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(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Large Accelerated Filer
þ
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Accelerated Filer
o
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Non-Accelerated Filer
o
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Smaller Reporting Company
o
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(Do not check if a smaller reporting company.)
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Three months ended
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Six months ended
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||||||||||||
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March 31
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March 31
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||||||||||||
(In millions except per share data - unaudited)
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2015
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2014
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2015
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2014
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||||
Sales
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$
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1,350
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$
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1,545
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$
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2,741
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$
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2,977
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Cost of sales
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925
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1,168
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1,906
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2,216
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Gross profit
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425
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377
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835
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761
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||||
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||||||||
Selling, general and administrative expense
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203
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370
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429
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605
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Research and development expense
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25
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36
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50
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63
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||||
Equity and other income (loss)
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(4
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)
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(35
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)
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6
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(14
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)
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||||
Operating income (loss)
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193
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(64
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)
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362
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79
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||||
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||||||||
Net interest and other financing expense
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40
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41
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81
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83
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||||
Net gain (loss) on divestitures
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(33
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)
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1
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(118
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)
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6
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||||
Income (loss) from continuing operations before
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|
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||||||||
income taxes
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120
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(104
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)
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163
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|
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2
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||||
Income tax expense (benefit) - Note I
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25
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(43
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)
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27
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(25
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)
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Income (loss) from continuing operations
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95
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(61
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)
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136
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27
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||||
Income from discontinued operations (net of tax) - Note C
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129
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17
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121
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39
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||||
Net income (loss)
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$
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224
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$
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(44
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)
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$
|
257
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$
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66
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||||||||
PER SHARE DATA
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||||||||
Basic earnings per share - Note L
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Income (loss) from continuing operations
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$
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1.40
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$
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(0.78
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)
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$
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1.97
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$
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0.35
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Income from discontinued operations
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1.90
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0.21
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1.76
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0.50
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||||
Net income (loss)
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$
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3.30
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$
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(0.57
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)
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$
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3.73
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$
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0.85
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||||||||
Diluted earnings per share - Note L
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||||
Income (loss) from continuing operations
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$
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1.39
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$
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(0.78
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)
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$
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1.95
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$
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0.35
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Income from discontinued operations
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1.87
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0.21
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1.73
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0.49
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Net income (loss)
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$
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3.26
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$
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(0.57
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)
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$
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3.68
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$
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0.84
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||||||||
DIVIDENDS PAID PER COMMON SHARE
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$
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0.34
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$
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0.34
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$
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0.68
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$
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0.68
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||||||||
COMPREHENSIVE INCOME (LOSS)
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Net income (loss)
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$
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224
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$
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(44
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)
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$
|
257
|
|
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$
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66
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Other comprehensive income (loss), net of tax - Note M
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||||||||
Unrealized translation gain (loss)
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(255
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)
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(25
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)
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(382
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)
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14
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Pension and postretirement obligation adjustment
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(6
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)
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(5
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)
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(11
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)
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(9
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)
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||||
Other comprehensive income (loss)
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(261
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)
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(30
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)
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(393
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)
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5
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||||
Comprehensive income (loss)
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$
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(37
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)
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$
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(74
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)
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$
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(136
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)
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$
|
71
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March 31
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September 30
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(In millions - unaudited)
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2015
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2014
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||||
ASSETS
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||||
Current assets
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||||
Cash and cash equivalents
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$
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911
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$
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1,393
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Accounts receivable
(a)
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1,046
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1,202
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Inventories - Note F
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714
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|
765
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Deferred income taxes
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121
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118
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Other assets
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110
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83
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Total current assets
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2,902
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3,561
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Noncurrent assets
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Property, plant and equipment
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||||
Cost
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4,061
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4,275
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Accumulated depreciation
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1,898
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|
1,861
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Net property, plant and equipment
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2,163
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|
2,414
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Goodwill - Note G
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2,480
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|
2,643
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|
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Intangibles - Note G
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1,188
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|
|
1,309
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|
||
Restricted investments - Note A
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300
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|
|
—
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|
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Asbestos insurance receivable - Note K
|
193
|
|
|
433
|
|
||
Equity and other unconsolidated investments
|
69
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|
|
81
|
|
||
Other assets
|
501
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|
|
510
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|
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Total noncurrent assets
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6,894
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7,390
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Total assets
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$
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9,796
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$
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10,951
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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|
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|
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Current liabilities
|
|
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|
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|
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Short-term debt - Note H
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$
|
233
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|
$
|
329
|
|
Current portion of long-term debt - Note H
|
9
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|
|
9
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|
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Trade and other payables
|
500
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|
674
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|
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Accrued expenses and other liabilities
|
508
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|
675
|
|
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Total current liabilities
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1,250
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|
|
1,687
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|
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Noncurrent liabilities
|
|
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|
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|
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Long-term debt - Note H
|
2,943
|
|
|
2,942
|
|
||
Employee benefit obligations - Note J
|
1,415
|
|
|
1,468
|
|
||
Asbestos litigation reserve - Note K
|
677
|
|
|
701
|
|
||
Deferred income taxes
|
51
|
|
|
110
|
|
||
Other liabilities
|
441
|
|
|
460
|
|
||
Total noncurrent liabilities
|
5,527
|
|
|
5,681
|
|
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Commitments and contingencies - Note K
|
|
|
|
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|
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Stockholders’ equity
|
3,019
|
|
|
3,583
|
|
||
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
9,796
|
|
|
$
|
10,951
|
|
|
|
|
|
(a)
|
Accounts receivable includes an allowance for doubtful accounts of
$13 million
at
March 31, 2015
and
September 30, 2014
, respectively.
|
|
|
|
|
|
|
|
|
|
(In millions - unaudited)
|
Common
stock
|
|
|
Paid-in
capital
|
|
|
Retained
earnings
|
|
|
Accumulated
other
comprehensive
income (loss)
|
|
(a)
|
Total
|
|
|||||
BALANCE AT SEPTEMBER 30, 2014
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3,475
|
|
|
$
|
107
|
|
|
$
|
3,583
|
|
Total comprehensive income (loss)
|
|
|
|
|
|
257
|
|
|
(393
|
)
|
|
(136
|
)
|
||||||
Regular dividends, $.68 per common share
|
|
|
|
|
|
|
(46
|
)
|
|
|
|
|
(46
|
)
|
|||||
Common shares issued under stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
incentive and other plans
(b)
|
|
|
|
23
|
|
|
(8
|
)
|
|
|
|
|
15
|
|
|||||
Repurchase of common shares
(c)
|
|
|
|
|
|
(397
|
)
|
|
|
|
(397
|
)
|
|||||||
BALANCE AT MARCH 31, 2015
|
$
|
1
|
|
|
$
|
23
|
|
|
$
|
3,281
|
|
|
$
|
(286
|
)
|
|
$
|
3,019
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
At
March 31, 2015
and
September 30, 2014
, the after-tax accumulated other comprehensive loss of
$286 million
and gain of
$107 million
, respectively, was comprised of unrecognized prior service credits as a result of certain employee benefit plan amendments of
$48 million
and
$59 million
, respectively, and net unrealized translation loss of
$334 million
and gain of
$48 million
, respectively.
|
(b)
|
Common shares issued were
359,086
for the
six
months ended
March 31, 2015
and includes the impact of the modification of certain performance shares. See Note N of the Notes to Condensed Consolidated Financial Statements for further information.
|
(c)
|
Common shares repurchased were
3,078,136
for the
six
months ended
March 31, 2015
. See Note M of the Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
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|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions - unaudited)
|
2015
|
|
|
2014
|
|
||
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM
|
|
|
|
||||
CONTINUING OPERATIONS
|
|
|
|
||||
Net income
|
$
|
257
|
|
|
$
|
66
|
|
Income from discontinued operations (net of tax)
|
(121
|
)
|
|
(39
|
)
|
||
Adjustments to reconcile income from continuing operations to
|
|
|
|
|
|
||
cash flows from operating activities
|
|
|
|
|
|
||
Depreciation and amortization
|
170
|
|
|
183
|
|
||
Debt issuance cost amortization
|
7
|
|
|
7
|
|
||
Purchased in-process research and development impairment
|
—
|
|
|
9
|
|
||
Deferred income taxes
|
(13
|
)
|
|
(4
|
)
|
||
Equity income from affiliates
|
(7
|
)
|
|
(14
|
)
|
||
Distributions from equity affiliates
|
10
|
|
|
6
|
|
||
Stock based compensation expense
|
15
|
|
|
17
|
|
||
Net loss (gain) on divestitures
|
118
|
|
|
(6
|
)
|
||
Impairment of equity investments
|
14
|
|
|
46
|
|
||
Losses on pension plan remeasurements
|
9
|
|
|
105
|
|
||
Change in operating assets and liabilities
(a)
|
(363
|
)
|
|
(182
|
)
|
||
Total cash flows provided by operating activities from continuing operations
|
96
|
|
|
194
|
|
||
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(86
|
)
|
|
(96
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
1
|
|
|
4
|
|
||
Purchase of operations - net of cash acquired
|
—
|
|
|
(2
|
)
|
||
Proceeds from sale of operations or equity investments
|
106
|
|
|
6
|
|
||
Funds restricted for specific transactions
|
(320
|
)
|
|
—
|
|
||
Total cash flows used by investing activities from continuing operations
|
(299
|
)
|
|
(88
|
)
|
||
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Repayment of long-term debt
|
—
|
|
|
(12
|
)
|
||
Proceeds (repayment) from short-term debt
|
(96
|
)
|
|
93
|
|
||
Repurchase of common stock
|
(397
|
)
|
|
—
|
|
||
Cash dividends paid
|
(46
|
)
|
|
(53
|
)
|
||
Excess tax benefits related to share-based payments
|
7
|
|
|
7
|
|
||
Total cash flows provided (used) by financing activities from continuing operations
|
(532
|
)
|
|
35
|
|
||
CASH PROVIDED (USED) BY CONTINUING OPERATIONS
|
(735
|
)
|
|
141
|
|
||
Cash provided (used) by discontinued operations
|
|
|
|
|
|
||
Operating cash flows
|
277
|
|
|
20
|
|
||
Investing cash flows
|
10
|
|
|
(15
|
)
|
||
Total cash provided by discontinued operations
|
287
|
|
|
5
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(34
|
)
|
|
(1
|
)
|
||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(482
|
)
|
|
145
|
|
||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
1,393
|
|
|
346
|
|
||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
911
|
|
|
$
|
491
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Income (loss) from discontinued operations (net of tax)
|
|
|
|
|
|
|
|
||||||||
Asbestos-related litigation
|
$
|
122
|
|
|
$
|
—
|
|
|
$
|
120
|
|
|
$
|
(1
|
)
|
Water Technologies
(a)
|
—
|
|
|
17
|
|
|
(2
|
)
|
|
40
|
|
||||
Gain on disposal of discontinued operations (net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Water Technologies
|
7
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total income from discontinued operations (net of tax)
|
$
|
129
|
|
|
$
|
17
|
|
|
$
|
121
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
(a)
|
For the
three and six
months ended
March 31, 2014
, pretax operating income recorded for Water Technologies was
$19 million
and
$55 million
, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility
|
|
|
|
|||||
(In millions)
|
Severance
|
|
|
costs
|
|
|
Total
|
|
|||
Balance as of September 30, 2014
|
$
|
56
|
|
|
$
|
9
|
|
|
$
|
65
|
|
Reserve adjustments
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Utilization (cash paid or otherwise settled)
|
(38
|
)
|
|
(2
|
)
|
|
(40
|
)
|
|||
Balance at March 31, 2015
|
$
|
16
|
|
|
$
|
7
|
|
|
$
|
23
|
|
|
|
|
|
|
|
||||||
Balance as of September 30, 2013
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
25
|
|
Restructuring reserve
|
75
|
|
|
3
|
|
|
78
|
|
|||
Utilization (cash paid or otherwise settled)
|
(10
|
)
|
|
(1
|
)
|
|
(11
|
)
|
|||
Balance at March 31, 2014
|
$
|
82
|
|
|
$
|
10
|
|
|
$
|
92
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
Carrying
value
|
|
|
Total
fair
value
|
|
|
Quoted prices
in active
markets for
identical
assets
Level 1
|
|
|
Significant
other
observable
inputs
Level 2
|
|
|
Significant
unobservable
inputs
Level 3
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
911
|
|
|
$
|
911
|
|
|
$
|
911
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted investments
(a)
|
335
|
|
|
335
|
|
|
335
|
|
|
—
|
|
|
—
|
|
|||||
Deferred compensation investments
(b)
|
187
|
|
|
187
|
|
|
43
|
|
|
144
|
|
|
—
|
|
|||||
Investments of captive insurance company
(b)
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
15
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
1,451
|
|
|
$
|
1,451
|
|
|
$
|
1,292
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency derivatives
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in restricted investments and
$35 million
within other current assets in the Condensed Consolidated Balance Sheets.
|
(b)
|
Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.
|
(In millions)
|
Carrying
value
|
|
|
Total
fair
value
|
|
|
Quoted prices
in active
markets for
identical
assets
Level 1
|
|
|
Significant
other
observable
inputs
Level 2
|
|
|
Significant
unobservable
inputs
Level 3
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
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
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Foreign currency derivative gain (loss)
|
$
|
(12
|
)
|
|
$
|
2
|
|
|
$
|
(16
|
)
|
|
$
|
5
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2015
|
|
|
2014
|
|
||
Foreign currency derivative assets
|
$
|
6
|
|
|
$
|
2
|
|
Notional contract values
|
183
|
|
|
88
|
|
||
|
|
|
|
||||
Foreign currency derivative liabilities
|
$
|
9
|
|
|
$
|
4
|
|
Notional contract values
|
341
|
|
|
281
|
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
Consolidated balance sheet caption
|
2015
|
|
|
2014
|
|
||
Net investment hedge assets
|
Accounts receivable
|
$
|
9
|
|
|
$
|
9
|
|
Net investment hedge liabilities
|
Accrued expenses and other liabilities
|
4
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
||||
|
|
March 31
|
|
|
|
March 31
|
|
||
(In millions)
|
|
2015
|
|
|
|
2015
|
|
||
Change in unrealized gain in AOCI
|
|
$
|
5
|
|
|
|
$
|
5
|
|
Tax impact of change in unrealized gain in AOCI
|
|
(3
|
)
|
|
|
(4
|
)
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2015
|
|
|
2014
|
|
||
Finished products
|
$
|
545
|
|
|
$
|
557
|
|
Raw materials, supplies and work in process
|
212
|
|
|
239
|
|
||
LIFO reserve
|
(43
|
)
|
|
(31
|
)
|
||
|
$
|
714
|
|
|
$
|
765
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
|
|
|
Performance
|
|
|
|
|
|
|
|||||
(In millions)
|
Ingredients
|
|
|
Materials
|
|
(a)
|
Valvoline
|
|
|
Total
|
|
||||
Balance at September 30, 2014
|
$
|
2,129
|
|
|
$
|
346
|
|
|
$
|
168
|
|
|
$
|
2,643
|
|
Divestiture
(b)
|
—
|
|
|
(10
|
)
|
|
(1
|
)
|
|
(11
|
)
|
||||
Currency translation adjustment
|
(136
|
)
|
|
(16
|
)
|
|
—
|
|
|
(152
|
)
|
||||
Balance at March 31, 2015
|
$
|
1,993
|
|
|
$
|
320
|
|
|
$
|
167
|
|
|
$
|
2,480
|
|
|
|
|
|
|
|
|
|
(a)
|
As of
March 31, 2015
, goodwill consisted of
$172 million
for the Intermediates/Solvents reporting unit and
$148 million
for the Composites reporting unit.
|
(b)
|
Divestiture caption represents the amounts of goodwill for the sale of Elastomers and Valvoline car care products. See Note B for additional information.
|
|
March 31, 2015
|
||||||||||
|
Gross
|
|
|
|
|
Net
|
|
||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|||
Definite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
(a) (b)
|
$
|
59
|
|
|
$
|
(43
|
)
|
|
$
|
16
|
|
Intellectual property
(a)
|
809
|
|
|
(244
|
)
|
|
565
|
|
|||
Customer relationships
(b)
|
418
|
|
|
(133
|
)
|
|
285
|
|
|||
Total definite-lived intangible assets
|
1,286
|
|
|
(420
|
)
|
|
866
|
|
|||
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
||||||
IPR&D
|
19
|
|
|
—
|
|
|
19
|
|
|||
Trademarks and trade names
|
303
|
|
|
—
|
|
|
303
|
|
|||
Total intangible assets
|
$
|
1,608
|
|
|
$
|
(420
|
)
|
|
$
|
1,188
|
|
|
|
|
|
|
|
(a)
|
Elastomers had a gross carrying amount for trademarks/trade names and intellectual property of
$6 million
and
$18 million
, respectively, with
$5 million
of accumulated amortization for each caption.
|
(b)
|
Valvoline car care products intangibles were included in the loss to recognize the fair value of assets less cost of sale during the March 2015 quarter. These intangibles included trademarks/trade names and customer relationships with gross carrying amounts of
$7 million
and
$1 million
, respectively, with
$3 million
and
$1 million
, respectively, of accumulated amortization. See Note B for additional information.
|
|
|
|
|
|
|
|
|
|
|
September 30, 2014
|
||||||||||
|
Gross
|
|
|
|
|
Net
|
|
||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|||
Definite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
|
$
|
72
|
|
|
$
|
(49
|
)
|
|
$
|
23
|
|
Intellectual property
|
827
|
|
|
(226
|
)
|
|
601
|
|
|||
Customer relationships
|
481
|
|
|
(118
|
)
|
|
363
|
|
|||
Total definite-lived intangible assets
|
1,380
|
|
|
(393
|
)
|
|
987
|
|
|||
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
||||||
IPR&D
|
19
|
|
|
—
|
|
|
19
|
|
|||
Trademarks and trade names
|
303
|
|
|
—
|
|
|
303
|
|
|||
Total intangible assets
|
$
|
1,702
|
|
|
$
|
(393
|
)
|
|
$
|
1,309
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2015
|
|
|
2014
|
|
||
4.750% notes, due 2022
|
$
|
1,120
|
|
|
$
|
1,120
|
|
3.875% notes, due 2018
|
700
|
|
|
700
|
|
||
3.000% notes, due 2016
|
600
|
|
|
600
|
|
||
6.875% notes, due 2043
|
376
|
|
|
376
|
|
||
Accounts receivable securitization
(a)
|
165
|
|
|
255
|
|
||
6.50% junior subordinated notes, due 2029
|
135
|
|
|
134
|
|
||
Revolving credit facility
|
40
|
|
|
45
|
|
||
Other international loans, interest at a weighted-
|
|
|
|
|
|
||
average rate of 6.7% at March 31, 2015 (5.9% to 10.0%)
|
28
|
|
|
29
|
|
||
Medium-term notes, due 2015-2019, interest at a weighted-
|
|
|
|
|
|
||
average rate of 8.7% at March 31, 2015 (8.4% to 9.4%)
|
14
|
|
|
14
|
|
||
Other
|
7
|
|
|
7
|
|
||
Total debt
|
3,185
|
|
|
3,280
|
|
||
Short-term debt
|
(233
|
)
|
|
(329
|
)
|
||
Current portion of long-term debt
|
(9
|
)
|
|
(9
|
)
|
||
Long-term debt (less current portion)
|
$
|
2,943
|
|
|
$
|
2,942
|
|
|
|
|
|
(a)
|
During the December 2014 quarter, the potential funding for qualified receivables was reduced from
$275 million
to
$250 million
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes
$4 million
of currency translation adjustment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other postretirement
|
||||||||||
|
Pension benefits
|
|
benefits
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Three months ended March 31
|
|
|
|
|
|
|
|
||||||||
Service cost
(a)
|
$
|
6
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
44
|
|
|
50
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(55
|
)
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(5
|
)
|
||||
Curtailment, settlement and other
|
(7
|
)
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss
|
11
|
|
|
96
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(2
|
)
|
|
$
|
123
|
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
|
|
|
|
|
|
|
||||||||
Six months ended March 31
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
$
|
13
|
|
|
$
|
21
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
88
|
|
|
99
|
|
|
3
|
|
|
4
|
|
||||
Expected return on plan assets
|
(109
|
)
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1
|
)
|
|
(1
|
)
|
|
(8
|
)
|
|
(11
|
)
|
||||
Curtailment, settlement and other
|
(7
|
)
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss
|
11
|
|
|
96
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(5
|
)
|
|
$
|
124
|
|
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
|
|
|
|
|
|
|
(a)
|
Service cost and net pension benefit costs of $0 denote values less than $1 million.
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|||||||
|
March 31
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Open claims - beginning of period
|
65
|
|
|
65
|
|
|
65
|
|
|
66
|
|
|
72
|
|
New claims filed
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Claims settled
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Claims dismissed
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(7
|
)
|
Open claims - end of period
|
65
|
|
|
66
|
|
|
65
|
|
|
65
|
|
|
66
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||||
Asbestos reserve - beginning of period
|
$
|
438
|
|
|
$
|
463
|
|
|
$
|
463
|
|
|
$
|
522
|
|
|
$
|
543
|
|
Reserve adjustment
|
—
|
|
|
—
|
|
|
4
|
|
|
(28
|
)
|
|
11
|
|
|||||
Amounts paid
|
(16
|
)
|
|
(16
|
)
|
|
(29
|
)
|
|
(31
|
)
|
|
(32
|
)
|
|||||
Asbestos reserve - end of period
|
$
|
422
|
|
|
$
|
447
|
|
|
$
|
438
|
|
|
$
|
463
|
|
|
$
|
522
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||||
Insurance receivable - beginning of period
|
$
|
402
|
|
|
$
|
408
|
|
|
$
|
408
|
|
|
$
|
423
|
|
|
$
|
431
|
|
Receivable adjustment
|
—
|
|
|
—
|
|
|
22
|
|
|
(3
|
)
|
|
19
|
|
|||||
Insurance settlement
|
(227
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Amounts collected
|
(13
|
)
|
|
(5
|
)
|
|
(28
|
)
|
|
(12
|
)
|
|
(27
|
)
|
|||||
Insurance receivable - end of period
|
$
|
162
|
|
|
$
|
403
|
|
|
$
|
402
|
|
|
$
|
408
|
|
|
$
|
423
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|||||||
|
March 31
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Open claims - beginning of period
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
New claims filed
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Claims dismissed
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Open claims - end of period
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||||
Asbestos reserve - beginning of period
|
$
|
329
|
|
|
$
|
342
|
|
|
$
|
342
|
|
|
$
|
320
|
|
|
$
|
311
|
|
Reserve adjustment
|
—
|
|
|
—
|
|
|
10
|
|
|
46
|
|
|
30
|
|
|||||
Amounts paid
|
(9
|
)
|
|
(11
|
)
|
|
(23
|
)
|
|
(24
|
)
|
|
(21
|
)
|
|||||
Asbestos reserve - end of period
|
$
|
320
|
|
|
$
|
331
|
|
|
$
|
329
|
|
|
$
|
342
|
|
|
$
|
320
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|||||
Insurance receivable - beginning of period
|
$
|
77
|
|
|
$
|
75
|
|
|
$
|
75
|
|
|
$
|
56
|
|
|
$
|
48
|
|
Receivable adjustment
|
—
|
|
|
—
|
|
|
3
|
|
|
19
|
|
|
9
|
|
|||||
Insurance settlement
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Amounts collected
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Insurance receivable - end of period
|
$
|
55
|
|
|
$
|
74
|
|
|
$
|
77
|
|
|
$
|
75
|
|
|
$
|
56
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Reserve - beginning of period
|
$
|
197
|
|
|
$
|
211
|
|
Disbursements
|
(22
|
)
|
|
(20
|
)
|
||
Revised obligation estimates and accretion
|
15
|
|
|
11
|
|
||
Reserve - end of period
|
$
|
190
|
|
|
$
|
202
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Environmental expense
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
14
|
|
|
$
|
9
|
|
Accretion
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Legal expense
|
2
|
|
|
2
|
|
|
3
|
|
|
2
|
|
||||
Total expense
|
11
|
|
|
8
|
|
|
18
|
|
|
13
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Insurance receivable
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Total expense, net of receivable activity
(a)
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
17
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
(a)
|
Net expense of
$2 million
for the
three and six
months ended
March 31, 2015
and
$1 million
for the six months ended
March 31, 2014
relates to divested businesses which qualified for treatment as discontinued operations and for which certain environmental liabilities were retained by Ashland. These amounts are classified within the income from discontinued operations caption of the Statements of Consolidated Comprehensive Income.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions except per share data)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Numerator for basic and diluted EPS – Income
|
|
|
|
|
|
|
|
||||||||
(loss) from continuing operations
|
$
|
95
|
|
|
$
|
(61
|
)
|
|
$
|
136
|
|
|
$
|
27
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|||||
Denominator for basic EPS – Weighted-average
|
|
|
|
|
|
|
|
|
|
|
|||||
common shares outstanding
|
68
|
|
|
78
|
|
|
69
|
|
|
78
|
|
||||
Share-based awards convertible to common shares
(a)
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Denominator for diluted EPS – Adjusted weighted-
|
|
|
|
|
|
|
|
|
|
|
|||||
average shares and assumed conversions
|
69
|
|
|
78
|
|
|
70
|
|
|
79
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EPS from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
1.40
|
|
|
$
|
(0.78
|
)
|
|
$
|
1.97
|
|
|
$
|
0.35
|
|
Diluted
|
1.39
|
|
|
(0.78
|
)
|
|
1.95
|
|
|
0.35
|
|
||||
|
|
|
|
|
|
|
|
(a)
|
As a result of the loss from continuing operations during the three months ended March 31, 2014, the effect of the share-based awards convertible to common shares would be antidilutive. As such, they were excluded from the diluted EPS calculation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
|
|
Tax
|
|
|
|
|
|
|
Tax
|
|
|
|
||||||||||
|
Before
|
|
|
(expense)
|
|
|
Net of
|
|
|
Before
|
|
|
(expense)
|
|
|
Net of
|
|
||||||
(In millions)
|
tax
|
|
|
benefit
|
|
|
tax
|
|
|
tax
|
|
|
benefit
|
|
|
tax
|
|
||||||
Three months ended March 31
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized translation loss
|
$
|
(256
|
)
|
|
$
|
1
|
|
|
$
|
(255
|
)
|
|
$
|
(24
|
)
|
|
$
|
(1
|
)
|
|
$
|
(25
|
)
|
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of unrecognized prior service
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
credits included in net income (loss)
(a)
|
(8
|
)
|
|
2
|
|
|
(6
|
)
|
|
(6
|
)
|
|
1
|
|
|
(5
|
)
|
||||||
Total other comprehensive loss
|
$
|
(264
|
)
|
|
$
|
3
|
|
|
$
|
(261
|
)
|
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six months ended March 31
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized translation gain (loss)
|
$
|
(382
|
)
|
|
$
|
—
|
|
|
$
|
(382
|
)
|
|
$
|
15
|
|
|
$
|
(1
|
)
|
|
$
|
14
|
|
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of unrecognized prior service
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
credits included in net income
(a)
|
(12
|
)
|
|
1
|
|
|
(11
|
)
|
|
(12
|
)
|
|
3
|
|
|
(9
|
)
|
||||||
Total other comprehensive income (loss)
|
$
|
(394
|
)
|
|
$
|
1
|
|
|
$
|
(393
|
)
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
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.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Cost of sales
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
Selling, general and administrative expense
|
(3
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
(7
|
)
|
||||
Discontinued operations
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||
Total amortization of unrecognized prior service credits
|
$
|
(8
|
)
|
|
$
|
(6
|
)
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions - unaudited)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
SALES
|
|
|
|
|
|
|
|
||||||||
Specialty Ingredients
|
$
|
583
|
|
|
$
|
629
|
|
|
$
|
1,144
|
|
|
$
|
1,209
|
|
Performance Materials
|
286
|
|
|
413
|
|
|
623
|
|
|
779
|
|
||||
Valvoline
|
481
|
|
|
503
|
|
|
974
|
|
|
989
|
|
||||
|
$
|
1,350
|
|
|
$
|
1,545
|
|
|
$
|
2,741
|
|
|
$
|
2,977
|
|
OPERATING INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
65
|
|
|
$
|
61
|
|
|
$
|
125
|
|
|
$
|
113
|
|
Performance Materials
|
30
|
|
|
(35
|
)
|
|
55
|
|
|
(22
|
)
|
||||
Valvoline
|
82
|
|
|
81
|
|
|
165
|
|
|
156
|
|
||||
Unallocated and other
(a)
|
16
|
|
|
(171
|
)
|
|
17
|
|
|
(168
|
)
|
||||
|
$
|
193
|
|
|
$
|
(64
|
)
|
|
$
|
362
|
|
|
$
|
79
|
|
|
|
|
|
|
|
|
|
(a)
|
As a result of the sale of Water Technologies on July 31, 2014, Unallocated and other is impacted by certain items related to discontinued operations accounting. For the
three and six
months ended
March 31, 2014
, Unallocated and other includes
$9 million
and
$18 million
, respectively, of costs previously charged to the Water Technologies business for primarily indirect corporate cost allocations that U.S. GAAP provisions require to be included within continuing operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
March 31
|
|
March 31
|
||||||||
Sales by Geography
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
North America
(a)
|
52
|
%
|
|
52
|
%
|
|
53
|
%
|
|
52
|
%
|
Europe
|
25
|
%
|
|
26
|
%
|
|
24
|
%
|
|
25
|
%
|
Asia Pacific
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
Latin America & other
|
7
|
%
|
|
6
|
%
|
|
7
|
%
|
|
7
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
March 31
|
|
March 31
|
||||||||
Sales by Reportable Segment
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Specialty Ingredients
|
43
|
%
|
|
41
|
%
|
|
42
|
%
|
|
41
|
%
|
Performance Materials
|
21
|
%
|
|
26
|
%
|
|
23
|
%
|
|
26
|
%
|
Valvoline
|
36
|
%
|
|
33
|
%
|
|
35
|
%
|
|
33
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
•
|
In July 2014, completed a prepaid variable share repurchase agreement for $80 million and received 0.8 million shares.
|
•
|
In August 2014, entered into $750 million accelerated share repurchase agreements that will expire on June 30, 2015 and to date have received 5.9 million shares.
|
•
|
In August 2014, entered into $250 million share repurchase agreements that were completed during the December 2014 quarter and received 2.4 million shares.
|
•
|
In January 2015, entered into $270 million accelerated share repurchase agreements that will expire on July 31, 2015 and to date have received 1.9 million shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
$9 million
and
$105 million
during the three months ended March 31, 2015 and 2014, respectively, of key items related to pension plan remeasurement losses;
|
•
|
$87 million, which included
$7 million
of accelerated depreciation, during the three months ended March 31, 2014 of global restructuring program costs;
|
•
|
$16 million
of severance and other costs and $2 million of accelerated depreciation relating to a manufacturing facility during the three months ended March 31, 2015;
|
•
|
a
$14 million
impairment related to the Valvoline joint venture equity investment within Venezuela during the three months ended March 31, 2015, and a $46 million impairment related to the ASK joint venture equity investment during the three months ended March 31, 2014;
|
•
|
$16 million
of tax indemnity income during the three months ended March 31, 2015; and
|
•
|
a
$9 million
impairment related to certain in-process research and development (IPR&D) assets associated to the acquisition of International Specialty Products Inc. (ISP) during the three months ended March 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Net income (loss)
|
$
|
224
|
|
|
$
|
(44
|
)
|
Income tax expense (benefit)
|
25
|
|
|
(43
|
)
|
||
Net interest and other financing expense
|
40
|
|
|
41
|
|
||
Depreciation and amortization
(a)
|
83
|
|
|
88
|
|
||
EBITDA
|
372
|
|
|
42
|
|
||
Income from discontinued operations (net of tax)
|
(129
|
)
|
|
(17
|
)
|
||
Net loss on divestitures
|
33
|
|
|
—
|
|
||
Losses on pension plan remeasurements
|
9
|
|
|
105
|
|
||
Restructuring and other costs
|
16
|
|
|
80
|
|
||
Impairment of equity investments
|
14
|
|
|
46
|
|
||
Tax indemnity income
|
(16
|
)
|
|
—
|
|
||
Accelerated depreciation
|
2
|
|
|
7
|
|
||
Impairment of IPR&D assets
|
—
|
|
|
9
|
|
||
Adjusted EBITDA
|
$
|
301
|
|
|
$
|
272
|
|
|
|
|
|
(a)
|
Excludes
$2 million
and
$7 million
of accelerated depreciation for the three months ended
March 31, 2015
and
2014
.
|
•
|
a
$7 million
charge for a stock inventive plan award modification for the six months ended March 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Net income
|
$
|
257
|
|
|
$
|
66
|
|
Income tax expense (benefit)
|
27
|
|
|
(25
|
)
|
||
Net interest and other financing expense
|
81
|
|
|
83
|
|
||
Depreciation and amortization
(a)
|
168
|
|
|
176
|
|
||
EBITDA
|
533
|
|
|
300
|
|
||
Income from discontinued operations (net of tax)
|
(121
|
)
|
|
(39
|
)
|
||
Net loss on divestitures
|
118
|
|
|
—
|
|
||
Losses on pension plan remeasurements
|
9
|
|
|
105
|
|
||
Restructuring and other costs
|
17
|
|
|
80
|
|
||
Impairment of equity investments
|
14
|
|
|
46
|
|
||
Tax indemnity income
|
(16
|
)
|
|
—
|
|
||
Accelerated depreciation
|
2
|
|
|
7
|
|
||
Stock incentive award modification
|
7
|
|
|
—
|
|
||
Impairment of IPR&D assets
|
—
|
|
|
9
|
|
||
Adjusted EBITDA
|
$
|
563
|
|
|
$
|
508
|
|
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Sales
|
$
|
1,350
|
|
|
$
|
1,545
|
|
|
$
|
(195
|
)
|
|
$
|
2,741
|
|
|
$
|
2,977
|
|
|
$
|
(236
|
)
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Cost of sales
|
$
|
925
|
|
|
$
|
1,168
|
|
|
$
|
(243
|
)
|
|
$
|
1,906
|
|
|
$
|
2,216
|
|
|
$
|
(310
|
)
|
Gross profit as a percent of sales
|
31.5
|
%
|
|
24.4
|
%
|
|
|
|
|
30.5
|
%
|
|
25.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
||||
(In millions)
|
March 31, 2015
|
|
|
March 31, 2015
|
|
||||
Changes in:
|
|
|
|
|
|
||||
Production costs
|
|
$
|
(83
|
)
|
|
|
$
|
(114
|
)
|
Volumes and product mix
|
|
(14
|
)
|
|
|
(14
|
)
|
||
Divestitures
|
|
(61
|
)
|
|
|
(78
|
)
|
||
Currency exchange
|
|
(49
|
)
|
|
|
(68
|
)
|
||
Losses on pension plan remeasurements
|
|
(34
|
)
|
|
|
(34
|
)
|
||
Severance and other costs
|
|
3
|
|
|
|
3
|
|
||
Accelerated depreciation
|
|
(5
|
)
|
|
|
(5
|
)
|
||
Change in cost of sales
|
|
$
|
(243
|
)
|
|
|
$
|
(310
|
)
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Selling, general and administrative
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
expense
|
$
|
203
|
|
|
$
|
370
|
|
|
$
|
(167
|
)
|
|
$
|
429
|
|
|
$
|
605
|
|
|
$
|
(176
|
)
|
As a percent of sales
|
15.0
|
%
|
|
23.9
|
%
|
|
|
|
|
15.7
|
%
|
|
20.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Research and development expense
|
$
|
25
|
|
|
$
|
36
|
|
|
$
|
(11
|
)
|
|
$
|
50
|
|
|
$
|
63
|
|
|
$
|
(13
|
)
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Equity and other income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity loss
|
$
|
(10
|
)
|
|
$
|
(38
|
)
|
|
$
|
28
|
|
|
$
|
(7
|
)
|
|
$
|
(32
|
)
|
|
$
|
25
|
|
Other income
|
6
|
|
|
3
|
|
|
3
|
|
|
13
|
|
|
18
|
|
|
(5
|
)
|
||||||
|
$
|
(4
|
)
|
|
$
|
(35
|
)
|
|
$
|
31
|
|
|
$
|
6
|
|
|
$
|
(14
|
)
|
|
$
|
20
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Net interest and other financing
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
expense (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
40
|
|
|
$
|
41
|
|
|
$
|
(1
|
)
|
|
$
|
81
|
|
|
$
|
82
|
|
|
$
|
(1
|
)
|
Interest income
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
(4
|
)
|
|
(3
|
)
|
|
(1
|
)
|
||||||
Other financing costs
|
2
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
||||||
|
$
|
40
|
|
|
$
|
41
|
|
|
$
|
(1
|
)
|
|
$
|
81
|
|
|
$
|
83
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Net gain (loss) on divestitures
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Valvoline car care products
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
Elastomers
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
||||||
MAP Transaction adjustments
|
(6
|
)
|
|
1
|
|
|
(7
|
)
|
|
(6
|
)
|
|
6
|
|
|
(12
|
)
|
||||||
|
$
|
(33
|
)
|
|
$
|
1
|
|
|
$
|
(34
|
)
|
|
$
|
(118
|
)
|
|
$
|
6
|
|
|
$
|
(124
|
)
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Income tax expense (benefit)
|
$
|
25
|
|
|
$
|
(43
|
)
|
|
$
|
68
|
|
|
$
|
27
|
|
|
$
|
(25
|
)
|
|
$
|
52
|
|
Effective tax rate
|
20.8
|
%
|
|
41.3
|
%
|
|
|
|
|
16.6
|
%
|
|
(1,250.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
2015
|
|
|
2014
|
|
|
Change
|
|
||||||
Income (loss) from discontinued
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
operations (net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asbestos-related litigation
|
$
|
122
|
|
|
$
|
—
|
|
|
$
|
122
|
|
|
$
|
120
|
|
|
$
|
(1
|
)
|
|
$
|
121
|
|
Water Technologies
|
7
|
|
|
17
|
|
|
(10
|
)
|
|
1
|
|
|
40
|
|
|
(39
|
)
|
||||||
|
$
|
129
|
|
|
$
|
17
|
|
|
$
|
112
|
|
|
$
|
121
|
|
|
$
|
39
|
|
|
$
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Sales
|
|
|
|
|
|
|
|
||||||||
Specialty Ingredients
|
$
|
583
|
|
|
$
|
629
|
|
|
$
|
1,144
|
|
|
$
|
1,209
|
|
Performance Materials
|
286
|
|
|
413
|
|
|
623
|
|
|
779
|
|
||||
Valvoline
|
481
|
|
|
503
|
|
|
974
|
|
|
989
|
|
||||
|
$
|
1,350
|
|
|
$
|
1,545
|
|
|
$
|
2,741
|
|
|
$
|
2,977
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
65
|
|
|
$
|
61
|
|
|
$
|
125
|
|
|
$
|
113
|
|
Performance Materials
|
30
|
|
|
(35
|
)
|
|
55
|
|
|
(22
|
)
|
||||
Valvoline
|
82
|
|
|
81
|
|
|
165
|
|
|
156
|
|
||||
Unallocated and other
|
16
|
|
|
(171
|
)
|
|
17
|
|
|
(168
|
)
|
||||
|
$
|
193
|
|
|
$
|
(64
|
)
|
|
$
|
362
|
|
|
$
|
79
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
61
|
|
|
$
|
60
|
|
|
$
|
121
|
|
|
$
|
120
|
|
Performance Materials
|
14
|
|
|
25
|
|
|
30
|
|
|
44
|
|
||||
Valvoline
|
10
|
|
|
9
|
|
|
19
|
|
|
17
|
|
||||
Unallocated and other
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
|
$
|
85
|
|
|
$
|
95
|
|
|
$
|
170
|
|
|
$
|
183
|
|
Operating information
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales per shipping day
|
$
|
9.3
|
|
|
$
|
10.0
|
|
|
$
|
9.2
|
|
|
$
|
9.7
|
|
Metric tons sold (thousands)
|
82.7
|
|
|
87.4
|
|
|
162.6
|
|
|
169.1
|
|
||||
Gross profit as a percent of sales
(a)
|
31.7
|
%
|
|
32.6
|
%
|
|
32.2
|
%
|
|
31.8
|
%
|
||||
Performance Materials
|
|
|
|
|
|
|
|
|
|
||||||
Sales per shipping day
|
$
|
4.5
|
|
|
$
|
6.6
|
|
|
$
|
5.0
|
|
|
$
|
6.2
|
|
Metric tons sold (thousands)
|
118.3
|
|
|
153.4
|
|
|
247.8
|
|
|
291.3
|
|
||||
Gross profit as a percent of sales
(a)
|
22.7
|
%
|
|
10.7
|
%
|
|
19.8
|
%
|
|
12.0
|
%
|
||||
Valvoline
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lubricant sales gallons
|
40.5
|
|
|
39.6
|
|
|
79.5
|
|
|
78.2
|
|
||||
Premium lubricants (percent of U.S. branded volumes)
|
40.7
|
%
|
|
37.1
|
%
|
|
39.6
|
%
|
|
36.4
|
%
|
||||
Gross profit as a percent of sales
(a)
|
36.1
|
%
|
|
32.1
|
%
|
|
34.7
|
%
|
|
31.6
|
%
|
||||
|
|
|
|
|
|
|
|
(a)
|
Gross profit is defined as sales, less cost of sales divided by sales.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Operating income
|
$
|
65
|
|
|
$
|
61
|
|
|
$
|
125
|
|
|
$
|
113
|
|
Depreciation and amortization
(a)
|
59
|
|
|
60
|
|
|
119
|
|
|
120
|
|
||||
EBITDA
|
124
|
|
|
121
|
|
|
244
|
|
|
233
|
|
||||
Severance and other costs
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Accelerated depreciation
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Impairment of IPR&D assets
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
Adjusted EBITDA
|
$
|
142
|
|
|
$
|
130
|
|
|
$
|
262
|
|
|
$
|
242
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes
$2 million
of accelerated depreciation for the three and six months ended
March 31, 2015
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Operating income (loss)
|
$
|
30
|
|
|
$
|
(35
|
)
|
|
$
|
55
|
|
|
$
|
(22
|
)
|
Depreciation and amortization
(a)
|
14
|
|
|
18
|
|
|
30
|
|
|
37
|
|
||||
EBITDA
|
44
|
|
|
(17
|
)
|
|
85
|
|
|
15
|
|
||||
Impairment of ASK joint venture
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||
Severance
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||
Accelerated depreciation and other plant closure costs
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Adjusted EBITDA
|
$
|
44
|
|
|
$
|
49
|
|
|
$
|
85
|
|
|
$
|
81
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes
$7 million
of accelerated depreciation for the
three and six
months ended
March 31, 2014
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Operating income
|
$
|
82
|
|
|
$
|
81
|
|
|
$
|
165
|
|
|
$
|
156
|
|
Depreciation and amortization
|
10
|
|
|
9
|
|
|
19
|
|
|
17
|
|
||||
EBITDA
|
92
|
|
|
90
|
|
|
184
|
|
|
173
|
|
||||
Impairment of equity investment
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
106
|
|
|
$
|
90
|
|
|
$
|
198
|
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
||||
Losses on pension plan remeasurements
|
$
|
(9
|
)
|
|
$
|
(105
|
)
|
|
$
|
(9
|
)
|
|
$
|
(105
|
)
|
Pension and other postretirement net periodic income
|
|
|
|
|
|
|
|
||||||||
(excluding service cost)
|
14
|
|
|
12
|
|
|
27
|
|
|
24
|
|
||||
Restructuring activities (includes severance,
|
|
|
|
|
|
|
|
|
|
|
|
||||
integration and stranded divestiture costs)
|
—
|
|
|
(76
|
)
|
|
(1
|
)
|
|
(85
|
)
|
||||
Tax indemnity income
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Environmental expense for divested businesses
|
(9
|
)
|
|
(6
|
)
|
|
(15
|
)
|
|
(9
|
)
|
||||
Other income (expense)
|
4
|
|
|
4
|
|
|
(1
|
)
|
|
7
|
|
||||
Total unallocated income (expense)
|
$
|
16
|
|
|
$
|
(171
|
)
|
|
$
|
17
|
|
|
$
|
(168
|
)
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Cash provided (used) by:
|
|
|
|
||||
Operating activities from continuing operations
|
$
|
96
|
|
|
$
|
194
|
|
Investing activities from continuing operations
|
(299
|
)
|
|
(88
|
)
|
||
Financing activities from continuing operations
|
(532
|
)
|
|
35
|
|
||
Discontinued operations
|
287
|
|
|
5
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(34
|
)
|
|
(1
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(482
|
)
|
|
$
|
145
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Cash flows provided (used) by operating activities from continuing operations
|
|
|
|
||||
Net income
|
$
|
257
|
|
|
$
|
66
|
|
Income from discontinued operations (net of tax)
|
(121
|
)
|
|
(39
|
)
|
||
Adjustments to reconcile income from continuing operations to
|
|
|
|
|
|
||
cash flows from operating activities
|
|
|
|
|
|
||
Depreciation and amortization
|
170
|
|
|
183
|
|
||
Debt issuance cost amortization
|
7
|
|
|
7
|
|
||
Purchased in-process research and development impairment
|
—
|
|
|
9
|
|
||
Deferred income taxes
|
(13
|
)
|
|
(4
|
)
|
||
Equity income from affiliates
|
(7
|
)
|
|
(14
|
)
|
||
Distributions from equity affiliates
|
10
|
|
|
6
|
|
||
Stock based compensation expense
|
15
|
|
|
17
|
|
||
Net loss (gain) on divestitures
|
118
|
|
|
(6
|
)
|
||
Impairment of equity investments
|
14
|
|
|
46
|
|
||
Losses on pension plan remeasurements
|
9
|
|
|
105
|
|
||
Change in operating assets and liabilities
(a)
|
(363
|
)
|
|
(182
|
)
|
||
Total cash flows provided by operating activities from continuing operations
|
$
|
96
|
|
|
$
|
194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Cash flows provided (used) by investing activities from continuing operations
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
(86
|
)
|
|
$
|
(96
|
)
|
Proceeds from disposal of property, plant and equipment
|
1
|
|
|
4
|
|
||
Purchase of operations - net of cash acquired
|
—
|
|
|
(2
|
)
|
||
Proceeds from sale of operations or equity investments
|
106
|
|
|
6
|
|
||
Funds restricted for specific transactions
|
(320
|
)
|
|
—
|
|
||
Total cash flows used by investing activities from continuing operations
|
$
|
(299
|
)
|
|
$
|
(88
|
)
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Cash flows provided (used) by financing activities from continuing operations
|
|
|
|
||||
Repayment of long-term debt
|
$
|
—
|
|
|
$
|
(12
|
)
|
Proceeds (repayment) from short-term debt
|
(96
|
)
|
|
93
|
|
||
Repurchase of common stock
|
(397
|
)
|
|
—
|
|
||
Cash dividends paid
|
(46
|
)
|
|
(53
|
)
|
||
Excess tax benefits related to share-based payments
|
7
|
|
|
7
|
|
||
Total cash flows provided (used) by financing activities from continuing operations
|
$
|
(532
|
)
|
|
$
|
35
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Cash provided (used) by discontinued operations
|
|
|
|
||||
Operating cash flows
|
$
|
277
|
|
|
$
|
20
|
|
Investing cash flows
|
10
|
|
|
(15
|
)
|
||
Total cash flows provided by discontinued operations
|
$
|
287
|
|
|
$
|
5
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2015
|
|
|
2014
|
|
||
Cash flows provided by operating activities from continuing operations
|
$
|
96
|
|
|
$
|
194
|
|
Adjustments:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(86
|
)
|
|
(96
|
)
|
||
Free cash flows
|
$
|
10
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2015
|
|
|
2014
|
|
||
Cash and cash equivalents
|
$
|
911
|
|
|
$
|
1,393
|
|
|
|
|
|
||||
Unused borrowing capacity
|
|
|
|
|
|
||
Revolving credit facility
|
$
|
1,088
|
|
|
$
|
1,084
|
|
Accounts receivable securitization facility
|
$
|
68
|
|
|
$
|
—
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2015
|
|
|
2014
|
|
||
Short-term debt
|
$
|
233
|
|
|
$
|
329
|
|
Long-term debt (including current portion)
|
2,952
|
|
|
2,951
|
|
||
Total debt
|
$
|
3,185
|
|
|
$
|
3,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Purchases of Equity Securities
|
||||||||||||||||||
Q2 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)(1)
|
||||||||||||
January 1, 2015 to January 31, 2015:
|
|
|
|
|
|
|
|
|
|
|||||||||
Open Market Purchases
|
1,850,696
|
|
(2
|
)
|
|
$
|
—
|
|
(2
|
)
|
1,850,696
|
|
(2
|
)
|
|
|
||
Employee Tax Withholdings
|
704
|
|
(3
|
)
|
|
$
|
120.01
|
|
|
—
|
|
|
|
|
||||
February 1, 2015 to February 28, 2015:
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||
March 1, 2015 to March 31, 2015:
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||
Total
|
1,851,400
|
|
|
|
|
|
1,850,696
|
|
|
$
|
—
|
|
|
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Ashland Inc.
|
|
(Registrant)
|
April 30, 2015
|
/s/ J. Kevin Willis
|
|
J. Kevin Willis
|
|
Senior Vice President and Chief Financial Officer
(on behalf of the Registrant and as principal
financial officer)
|
Exhibit No.
|
|
Description
|
10.1
|
|
2015 Ashland Inc. Incentive Plan (filed as Exhibit 10.1 to Ashland’s Form 8-K filed on January 30, 2015 (SEC File No. 001-32532) and incorporated herein by reference).
|
|
|
|
10.2*
|
|
Amendment Agreement, dated as of February 5, 2014, to the Credit Agreement dated as of March 14, 2013, among Ashland Inc., as Borrower, The Bank of Nova Scotia, as Administrative Agent, and each Lender from time to time party thereto and the other agents and arrangers party thereto.
|
|
|
|
10.3*
|
|
Amendment No. 2, dated as of February 27, 2015, to the Credit Agreement, dated as of March 14, 2013, as amended by the Amendment Agreement, dated as of February 5, 2014, among Ashland Inc., as Borrower, The Bank of Nova Scotia, as Administrative Agent, each Lender from time to time party thereto and the other agents and arrangers party thereto.
|
|
|
|
10.4*
|
|
Amendment to the Amended and Restated Ashland Inc. Deferred Compensation Plan for Non-Employee Directors (2005).
|
|
|
|
10.5*
|
|
Form of Restricted Stock Award Agreement.
|
|
|
|
10.6*
|
|
Form of Restricted Stock Unit Award Agreement.
|
|
|
|
10.7*
|
|
Form of Stock Appreciation Rights Award Agreement.
|
|
|
|
10.8*
|
|
Form of Performance Unit (LTIP) Award Agreement.
|
|
|
|
10.9*
|
|
Form of Performance Unit (LTIP) Award Agreement (International).
|
|
|
|
10.10*
|
|
Form of Restricted Stock Equivalent Agreement.
|
|
|
|
10.11
|
|
Master Confirmation - Uncollared Accelerated Share Repurchase (including the Form of Supplemental Confirmation), 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).
|
|
|
|
10.12
|
|
Master Confirmation – Uncollared Accelerated Share Repurchase (including the Form of Supplemental Confirmation), 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).
|
|
|
|
12*
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
31.1*
|
|
Certificate of William A. Wulfsohn, Chief Executive Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certificate of J. Kevin Willis, Chief Financial Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32*
|
|
Certificate of William A. Wulfsohn, 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.
|
(c)
|
No Default or Event of Default has occurred and is continuing.
|
|
ASHLAND, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name:
|
Eric N. Boni
|
|
Title:
|
Vice President and Treasurer
|
|
THE BANK OF NOVA SCOTIA,
|
|
|
as Administrative Agent
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Boomhour
|
|
Name:
|
Robert Boomhour
|
|
Title:
|
Director
|
|
|
|
|
By:
|
/s/ Clement Yu
|
|
Name:
|
Clement Yu
|
|
Title:
|
Associate Director
|
|
CITIBANK, N.A.,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kirkwood Roland
|
|
Name:
|
Kirkwood Roland
|
|
Title:
|
Director & Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
THE BANK OF NOVA SCOTIA,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ David Mahmood
|
|
Name:
|
David Mahmood
|
|
Title:
|
Managing Director
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
BANK OF AMERICA, N.A.,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ George Hlentzas
|
|
Name:
|
George Hlentzas
|
|
Title:
|
Managing Director
|
|
DEUTSCHE BANK TRUST COMPANY
|
|
|
AMERICAS,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Yvonne Tilden
|
|
Name:
|
Yvonne Tilden
|
|
Title:
|
Director
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
/s/ Ming K. Chu
|
|
Name:
|
Ming K. Chu
|
|
Title:
|
Vice President
|
|
PNC Bank, National Association,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ C. Joseph Richardson
|
|
Name:
|
C. Joseph Richardson
|
|
Title:
|
Senior Vice President
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark Campbell
|
|
Name:
|
Mark Campbell
|
|
Title:
|
Authorized Signatory
|
|
Compass Bank,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Dixon
|
|
Name:
|
Michael Dixon
|
|
Title:
|
Senior Vice President
|
|
CREDIT AGRICOLE CORPORATE
|
|
|
AND INVESTMENT BANK,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Blake Wright
|
|
Name:
|
Blake Wright
|
|
Title:
|
Managing Director
|
|
|
|
|
By:
|
/s/ James Austin
|
|
Name:
|
James Austin
|
|
Title:
|
Vice President
|
|
Fifth Third Bank
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Megan S. Szewc
|
|
Name:
|
Megan S. Szewc
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
HSBC Bank USA, N.A.
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Joseph D. Donovan
|
|
Name:
|
Joseph D. Donovan
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
J.P. Morgan Chase Bank, N.A.,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Anthony A. Eastman
|
|
Name:
|
Anthony A. Eastman
|
|
Title:
|
Vice President
|
|
Mizuho Bank, Ltd.
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Leon Mo
|
|
Name:
|
Leon Mo
|
|
Title:
|
Authorized Signatory
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
The Royal Bank of Scotland, plc
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brett E. Thompson
|
|
Name:
|
Brett E. Thompson
|
|
Title:
|
Director
|
|
Sumitomo Mitsui Banking Corporation
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jason D. Weinstein
|
|
Name:
|
James D. Weinstein
|
|
Title:
|
Managing Director
|
|
SunTrust Bank,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Henry J. Spark
|
|
Name:
|
Henry J. Spark
|
|
Title:
|
Vice President
|
|
U.S. BANK, NATIONAL ASSOCIATION,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven Dixon
|
|
Name:
|
Steven Dixon
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
WELLS FARGO BANK, NATIONAL
|
|
|
ASSOCIATION
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Andrew Payne
|
|
Name:
|
Andrew Payne
|
|
Title:
|
Director
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
THE BANK OF NEW YORK MELLON,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ William M. Feathers
|
|
Name:
|
William M. Feathers
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Bayerische Landesbank, New York Branch,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew DeCarlo
|
|
Name:
|
Matthew DeCarlo
|
|
Title:
|
Senior Director
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
/s/ Rolf Siebert
|
|
Name:
|
Rolf Siebert
|
|
Title:
|
Executive Director
|
|
GOLDMAN SACHS BANK USA,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michelle Latzoni
|
|
Name:
|
Michelle Latzoni
|
|
Title:
|
Authorized Signatory
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
ING Bank N.V., Dublin Branch, as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ P. Matthews
|
|
Name:
|
P. Matthews
|
|
Title:
|
Vice-President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
/s/ A. Neill
|
|
Name:
|
A. Neill
|
|
Title:
|
Director
|
|
THE NORTHERN TRUST COMPANY,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tom P. McGrath
|
|
Name:
|
Tom P. McGrath
|
|
Title:
|
Officer
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
TD BANK, N.A.,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michele Dragonetti
|
|
Name:
|
Michele Dragonetti
|
|
Title:
|
Senior Vice President
|
|
ASHLAND, INC., as Borrower
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name:
|
Eric N. Boni
|
|
Title:
|
Vice President and Treasurer
|
|
THE BANK OF NOVA SCOTIA, as
|
|
|
Administrative Agent, Swing Line Lender
|
|
|
and L/C Issuer
|
|
|
|
|
|
|
|
|
By:
|
/s/ Clement Yu
|
|
Name:
|
Clement Yu
|
|
Title:
|
Associate Director
|
|
|
|
|
By:
|
/s/ Syed Ali
|
|
Name:
|
Syed Ali
|
|
Title:
|
Analyst
|
|
Citibank, N.A.,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ David Jaffe
|
|
Name:
|
David Jaffe
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
THE BANK OF NOVA SCOTIA,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Grad
|
|
Name:
|
Michael Grad
|
|
Title:
|
Director
|
|
BANK OF AMERICA, N.A.,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Christopher DiBiase
|
|
Name:
|
Christopher DiBiase
|
|
Title:
|
Director
|
|
Deutsche Bank Trust Company Americas,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Marcus M. Tarkington
|
|
Name:
|
Marcus M. Tarkington
|
|
Title:
|
Director
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
/s/ Michael Winters
|
|
Name:
|
Michael Winters
|
|
Title:
|
Vice President
|
|
PNC BANK, NATIONAL ASSOCIATION,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jeffrey P. Fisher
|
|
Name:
|
Jeffrey P. Fisher
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark Campbell
|
|
Name:
|
Mark Campbell
|
|
Title:
|
Authorized Signatory
|
|
Compass Bank,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Dixon
|
|
Name:
|
Michael Dixon
|
|
Title:
|
Senior Vice President
|
|
CRÉDIT AGRICOLE CORPORATE
|
|
|
AND INVESTMENT BANK,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Blake Wright
|
|
Name:
|
Blake Wright
|
|
Title:
|
Managing Director
|
|
|
|
|
By:
|
/s/ James Austin
|
|
Name:
|
James Austin
|
|
Title:
|
Vice President
|
|
Fifth Third Bank,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Megan S. Szewc
|
|
Name:
|
Megan S. Szewc
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
HSBC Bank USA, N.A., as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Joseph D. Donovan
|
|
Name:
|
Joseph D. Donovan
|
|
Title:
|
Vice President
|
|
JPMORGAN CHASE BANK, N.A.
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Olivier Lopez
|
|
Name:
|
Olivier Lopez
|
|
Title:
|
Vice President
|
|
Mizuho Bank, Ltd., as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Donna DeMagistris
|
|
Name:
|
Donna DeMagistris
|
|
Title:
|
Authorized Signatory
|
|
|
|
|
Royal Bank of Scotland, plc
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tracy Rahn
|
|
Name:
|
Tracy Rahn
|
|
Title:
|
Director
|
|
Sumitomo Mitsui Banking Corporation,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Shuji Yabe
|
|
Name:
|
Shuji Yabe
|
|
Title:
|
Managing Director
|
|
SunTrust Bank, as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Henry J. Spark
|
|
Name:
|
Henry J. Spark
|
|
Title:
|
Vice President
|
|
U.S. BANK, NATIONAL ASSOCIATION
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven Dixon
|
|
Name:
|
Steven Dixon
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
WELLS FARGO BANK, NATIONAL
|
|
|
ASSOCIATION
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Andrew Payne
|
|
Name:
|
Andrew Payne
|
|
Title:
|
Director
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
THE BANK OF NEW YORK MELLON,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ William M. Feathers
|
|
Name:
|
William M. Feathers
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Bayerische Landesbank, New York Branch,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Elke Videgain
|
|
Name:
|
Elke Videgain
|
|
Title:
|
Vice President
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
/s/ Matthew DeCarlo
|
|
Name:
|
Matthew DeCarlo
|
|
Title:
|
Senior Director
|
|
GOLDMAN SACHS BANK USA,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jamie Minieri
|
|
Name:
|
Jamie Minieri
|
|
Title:
|
Authorized Signatory
|
|
|
|
For any institution requiring
|
|
|
a second signatory:
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
ING Bank N.V., Dublin Branch,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Pádraig Matthews
|
|
Name:
|
Pádraig Matthews
|
|
Title:
|
Vice President
|
|
|
|
|
By:
|
/s/ Sean Hassett
|
|
Name:
|
Sean Hassett
|
|
Title:
|
Director
|
|
THE NORTHERN TRUST COMPANY,
|
|
|
as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ John Dilegge
|
|
Name:
|
John Dilegge
|
|
Title:
|
Vice President
|
|
TD BANK, N.A., as a Lender
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michele Dragonetti
|
|
Name:
|
Michele Dragonetti
|
|
Title:
|
Senior Vice President
|
1
|
This certificate should be from the chief executive officer, chief financial officer, treasurer or controller of the Borrower.
|
|
ASHLAND, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
I.
|
Section 7.11(a) - Consolidated Leverage Ratio.
|
A.
|
Consolidated Indebtedness at the Statement Date
2:
|
||
|
|
|
|
|
1.
|
the outstanding principal amount of all obligations (as calculated under GAAP), whether current or long-term, for borrowed money (including Obligations in respect of the Loans under the Agreement), reimbursement obligations for amounts drawn under letters of credit and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments:
|
$
|
|
|
|
|
|
2.
|
all purchase money Indebtedness:
|
$
|
|
|
|
|
|
3.
|
all direct (but, for the avoidance of doubt, not contingent) obligations arising under bankers’ acceptances and bank guaranties:
|
$
|
|
|
|
|
|
4.
|
all obligations in respect of the deferred purchase price of property or services (other than (i) trade accounts payable in the ordinary course of business, (ii) any earn-out or similar obligation that is a contingent obligation or that is not reasonably determinable as of the applicable date of determination and (iii) any earn-out or similar obligation that is not a contingent obligation and that is reasonably determinable as of the applicable date of determination to the extent that (A) such Person is indemnified for the payment thereof by a solvent Person reasonably acceptable to the Administrative Agent or (B) amounts to be applied to the payment therefor are in escrow):
|
$
|
|
|
|
|
2
|
Consolidated Indebtedness shall (i) be calculated on a Pro Forma Basis unless otherwise specified, (ii) not include Defeased Debt and (iii) include all outstandings of the Borrower and its Subsidiaries under any Permitted Receivables Facility (but excluding the intercompany obligations owed by a Special Purpose Finance Subsidiary to the Borrower or any other Subsidiary in connection therewith). The principal amount outstanding at any time of any Indebtedness issued with original issue discount shall be the principal amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP, but such Indebtedness shall be deemed incurred only as of the date of original issuance thereof.
|
|
5.
|
all attributable Indebtedness:
|
$
|
|
|
|
|
|
|
|
6.
|
without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in Lines I.A.1 through I.A.5 above of Persons other than the Borrower or any Subsidiary:
|
$
|
|
|
|
|
|
|
|
7.
|
all Indebtedness of the types referred to in Lines I.A.1 through I.A.6 above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or other entity the obligations of which are not, by operation of law, the joint or several obligations of the holders of its Equity Interests) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary:
|
$
|
|
|
|
|
|
|
|
8.
|
Consolidated Indebtedness at the Statement Date (Lines I.A.1 + I.A.2 + I.A.3 + I.A.4 + I.A.5 + I.A.6 + I.A.7):
|
$
|
|
|
|
|
|
|
B.
|
Consolidated EBITDA for the Measurement Period ending on the Statement Date ("
Subject Period
")
3:
|
|
||
|
|
|
|
|
|
1.
|
Consolidated Net Income for the Subject Period:
|
|
|
|
|
|
|
|
|
|
a.
|
the net income (loss) of the Borrower and its Subsidiaries on a consolidated basis:
|
$
|
|
|
|
|
|
|
|
b.
|
extraordinary gains (extraordinary losses) for such Subject Period:
|
$
|
|
|
|
|
|
|
|
c.
|
the net income of any Subsidiary during such Subject Period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such income is not permitted by operation of the terms of its Organization Documents or any agreement, instrument or Law applicable to such Subsidiary (unless such restrictions on dividends or similar distributions have been legally and effectively waived), other than to the extent of the Borrower’s equity in any net loss of any such Subsidiary:
|
$
|
|
|
|
|
|
|
|
d.
|
any income (loss) for such Subject Period of any Person if such Person is not a Subsidiary:
|
$
|
|
|
|
|
|
|
|
e.
|
the Borrower’s equity in the net income of any such Person referred to in Line I.B.1.d for such Subject Period up to the aggregate amount of cash actually distributed by such Person during such Subject Period to the Borrower or a Subsidiary as a dividend or other distribution (and in the case of a dividend or other distribution to a Subsidiary, such Subsidiary is not precluded from further distributing such amount to the Borrower as described in Line I.B.1.c):
|
$
|
|
|
|
|
|
|
|
f.
|
any gain (loss) realized as a result of the cumulative effect of a change in accounting principles:
|
$
|
|
|
|
|
|
|
|
g.
|
any gain (loss) attributable to any foreign currency hedging arrangements or currency fluctuations:
|
$
|
|
|
|
|
|
|
|
h.
|
extinguishment charges relating to the early extinguishment of Indebtedness and obligations under Swap Contracts and extinguishment charges relating to upfront fees and original issue discount on Indebtedness:
|
$
|
|
|
|
|
|
|
|
i.
|
any pension or other post-retirement gain (expense) for such Subject Period:
|
$
|
|
|
|
|
|
|
|
j.
|
the amount of any cash payments made during such Subject Period relating to pension and other post-retirement costs:
|
$
|
|
|
|
|
|
|
|
k.
|
tax impact of lines I.B.1.b through I.B.1.j
|
$
|
|
|
|
|
|
|
|
l.
|
Consolidated Net Income for the Subject Period Lines I.B.1.a - I.B.1.b - I.B.1.c - I.B.1.d + I.B.1.e - I.B.1.f - I.B.1.g + I.B.1.h - I.B.1.i - I.B.1.j + I.B.1.k:
|
$
|
|
|
|
|
|
|
To the extent not included in Consolidated Net Income for the Subject Period:
|
|
||
|
|
|
|
|
|
2.
|
proceeds of business interruption insurance received during the Subject Period:
|
$
|
|
|
|
|
|
|
|
To the extent deducted in calculating Consolidated Net Income for the Subject Period, but without duplication and in each case for the Subject Period:
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
Consolidated Interest Charges:
|
$
|
|
|
|
|
|
|
|
4.
|
the provision for Federal, state, local and foreign income taxes payable:
|
$
|
|
|
|
|
|
|
|
5.
|
depreciation and amortization expense:
|
$
|
|
|
|
|
|
|
|
6.
|
asset impairment charges:
|
$
|
|
|
|
|
|
|
|
7.
|
expenses reimbursed by third parties (including through insurance and indemnity payments):
|
$
|
|
|
|
|
|
|
|
8.
|
fees and expenses incurred in connection with the Transactions, any Permitted Receivables Facility, any proposed or actual issuance of any Indebtedness or Equity Interests (including upfront fees and original issue discount), or any proposed or actual acquisitions, investments, asset sales or divestitures permitted under the Agreement, in each case that are expensed:
|
$
|
|
|
|
|
|
|
|
9.
|
non-cash restructuring and integration charges and cash restructuring and integration charges
4
:
|
$
|
|
|
|
|
|
|
|
10.
|
non-cash stock expense and non-cash equity compensation expense:
|
$
|
|
|
|
|
|
|
|
11.
|
other expenses or losses, including purchase accounting entries such as the inventory adjustment to fair value, reducing such Consolidated Net Income which do not represent a cash item in such period or any future period:
|
$
|
|
|
|
|
|
|
|
12.
|
expenses or losses in respect of discontinued operations of Borrower or any of its Subsidiaries:
|
$
|
|
|
|
|
|
|
|
13.
|
any unrealized losses attributable to the application of “mark to market” accounting in respect of Swap Contracts:
|
$
|
|
|
|
|
|
|
|
14.
|
with respect to any Disposition for which pro forma effect is required to be given pursuant to the definition of Pro Forma Basis, any loss thereon:
|
$
|
|
|
|
|
|
|
|
To the extent included in calculating Consolidated Net Income for the Subject Period, but without duplication and in each case for the Subject Period:
|
|
||
|
|
|
|
|
|
15.
|
Federal, state, local and foreign income tax credits:
|
$
|
|
|
|
|
|
|
|
16.
|
all non-cash gains or other items increasing Consolidated Net Income:
|
$
|
|
|
|
|
|
|
|
17.
|
gains in respect of discontinued operations of the Borrower or any of its Subsidiaries:
|
|
|
|
|
|
|
|
|
18.
|
any unrealized gains for such period attributable to the application of “mark to market” accounting in respect of Swap Contracts
:
|
$
|
|
|
|
|
|
|
|
19.
|
|
with respect to any Disposition for which pro forma effect is required to be given pursuant to the definition of Pro Forma Basis, any gain thereon:
|
$
|
|
|
|
|
|
|
20.
|
|
Consolidated EBITDA for the Subject Period (Lines I.B.1.l + I.B.2 + I.B.3 + I.B.4 + I.B.5 + I.B.6 + I.B.7 + I.B.8 + I.B.9 + I.B.10 + I.B.11 + I.B.12 + I.B.13 + I.B.14 - I.B.15 - I.B.16 - I.B.17 - I.B.18 - I.B.19):
|
$
|
II.
|
Section 7.11(b) - Consolidated Interest Coverage Ratio.
|
A.
|
Consolidated EBITDA for the Subject Period (Line I.B.20):
|
$
|
||
|
|
|
|
|
B.
|
Consolidated Interest Charges for the Subject Period, without duplication:
|
|
||
|
|
|
|
|
|
1.
|
all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP:
|
$
|
|
|
|
|
|
|
|
2.
|
cash payments made in respect of obligations referred to in Line II.B.6 below:
|
$
|
|
|
|
|
|
|
|
3.
|
the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case, of or by the Borrower and its Subsidiaries on a consolidated basis for such Subject Period:
|
$
|
|
|
|
|
|
|
|
4.
|
all interest, premium payments, debt discount, fees, charges and related expenses in connection with the Permitted Receivables Facility:
|
$
|
|
|
|
|
|
|
|
To the extent included in such consolidated interest expense for such Subject Period, without duplication:
|
|
||
|
|
|
|
|
|
5.
|
extinguishment charges relating to the early extinguishment of Indebtedness or obligations under Swap Contracts:
|
$
|
|
|
|
|
|
|
|
6.
|
noncash amounts attributable to the amortization of debt discounts or accrued interest payable in kind:
|
$
|
|
|
|
|
|
|
|
7.
|
Noncash amounts attributable to amortization or write-off of capitalized interest or other financing costs paid in a previous period:
|
$
|
|
|
|
|
|
|
|
8.
|
interest income treated as such in accordance with GAAP:
|
$
|
|
|
|
|
|
|
|
9.
|
fees and expenses, original issue discount and upfront fees, in each case of or by the Borrower and its Subsidiaries on a consolidated basis for such Subject Period:
|
$
|
|
|
|
|
|
|
|
10.
|
Consolidated Interest Charges for the Subject Period, the excess, without duplication of (Lines II.B.1 + II.B.2 + II.B.3 + II.B.4) - (Lines II.B.5 + II.B.6 + II.B.7 + II.B.8 + II.B.9):
|
$
|
|
|
|
|
|
|
C.
|
Consolidated Interest Coverage Ratio at the Statement Date (Line II.A) ÷ Line II.B.10):
|
:1.00
|
||
|
|
|
|
|
|
Minimum Consolidated Interest Coverage Ratio Required:
|
3.00:1.00
|
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Twelve Months Ended
|
the net income (loss) of the Borrower and its Subsidiaries on a consolidated basis
|
|
|
|
|
|
- extraordinary gains (extraordinary losses) for such Subject Period
|
|
|
|
|
|
- the net income of any Subsidiary during such Subject Period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such income is not permitted by operation of the terms of its Organization Documents or any agreement, instrument or Law applicable to such Subsidiary (unless such restrictions on dividends or similar distributions have been) legally and effectively waived), other than to the extent of the Borrower’s equity in any net loss of any such Subsidiary
|
|
|
|
|
|
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Twelve Months Ended
|
- any income (loss) for such Subject Period of any Person if such Person is not a Subsidiary
|
|
|
|
|
|
+ the Borrower’s equity in the net income of any Person referred to in the immediately preceding row for such Subject Period up to the aggregate amount of cash actually distributed by such Person during such Subject Period to the Borrower or a Subsidiary as a dividend or other distribution (and in the case of a dividend or other distribution to a Subsidiary, such Subsidiary is not precluded from further distributing such amount to the Borrower as described in the third row of this Schedule 2)
|
|
|
|
|
|
- any gain (loss) realized as a result of the cumulative effect of a change in accounting principles
|
|
|
|
|
|
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Twelve Months Ended
|
- any gain (loss) attributable to any foreign currency hedging arrangements or currency fluctuations
|
|
|
|
|
|
+ extinguishment charges relating to the early extinguishment of Indebtedness and obligations under Swap Contracts and extinguishment charges relating to upfront fees and original issue discount on Indebtedness
|
|
|
|
|
|
- any pension or other post-retirement gain (expense) for such Subject Period
|
|
|
|
|
|
- the amount of any cash payments made during such Subject Period relating to pension and other post-retirement costs
|
|
|
|
|
|
+ tax impact of adjustments to net income
|
|
|
|
|
|
= Consolidated Net Income
|
|
|
|
|
|
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Twelve Months Ended
|
+ proceeds of business interruption insurance, to the extent not included in Consolidated Net Income
|
|
|
|
|
|
+ Consolidated Interest Charges
|
|
|
|
|
|
+ provision for Federal, state, local and foreign income taxes payable
|
|
|
|
|
|
+ depreciation expense
|
|
|
|
|
|
+ amortization expense
|
|
|
|
|
|
+ asset impairment charges
|
|
|
|
|
|
+ expenses reimbursed by third parties (including through insurance and indemnity payments)
|
|
|
|
|
|
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Twelve Months Ended
|
+ fees and expenses incurred in connection with the Transactions, any Permitted Receivables Facility, any proposed or actual issuance of any Indebtedness or Equity Interests (including upfront fees and original issue discount), or any proposed or actual acquisitions, investments, asset sales or divestitures permitted hereunder, in each case that are expensed
|
|
|
|
|
|
+ non-cash restructuring and integration charges and cash restructuring and integration charges
5
|
|
|
|
|
|
+ non-cash stock expense and non-cash equity compensation expense
|
|
|
|
|
|
+ other expenses or losses, including purchase accounting entries such as inventory adjustment to fair value, reducing such Consolidated Net Income which do not represent a cash item
|
|
|
|
|
|
5
|
In the case of cash restructuring and integration charges, not to exceed $100,000,000 in any twelve-month period.
|
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Quarter Ended
|
Twelve Months Ended
|
+ expenses or losses in respect of discontinued operations of the Borrower or any of its Subsidiaries
|
|
|
|
|
|
+ any unrealized losses attributable to the application of “mark to market” accounting in respect of Swap Contracts
|
|
|
|
|
|
+ with respect to any Disposition for which pro forma effect is required to be given pursuant to the definition of Pro Forma Basis, any loss thereon
|
|
|
|
|
|
- Federal, state, local and foreign income tax credits
|
|
|
|
|
|
- all non-cash gains or other items increasing Consolidated Net Income
|
|
|
|
|
|
-
gains in respect of discontinued operations of the Borrower or any of its Subsidiaries
|
|
|
|
|
|
-
any unrealized gains for such period attributable to the application of “mark to market” accounting in respect of Swap Contracts
|
|
|
|
|
|
- with respect to any Disposition for which pro forma effect is required to be given pursuant to the definition of Pro Forma Basis, any gain thereon
|
|
|
|
|
|
= Consolidated EBITDA
|
|
|
|
|
|
A.
|
50% of the Consolidated Net Income for all fiscal quarters of the Borrower for which Consolidated Net Income is positive and that have ended on or after September 30, 2011 and prior to such date for which financial statements shall have been delivered to the Administrative Agent pursuant to
Section 6.01(a)
or
6.01(b)
of the Agreement (treated as one continuous accounting period):
|
$
|
|
|
|
|
|
B.
|
100% of the Consolidated Net Income for all fiscal quarters of the Borrower for which Consolidated Net Income is negative and that have ended on or after September 30, 2011 and prior to such date for which financial statements shall have been delivered to the Administrative Agent pursuant to
Section 6.01(a)
or
6.01(b
) of the Agreement (treated as one continuous accounting period):
|
$
|
|
|
|
|
|
C.
|
the net cash proceeds from the issuance of common stock of the Borrower after August 23, 2011, other than any such issuance to a Subsidiary, to an employee stock ownership plan or to a trust established by the Borrower or any of its Subsidiaries for the benefit of their employees:
|
$
|
|
|
|
|
|
D.
|
without duplication, the sum of the portion of the Available Amount previously utilized pursuant to
Section 7.03(k)
and/or
7.06(g)
of the Agreement:
|
$
|
|
|
|
|
|
E.
|
without duplication, the sum of the portion of the Available Amount (as defined in the Existing Credit Agreement) previously utilized pursuant to Section 7.03(k), 7.06(g) and/or 7.14(e) of the Existing Credit Agreement:
|
$
|
|
|
|
|
|
F.
|
Available Amount at the Statement Date Lines I.A - I.B + Line I.C - Line I.D - Line I.E:
|
$
|
|
ASHLAND INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Susan B. Esler
|
|
Title:
|
VP & Chief HR & Communications Officer
|
|
Date:
|
March 30, 2015
|
Vest Date:
|
1/3 _________________, 20 ___
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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/ William A. Wulfsohn
|
|
William A. Wulfsohn
|
|
Chairman and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ William A. Wulfsohn
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William A. Wulfsohn
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Chief Executive Officer
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April 30, 2015
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/s/ J. Kevin Willis
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J. Kevin Willis
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Chief Financial Officer
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April 30, 2015
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