|
|
|
|
|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Kentucky
(State or other jurisdiction of incorporation or organization)
|
20-0865835
(I.R.S. Employer Identification No.)
|
Title of each class
|
Name of each exchange on which registered
|
Common Stock, par value $.01 per share
|
New York Stock Exchange
|
Large Accelerated Filer
þ
|
Accelerated Filer
o
|
Non-Accelerated Filer
o
|
Smaller Reporting Company
o
|
(Do not check if a smaller reporting company)
|
|
|
|
|
Page
|
|
PART I
|
|
|
|
|
|
Item 1.
|
Business
|
1
|
|
|
|
General
|
1
|
|
|
|
Corporate Developments
|
2
|
|
|
|
Ashland Specialty Ingredients
|
2
|
|
|
|
Ashland Performance Materials
|
4
|
|
|
|
Valvoline
|
5
|
|
|
|
Miscellaneous
|
6
|
|
|
Item 1A.
|
Risk Factors
|
9
|
|
|
Item 1B.
|
Unresolved Staff Comments
|
14
|
|
|
Item 2.
|
Properties
|
14
|
|
|
Item 3.
|
Legal Proceedings
|
15
|
|
|
Item 4.
|
Mine Safety Disclosures
|
16
|
|
|
Item X.
|
Executive Officers of Ashland
|
16
|
|
|
|
|
|
|
PART II
|
|
|
|
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder
|
|
|
|
|
Five-Year Total Return Performance Graph
|
18
|
|
|
|
Matters and Issuer Purchases of Equity Securities
|
18
|
|
|
Item 6.
|
Selected Financial Data
|
19
|
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial
|
|
|
|
|
Condition and Results of Operation
|
19
|
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
19
|
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
20
|
|
|
Item 9.
|
Changes in and Disagreements with Accountants
|
|
|
|
|
on Accounting and Financial Disclosure
|
20
|
|
|
Item 9A.
|
Controls and Procedures
|
20
|
|
|
Item 9B.
|
Other Information
|
20
|
|
|
|
|
|
|
PART III
|
|
|
|
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
20
|
|
|
Item 11.
|
Executive Compensation
|
20
|
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners
|
|
|
|
|
and Management and Related Stockholder Matters
|
21
|
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
21
|
|
|
Item 14.
|
Principal Accounting Fees and Services
|
21
|
|
|
|
|
|
|
PART IV
|
|
|
|
|
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
21
|
|
•
|
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.
|
•
|
Hair Care – Specialty Ingredients’ portfolio of hair care products includes advanced styling polymers, fixatives, conditioning polymers, emulsifiers, preservatives and rheology modifiers.
|
•
|
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.
|
•
|
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.
|
•
|
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.
|
•
|
Nutrition – Specialty Ingredients’ nutrition portfolio provides functional benefits in areas such as thickening, texture control, thermal gelation, structure enhancement, water binding, clarification and stabilization. Its core products include 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.
|
•
|
Coatings - Coatings Specialties 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.
|
•
|
Construction - Construction Specialties 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.
|
•
|
Energy - Energy Specialties is a leading global manufacturer of guar-, synthetic- and cellulosic-based products for drilling fluids, oil-well cement slurries, completion and workover fluids, fracturing fluids and production chemicals. Specialty Ingredients offers the oil and gas industry solutions for drilling, stimulation, completion, cementing and production applications.
|
•
|
Adhesives - Adhesives Specialties manufactures and sells adhesive solutions to the packaging and converting, building and construction, and transportation markets and manufactures and markets specialty coatings and adhesive solutions for use across multiple industries. Key technologies and markets include: acrylic polymers for pressure-sensitive adhesives; urethane adhesive for flexible packaging applications; aqueous and radiation-curable adhesives and specialty coatings for printing and converting applications; emulsion polymer isocyanate adhesives for structural wood bonding; elastomeric polymer adhesives for commercial roofing applications; acrylic, polyurethane and epoxy structural adhesives for bonding
|
•
|
Performance - Performance Specialties provides products and services to over 30 industries. Ashland offers a broad spectrum of organo- and water-soluble polymers that are derived from both natural and synthetic resources. Product lines include derivatized cellulose polymers, synthetics, guar and guar derivatives that impart effective functionalities to serve a variety of industrial markets and specialized applications. Many of the products within Performance Specialties function as performance additives that deliver high levels of end-user value in formulated products. In other areas, such as plastics and textiles, Performance Specialties’ products function as a processing aid, improving the quality of end products and reducing manufacturing costs.
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
placing Ashland at a competitive disadvantage compared with those of its competitors that have less debt and lower debt service requirements;
|
•
|
making Ashland more vulnerable to increases in interest rates since some of its indebtedness is subject to variable rates of interest; and
|
•
|
making it more difficult for Ashland to satisfy its financial obligations.
|
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
Ashland
|
100
|
114
|
104
|
171
|
224
|
256
|
S&P MidCap 400
†
|
100
|
118
|
116
|
149
|
191
|
213
|
Peer Group - Materials
|
100
|
112
|
105
|
137
|
160
|
191
|
•
|
Peer Group – Materials:
S&P 500
†
Materials (large-cap) and S&P MidCap 400
†
Materials. As of
September 30, 2014
, this peer group consisted of
62
companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q4 Fiscal Periods
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share, including commission
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions) (a)
|
|||||||||
July 1, 2014 to July 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
||||
August 1, 2014 to August 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
May 2014 PSR
|
|
763,896
|
|
(b)
|
|
(b)
|
|
|
763,896
|
|
(b)
|
|
|
|
|||
August 2014 ASR
|
|
5,883,506
|
|
(c)
|
|
(c)
|
|
|
5,883,506
|
|
(c)
|
|
|
|
|||
Open Market Purchases
|
|
534,940
|
|
|
|
$
|
104.19
|
|
|
534,940
|
|
|
|
|
|
||
September 1, 2014 to September 30, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Open Market Purchases
|
|
630,000
|
|
|
|
$
|
107.50
|
|
|
630,000
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total.......................................................................
|
|
7,812,342
|
|
|
|
|
|
7,812,342
|
|
|
|
$
|
396
|
|
(a)
|
In 2013, the Company's Board of Directors authorized a program to repurchase up to $600 million of the company's stock beginning in 2013. In February 2014, the Company's Board of Directors increased the share repurchase program authorization from $600 million to $1,350 million. The Company's share repurchase program does not obligate it to acquire any specific number of shares. Under the program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 of the Exchange Act. The $396 million represents the remaining amount available to repurchase as of September 30, 2014 under the authorized repurchase program.
|
||||||||
|
|
|
|
|
|
|
|
|
|
(b)
|
On May 28, 2014, Ashland entered into a prepaid variable share repurchase agreement (PSR) with a financial institution pursuant to which it delivered $125 million to the financial institution. Under the agreement, between $75 million and $125 million of Ashland common stock was to be purchased by the financial institution during the period that began on May 29, 2014 and ended on July 30, 2014. The number of shares to be delivered to Ashland by the financial institution under the agreement was based upon a pre-determined formula, subject to modification or cancellation of the plan under certain circumstances. On August 4, 2014 the financial institution delivered $44.6 million of cash and 763,896 shares of common stock at an average price of $105.22. With the delivery of $44.6 million of cash to Ashland on August 4, 2014, the PSR had the net effect of reducing shareholders' equity in the Company's Consolidated Balance Sheet by $80.4 million.
|
||||||||
|
|
|
|
|
|
|
|
|
|
(c)
|
In August 2014, the Company entered into an accelerated share repurchase (ASR) program with two financial institutions to purchase $750 million of the Company's common stock. In exchange for up-front payments totaling $750 million, the financial institutions committed to deliver shares during the ASR's purchase periods, which will end during 2015. The total number of shares ultimately delivered, and therefore the average price paid per share, will be determined at the end of the applicable purchase period based on the volume weighted average price of the Company's stock during that period. During the fourth quarter of 2014, 5,883,506 shares were initially delivered to the Company and retired. This does not represent the final number of shares to be delivered under the ASR. The up-front payments of $750 million were accounted for as a reduction to shareholders' equity in the Company's Consolidated Balance Sheet.
|
2.1
|
–
|
Stock and Asset Purchase Agreement, dated as of February 18, 2014, between Ashland Inc. and CD&R Seahawk Bidco, LLC (filed as Exhibit 2.1 to Ashland’s Form 8-K filed on February 24, 2014 (SEC File No. 001-32532), and incorporated herein by reference).
|
2.2
|
–
|
Sale and Purchase Agreement related to the ASK Chemicals Group, dated April 8, 2014, among Ashland Inc., Ashland International Holdings, Inc., Clariant Produkte (Deutschland) GmbH, Clariant Corp., mertus 158. GmbH, Ascot US Bidco Inc. and Ascot UK Bidco Limited (filed as Exhibit 2.1 to Ashland’s Form 8-K filed on April 14, 2014 ( SEC File No. 001-32532), and incorporated herein by reference).
|
3.1
|
–
|
Fourth Restated Articles of Incorporation of Ashland Inc. (filed as Exhibit 3.2 to Ashland’s Form 8-K
filed on February 4, 2014 (SEC File No. 001-32532), and incorporated herein by reference).
|
3.2
|
–
|
By-laws of Ashland Inc., as amended and restated (filed as Exhibit 3.3 to Ashland’s Form 8-K filed on
February 4, 2014 (SEC File No. 001-32532), and incorporated herein by reference).
|
4.1
|
–
|
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.
|
4.2
|
–
|
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).
|
4.3
|
–
|
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).
|
4.4
|
–
|
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).
|
4.5
|
–
|
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).
|
4.6
|
–
|
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).
|
4.7
|
–
|
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).
|
4.8
|
–
|
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).
|
4.9
|
–
|
Form of $100,000,000 6.6% Debenture due August 27, 2027 (filed as Exhibit 4.2 to Hercules’ Form 8-
K filed on July 30, 1997 (SEC File No. 001-00496), and incorporated herein by reference).
|
4.10
|
–
|
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).
|
4.11
|
–
|
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).
|
4.12
|
–
|
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. (filed as Exhibit 4.11 to Ashland’s Form 10-K for the fiscal year ended September 30, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
|
4.13
|
–
|
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).
|
4.14
|
–
|
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).
|
4.15
|
–
|
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).
|
4.16
|
–
|
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).
|
4.17
|
–
|
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).
|
4.18
|
–
|
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).
|
10.1
|
–
|
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).
|
10.2
|
–
|
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).
|
10.3
|
–
|
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).
|
10.4
|
–
|
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).
|
10.5
|
–
|
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).
|
10.6
|
–
|
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).
|
10.7
|
–
|
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).
|
10.8
|
–
|
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).
|
10.9
|
–
|
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).
|
10.10
|
–
|
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).
|
10.11
|
–
|
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).
|
10.12
|
–
|
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).
|
10.13
|
–
|
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).
|
10.14
|
–
|
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).
|
10.15
|
–
|
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).
|
10.16**
|
–
|
Form of Stock Appreciation Rights Award Agreement
|
10.17**
|
–
|
Form of Performance Unit (LTIP) Award Agreement
|
10.18**
|
–
|
Form of Restricted Stock Award Agreement
|
10.19**
|
–
|
Form of Restricted Stock Unit Agreement
|
10.20
|
–
|
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).
|
10.21
|
–
|
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).
|
10.22
|
–
|
Letter Agreement between Ashland and Luis Fernandez-Moreno dated July 29, 2013. (filed as Exhibit
10.22 to Ashland’s Form 10-K for the fiscal year ended September 30, 2013 (SEC File No. 001- 32532), and incorporated herein by reference).
|
10.23
|
–
|
Letter Agreement between Ashland and Luis Fernandez-Moreno dated November 4, 2013. (filed as Exhibit 10.23 to Ashland’s Form 10-K for the fiscal year ended September 30, 2013 (SEC File No. 001-32532), and incorporated herein by reference).
|
10.24
|
–
|
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).
|
10.25**
|
–
|
Letter Agreement between Ashland and Susan B. Esler dated October 28, 2014.
|
10.26
|
–
|
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).
|
10.27
|
–
|
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).
|
10.28
|
–
|
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).
|
10.29
|
–
|
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).
|
10.30
|
–
|
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).
|
10.31
|
–
|
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).
|
10.32
|
–
|
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).
|
10.33
|
–
|
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).
|
10.34
|
–
|
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).
|
10.35
|
–
|
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. (filed as Exhibit 10.34 to Ashland’s Form 10-K for the fiscal year ended September 30, 2013 (SEC File
No. 001-32532), and incorporated herein by reference).
|
10.36
|
–
|
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.(filed as Exhibit 10.35 to Ashland’s Form 10-K for the fiscal year ended September 30, 2013 (SEC File
No. 001-32532), and incorporated herein by reference).
|
10.37
|
–
|
Fourth Amendment to Transfer and Administration Agreement, dated as of June 30, 2014, 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. (filed as Exhibit 10.1 to Ashland’s Form 10-Q for the quarter ended June 30, 2014 (SEC File No. 001-32532), and incorporated herein by reference).
|
10.38
|
–
|
First Amendment to Sale Agreement, dated as of June 30, 2014, among Ashland Inc., Hercules Incorporated, Ashland Specialty Ingredients G.P., ISP Technologies Inc., Ashland Elastomers LLC and CVG Capital III LLC. (filed as Exhibit 10.2 to Ashland’s Form 10-Q for the quarter ended June 30, 2014 (SEC File No. 001-32532), and incorporated herein by reference).
|
10.39
|
–
|
Originator Removal Agreement and Facility Amendment, dated as of July 28, 2014, by and among Ashland, Hercules Incorporated, Ashland Specialty Ingredients G.P., ISP Technologies Inc., Ashland
LLC, CVG Capital III LLC, the Investors, the Letter of Credit Issuers, Managing Agents and Administrators party thereto, and the Bank of Nova Scotia, as Agent for the Investors. (filed as Exhibit 10.1 to Ashland’s Form 8-K filed on August 1, 2014 (SEC File No. 001-32532) and incorporated herein by reference).
|
10.40
|
–
|
Master Confirmation - Uncollared Accelerated Share Repurchase, dated August 5, 2014, between Ashland Inc. and Deutsche Bank AG, London Branch. (filed as Exhibit 10.1 to Ashland’s Form 8-K filed on August 6, 2014 (SEC File No. 001-32532) and incorporated herein by reference).
|
10.41
|
–
|
Master Confirmation – Uncollared Accelerated Share Repurchase, dated August 5, 2014, between Ashland Inc. and J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, N.A. (filed as Exhibit 10.2 to Ashland’s Form 8-K filed on August 6, 2014 (SEC File No. 001-32532) and incorporated herein by reference).
|
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 24, 2014
|
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
|
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 24, 2014
|
Sales by Geography
|
2014
|
|
|
2013
|
|
|
2012
|
|
North America
(a)
|
53
|
%
|
|
54
|
%
|
|
56
|
%
|
Europe
|
25
|
%
|
|
24
|
%
|
|
24
|
%
|
Asia Pacific
|
15
|
%
|
|
15
|
%
|
|
14
|
%
|
Latin America & other
|
7
|
%
|
|
7
|
%
|
|
6
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
Sales by Reportable Segment
|
2014
|
|
|
2013
|
|
|
2012
|
|
Specialty Ingredients
|
41
|
%
|
|
41
|
%
|
|
42
|
%
|
Performance Materials
|
26
|
%
|
|
26
|
%
|
|
27
|
%
|
Valvoline
|
33
|
%
|
|
33
|
%
|
|
31
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
•
|
More than 80% of the previously announced 800 job eliminations have been completed with the remainder substantially completed by the end of the second fiscal quarter of 2015.
|
•
|
Ashland’s previously centralized supply chain organization has been integrated into the commercial units, optimizing the level of support needed to serve the varying needs of customers and markets.
|
•
|
Regional business teams in Europe, Asia Pacific and Latin America have been realigned to provide better service and value to customers.
|
•
|
Relocation of certain positions to low-cost centers of excellence has continued to progress.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Net income
|
$
|
233
|
|
|
$
|
683
|
|
|
$
|
26
|
|
Income tax expense (benefit)
|
(188
|
)
|
|
196
|
|
|
(57
|
)
|
|||
Net interest and other financing expense
|
166
|
|
|
282
|
|
|
317
|
|
|||
Depreciation and amortization
(a)
|
357
|
|
|
354
|
|
|
355
|
|
|||
EBITDA
|
568
|
|
|
1,515
|
|
|
641
|
|
|||
Income from discontinued operations (net of taxes)
|
(161
|
)
|
|
(130
|
)
|
|
(12
|
)
|
|||
Losses (gain) on pension and other postretirement plan remeasurement
(b)
|
438
|
|
|
(417
|
)
|
|
406
|
|
|||
Restructuring and other integration costs
|
111
|
|
|
29
|
|
|
83
|
|
|||
Impairment of ASK joint venture
|
50
|
|
|
—
|
|
|
—
|
|
|||
Environmental reserve adjustments
|
13
|
|
|
16
|
|
|
8
|
|
|||
Impairment of IPR&D assets
|
13
|
|
|
41
|
|
|
13
|
|
|||
Asset impairment and accelerated depreciation
|
36
|
|
|
2
|
|
|
4
|
|
|||
Foreign tax indemnification receivable adjustment
|
5
|
|
|
—
|
|
|
—
|
|
|||
Legal reserve charge
|
5
|
|
|
—
|
|
|
—
|
|
|||
Insurance settlement
|
—
|
|
|
(22
|
)
|
|
—
|
|
|||
Settled claim
|
—
|
|
|
(13
|
)
|
|
—
|
|
|||
Net loss on divestitures
|
—
|
|
|
14
|
|
|
4
|
|
|||
Inventory fair value adjustment
|
—
|
|
|
—
|
|
|
28
|
|
|||
Other
|
—
|
|
|
2
|
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
1,078
|
|
|
$
|
1,037
|
|
|
$
|
1,175
|
|
|
|
|
|
|
|
(a)
|
Excludes
$36 million
,
$2 million
and $4 million of asset impairment charges and accelerated depreciation during
2014
,
2013
and
2012
, respectively.
|
(b)
|
For supplemental information on the components of this adjustment, see page M-28 within the MD&A - Critical Accounting Policies - Employee benefit obligations.
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Sales
|
$
|
6,121
|
|
|
$
|
6,091
|
|
|
$
|
6,472
|
|
|
$
|
30
|
|
|
$
|
(381
|
)
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Cost of sales
|
$
|
4,605
|
|
|
$
|
4,304
|
|
|
$
|
4,813
|
|
|
$
|
301
|
|
|
$
|
(509
|
)
|
Gross profit as a percent of sales
|
24.8
|
%
|
|
29.3
|
%
|
|
25.6
|
%
|
|
|
|
|
|
|
(In millions)
|
2014 change
|
|
|
2013 change
|
|
||
Pension and other postretirement benefit plans expense (income) (including remeasurements)
|
$
|
269
|
|
|
$
|
(248
|
)
|
Production costs
|
(70
|
)
|
|
(157
|
)
|
||
Volumes and product mix
|
80
|
|
|
(81
|
)
|
||
Divestitures
|
—
|
|
|
(10
|
)
|
||
Currency exchange
|
4
|
|
|
(12
|
)
|
||
Inventory charges
|
(51
|
)
|
|
51
|
|
||
Insurance claim settlement
|
22
|
|
|
(22
|
)
|
||
Inventory fair value assessment noncash charge
|
—
|
|
|
(28
|
)
|
||
Severance
|
13
|
|
|
—
|
|
||
Asset impairment and accelerated depreciation
|
34
|
|
|
(2
|
)
|
||
Change in cost of sales
|
$
|
301
|
|
|
$
|
(509
|
)
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Selling, general and administrative expense
|
$
|
1,358
|
|
|
$
|
670
|
|
|
$
|
1,327
|
|
|
$
|
688
|
|
|
$
|
(657
|
)
|
As a percent of sales
|
22.2
|
%
|
|
11.0
|
%
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Research and development expense
|
$
|
114
|
|
|
$
|
142
|
|
|
$
|
104
|
|
|
$
|
(28
|
)
|
|
$
|
38
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Equity and other income (loss)
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity income (loss)
|
$
|
(25
|
)
|
|
$
|
26
|
|
|
$
|
34
|
|
|
$
|
(51
|
)
|
|
$
|
(8
|
)
|
Other income
|
27
|
|
|
38
|
|
|
19
|
|
|
(11
|
)
|
|
19
|
|
|||||
|
$
|
2
|
|
|
$
|
64
|
|
|
$
|
53
|
|
|
$
|
(62
|
)
|
|
$
|
11
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Net interest and other financing expense (income)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
163
|
|
|
$
|
273
|
|
|
$
|
251
|
|
|
$
|
(110
|
)
|
|
$
|
22
|
|
Interest income
|
(6
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
(2
|
)
|
|
4
|
|
|||||
Other financing costs
|
9
|
|
|
13
|
|
|
74
|
|
|
(4
|
)
|
|
(61
|
)
|
|||||
|
$
|
166
|
|
|
$
|
282
|
|
|
$
|
317
|
|
|
$
|
(116
|
)
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Net gain (loss) on divestitures
|
|
|
|
|
|
|
|
|
|
||||||||||
PVAc divestiture
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
MAP Transaction adjustments
|
4
|
|
|
(8
|
)
|
|
(8
|
)
|
|
12
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|||||
|
$
|
4
|
|
|
$
|
(8
|
)
|
|
$
|
(7
|
)
|
|
$
|
12
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Income tax expense (benefit)
|
$
|
(188
|
)
|
|
$
|
196
|
|
|
$
|
(57
|
)
|
|
$
|
(384
|
)
|
|
$
|
253
|
|
Effective tax rate
|
(162.1
|
)%
|
|
26.2
|
%
|
|
(132.6
|
)%
|
|
|
|
|
|
|
|||||
Effective tax rate (excluding key items)
|
19.9
|
%
|
|
21.9
|
%
|
|
25.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
change
|
|
|
change
|
|
|||||
Income (loss) from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||||||||
(net of taxes)
|
|
|
|
|
|
|
|
|
|
||||||||||
Water Technologies
|
$
|
151
|
|
|
$
|
124
|
|
|
$
|
24
|
|
|
$
|
27
|
|
|
$
|
100
|
|
Distribution
|
—
|
|
|
(6
|
)
|
|
(11
|
)
|
|
6
|
|
|
5
|
|
|||||
Asbestos-related litigation reserves
|
6
|
|
|
2
|
|
|
(1
|
)
|
|
4
|
|
|
3
|
|
|||||
APAC
|
4
|
|
|
10
|
|
|
—
|
|
|
(6
|
)
|
|
10
|
|
|||||
|
$
|
161
|
|
|
$
|
130
|
|
|
$
|
12
|
|
|
$
|
31
|
|
|
$
|
118
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Sales
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
2,498
|
|
|
$
|
2,478
|
|
|
$
|
2,699
|
|
Performance Materials
|
1,582
|
|
|
1,617
|
|
|
1,739
|
|
|||
Valvoline
|
2,041
|
|
|
1,996
|
|
|
2,034
|
|
|||
|
$
|
6,121
|
|
|
$
|
6,091
|
|
|
$
|
6,472
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
253
|
|
|
$
|
243
|
|
|
$
|
399
|
|
Performance Materials
|
7
|
|
|
106
|
|
|
157
|
|
|||
Valvoline
|
323
|
|
|
295
|
|
|
236
|
|
|||
Unallocated and other
|
(537
|
)
|
|
395
|
|
|
(511
|
)
|
|||
|
$
|
46
|
|
|
$
|
1,039
|
|
|
$
|
281
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
262
|
|
|
$
|
242
|
|
|
$
|
243
|
|
Performance Materials
|
91
|
|
|
75
|
|
|
74
|
|
|||
Valvoline
|
37
|
|
|
35
|
|
|
36
|
|
|||
Unallocated and other
|
3
|
|
|
4
|
|
|
6
|
|
|||
|
$
|
393
|
|
|
$
|
356
|
|
|
$
|
359
|
|
Operating information
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
(a)
|
|
|
|
|
|
|
|
|
|||
Sales per shipping day
|
$
|
9.9
|
|
|
$
|
9.8
|
|
|
$
|
10.7
|
|
Metric tons sold (thousands)
|
355.2
|
|
|
336.1
|
|
|
347.2
|
|
|||
Gross profit as a percent of sales
|
31.2
|
%
|
|
30.8
|
%
|
|
33.6
|
%
|
|||
Performance Materials
(a)
|
|
|
|
|
|
|
|
|
|||
Sales per shipping day
|
$
|
6.3
|
|
|
$
|
6.4
|
|
|
$
|
6.9
|
|
Metric tons sold (thousands)
|
591.1
|
|
|
582.8
|
|
|
592.2
|
|
|||
Gross profit as a percent of sales
|
13.1
|
%
|
|
14.9
|
%
|
|
17.2
|
%
|
|||
Valvoline
(a)
|
|
|
|
|
|
|
|
|
|||
Lubricant sales gallons
|
162.6
|
|
|
158.4
|
|
|
158.7
|
|
|||
Premium lubricants (percent of U.S. branded volumes)
|
37.1
|
%
|
|
33.6
|
%
|
|
30.3
|
%
|
|||
Gross profit as a percent of sales
|
31.8
|
%
|
|
31.6
|
%
|
|
27.1
|
%
|
|||
|
|
|
|
|
|
(a)
|
Sales are defined as sales and operating revenues. Gross profit is defined as sales, less cost of sales.
|
|
September 30
|
||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Operating income
|
$
|
253
|
|
|
$
|
243
|
|
|
$
|
399
|
|
Depreciation and amortization (a)
|
243
|
|
|
242
|
|
|
243
|
|
|||
EBITDA
|
496
|
|
|
485
|
|
|
642
|
|
|||
Impairment of IPR&D assets
|
13
|
|
|
41
|
|
|
13
|
|
|||
Asset impairment
|
19
|
|
|
—
|
|
|
—
|
|
|||
Environmental reserve adjustment
|
1
|
|
|
—
|
|
|
—
|
|
|||
Settled claim
|
—
|
|
|
(13
|
)
|
|
—
|
|
|||
Insurance settlement
|
—
|
|
|
(22
|
)
|
|
—
|
|
|||
Inventory fair value adjustment
|
—
|
|
|
—
|
|
|
28
|
|
|||
Adjusted EBITDA
|
$
|
529
|
|
|
$
|
491
|
|
|
$
|
683
|
|
|
|
|
|
|
|
(a)
|
Excludes $19 million of asset impairment charges during
2014
.
|
|
September 30
|
||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Operating income
|
$
|
7
|
|
|
$
|
106
|
|
|
$
|
157
|
|
Depreciation and amortization
(a)
|
74
|
|
|
73
|
|
|
71
|
|
|||
EBITDA
|
81
|
|
|
179
|
|
|
228
|
|
|||
Impairment of ASK joint venture
|
50
|
|
|
—
|
|
|
—
|
|
|||
Severance
|
13
|
|
|
—
|
|
|
7
|
|
|||
Legal reserve charge
|
5
|
|
|
—
|
|
|
—
|
|
|||
Accelerated depreciation and other plant closure costs
|
17
|
|
|
2
|
|
|
4
|
|
|||
Adjusted EBITDA
|
$
|
166
|
|
|
$
|
181
|
|
|
$
|
239
|
|
|
|
|
|
|
|
(a)
|
Excludes
$17 million
,
$2 million
and $3 million of accelerated depreciation during
2014
,
2013
and
2012
, respectively.
|
|
September 30
|
||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Operating income
|
$
|
323
|
|
|
$
|
295
|
|
|
$
|
236
|
|
Depreciation and amortization
|
37
|
|
|
35
|
|
|
36
|
|
|||
EBITDA
|
$
|
360
|
|
|
$
|
330
|
|
|
$
|
272
|
|
|
September 30
|
||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Gain (losses) on pension and other postretirement plan remeasurement
|
$
|
(438
|
)
|
|
$
|
417
|
|
|
$
|
(406
|
)
|
Pension and other postretirement net periodic income
(a)
|
54
|
|
|
68
|
|
|
28
|
|
|||
Restructuring activities (includes severance, integration and stranded divestiture costs)
|
(129
|
)
|
|
(64
|
)
|
|
(117
|
)
|
|||
Environmental reserves for divested businesses
|
(28
|
)
|
|
(22
|
)
|
|
(14
|
)
|
|||
Other income (expense)
|
4
|
|
|
(4
|
)
|
|
(2
|
)
|
|||
Total unallocated income (expense)
|
$
|
(537
|
)
|
|
$
|
395
|
|
|
$
|
(511
|
)
|
|
|
|
|
|
|
(a)
|
Amounts exclude service costs of $30 million during
2014
and
2013
, and $25 million during
2012
which are allocated to Ashland’s reportable segments.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash provided (used) by:
|
|
|
|
|
|
||||||
Operating activities from continuing operations
|
$
|
580
|
|
|
$
|
653
|
|
|
$
|
189
|
|
Investing activities from continuing operations
|
(168
|
)
|
|
(272
|
)
|
|
(205
|
)
|
|||
Financing activities from continuing operations
|
(1,034
|
)
|
|
(592
|
)
|
|
(317
|
)
|
|||
Discontinued operations
|
1,671
|
|
|
32
|
|
|
128
|
|
|||
Effect of currency exchange rate changes on cash and cash equivalents
|
(2
|
)
|
|
2
|
|
|
(9
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
1,047
|
|
|
$
|
(177
|
)
|
|
$
|
(214
|
)
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash flows provided (used) by operating activities from continuing operations
|
|
|
|
|
|
||||||
Net income
|
$
|
233
|
|
|
$
|
683
|
|
|
$
|
26
|
|
Income from discontinued operations (net of taxes)
|
(161
|
)
|
|
(130
|
)
|
|
(12
|
)
|
|||
Adjustments to reconcile income from continuing operations
|
|
|
|
|
|
|
|
|
|||
to cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
393
|
|
|
356
|
|
|
359
|
|
|||
Debt issuance cost amortization
|
14
|
|
|
65
|
|
|
54
|
|
|||
Deferred income taxes
|
(294
|
)
|
|
153
|
|
|
(125
|
)
|
|||
Equity income from affiliates
|
(25
|
)
|
|
(26
|
)
|
|
(34
|
)
|
|||
Distributions from equity affiliates
|
14
|
|
|
11
|
|
|
2
|
|
|||
Stock based compensation expense - Note P
|
34
|
|
|
30
|
|
|
28
|
|
|||
Net loss (gain) on divestitures - Notes B and C
|
(4
|
)
|
|
8
|
|
|
7
|
|
|||
Inventory fair value adjustment related to ISP acquisition
|
—
|
|
|
—
|
|
|
28
|
|
|||
Impairments of equity method investment and in-process research and
|
|
|
|
|
|
||||||
development
|
63
|
|
|
41
|
|
|
13
|
|
|||
Loss (gain) on pension and postretirement plan remeasurement
|
438
|
|
|
(417
|
)
|
|
406
|
|
|||
Change in operating assets and liabilities
(a)
|
(125
|
)
|
|
(121
|
)
|
|
(563
|
)
|
|||
Total cash flows provided by operating activities from continuing operations
|
$
|
580
|
|
|
$
|
653
|
|
|
$
|
189
|
|
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash flows provided (used) by investing activities from continuing operations
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
$
|
(248
|
)
|
|
$
|
(264
|
)
|
|
$
|
(242
|
)
|
Proceeds from disposal of property, plant and equipment
|
3
|
|
|
5
|
|
|
6
|
|
|||
Proceeds from sale of available-for-sale securities
|
—
|
|
|
—
|
|
|
10
|
|
|||
Proceeds (uses) from sale of operations or equity investments
|
92
|
|
|
(13
|
)
|
|
21
|
|
|||
Funds restricted for property transactions
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||
Total cash flows used by investing activities from continuing operations
|
$
|
(168
|
)
|
|
$
|
(272
|
)
|
|
$
|
(205
|
)
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash flows provided (used) by financing activities from continuing operations
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
$
|
—
|
|
|
$
|
2,320
|
|
|
$
|
502
|
|
Repayment of long-term debt
|
(11
|
)
|
|
(2,613
|
)
|
|
(1,023
|
)
|
|||
Proceeds from (repayment of) short-term debt, net
|
22
|
|
|
(36
|
)
|
|
261
|
|
|||
Repurchase of common stock
|
(954
|
)
|
|
(150
|
)
|
|
—
|
|
|||
Debt issuance costs
|
—
|
|
|
(38
|
)
|
|
(10
|
)
|
|||
Cash dividends paid
|
(103
|
)
|
|
(88
|
)
|
|
(63
|
)
|
|||
Excess tax benefits related to share-based payments
|
12
|
|
|
13
|
|
|
16
|
|
|||
Total cash flows used by financing activities from continuing operations
|
$
|
(1,034
|
)
|
|
$
|
(592
|
)
|
|
$
|
(317
|
)
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash provided (used) by discontinued operations
|
|
|
|
|
|
||||||
Operating cash flows
|
$
|
63
|
|
|
$
|
80
|
|
|
$
|
165
|
|
Investing cash flows
|
1,608
|
|
|
(48
|
)
|
|
(37
|
)
|
|||
Total cash flows provided by discontinued operations
|
$
|
1,671
|
|
|
$
|
32
|
|
|
$
|
128
|
|
|
September 30
|
||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash flows provided by operating activities from continuing operations
|
$
|
580
|
|
|
$
|
653
|
|
|
$
|
189
|
|
Less:
|
|
|
|
|
|
|
|
|
|||
Additions to property, plant and equipment
|
(248
|
)
|
|
(264
|
)
|
|
(242
|
)
|
|||
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
|
$
|
332
|
|
|
$
|
441
|
|
|
$
|
106
|
|
|
|
|
|
|
|
(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)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash and cash equivalents
|
$
|
1,393
|
|
|
$
|
346
|
|
|
$
|
523
|
|
|
|
|
|
|
|
||||||
Unused borrowing capacity
|
|
|
|
|
|
|
|
|
|||
Revolving credit facility
|
$
|
1,084
|
|
|
$
|
1,119
|
|
|
$
|
905
|
|
Accounts receivable securitization facility
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
50
|
|
|
September 30
|
||||||
(In millions)
|
2014
|
|
|
2013
|
|
||
Short-term debt
|
$
|
329
|
|
|
$
|
308
|
|
Long-term debt (including current portion)
|
2,951
|
|
|
2,959
|
|
||
Total debt
|
$
|
3,280
|
|
|
$
|
3,267
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Specialty Ingredients
|
$
|
159
|
|
|
$
|
144
|
|
|
$
|
121
|
|
Performance Materials
|
38
|
|
|
43
|
|
|
58
|
|
|||
Valvoline
|
36
|
|
|
41
|
|
|
40
|
|
|||
Unallocated and other
|
15
|
|
|
36
|
|
|
23
|
|
|||
Total capital expenditures
|
$
|
248
|
|
|
$
|
264
|
|
|
$
|
242
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Capital employed
(a)
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
5,413
|
|
|
$
|
5,646
|
|
|
$
|
5,813
|
|
Performance Materials
|
1,121
|
|
|
1,280
|
|
|
1,349
|
|
|||
Valvoline
|
746
|
|
|
702
|
|
|
688
|
|
|||
|
|
|
|
|
|
(a)
|
Excludes the assets and liabilities classified within unallocated and other which primarily includes debt and other long-term liabilities such as asbestos and pension. The net liability in unallocated and other was
$3,697 million
,
$3,075 million
and
$3,821 million
as of
September 30, 2014
,
2013
and
2012
, 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)
|
$
|
556
|
|
|
$
|
146
|
|
|
$
|
239
|
|
|
$
|
75
|
|
|
$
|
96
|
|
Employee benefit obligations
(b)
|
404
|
|
|
119
|
|
|
70
|
|
|
66
|
|
|
149
|
|
|||||
Operating lease obligations
(c)
|
169
|
|
|
36
|
|
|
54
|
|
|
28
|
|
|
51
|
|
|||||
Debt
(d)
|
3,433
|
|
|
293
|
|
|
600
|
|
|
750
|
|
|
1,790
|
|
|||||
Interest payments
(e)
|
1,613
|
|
|
152
|
|
|
270
|
|
|
226
|
|
|
965
|
|
|||||
Unrecognized tax benefits
(f)
|
155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|||||
Total contractual obligations
|
$
|
6,330
|
|
|
$
|
746
|
|
|
$
|
1,233
|
|
|
$
|
1,145
|
|
|
$
|
3,206
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other commitments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Letters of credit
(g)
|
$
|
71
|
|
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(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 2015, as well as projected benefit payments through 2024 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, 2014.
|
(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)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Loss (gain) on pension and other postretirement plan remeasurement:
|
|
|
|
|
|
||||||
Change in discount rate and other actuarial assumptions
(a)
|
$
|
369
|
|
|
$
|
(575
|
)
|
|
$
|
624
|
|
Change in mortality table
(a)
|
149
|
|
|
—
|
|
|
—
|
|
|||
Actual return on plan assets
(a)
|
(309
|
)
|
|
(161
|
)
|
|
(357
|
)
|
|||
Expected return on plan assets
(a)
|
237
|
|
|
238
|
|
|
226
|
|
|||
Total actuarial (gain) loss on pension and other postretirement plan
|
|
|
|
|
|
||||||
remeasurement
|
446
|
|
|
(498
|
)
|
|
493
|
|
|||
Curtailment, settlement and other loss
|
11
|
|
|
—
|
|
|
—
|
|
|||
Total loss (gain) on pension and other postretirement plan remeasurement
|
457
|
|
|
(498
|
)
|
|
493
|
|
|||
Less: Actuarial (gain) loss recognized in discontinued operations
|
44
|
|
|
(81
|
)
|
|
87
|
|
|||
Less: Curtailment, settlement and other gain in discontinued operations
|
(25
|
)
|
|
—
|
|
|
—
|
|
|||
Total loss (gain) on pension and other postretirement plan
|
|
|
|
|
|
||||||
remeasurement from continuing operations
|
$
|
438
|
|
|
$
|
(417
|
)
|
|
$
|
406
|
|
|
|
|
|
|
|
(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)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Increase in pension costs from
|
|
|
|
|
|
||||||
Decrease in the discount rate
|
$
|
591
|
|
|
$
|
557
|
|
|
$
|
707
|
|
Increase in the salary adjustment rate
|
32
|
|
|
44
|
|
|
54
|
|
|||
Decrease in expected return on plan assets
|
31
|
|
|
33
|
|
|
29
|
|
|||
Increase in other postretirement costs from
|
|
|
|
|
|
||||||
Decrease in the discount rate
|
20
|
|
|
20
|
|
|
26
|
|
|
Page
|
Management's report on internal control over financial reporting
|
F-2
|
Report of independent registered public accounting firm
|
F-3
|
Consolidated Financial Statements:
|
|
Statements of Consolidated Comprehensive Income
|
F-4
|
Consolidated Balance Sheets
|
F-5
|
Statements of Consolidated Stockholders’ Equity
|
F-6
|
Statements of Consolidated Cash Flows
|
F-7
|
Notes to Consolidated Financial Statements
|
F-8
|
Quarterly financial information
|
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)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Sales
|
$
|
6,121
|
|
|
$
|
6,091
|
|
|
$
|
6,472
|
|
Cost of sales
|
4,605
|
|
|
4,304
|
|
|
4,813
|
|
|||
Gross profit
|
1,516
|
|
|
1,787
|
|
|
1,659
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expense
|
1,358
|
|
|
670
|
|
|
1,327
|
|
|||
Research and development expense
|
114
|
|
|
142
|
|
|
104
|
|
|||
Equity and other income - Note D
|
2
|
|
|
64
|
|
|
53
|
|
|||
Operating income
|
46
|
|
|
1,039
|
|
|
281
|
|
|||
|
|
|
|
|
|
||||||
Net interest and other financing expense - Note I
|
166
|
|
|
282
|
|
|
317
|
|
|||
Net gain (loss) on divestitures - Note B
|
4
|
|
|
(8
|
)
|
|
(7
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
(116
|
)
|
|
749
|
|
|
(43
|
)
|
|||
Income tax expense (benefit) - Note L
|
(188
|
)
|
|
196
|
|
|
(57
|
)
|
|||
Income from continuing operations
|
72
|
|
|
553
|
|
|
14
|
|
|||
Income from discontinued operations (net of tax) - Note C
|
161
|
|
|
130
|
|
|
12
|
|
|||
Net income
|
$
|
233
|
|
|
$
|
683
|
|
|
$
|
26
|
|
|
|
|
|
|
|
||||||
PER SHARE DATA - NOTE A
|
|
|
|
|
|
|
|
|
|||
Basic earnings per share
|
|
|
|
|
|
|
|
|
|||
Income from continuing operations
|
$
|
0.94
|
|
|
$
|
7.06
|
|
|
$
|
0.18
|
|
Income from discontinued operations
|
2.10
|
|
|
1.65
|
|
|
0.15
|
|
|||
Net income
|
$
|
3.04
|
|
|
$
|
8.71
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|||
Diluted earnings per share
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.93
|
|
|
$
|
6.95
|
|
|
$
|
0.17
|
|
Income from discontinued operations
|
2.07
|
|
|
1.62
|
|
|
0.16
|
|
|||
Net income
|
$
|
3.00
|
|
|
$
|
8.57
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
||||||
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Net income
|
$
|
233
|
|
|
$
|
683
|
|
|
$
|
26
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||
Unrealized translation gain (loss)
|
(160
|
)
|
|
37
|
|
|
(87
|
)
|
|||
Pension and postretirement obligation adjustment
|
(21
|
)
|
|
(5
|
)
|
|
24
|
|
|||
Net change in interest rate hedges
|
—
|
|
|
38
|
|
|
(26
|
)
|
|||
Other comprehensive income (loss)
|
(181
|
)
|
|
70
|
|
|
(89
|
)
|
|||
Comprehensive income (loss)
|
$
|
52
|
|
|
$
|
753
|
|
|
$
|
(63
|
)
|
See Notes to Consolidated Financial Statements.
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
||||
Consolidated Balance Sheets
|
|
|
|
||||
At September 30
|
|
|
|
||||
(In millions)
|
2014
|
|
|
2013
|
|
||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,393
|
|
|
$
|
346
|
|
Accounts receivable
(less allowance for doubtful accounts of $13 million in 2014 and $12 million in 2013)
|
1,202
|
|
|
1,113
|
|
||
Inventories - Note A
|
765
|
|
|
758
|
|
||
Deferred income taxes - Note L
|
118
|
|
|
107
|
|
||
Other assets
|
83
|
|
|
62
|
|
||
Held for sale - Note B
|
—
|
|
|
487
|
|
||
Total current assets
|
3,561
|
|
|
2,873
|
|
||
Noncurrent assets
|
|
|
|
|
|
||
Property, plant and equipment - Note G
|
|
|
|
|
|
||
Cost
|
4,275
|
|
|
4,181
|
|
||
Accumulated depreciation
|
1,861
|
|
|
1,674
|
|
||
Net property, plant and equipment
|
2,414
|
|
|
2,507
|
|
||
Goodwill - Note H
|
2,643
|
|
|
2,709
|
|
||
Intangibles - Note H
|
1,309
|
|
|
1,437
|
|
||
Asbestos insurance receivable - Note N
|
433
|
|
|
437
|
|
||
Equity and other unconsolidated investments
|
81
|
|
|
213
|
|
||
Other assets - Note J
|
510
|
|
|
552
|
|
||
Held for sale - Note B
|
—
|
|
|
1,360
|
|
||
Total noncurrent assets
|
7,390
|
|
|
9,215
|
|
||
Total assets
|
$
|
10,951
|
|
|
$
|
12,088
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Short-term debt - Note I
|
$
|
329
|
|
|
$
|
308
|
|
Current portion of long-term debt - Note I
|
9
|
|
|
12
|
|
||
Trade and other payables
|
674
|
|
|
714
|
|
||
Accrued expenses and other liabilities
|
675
|
|
|
499
|
|
||
Held for sale - Note B
|
—
|
|
|
194
|
|
||
Total current liabilities
|
1,687
|
|
|
1,727
|
|
||
Noncurrent liabilities
|
|
|
|
|
|
||
Long-term debt - Note I
|
2,942
|
|
|
2,947
|
|
||
Employee benefit obligations - Note M
|
1,468
|
|
|
1,110
|
|
||
Asbestos litigation reserve - Note N
|
701
|
|
|
735
|
|
||
Deferred income taxes - Note L
|
110
|
|
|
397
|
|
||
Other liabilities - Note J
|
460
|
|
|
520
|
|
||
Held for sale - Note B
|
—
|
|
|
99
|
|
||
Total noncurrent liabilities
|
5,681
|
|
|
5,808
|
|
||
Commitments and contingencies - Notes K and N
|
|
|
|
|
|
||
Stockholders’ equity
- Notes O and P
|
|
|
|
|
|
||
Common stock, par value $.01 per share, 200 million shares authorized
|
|
|
|
|
|
||
Issued 70 million shares in 2014 and 77 million shares in 2013
|
1
|
|
|
1
|
|
||
Paid-in capital
|
—
|
|
|
506
|
|
||
Retained earnings
|
3,475
|
|
|
3,758
|
|
||
Accumulated other comprehensive income
|
107
|
|
|
288
|
|
||
Total stockholders’ equity
|
3,583
|
|
|
4,553
|
|
||
Total liabilities and stockholders’ equity
|
$
|
10,951
|
|
|
$
|
12,088
|
|
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, 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
|
|
|||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
233
|
|
|
(181
|
)
|
|
52
|
|
|||||
Regular dividends, $1.36 per common share
|
|
|
|
|
|
|
(103
|
)
|
|
|
|
|
(103
|
)
|
|||||
Common shares issued under stock incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
and other plans
(b) (c)
|
|
|
|
35
|
|
|
|
|
|
|
|
|
35
|
|
|||||
Repurchase of common shares
(d)
|
|
|
(541
|
)
|
|
(413
|
)
|
|
|
|
(954
|
)
|
|||||||
Balance at September 30, 2014
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3,475
|
|
|
$
|
107
|
|
|
$
|
3,583
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
At
September 30, 2014
and
2013
, the accumulated other comprehensive income of
$107 million
for
2014
and
$288 million
for
2013
was comprised of unrecognized prior service credits as a result of certain plan amendments of
$59 million
for
2014
and
$80 million
for
2013
and net unrealized translation gains of
$48 million
for
2014
and
$208 million
for
2013
.
|
(b)
|
Includes income tax benefits resulting from the exercise of stock options of
$23 million
in
2014
,
$1 million
in
2013
and
$16 million
in
2012
.
|
(c)
|
Common shares issued were
615,049
,
415,351
and
729,484
for
2014
,
2013
and
2012
, respectively.
|
(d)
|
Common shares repurchased were
7,812,342
and
1,737,744
for
2014
and
2013
, 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)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cash flows provided (used) by operating activities from continuing operations
|
|
|
|
|
|
||||||
Net income
|
$
|
233
|
|
|
$
|
683
|
|
|
$
|
26
|
|
Income from discontinued operations (net of tax)
|
(161
|
)
|
|
(130
|
)
|
|
(12
|
)
|
|||
Adjustments to reconcile income from continuing operations
|
|
|
|
|
|
|
|
|
|||
to cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
393
|
|
|
356
|
|
|
359
|
|
|||
Debt issuance cost amortization
|
14
|
|
|
65
|
|
|
54
|
|
|||
Deferred income taxes
|
(294
|
)
|
|
153
|
|
|
(125
|
)
|
|||
Equity income from affiliates
|
(25
|
)
|
|
(26
|
)
|
|
(34
|
)
|
|||
Distributions from equity affiliates
|
14
|
|
|
11
|
|
|
2
|
|
|||
Stock based compensation expense - Note P
|
34
|
|
|
30
|
|
|
28
|
|
|||
Net loss (gain) on divestitures - Notes B and C
|
(4
|
)
|
|
8
|
|
|
7
|
|
|||
Inventory fair value adjustment related to ISP acquisition
|
—
|
|
|
—
|
|
|
28
|
|
|||
Impairments of equity method investment and in-process research and development
|
63
|
|
|
41
|
|
|
13
|
|
|||
Loss (gain) on pension and other postretirement plan remeasurement
|
438
|
|
|
(417
|
)
|
|
406
|
|
|||
Change in operating assets and liabilities
(a)
|
(125
|
)
|
|
(121
|
)
|
|
(563
|
)
|
|||
Total cash flows provided by operating activities from continuing operations
|
580
|
|
|
653
|
|
|
189
|
|
|||
Cash flows provided (used) by investing activities from continuing operations
|
|
|
|
|
|
|
|
|
|||
Additions to property, plant and equipment
|
(248
|
)
|
|
(264
|
)
|
|
(242
|
)
|
|||
Proceeds from disposal of property, plant and equipment
|
3
|
|
|
5
|
|
|
6
|
|
|||
Proceeds from sale of available-for-sale securities
|
—
|
|
|
—
|
|
|
10
|
|
|||
Proceeds (uses) from sale of operations or equity investments
|
92
|
|
|
(13
|
)
|
|
21
|
|
|||
Funds restricted for property transactions
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||
Total cash flows used by investing activities from continuing operations
|
(168
|
)
|
|
(272
|
)
|
|
(205
|
)
|
|||
Cash flows provided (used) by financing activities from continuing operations
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,320
|
|
|
502
|
|
|||
Repayment of long-term debt
|
(11
|
)
|
|
(2,613
|
)
|
|
(1,023
|
)
|
|||
Proceeds (repayment) from short-term debt
|
22
|
|
|
(36
|
)
|
|
261
|
|
|||
Repurchase of common stock
|
(954
|
)
|
|
(150
|
)
|
|
—
|
|
|||
Debt issuance costs
|
—
|
|
|
(38
|
)
|
|
(10
|
)
|
|||
Cash dividends paid
|
(103
|
)
|
|
(88
|
)
|
|
(63
|
)
|
|||
Excess tax benefits related to share-based payments
|
12
|
|
|
13
|
|
|
16
|
|
|||
Total cash flows used by financing activities from continuing operations
|
(1,034
|
)
|
|
(592
|
)
|
|
(317
|
)
|
|||
Cash used by continuing operations
|
(622
|
)
|
|
(211
|
)
|
|
(333
|
)
|
|||
Cash provided (used) by discontinued operations
|
|
|
|
|
|
|
|
|
|||
Operating cash flows
|
63
|
|
|
80
|
|
|
165
|
|
|||
Investing cash flows
|
1,608
|
|
|
(48
|
)
|
|
(37
|
)
|
|||
Total cash provided by discontinued operations
|
1,671
|
|
|
32
|
|
|
128
|
|
|||
Effect of currency exchange rate changes on cash and cash equivalents
|
(2
|
)
|
|
2
|
|
|
(9
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
1,047
|
|
|
(177
|
)
|
|
(214
|
)
|
|||
Cash and cash equivalents - beginning of year
|
346
|
|
|
523
|
|
|
737
|
|
|||
Cash and cash equivalents - end of year
|
$
|
1,393
|
|
|
$
|
346
|
|
|
$
|
523
|
|
|
|
|
|
|
|
||||||
Decrease (increase) in operating assets
(a)
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
$
|
(16
|
)
|
|
$
|
43
|
|
|
$
|
9
|
|
Inventories
|
(4
|
)
|
|
106
|
|
|
(118
|
)
|
|||
Other current and noncurrent assets
|
226
|
|
|
(194
|
)
|
|
153
|
|
|||
Increase (decrease) in operating liabilities
(a)
|
|
|
|
|
|
|
|
|
|||
Trade and other payables
|
64
|
|
|
(7
|
)
|
|
(109
|
)
|
|||
Pension contributions
|
(38
|
)
|
|
(124
|
)
|
|
(166
|
)
|
|||
Other current and noncurrent liabilities
|
(357
|
)
|
|
55
|
|
|
(332
|
)
|
|||
Change in operating assets and liabilities
|
$
|
(125
|
)
|
|
$
|
(121
|
)
|
|
$
|
(563
|
)
|
Supplemental disclosures
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
154
|
|
|
$
|
182
|
|
|
$
|
202
|
|
Income taxes paid
|
88
|
|
|
69
|
|
|
88
|
|
|||
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
See Notes to Consolidated Financial Statements.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Allowance for doubtful accounts - beginning of year
|
$
|
12
|
|
|
$
|
19
|
|
|
$
|
20
|
|
Provisions charged to earnings
|
5
|
|
|
(4
|
)
|
|
3
|
|
|||
Reserves utilized
|
(4
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|||
Other changes
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Allowance for doubtful accounts - end of year
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
19
|
|
(In millions)
|
2014
|
|
|
2013
|
|
||
Finished products
|
$
|
557
|
|
|
$
|
518
|
|
Raw materials, supplies and work in process
|
239
|
|
|
261
|
|
||
LIFO reserves
|
(31
|
)
|
|
(21
|
)
|
||
|
$
|
765
|
|
|
$
|
758
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Inventory reserves - beginning of year
|
$
|
59
|
|
|
$
|
28
|
|
|
$
|
29
|
|
Provisions charged to earnings
|
4
|
|
|
42
|
|
|
1
|
|
|||
Reserves utilized
|
(10
|
)
|
|
(11
|
)
|
|
(1
|
)
|
|||
Acquisition and other changes
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Inventory reserves - end of year
|
$
|
53
|
|
|
$
|
59
|
|
|
$
|
28
|
|
(In millions) |
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Tax valuation allowances - beginning of year
|
$
|
166
|
|
|
$
|
175
|
|
|
$
|
718
|
|
Provisions charged to earnings
|
(5
|
)
|
|
(6
|
)
|
|
37
|
|
|||
Reserves utilized
|
(14
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Acquisition and other changes
|
1
|
|
|
(1
|
)
|
|
(580
|
)
|
|||
Tax valuation allowances - end of year
|
$
|
148
|
|
|
$
|
166
|
|
|
$
|
175
|
|
(In millions except per share data)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Numerator
|
|
|
|
|
|
||||||
Numerator for basic and diluted EPS -
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
72
|
|
|
$
|
553
|
|
|
$
|
14
|
|
Denominator
|
|
|
|
|
|
|
|
|
|||
Denominator for basic EPS - Weighted-average
|
|
|
|
|
|
|
|
|
|||
common shares outstanding
|
77
|
|
|
78
|
|
|
78
|
|
|||
Share based awards convertible to common shares
|
1
|
|
|
2
|
|
|
2
|
|
|||
Denominator for diluted EPS - Adjusted weighted-
|
|
|
|
|
|
|
|||||
average shares and assumed conversions
|
78
|
|
|
80
|
|
|
80
|
|
|||
EPS from continuing operations
|
|
|
|
|
|
|
|||||
Basic
|
$
|
0.94
|
|
|
$
|
7.06
|
|
|
$
|
0.18
|
|
Diluted
|
0.93
|
|
|
6.95
|
|
|
0.17
|
|
|
September 30
|
|
|
(In millions)
|
2013
|
|
|
Accounts receivable
(a)
|
$
|
332
|
|
Inventories
|
141
|
|
|
Other assets
|
14
|
|
|
Current assets held for sale
|
$
|
487
|
|
|
|
||
Net property, plant and equipment
|
$
|
335
|
|
Goodwill
|
657
|
|
|
Intangibles
|
354
|
|
|
Equity and other unconsolidated investments
|
5
|
|
|
Other assets
|
9
|
|
|
Noncurrent assets held for sale
|
$
|
1,360
|
|
|
|
||
Trade payables
|
$
|
171
|
|
Accrued expenses and other liabilities
|
23
|
|
|
Current liabilities held for sale
|
$
|
194
|
|
|
|
||
Employee benefit obligations
|
$
|
64
|
|
Deferred income taxes
|
32
|
|
|
Other liabilities
|
3
|
|
|
Noncurrent liabilities held for sale
|
$
|
99
|
|
|
|
(a)
|
Accounts receivable includes an allowance for doubtful accounts of
$5 million
at
September 30, 2013
.
|
|
|||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Income (loss) from discontinued operations
|
|
|
|
|
|
||||||
Asbestos-related litigation reserves, expenses and related receivables
|
$
|
5
|
|
|
$
|
(3
|
)
|
|
$
|
(7
|
)
|
Water Technologies
|
84
|
|
|
202
|
|
|
29
|
|
|||
Distribution
|
—
|
|
|
(9
|
)
|
|
(6
|
)
|
|||
Gain (loss) on disposal of discontinued operations
|
|
|
|
|
|
|
|
|
|||
Water Technologies
|
148
|
|
|
—
|
|
|
—
|
|
|||
Distribution
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Income before taxes
|
237
|
|
|
190
|
|
|
15
|
|
|||
Income tax benefit (expense)
|
|
|
|
|
|
|
|
|
|||
Benefit (expense) related to income (loss) from discontinued operations
|
|
|
|
|
|
|
|
|
|||
Asbestos-related litigation reserves and expenses
|
1
|
|
|
5
|
|
|
6
|
|
|||
Water Technologies
|
(25
|
)
|
|
(78
|
)
|
|
(5
|
)
|
|||
Distribution
|
—
|
|
|
3
|
|
|
2
|
|
|||
Benefit (expense) related to gain (loss) on disposal of discontinued operations
|
|
|
|
|
|
|
|
|
|||
Water Technologies
|
(56
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||
APAC
|
4
|
|
|
10
|
|
|
—
|
|
|||
Income from discontinued operations (net of taxes)
|
$
|
161
|
|
|
$
|
130
|
|
|
$
|
12
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Financial position
|
|
|
|
|
|
||||||
Current assets
|
$
|
292
|
|
|
$
|
477
|
|
|
|
||
Current liabilities
|
(98
|
)
|
|
(180
|
)
|
|
|
||||
Working capital
|
194
|
|
|
297
|
|
|
|
||||
Noncurrent assets
|
45
|
|
|
333
|
|
|
|
||||
Noncurrent liabilities
|
(1
|
)
|
|
(129
|
)
|
|
|
||||
Stockholders’ equity
|
$
|
238
|
|
|
$
|
501
|
|
|
|
||
Results of operations
|
|
|
|
|
|
||||||
Sales
|
$
|
966
|
|
|
$
|
1,181
|
|
|
$
|
1,362
|
|
Income from operations
|
74
|
|
|
79
|
|
|
98
|
|
|||
Net income
|
63
|
|
|
53
|
|
|
56
|
|
|||
Amounts recorded by Ashland
|
|
|
|
|
|
||||||
Investments and advances
|
$
|
81
|
|
|
$
|
213
|
|
|
$
|
212
|
|
Equity income (loss)
(a)
|
(25
|
)
|
|
26
|
|
|
34
|
|
|||
Distributions received
|
14
|
|
|
11
|
|
|
2
|
|
|||
|
|
|
|
|
|
|
|
|
Facility
|
|
|
|
|||||
(In millions)
|
Severance
|
|
|
costs
|
|
|
Total
|
|
|||
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
|
|
|||
Restructuring reserves
|
95
|
|
|
4
|
|
|
99
|
|
|||
Reserve adjustments
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Utilization (cash paid or otherwise settled)
|
(52
|
)
|
|
(3
|
)
|
|
(55
|
)
|
|||
Balance as of September 30, 2014
|
$
|
56
|
|
|
$
|
9
|
|
|
$
|
65
|
|
|
|
|
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
|
$
|
1,393
|
|
|
$
|
1,393
|
|
|
$
|
1,393
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred compensation investments
(a)
|
184
|
|
|
184
|
|
|
45
|
|
|
139
|
|
|
—
|
|
|||||
Investments of captive insurance company
(a)
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
11
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
1,591
|
|
|
$
|
1,591
|
|
|
$
|
1,441
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency derivatives
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
Total liabilities at fair value
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
|
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.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Foreign currency derivative gains (losses)
|
$
|
(7
|
)
|
|
$
|
1
|
|
|
$
|
7
|
|
(In millions)
|
2014
|
|
|
2013
|
|
||
Foreign currency derivative assets
|
$
|
2
|
|
|
$
|
1
|
|
Notional contract values
|
88
|
|
|
312
|
|
||
|
|
|
|
||||
Foreign currency derivative liabilities
(a)
|
$
|
4
|
|
|
$
|
—
|
|
Notional contract values
|
281
|
|
|
246
|
|
||
|
|
|
|
(a)
|
Fair values of assets or liabilities of $0 denote values less than $1 million.
|
|
|
|
Fair value at
|
||
(In millions)
|
Consolidated balance sheet caption
|
September 30, 2014
|
|
||
Net investment hedge assets
|
Accounts receivable
|
|
$
|
9
|
|
Net investment hedge liabilities
|
Accrued expenses and other liabilities
|
|
5
|
|
(In millions)
|
2014
|
|
|
Change in unrealized gain in AOCI
|
$
|
4
|
|
Tax impact of change in unrealized gain in AOCI
|
(3
|
)
|
(In millions)
|
2014
|
|
|
2013
|
|
||
Land
|
$
|
228
|
|
|
$
|
228
|
|
Buildings
|
730
|
|
|
704
|
|
||
Machinery and equipment
|
3,049
|
|
|
2,986
|
|
||
Construction in progress
|
268
|
|
|
263
|
|
||
Total property, plant and equipment (gross)
|
4,275
|
|
|
4,181
|
|
||
Accumulated depreciation
|
(1,861
|
)
|
|
(1,674
|
)
|
||
Total property, plant and equipment (net)
|
$
|
2,414
|
|
|
$
|
2,507
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Depreciation
|
$
|
304
|
|
|
$
|
268
|
|
|
$
|
270
|
|
Capitalized interest
|
1
|
|
|
1
|
|
|
1
|
|
|
Specialty
|
|
|
Performance
|
|
|
|
|
|
||||||
(In millions)
|
Ingredients
|
|
|
Materials
|
|
(a)
|
Valvoline
|
|
|
Total
|
|
||||
Balance at September 30, 2012
|
$
|
2,202
|
|
|
$
|
315
|
|
|
$
|
166
|
|
|
$
|
2,683
|
|
Currency translation
|
29
|
|
|
(4
|
)
|
|
1
|
|
|
26
|
|
||||
Balance at September 30, 2013
|
2,231
|
|
|
311
|
|
|
167
|
|
|
2,709
|
|
||||
Business realignment adjustment
(b)
|
(39
|
)
|
|
39
|
|
|
—
|
|
|
—
|
|
||||
Other
(c)
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Currency translation
|
(60
|
)
|
|
(4
|
)
|
|
1
|
|
|
(63
|
)
|
||||
Balance at September 30, 2014
|
$
|
2,129
|
|
|
$
|
346
|
|
|
$
|
168
|
|
|
$
|
2,643
|
|
|
|
|
|
|
|
|
|
(a)
|
As of
September 30, 2014
, goodwill consisted of
$10 million
for the Elastomers reporting unit,
$164 million
for the Composites reporting unit and
$172 million
for the Intermediates/Solvents reporting unit.
|
(b)
|
Business realignment adjustment represents the reallocation of goodwill during 2014 as a result of the transfer of Adhesives and Intermediates/Solvents between the Specialty Ingredients and Performance Materials reportable segments. In the fourth quarter of 2014, an error of
$32 million
was identified in the amount of goodwill associated with Intermediates/Solvents that was originally reallocated in the third quarter of 2014. The amount of goodwill transferred from Specialty Ingredients to Performance Materials was revised from
$71 million
to
$39 million
to correct the error. Ashland does not believe that this revision was material to the previously filed financial information.
|
(c)
|
Other caption represents the adjustment of certain items identified from previous acquisitions that were revised within the Consolidated Balance Sheet.
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
Gross
|
|
|
|
|
Net
|
|
|
Gross
|
|
|
|
|
Net
|
|
||||||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
||||||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|
amount
|
|
|
amortization
|
|
|
amount
|
|
||||||
Definite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and trade names
|
$
|
72
|
|
|
$
|
(49
|
)
|
|
$
|
23
|
|
|
$
|
72
|
|
|
$
|
(45
|
)
|
|
$
|
27
|
|
Intellectual property
|
827
|
|
|
(226
|
)
|
|
601
|
|
|
827
|
|
|
(175
|
)
|
|
652
|
|
||||||
Customer relationships
|
481
|
|
|
(118
|
)
|
|
363
|
|
|
507
|
|
|
(84
|
)
|
|
423
|
|
||||||
Total definite-lived intangible assets
|
1,380
|
|
|
(393
|
)
|
|
987
|
|
|
1,406
|
|
|
(304
|
)
|
|
1,102
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
IPR&D
|
19
|
|
|
—
|
|
|
19
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||||
Trademarks and trade names
|
303
|
|
|
—
|
|
|
303
|
|
|
303
|
|
|
—
|
|
|
303
|
|
||||||
Total intangible assets
|
$
|
1,702
|
|
|
$
|
(393
|
)
|
|
$
|
1,309
|
|
|
$
|
1,741
|
|
|
$
|
(304
|
)
|
|
$
|
1,437
|
|
(In millions)
|
2014
|
|
|
2013
|
|
||
4.750% notes, due 2022
|
$
|
1,120
|
|
|
$
|
1,119
|
|
3.875% notes, due 2018
|
700
|
|
|
700
|
|
||
3.000% notes, due 2016
|
600
|
|
|
600
|
|
||
6.875% notes, due 2043
|
376
|
|
|
376
|
|
||
Accounts receivable securitization
|
255
|
|
|
270
|
|
||
6.50% junior subordinated notes, due 2029
|
134
|
|
|
131
|
|
||
Revolving credit facility
|
45
|
|
|
—
|
|
||
Other international loans, interest at a weighted-
|
|
|
|
|
|
||
average rate of 7.0% at September 30, 2014 (6.0% to 10.3%)
|
29
|
|
|
44
|
|
||
Medium-term notes, due 2015-2019, interest at a weighted-
|
|
|
|
|
|
||
average rate of 8.7% at September 30, 2014 (8.4% to 9.4%)
|
14
|
|
|
14
|
|
||
Other
|
7
|
|
|
13
|
|
||
Total debt
|
3,280
|
|
|
3,267
|
|
||
Short-term debt
|
(329
|
)
|
|
(308
|
)
|
||
Current portion of long-term debt
|
(9
|
)
|
|
(12
|
)
|
||
Long-term debt (less current portion)
|
$
|
2,942
|
|
|
$
|
2,947
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Interest expense
(a)
|
$
|
163
|
|
|
$
|
273
|
|
|
$
|
251
|
|
Interest income
|
(6
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|||
Other financing costs
(b)
|
9
|
|
|
13
|
|
|
74
|
|
|||
|
$
|
166
|
|
|
$
|
282
|
|
|
$
|
317
|
|
|
|
|
|
|
|
(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)
|
2014
|
|
|
2013
|
|
(a)
|
2012
|
|
(b)
|
|||
Normal amortization
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
24
|
|
|
Accelerated amortization
|
—
|
|
|
50
|
|
|
30
|
|
|
|||
Total
|
$
|
14
|
|
|
$
|
65
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
(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.
|
(In millions)
|
2014
|
|
|
2013
|
|
||
Deferred compensation investments
|
$
|
184
|
|
|
$
|
181
|
|
Debt issuance costs
|
49
|
|
|
60
|
|
||
Note receivables
|
44
|
|
|
25
|
|
||
Environmental insurance receivables
|
24
|
|
|
26
|
|
||
Land use rights
|
23
|
|
|
34
|
|
||
Defined benefit plan assets
|
22
|
|
|
48
|
|
||
Life insurance policies
|
18
|
|
|
21
|
|
||
Tax receivables
|
17
|
|
|
26
|
|
||
Customer incentive
|
16
|
|
|
17
|
|
||
Debt defeasance assets
|
15
|
|
|
16
|
|
||
Other
|
98
|
|
|
98
|
|
||
|
$
|
510
|
|
|
$
|
552
|
|
(In millions)
|
2014
|
|
|
2013
|
|
||
Environmental remediation reserves
|
$
|
158
|
|
|
$
|
171
|
|
Accrued tax liabilities (including sales and franchise)
|
74
|
|
|
95
|
|
||
Deferred compensation
|
72
|
|
|
75
|
|
||
Insurance reserves related to workers compensation and general liability
|
50
|
|
|
73
|
|
||
Other
|
106
|
|
|
106
|
|
||
|
$
|
460
|
|
|
$
|
520
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Minimum rentals (including rentals under short-term leases)
(a)
|
$
|
69
|
|
|
$
|
57
|
|
|
$
|
95
|
|
Contingent rentals
|
7
|
|
|
6
|
|
|
7
|
|
|||
Sublease rental income
|
(2
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|||
|
$
|
74
|
|
|
$
|
61
|
|
|
$
|
93
|
|
|
|
|
|
|
|
(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.
|
(b)
|
The table above excludes
$13 million
of lease commitments during
2013
and
2012
that were related to the Water Technologies business that has been reclassified to discontinued operations in these periods due to its sale in July 2014.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
34
|
|
|
$
|
7
|
|
|
$
|
29
|
|
State
|
10
|
|
|
(6
|
)
|
|
(1
|
)
|
|||
Foreign
|
62
|
|
|
42
|
|
|
40
|
|
|||
|
106
|
|
|
43
|
|
|
68
|
|
|||
Deferred
|
(294
|
)
|
|
153
|
|
|
(125
|
)
|
|||
Income tax expense (benefit)
|
$
|
(188
|
)
|
|
$
|
196
|
|
|
$
|
(57
|
)
|
(In millions)
|
2014
|
|
|
2013
(g)
|
|
||
Deferred tax assets
|
|
|
|
||||
Foreign net operating loss carryforwards
(a)
|
$
|
84
|
|
|
$
|
108
|
|
Employee benefit obligations
|
544
|
|
|
408
|
|
||
Environmental, self-insurance and litigation reserves (net of receivables)
|
172
|
|
|
187
|
|
||
State net operating/capital loss carryforwards
(b)
|
58
|
|
|
77
|
|
||
Compensation accruals
|
91
|
|
|
84
|
|
||
Credit carryforwards
(c)
|
25
|
|
|
131
|
|
||
Uncollectible accounts receivable
|
2
|
|
|
5
|
|
||
Other items
(d)
|
63
|
|
|
64
|
|
||
Valuation allowances
(e)
|
(148
|
)
|
|
(166
|
)
|
||
Total deferred tax assets
|
891
|
|
|
898
|
|
||
Deferred tax liabilities
|
|
|
|
|
|
||
Goodwill and other intangibles
(f)
|
409
|
|
|
537
|
|
||
Property, plant and equipment
|
416
|
|
|
489
|
|
||
Unremitted earnings
|
19
|
|
|
188
|
|
||
Total deferred tax liabilities
|
844
|
|
|
1,214
|
|
||
Net deferred tax asset (liability)
|
$
|
47
|
|
|
$
|
(316
|
)
|
|
|
|
|
(a)
|
Gross net operating loss carryforwards will expire in future years as follows:
$9 million
in
2015
,
$3 million
in
2016
and the remaining balance in other future years.
|
(b)
|
Gross net operating/capital loss carryforwards include offset for uncertain tax positions and will expire in future years as follows:
$13 million
in
2015
,
$32 million
in
2016
and the remaining balance in other future years.
|
(c)
|
Credit carryforwards include offset for uncertain tax positions and consist primarily of foreign tax credits of
$11 million
expiring in
2023
and alternative minimum tax credits of
$11 million
with no expiration date.
|
(d)
|
Other items include offset for impact of uncertain tax positions.
|
(e)
|
Valuation allowances primarily relate to certain state and foreign net operating loss carryforwards as well as capital losses.
|
(f)
|
The total gross amount of goodwill as of
September 30, 2014
expected to be deductible for tax purposes is
$56 million
.
|
(g)
|
The 2013 column includes
$32 million
of net deferred income tax liabilities related to Water Technologies which are classified as held for sale in the Consolidated Balance Sheet as of September 30, 2013.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
||||||
United States
|
$
|
(862
|
)
|
|
$
|
227
|
|
|
$
|
(513
|
)
|
Foreign
|
746
|
|
|
522
|
|
|
470
|
|
|||
|
$
|
(116
|
)
|
|
$
|
749
|
|
|
$
|
(43
|
)
|
|
|
|
|
|
|
||||||
Income taxes computed at U.S. statutory rate (35%)
|
$
|
(40
|
)
|
|
$
|
262
|
|
|
$
|
(15
|
)
|
Increase (decrease) in amount computed resulting from
|
|
|
|
|
|
|
|
|
|||
Net gain on divestitures
(a)
|
37
|
|
|
—
|
|
|
2
|
|
|||
Uncertain tax positions
|
33
|
|
|
11
|
|
|
(1
|
)
|
|||
Valuation allowance (release)
(b)
|
14
|
|
|
(12
|
)
|
|
40
|
|
|||
Claim for research and development credits
(c)
|
(2
|
)
|
|
(14
|
)
|
|
(1
|
)
|
|||
State taxes
(d)
|
(16
|
)
|
|
23
|
|
|
(7
|
)
|
|||
Net impact of foreign results
(e)
|
(214
|
)
|
|
(74
|
)
|
|
(70
|
)
|
|||
Other items
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||
Income tax expense (benefit)
|
$
|
(188
|
)
|
|
$
|
196
|
|
|
$
|
(57
|
)
|
|
|
|
|
|
|
(a)
|
2014 tax adjustments associated with the Water Technologies business and ASK divestitures are a
$39 million
charge and
$2 million
gain respectively. 2012 tax adjustments associated with the PVAc/Synlubes divestitures.
|
(b)
|
Related to foreign and state deferred tax asset valuation allowances/(releases).
|
(c)
|
2013 includes a benefit related to credits signed into law on a retroactive basis.
|
(d)
|
2014 and 2013 include expense of
$5 million
and
$7 million
, respectively, recorded for deferred tax adjustments, primarily attributable to state rate changes.
|
(e)
|
2014 includes a
$168 million
tax benefit related to the reversal of deferred tax liabilities for outside basis differences and other APB No. 23 related matters and a
$14 million
expense recorded for a rate change in a foreign jurisdiction. 2013 includes a
$17 million
benefit recorded for a rate change in a foreign jurisdiction.
|
(In millions)
|
|
|
|
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
|
|
|
Increases related to positions taken on items from prior years
|
29
|
|
|
Decreases related to positions taken on items from prior years
|
(13
|
)
|
|
Increases related to positions taken in the current year
|
31
|
|
|
Lapse of statute of limitations
|
(13
|
)
|
|
Disposition of Water Technologies
|
(12
|
)
|
|
Balance at September 30, 2014
|
$
|
155
|
|
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
||||||
Net periodic benefit costs (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
38
|
|
|
$
|
43
|
|
|
$
|
36
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
190
|
|
|
175
|
|
|
198
|
|
|
9
|
|
|
7
|
|
|
12
|
|
||||||
Curtailment, settlement and other
|
31
|
|
|
—
|
|
|
(1
|
)
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
||||||
Expected return on plan assets
|
(237
|
)
|
|
(238
|
)
|
|
(226
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
(a)
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(21
|
)
|
|
(21
|
)
|
|
(14
|
)
|
||||||
Actuarial (gain) loss
|
431
|
|
|
(472
|
)
|
|
482
|
|
|
15
|
|
|
(26
|
)
|
|
11
|
|
||||||
|
$
|
451
|
|
|
$
|
(494
|
)
|
|
$
|
487
|
|
|
$
|
(15
|
)
|
|
$
|
(38
|
)
|
|
$
|
11
|
|
Weighted-average plan assumptions
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.68
|
%
|
|
3.70
|
%
|
|
4.76
|
%
|
|
4.28
|
%
|
|
3.23
|
%
|
|
4.39
|
%
|
||||||
Rate of compensation increase
|
3.59
|
%
|
|
3.66
|
%
|
|
3.69
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expected long-term rate of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
return on plan assets
|
7.67
|
%
|
|
7.26
|
%
|
|
7.67
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Changes to the post-65 Ashland Medical plan resulted in negative plan amendments that are being amortized within the other postretirement benefits caption.
|
(b)
|
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
91%
of the projected benefit obligation at
September 30, 2014
. Other postretirement benefit plans consist of U.S. and Canada, with the U.S. plan representing approximately
92%
of the accumulated postretirement benefit obligation at
September 30, 2014
. Non-U.S. plans use assumptions generally consistent with those of U.S. plans.
|
|
Pension
|
|
Postretirement
|
||||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Prior service credit
|
$
|
(6
|
)
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
Curtailment, settlement and other
|
3
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Amortization of prior service credit
|
2
|
|
|
2
|
|
|
21
|
|
|
21
|
|
||||
Total
|
$
|
(1
|
)
|
|
$
|
(12
|
)
|
|
$
|
31
|
|
|
$
|
22
|
|
|
|
|
|
|
|
|
|
||||||||
Total recognized in net periodic benefit cost (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||
and accumulated other comprehensive income
|
$
|
450
|
|
|
$
|
(506
|
)
|
|
$
|
16
|
|
|
$
|
(16
|
)
|
|
|
|
|
Other
|
|
|||
|
Pension
|
|
|
postretirement
|
|
|||
(In millions)
|
benefits
|
|
|
|
benefits
|
|
||
Prior service credit
|
$
|
(3
|
)
|
|
|
$
|
(17
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Prior service credit
|
$
|
(21
|
)
|
|
$
|
(20
|
)
|
|
$
|
(62
|
)
|
|
$
|
(93
|
)
|
|
|
|
|
|
Other postretirement
|
||||||||||
|
Pension plans
|
|
benefit plans
|
||||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Change in benefit obligations
|
|
|
|
|
|
|
|
||||||||
Benefit obligations at October 1
|
$
|
4,307
|
|
|
$
|
4,877
|
|
|
$
|
217
|
|
|
$
|
255
|
|
Service cost
|
38
|
|
|
43
|
|
|
2
|
|
|
2
|
|
||||
Interest cost
|
190
|
|
|
175
|
|
|
9
|
|
|
7
|
|
||||
Participant contributions
|
2
|
|
|
2
|
|
|
12
|
|
|
13
|
|
||||
Benefits paid
|
(245
|
)
|
|
(241
|
)
|
|
(34
|
)
|
|
(34
|
)
|
||||
Actuarial (gain) loss
|
503
|
|
|
(549
|
)
|
|
15
|
|
|
(26
|
)
|
||||
Plan amendment
|
(6
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign currency exchange rate changes
|
(15
|
)
|
|
15
|
|
|
(1
|
)
|
|
—
|
|
||||
Other
|
4
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Divestiture
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Curtailment and settlement
|
(325
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Benefit obligations at September 30
|
$
|
4,326
|
|
|
$
|
4,307
|
|
|
$
|
210
|
|
|
$
|
217
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Value of plan assets at October 1
|
$
|
3,381
|
|
|
$
|
3,320
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
309
|
|
|
161
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
43
|
|
|
128
|
|
|
22
|
|
|
21
|
|
||||
Participant contributions
|
2
|
|
|
2
|
|
|
12
|
|
|
13
|
|
||||
Benefits paid
|
(245
|
)
|
|
(241
|
)
|
|
(34
|
)
|
|
(34
|
)
|
||||
Foreign currency exchange rate changes
|
(5
|
)
|
|
12
|
|
|
—
|
|
|
—
|
|
||||
Settlement
|
(359
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Divestiture
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
6
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Value of plan assets at September 30
|
$
|
3,075
|
|
|
$
|
3,381
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Unfunded status of the plans
|
$
|
(1,251
|
)
|
|
$
|
(926
|
)
|
|
$
|
(210
|
)
|
|
$
|
(217
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts recognized in the balance sheet
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncurrent benefit assets
|
$
|
22
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current benefit liabilities
|
(15
|
)
|
|
(15
|
)
|
|
(19
|
)
|
|
(19
|
)
|
||||
Held for sale current liabilities
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Noncurrent benefit liabilities
|
(1,258
|
)
|
|
(894
|
)
|
|
(191
|
)
|
|
(198
|
)
|
||||
Held for sale noncurrent liabilities
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
||||
Net amount recognized
|
$
|
(1,251
|
)
|
|
$
|
(926
|
)
|
|
$
|
(210
|
)
|
|
$
|
(217
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average plan assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
4.18
|
%
|
|
4.68
|
%
|
|
3.85
|
%
|
|
4.28
|
%
|
||||
Rate of compensation increase
|
3.18
|
%
|
|
3.59
|
%
|
|
—
|
|
|
—
|
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
|
Non-
|
|
|
|
|
|
|
Non-
|
|
|
|
||||||||||
|
Qualified
|
|
|
qualified
|
|
|
|
|
Qualified
|
|
|
qualified
|
|
|
|
||||||||
(In millions)
|
plans
(a)
|
|
|
plans
|
|
|
Total
|
|
|
plans
(a)
|
|
|
plans
|
|
|
Total
|
|
||||||
Projected benefit obligation
|
$
|
3,930
|
|
|
$
|
172
|
|
|
$
|
4,102
|
|
|
$
|
3,612
|
|
|
$
|
171
|
|
|
$
|
3,783
|
|
Accumulated benefit obligation
|
3,880
|
|
|
165
|
|
|
4,045
|
|
|
3,530
|
|
|
163
|
|
|
3,693
|
|
||||||
Fair value of plan assets
|
2,832
|
|
|
—
|
|
|
2,832
|
|
|
2,809
|
|
|
—
|
|
|
2,809
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
|
102
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. government securities
|
180
|
|
|
7
|
|
|
173
|
|
|
—
|
|
||||
Other government securities
|
165
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
Corporate debt instruments
|
1,172
|
|
|
788
|
|
|
384
|
|
|
—
|
|
||||
Corporate stocks
|
326
|
|
|
158
|
|
|
168
|
|
|
—
|
|
||||
Insurance contracts
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Private equity and hedge funds
|
1,085
|
|
|
—
|
|
|
—
|
|
|
1,085
|
|
||||
Other investments
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Total assets at fair value
|
$
|
3,075
|
|
|
$
|
1,055
|
|
|
$
|
902
|
|
|
$
|
1,118
|
|
|
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
|
|
|
Total
|
|
|
Private
|
|
|
|
||||
|
Level 3
|
|
|
equity and
|
|
|
Other
|
|
|||
(In millions)
|
assets
|
|
|
hedge funds
|
|
|
investments
|
|
|||
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
|
|
|||
Purchases
|
71
|
|
|
71
|
|
|
—
|
|
|||
Sales
|
(258
|
)
|
|
(258
|
)
|
|
—
|
|
|||
Actual return on plan assets
|
|
|
|
|
|
||||||
Relating to assets held at September 30, 2014
|
67
|
|
|
72
|
|
|
(5
|
)
|
|||
Relating to assets sold during 2014
|
10
|
|
|
10
|
|
|
—
|
|
|||
Balance as of September 30, 2014
|
$
|
1,118
|
|
|
$
|
1,085
|
|
|
$
|
33
|
|
|
|
|
Actual at September 30
|
||||
(In millions)
|
Target
|
|
2014
|
|
|
2013
|
|
Plan assets allocation
|
|
|
|
|
|
||
Equity securities
|
40 - 80%
|
|
51
|
%
|
|
50
|
%
|
Debt securities
|
20 - 45%
|
|
47
|
%
|
|
48
|
%
|
Other
|
0 - 20%
|
|
2
|
%
|
|
2
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Other
|
|
|||
|
Pension
|
|
|
postretirement
|
|
|||
(In millions)
|
benefits
|
|
|
|
benefits
|
|
||
2015
|
$
|
232
|
|
|
|
$
|
19
|
|
2016
|
233
|
|
|
|
19
|
|
||
2017
|
234
|
|
|
|
18
|
|
||
2018
|
239
|
|
|
|
18
|
|
||
2019
|
243
|
|
|
|
16
|
|
||
2020 - 2024
|
1,283
|
|
|
|
67
|
|
(In thousands)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Open claims - beginning of year
|
65
|
|
|
66
|
|
|
72
|
|
New claims filed
|
2
|
|
|
2
|
|
|
2
|
|
Claims settled
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Claims dismissed
|
(1
|
)
|
|
(2
|
)
|
|
(7
|
)
|
Open claims - end of year
|
65
|
|
|
65
|
|
|
66
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Asbestos reserve - beginning of year
|
$
|
463
|
|
|
$
|
522
|
|
|
$
|
543
|
|
Reserve adjustment
|
4
|
|
|
(28
|
)
|
|
11
|
|
|||
Amounts paid
|
(29
|
)
|
|
(31
|
)
|
|
(32
|
)
|
|||
Asbestos reserve - end of year
|
$
|
438
|
|
|
$
|
463
|
|
|
$
|
522
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Insurance receivable - beginning of year
|
$
|
408
|
|
|
$
|
423
|
|
|
$
|
431
|
|
Receivable adjustment
|
22
|
|
|
(3
|
)
|
|
19
|
|
|||
Amounts collected
|
(28
|
)
|
|
(12
|
)
|
|
(27
|
)
|
|||
Insurance receivable - end of year
|
$
|
402
|
|
|
$
|
408
|
|
|
$
|
423
|
|
(In thousands)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Open claims - beginning of year
|
21
|
|
|
21
|
|
|
21
|
|
New claims filed
|
1
|
|
|
1
|
|
|
1
|
|
Claims dismissed
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Open claims - end of year
|
21
|
|
|
21
|
|
|
21
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Asbestos reserve - beginning of year
|
$
|
342
|
|
|
$
|
320
|
|
|
$
|
311
|
|
Reserve adjustments
|
10
|
|
|
46
|
|
|
30
|
|
|||
Amounts paid
|
(23
|
)
|
|
(24
|
)
|
|
(21
|
)
|
|||
Asbestos reserve - end of year
|
$
|
329
|
|
|
$
|
342
|
|
|
$
|
320
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Insurance receivable - beginning of year
|
$
|
75
|
|
|
$
|
56
|
|
|
$
|
48
|
|
Receivable adjustment
|
3
|
|
|
19
|
|
|
9
|
|
|||
Amounts collected
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Insurance receivable - end of year
|
$
|
77
|
|
|
$
|
75
|
|
|
$
|
56
|
|
(In millions)
|
2014
|
|
|
2013
|
|
||
Environmental remediation reserve - beginning of year
|
$
|
211
|
|
|
$
|
228
|
|
Disbursements, net of cost recoveries
|
(46
|
)
|
|
(50
|
)
|
||
Revised obligation estimates and accretion
|
32
|
|
|
31
|
|
||
Foreign currency translation
|
—
|
|
|
2
|
|
||
Environmental remediation reserve - end of year
|
$
|
197
|
|
|
$
|
211
|
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Environmental expense
|
$
|
29
|
|
|
$
|
28
|
|
|
$
|
23
|
|
Accretion
|
3
|
|
|
3
|
|
|
4
|
|
|||
Legal expense
|
5
|
|
|
2
|
|
|
2
|
|
|||
Total expense
|
37
|
|
|
33
|
|
|
29
|
|
|||
|
|
|
|
|
|
||||||
Insurance receivable
|
(4
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|||
Total expense, net of receivable activity
(a)
|
$
|
33
|
|
|
$
|
29
|
|
|
$
|
23
|
|
|
|
|
|
|
|
(a)
|
Net expense of
$4 million
,
$6 million
and
$9 million
for the fiscal years ended
September 30, 2014
,
2013
and
2012
, 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 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, 2014
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Net change in translation gain (loss):
|
|
|
|
|
|
||||||
Unrealized translation gain (loss)
|
$
|
(163
|
)
|
|
$
|
(3
|
)
|
|
$
|
(166
|
)
|
Reclassification adjustment for losses
|
|
|
|
|
|
||||||
included in net income
(a)
|
6
|
|
|
—
|
|
|
6
|
|
|||
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
||||||
Adjustment of unrecognized prior service credit
|
6
|
|
|
(2
|
)
|
|
4
|
|
|||
Amortization of unrecognized prior service
|
|
|
|
|
|
||||||
credits included in net income
(b)
|
(36
|
)
|
|
11
|
|
|
(25
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
(187
|
)
|
|
$
|
6
|
|
|
$
|
(181
|
)
|
|
|
|
|
|
|
||||||
Year ended September 30, 2013
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Unrealized translation gain (loss)
|
$
|
45
|
|
|
$
|
(8
|
)
|
|
$
|
37
|
|
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
||||||
Adjustment of unrecognized prior service credit
|
13
|
|
|
(3
|
)
|
|
10
|
|
|||
Amortization of unrecognized prior service
|
|
|
|
|
|
||||||
credits included in net income
(b)
|
(23
|
)
|
|
8
|
|
|
(15
|
)
|
|||
Net change in interest rate hedges:
|
|
|
|
|
|
||||||
Unrealized loss during period
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Reclassification adjustment for losses
|
|
|
|
|
|
||||||
included in net income
(c)
|
65
|
|
|
(24
|
)
|
|
41
|
|
|||
Total other comprehensive income (loss)
|
$
|
97
|
|
|
$
|
(27
|
)
|
|
$
|
70
|
|
|
|
|
|
|
|
||||||
Year ended September 30, 2012
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Unrealized translation gain (loss)
|
$
|
(99
|
)
|
|
$
|
12
|
|
|
$
|
(87
|
)
|
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
||||||
Adjustment of unrecognized prior service credit
|
48
|
|
|
(15
|
)
|
|
33
|
|
|||
Amortization of unrecognized prior service
|
|
|
|
|
|
||||||
credits included in net income
(b)
|
(16
|
)
|
|
7
|
|
|
(9
|
)
|
|||
Net change in interest rate hedges:
|
|
|
|
|
|
||||||
Unrealized loss during period
|
(64
|
)
|
|
25
|
|
|
(39
|
)
|
|||
Reclassification adjustment for losses
|
|
|
|
|
|
||||||
included in net income
(c)
|
22
|
|
|
(9
|
)
|
|
13
|
|
|||
Total other comprehensive income (loss)
|
$
|
(109
|
)
|
|
$
|
20
|
|
|
$
|
(89
|
)
|
|
|
|
|
|
|
(a)
|
Losses from the translation adjustment included in net income are attributable to foreign Water Technologies subsidiaries sold with the divestiture. These adjustments are recorded in the discontinued operations caption of the Statements of Consolidated Comprehensive Income.
|
(b)
|
Amortization of unrecognized prior service credits are included in the calculation of net periodic benefit costs (income) for pension and other postretirement plans. For specific financial statement captions impacted by the amortization see the table below.
|
(c)
|
Losses from interest rate hedges are recorded in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income. See Note F for further information.
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Cost of sales
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
$
|
(4
|
)
|
Selling, general and administrative expense
|
(14
|
)
|
|
(14
|
)
|
|
(10
|
)
|
|||
Discontinued operations
|
(16
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|||
Total amortization of unrecognized prior service credits
|
$
|
(36
|
)
|
|
$
|
(23
|
)
|
|
$
|
(16
|
)
|
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
SARs
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
13
|
|
Nonvested stock awards
|
10
|
|
|
4
|
|
|
5
|
|
|||
Performance share awards
|
8
|
|
|
9
|
|
|
10
|
|
|||
|
$
|
34
|
|
|
$
|
30
|
|
|
$
|
28
|
|
|
|
|
|
|
|
||||||
Income tax benefit
|
$
|
13
|
|
|
$
|
11
|
|
|
$
|
11
|
|
(In millions except per share data)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Weighted-average fair value per share of SARs granted
|
$
|
34.96
|
|
|
$
|
29.93
|
|
|
$
|
23.96
|
|
Assumptions (weighted-average)
|
|
|
|
|
|
|
|
||||
Risk-free interest rate
|
1.4
|
%
|
|
0.7
|
%
|
|
1.0
|
%
|
|||
Expected dividend yield
|
1.5
|
%
|
|
1.3
|
%
|
|
1.3
|
%
|
|||
Expected volatility
|
49.7
|
%
|
|
55.0
|
%
|
|
55.0
|
%
|
|||
Expected life (in years)
|
5
|
|
|
5
|
|
|
5
|
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
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
|
2,658
|
|
|
$
|
55.84
|
|
|
2,908
|
|
|
$
|
45.94
|
|
|
3,546
|
|
|
$
|
39.52
|
|
Granted
|
391
|
|
|
89.69
|
|
|
888
|
|
|
70.41
|
|
|
700
|
|
|
55.75
|
|
|||
Exercised
|
(1,123
|
)
|
|
54.14
|
|
|
(1,037
|
)
|
|
39.95
|
|
|
(1,273
|
)
|
|
33.30
|
|
|||
Forfeitures and expirations
|
(128
|
)
|
|
75.82
|
|
|
(101
|
)
|
|
61.96
|
|
|
(65
|
)
|
|
48.64
|
|
|||
Outstanding - end of year
(a)
|
1,798
|
|
|
62.85
|
|
|
2,658
|
|
|
55.84
|
|
|
2,908
|
|
|
45.94
|
|
|||
Exercisable - end of year
|
1,066
|
|
|
53.80
|
|
|
1,390
|
|
|
47.46
|
|
|
1,832
|
|
|
41.97
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Exercise prices per share for SARs outstanding at
September 30, 2014
ranged from
$9.49
to
$49.79
for
197,000
shares, from
$51.86
to
$55.73
for
657,000
shares, from
$64.92
to
$70.37
for
619,000
shares, and from
$87.86
to
$89.69
for
325,000
shares. The weighted-average remaining contractual life of outstanding SARs and stock options was
7.2
years and exercisable SARs and stock options was
6.3
years.
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
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
|
140
|
|
|
$
|
56.97
|
|
|
333
|
|
|
$
|
33.80
|
|
|
368
|
|
|
$
|
33.05
|
|
Granted
|
192
|
|
|
94.17
|
|
|
22
|
|
|
84.12
|
|
|
35
|
|
|
65.94
|
|
|||
Vested
|
(78
|
)
|
|
47.07
|
|
|
(205
|
)
|
|
22.50
|
|
|
(56
|
)
|
|
45.83
|
|
|||
Forfeitures
|
(33
|
)
|
|
83.84
|
|
|
(10
|
)
|
|
51.01
|
|
|
(14
|
)
|
|
48.62
|
|
|||
Nonvested - end of year
|
221
|
|
|
88.81
|
|
|
140
|
|
|
56.97
|
|
|
333
|
|
|
33.80
|
|
|
|
|
|
|
Weighted-
|
|
||
|
|
|
Target
|
|
|
average
|
|
|
|
|
|
shares
|
|
|
fair value
|
|
|
(In thousands)
|
Performance period
|
|
granted
|
|
(a)
|
per share
|
|
|
Fiscal Year 2014
|
October 1, 2013 - September 30, 2016
|
|
110
|
|
|
$
|
85.84
|
|
Fiscal Year 2013
|
October 1, 2012 - September 30, 2015
|
|
134
|
|
|
$
|
73.50
|
|
Fiscal Year 2012
|
October 1, 2011 - September 30, 2014
|
|
199
|
|
|
$
|
63.26
|
|
|
|
|
|
|
|
(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%
.
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Risk-free interest rate
|
0.1% - 0.6%
|
|
|
0.2% - 0.3%
|
|
|
0.1% - 0.4%
|
|
Expected dividend yield
|
1.4
|
%
|
|
1.3
|
%
|
|
1.2
|
%
|
Expected life (in years)
|
3
|
|
|
3
|
|
|
3
|
|
Expected volatility
|
32.1
|
%
|
|
37.6
|
%
|
|
56.3
|
%
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
|
|
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
|
433
|
|
|
$
|
65.05
|
|
|
480
|
|
|
$
|
54.39
|
|
|
577
|
|
|
$
|
30.92
|
|
Granted
(a)
|
155
|
|
|
81.09
|
|
|
152
|
|
|
69.74
|
|
|
325
|
|
|
41.09
|
|
|||
Vested
(a)
|
(183
|
)
|
|
62.05
|
|
|
(175
|
)
|
|
39.55
|
|
|
(309
|
)
|
|
6.69
|
|
|||
Forfeitures
|
(37
|
)
|
|
75.02
|
|
|
(24
|
)
|
|
67.06
|
|
|
(113
|
)
|
|
26.84
|
|
|||
Nonvested - end of year
|
368
|
|
|
72.20
|
|
|
433
|
|
|
65.05
|
|
|
480
|
|
|
54.39
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The current year includes
45
additional shares from the fiscal 2011 through 2013 plans, 2013 includes
18
additional shares from the fiscal 2010 through 2012 plan and 2012 includes
126
additional shares from the fiscal 2009 through 2011 plan since a portion of each plans payout was in excess of the initial
100%
target.
|
|
Sales from
|
|
|
|
|
|
Property, plant
|
||||||||||||||||||||
|
external customers
|
|
Net assets (liabilities)
|
|
and equipment - net
|
||||||||||||||||||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|||||||
United States
|
$
|
3,076
|
|
|
$
|
3,130
|
|
|
$
|
3,460
|
|
|
$
|
(160
|
)
|
|
$
|
276
|
|
|
$
|
1,721
|
|
|
$
|
1,746
|
|
International
|
3,045
|
|
|
2,961
|
|
|
3,012
|
|
|
3,743
|
|
|
4,277
|
|
|
693
|
|
|
761
|
|
|||||||
|
$
|
6,121
|
|
|
$
|
6,091
|
|
|
$
|
6,472
|
|
|
$
|
3,583
|
|
|
$
|
4,553
|
|
|
$
|
2,414
|
|
|
$
|
2,507
|
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
||||||
Reportable Segment Information
|
|
|
|
|
|
||||||
Years Ended September 30
|
|
|
|
|
|
||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Sales
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
2,498
|
|
|
$
|
2,478
|
|
|
$
|
2,699
|
|
Performance Materials
|
1,582
|
|
|
1,617
|
|
|
1,739
|
|
|||
Valvoline
|
2,041
|
|
|
1,996
|
|
|
2,034
|
|
|||
|
$
|
6,121
|
|
|
$
|
6,091
|
|
|
$
|
6,472
|
|
Equity income (expense)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
9
|
|
Performance Materials
|
(38
|
)
|
|
10
|
|
|
13
|
|
|||
Valvoline
|
10
|
|
|
13
|
|
|
12
|
|
|||
Unallocated and other
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
|
(25
|
)
|
|
26
|
|
|
34
|
|
|||
Other income (expense)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
(2
|
)
|
|
14
|
|
|
(2
|
)
|
|||
Performance Materials
|
5
|
|
|
6
|
|
|
3
|
|
|||
Valvoline
|
20
|
|
|
11
|
|
|
10
|
|
|||
Unallocated and other
|
4
|
|
|
7
|
|
|
8
|
|
|||
|
27
|
|
|
38
|
|
|
19
|
|
|||
|
$
|
2
|
|
|
$
|
64
|
|
|
$
|
53
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
253
|
|
|
$
|
243
|
|
|
$
|
399
|
|
Performance Materials
|
7
|
|
|
106
|
|
|
157
|
|
|||
Valvoline
|
323
|
|
|
295
|
|
|
236
|
|
|||
Unallocated and other
|
(537
|
)
|
|
395
|
|
|
(511
|
)
|
|||
|
$
|
46
|
|
|
$
|
1,039
|
|
|
$
|
281
|
|
Assets
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
5,756
|
|
|
$
|
5,994
|
|
|
$
|
6,167
|
|
Performance Materials
|
1,395
|
|
|
1,518
|
|
|
1,633
|
|
|||
Valvoline
|
1,073
|
|
|
1,051
|
|
|
1,017
|
|
|||
Unallocated and other
|
2,727
|
|
|
3,525
|
|
|
3,707
|
|
|||
|
$
|
10,951
|
|
|
$
|
12,088
|
|
|
$
|
12,524
|
|
|
|
|
|
|
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
||||||
Reportable Segment Information (continued)
|
|
|
|
|
|
||||||
Years Ended September 30
|
|
|
|
|
|
||||||
(In millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||
Investment in equity affiliates
|
|
|
|
|
|
||||||
Specialty Ingredients
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
11
|
|
Performance Materials
(b)
|
23
|
|
|
157
|
|
|
156
|
|
|||
Valvoline
|
44
|
|
|
40
|
|
|
41
|
|
|||
Unallocated and other
|
4
|
|
|
4
|
|
|
4
|
|
|||
|
$
|
81
|
|
|
$
|
213
|
|
|
$
|
212
|
|
Operating income not affecting cash during the year
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
262
|
|
|
$
|
242
|
|
|
$
|
243
|
|
Performance Materials
|
91
|
|
|
75
|
|
|
74
|
|
|||
Valvoline
|
37
|
|
|
35
|
|
|
36
|
|
|||
Unallocated and other
|
3
|
|
|
4
|
|
|
6
|
|
|||
|
393
|
|
|
356
|
|
|
359
|
|
|||
Other items
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
25
|
|
|
52
|
|
|
52
|
|
|||
Performance Materials
|
7
|
|
|
6
|
|
|
5
|
|
|||
Valvoline
|
7
|
|
|
6
|
|
|
5
|
|
|||
Unallocated and other
(a)
|
446
|
|
|
(410
|
)
|
|
413
|
|
|||
|
485
|
|
|
(346
|
)
|
|
475
|
|
|||
|
$
|
878
|
|
|
$
|
10
|
|
|
$
|
834
|
|
Property, plant and equipment - net
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
1,433
|
|
|
$
|
1,445
|
|
|
$
|
1,455
|
|
Performance Materials
|
508
|
|
|
551
|
|
|
566
|
|
|||
Valvoline
|
272
|
|
|
270
|
|
|
262
|
|
|||
Unallocated and other
|
201
|
|
|
241
|
|
|
222
|
|
|||
|
$
|
2,414
|
|
|
$
|
2,507
|
|
|
$
|
2,505
|
|
Additions to property, plant and equipment
|
|
|
|
|
|
|
|
|
|||
Specialty Ingredients
|
$
|
159
|
|
|
$
|
144
|
|
|
$
|
121
|
|
Performance Materials
|
38
|
|
|
43
|
|
|
58
|
|
|||
Valvoline
|
36
|
|
|
41
|
|
|
40
|
|
|||
Unallocated and other
|
15
|
|
|
36
|
|
|
23
|
|
|||
|
$
|
248
|
|
|
$
|
264
|
|
|
$
|
242
|
|
|
|
|
|
|
|
(a)
|
Includes losses on pension and other postretirement benefit plan remeasurements of
$438 million
in
2014
and
$406 million
in
2012
, and an actuarial gain on pension and other postretirement benefit plan remeasurement of
$417 million
in
2013
. 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.
|
(b)
|
ASK joint venture sold during 2014.
|
Quarters ended
|
December 31
|
|
March 31
|
|
June 30
|
|
September 30
|
||||||||||||||||||||||||
(In millions except per share data)
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
(a)
|
|
|
2013
(b)
|
|
||||||||||||||
Sales
|
$
|
1,432
|
|
|
$
|
1,448
|
|
|
$
|
1,545
|
|
|
$
|
1,550
|
|
|
$
|
1,605
|
|
|
$
|
1,624
|
|
|
$
|
1,538
|
|
|
$
|
1,470
|
|
Cost of sales
|
1,048
|
|
|
1,052
|
|
|
1,168
|
|
|
1,124
|
|
|
1,161
|
|
|
1,192
|
|
|
1,227
|
|
|
936
|
|
||||||||
Gross profit as a percentage of sales
|
26.8
|
%
|
|
27.3
|
%
|
|
24.4
|
%
|
|
27.5
|
%
|
|
27.7
|
%
|
|
26.6
|
%
|
|
20.2
|
%
|
|
36.3
|
%
|
||||||||
Operating income (loss)
|
143
|
|
|
147
|
|
|
(64
|
)
|
|
184
|
|
|
143
|
|
|
175
|
|
|
(175
|
)
|
|
532
|
|
||||||||
Income (loss) from continuing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
operations
|
88
|
|
|
80
|
|
|
(61
|
)
|
|
48
|
|
|
71
|
|
|
89
|
|
|
(26
|
)
|
|
336
|
|
||||||||
Net income (loss)
|
110
|
|
|
101
|
|
|
(44
|
)
|
|
53
|
|
|
99
|
|
|
124
|
|
|
68
|
|
|
405
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
$
|
1.14
|
|
|
$
|
1.01
|
|
|
$
|
(0.78
|
)
|
|
$
|
0.61
|
|
|
$
|
0.91
|
|
|
$
|
1.14
|
|
|
$
|
(0.35
|
)
|
|
$
|
4.34
|
|
Net income (loss)
|
1.42
|
|
|
1.28
|
|
|
(0.57
|
)
|
|
0.67
|
|
|
1.27
|
|
|
1.58
|
|
|
0.93
|
|
|
5.23
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations
|
$
|
1.12
|
|
|
$
|
1.00
|
|
|
$
|
(0.78
|
)
|
|
$
|
0.61
|
|
|
$
|
0.90
|
|
|
$
|
1.12
|
|
|
$
|
(0.35
|
)
|
|
$
|
4.27
|
|
Net income (loss)
|
1.40
|
|
|
1.26
|
|
|
(0.57
|
)
|
|
0.66
|
|
|
1.25
|
|
|
1.55
|
|
|
0.93
|
|
|
5.15
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Regular cash dividends per share
|
$
|
0.340
|
|
|
$
|
0.225
|
|
|
$
|
0.340
|
|
|
$
|
0.225
|
|
|
$
|
0.340
|
|
|
$
|
0.340
|
|
|
$
|
0.340
|
|
|
$
|
0.340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Market price per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
High
|
$
|
97.68
|
|
|
$
|
80.84
|
|
|
$
|
100.87
|
|
|
$
|
86.96
|
|
|
$
|
108.93
|
|
|
$
|
91.11
|
|
|
$
|
110.02
|
|
|
$
|
94.65
|
|
Low
|
84.43
|
|
|
67.16
|
|
|
88.76
|
|
|
72.11
|
|
|
93.62
|
|
|
72.87
|
|
|
98.55
|
|
|
82.79
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Fourth quarter results for 2014 include a decrease in operating income of $317 million related to the loss on pension and postretirement benefit plan remeasurement ($97 million in cost of sales and $220 million in selling, general and administrative expenses), a decrease of $29 million related to restructuring and plant closure costs, a decrease of $5 million for foreign legal reserves and a decrease of $4 million related to the impairment on IPR&D assets associated with the ISP acquisition. Income tax benefit for the fourth quarter included $100 million of discrete tax income items including a $168 million reversal of a deferred tax liability related to an assertion change of the nature of unremitted earnings of foreign subsidiaries.
|
(b)
|
Fourth quarter results for 2013 include an increase in operating income of $417 million and an increase in discontinued operations income of $81 million related to the actuarial gain on pension and postretirement benefit plans ($128 million in cost of sales and $289 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 $10 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.
|
Ashland Inc. and Consolidated Subsidiaries
|
|
|
|
|
|
|
|
|
|
||||||||||
Five-Year Selected Financial Information
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Years Ended September 30
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions except per share data)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||||
Summary of operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
6,121
|
|
|
$
|
6,091
|
|
|
$
|
6,472
|
|
|
$
|
4,600
|
|
|
$
|
3,956
|
|
Cost of sales
|
4,605
|
|
|
4,304
|
|
|
4,813
|
|
|
3,563
|
|
|
2,930
|
|
|||||
Gross profit
|
1,516
|
|
|
1,787
|
|
|
1,659
|
|
|
1,037
|
|
|
1,026
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
1,358
|
|
|
670
|
|
|
1,327
|
|
|
980
|
|
|
882
|
|
|||||
Research and development expense
|
114
|
|
|
142
|
|
|
104
|
|
|
49
|
|
|
50
|
|
|||||
Equity and other income
|
2
|
|
|
64
|
|
|
53
|
|
|
45
|
|
|
49
|
|
|||||
Operating income
|
46
|
|
|
1,039
|
|
|
281
|
|
|
53
|
|
|
143
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest and other financing expense
|
166
|
|
|
282
|
|
|
317
|
|
|
121
|
|
|
198
|
|
|||||
Net gain (loss) on divestitures
|
4
|
|
|
(8
|
)
|
|
(7
|
)
|
|
2
|
|
|
19
|
|
|||||
Other expense (income)
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
before income taxes
|
(116
|
)
|
|
749
|
|
|
(43
|
)
|
|
(67
|
)
|
|
(34
|
)
|
|||||
Income tax expense (benefit)
|
(188
|
)
|
|
196
|
|
|
(57
|
)
|
|
(70
|
)
|
|
(41
|
)
|
|||||
Income from continuing operations
|
72
|
|
|
553
|
|
|
14
|
|
|
3
|
|
|
7
|
|
|||||
Income from discontinued operations
|
161
|
|
|
130
|
|
|
12
|
|
|
411
|
|
|
134
|
|
|||||
Net income
|
$
|
233
|
|
|
$
|
683
|
|
|
$
|
26
|
|
|
$
|
414
|
|
|
$
|
141
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance sheet information (as of September 30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
$
|
3,561
|
|
|
$
|
2,873
|
|
|
$
|
3,209
|
|
|
$
|
3,387
|
|
|
$
|
2,833
|
|
Current liabilities
|
1,687
|
|
|
1,727
|
|
|
1,913
|
|
|
1,739
|
|
|
1,687
|
|
|||||
Working capital
|
$
|
1,874
|
|
|
$
|
1,146
|
|
|
$
|
1,296
|
|
|
$
|
1,648
|
|
|
$
|
1,146
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
10,951
|
|
|
$
|
12,088
|
|
|
$
|
12,524
|
|
|
$
|
12,966
|
|
|
$
|
9,530
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term debt
|
$
|
329
|
|
|
$
|
308
|
|
|
$
|
344
|
|
|
$
|
83
|
|
|
$
|
71
|
|
Long-term debt (including current portion)
|
2,951
|
|
|
2,959
|
|
|
3,246
|
|
|
3,749
|
|
|
1,153
|
|
|||||
Stockholders’ equity
|
3,583
|
|
|
4,553
|
|
|
4,029
|
|
|
4,135
|
|
|
3,807
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from operating activities from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
continuing operations
|
$
|
580
|
|
|
$
|
653
|
|
|
$
|
189
|
|
|
$
|
50
|
|
|
$
|
381
|
|
Additions to property, plant and equipment
|
248
|
|
|
264
|
|
|
242
|
|
|
152
|
|
|
160
|
|
|||||
Cash dividends
|
103
|
|
|
88
|
|
|
63
|
|
|
51
|
|
|
35
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from continuing operations
|
$
|
0.94
|
|
|
$
|
7.06
|
|
|
$
|
0.18
|
|
|
$
|
0.05
|
|
|
$
|
0.09
|
|
Net income
|
3.04
|
|
|
8.71
|
|
|
0.33
|
|
|
5.28
|
|
|
1.82
|
|
|||||
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from continuing operations
|
0.93
|
|
|
6.95
|
|
|
0.17
|
|
|
0.05
|
|
|
0.08
|
|
|||||
Net income
|
3.00
|
|
|
8.57
|
|
|
0.33
|
|
|
5.17
|
|
|
1.78
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends
|
1.36
|
|
|
1.13
|
|
|
0.80
|
|
|
0.65
|
|
|
0.45
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(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 the annual impact of immediately recognizing actuarial gain and loss remeasurements for defined benefit pension plans and other postretirement benefit plans. For a complete discussion of Ashland’s divestitures during the years ended September 30, 2014, 2013 and 2012, see Note B to Consolidated Financial Statements. For further information of activity during the years ended September 30, 2011 and 2010, see the applicable Notes to Consolidated Financial Statements in the Form 10-K Filings from prior years.
|
ASHLAND INC.
|
|
|
|
By:
|
/s/ James J. O'Brien
|
ASHLAND INC.
|
|
|
|
By:
|
/s/ Susan B. Esler
|
Name:
|
Susan B. Esler
|
Title:
|
Chief Human Resources & Communications Officer
|
|
ASHLAND INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Susan B. Esler
|
|
Name:
|
Susan B. Esler
|
|
Title:
|
Vice President, Human Resources
|
|
ASHLAND INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Susan B. Esler
|
|
Name:
|
Susan B. Esler
|
|
Title:
|
Vice President, Human Resources
|
(1)
|
you elect to terminate your employment with Ashland prior to your Release Date;
|
(2)
|
Ashland terminates your employment for cause prior to your Release Date; For the purposes of this letter, termination for cause will arise if you: (a) substantially fail to perform your duties with Ashland, 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.
|
(3)
|
you are disabled prior to your Release Date, in which case payment of those severance benefits provided for hereunder will be determined in accordance with the provisions of the "Deferred Terminations" section of the Ashland Inc. Severance Pay Plan; or
|
(4)
|
in the event of your death prior to your Release Date. Provided, however, that Ashland will not be relieved of any obligations under its employee benefits plans, including the SERP, which arise due to your death.
|
|
Sincerely yours,
|
|
|
|
|
|
By:
|
/s/ Peter J. Ganz
|
|
Name:
|
Peter J. Ganz
|
Agreed to and accepted
|
|
this 30th day of October 2014.
|
|
|
|
By:
|
/s/ Susan B. Esler
|
Name:
|
Susan B. Esler
|
Company
|
|
Jurisdiction of Incorporation
|
565 Corporation
|
|
Delaware, United States
|
ACM Eurasia LLC
|
|
Russia
|
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 (Gibraltar) One Holding, Inc.
|
|
Delaware, United States
|
Ashland (Tianjin) Chemical Co., Ltd.
|
|
China
|
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 Eastern Markets LLC
|
|
Russia
|
Ashland Elastomers LLC
|
|
Delaware, United States
|
Ashland Ethanol, Inc.
|
|
Delaware, United States
|
Ashland Finance Limited
|
|
Bermuda
|
Ashland Finland Oy
|
|
Finland
|
Ashland France SAS
|
|
France
|
Ashland Hercules Water Technologies (Australia) Pty Ltd
|
|
Australia
|
Ashland Holdings B. V.
|
|
Netherlands
|
Ashland India Private Limited
|
|
India
|
Ashland Industries Deutschland GmbH
|
|
Germany
|
Ashland Industries Europe GmbH
|
|
Switzerland
|
Ashland Industries France SAS
|
|
France
|
Ashland Industries Ireland Limited
|
|
Ireland
|
Ashland Industries Italia S.r.l.
|
|
Italy
|
Ashland Industries Nederland B.V.
|
|
Netherlands
|
Ashland Industries UK Limited
|
|
United Kingdom
|
Ashland International Holdings, Inc.
|
|
Delaware, United States
|
Ashland Italia S.r.l.
|
|
Italy
|
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
|
Company
|
|
Jurisdiction of Incorporation
|
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 Rhine Holdings B.V.
|
|
Netherlands
|
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 Austria GmbH
|
|
Austria
|
Ashland Specialties Belgium BVBA
|
|
Belgium
|
Ashland Specialties France S.a.r.l.
|
|
France
|
Ashland Specialties Hispania S.L.
|
|
Spain
|
Ashland Specialties South Africa Proprietary Limited
|
|
South Africa
|
Ashland Specialties Sverige AB
|
|
Sweden
|
Ashland Specialties UK Limited
|
|
United Kingdom
|
Ashland Specialty Ingredients G.P.
|
|
Delaware, United States
|
Ashland Switzerland Holdings GmbH
|
|
Switzerland
|
Ashland Valvoline Chemical (Shanghai) Co., Ltd
|
|
China
|
Ashland-Alaskan, Limited
|
|
Alaska, United States
|
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
|
Belleville Realty Corp.
|
|
Delaware, United States
|
Bluegrass Insurance Company Limited
|
|
Bermuda
|
Bluehall Incorporated
|
|
Delaware, United States
|
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
|
East Bay Realty Services, Inc.
|
|
Delaware, United States
|
Ever Success Overseas Limited
|
|
British Virgin Islands
|
FRJ, Inc.
|
|
Georgia, United States
|
Funding Corp. I
|
|
Delaware, United States
|
Hercofina
|
|
Delaware, United States
|
Hercules Chemicals South Africa (Proprietary) Limited
|
|
South Africa
|
Hercules China Limited
|
|
Hong Kong
|
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
|
Company
|
|
Jurisdiction of Incorporation
|
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 Tianpu Chemicals Company Limited
|
|
China
|
Hercules Trading (Shanghai) Company Limited
|
|
China
|
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
|
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
|
Company
|
|
Jurisdiction of Incorporation
|
ISP Hungary Holdings Limited Liability Company
|
|
Hungary
|
ISP Indústria e Comércio de Ingredientes e Especialidades para Alimentos Ltda.
|
|
Brazil
|
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 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 VC Lubricating Oil Co., Ltd.
|
|
China
|
St Croix Petrochemical Corp
|
|
American Virgin Islands
|
Techwax Limited
|
|
United Kingdom
|
V C Lubricating Oil Co. Ltd.
|
|
Hong Kong
|
Valvoline (Australia) Pty. Limited
|
|
Australia
|
Valvoline (Deutschland) B.V. & Co. KG
|
|
Germany
|
Valvoline (Thailand) Ltd.
|
|
Thailand
|
Valvoline Cummins Argentina S.A.
|
|
Argentina
|
Valvoline Cummins Limited
|
|
India
|
Valvoline de Colombia S.A.S.
|
|
Colombia
|
Valvoline De Venezuela S.A.
|
|
Venezuela
|
Valvoline Do Brasil Lubrificantes Ltda.
|
|
Brazil
|
Valvoline Instant Oil Change Franchising, Inc.
|
|
Delaware, United States
|
Valvoline International, Inc.
|
|
Delaware, United States
|
VIOC Funding, Inc.
|
|
Delaware, United States
|
WSP LLC
|
|
Delaware, United States
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ James J. O’Brien
|
|
/s/ Barry W. Perry
|
James J. O’Brien, Chairman of the Board
|
|
Barry W. Perry, Director
|
and Chief Executive Officer and Director
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ J. Kevin Willis
|
|
/s/ Mark C. Rohr
|
J. Kevin Willis, Senior Vice President
|
|
Mark C. Rohr, Director
|
and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ J. William Heitman
|
|
/s/ George A. Schaefer, Jr.
|
J. William Heitman, Vice President
|
|
George A. Schaefer, Jr., Director
|
and Controller
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ Roger W. Hale
|
|
/s/ Stephen F. Kirk
|
Roger W. Hale, Director
|
|
Stephen F. Kirk, Director
|
|
|
|
/s/ Janice J. Teal
|
|
/s/ John F. Turner
|
Janice J. Teal, Director
|
|
John F. Turner, Director
|
|
|
|
/s/ Vada O. Manager
|
|
/s/ Michael J. Ward
|
Vada O. Manager, Director
|
|
Michael J. Ward, Director
|
|
|
|
/s/ Brendan M. Cummins
|
|
|
Brendan M. Cummins, Director
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Ashland Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
|
/s/ James J. O'Brien
|
|
James J. O’Brien
|
|
Chairman and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Ashland Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
|
/s/ J. Kevin Willis
|
|
J. Kevin Willis
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/s/ James J. O'Brien
|
|
James J. O'Brien
|
|
Chief Executive Officer
|
|
November 24, 2014
|
|
|
|
|
|
/s/ J. Kevin Willis
|
|
J. Kevin Willis
|
|
Chief Financial Officer
|
|
November 24, 2014
|
|