Accrued expenses
|
(210
|
)
|
|
Debt
|
(1,196
|
)
|
|
Deferred tax - net
|
(566
|
)
|
|
Employee benefit obligations
|
(72
|
)
|
|
Other noncurrent liabilities
|
(67
|
)
|
|
Total purchase price
|
$
|
2,179
|
|
|
|
|
Life
|
||
Intangible asset type (in millions)
|
Value
|
|
|
(years)
|
|
Customer relationships - Specialty Ingredients
|
$
|
266
|
|
|
18
|
Developed technology - Specialty Ingredients
|
498
|
|
|
8 - 15
|
|
Developed technology - Performance Materials
|
19
|
|
|
8 - 15
|
|
IPR&D - Specialty Ingredients
|
86
|
|
|
Indefinite
|
|
Product trade names - Specialty Ingredients
|
174
|
|
|
Indefinite
|
|
Product trade names - Specialty Ingredients
|
3
|
|
|
4
|
|
Product trade names - Performance Materials
|
6
|
|
|
4
|
|
Total
|
$
|
1,052
|
|
|
|
ISP results of operations
|
|
Year ended
|
|
|
|
(In millions)
|
September 30, 2011
|
|
(a)
|
||
Sales
|
|
$
|
205
|
|
|
Income from continuing operations before income taxes
|
|
$
|
5
|
|
|
|
|
|
|
(a)
|
Amounts for 2011 represent the sales and results of operations for the period August 23, 2011 through September 30, 2011, the period for which ISP was owned during 2011.
|
Unaudited pro forma information
|
Fiscal year ended
|
|
|
(In millions, except per share amounts)
|
September 30, 2011
|
|
|
Sales
|
$
|
8,150
|
|
Income from continuing operations
|
$
|
106
|
|
Net income
|
$
|
464
|
|
|
|
||
Basic earnings per share
|
|
|
|
Income from continuing operations
|
$
|
1.35
|
|
Net income
|
$
|
5.91
|
|
|
|
||
Diluted earnings per share
|
|
|
|
Income from continuing operations
|
$
|
1.33
|
|
Net income
|
$
|
5.80
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
(Loss) income from discontinued operations
|
|
|
|
|
|
||||||
Distribution
|
$
|
(9
|
)
|
|
$
|
(6
|
)
|
|
$
|
95
|
|
Asbestos-related litigation reserves, expenses and related receivables
|
(3
|
)
|
|
(7
|
)
|
|
27
|
|
|||
Electronic Chemicals
|
—
|
|
|
—
|
|
|
2
|
|
|||
(Loss) gain on disposal of discontinued operations
|
|
|
|
|
|
|
|
|
|||
Distribution
|
—
|
|
|
(1
|
)
|
|
354
|
|
|||
(Loss) income before income taxes
|
(12
|
)
|
|
(14
|
)
|
|
478
|
|
|||
Income tax benefit (expense)
|
|
|
|
|
|
|
|
|
|||
Benefit (expense) related to (loss) income from discontinued operations
|
|
|
|
|
|
|
|
|
|||
Distribution
|
3
|
|
|
2
|
|
|
(33
|
)
|
|||
Asbestos-related litigation reserves and expenses
|
5
|
|
|
6
|
|
|
(7
|
)
|
|||
Benefit (expense) related to (loss) gain on disposal of discontinued operations
|
|
|
|
|
|
|
|
|
|||
Distribution
|
—
|
|
|
(6
|
)
|
|
(83
|
)
|
|||
APAC
|
10
|
|
|
—
|
|
|
3
|
|
|||
Income (loss) from discontinued operations (net of income taxes)
|
$
|
6
|
|
|
$
|
(12
|
)
|
|
$
|
358
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Financial position
|
|
|
|
|
|
||||||
Current assets
|
$
|
487
|
|
|
$
|
499
|
|
|
|
||
Current liabilities
|
(182
|
)
|
|
(198
|
)
|
|
|
||||
Working capital
|
305
|
|
|
301
|
|
|
|
||||
Noncurrent assets
|
334
|
|
|
342
|
|
|
|
||||
Noncurrent liabilities
|
(129
|
)
|
|
(134
|
)
|
|
|
||||
Stockholders’ equity
|
$
|
510
|
|
|
$
|
509
|
|
|
|
||
Results of operations
|
|
|
|
|
|
||||||
Sales
|
$
|
1,204
|
|
|
$
|
1,385
|
|
|
$
|
1,128
|
|
Income from operations
|
82
|
|
|
101
|
|
|
65
|
|
|||
Net income
|
55
|
|
|
58
|
|
|
40
|
|
|||
Amounts recorded by Ashland
|
|
|
|
|
|
||||||
Investments and advances
|
$
|
218
|
|
|
$
|
217
|
|
|
$
|
193
|
|
Equity income
|
27
|
|
|
35
|
|
|
17
|
|
|||
Distributions received
|
12
|
|
|
3
|
|
|
5
|
|
|
|
|
Facility
|
|
|
|
|||||
(In millions)
|
Severance
|
|
|
costs
|
|
|
Total
|
|
|||
Balance at September 30, 2010
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
Restructuring reserves
|
34
|
|
|
—
|
|
|
34
|
|
|||
Utilization (cash paid or otherwise settled)
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||
Balance as of September 30, 2011
|
45
|
|
|
—
|
|
|
45
|
|
|||
Restructuring reserves
|
27
|
|
|
20
|
|
|
47
|
|
|||
Reserve adjustments
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||
Utilization (cash paid or otherwise settled)
|
(33
|
)
|
|
(5
|
)
|
|
(38
|
)
|
|||
Balance as of September 30, 2012
|
29
|
|
|
15
|
|
|
44
|
|
|||
Reserve adjustments
|
9
|
|
|
—
|
|
|
9
|
|
|||
Utilization (cash paid or otherwise settled)
|
(21
|
)
|
|
(7
|
)
|
|
(28
|
)
|
|||
Balance as of September 30, 2013
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
25
|
|
|
|
|
Quoted prices
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
in active
|
|
|
Significant
|
|
|
|
||||||||
|
|
|
|
|
markets for
|
|
|
other
|
|
|
Significant
|
|
|||||||
|
|
|
|
|
identical
|
|
|
observable
|
|
|
unobservable
|
|
|||||||
|
Carrying
|
|
|
Total fair
|
|
|
assets
|
|
|
inputs
|
|
|
inputs
|
|
|||||
(In millions)
|
value
|
|
|
value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
346
|
|
|
$
|
346
|
|
|
$
|
346
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred compensation investments
(a)
|
181
|
|
|
181
|
|
|
50
|
|
|
131
|
|
|
—
|
|
|||||
Investments of captive insurance company
(a)
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
531
|
|
|
$
|
531
|
|
|
$
|
399
|
|
|
$
|
132
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in other noncurrent assets in the Consolidated Balance Sheets.
|
|
|
|
Quoted prices
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
in active
|
|
|
Significant
|
|
|
|
||||||||
|
|
|
|
|
markets for
|
|
|
other
|
|
|
Significant
|
|
|||||||
|
|
|
|
|
identical
|
|
|
observable
|
|
|
unobservable
|
|
|||||||
|
Carrying
|
|
|
Total fair
|
|
|
assets
|
|
|
inputs
|
|
|
inputs
|
|
|||||
(In millions)
|
value
|
|
|
value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
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 Consolidated Balance Sheets.
|
(b)
|
Included in accrued expense and other liabilities and other noncurrent liabilities in the Consolidated Balance Sheets. See further discussion below on the interest rate swap liabilities.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Foreign currency derivative gains
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
5
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Foreign currency derivative assets
|
$
|
1
|
|
|
$
|
1
|
|
Notional contract values
|
312
|
|
|
168
|
|
||
|
|
|
|
||||
Foreign currency derivative liabilities
(a)
|
$
|
—
|
|
|
$
|
—
|
|
Notional contract values
|
246
|
|
|
35
|
|
||
|
|
|
|
(a)
|
Fair values of assets or liabilities of $0 denote values less than $1 million.
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Change in unrealized loss in AOCI
|
$
|
3
|
|
|
$
|
64
|
|
Loss reclassified from AOCI to income
|
65
|
|
|
22
|
|
|
Specialty
|
|
|
Water
|
|
|
Performance
|
|
|
Consumer
|
|
|
|
||||||
(In millions)
|
Ingredients
|
|
|
Technologies
|
|
|
Materials
|
|
(a)
|
Markets
|
|
|
Total
|
|
|||||
Balance at September 30, 2011
|
$
|
2,092
|
|
|
$
|
676
|
|
|
$
|
357
|
|
|
$
|
166
|
|
|
$
|
3,291
|
|
Acquisitions
(b)
|
125
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
103
|
|
|||||
Divestitures
(c)
|
—
|
|
|
(6
|
)
|
|
(5
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Currency translation
|
(15
|
)
|
|
(11
|
)
|
|
(15
|
)
|
|
—
|
|
|
(41
|
)
|
|||||
Balance at September 30, 2012
|
2,202
|
|
|
659
|
|
|
315
|
|
|
166
|
|
|
3,342
|
|
|||||
Currency translation
|
29
|
|
|
(2
|
)
|
|
(4
|
)
|
|
1
|
|
|
24
|
|
|||||
Balance at September 30, 2013
|
$
|
2,231
|
|
|
$
|
657
|
|
|
$
|
311
|
|
|
$
|
167
|
|
|
$
|
3,366
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Goodwill consisted of
$10 million
as of
September 30, 2013
and
2012
for the Elastomers reporting unit as well as
$301 million
and
$305 million
, respectively, for the Composites and Adhesives reporting unit as of
September 30, 2013
and
2012
.
|
(b)
|
The additions activity of
$103 million
of goodwill during
2012
was related to the ISP acquisition, which is not deductible for tax purposes. Activity is a result of final post-closing adjustments for the ISP acquisition, primarily related to deferred tax balances and IPR&D assets, as well as the final allocation of goodwill between reporting segments.
|
(c)
|
The reduction of
$11 million
primarily relates to the Synlubes and PVAc business divestitures.
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
Gross
|
|
|
|
|
Net
|
|
|
Gross
|
|
|
|
|
Net
|
|
||||||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
||||||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|
amount
|
|
|
amortization
|
|
|
amount
|
|
||||||
Trademarks and trade names
|
$
|
535
|
|
|
$
|
(46
|
)
|
|
$
|
489
|
|
|
$
|
535
|
|
|
$
|
(39
|
)
|
|
$
|
496
|
|
Intellectual property
|
840
|
|
|
(185
|
)
|
|
655
|
|
|
843
|
|
|
(136
|
)
|
|
707
|
|
||||||
Customer relationships
|
848
|
|
|
(233
|
)
|
|
615
|
|
|
833
|
|
|
(173
|
)
|
|
660
|
|
||||||
IPR&D
|
32
|
|
|
—
|
|
|
32
|
|
|
73
|
|
|
—
|
|
|
73
|
|
||||||
Total intangible assets
|
$
|
2,255
|
|
|
$
|
(464
|
)
|
|
$
|
1,791
|
|
|
$
|
2,284
|
|
|
$
|
(348
|
)
|
|
$
|
1,936
|
|
(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
|
270
|
|
|
300
|
|
||
6.50% junior subordinated notes, due 2029
|
131
|
|
|
129
|
|
||
9.125% notes, due 2017
|
—
|
|
|
76
|
|
||
Other international loans, interest at a weighted-
|
|
|
|
|
|
||
average rate of 6.9% at September 30, 2013 (5.6% to 11.9%)
|
44
|
|
|
69
|
|
||
Medium-term notes, due 2013-2019, interest at a weighted-
|
|
|
|
|
|
||
average rate of 8.7% at September 30, 2013 (8.4% to 9.4%)
|
14
|
|
|
21
|
|
||
8.80% debentures, due 2013
|
—
|
|
|
20
|
|
||
Other
|
13
|
|
|
14
|
|
||
Total debt
|
3,267
|
|
|
3,590
|
|
||
Short-term debt
|
(308
|
)
|
|
(344
|
)
|
||
Current portion of long-term debt
|
(12
|
)
|
|
(115
|
)
|
||
Long-term debt (less current portion)
|
$
|
2,947
|
|
|
$
|
3,131
|
|
|
|
|
|
(a)
|
2011 Senior Credit Facility.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Interest expense
(a)
|
$
|
273
|
|
|
$
|
251
|
|
|
$
|
131
|
|
Interest income
|
(4
|
)
|
|
(8
|
)
|
|
(16
|
)
|
|||
Other financing costs
(b)
|
13
|
|
|
74
|
|
|
6
|
|
|||
|
$
|
282
|
|
|
$
|
317
|
|
|
$
|
121
|
|
|
|
|
|
|
|
(a)
|
Includes the
$52 million
charge to terminate the interest rate swaps associated with the term loan A and term loan B facilities during 2013.
|
(b)
|
Includes a
$4 million
and
$67 million
redemption premium payment for 2013 and 2012, respectively, related to the
$78 million
and
$572 million
principal
9.125%
senior notes redeemed during 2013 and 2012, respectively.
|
(In millions)
|
2013
|
|
(a)
|
2012
|
|
(b)
|
2011
|
|
(c)
|
|||
Normal amortization
|
$
|
15
|
|
|
$
|
24
|
|
|
$
|
14
|
|
|
Accelerated amortization
|
50
|
|
|
30
|
|
|
12
|
|
|
|||
Total
|
$
|
65
|
|
|
$
|
54
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
(a)
|
Accelerated amortization of
$47 million
and
$3 million
resulted from the repayment of the 2011 Senior Credit Facility and the early paydown of Ashland’s remaining
9.125%
senior notes, respectively.
|
(b)
|
Accelerated amortization of
$24 million
and
$6 million
resulted from the early redemption of
88%
of Ashland’s
9.125%
senior notes and the early paydown of
$350 million
in term loan B principal associated with the 2011 Senior Credit Facility, respectively.
|
(c)
|
Accelerated amortization of
$12 million
resulted from the termination of the term loan A (associated with a former senior credit facility entered into by Ashland in 2010) and a former accounts receivable securitization facility in March 2011.
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Deferred compensation investments
|
$
|
181
|
|
|
$
|
176
|
|
Debt issuance costs
|
60
|
|
|
80
|
|
||
Tax receivables
|
26
|
|
|
31
|
|
||
Defined benefit plan assets
|
48
|
|
|
45
|
|
||
Land use rights
|
40
|
|
|
37
|
|
||
Environmental insurance receivables
|
26
|
|
|
26
|
|
||
Note receivables
|
25
|
|
|
24
|
|
||
Life insurance policies
|
21
|
|
|
21
|
|
||
Customer incentive
|
17
|
|
|
13
|
|
||
Debt defeasance assets
|
16
|
|
|
16
|
|
||
Other
|
101
|
|
|
70
|
|
||
|
$
|
561
|
|
|
$
|
539
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Environmental remediation reserves
|
$
|
171
|
|
|
$
|
187
|
|
Accrued tax liabilities (including sales and franchise)
|
123
|
|
|
138
|
|
||
Deferred compensation
|
75
|
|
|
80
|
|
||
Insurance reserves related to workers compensation and general liability
|
73
|
|
|
75
|
|
||
Interest rate swap liabilities
|
—
|
|
|
40
|
|
||
Other
|
109
|
|
|
113
|
|
||
|
$
|
551
|
|
|
$
|
633
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Minimum rentals (including rentals under short-term leases)
(a)
|
$
|
70
|
|
|
$
|
108
|
|
|
$
|
68
|
|
Contingent rentals
|
6
|
|
|
7
|
|
|
6
|
|
|||
Sublease rental income
|
(2
|
)
|
|
(9
|
)
|
|
(7
|
)
|
|||
|
$
|
74
|
|
|
$
|
106
|
|
|
$
|
67
|
|
|
|
|
|
|
|
(a)
|
Expense for 2012 includes a lease abandonment charge of
$20 million
related to the closure of a corporate facility. Future payments related to this lease will occur over the remaining lease term through May 2016, and are included in the future minimum rental payments.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
8
|
|
|
$
|
47
|
|
|
$
|
(59
|
)
|
State
|
(6
|
)
|
|
(1
|
)
|
|
4
|
|
|||
Foreign
|
78
|
|
|
56
|
|
|
57
|
|
|||
|
80
|
|
|
102
|
|
|
2
|
|
|||
Deferred
|
194
|
|
|
(154
|
)
|
|
(55
|
)
|
|||
Income tax expense (benefit)
|
$
|
274
|
|
|
$
|
(52
|
)
|
|
$
|
(53
|
)
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Deferred tax assets
|
|
|
|
||||
Foreign net operating loss carryforwards
(a)
|
$
|
108
|
|
|
$
|
109
|
|
Employee benefit obligations
|
408
|
|
|
691
|
|
||
Environmental, self-insurance and litigation reserves (net of receivables)
|
187
|
|
|
185
|
|
||
State net operating/capital loss carryforwards
(b)
|
77
|
|
|
73
|
|
||
Compensation accruals
|
84
|
|
|
88
|
|
||
Credit carryforwards
(c)
|
131
|
|
|
81
|
|
||
Uncollectible accounts receivable
|
5
|
|
|
8
|
|
||
Federal net operating/capital loss carryforwards
(d)
|
1
|
|
|
13
|
|
||
Other items
(e)
|
63
|
|
|
87
|
|
||
Valuation allowances
(f)
|
(166
|
)
|
|
(175
|
)
|
||
Total deferred tax assets
|
898
|
|
|
1,160
|
|
||
Deferred tax liabilities
|
|
|
|
|
|
||
Goodwill and other intangibles
(g)
|
537
|
|
|
570
|
|
||
Property, plant and equipment
|
489
|
|
|
520
|
|
||
Unremitted earnings
|
188
|
|
|
182
|
|
||
Total deferred tax liabilities
|
1,214
|
|
|
1,272
|
|
||
Net deferred tax liability
|
$
|
(316
|
)
|
|
$
|
(112
|
)
|
|
|
|
|
(a)
|
Gross foreign net operating loss carryforwards include offset for related uncertain tax positions and will expire in future years as follows:
$5 million
in
2014
,
$17 million
in
2015
and the remaining balance in other future years. The 2012 amount has been revised from
$762 million
to
$109 million
to reflect that an entity was liquidated in 2012. See Schedule II for additional information related to the 2012 adjustment.
|
(b)
|
Gross state net operating/capital loss carryforwards include offset for related uncertain tax positions and will expire in future years as follows:
$29 million
in
2014
,
$19 million
in
2015
and the remaining balance in other future years.
|
(c)
|
Includes offset for related uncertain tax positions and consists primarily of foreign tax credits of
$84 million
expiring over
2017
to
2023
, alternative minimum tax credits of
$16 million
with no expiration and research and development credits of
$28 million
expiring over
2021
to
2033
.
|
(d)
|
Excludes
$43 million
gross federal net operating loss carryforward generated in 2013 that will expire in future years beyond 2015. Realization of tax benefits associated with the federal net operating loss carry-forwards is anticipated to result from the exercise of employee stock-based awards. These tax benefits, which will be recorded in stockholders' equity, are appropriately not recognized until the underlying exercise of employee stock-based awards occurs.
|
(e)
|
Includes offset for impact of related uncertain tax positions.
|
(f)
|
Valuation allowances primarily relate to the realization of recorded tax benefits on certain state and foreign net operating loss carryforwards as well as capital losses. The 2012 amount has been revised from
$828 million
to
$175 million
to reflect that an entity was formally liquidated in 2012. See Schedule II for additional information related to the 2012 revision.
|
(g)
|
The total gross amount of goodwill as of
September 30, 2013
expected to be deductible for tax purposes is
$75 million
.
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
||||||
United States
|
$
|
366
|
|
|
$
|
(535
|
)
|
|
$
|
(230
|
)
|
Foreign
|
585
|
|
|
521
|
|
|
233
|
|
|||
|
$
|
951
|
|
|
$
|
(14
|
)
|
|
$
|
3
|
|
|
|
|
|
|
|
||||||
Income taxes computed at U.S. statutory rate (35%)
|
$
|
333
|
|
|
$
|
(5
|
)
|
|
$
|
1
|
|
Increase (decrease) in amount computed resulting from
|
|
|
|
|
|
|
|
|
|||
Net gain on divestitures
(a)
|
—
|
|
|
3
|
|
|
8
|
|
|||
Uncertain tax positions
|
20
|
|
|
(1
|
)
|
|
3
|
|
|||
Valuation allowance (release)
(b)
|
(12
|
)
|
|
41
|
|
|
(92
|
)
|
|||
Claim for research and development credits
(c)
|
(17
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|||
State taxes
(d)
|
27
|
|
|
(9
|
)
|
|
(6
|
)
|
|||
Net impact of foreign results
(e)
|
(77
|
)
|
|
(74
|
)
|
|
38
|
|
|||
Other items
|
—
|
|
|
(5
|
)
|
|
4
|
|
|||
Income tax expense (benefit)
|
$
|
274
|
|
|
$
|
(52
|
)
|
|
$
|
(53
|
)
|
|
|
|
|
|
|
(a)
|
2012 tax adjustments associated with the PVAc/Synlubes divestitures; 2011 tax adjustments associated with the Süd-Chemie joint venture.
|
(b)
|
Related to state deferred tax asset valuation allowances/(releases).
|
(c)
|
2013 includes a benefit related to credits signed into law on a retroactive basis.
|
(d)
|
2013 includes a
$7 million
expense recorded for deferred tax adjustments, primarily attributable to state rate changes.
|
(e)
|
2013 includes a
$17 million
benefit recorded for a rate change in a foreign jurisdiction; 2011 includes a
$60 million
unfavorable charge for the repatriation of foreign earnings to the U.S.
|
(In millions)
|
|
|
|
Balance at September 30, 2011
|
$
|
160
|
|
Increases related to positions taken on items from prior years
|
17
|
|
|
Decreases related to positions taken on items from prior years
|
(41
|
)
|
|
Increases related to positions taken in the current year
|
8
|
|
|
Lapse of statute of limitations
|
(4
|
)
|
|
Settlement of uncertain tax positions with tax authorities
|
(16
|
)
|
|
Balance at September 30, 2012
|
124
|
|
|
Increases related to positions taken on items from prior years
|
22
|
|
|
Decreases related to positions taken on items from prior years
|
(4
|
)
|
|
Increases related to positions taken in the current year
|
14
|
|
|
Lapse of statute of limitations
|
(21
|
)
|
|
Settlement of uncertain tax positions with tax authorities
|
(2
|
)
|
|
Balance at September 30, 2013
|
$
|
133
|
|
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
||||||
Net periodic benefit costs (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
43
|
|
|
$
|
36
|
|
|
$
|
39
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Interest cost
|
175
|
|
|
198
|
|
|
201
|
|
|
7
|
|
|
12
|
|
|
16
|
|
||||||
Curtailment
(a)
|
—
|
|
|
(1
|
)
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
||||||
Expected return on plan assets
|
(238
|
)
|
|
(226
|
)
|
|
(226
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
(b)
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(21
|
)
|
|
(14
|
)
|
|
(10
|
)
|
||||||
Actuarial (gain) loss
|
(472
|
)
|
|
482
|
|
|
275
|
|
|
(26
|
)
|
|
11
|
|
|
8
|
|
||||||
|
$
|
(494
|
)
|
|
$
|
487
|
|
|
$
|
267
|
|
|
$
|
(38
|
)
|
|
$
|
11
|
|
|
$
|
(7
|
)
|
Weighted-average plan assumptions
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.70
|
%
|
|
4.76
|
%
|
|
5.01
|
%
|
|
3.23
|
%
|
|
4.39
|
%
|
|
4.68
|
%
|
||||||
Rate of compensation increase
|
3.66
|
%
|
|
3.69
|
%
|
|
3.66
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expected long-term rate of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
return on plan assets
|
7.26
|
%
|
|
7.67
|
%
|
|
7.68
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The Distribution divestiture during 2011 resulted in a pension and other postretirement curtailment gain of
$44 million
, which was recognized as part of the
$271 million
gain on sale of Distribution, recorded within the discontinued operations caption of the Statement of Consolidated Comprehensive Income.
|
(b)
|
During 2011 and 2012, changes to the post-65 Ashland Medical plan resulted in negative plan amendments that are being amortized within the other postretirement benefits caption.
|
(c)
|
The plan assumptions discussed are a blended weighted-average rate for Ashland’s U.S. and non-U.S. plans. The U.S. pension plan represented approximately
82%
of the projected benefit obligation at
September 30, 2013
. Other postretirement benefit plans consist of U.S. and Canada, with the U.S. plan representing approximately
93%
of the accumulated postretirement benefit obligation at
September 30, 2013
. Non-U.S. plans use assumptions generally consistent with those of U.S. plans.
|
|
Pension
|
|
Postretirement
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Prior service credit
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(48
|
)
|
Amortization of prior service credit
|
2
|
|
|
2
|
|
|
21
|
|
|
14
|
|
||||
Total
|
$
|
(12
|
)
|
|
$
|
2
|
|
|
$
|
22
|
|
|
$
|
(34
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total recognized in net periodic benefit cost (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||
and accumulated other comprehensive income
|
$
|
(506
|
)
|
|
$
|
489
|
|
|
$
|
(16
|
)
|
|
$
|
(23
|
)
|
|
|
|
|
Other
|
|
|||
|
Pension
|
|
|
postretirement
|
|
|||
(In millions)
|
benefits
|
|
|
|
benefits
|
|
||
Prior service credit
|
$
|
(3
|
)
|
|
|
$
|
(21
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Prior service credit
|
$
|
(20
|
)
|
|
$
|
(8
|
)
|
|
$
|
(93
|
)
|
|
$
|
(115
|
)
|
|
|
|
|
|
Other postretirement
|
||||||||||
|
Pension plans
|
|
benefit plans
|
||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
||||
Change in benefit obligations
|
|
|
|
|
|
|
|
||||||||
Benefit obligations at October 1
|
$
|
4,877
|
|
|
$
|
4,242
|
|
|
$
|
255
|
|
|
$
|
302
|
|
Service cost
|
43
|
|
|
36
|
|
|
2
|
|
|
2
|
|
||||
Interest cost
|
175
|
|
|
198
|
|
|
7
|
|
|
12
|
|
||||
Participant contributions
|
2
|
|
|
2
|
|
|
13
|
|
|
15
|
|
||||
Benefits paid
|
(241
|
)
|
|
(238
|
)
|
|
(34
|
)
|
|
(41
|
)
|
||||
Actuarial (gain) loss
|
(549
|
)
|
|
613
|
|
|
(26
|
)
|
|
11
|
|
||||
Plan amendment
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
||||
Foreign currency exchange rate changes
|
15
|
|
|
(6
|
)
|
|
—
|
|
|
1
|
|
||||
Other
|
(1
|
)
|
|
31
|
|
|
—
|
|
|
—
|
|
||||
Medicare Part D Act
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Curtailment gain
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit obligations at September 30
|
$
|
4,307
|
|
|
$
|
4,877
|
|
|
$
|
217
|
|
|
$
|
255
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Value of plan assets at October 1
|
$
|
3,320
|
|
|
$
|
3,012
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
161
|
|
|
357
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
128
|
|
|
170
|
|
|
21
|
|
|
26
|
|
||||
Participant contributions
|
2
|
|
|
2
|
|
|
13
|
|
|
15
|
|
||||
Benefits paid
|
(241
|
)
|
|
(238
|
)
|
|
(34
|
)
|
|
(41
|
)
|
||||
Foreign currency exchange rate changes
|
12
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
Other
|
(1
|
)
|
|
21
|
|
|
—
|
|
|
—
|
|
||||
Value of plan assets at September 30
|
$
|
3,381
|
|
|
$
|
3,320
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Unfunded status of the plans
|
$
|
(926
|
)
|
|
$
|
(1,557
|
)
|
|
$
|
(217
|
)
|
|
$
|
(255
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in the balance sheet
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncurrent benefit assets
|
$
|
48
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current benefit liabilities
|
(16
|
)
|
|
(17
|
)
|
|
(19
|
)
|
|
(20
|
)
|
||||
Noncurrent benefit liabilities
|
(958
|
)
|
|
(1,585
|
)
|
|
(198
|
)
|
|
(235
|
)
|
||||
Net amount recognized
|
$
|
(926
|
)
|
|
$
|
(1,557
|
)
|
|
$
|
(217
|
)
|
|
$
|
(255
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average plan assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
4.68
|
%
|
|
3.70
|
%
|
|
4.28
|
%
|
|
3.23
|
%
|
||||
Rate of compensation increase
|
3.59
|
%
|
|
3.66
|
%
|
|
—
|
|
|
—
|
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
|
|
Non-
|
|
|
|
|
|
|
Non-
|
|
|
|
||||||||||
|
Qualified
|
|
|
qualified
|
|
|
|
|
Qualified
|
|
|
qualified
|
|
|
|
||||||||
(In millions)
|
plans
(a)
|
|
|
plans
|
|
|
Total
|
|
|
plans
(a)
|
|
|
plans
|
|
|
Total
|
|
||||||
Projected benefit obligation
|
$
|
3,612
|
|
|
$
|
171
|
|
|
$
|
3,783
|
|
|
$
|
4,185
|
|
|
$
|
190
|
|
|
$
|
4,375
|
|
Accumulated benefit obligation
|
3,530
|
|
|
163
|
|
|
3,693
|
|
|
4,074
|
|
|
179
|
|
|
4,253
|
|
||||||
Fair value of plan assets
|
2,809
|
|
|
—
|
|
|
2,809
|
|
|
2,777
|
|
|
—
|
|
|
2,777
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes qualified U.S. and non-U.S. pension plans.
|
|
Quoted prices
|
|
|
|
|
|
|||||||||
|
|
|
in active
|
|
|
Significant
|
|
|
|
||||||
|
|
|
markets for
|
|
|
other
|
|
|
Significant
|
|
|||||
|
|
|
identical
|
|
|
observable
|
|
|
unobservable
|
|
|||||
|
Total fair
|
|
|
assets
|
|
|
inputs
|
|
|
inputs
|
|
||||
(In millions)
|
value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Cash and cash equivalents
|
$
|
352
|
|
|
$
|
352
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. government securities
|
89
|
|
|
12
|
|
|
77
|
|
|
—
|
|
||||
Other government securities
|
148
|
|
|
—
|
|
|
148
|
|
|
—
|
|
||||
Corporate debt instruments
|
1,222
|
|
|
634
|
|
|
588
|
|
|
—
|
|
||||
Corporate stocks
|
324
|
|
|
209
|
|
|
115
|
|
|
—
|
|
||||
Insurance contracts
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Private equity and hedge funds
|
1,190
|
|
|
—
|
|
|
—
|
|
|
1,190
|
|
||||
Other investments
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||
Total assets at fair value
|
$
|
3,381
|
|
|
$
|
1,207
|
|
|
$
|
946
|
|
|
$
|
1,228
|
|
|
Quoted prices
|
|
|
|
|
|
|||||||||
|
|
|
in active
|
|
|
Significant
|
|
|
|
||||||
|
|
|
markets for
|
|
|
other
|
|
|
Significant
|
|
|||||
|
|
|
identical
|
|
|
observable
|
|
|
unobservable
|
|
|||||
|
Total fair
|
|
|
assets
|
|
|
inputs
|
|
|
inputs
|
|
||||
(In millions)
|
value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Cash and cash equivalents
|
$
|
152
|
|
|
$
|
152
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. government securities
|
189
|
|
|
150
|
|
|
39
|
|
|
—
|
|
||||
Other government securities
|
157
|
|
|
21
|
|
|
136
|
|
|
—
|
|
||||
Corporate debt instruments
|
1,284
|
|
|
807
|
|
|
477
|
|
|
—
|
|
||||
Corporate stocks
|
383
|
|
|
174
|
|
|
209
|
|
|
—
|
|
||||
Insurance contracts
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Private equity and hedge funds
|
1,101
|
|
|
—
|
|
|
—
|
|
|
1,101
|
|
||||
Other investments
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||
Total assets at fair value
|
$
|
3,320
|
|
|
$
|
1,304
|
|
|
$
|
870
|
|
|
$
|
1,146
|
|
|
Total
|
|
|
Private
|
|
|
|
||||
|
Level 3
|
|
|
equity and
|
|
|
Other
|
|
|||
(In millions)
|
assets
|
|
|
hedge funds
|
|
|
investments
|
|
|||
Balance as of September 30, 2011
|
$
|
1,115
|
|
|
$
|
1,067
|
|
|
$
|
48
|
|
Purchases
|
144
|
|
|
144
|
|
|
—
|
|
|||
Sales
|
(173
|
)
|
|
(173
|
)
|
|
—
|
|
|||
Actual return on plan assets
|
|
|
|
|
|
||||||
Relating to assets held at September 30, 2012
|
61
|
|
|
64
|
|
|
(3
|
)
|
|||
Relating to assets sold during 2012
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Balance as of September 30, 2012
|
1,146
|
|
|
1,101
|
|
|
45
|
|
|||
Purchases
|
207
|
|
|
207
|
|
|
—
|
|
|||
Sales
|
(230
|
)
|
|
(230
|
)
|
|
—
|
|
|||
Actual return on plan assets
|
|
|
|
|
|
||||||
Relating to assets held at September 30, 2013
|
101
|
|
|
108
|
|
|
(7
|
)
|
|||
Relating to assets sold during 2013
|
4
|
|
|
4
|
|
|
—
|
|
|||
Balance as of September 30, 2013
|
$
|
1,228
|
|
|
$
|
1,190
|
|
|
$
|
38
|
|
|
|
|
Actual at September 30
|
||||
(In millions)
|
Target
|
|
2013
|
|
|
2012
|
|
Plan assets allocation
|
|
|
|
|
|
||
Equity securities
|
40 - 80%
|
|
50
|
%
|
|
51
|
%
|
Debt securities
|
20 - 45%
|
|
48
|
%
|
|
47
|
%
|
Other
|
0 - 20%
|
|
2
|
%
|
|
2
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Other
|
|
|||
|
Pension
|
|
|
postretirement
|
|
|||
(In millions)
|
benefits
|
|
|
|
benefits
|
|
||
2014
|
$
|
235
|
|
|
|
$
|
19
|
|
2015
|
241
|
|
|
|
19
|
|
||
2016
|
245
|
|
|
|
19
|
|
||
2017
|
254
|
|
|
|
19
|
|
||
2018
|
257
|
|
|
|
19
|
|
||
2019 - 2023
|
1,364
|
|
|
|
80
|
|
(In thousands)
|
2013
|
|
|
2012
|
|
|
2011
|
|
Open claims - beginning of year
|
66
|
|
|
72
|
|
|
83
|
|
New claims filed
|
2
|
|
|
2
|
|
|
2
|
|
Claims settled
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Claims dismissed
|
(2
|
)
|
|
(7
|
)
|
|
(12
|
)
|
Open claims - end of year
|
65
|
|
|
66
|
|
|
72
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Asbestos reserve - beginning of year
|
$
|
522
|
|
|
$
|
543
|
|
|
$
|
537
|
|
Reserve adjustment
|
(28
|
)
|
|
11
|
|
|
41
|
|
|||
Amounts paid
|
(31
|
)
|
|
(32
|
)
|
|
(35
|
)
|
|||
Asbestos reserve - end of year
|
$
|
463
|
|
|
$
|
522
|
|
|
$
|
543
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Insurance receivable - beginning of year
|
$
|
423
|
|
|
$
|
431
|
|
|
$
|
421
|
|
Receivable adjustment
|
(3
|
)
|
|
19
|
|
|
42
|
|
|||
Amounts collected
|
(12
|
)
|
|
(27
|
)
|
|
(32
|
)
|
|||
Insurance receivable - end of year
|
$
|
408
|
|
|
$
|
423
|
|
|
$
|
431
|
|
(In thousands)
|
2013
|
|
|
2012
|
|
|
2011
|
|
Open claims - beginning of year
|
21
|
|
|
21
|
|
|
20
|
|
New claims filed
|
1
|
|
|
1
|
|
|
2
|
|
Claims dismissed
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Open claims - end of year
|
21
|
|
|
21
|
|
|
21
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Asbestos reserve - beginning of year
|
$
|
320
|
|
|
$
|
311
|
|
|
$
|
375
|
|
Reserve adjustments
|
46
|
|
|
30
|
|
|
(48
|
)
|
|||
Amounts paid
|
(24
|
)
|
|
(21
|
)
|
|
(16
|
)
|
|||
Asbestos reserve - end of year
|
$
|
342
|
|
|
$
|
320
|
|
|
$
|
311
|
|
|
|
|
|
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Insurance receivable - beginning of year
|
$
|
56
|
|
|
$
|
48
|
|
|
$
|
68
|
|
Receivable adjustment
|
19
|
|
|
9
|
|
|
(20
|
)
|
|||
Amounts collected
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Insurance receivable - end of year
|
$
|
75
|
|
|
$
|
56
|
|
|
$
|
48
|
|
(In millions)
|
2013
|
|
|
2012
|
|
||
Environmental remediation reserve - beginning of year
|
$
|
228
|
|
|
$
|
246
|
|
Disbursements, net of cost recoveries
|
(50
|
)
|
|
(44
|
)
|
||
Revised obligation estimates and accretion
|
31
|
|
|
27
|
|
||
Foreign currency translation
|
2
|
|
|
(1
|
)
|
||
Environmental remediation reserve - end of year
|
$
|
211
|
|
|
$
|
228
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Environmental expense
|
$
|
28
|
|
|
$
|
23
|
|
|
$
|
42
|
|
Accretion
|
3
|
|
|
4
|
|
|
4
|
|
|||
Legal expense
|
2
|
|
|
2
|
|
|
3
|
|
|||
Total expense
|
33
|
|
|
29
|
|
|
49
|
|
|||
|
|
|
|
|
|
||||||
Insurance receivable
|
(4
|
)
|
|
(6
|
)
|
|
(13
|
)
|
|||
Total expense, net of receivable activity
(a)
|
$
|
29
|
|
|
$
|
23
|
|
|
$
|
36
|
|
|
|
|
|
|
|
(a)
|
Net expense of
$6 million
,
$8 million
and
$6 million
for the fiscal years ended
September 30, 2013
,
2012
and
2011
, respectively, relates to divested businesses which qualified for treatment as discontinued operations and for which the environmental liabilities were retained by Ashland. These amounts are classified within the income (loss) from discontinued operations caption of the Statements of Consolidated Comprehensive Income.
|
|
|
|
Tax
|
|
|
|
|||||
|
Before
|
|
|
(expense)
|
|
|
Net of
|
|
|||
(In millions)
|
tax
|
|
|
benefit
|
|
|
tax
|
|
|||
Year ended September 30, 2013
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Unrealized translation gain
|
$
|
45
|
|
|
$
|
(8
|
)
|
|
$
|
37
|
|
Pension and postretirement obligation adjustment
|
(10
|
)
|
|
5
|
|
|
(5
|
)
|
|||
Net change in interest rate hedges
|
62
|
|
|
(24
|
)
|
|
38
|
|
|||
Total other comprehensive income (loss)
|
$
|
97
|
|
|
$
|
(27
|
)
|
|
$
|
70
|
|
|
|
|
|
|
|
||||||
Year ended September 30, 2012
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Unrealized translation loss
|
$
|
(99
|
)
|
|
$
|
12
|
|
|
$
|
(87
|
)
|
Pension and postretirement obligation adjustment
|
32
|
|
|
(8
|
)
|
|
24
|
|
|||
Net change in interest rate hedges
|
(42
|
)
|
|
16
|
|
|
(26
|
)
|
|||
Total other comprehensive (loss) income
|
$
|
(109
|
)
|
|
$
|
20
|
|
|
$
|
(89
|
)
|
|
|
|
|
|
|
||||||
Year ended September 30, 2011
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Unrealized translation loss
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
$
|
(18
|
)
|
Pension and postretirement obligation adjustment
|
50
|
|
|
(17
|
)
|
|
33
|
|
|||
Net change in interest rate hedges
|
(20
|
)
|
|
8
|
|
|
(12
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
11
|
|
|
$
|
(8
|
)
|
|
$
|
3
|
|
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
SARs
|
$
|
17
|
|
|
$
|
13
|
|
|
$
|
10
|
|
Nonvested stock awards
|
4
|
|
|
5
|
|
|
4
|
|
|||
Performance share awards
|
9
|
|
|
10
|
|
|
2
|
|
|||
|
$
|
30
|
|
|
$
|
28
|
|
|
$
|
16
|
|
|
|
|
|
|
|
||||||
Income tax benefit
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
6
|
|
(In millions except per share data)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Weighted-average fair value per share of SARs granted
|
$
|
29.93
|
|
|
$
|
23.96
|
|
|
$
|
22.25
|
|
Assumptions (weighted-average)
|
|
|
|
|
|
|
|
||||
Risk-free interest rate
|
0.7
|
%
|
|
1.0
|
%
|
|
1.5
|
%
|
|||
Expected dividend yield
|
1.3
|
%
|
|
1.3
|
%
|
|
1.2
|
%
|
|||
Expected volatility
|
55.0
|
%
|
|
55.0
|
%
|
|
53.4
|
%
|
|||
Expected life (in years)
|
5
|
|
|
5
|
|
|
5
|
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
Number
|
|
|
Weighted-
|
|
|
Number
|
|
|
Weighted-
|
|
|
Number
|
|
|
Weighted-
|
|
|||
|
of
|
|
|
average
|
|
|
of
|
|
|
average
|
|
|
of
|
|
|
average
|
|
|||
|
common
|
|
|
exercise price
|
|
|
common
|
|
|
exercise price
|
|
|
common
|
|
|
exercise price
|
|
|||
(In thousands except per share data)
|
shares
|
|
|
per share
|
|
|
shares
|
|
|
per share
|
|
|
shares
|
|
|
per share
|
|
|||
Outstanding - beginning of year
|
2,908
|
|
|
$
|
45.94
|
|
|
3,546
|
|
|
$
|
39.52
|
|
|
3,714
|
|
|
$
|
36.11
|
|
Granted
|
888
|
|
|
70.41
|
|
|
700
|
|
|
55.75
|
|
|
596
|
|
|
51.86
|
|
|||
Exercised
|
(1,037
|
)
|
|
39.95
|
|
|
(1,273
|
)
|
|
33.30
|
|
|
(698
|
)
|
|
31.02
|
|
|||
Forfeitures and expirations
|
(101
|
)
|
|
61.96
|
|
|
(65
|
)
|
|
48.64
|
|
|
(66
|
)
|
|
48.62
|
|
|||
Outstanding - end of year
(a)
|
2,658
|
|
|
55.84
|
|
|
2,908
|
|
|
45.94
|
|
|
3,546
|
|
|
39.52
|
|
|||
Exercisable - end of year
|
1,390
|
|
|
47.46
|
|
|
1,832
|
|
|
41.97
|
|
|
2,410
|
|
|
40.22
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Exercise prices per share for SARs outstanding at
September 30, 2013
ranged from
$9.49
to
$19.81
for
174,000
shares, from
$21.43
to
$38.47
for
209,000
shares, from
$42.58
to
$55.73
for
1,189,000
shares, and from
$64.92
to
$87.86
for
1,086,000
shares. The weighted-average remaining contractual life of outstanding SARs and stock options was
7.0
years and exercisable SARs and stock options was
5.4
years.
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
Number
|
|
|
Weighted-
|
|
|
Number
|
|
|
Weighted-
|
|
|
Number
|
|
|
Weighted-
|
|
|||
|
of
|
|
|
average
|
|
|
of
|
|
|
average
|
|
|
of
|
|
|
average
|
|
|||
|
common
|
|
|
grant date
|
|
|
common
|
|
|
grant date
|
|
|
common
|
|
|
grant date
|
|
|||
(In thousands except per share data)
|
shares
|
|
|
fair value
|
|
|
shares
|
|
|
fair value
|
|
|
shares
|
|
|
fair value
|
|
|||
Nonvested - beginning of year
|
333
|
|
|
$
|
33.80
|
|
|
368
|
|
|
$
|
33.05
|
|
|
354
|
|
|
$
|
30.98
|
|
Granted
|
22
|
|
|
84.12
|
|
|
35
|
|
|
65.94
|
|
|
66
|
|
|
52.00
|
|
|||
Vested
|
(205
|
)
|
|
22.50
|
|
|
(56
|
)
|
|
45.83
|
|
|
(48
|
)
|
|
42.14
|
|
|||
Forfeitures
|
(10
|
)
|
|
51.01
|
|
|
(14
|
)
|
|
48.62
|
|
|
(4
|
)
|
|
45.82
|
|
|||
Nonvested - end of year
|
140
|
|
|
56.97
|
|
|
333
|
|
|
33.80
|
|
|
368
|
|
|
33.05
|
|
|
|
|
|
|
Weighted-
|
|
||
|
|
|
Target
|
|
|
average
|
|
|
|
|
|
shares
|
|
|
fair value
|
|
|
(In thousands)
|
Performance period
|
|
granted
|
|
(a)
|
per share
|
|
|
Fiscal Year 2013
|
October 1, 2012 - September 30, 2015
|
|
134
|
|
|
$
|
73.50
|
|
Fiscal Year 2012
|
October 1, 2011 - September 30, 2014
|
|
199
|
|
|
$
|
63.26
|
|
Fiscal Year 2011
|
October 1, 2010 - September 30, 2013
|
|
158
|
|
|
$
|
59.93
|
|
|
|
|
|
|
|
(a)
|
At the end of the performance period, the actual number of shares issued can range from
zero
to
200%
of the target shares granted, which is assumed to be
100%
.
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Risk-free interest rate
|
0.2% - 0.3%
|
|
|
0.1% - 0.4%
|
|
|
0.3% - 0.8%
|
|
Expected dividend yield
|
1.3
|
%
|
|
1.2
|
%
|
|
1.0
|
%
|
Expected life (in years)
|
3
|
|
|
3
|
|
|
3
|
|
Expected volatility
|
37.6
|
%
|
|
56.3
|
%
|
|
65.0
|
%
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
|
|
Weighted-
|
|
|
|
|
Weighted-
|
|
|
|
|
Weighted-
|
|
||||||
|
|
|
average
|
|
|
|
|
average
|
|
|
|
|
average
|
|
||||||
|
|
|
grant date
|
|
|
|
|
grant date
|
|
|
|
|
grant date
|
|
||||||
(In thousands except per share data)
|
Shares
|
|
|
fair value
|
|
|
Shares
|
|
|
fair value
|
|
|
Shares
|
|
|
fair value
|
|
|||
Nonvested - beginning of year
|
480
|
|
|
$
|
54.39
|
|
|
577
|
|
|
$
|
30.92
|
|
|
536
|
|
|
$
|
25.97
|
|
Granted
(a)
|
152
|
|
|
69.74
|
|
|
325
|
|
|
41.09
|
|
|
158
|
|
|
59.93
|
|
|||
Vested
(a)
|
(175
|
)
|
|
39.55
|
|
|
(309
|
)
|
|
6.69
|
|
|
(16
|
)
|
|
50.78
|
|
|||
Forfeitures
|
(24
|
)
|
|
67.06
|
|
|
(113
|
)
|
|
26.84
|
|
|
(101
|
)
|
|
46.85
|
|
|||
Nonvested - end of year
|
433
|
|
|
65.05
|
|
|
480
|
|
|
54.39
|
|
|
577
|
|
|
30.92
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The current year includes
18
additional shares from the fiscal 2010 through 2012 plan since a portion of that plan’s payout was in excess of the initial
100%
target.
|
|
Sales from
|
|
|
|
|
|
Property, plant
|
||||||||||||||||||||
|
external customers
|
|
Net assets (liabilities)
|
|
and equipment - net
|
||||||||||||||||||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|||||||
United States
|
$
|
3,792
|
|
|
$
|
4,106
|
|
|
$
|
3,316
|
|
|
$
|
276
|
|
|
$
|
(476
|
)
|
|
$
|
1,857
|
|
|
$
|
1,854
|
|
International
|
4,021
|
|
|
4,100
|
|
|
3,186
|
|
|
4,277
|
|
|
4,505
|
|
|
985
|
|
|
978
|
|
|||||||
|
$
|
7,813
|
|
|
$
|
8,206
|
|
|
$
|
6,502
|
|
|
$
|
4,553
|
|
|
$
|
4,029
|
|
|
$
|
2,842
|
|
|
$
|
2,832
|
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
||||||
Segment Information
|
|
|
|
|
|
||||||
Years Ended September 30
|
|
|
|
|
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Sales
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
2,616
|
|
|
$
|
2,878
|
|
|
$
|
1,256
|
|
Water Technologies
|
1,722
|
|
|
1,734
|
|
|
1,902
|
|
|||
Performance Materials
|
1,479
|
|
|
1,560
|
|
|
1,373
|
|
|||
Consumer Markets
|
1,996
|
|
|
2,034
|
|
|
1,971
|
|
|||
|
$
|
7,813
|
|
|
$
|
8,206
|
|
|
$
|
6,502
|
|
Equity income (expense)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
4
|
|
|
$
|
9
|
|
|
$
|
1
|
|
Water Technologies
|
1
|
|
|
1
|
|
|
1
|
|
|||
Performance Materials
|
10
|
|
|
13
|
|
|
5
|
|
|||
Consumer Markets
|
13
|
|
|
12
|
|
|
10
|
|
|||
Unallocated and other
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
|
27
|
|
|
35
|
|
|
17
|
|
|||
Other income (expense)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
13
|
|
|
(4
|
)
|
|
1
|
|
|||
Water Technologies
|
5
|
|
|
4
|
|
|
3
|
|
|||
Performance Materials
|
7
|
|
|
5
|
|
|
5
|
|
|||
Consumer Markets
|
11
|
|
|
10
|
|
|
10
|
|
|||
Unallocated and other
|
6
|
|
|
8
|
|
|
13
|
|
|||
|
42
|
|
|
23
|
|
|
32
|
|
|||
|
$
|
69
|
|
|
$
|
58
|
|
|
$
|
49
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
281
|
|
|
$
|
457
|
|
|
$
|
171
|
|
Water Technologies
|
80
|
|
|
72
|
|
|
93
|
|
|||
Performance Materials
|
68
|
|
|
99
|
|
|
37
|
|
|||
Consumer Markets
|
295
|
|
|
236
|
|
|
213
|
|
|||
Unallocated and other
|
517
|
|
|
(562
|
)
|
|
(384
|
)
|
|||
|
$
|
1,241
|
|
|
$
|
302
|
|
|
$
|
130
|
|
Assets
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
6,247
|
|
|
$
|
6,451
|
|
|
$
|
6,433
|
|
Water Technologies
|
1,861
|
|
|
1,865
|
|
|
1,942
|
|
|||
Performance Materials
|
1,266
|
|
|
1,349
|
|
|
1,417
|
|
|||
Consumer Markets
|
1,051
|
|
|
1,017
|
|
|
986
|
|
|||
Unallocated and other
|
1,663
|
|
|
1,842
|
|
|
2,188
|
|
|||
|
$
|
12,088
|
|
|
$
|
12,524
|
|
|
$
|
12,966
|
|
|
|
|
|
|
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
||||||
Segment Information (continued)
|
|
|
|
|
|
||||||
Years Ended September 30
|
|
|
|
|
|
||||||
(In millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|||
Investment in equity affiliates
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
3
|
|
Water Technologies
|
5
|
|
|
5
|
|
|
5
|
|
|||
Performance Materials
|
157
|
|
|
156
|
|
|
150
|
|
|||
Consumer Markets
|
40
|
|
|
41
|
|
|
31
|
|
|||
Unallocated and other
|
4
|
|
|
4
|
|
|
4
|
|
|||
|
$
|
218
|
|
|
$
|
217
|
|
|
$
|
193
|
|
Operating income not affecting cash during the year
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
263
|
|
|
$
|
265
|
|
|
$
|
113
|
|
Water Technologies
|
73
|
|
|
75
|
|
|
85
|
|
|||
Performance Materials
|
54
|
|
|
52
|
|
|
59
|
|
|||
Consumer Markets
|
35
|
|
|
36
|
|
|
38
|
|
|||
Unallocated and other
|
—
|
|
|
2
|
|
|
4
|
|
|||
|
425
|
|
|
430
|
|
|
299
|
|
|||
Other items
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
52
|
|
|
52
|
|
|
21
|
|
|||
Water Technologies
|
7
|
|
|
7
|
|
|
7
|
|
|||
Performance Materials
|
6
|
|
|
5
|
|
|
4
|
|
|||
Consumer Markets
|
6
|
|
|
5
|
|
|
7
|
|
|||
Unallocated and other
(a)
|
(498
|
)
|
|
493
|
|
|
324
|
|
|||
|
(427
|
)
|
|
562
|
|
|
363
|
|
|||
|
$
|
(2
|
)
|
|
$
|
992
|
|
|
$
|
662
|
|
Property, plant and equipment - net
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
1,590
|
|
|
$
|
1,608
|
|
|
$
|
1,683
|
|
Water Technologies
|
356
|
|
|
348
|
|
|
351
|
|
|||
Performance Materials
|
406
|
|
|
413
|
|
|
425
|
|
|||
Consumer Markets
|
270
|
|
|
262
|
|
|
256
|
|
|||
Unallocated and other
|
220
|
|
|
201
|
|
|
199
|
|
|||
|
$
|
2,842
|
|
|
$
|
2,832
|
|
|
$
|
2,914
|
|
Additions to property, plant and equipment
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
145
|
|
|
$
|
125
|
|
|
$
|
74
|
|
Water Technologies
|
50
|
|
|
56
|
|
|
49
|
|
|||
Performance Materials
|
42
|
|
|
54
|
|
|
32
|
|
|||
Consumer Markets
|
41
|
|
|
40
|
|
|
34
|
|
|||
Unallocated and other
|
36
|
|
|
23
|
|
|
12
|
|
|||
|
$
|
314
|
|
|
$
|
298
|
|
|
$
|
201
|
|
|
|
|
|
|
|
(a)
|
Includes actuarial gain on pension and other postretirement benefit plan remeasurement of
$498 million
in 2013 and actuarial loss on pension and other postretirement benefit plan remeasurement of
$493 million
and
$318 million
in 2012 and 2011, respectively. While these adjustments did not impact funding in the period recorded, they may ultimately impact the required funding of our defined benefit plans in future years.
|
Quarters ended
|
December 31
|
|
March 31
|
|
June 30
|
|
September 30
|
||||||||||||||||||||||||
|
|
|
As Corrected
|
|
|
|
As Corrected
|
|
|
|
|
|
|
|
|
||||||||||||||||
(In millions except per share data)
|
2012
|
|
2011
(c)
|
|
2013
|
|
2012
(c)
|
|
2013
|
|
2012
|
|
2013
(a)
|
|
|
2012
(b)
|
|
||||||||||||||
Sales
|
$
|
1,869
|
|
|
$
|
1,930
|
|
|
$
|
1,974
|
|
|
$
|
2,079
|
|
|
$
|
2,059
|
|
|
$
|
2,141
|
|
|
$
|
1,911
|
|
|
$
|
2,056
|
|
Cost of sales
|
1,332
|
|
|
1,429
|
|
|
1,406
|
|
|
1,483
|
|
|
1,479
|
|
|
1,514
|
|
|
1,202
|
|
|
1,598
|
|
||||||||
Gross profit as a percentage of sales
|
28.7
|
%
|
|
26.0
|
%
|
|
28.8
|
%
|
|
28.7
|
%
|
|
28.2
|
%
|
|
29.3
|
%
|
|
37.1
|
%
|
|
22.3
|
%
|
||||||||
Operating income (loss)
|
176
|
|
|
123
|
|
|
205
|
|
|
200
|
|
|
210
|
|
|
263
|
|
|
650
|
|
|
(284
|
)
|
||||||||
Income (loss) from continuing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
operations
|
102
|
|
|
45
|
|
|
55
|
|
|
105
|
|
|
117
|
|
|
160
|
|
|
404
|
|
|
(272
|
)
|
||||||||
Net income (loss)
|
101
|
|
|
46
|
|
|
53
|
|
|
103
|
|
|
124
|
|
|
151
|
|
|
405
|
|
|
(274
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
$
|
1.29
|
|
|
$
|
0.58
|
|
|
$
|
0.70
|
|
|
$
|
1.34
|
|
|
$
|
1.49
|
|
|
$
|
2.04
|
|
|
$
|
5.21
|
|
|
$
|
(3.47
|
)
|
Net income (loss)
|
1.28
|
|
|
0.59
|
|
|
0.67
|
|
|
1.31
|
|
|
1.58
|
|
|
1.93
|
|
|
5.23
|
|
|
(3.49
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
$
|
1.27
|
|
|
$
|
0.57
|
|
|
$
|
0.68
|
|
|
$
|
1.32
|
|
|
$
|
1.47
|
|
|
$
|
2.00
|
|
|
$
|
5.13
|
|
|
$
|
(3.47
|
)
|
Net income (loss)
|
1.26
|
|
|
0.58
|
|
|
0.66
|
|
|
1.29
|
|
|
1.55
|
|
|
1.90
|
|
|
5.15
|
|
|
(3.49
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Regular cash dividends per share
|
$
|
0.225
|
|
|
$
|
0.175
|
|
|
$
|
0.225
|
|
|
$
|
0.175
|
|
|
$
|
0.340
|
|
|
$
|
0.225
|
|
|
$
|
0.340
|
|
|
$
|
0.225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Market price per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
80.84
|
|
|
$
|
58.51
|
|
|
$
|
86.96
|
|
|
$
|
66.25
|
|
|
$
|
91.11
|
|
|
$
|
69.99
|
|
|
$
|
94.65
|
|
|
$
|
78.27
|
|
Low
|
67.16
|
|
|
41.11
|
|
|
72.11
|
|
|
56.83
|
|
|
72.87
|
|
|
58.54
|
|
|
82.79
|
|
|
65.15
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Fourth quarter results for 2013 include an increase in operating income of $498 million related to the actuarial gain on pension and postretirement benefit plans ($151 million in cost of sales and $347 million in selling, general and administrative expenses), a decrease of $37 million related to the impairment on IPR&D assets associated with the ISP acquisition and a decrease of $14 million related to restructuring and integration. Net loss on acquisitions and divestitures in the fourth quarter included a $14 million charge related to the MAP settlement charge, and income tax expense for the fourth quarter included a tax benefit of $18 million for a deferred tax adjustment related to a foreign country rate change and tax expense of $2 million for ISP restructuring charges.
|
(b)
|
Fourth quarter results for 2012 include decreases in operating income of $493 million related to the actuarial loss on pension and postretirement benefit plans ($139 million in cost of sales and $354 million in selling, general and administrative expenses), $97 million of accelerated amortization of deferred debt issuance costs and prepayment premiums associated with the early payoff of approximately 88% of the 9.125% senior notes, as well as the prepayment of $350 million of principal on Ashland’s term loan B facility. Income tax expense for the fourth quarter included a tax benefit of $15 million for deferred tax adjustments related to ongoing international restructuring efforts, as well as expense of $41 million to establish a state valuation allowance.
|
(c)
|
The following table discloses financial information for the quarter ended December 31, 2011 and for the quarter ended March 31, 2012 that has been corrected due to inventory valuation errors in these two quarters in the Elastomers line of business within the Performance Materials segment. Ashland determined that the impact of the inventory valuation errors in these quarters, when considered from both a quantitative and a qualitative perspective, are immaterial. The impact of inventory valuation errors in the Elastomers line of business on subsequent quarters in 2012 and 2013 were significantly less quantitatively, determined to be immaterial and corrected through out-of-period adjustments recorded in 2013. For additional information, see Item 9A. “Controls and Procedures” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Results of Operations-Business Segment Review-Performance Materials-Out-of-Period Adjustments.”
|
|
Quarter ended December 31, 2011
|
|
Quarter ended March 31, 2012
|
||||||||||||||||
(In millions except per share data)
|
As Previously Reported
|
Adjustment
|
As Corrected
|
|
As Previously Reported
|
Adjustment
|
As Corrected
|
||||||||||||
Sales
|
$
|
1,930
|
|
$
|
—
|
|
$
|
1,930
|
|
|
$
|
2,079
|
|
$
|
—
|
|
$
|
2,079
|
|
Cost of sales
|
1,408
|
|
21
|
|
1,429
|
|
|
1,504
|
|
(21
|
)
|
1,483
|
|
||||||
Gross profit as a percentage of sales
|
27.0
|
%
|
(1.0
|
)%
|
26.0
|
%
|
|
27.7
|
%
|
1.0
|
%
|
28.7
|
%
|
||||||
Operating income (loss)
|
144
|
|
(21
|
)
|
123
|
|
|
179
|
|
21
|
|
200
|
|
||||||
Income (loss) from continuing operations
|
60
|
|
(15
|
)
|
45
|
|
|
90
|
|
15
|
|
105
|
|
||||||
Net income (loss)
|
61
|
|
(15
|
)
|
46
|
|
|
88
|
|
15
|
|
103
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings per share
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
$
|
0.77
|
|
$
|
(0.19
|
)
|
$
|
0.58
|
|
|
$
|
1.15
|
|
$
|
0.19
|
|
$
|
1.34
|
|
Net income (loss)
|
0.78
|
|
(0.19
|
)
|
0.59
|
|
|
1.12
|
|
0.19
|
|
1.31
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per shares
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
$
|
0.76
|
|
$
|
(0.19
|
)
|
$
|
0.57
|
|
|
$
|
1.13
|
|
$
|
0.19
|
|
$
|
1.32
|
|
Net income (loss)
|
0.77
|
|
(0.19
|
)
|
0.58
|
|
|
1.10
|
|
0.19
|
|
1.29
|
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
|
|
|
|
||||||||||
Schedule II - Valuation and Qualifying Accounts
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Balance at
|
|
|
Provisions
|
|
|
|
|
|
Acquisition
|
|
|
Balance
|
|
|||||
|
beginning
|
|
|
charged to
|
|
|
Reserves
|
|
|
and other
|
|
|
at end
|
|
|||||
(In millions)
|
of year
|
|
|
earnings
|
|
|
utilized
|
|
|
changes
|
|
|
of year
|
|
|||||
Year ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Reserves deducted from asset accounts
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable
|
$
|
24
|
|
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
17
|
|
Inventories
|
32
|
|
|
42
|
|
|
(11
|
)
|
|
—
|
|
|
63
|
|
|||||
Tax valuation allowance
|
175
|
|
|
(6
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
166
|
|
|||||
Year ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reserves deducted from asset accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts receivable
|
$
|
30
|
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
|
$
|
(1
|
)
|
|
$
|
24
|
|
Inventories
|
34
|
|
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|
32
|
|
|||||
Tax valuation allowance
(a)
|
718
|
|
|
37
|
|
|
—
|
|
|
(580
|
)
|
|
175
|
|
|||||
Year ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reserves deducted from asset accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts receivable
|
$
|
21
|
|
|
$
|
12
|
|
|
$
|
(8
|
)
|
|
$
|
5
|
|
|
$
|
30
|
|
Inventories
|
19
|
|
|
2
|
|
|
(6
|
)
|
|
19
|
|
|
34
|
|
|||||
Tax valuation allowance
|
870
|
|
|
(156
|
)
|
|
—
|
|
|
4
|
|
|
718
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(a)
|
During 2013, Ashland identified that amounts previously reported for the year ended September 30, 2012 in Note L to Consolidated Financial Statements in the 2012 Form 10-K Filing involving the presentation of foreign net operating losses and offsetting valuation allowances were related to a legal entity liquidated in 2012. The amounts were properly recorded on a net basis in the Consolidated Balance Sheet but were improperly recorded on a gross basis in both Note L and Schedule II. Schedule II and Note L have been revised to reflect the corrected amounts. Ashland does not believe that the revisions to the disclosures, the change in the acquisition and other changes column from
$73 million
to
$(580) million
and the reduction in the balance as of September 30, 2012 from
$828 million
to
$175 million
are material in total to the 2012 Consolidated Financial Statements.
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
|
|
|
|
||||||||||
Five-Year Selected Financial Information
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Years Ended September 30
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions except per share data)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|||||
Summary of operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
7,813
|
|
|
$
|
8,206
|
|
|
$
|
6,502
|
|
|
$
|
5,741
|
|
|
$
|
5,220
|
|
Cost of sales
|
5,419
|
|
|
6,025
|
|
|
4,890
|
|
|
4,124
|
|
|
3,850
|
|
|||||
Gross profit
|
2,394
|
|
|
2,181
|
|
|
1,612
|
|
|
1,617
|
|
|
1,370
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
1,044
|
|
|
1,800
|
|
|
1,451
|
|
|
1,338
|
|
|
1,406
|
|
|||||
Research and development expense
|
178
|
|
|
137
|
|
|
80
|
|
|
78
|
|
|
89
|
|
|||||
Equity and other income
|
69
|
|
|
58
|
|
|
49
|
|
|
48
|
|
|
34
|
|
|||||
Operating income (loss)
|
1,241
|
|
|
302
|
|
|
130
|
|
|
249
|
|
|
(91
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest and other financing expense
|
282
|
|
|
317
|
|
|
121
|
|
|
197
|
|
|
205
|
|
|||||
Net (loss) gain on acquisitions and divestitures
|
(8
|
)
|
|
1
|
|
|
(5
|
)
|
|
21
|
|
|
59
|
|
|||||
Other expense (income)
|
—
|
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|
86
|
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
before income taxes
|
951
|
|
|
(14
|
)
|
|
3
|
|
|
75
|
|
|
(323
|
)
|
|||||
Income tax expense (benefit)
|
274
|
|
|
(52
|
)
|
|
(53
|
)
|
|
(13
|
)
|
|
(83
|
)
|
|||||
Income (loss) from continuing operations
|
677
|
|
|
38
|
|
|
56
|
|
|
88
|
|
|
(240
|
)
|
|||||
Income (loss) from discontinued operations
|
6
|
|
|
(12
|
)
|
|
358
|
|
|
53
|
|
|
(21
|
)
|
|||||
Net income (loss)
|
$
|
683
|
|
|
$
|
26
|
|
|
$
|
414
|
|
|
$
|
141
|
|
|
$
|
(261
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance sheet information (as of September 30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
$
|
2,873
|
|
|
$
|
3,209
|
|
|
$
|
3,387
|
|
|
$
|
2,833
|
|
|
$
|
2,478
|
|
Current liabilities
|
1,727
|
|
|
1,913
|
|
|
1,739
|
|
|
1,687
|
|
|
1,577
|
|
|||||
Working capital
|
$
|
1,146
|
|
|
$
|
1,296
|
|
|
$
|
1,648
|
|
|
$
|
1,146
|
|
|
$
|
901
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
12,088
|
|
|
$
|
12,524
|
|
|
$
|
12,966
|
|
|
$
|
9,530
|
|
|
$
|
9,610
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term debt
|
$
|
308
|
|
|
$
|
344
|
|
|
$
|
83
|
|
|
$
|
71
|
|
|
$
|
23
|
|
Long-term debt (including current portion)
|
2,959
|
|
|
3,246
|
|
|
3,749
|
|
|
1,153
|
|
|
1,590
|
|
|||||
Stockholders’ equity
|
4,553
|
|
|
4,029
|
|
|
4,135
|
|
|
3,807
|
|
|
3,601
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from operating activities from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
continuing operations
|
$
|
791
|
|
|
$
|
385
|
|
|
$
|
243
|
|
|
$
|
551
|
|
|
$
|
735
|
|
Additions to property, plant and equipment
|
314
|
|
|
298
|
|
|
201
|
|
|
192
|
|
|
165
|
|
|||||
Cash dividends
|
88
|
|
|
63
|
|
|
51
|
|
|
35
|
|
|
22
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
|
$
|
8.64
|
|
|
$
|
0.49
|
|
|
$
|
0.72
|
|
|
$
|
1.14
|
|
|
$
|
(3.31
|
)
|
Net income (loss)
|
8.71
|
|
|
0.33
|
|
|
5.28
|
|
|
1.82
|
|
|
(3.60
|
)
|
|||||
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
|
8.50
|
|
|
0.48
|
|
|
0.70
|
|
|
1.11
|
|
|
(3.31
|
)
|
|||||
Net income (loss)
|
8.57
|
|
|
0.33
|
|
|
5.17
|
|
|
1.78
|
|
|
(3.60
|
)
|
|||||
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Regular cash dividends per share
|
1.13
|
|
|
0.80
|
|
|
0.65
|
|
|
0.45
|
|
|
0.30
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(a)
|
During the periods presented, Ashland experienced significant changes to its businesses affecting the comparability of financial information between years. These changes include, but are not limited to, significant acquisitions and divestitures as well as a change in method of recognizing actuarial gain and loss remeasurements for defined benefit pension plans and other postretirement benefit plans. For a complete discussion of Ashland’s acquisitions and divestitures during the years ended September 30, 2013, 2012 and 2011, see Note B and Note C to Consolidated Financial Statements, and see Note A to Consolidated Financial Statements for further information regarding Ashland’s change in method of recognizing actuarial gains and losses for defined benefit pension plans and other postretirement benefit plans. For further information of activity during the years ended September 30, 2010 and 2009, see the applicable Notes to Consolidated Financial Statements in the Form 10-K Filings from prior years.
|
|
|
|
|
COMPANY:
|
|
|
ASHLAND INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name:
|
Eric N. Boni
|
|
Title:
|
Vice President and Treasurer
|
|
TRUSTEE, REGISTRAR AND PAYING AGENT:
|
|
|
U.S. BANK NATIONAL ASSOCIATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ William E. Sicking
|
|
Name:
|
William E. Sicking
|
|
Title:
|
Vice President & Trust Officer
|
i)
|
the date on which the potential Transaction closes;
|
ii)
|
the date on which a decision is made not to proceed with the potential Transaction, and to continue to operate AWT under its current ownership;
|
iii)
|
the date your active employment is terminated by Hercules without cause; or
|
iv)
|
March 31, 2014.
|
i)
|
you voluntarily terminate your employment with Hercules;
|
ii)
|
you violate the confidentiality provisions contained herein;
|
iii)
|
Hercules terminates your employment for cause; For the purposes of this letter, termination for cause will arise if you: (a) substantially fail to perform your duties with Hercules, unless such failure is due to your incapacity as a result of physical or mental illness; or (b) you engage in willful misconduct or gross negligence in performing your duties;
|
iv)
|
in the event of your death. Provided, however, that Hercules will not be relieved of any obligations under its employee benefits plans which arise due to your death.
|
•
|
5,000 shares will vest on the one-year anniversary of the grant;
|
•
|
5,000 shares will vest on the two-year anniversary of the grant; and
|
•
|
the remaining 5,000 shares will vest on the four-year anniversary of the grant.
|
i)
|
you voluntarily terminate your employment with ASI;
|
ii)
|
ASI terminates your employment for cause; For the purposes of this letter, termination for cause will arise if you: (a) substantially fail to perform your duties with ASI, unless
|
iii)
|
in the event of your death. Provided, however, that ASI and/or Ashland will not be relieved of any obligations under those employee benefits plans in which you participated which arise due to your death.
|
|
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
|
|
ASHLAND SPECIALTY INGREDIENTS G.P., 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
|
|
ASHLAND ELASTOMERS LLC, as Originator
|
|
|
|
|
|
|
|
|
By:
|
/s/ Lynn P. Freeman
|
|
Name:
|
Lynn P. Freeman
|
|
Title:
|
Treasurer
|
|
LIBERTY STREET FUNDING LLC, as a Conduit Investor and Uncommitted Investor
|
|
|
|
|
|
|
|
|
By:
|
/s/ Frank B. Bilotta
|
|
Name:
|
Frank B. Bilotta
|
|
Title:
|
Vice President
|
|
MARKET STREET FUNDING LLC, as a Conduit Investor and Uncommitted Investor
|
|
|
|
|
|
|
|
|
By:
|
/s/ Doris J. Hearn
|
|
Name:
|
Doris J. Hearn
|
|
Title:
|
Vice President
|
|
GOTHAM FUNDING CORPORATION, as a Conduit Investor and Uncommitted Investor
|
|
|
|
|
|
|
|
|
By:
|
/s/ David V. DeAngelis
|
|
Name:
|
David V. DeAngelis
|
|
Title:
|
Vice President
|
|
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
|
|
|
|
|
|
|
|
|
By:
|
/s/ Darren Ward
|
|
Name:
|
Darren Ward
|
|
Title:
|
Director
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD, as a Managing Agent and Administrator for the BTMU Investor Group
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric Williams
|
|
Name:
|
Eric Williams
|
|
Title:
|
Managing Director
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD, as a Letter of Credit Issuer and Committed Investor for the BTMU Investor Group
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark S. Campbell
|
|
Name:
|
Mark S. Campbell
|
|
Title:
|
Authorized Signatory
|
|
PNC BANK, NATIONAL ASSOCIATION, as a Letter of Credit Issuer, Managing Agent, Administrator and Committed Investor for the PNC Investor Group
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robyn Reeher
|
|
Name:
|
Robyn Reeher
|
|
Title:
|
Vice President
|
|
SUNTRUST BANK, as a Letter of Credit Issuer, a Committed Investor, the Managing Agent and Administrator for the SunTrust Investor Group
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jason Meyer
|
|
Name:
|
Jason Meyer
|
|
Title:
|
First Vice President
|
|
CVG CAPITAL III LLC, as SPV
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brian D. Menshouse
|
|
Name:
|
Brian D. Menshouse
|
|
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
|
|
ASHLAND SPECIALTY INGREDIENTS G.P., 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:
|
Vice President/Assistant Secretary and Treasurer
|
|
ASHLAND ELASTOMERS LLC, as Originator
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name:
|
Eric N. Boni
|
|
Title:
|
Vice President - Finance
|
|
LIBERTY STREET FUNDING LLC, as a Conduit Investor and Uncommitted Investor
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jill A. Russo
|
|
Name:
|
Jill A. Russo
|
|
Title:
|
Vice President
|
|
MARKET STREET FUNDING LLC, as a Conduit Investor, Uncommitted Investor and Assignor
|
|
|
|
|
|
|
|
|
By:
|
/s/ Doris J. Hearn
|
|
Name:
|
Doris J. Hearn
|
|
Title:
|
Vice President
|
|
GOTHAM FUNDING CORPORATION, as a Conduit Investor and Uncommitted Investor
|
|
|
|
|
|
|
|
|
By:
|
/s/ David V. DeAngelis
|
|
Name:
|
David V. DeAngelis
|
|
Title:
|
Vice President
|
|
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
|
|
|
|
|
|
|
|
|
By:
|
/s/ Darren Ward
|
|
Name:
|
Darren Ward
|
|
Title:
|
Director
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD, as a Managing Agent and Administrator for the BTMU Investor Group
|
|
|
|
|
|
|
|
|
By:
|
/s/ Van Dusenbury
|
|
Name:
|
Van Dusenbury
|
|
Title:
|
Managing Director
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD, as a Letter of Credit Issuer and Committed Investor for the BTMU Investor Group
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark S. Campbell
|
|
Name:
|
Mark S. Campbell
|
|
Title:
|
Authorized Signatory
|
|
PNC BANK, NATIONAL ASSOCIATION, as a Letter of Credit Issuer, Managing Agent, Administrator, Committed Investor for the PNC Investor Group and Assignee
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jason Rising
|
|
Name:
|
Jason Rising
|
|
Title:
|
Senior Vice President
|
|
SUNTRUST BANK, as a Letter of Credit Issuer, a Committed Investor, the Managing Agent and Administrator for the SunTrust Investor Group
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kyle Shenton
|
|
Name:
|
Kyle Shenton
|
|
Title:
|
Vice President
|
Company
|
|
Jurisdiction of Incorporation
|
565 Corporation
|
|
Delaware, United States
|
Ash (Gibraltar) One Limited
|
|
Gibraltar
|
Ash (Gibraltar) Two Limited
|
|
Gibraltar
|
ASH GP LLC
|
|
Delaware, United States
|
Ashland (Changzhou) Advanced Chemical Co., Ltd.
|
|
China
|
Ashland (Changzhou) Specialty Chemical Co., Ltd
|
|
China
|
Ashland (China) Holdings Co., Ltd.
|
|
China
|
Ashland (Tianjin) Chemical Co., Ltd.
|
|
China
|
Ashland (Trinidad And Tobago) Limited
|
|
Tobago
|
Ashland Austria GmbH
|
|
Austria
|
Ashland Branded Finance, Inc.
|
|
Delaware, United States
|
Ashland Canada Corp.
|
|
Nova Scotia, Canada
|
Ashland Canada Holdings B. V.
|
|
Netherlands
|
Ashland Chemical De Mexico S.A. De C.V.
|
|
Mexico
|
Ashland Chemical Hispania, S. L.
|
|
Spain
|
Ashland Chemicals (Nanjing) Company Limited
|
|
China
|
Ashland CZ s.r.o.
|
|
Czech Republic
|
Ashland Danmark ApS
|
|
Denmark
|
Ashland Deutschland GmbH
|
|
Germany
|
Ashland Elastomers LLC
|
|
Delaware, United States
|
Ashland Ethanol, Inc.
|
|
Delaware, United States
|
Ashland Eurasia Limited Liability Company
|
|
Russia
|
Ashland Finance Limited
|
|
Bermuda
|
Ashland Finland Oy
|
|
Finland
|
Ashland France SAS
|
|
France
|
Ashland Hercules Produtos Quimicos Ltda.
|
|
Brazil
|
Ashland Hercules Water Technologies (Australia) Pty Ltd
|
|
Australia
|
Ashland Holdings B. V.
|
|
Netherlands
|
Ashland India Private Limited
|
|
India
|
Ashland Industries Austria GmbH
|
|
Austria
|
Ashland Industries Deutschland GmbH
|
|
Germany
|
Ashland Industries Europe GmbH
|
|
Switzerland
|
Ashland Industries Finland OY
|
|
Finland
|
Ashland Industries France SAS
|
|
France
|
Ashland Industries Hispania SA
|
|
Spain
|
Ashland Industries Ireland Limited
|
|
Ireland
|
Ashland Industries Italia S.r.l.
|
|
Italy
|
Ashland Industries Nederland B.V.
|
|
Netherlands
|
Ashland Industries Sweden AB
|
|
Sweden
|
Ashland Industries UK Limited
|
|
United Kingdom
|
Ashland International Holdings, Inc.
|
|
Delaware, United States
|
Ashland Italia S.r.l.
|
|
Italy
|
Ashland Japan Chemical G. K.
|
|
Japan
|
Company
|
|
Jurisdiction of Incorporation
|
Ashland Korea Co., Ltd.
|
|
Korea
|
Ashland Licensing and Intellectual Property LLC
|
|
Delaware, United States
|
Ashland ME Holdings, Inc.
|
|
Delaware, United States
|
Ashland Nederland B.V.
|
|
Netherlands
|
Ashland New Zealand Limited
|
|
New Zealand
|
Ashland Nigeria Exploration Unlimited
|
|
Nigeria
|
Ashland Norge AS
|
|
Norway
|
Ashland Oil (Nigeria) Company Unlimited
|
|
Nigeria
|
Ashland Oil, Inc.
|
|
Kentucky, United States
|
Ashland Pacific Pty. Ltd.
|
|
Australia
|
Ashland Participacoes Ltda.
|
|
Brazil
|
Ashland Poland Sp. z o.o.
|
|
Poland
|
Ashland Polímeros do Brasil S.A.
|
|
Brazil
|
Ashland Polyester (Kunshan) Co. Ltd.
|
|
China
|
Ashland Rhone Holdings B.V.
|
|
Netherlands
|
Ashland Services B. V.
|
|
Netherlands
|
Ashland Services Mexico, S.A. de C.V.
|
|
Mexico
|
Ashland Singapore Pte. Ltd.
|
|
Singapore
|
Ashland Specialties Belgium BVBA
|
|
Belgium
|
Ashland Specialties France S.a.r.l.
|
|
France
|
Ashland Specialties South Africa Proprietary Limited
|
|
South Africa
|
Ashland Specialties UK Limited
|
|
United Kingdom
|
Ashland Specialty Ingredients G.P.
|
|
Delaware, United States
|
Ashland Switzerland Holdings GmbH
|
|
Switzerland
|
Ashland UK Limited
|
|
United Kingdom
|
Ashland Valvoline Chemical (Shanghai) Co., Ltd
|
|
China
|
Ashland-Alaskan, Limited
|
|
Alaska, United States
|
Ashland-Especialidades Quimicas Ltda.
|
|
Brazil
|
Ashland-Plasticos De Portugal, Lda.
|
|
Portugal
|
Ashmont Insurance Company, Inc.
|
|
Vermont, United States
|
AshOne C. V.
|
|
Netherlands
|
Ashprop Two LLC
|
|
Delaware, United States
|
AshTwo C. V.
|
|
Netherlands
|
ASK Chemicals GmbH
|
|
Germany
|
ASK Chemicals LP
|
|
Delaware, United States
|
AWT Dominican Republic, SRL
|
|
Dominican Republic
|
Beijing Tianshi Special Chemical Technique Co., Ltd.
|
|
China
|
Belleville Realty Corp.
|
|
Delaware, United States
|
Bluegrass Insurance Company Limited
|
|
Bermuda
|
Bluehall Incorporated
|
|
Delaware, United States
|
Chembond Ashland Water Technologies Limited
|
|
India
|
CLTA LLC
|
|
Delaware, United States
|
Corporacion ISP Andina, C.A.
|
|
Venezuela
|
Curtis Bay Insurance Co. Ltd
|
|
Bermuda
|
CVG Capital III LLC
|
|
Delaware, United States
|
Delta Technologies LLC
|
|
Delaware, United States
|
Drew Ameroid (M) Sdn. Bhd.
|
|
Malaysia
|
East Bay Realty Services, Inc.
|
|
Delaware, United States
|
Ever Success Overseas Limited
|
|
British Virgin Islands
|
Company
|
|
Jurisdiction of Incorporation
|
FRJ, Inc.
|
|
Georgia, United States
|
Funding Corp. I
|
|
Delaware, United States
|
Hercofina
|
|
Delaware, United States
|
Hercules Argentina S.A.
|
|
Argentina
|
Hercules Chemicals South Africa (Proprietary) Limited
|
|
South Africa
|
Hercules Chemicals Taiwan Co., Ltd.
|
|
Taiwan
|
Hercules Chile Limitada
|
|
Chile
|
Hercules China Limited
|
|
Hong Kong
|
Hercules do Brasil Produtos Quimicos Ltda.
|
|
Brazil
|
Hercules Holding BV BVBA
|
|
Belgium
|
Hercules Holding II Limited
|
|
United Kingdom
|
Hercules Holding Specialty Materials B. V.
|
|
Netherlands
|
Hercules Hydrocarbon Holdings, Inc.
|
|
Delaware, United States
|
Hercules Incorporated
|
|
Delaware, United States
|
Hercules Industrial Chemicals Private Limited
|
|
India
|
Hercules International Limited, LLC
|
|
Delaware, United States
|
Hercules Investment ApS
|
|
Denmark
|
Hercules Investments Netherlands B.V.
|
|
Netherlands
|
Hercules Islands Corporation
|
|
American Virgin Islands
|
Hercules Paper Holdings, Inc.
|
|
Delaware, United States
|
Hercules Portuguesa, Lda.
|
|
Portugal
|
Hercules Russia Limited Liability Company
|
|
Russia
|
Hercules Tianpu Chemicals Company Limited
|
|
China
|
Hercules Trading (Shanghai) Company Limited
|
|
China
|
Hoimyung Ashland Ltd.
|
|
Korea
|
International Specialty Holdings LLC
|
|
Delaware, United States
|
International Specialty Products (India) Private Limited
|
|
India
|
International Specialty Products Funding Corporation
|
|
Delaware, United States
|
International Specialty Products Inc.
|
|
Delaware, United States
|
ISP (Australasia) Pty. Limited
|
|
Australia
|
ISP (Belgium) International N. V.
|
|
Belgium
|
ISP (Great Britain) Co. Ltd.
|
|
United Kingdom
|
ISP (Japan) Ltd
|
|
Japan
|
ISP (Korea) Limited
|
|
Korea
|
ISP (Polska) Sp.z o.o.
|
|
Poland
|
ISP (Puerto Rico) Inc.
|
|
Delaware, United States
|
ISP (SHANGHAI) COMPANY LIMITED
|
|
China
|
ISP (SINGAPORE) PTE LTD
|
|
Singapore
|
ISP (Thailand) Co., Ltd
|
|
Thailand
|
ISP Alginates Inc.
|
|
Delaware, United States
|
ISP Argentina S.R.L.
|
|
Argentina
|
ISP Asia Pacific Pte. Ltd
|
|
Singapore
|
ISP Bermuda Limited
|
|
Bermuda
|
ISP Biochema Schwaben GmbH
|
|
Germany
|
ISP Canada Corp.
|
|
Nova Scotia, Canada
|
ISP Capital LLC
|
|
Delaware, United States
|
ISP Ceska Republica Spol, S.R.O.
|
|
Czech Republic
|
ISP Chemco LLC
|
|
Delaware, United States
|
ISP Chemical Products LLC
|
|
Delaware, United States
|
Company
|
|
Jurisdiction of Incorporation
|
ISP CHEMICALS (MALAYSIA) SDN.BHD
|
|
Malaysia
|
ISP Chemicals LLC
|
|
Delaware, United States
|
ISP Chile S. A.
|
|
Chile
|
ISP Colombia Ltda.
|
|
Colombia
|
ISP do Brasil Ltda.
|
|
Brazil
|
ISP Environmental Services Inc.
|
|
Delaware, United States
|
ISP France Customer Service SARL
|
|
France
|
ISP France Holding SARL
|
|
France
|
ISP France Marketing SARL
|
|
France
|
ISP Freetown Fine Chemicals Inc.
|
|
Delaware, United States
|
ISP Freight Services N. V.
|
|
Belgium
|
ISP Global Operations (Barbados) Inc.
|
|
Barbados
|
ISP Global Technologies Deutschland Unterstutzungskasse GmbH
|
|
Germany
|
ISP Global Technologies Inc.
|
|
Delaware, United States
|
ISP Global Technologies LLC
|
|
Delaware, United States
|
ISP HC Limited
|
|
Cyprus
|
ISP Holdings (U.K.) Ltd.
|
|
United Kingdom
|
ISP Horhausen GmbH
|
|
Germany
|
ISP Hungary Holdings Limited Liability Company
|
|
Hungary
|
ISP International Corp.
|
|
Delaware, United States
|
ISP Investments Inc.
|
|
Delaware, United States
|
ISP Lima LLC
|
|
Delaware, United States
|
ISP Luxembourg Canada S.a.r.l.
|
|
Luxembourg
|
ISP Management Company, Inc.
|
|
Delaware, United States
|
ISP Marl GmbH
|
|
Germany
|
ISP Marl Holdings GmbH
|
|
Germany
|
ISP Microcaps (U.K.) Limited
|
|
United Kingdom
|
ISP Microcaps Deutschland GmbH
|
|
Germany
|
ISP Pharma Systems LLC
|
|
Delaware, United States
|
ISP Real Estate Company, Inc.
|
|
Delaware, United States
|
ISP Sales (U.K.) Limited
|
|
Ireland
|
ISP Singapore Holding LLC
|
|
Delaware, United States
|
ISP Technologies Inc.
|
|
Delaware, United States
|
ISP Technologies LLC
|
|
Delaware, United States
|
Jiangmen Ashland Chemicals Company Limited
|
|
China
|
Lubricantes Andinos "Lubrian S. A."
|
|
Ecuador
|
Lubricantes del Peru S.A.
|
|
Peru
|
Lubrival S. A.
|
|
Ecuador
|
Oil Casualty Insurance, Ltd.
|
|
Bermuda
|
Pakistan Gum Industries (Private) Limited
|
|
Pakistan
|
Progiven S.A.S.
|
|
France
|
PT Ashland Asia
|
|
Indonesia
|
PT ISP Chemicals Indonesia
|
|
Indonesia
|
PT. Hercules Chemicals Indonesia
|
|
Indonesia
|
Relocation Properties Management LLC
|
|
Delaware, United States
|
Saudi Industrial Resins Co. Ltd. (Polyester)
|
|
Saudi Arabia
|
Shanghai Ashland Chemicals Company Ltd.
|
|
China
|
Shanghai VC Lubricating Oil Co., Ltd.
|
|
China
|
St Croix Petrochemical Corp
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American Virgin Islands
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Company
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Jurisdiction of Incorporation
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Techwax Limited
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United Kingdom
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V C Lubricating Oil Co. Ltd.
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Hong Kong
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Valvoline (Australia) Pty. Limited
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Australia
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Valvoline (Deutschland) GmbH & Co. KG
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Germany
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Valvoline (Thailand) Ltd.
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Thailand
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Valvoline Automotive Services (Shanghai) Company Limited
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China
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Valvoline Cummins Argentina S.A.
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Argentina
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Valvoline Cummins Do Brasil Lubrificantes Ltda.
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Brazil
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Valvoline Cummins Limited
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India
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Valvoline de Colombia S.A.S.
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Colombia
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Valvoline De Venezuela S.A.
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Venezuela
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Valvoline Instant Oil Change Franchising, Inc.
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Delaware, United States
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Valvoline International, Inc.
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Delaware, United States
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VIOC Funding, Inc.
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Delaware, United States
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WSP LLC
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Delaware, United States
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ZAO Ashland MSP
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Russia
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/s/ James J. O’Brien
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/s/ Vada O. Manager
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James J. O’Brien, Chairman of the Board
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Vada O. Manager, Director
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and Chief Executive Officer
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(Principal Executive Officer)
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/s/ J. Kevin Willis
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/s/ Barry W. Perry
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J. Kevin Willis, Senior Vice President
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Barry W. Perry, Director
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and Chief Financial Officer
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(Principal Financial Officer)
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/s/ J. William Heitman
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/s/ Mark C. Rohr
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J. William Heitman, Vice President
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Mark C. Rohr, Director
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and Controller
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(Principal Accounting Officer)
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/s/ Brendan M. Cummins
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/s/ George A. Schaefer, Jr.
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Brendan M. Cummins, Director
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George A. Schaefer, Jr., Director
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/s/ Roger W. Hale
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/s/ Janice J. Teal
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Roger W. Hale, Director
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Janice J. Teal, Director
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/s/ Stephen F. Kirk
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/s/ John F. Turner
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Stephen F. Kirk, Director
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John F. Turner, Director
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/s/ Kathleen Ligocki
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/s/ Michael J. Ward
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Kathleen Ligocki, Director
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Michael J. Ward, Director
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1.
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I have reviewed this annual report on Form 10-K 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 annual report on Form 10-K 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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November 27, 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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November 27, 2013
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