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|
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(Mark One)
|
|
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þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
Large Accelerated Filer
þ
|
|
Accelerated Filer
o
|
|
Non-Accelerated Filer
o
|
|
Smaller Reporting Company
o
|
|
(Do not check if a smaller reporting company.)
|
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Three months ended
|
||||||
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December 31
|
||||||
(In millions except per share data - unaudited)
|
2016
|
|
|
2015
|
|
||
Sales
|
$
|
1,193
|
|
|
$
|
1,163
|
|
Cost of sales
|
807
|
|
|
771
|
|
||
Gross profit
|
386
|
|
|
392
|
|
||
|
|
|
|
||||
Selling, general and administrative expense
|
239
|
|
|
224
|
|
||
Research and development expense
|
23
|
|
|
25
|
|
||
Equity and other income
|
13
|
|
|
8
|
|
||
Operating income
|
137
|
|
|
151
|
|
||
|
|
|
|
||||
Net interest and other financing expense
|
132
|
|
|
42
|
|
||
Net gain (loss) on divestitures
|
(1
|
)
|
|
2
|
|
||
Income from continuing operations before income taxes
|
4
|
|
|
111
|
|
||
Income tax expense (benefit) - Note I
|
(6
|
)
|
|
20
|
|
||
Income from continuing operations
|
10
|
|
|
91
|
|
||
Loss from discontinued operations (net of tax) - Note D
|
—
|
|
|
(2
|
)
|
||
Net income
|
10
|
|
|
89
|
|
||
Net income attributable to noncontrolling interest
|
11
|
|
|
—
|
|
||
Net income (loss) attributable to Ashland
|
$
|
(1
|
)
|
|
$
|
89
|
|
|
|
|
|
||||
PER SHARE DATA
|
|
|
|
||||
Basic earnings per share - Note L
|
|
|
|
|
|
||
Income (loss) from continuing operations attributable to Ashland
|
$
|
(0.01
|
)
|
|
$
|
1.39
|
|
Loss from discontinued operations
|
—
|
|
|
(0.02
|
)
|
||
Net income (loss) attributable to Ashland
|
$
|
(0.01
|
)
|
|
$
|
1.37
|
|
|
|
|
|
||||
Diluted earnings per share - Note L
|
|
|
|
|
|
||
Income (loss) from continuing operations attributable to Ashland
|
$
|
(0.01
|
)
|
|
$
|
1.38
|
|
Loss from discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
Net income (loss) attributable to Ashland
|
$
|
(0.01
|
)
|
|
$
|
1.35
|
|
|
|
|
|
||||
DIVIDENDS PAID PER COMMON SHARE
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
|
|
|
||||
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
||||
Net income
|
$
|
10
|
|
|
$
|
89
|
|
Other comprehensive income (loss), net of tax - Note M
|
|
|
|
||||
Unrealized translation loss
|
(146
|
)
|
|
(61
|
)
|
||
Pension and postretirement obligation adjustment
|
(1
|
)
|
|
(3
|
)
|
||
Unrealized gain on available-for-sale securities
|
—
|
|
|
6
|
|
||
Other comprehensive loss
|
(147
|
)
|
|
(58
|
)
|
||
Comprehensive income (loss)
|
(137
|
)
|
|
31
|
|
||
Comprehensive income attributable to noncontrolling interest
|
10
|
|
|
—
|
|
||
Comprehensive income (loss) attributable to Ashland
|
$
|
(147
|
)
|
|
$
|
31
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
September 30
|
|
||
(In millions - unaudited)
|
2016
|
|
|
2016
|
|
||
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
704
|
|
|
$
|
1,188
|
|
Accounts receivable
(a)
|
858
|
|
|
894
|
|
||
Inventories - Note F
|
666
|
|
|
671
|
|
||
Other assets
|
106
|
|
|
113
|
|
||
Total current assets
|
2,334
|
|
|
2,866
|
|
||
Noncurrent assets
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
||||
Cost
|
4,283
|
|
|
4,343
|
|
||
Accumulated depreciation
|
2,097
|
|
|
2,119
|
|
||
Net property, plant and equipment
|
2,186
|
|
|
2,224
|
|
||
Goodwill - Note G
|
2,348
|
|
|
2,401
|
|
||
Intangibles - Note G
|
1,026
|
|
|
1,064
|
|
||
Restricted investments - Note E
|
297
|
|
|
292
|
|
||
Asbestos insurance receivable - Note K
|
194
|
|
|
196
|
|
||
Equity and other unconsolidated investments
|
60
|
|
|
57
|
|
||
Deferred income taxes
|
199
|
|
|
177
|
|
||
Other assets
|
419
|
|
|
420
|
|
||
Total noncurrent assets
|
6,729
|
|
|
6,831
|
|
||
Total assets
|
$
|
9,063
|
|
|
$
|
9,697
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Short-term debt - Note H
|
$
|
92
|
|
|
$
|
170
|
|
Current portion of long-term debt - Note H
|
15
|
|
|
19
|
|
||
Trade and other payables
|
458
|
|
|
541
|
|
||
Accrued expenses and other liabilities
|
451
|
|
|
486
|
|
||
Total current liabilities
|
1,016
|
|
|
1,216
|
|
||
Noncurrent liabilities
|
|
|
|
|
|
||
Long-term debt - Note H
|
2,825
|
|
|
3,055
|
|
||
Employee benefit obligations - Note J
|
1,040
|
|
|
1,080
|
|
||
Asbestos litigation reserve - Note K
|
674
|
|
|
686
|
|
||
Deferred income taxes
|
69
|
|
|
69
|
|
||
Other liabilities
|
438
|
|
|
426
|
|
||
Total noncurrent liabilities
|
5,046
|
|
|
5,316
|
|
||
Commitments and contingencies - Note K
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Total Ashland stockholders' equity
|
3,175
|
|
|
3,347
|
|
||
Noncontrolling interest
|
(174
|
)
|
|
(182
|
)
|
||
Total equity
|
3,001
|
|
|
3,165
|
|
||
Total liabilities and equity
|
$
|
9,063
|
|
|
$
|
9,697
|
|
|
|
|
|
(a)
|
Accounts receivable includes an allowance for doubtful accounts of
$14 million
at
December 31, 2016
and
September 30, 2016
.
|
|
|
|
|
|
|
|
|
|
(In millions - unaudited)
|
Common
stock
|
|
|
Paid-in
capital
|
|
|
Retained
earnings
|
|
|
Accumulated
other
comprehensive
income (loss)
|
|
(a)
|
Noncontrolling interest
|
|
(b)
|
Total
|
|
||||||
BALANCE AT SEPTEMBER 30, 2016
|
$
|
1
|
|
|
$
|
923
|
|
|
$
|
2,704
|
|
|
$
|
(281
|
)
|
|
$
|
(182
|
)
|
|
$
|
3,165
|
|
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
|
|
|
|
|
(1
|
)
|
|
|
|
11
|
|
|
10
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
(146
|
)
|
|
(1
|
)
|
|
(147
|
)
|
|||||||||
Regular dividends, $0.39 per common share
|
|
|
|
|
|
|
(24
|
)
|
|
|
|
|
|
|
(24
|
)
|
|||||||
Common shares issued under stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
incentive and other plans
(c)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
(1
|
)
|
||||||||
Distributions to noncontrolling interest
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||||||
BALANCE AT DECEMBER 31, 2016
|
$
|
1
|
|
|
$
|
922
|
|
|
$
|
2,679
|
|
|
$
|
(427
|
)
|
|
$
|
(174
|
)
|
|
$
|
3,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
At
December 31, 2016
and
September 30, 2016
, the after-tax accumulated other comprehensive loss attributable to Ashland of
$427 million
and
$281 million
, respectively, was comprised of unrecognized prior service credits as a result of certain employee benefit plan amendments of
$45 million
and
$46 million
, respectively, net unrealized translation losses of
$478 million
and
$333 million
, respectively, and net unrealized gain on available-for-sale securities of
$6 million
. At
December 31, 2016
and
September 30, 2016
, amounts attributable to noncontrolling interest included unrecognized prior service credits of
$9 million
and net unrealized translation losses of
$3 million
and
$2 million
, respectively.
|
(b)
|
See Note B for discussion of Valvoline Inc. noncontrolling interest.
|
(c)
|
Common shares issued were
56,590
for the
three
months ended
December 31, 2016
.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions - unaudited)
|
2016
|
|
|
2015
|
|
||
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM
|
|
|
|
||||
CONTINUING OPERATIONS
|
|
|
|
||||
Net income
|
$
|
10
|
|
|
$
|
89
|
|
Loss from discontinued operations (net of tax)
|
—
|
|
|
2
|
|
||
Adjustments to reconcile income from continuing operations to
|
|
|
|
|
|
||
cash flows from operating activities
|
|
|
|
|
|
||
Depreciation and amortization
|
77
|
|
|
83
|
|
||
Original issue discount and debt issuance cost amortization
|
95
|
|
|
3
|
|
||
Deferred income taxes
|
2
|
|
|
3
|
|
||
Equity income from affiliates
|
(4
|
)
|
|
(4
|
)
|
||
Distributions from equity affiliates
|
—
|
|
|
5
|
|
||
Stock based compensation expense
|
6
|
|
|
8
|
|
||
Gain on early retirement of debt
|
(3
|
)
|
|
—
|
|
||
Gain on available-for-sale securities
|
(3
|
)
|
|
(2
|
)
|
||
Net loss (gain) on divestitures
|
1
|
|
|
(2
|
)
|
||
Pension contributions
|
(3
|
)
|
|
(4
|
)
|
||
Gain on post-employment plan remeasurement
|
(10
|
)
|
|
—
|
|
||
Change in operating assets and liabilities
(a)
|
(156
|
)
|
|
(115
|
)
|
||
Total cash flows provided by operating activities from continuing operations
|
12
|
|
|
66
|
|
||
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(43
|
)
|
|
(53
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
—
|
|
|
1
|
|
||
Purchase of operations - net of cash acquired
|
—
|
|
|
(4
|
)
|
||
Uses from sale of operations or equity investments
|
—
|
|
|
(2
|
)
|
||
Net purchase of funds restricted for specific transactions
|
(2
|
)
|
|
—
|
|
||
Reimbursements from restricted investments
|
—
|
|
|
7
|
|
||
Proceeds from the settlement of derivative instruments
|
4
|
|
|
7
|
|
||
Total cash flows used by investing activities from continuing operations
|
(41
|
)
|
|
(44
|
)
|
||
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Repayment of long-term debt
|
(318
|
)
|
|
(14
|
)
|
||
Premium on long-term debt repayment
|
(5
|
)
|
|
—
|
|
||
Proceeds (repayment) from short-term debt
|
(78
|
)
|
|
319
|
|
||
Repurchase of common stock
|
—
|
|
|
(500
|
)
|
||
Debt issuance costs
|
(4
|
)
|
|
—
|
|
||
Cash dividends paid
|
(24
|
)
|
|
(24
|
)
|
||
Distributions to noncontrolling interest
|
(2
|
)
|
|
—
|
|
||
Excess tax benefits related to share-based payments
|
(4
|
)
|
|
—
|
|
||
Total cash flows used by financing activities from continuing operations
|
(435
|
)
|
|
(219
|
)
|
||
CASH USED BY CONTINUING OPERATIONS
|
(464
|
)
|
|
(197
|
)
|
||
Cash used by discontinued operations
|
|
|
|
|
|
||
Operating cash flows
|
(12
|
)
|
|
(10
|
)
|
||
Investing cash flows
|
—
|
|
|
—
|
|
||
Total cash used by discontinued operations
|
(12
|
)
|
|
(10
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(8
|
)
|
|
(11
|
)
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(484
|
)
|
|
(218
|
)
|
||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
1,188
|
|
|
1,257
|
|
||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
704
|
|
|
$
|
1,039
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Loss on disposal of discontinued operations (net of tax)
|
|
|
|
|
|
||
Water Technologies
|
$
|
—
|
|
|
$
|
(2
|
)
|
Total loss from discontinued operations (net of tax)
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
(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
|
$
|
704
|
|
|
$
|
704
|
|
|
$
|
704
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted investments
(a)
|
327
|
|
|
327
|
|
|
327
|
|
|
—
|
|
|
—
|
|
|||||
Deferred compensation investments
(b)
|
184
|
|
|
184
|
|
|
34
|
|
|
150
|
|
|
—
|
|
|||||
Investments of captive insurance company
(b)
|
2
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
17
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
1,234
|
|
|
$
|
1,234
|
|
|
$
|
1,067
|
|
|
$
|
167
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency derivatives
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in restricted investments and
$30 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
|
$
|
1,188
|
|
|
$
|
1,188
|
|
|
$
|
1,188
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted investments
(a)
|
322
|
|
|
322
|
|
|
322
|
|
|
—
|
|
|
—
|
|
|||||
Deferred compensation investments
(b)
|
185
|
|
|
185
|
|
|
35
|
|
|
150
|
|
|
—
|
|
|||||
Investments of captive insurance company
(b)
|
4
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
1,702
|
|
|
$
|
1,702
|
|
|
$
|
1,549
|
|
|
$
|
153
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency derivatives
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Included in restricted investments and
$30 million
within other current assets in the Condensed Consolidated Balance Sheets.
|
(b)
|
Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
September 30
|
|
||
(In millions)
|
2016
|
|
|
2016
|
|
||
Original cost
|
$
|
335
|
|
|
$
|
335
|
|
Accumulated investment income, settlement funds,
|
|
|
|
||||
and disbursements, net
|
(24
|
)
|
|
(3
|
)
|
||
Adjusted cost
(a)
|
311
|
|
|
332
|
|
||
Investment income
(b)
|
3
|
|
|
8
|
|
||
Unrealized gain
|
13
|
|
|
11
|
|
||
Unrealized loss
|
(2
|
)
|
|
—
|
|
||
Settlement funds
|
2
|
|
|
4
|
|
||
Disbursements
|
—
|
|
|
(33
|
)
|
||
Fair value
|
$
|
327
|
|
|
$
|
322
|
|
|
|
|
|
(a)
|
The adjusted cost of the demand deposit includes accumulated investment income, disbursements and settlements recorded in previous periods.
|
(b)
|
Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds.
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
||||||
(In millions)
|
Adjusted Cost
|
|
|
Unrealized Gain
|
|
|
Unrealized Loss
|
|
|
Fair Value
|
|
||||
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Demand Deposit
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Equity Mutual Fund
|
185
|
|
|
13
|
|
|
—
|
|
|
198
|
|
||||
Corporate bond Mutual Fund
|
120
|
|
|
—
|
|
|
(2
|
)
|
|
118
|
|
||||
Fair value
|
$
|
316
|
|
|
$
|
13
|
|
|
$
|
(2
|
)
|
|
$
|
327
|
|
|
|
|
|
|
|
|
|
||||||||
As of September 30, 2016
|
|
|
|
|
|
|
|
||||||||
Demand Deposit
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Equity Mutual Fund
|
185
|
|
|
8
|
|
|
—
|
|
|
193
|
|
||||
Corporate bond Mutual Fund
|
120
|
|
|
3
|
|
|
—
|
|
|
123
|
|
||||
Fair value
|
$
|
311
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
322
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Foreign currency derivative gain
|
$
|
2
|
|
|
$
|
3
|
|
|
December 31
|
|
|
September 30
|
|
||
(In millions)
|
2016
|
|
|
2016
|
|
||
Foreign currency derivative assets
|
$
|
15
|
|
|
$
|
3
|
|
Notional contract values
|
678
|
|
|
333
|
|
||
|
|
|
|
||||
Foreign currency derivative liabilities
|
$
|
12
|
|
|
$
|
4
|
|
Notional contract values
|
629
|
|
|
530
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
September 30
|
|
||
(In millions)
|
Consolidated balance sheet caption
|
2016
|
|
|
2016
|
|
||
Net investment hedge assets
(a)
|
Accounts receivable
|
$
|
2
|
|
|
$
|
—
|
|
Net investment hedge liabilities
(a)
|
Accrued expenses and other liabilities
|
—
|
|
|
1
|
|
||
|
|
|
|
|
(a)
|
Fair value of $0 denotes a value less than $1 million.
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Change in unrealized gain in AOCI
(a)
|
$
|
2
|
|
|
$
|
—
|
|
Tax impact of change in unrealized gain in AOCI
(a)
|
(1
|
)
|
|
—
|
|
||
|
|
|
|
(a)
|
$0 denotes a value less than $1 million.
|
|
|
|
|
December 31
|
|
|
September 30
|
|
||
(In millions)
|
2016
|
|
|
2016
|
|
||
Finished products
|
$
|
512
|
|
|
$
|
516
|
|
Raw materials, supplies and work in process
|
182
|
|
|
184
|
|
||
LIFO reserves
|
(28
|
)
|
|
(29
|
)
|
||
|
$
|
666
|
|
|
$
|
671
|
|
|
Specialty
|
|
|
Performance
|
|
|
|
|
|
|
|||||
(In millions)
|
Ingredients
|
|
|
Materials
|
|
(a)
|
Valvoline
|
|
(b)
|
Total
|
|
||||
Balance as of September 30, 2016
|
$
|
1,991
|
|
|
$
|
147
|
|
|
$
|
263
|
|
|
$
|
2,401
|
|
Acquisitions
(c)
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||
Currency translation adjustment
|
(54
|
)
|
|
(3
|
)
|
|
—
|
|
|
(57
|
)
|
||||
Balance as of December 31, 2016
|
$
|
1,937
|
|
|
$
|
144
|
|
|
$
|
267
|
|
|
$
|
2,348
|
|
|
|
|
|
|
|
|
|
(a)
|
As of
December 31, 2016
, goodwill was completely attributable to the Composites reporting unit due to the full impairment of the goodwill for the Intermediates/Solvents reporting unit during the fourth quarter of 2016.
|
(b)
|
As of
December 31, 2016
, goodwill consisted of
$89 million
for the Core North America reporting unit,
$139 million
for the Quick Lubes reporting unit and
$39 million
for the International reporting unit.
|
(c)
|
Relates to Valvoline Instant Oil Change
SM
center acquisitions during the
three
months ended
December 31, 2016
.
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
||||||||||
|
Gross
|
|
|
|
|
Net
|
|
||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|||
Definite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
|
$
|
42
|
|
|
$
|
(20
|
)
|
|
$
|
22
|
|
Intellectual property
|
659
|
|
|
(284
|
)
|
|
375
|
|
|||
Customer relationships
|
530
|
|
|
(202
|
)
|
|
328
|
|
|||
Total definite-lived intangible assets
|
1,231
|
|
|
(506
|
)
|
|
725
|
|
|||
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
|
301
|
|
|
—
|
|
|
301
|
|
|||
Total intangible assets
|
$
|
1,532
|
|
|
$
|
(506
|
)
|
|
$
|
1,026
|
|
|
September 30, 2016
|
||||||||||
|
Gross
|
|
|
|
|
Net
|
|
||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|||
Definite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
|
$
|
42
|
|
|
$
|
(19
|
)
|
|
$
|
23
|
|
Intellectual property
|
667
|
|
|
(273
|
)
|
|
394
|
|
|||
Customer relationships
|
546
|
|
|
(200
|
)
|
|
346
|
|
|||
Total definite-lived intangible assets
|
1,255
|
|
|
(492
|
)
|
|
763
|
|
|||
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
|
301
|
|
|
—
|
|
|
301
|
|
|||
Total intangible assets
|
$
|
1,556
|
|
|
$
|
(492
|
)
|
|
$
|
1,064
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
September 30
|
|
||
(In millions)
|
2016
|
|
|
2016
|
|
||
4.750% notes, due 2022
|
$
|
1,085
|
|
|
$
|
1,121
|
|
3.875% notes, due 2018
|
671
|
|
|
700
|
|
||
6.875% notes, due 2043
|
376
|
|
|
376
|
|
||
5.500% notes, due 2024
(a)
|
375
|
|
|
375
|
|
||
Term Loan, due 2021
(a)
|
296
|
|
|
375
|
|
||
2017 accounts receivable securitization facility
(a)
|
75
|
|
|
—
|
|
||
6.50% junior subordinated notes, due 2029
|
50
|
|
|
140
|
|
||
Other international loans, interest at a weighted-
|
|
|
|
|
|
||
average rate of 4.9% at December 31, 2016 (4.8% to 5.0%)
|
17
|
|
|
20
|
|
||
Medium-term notes, due 2019, interest of 9.4% at December 31, 2016
|
5
|
|
|
5
|
|
||
Term Loan, due 2017
|
—
|
|
|
150
|
|
||
Other
(b)
|
(18
|
)
|
|
(18
|
)
|
||
Total debt
|
2,932
|
|
|
3,244
|
|
||
Short-term debt
|
(92
|
)
|
|
(170
|
)
|
||
Current portion of long-term debt
|
(15
|
)
|
|
(19
|
)
|
||
Long-term debt (less current portion and debt issuance cost discounts)
|
$
|
2,825
|
|
|
$
|
3,055
|
|
|
|
|
|
(a)
|
These debt instruments were issued by Valvoline during 2016 and 2017 in connection with the separation process.
|
(b)
|
Other includes
$29 million
of debt issuance cost discounts as of
December 31, 2016
and
September 30, 2016
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|
|
|
Balance at October 1, 2016
|
$
|
168
|
|
Increases related to positions taken on items from prior years
|
4
|
|
|
Decreases related to positions taken on items from prior years
|
(2
|
)
|
|
Increases related to positions taken in the current year
|
4
|
|
|
Settlement of uncertain tax positions with tax authorities
|
(1
|
)
|
|
Balance at December 31, 2016
|
$
|
173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other postretirement
|
||||||||||
|
Pension benefits
|
|
benefits
|
||||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Three months ended December 31
|
|
|
|
|
|
|
|
||||||||
Service cost
(a)
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
23
|
|
|
31
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(39
|
)
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
(a)
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Actuarial gain
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
|
$
|
(13
|
)
|
|
$
|
(11
|
)
|
|
$
|
(12
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
(a)
|
Activity of $0 denote values less than $1 million.
|
|
Three months ended
|
|
|
|
|
|
|
|||||||
|
December 31
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Open claims - beginning of period
|
57
|
|
|
60
|
|
|
60
|
|
|
65
|
|
|
65
|
|
New claims filed
|
—
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Claims settled
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
Claims dismissed
|
(1
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|
(1
|
)
|
Open claims - end of period
|
56
|
|
|
59
|
|
|
57
|
|
|
60
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
||||||||||||
|
December 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Asbestos reserve - beginning of period
|
$
|
415
|
|
|
$
|
409
|
|
|
$
|
409
|
|
|
$
|
438
|
|
|
$
|
463
|
|
Reserve adjustment
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
4
|
|
|||||
Amounts paid
|
(9
|
)
|
|
(8
|
)
|
|
(31
|
)
|
|
(29
|
)
|
|
(29
|
)
|
|||||
Asbestos reserve - end of period
|
$
|
406
|
|
|
$
|
401
|
|
|
$
|
415
|
|
|
$
|
409
|
|
|
$
|
438
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
||||||||||||
|
December 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Insurance receivable - beginning of period
|
$
|
151
|
|
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
402
|
|
|
$
|
408
|
|
Receivable adjustment
|
—
|
|
|
—
|
|
|
16
|
|
|
(3
|
)
|
|
22
|
|
|||||
Insurance settlement
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(227
|
)
|
|
—
|
|
|||||
Amounts collected
|
(2
|
)
|
|
(5
|
)
|
|
(11
|
)
|
|
(22
|
)
|
|
(28
|
)
|
|||||
Insurance receivable - end of period
|
$
|
149
|
|
|
$
|
145
|
|
|
$
|
151
|
|
|
$
|
150
|
|
|
$
|
402
|
|
|
Three months ended
|
|
|
|
|
|
|
|||||||
|
December 31
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Open claims - beginning of period
|
15
|
|
|
20
|
|
|
20
|
|
|
21
|
|
|
21
|
|
New claims filed
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Claims dismissed
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(2
|
)
|
|
(1
|
)
|
Open claims - end of period
|
15
|
|
|
20
|
|
|
15
|
|
|
20
|
|
|
21
|
|
|
Three months ended
|
|
|
|
|
|
|
||||||||||||
|
December 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Asbestos reserve - beginning of period
|
$
|
321
|
|
|
$
|
311
|
|
|
$
|
311
|
|
|
$
|
329
|
|
|
$
|
342
|
|
Reserve adjustment
|
—
|
|
|
—
|
|
|
25
|
|
|
4
|
|
|
10
|
|
|||||
Amounts paid
|
(3
|
)
|
|
(5
|
)
|
|
(15
|
)
|
|
(22
|
)
|
|
(23
|
)
|
|||||
Asbestos reserve - end of period
|
$
|
318
|
|
|
$
|
306
|
|
|
$
|
321
|
|
|
$
|
311
|
|
|
$
|
329
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
||||||||||||
|
December 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Insurance receivable - beginning of period
|
$
|
63
|
|
|
$
|
56
|
|
|
$
|
56
|
|
|
$
|
77
|
|
|
$
|
75
|
|
Receivable adjustment
|
—
|
|
|
—
|
|
|
7
|
|
|
1
|
|
|
3
|
|
|||||
Insurance settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|||||
Amounts collected
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Insurance receivable - end of period
|
$
|
63
|
|
|
$
|
56
|
|
|
$
|
63
|
|
|
$
|
56
|
|
|
$
|
77
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Reserve - beginning of period
|
$
|
177
|
|
|
$
|
186
|
|
Disbursements
|
(7
|
)
|
|
(10
|
)
|
||
Revised obligation estimates and accretion
|
4
|
|
|
4
|
|
||
Reserve - end of period
|
$
|
174
|
|
|
$
|
180
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Environmental expense
|
$
|
4
|
|
|
$
|
4
|
|
Legal expense
|
2
|
|
|
2
|
|
||
Total expense
|
6
|
|
|
6
|
|
||
|
|
|
|
||||
Insurance receivable
(a)
|
—
|
|
|
—
|
|
||
Total expense, net of receivable activity
|
$
|
6
|
|
|
$
|
6
|
|
|
|
|
|
(a)
|
Activity of $0 denotes value less than $1 million.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions except per share data)
|
2016
|
|
|
2015
|
|
||
Numerator
|
|
|
|
||||
Numerator for basic and diluted EPS –
|
|
|
|
||||
Income from continuing operations
|
$
|
10
|
|
|
$
|
91
|
|
Less: Income from continuing operations attributable to noncontrolling interest
|
11
|
|
|
—
|
|
||
Income (loss) from continuing operations attributable to Ashland, net of tax
|
$
|
(1
|
)
|
|
$
|
91
|
|
Denominator
|
|
|
|
|
|
||
Denominator for basic EPS – Weighted-average
|
|
|
|
|
|
||
common shares outstanding
|
62
|
|
|
65
|
|
||
Share-based awards convertible to common shares
(a)
|
—
|
|
|
1
|
|
||
Denominator for diluted EPS – Adjusted weighted-
|
|
|
|
|
|
||
average shares and assumed conversions
|
62
|
|
|
66
|
|
||
|
|
|
|
||||
EPS from continuing operations attributable to Ashland
|
|
|
|
|
|
||
Basic
|
$
|
(0.01
|
)
|
|
$
|
1.39
|
|
Diluted
|
(0.01
|
)
|
|
1.38
|
|
||
|
|
|
|
(a)
|
As a result of the loss from continuing operations attributable to Ashland during the three months ended December 31, 2016, the effect of the share-based awards convertible to common shares would be antidilutive. As such, they have been excluded from the diluted EPS calculation.
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Tax
|
|
|
|
|||||||||||
|
Before
|
|
|
Tax
|
|
|
Net of
|
|
|
Before
|
|
|
(expense)
|
|
|
Net of
|
|
||||||
(In millions)
|
tax
|
|
|
benefit
|
|
|
tax
|
|
|
tax
|
|
|
benefit
|
|
|
tax
|
|
||||||
Three months ended December 31
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized translation loss
|
$
|
(150
|
)
|
|
$
|
4
|
|
|
$
|
(146
|
)
|
|
$
|
(63
|
)
|
|
$
|
2
|
|
|
$
|
(61
|
)
|
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of unrecognized prior service
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
credits included in net income
(a)
|
(3
|
)
|
|
2
|
|
|
(1
|
)
|
|
(5
|
)
|
|
2
|
|
|
(3
|
)
|
||||||
Unrealized gain on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
(3
|
)
|
|
6
|
|
||||||
Total other comprehensive loss
|
$
|
(153
|
)
|
|
$
|
6
|
|
|
$
|
(147
|
)
|
|
$
|
(59
|
)
|
|
$
|
1
|
|
|
$
|
(58
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Cost of sales
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
Selling, general and administrative expense
|
(2
|
)
|
|
(3
|
)
|
||
Total amortization of unrecognized prior service credits
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions - unaudited)
|
2016
|
|
|
2015
|
|
||
SALES
|
|
|
|
||||
Specialty Ingredients
|
$
|
482
|
|
|
$
|
476
|
|
Performance Materials
|
222
|
|
|
231
|
|
||
Valvoline
|
489
|
|
|
456
|
|
||
|
$
|
1,193
|
|
|
$
|
1,163
|
|
OPERATING INCOME (LOSS)
|
|
|
|
|
|
||
Specialty Ingredients
|
$
|
40
|
|
|
$
|
38
|
|
Performance Materials
|
8
|
|
|
24
|
|
||
Valvoline
|
99
|
|
|
92
|
|
||
Unallocated and other
|
(10
|
)
|
|
(3
|
)
|
||
|
$
|
137
|
|
|
$
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|||||||||||
Three months ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
Sales
|
$
|
—
|
|
|
$
|
156
|
|
|
$
|
1,014
|
|
|
$
|
(7
|
)
|
|
$
|
1,163
|
|
Cost of sales
|
—
|
|
|
102
|
|
|
675
|
|
|
(6
|
)
|
|
771
|
|
|||||
Gross profit
|
—
|
|
|
54
|
|
|
339
|
|
|
(1
|
)
|
|
392
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expense
|
—
|
|
|
32
|
|
|
192
|
|
|
—
|
|
|
224
|
|
|||||
Research and development expense
|
—
|
|
|
3
|
|
|
22
|
|
|
—
|
|
|
25
|
|
|||||
Equity and other income (loss)
|
—
|
|
|
(2
|
)
|
|
10
|
|
|
—
|
|
|
8
|
|
|||||
Operating income (loss)
|
—
|
|
|
17
|
|
|
135
|
|
|
(1
|
)
|
|
151
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest and other financing expense
|
—
|
|
|
38
|
|
|
4
|
|
|
—
|
|
|
42
|
|
|||||
Net gain on divestitures
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
before income taxes
|
—
|
|
|
(20
|
)
|
|
132
|
|
|
(1
|
)
|
|
111
|
|
|||||
Income tax expense (benefit)
|
—
|
|
|
(27
|
)
|
|
47
|
|
|
—
|
|
|
20
|
|
|||||
Equity in net income (loss) of subsidiaries
|
89
|
|
|
95
|
|
|
—
|
|
|
(184
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
89
|
|
|
102
|
|
|
85
|
|
|
(185
|
)
|
|
91
|
|
|||||
Loss from discontinued operations (net of tax)
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss)
|
$
|
89
|
|
|
$
|
101
|
|
|
$
|
84
|
|
|
$
|
(185
|
)
|
|
$
|
89
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
31
|
|
|
$
|
100
|
|
|
$
|
27
|
|
|
$
|
(127
|
)
|
|
$
|
31
|
|
|
|
|
|
|
|
|
|
|
Condensed Balance Sheets
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions) |
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries |
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
148
|
|
|
$
|
556
|
|
|
$
|
—
|
|
|
$
|
704
|
|
Accounts receivable
|
—
|
|
|
47
|
|
|
811
|
|
|
—
|
|
|
858
|
|
|||||
Inventories
|
—
|
|
|
45
|
|
|
621
|
|
|
—
|
|
|
666
|
|
|||||
Other assets
|
6
|
|
|
10
|
|
|
100
|
|
|
(10
|
)
|
|
106
|
|
|||||
Total current assets
|
6
|
|
|
250
|
|
|
2,088
|
|
|
(10
|
)
|
|
2,334
|
|
|||||
Noncurrent assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
241
|
|
|
1,945
|
|
|
—
|
|
|
2,186
|
|
|||||
Goodwill
|
—
|
|
|
141
|
|
|
2,207
|
|
|
—
|
|
|
2,348
|
|
|||||
Intangibles
|
—
|
|
|
35
|
|
|
991
|
|
|
—
|
|
|
1,026
|
|
|||||
Restricted investments
|
—
|
|
|
—
|
|
|
297
|
|
|
—
|
|
|
297
|
|
|||||
Asbestos insurance receivable
|
—
|
|
|
131
|
|
|
63
|
|
|
—
|
|
|
194
|
|
|||||
Equity and other unconsolidated investments
|
—
|
|
|
2
|
|
|
58
|
|
|
—
|
|
|
60
|
|
|||||
Investment in subsidiaries
|
2,995
|
|
|
7,503
|
|
|
—
|
|
|
(10,498
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
31
|
|
|
97
|
|
|
199
|
|
|
(128
|
)
|
|
199
|
|
|||||
Intercompany receivables
|
—
|
|
|
19
|
|
|
2,539
|
|
|
(2,558
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
254
|
|
|
165
|
|
|
—
|
|
|
419
|
|
|||||
Total noncurrent assets
|
3,026
|
|
|
8,423
|
|
|
8,464
|
|
|
(13,184
|
)
|
|
6,729
|
|
|||||
Total assets
|
$
|
3,032
|
|
|
$
|
8,673
|
|
|
$
|
10,552
|
|
|
$
|
(13,194
|
)
|
|
$
|
9,063
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short-term debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
—
|
|
|
$
|
92
|
|
Current portion of long-term debt
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Accounts payable and other accrued liabilities
|
—
|
|
|
222
|
|
|
697
|
|
|
(10
|
)
|
|
909
|
|
|||||
Total current liabilities
|
—
|
|
|
222
|
|
|
804
|
|
|
(10
|
)
|
|
1,016
|
|
|||||
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Long-term debt
|
—
|
|
|
2,116
|
|
|
709
|
|
|
—
|
|
|
2,825
|
|
|||||
Employee benefit obligations
|
—
|
|
|
38
|
|
|
1,002
|
|
|
—
|
|
|
1,040
|
|
|||||
Asbestos litigation reserve
|
—
|
|
|
371
|
|
|
303
|
|
|
—
|
|
|
674
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
197
|
|
|
(128
|
)
|
|
69
|
|
|||||
Intercompany payables
|
31
|
|
|
2,508
|
|
|
19
|
|
|
(2,558
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
220
|
|
|
218
|
|
|
—
|
|
|
438
|
|
|||||
Total noncurrent liabilities
|
31
|
|
|
5,253
|
|
|
2,448
|
|
|
(2,686
|
)
|
|
5,046
|
|
|||||
Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Ashland stockholders’ equity
|
3,001
|
|
|
3,198
|
|
|
7,474
|
|
|
(10,498
|
)
|
|
3,175
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(174
|
)
|
|
—
|
|
|
(174
|
)
|
|||||
Total equity
|
3,001
|
|
|
3,198
|
|
|
7,300
|
|
|
(10,498
|
)
|
|
3,001
|
|
|||||
Total liabilities and equity
|
$
|
3,032
|
|
|
$
|
8,673
|
|
|
$
|
10,552
|
|
|
$
|
(13,194
|
)
|
|
$
|
9,063
|
|
|
|
|
|
|
|
|
|
|
Condensed Balance Sheets
|
|
|
|
|
|
|
|
|
|
||||||||||
At September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions) |
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries |
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
76
|
|
|
$
|
1,112
|
|
|
$
|
—
|
|
|
$
|
1,188
|
|
Accounts receivable
|
—
|
|
|
18
|
|
|
876
|
|
|
—
|
|
|
894
|
|
|||||
Inventories
|
—
|
|
|
42
|
|
|
629
|
|
|
—
|
|
|
671
|
|
|||||
Other assets
|
7
|
|
|
16
|
|
|
98
|
|
|
(8
|
)
|
|
113
|
|
|||||
Total current assets
|
7
|
|
|
152
|
|
|
2,715
|
|
|
(8
|
)
|
|
2,866
|
|
|||||
Noncurrent assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
246
|
|
|
1,978
|
|
|
—
|
|
|
2,224
|
|
|||||
Goodwill
|
—
|
|
|
141
|
|
|
2,260
|
|
|
—
|
|
|
2,401
|
|
|||||
Intangibles
|
—
|
|
|
35
|
|
|
1,029
|
|
|
—
|
|
|
1,064
|
|
|||||
Restricted investments
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
292
|
|
|||||
Asbestos insurance receivable
|
—
|
|
|
133
|
|
|
63
|
|
|
—
|
|
|
196
|
|
|||||
Equity and other unconsolidated investments
|
—
|
|
|
2
|
|
|
55
|
|
|
—
|
|
|
57
|
|
|||||
Investment in subsidiaries
|
3,127
|
|
|
7,597
|
|
|
—
|
|
|
(10,724
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
31
|
|
|
97
|
|
|
146
|
|
|
(97
|
)
|
|
177
|
|
|||||
Intercompany receivables
|
—
|
|
|
5
|
|
|
2,264
|
|
|
(2,269
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
253
|
|
|
167
|
|
|
—
|
|
|
420
|
|
|||||
Total noncurrent assets
|
3,158
|
|
|
8,509
|
|
|
8,254
|
|
|
(13,090
|
)
|
|
6,831
|
|
|||||
Total assets
|
$
|
3,165
|
|
|
$
|
8,661
|
|
|
$
|
10,969
|
|
|
$
|
(13,098
|
)
|
|
$
|
9,697
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short-term debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170
|
|
|
$
|
—
|
|
|
$
|
170
|
|
Current portion of long-term debt
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|||||
Accounts payable and other accrued liabilities
|
—
|
|
|
244
|
|
|
791
|
|
|
(8
|
)
|
|
1,027
|
|
|||||
Total current liabilities
|
—
|
|
|
244
|
|
|
980
|
|
|
(8
|
)
|
|
1,216
|
|
|||||
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Long-term debt
|
—
|
|
|
2,182
|
|
|
873
|
|
|
—
|
|
|
3,055
|
|
|||||
Employee benefit obligations
|
—
|
|
|
44
|
|
|
1,036
|
|
|
—
|
|
|
1,080
|
|
|||||
Asbestos litigation reserve
|
—
|
|
|
381
|
|
|
305
|
|
|
—
|
|
|
686
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
166
|
|
|
(97
|
)
|
|
69
|
|
|||||
Intercompany payables
|
—
|
|
|
2,264
|
|
|
5
|
|
|
(2,269
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
220
|
|
|
206
|
|
|
—
|
|
|
426
|
|
|||||
Total noncurrent liabilities
|
—
|
|
|
5,091
|
|
|
2,591
|
|
|
(2,366
|
)
|
|
5,316
|
|
|||||
Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Ashland stockholders’ equity
|
3,165
|
|
|
3,326
|
|
|
7,580
|
|
|
(10,724
|
)
|
|
3,347
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
(182
|
)
|
|
—
|
|
|
(182
|
)
|
|||||
Total equity
|
3,165
|
|
|
3,326
|
|
|
7,398
|
|
|
(10,724
|
)
|
|
3,165
|
|
|||||
Total liabilities and equity
|
$
|
3,165
|
|
|
$
|
8,661
|
|
|
$
|
10,969
|
|
|
$
|
(13,098
|
)
|
|
$
|
9,697
|
|
|
|
|
|
|
|
|
|
|
Condensed Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions) |
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries |
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
Total cash flows provided (used) by operating
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
$
|
—
|
|
|
$
|
(83
|
)
|
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant and equipment
|
—
|
|
|
(3
|
)
|
|
(40
|
)
|
|
—
|
|
|
(43
|
)
|
|||||
Intercompany dividends
|
8
|
|
|
8
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|||||
Net purchases of funds restricted for
|
|
|
|
|
|
|
|
|
|
||||||||||
specific transactions
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Other investing activities, net
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Total cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
8
|
|
|
7
|
|
|
(40
|
)
|
|
(16
|
)
|
|
(41
|
)
|
|||||
Cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of long-term debt
|
—
|
|
|
(65
|
)
|
|
(253
|
)
|
|
—
|
|
|
(318
|
)
|
|||||
Premium on long-term debt repayment
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Repayment from short-term debt
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
(78
|
)
|
|||||
Cash dividends paid
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Intercompany dividends
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
16
|
|
|
—
|
|
|||||
Other intercompany activity, net
|
24
|
|
|
231
|
|
|
(255
|
)
|
|
—
|
|
|
—
|
|
|||||
Other financing activities, net
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Total cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
(8
|
)
|
|
158
|
|
|
(601
|
)
|
|
16
|
|
|
(435
|
)
|
|||||
Cash provided (used) by continuing operations
|
—
|
|
|
82
|
|
|
(546
|
)
|
|
—
|
|
|
(464
|
)
|
|||||
Cash used by discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating cash flows
|
—
|
|
|
(10
|
)
|
|
(2
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
Investing cash flows
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total cash used by discontinued operations
|
—
|
|
|
(10
|
)
|
|
(2
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
Effect of currency exchange rate changes on
|
|
|
|
|
|
|
|
|
|
||||||||||
cash and cash equivalents
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Increase (decrease) in cash and cash equivalents
|
—
|
|
|
72
|
|
|
(556
|
)
|
|
—
|
|
|
(484
|
)
|
|||||
Cash and cash equivalents - beginning of year
|
—
|
|
|
76
|
|
|
1,112
|
|
|
—
|
|
|
1,188
|
|
|||||
Cash and cash equivalents - end of year
|
$
|
—
|
|
|
$
|
148
|
|
|
$
|
556
|
|
|
$
|
—
|
|
|
$
|
704
|
|
|
|
|
|
|
|
|
|
|
Condensed Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(In millions) |
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries |
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
Total cash flows provided (used) by operating
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
$
|
—
|
|
|
$
|
(123
|
)
|
|
$
|
189
|
|
|
$
|
—
|
|
|
$
|
66
|
|
Cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant and equipment
|
—
|
|
|
(2
|
)
|
|
(51
|
)
|
|
—
|
|
|
(53
|
)
|
|||||
Purchase of operations - net of cash acquired
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Reimbursements from restricted investments
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Other investing activities, net
|
—
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|||||
Total cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
—
|
|
|
10
|
|
|
(54
|
)
|
|
—
|
|
|
(44
|
)
|
|||||
Cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of long-term debt
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||||
Proceeds (repayment) from short-term debt
|
—
|
|
|
409
|
|
|
(90
|
)
|
|
—
|
|
|
319
|
|
|||||
Repurchase of common stock
|
—
|
|
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||
Cash dividends paid
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||
Other intercompany activity, net
|
—
|
|
|
233
|
|
|
(233
|
)
|
|
—
|
|
|
—
|
|
|||||
Total cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
—
|
|
|
104
|
|
|
(323
|
)
|
|
—
|
|
|
(219
|
)
|
|||||
Cash used by continuing operations
|
—
|
|
|
(9
|
)
|
|
(188
|
)
|
|
—
|
|
|
(197
|
)
|
|||||
Cash used by discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating cash flows
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Investing cash flows
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total cash used by discontinued operations
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Effect of currency exchange rate changes on
|
|
|
|
|
|
|
|
|
|
||||||||||
cash and cash equivalents
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Decrease in cash and cash equivalents
|
—
|
|
|
(14
|
)
|
|
(204
|
)
|
|
—
|
|
|
(218
|
)
|
|||||
Cash and cash equivalents - beginning of year
|
—
|
|
|
21
|
|
|
1,236
|
|
|
—
|
|
|
1,257
|
|
|||||
Cash and cash equivalents - end of year
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
1,032
|
|
|
$
|
—
|
|
|
$
|
1,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||
|
December 31
|
||||
Sales by Reportable Segment
|
2016
|
|
|
2015
|
|
Specialty Ingredients
|
40
|
%
|
|
41
|
%
|
Performance Materials
|
19
|
%
|
|
20
|
%
|
Valvoline
|
41
|
%
|
|
39
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
EBITDA - net income, plus income tax expense (benefit), net interest and other financing expenses, and depreciation and amortization.
|
•
|
Adjusted EBITDA - EBITDA adjusted for noncontrolling interests, discontinued operations, net gain (loss) on acquisitions and divestitures, other income and (expense) and key items (including the remeasurement gains and losses related to pension and other postretirement plans).
|
•
|
Adjusted EBITDA margin - Adjusted EBITDA divided by sales.
|
•
|
Free cash flow - operating cash flows less capital expenditures and certain other adjustments as applicable.
|
|
|
|
|
|
|
|
|
|
•
|
Ashland’s net income (loss) attributable to Ashland amounted to a loss of
$1 million
and income of
$89 million
for the three months ended
December 31, 2016
and
2015
, respectively, or a loss of
$0.01
and income of
$1.35
diluted earnings per share, respectively.
|
•
|
Ashland’s net income attributable to noncontrolling interest amounted to
$11 million
for the three months ended
December 31, 2016
and reflects the noncontrolling interest of Valvoline Inc.
|
•
|
Income from continuing operations, which excludes results from discontinued operations, amounted to
$10 million
and
$91 million
for the three months ended
December 31, 2016
and
2015
, respectively.
|
•
|
The effective income tax benefit rate of
150%
and expense rate of
18%
for the three months ended
December 31, 2016
and
2015
, respectively, were both affected by certain discrete items.
|
|
|
|
|
|
|
|
|
|
•
|
Ashland incurred pretax net interest and other financing expense of
$132 million
and
$42 million
for the three months ended
December 31, 2016
and
2015
, respectively. The current quarter was impacted by $92 million of net charges associated with current quarter debt financing activity.
|
•
|
Operating income was
$137 million
and
$151 million
for the three months ended
December 31, 2016
and
2015
, respectively.
|
◦
|
$28 million
and $6 million of costs related to the separation of Valvoline during the three months ended
December 31, 2016
and
2015
, respectively;
|
◦
|
$5 million reversal of the severance accrual and $2 million of accelerated depreciation related to a restructuring plan within an existing manufacturing facility during the three months ended
December 31, 2015
;
|
•
|
Remeasurement gain of
$10 million
associated with the discontinuation of certain post-employment health and life insurance benefits during the three months ended
December 31, 2016
; and
|
•
|
$5 million and $10 million charges for legal reserves during the three months ended
December 31, 2016
and
2015
, respectively.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Net income
|
$
|
10
|
|
|
$
|
89
|
|
Income tax expense (benefit)
|
(6
|
)
|
|
20
|
|
||
Net interest and other financing expense
|
132
|
|
|
42
|
|
||
Depreciation and amortization
(a)
|
77
|
|
|
81
|
|
||
EBITDA
|
213
|
|
|
232
|
|
||
Net income attributable to noncontrolling interest
|
(11
|
)
|
|
—
|
|
||
Adjusted EBITDA adjustments attributable to noncontrolling interest
(b)
|
(10
|
)
|
|
—
|
|
||
Loss from discontinued operations (net of tax)
|
—
|
|
|
2
|
|
||
Separation, restructuring and other costs, net
|
28
|
|
|
1
|
|
||
Gain on post-employment plan remeasurement
|
(10
|
)
|
|
—
|
|
||
Legal reserve
|
5
|
|
|
10
|
|
||
Accelerated depreciation
|
—
|
|
|
2
|
|
||
Adjusted EBITDA
(c)
|
$
|
215
|
|
|
$
|
247
|
|
|
|
|
|
(a)
|
Excludes
$2 million
of accelerated depreciation for the three months ended December 31,
2015
.
|
(b)
|
Includes certain items attributable to the approximately 17% noncontrolling interest in Valvoline Inc. such as income tax expense, net interest and other financing expense, depreciation and amortization, separation costs and the gain on post-employment plan remeasurement.
|
(c)
|
Includes $12 million and
$13 million
during the
three
months ended
December 31, 2016
and
2015
, respectively, of net periodic pension and other postretirement income recognized ratably through the fiscal year. This income is comprised of service cost, interest cost, expected return on plan assets, and amortization of prior service credit and is disclosed in further detail in Note J of the Notes to Condensed Consolidated Financial Statements.
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Sales
|
$
|
1,193
|
|
|
$
|
1,163
|
|
|
$
|
30
|
|
|
Three months ended
|
|
||
(In millions)
|
December 31, 2016
|
|
||
Volume
|
|
$
|
55
|
|
Pricing
|
|
(29
|
)
|
|
Product mix
|
|
(4
|
)
|
|
Currency exchange
|
|
(5
|
)
|
|
Acquisitions and divestitures
|
|
13
|
|
|
Change in sales
|
|
$
|
30
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Cost of sales
|
$
|
807
|
|
|
$
|
771
|
|
|
$
|
36
|
|
Gross profit as a percent of sales
|
32.4
|
%
|
|
33.7
|
%
|
|
|
|
|
Three months ended
|
|
||
(In millions)
|
December 31, 2016
|
|
||
Changes in:
|
|
|
||
Volume
|
|
$
|
38
|
|
Acquisition and divestitures
|
|
9
|
|
|
Currency exchange
|
|
(4
|
)
|
|
Production costs
|
|
(4
|
)
|
|
Product mix
|
|
(3
|
)
|
|
Pension and other postretirement benefit plans expense (income)
|
|
(3
|
)
|
|
Severance and other costs
|
|
5
|
|
|
Accelerated depreciation
|
|
(2
|
)
|
|
Change in cost of sales
|
|
$
|
36
|
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Selling, general and administrative expense
|
$
|
239
|
|
|
$
|
224
|
|
|
$
|
15
|
|
As a percent of sales
|
20.0
|
%
|
|
19.3
|
%
|
|
|
|
•
|
$28 million of costs related to the separation of Valvoline during the current quarter compared to $6 million in the prior year quarter;
|
•
|
$5 million and $10 million charges for legal reserves during the current quarter and prior year quarter, respectively; and
|
|
|
|
|
|
|
|
|
|
•
|
a $6 million gain on the remeasurement of certain post-employment health and life insurance benefits during the current quarter.
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Research and development expense
|
$
|
23
|
|
|
$
|
25
|
|
|
$
|
(2
|
)
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Equity and other income
|
|
|
|
|
|
|
|
|
|||
Equity income
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Other income
|
9
|
|
|
4
|
|
|
5
|
|
|||
|
$
|
13
|
|
|
$
|
8
|
|
|
$
|
5
|
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Net interest and other financing expense (income)
|
|
|
|
|
|
||||||
Interest expense
|
$
|
135
|
|
|
$
|
43
|
|
|
$
|
92
|
|
Interest income
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Available-for-sale securities income
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|||
Other financing costs
|
1
|
|
|
2
|
|
|
(1
|
)
|
|||
|
$
|
132
|
|
|
$
|
42
|
|
|
$
|
90
|
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Net gain (loss) on divestitures
|
|
|
|
|
|
||||||
MAP Transaction adjustments
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
Castings Solutions joint venture
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Income tax expense (benefit)
|
$
|
(6
|
)
|
|
$
|
20
|
|
|
$
|
(26
|
)
|
Effective tax rate
|
(150
|
)%
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Loss from discontinued operations (net of tax)
|
|
|
|
|
|
||||||
Water Technologies
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Net income attributable to noncontrolling interest
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
Three months ended December 31
|
||||||||||
(In millions)
|
2016
|
|
|
2015
|
|
|
Change
|
|
|||
Other comprehensive income (loss) (net of taxes)
|
|
|
|
|
|
||||||
Unrealized translation loss
|
$
|
(146
|
)
|
|
$
|
(61
|
)
|
|
$
|
(85
|
)
|
Pension and postretirement obligation adjustment
|
(1
|
)
|
|
(3
|
)
|
|
2
|
|
|||
Unrealized gain on available-for-sale securities
|
—
|
|
|
6
|
|
|
(6
|
)
|
|||
|
$
|
(147
|
)
|
|
$
|
(58
|
)
|
|
$
|
(89
|
)
|
•
|
For the three months ended
December 31, 2016
, other comprehensive loss, net of tax, from foreign currency translation adjustments was
$146 million
compared to
$61 million
for the three months ended
December 31, 2015
, mainly as a result of the strengthening of the U.S. Dollar against other global currencies, such as the Euro. The fluctuations in unrealized translation gains and losses is primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars.
|
•
|
Pension and postretirement obligation adjustment was
$1 million
compared to
$3 million
for the three months ended
December 31, 2016
and
2015
, respectively. These amounts of unrecognized prior service credits, net of tax, related to pension and other postretirement benefit plans were amortized and reclassified into net income.
|
|
|
|
|
|
|
|
|
|
•
|
Unrealized gain of
$6 million
on available-for-sale securities, net of tax, related to restricted investments, were recognized within other comprehensive loss during the three months ended December 31,
2015
.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Sales
|
|
|
|
||||
Specialty Ingredients
|
$
|
482
|
|
|
$
|
476
|
|
Performance Materials
|
222
|
|
|
231
|
|
||
Valvoline
|
489
|
|
|
456
|
|
||
|
$
|
1,193
|
|
|
$
|
1,163
|
|
Operating income (loss)
|
|
|
|
|
|
||
Specialty Ingredients
|
$
|
40
|
|
|
$
|
38
|
|
Performance Materials
|
8
|
|
|
24
|
|
||
Valvoline
|
99
|
|
|
92
|
|
||
Unallocated and other
|
(10
|
)
|
|
(3
|
)
|
||
|
$
|
137
|
|
|
$
|
151
|
|
Depreciation and amortization
|
|
|
|
|
|
||
Specialty Ingredients
|
$
|
55
|
|
|
$
|
61
|
|
Performance Materials
|
13
|
|
|
13
|
|
||
Valvoline
|
9
|
|
|
9
|
|
||
|
$
|
77
|
|
|
$
|
83
|
|
Operating information
|
|
|
|
|
|
||
Specialty Ingredients
|
|
|
|
|
|
||
Sales per shipping day
|
$
|
7.9
|
|
|
$
|
7.7
|
|
Metric tons sold (thousands)
|
72.6
|
|
|
68.7
|
|
||
Gross profit as a percent of sales
(a)
|
32.0
|
%
|
|
32.9
|
%
|
||
Performance Materials
|
|
|
|
|
|||
Sales per shipping day
|
$
|
3.6
|
|
|
$
|
3.7
|
|
Metric tons sold (thousands)
|
110.6
|
|
|
106.2
|
|
||
Gross profit as a percent of sales
(a)
|
15.4
|
%
|
|
22.1
|
%
|
||
Valvoline
|
|
|
|
|
|
||
Lubricant sales gallons
|
43.1
|
|
|
40.4
|
|
||
Premium lubricants (percent of U.S. branded volumes)
|
47.2
|
%
|
|
43.0
|
%
|
||
Gross profit as a percent of sales
(a)
|
37.9
|
%
|
|
38.3
|
%
|
||
|
|
|
|
(a)
|
Gross profit is defined as sales, less cost of sales divided by sales.
|
|
Three months ended December 31, 2016
|
|||||||
Sales by Geography
|
Specialty Ingredients
|
|
Performance Materials
|
|
Valvoline
|
|||
North America
|
39
|
%
|
|
43
|
%
|
|
75
|
%
|
Europe
|
29
|
%
|
|
36
|
%
|
|
7
|
%
|
Asia Pacific
|
22
|
%
|
|
16
|
%
|
|
14
|
%
|
Latin America & other
|
10
|
%
|
|
5
|
%
|
|
4
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2015
|
|||||||
Sales by Geography
|
Specialty Ingredients
|
|
Performance Materials
|
|
Valvoline
|
|||
North America
|
38
|
%
|
|
40
|
%
|
|
75
|
%
|
Europe
|
32
|
%
|
|
39
|
%
|
|
7
|
%
|
Asia Pacific
|
20
|
%
|
|
14
|
%
|
|
14
|
%
|
Latin America & other
|
10
|
%
|
|
7
|
%
|
|
4
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Operating income
|
$
|
40
|
|
|
$
|
38
|
|
Depreciation and amortization
(a)
|
55
|
|
|
59
|
|
||
EBITDA
|
95
|
|
|
97
|
|
||
Severance
|
—
|
|
|
(5
|
)
|
||
Accelerated depreciation
|
—
|
|
|
2
|
|
||
Adjusted EBITDA
|
$
|
95
|
|
|
$
|
94
|
|
|
|
|
|
(a)
|
Excludes
$2 million
of accelerated depreciation for the three months ended
December 31, 2015
.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Operating income
|
$
|
8
|
|
|
$
|
24
|
|
Depreciation and amortization
|
13
|
|
|
13
|
|
||
EBITDA
|
$
|
21
|
|
|
$
|
37
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Operating income
|
$
|
99
|
|
|
$
|
92
|
|
Depreciation and amortization
|
9
|
|
|
9
|
|
||
EBITDA
|
$
|
108
|
|
|
$
|
101
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Pension and other postretirement net periodic income
|
|
|
|
||||
(excluding service cost)
|
$
|
18
|
|
|
$
|
19
|
|
Gain on post-employment plan remeasurement
|
10
|
|
|
—
|
|
||
Restructuring activities (includes separation and severance costs)
|
(28
|
)
|
|
(6
|
)
|
||
Environmental expense for divested businesses
|
(4
|
)
|
|
(6
|
)
|
||
Legal reserve
|
(5
|
)
|
|
(10
|
)
|
||
Other expense
|
(1
|
)
|
|
—
|
|
||
Total expense
|
$
|
(10
|
)
|
|
$
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Cash provided (used) by:
|
|
|
|
||||
Operating activities from continuing operations
|
$
|
12
|
|
|
$
|
66
|
|
Investing activities from continuing operations
|
(41
|
)
|
|
(44
|
)
|
||
Financing activities from continuing operations
|
(435
|
)
|
|
(219
|
)
|
||
Discontinued operations
|
(12
|
)
|
|
(10
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(8
|
)
|
|
(11
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(484
|
)
|
|
$
|
(218
|
)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Cash flows provided (used) by operating activities from continuing operations
|
|
|
|
||||
Net income
|
$
|
10
|
|
|
$
|
89
|
|
Loss from discontinued operations (net of tax)
|
—
|
|
|
2
|
|
||
Adjustments to reconcile income from continuing operations to
|
|
|
|
|
|
||
cash flows from operating activities
|
|
|
|
|
|
||
Depreciation and amortization
|
77
|
|
|
83
|
|
||
Original issue discount and debt issuance cost amortization
|
95
|
|
|
3
|
|
||
Deferred income taxes
|
2
|
|
|
3
|
|
||
Equity income from affiliates
|
(4
|
)
|
|
(4
|
)
|
||
Distributions from equity affiliates
|
—
|
|
|
5
|
|
||
Stock based compensation expense
|
6
|
|
|
8
|
|
||
Gain on early retirement of debt
|
(3
|
)
|
|
—
|
|
||
Gain on available-for-sale securities
|
(3
|
)
|
|
(2
|
)
|
||
Net loss (gain) on divestitures
|
1
|
|
|
(2
|
)
|
||
Pension contributions
|
(3
|
)
|
|
(4
|
)
|
||
Gain on post-employment plan remeasurement
|
(10
|
)
|
|
—
|
|
||
Change in operating assets and liabilities
(a)
|
(156
|
)
|
|
(115
|
)
|
||
Total cash flows provided by operating activities from continuing operations
|
$
|
12
|
|
|
$
|
66
|
|
|
|
|
|
•
|
Accounts receivable - The cash inflows of $47 million and $126 million during the current and prior year quarters, respectively, were primarily due to collections in excess of sales during the first quarter of each fiscal year compared to the prior fiscal year.
|
•
|
Inventory - The current quarter had a cash inflow of $14 million compared to a cash outflow of $5 million during the prior year quarter. The cash inflow during the current quarter was primarily a result of production management within the Specialty Ingredients reportable segment.
|
•
|
Trade and other payables - The cash outflows of $107 million and $195 million during the current and prior year quarters, respectively, were primarily driven by seasonal declines in trade payables, and incentive compensation payouts to employees and certain Valvoline separation payments from the prior year paid during the first quarter of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Cash flows provided (used) by investing activities from continuing operations
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
(43
|
)
|
|
$
|
(53
|
)
|
Proceeds from disposal of property, plant and equipment
|
—
|
|
|
1
|
|
||
Purchase of operations - net of cash acquired
|
—
|
|
|
(4
|
)
|
||
Uses from sale of operations or equity investments
|
—
|
|
|
(2
|
)
|
||
Net purchase of funds restricted for specific transactions
|
(2
|
)
|
|
—
|
|
||
Reimbursements from restricted investments
|
—
|
|
|
7
|
|
||
Proceeds from the settlement of derivative instruments
|
4
|
|
|
7
|
|
||
Total cash flows used by investing activities from continuing operations
|
$
|
(41
|
)
|
|
$
|
(44
|
)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Cash flows provided (used) by financing activities from continuing operations
|
|
|
|
||||
Repayment of long-term debt
|
$
|
(318
|
)
|
|
$
|
(14
|
)
|
Premium on long-term debt repayment
|
(5
|
)
|
|
—
|
|
||
Proceeds (repayment) from short-term debt
|
(78
|
)
|
|
319
|
|
||
Repurchase of common stock
|
—
|
|
|
(500
|
)
|
||
Debt issuance costs
|
(4
|
)
|
|
—
|
|
||
Cash dividends paid
|
(24
|
)
|
|
(24
|
)
|
||
Distributions to noncontrolling interest
|
(2
|
)
|
|
—
|
|
||
Excess tax benefits related to share-based payments
|
(4
|
)
|
|
—
|
|
||
Total cash flows used by financing activities from continuing operations
|
$
|
(435
|
)
|
|
$
|
(219
|
)
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Cash used by discontinued operations
|
|
|
|
||||
Operating cash flows
|
$
|
(12
|
)
|
|
$
|
(10
|
)
|
Investing cash flows
|
—
|
|
|
—
|
|
||
Total cash used by discontinued operations
|
$
|
(12
|
)
|
|
$
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
||||||
|
December 31
|
||||||
(In millions)
|
2016
|
|
|
2015
|
|
||
Cash flows provided by operating activities from continuing operations
|
$
|
12
|
|
|
$
|
66
|
|
Adjustments:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(43
|
)
|
|
(53
|
)
|
||
Free cash flows
|
$
|
(31
|
)
|
|
$
|
13
|
|
|
December 31
|
|
|
September 30
|
|
||
(In millions)
|
2016
|
|
|
2016
|
|
||
Cash and cash equivalents
|
$
|
704
|
|
|
$
|
1,188
|
|
|
|
|
|
||||
Unused borrowing capacity
|
|
|
|
|
|
||
2015 Revolving credit facility
|
$
|
742
|
|
|
$
|
742
|
|
2016 Revolving credit facility
(a)
|
428
|
|
|
435
|
|
||
2012 Accounts receivable securitization facility
|
75
|
|
|
80
|
|
||
2017 Accounts receivable securitization facility
(a)
|
50
|
|
|
—
|
|
||
|
|
|
|
(a)
|
The 2016 revolving credit facility and 2017 accounts receivable securitization facility were executed by Valvoline in connection with the separation process.
|
|
December 31
|
|
|
September 30
|
|
||
(In millions)
|
2016
|
|
|
2016
|
|
||
Short-term debt
|
$
|
92
|
|
|
$
|
170
|
|
Long-term debt (including current portion and debt issuance cost discounts)
(a)
|
2,840
|
|
|
3,074
|
|
||
Total debt
|
$
|
2,932
|
|
|
$
|
3,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Purchases of Equity Securities
|
||||||||||||||||
Q1 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)
|
||||||||||
October 1, 2016 to October 31, 2016:
|
|
|
|
|
|
|
|
$
|
500
|
|
|
|||||
Employee Tax Withholdings
|
60
|
|
(2
|
)
|
|
$
|
115.95
|
|
|
—
|
|
|
|
|
||
November 1, 2016 to November 30, 2016:
|
|
|
|
|
|
|
|
|
500
|
|
|
|||||
Employee Tax Withholdings
|
20,893
|
|
(2
|
)
|
|
108.68
|
|
|
—
|
|
|
|
|
|||
December 1, 2016 to December 31, 2016:
|
|
|
|
|
|
|
|
500
|
|
|
||||||
Employee Tax Withholdings
|
360
|
|
(2
|
)
|
|
110.16
|
|
|
—
|
|
|
|
|
|||
Total
|
21,313
|
|
|
|
|
|
—
|
|
|
$
|
500
|
|
|
|
Ashland Global Holdings Inc.
|
|
(Registrant)
|
January 27, 2017
|
/s/ J. Kevin Willis
|
|
J. Kevin Willis
|
|
Senior Vice President and Chief Financial Officer
(on behalf of the Registrant and as principal
financial officer)
|
Originator
|
Prior Names
|
Description
|
Date of Action
|
Remarks
|
Ashland LLC
|
Ashland Inc.
|
Converted from a Kentucky corporation to a Kentucky limited liability company
|
9/20/16
|
|
1.
|
PURPOSE
|
2.
|
DEFINITIONS
|
1.
|
there shall be consummated (A) any consolidation or merger of the Company (a “
Business Combination
”), other than a consolidation or merger of the Company into or with a direct or indirect wholly-owned subsidiary, as a result of which the shareholders of the Company own (directly or indirectly), immediately after the Business Combination, less than fifty percent (50%) of the then outstanding shares of common stock that are entitled to vote generally for the election of directors of the corporation resulting from such Business Combination, or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a Business Combination in which the holders of the Company’s Common Stock immediately prior to the Business Combination have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the Business Combination, or (B) any sale, lease, exchange or transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company, provided, however, that no sale, lease, exchange or other transfer of all or substantially all the assets of the Company shall be deemed to occur unless assets constituting at least eighty percent (80%) of the total assets of the Company are transferred pursuant to such sale, lease, exchange or other transfer;
|
2.
|
the shareholders of the Company shall approve any plan or proposal for the liquidation or dissolution of the Company;
|
3.
|
any Person shall become the Beneficial Owner of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing in special circumstances) having the right to vote in the election of directors, as a result of a tender or exchange offer, open market purchases, privately-negotiated purchases or otherwise, without the approval of the Board; or
|
4.
|
at any time during a period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board shall cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by the Company’s shareholders of each new director during such two- (2-) year period was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors at the beginning of such two- (2-) year period.
|
3.
|
SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION
|
4.
|
ELIGIBILITY
|
5.
|
ADMINISTRATION
|
1.
|
PARTICIPANT’S ACCOUNT
|
2.
|
EARLY PAYMENT/DISTRIBUTION
|
3.
|
ELECTIONS
|
1.
|
Stock Units
. Stock Units credited to a Participant’s Stock Account cannot be transferred to another hypothetical investment alternative under the Plan.
|
2.
|
Restricted Stock Units
. Restricted Stock Units credited on an annual basis to a Participant’s Restricted Stock Account cannot be transferred to another hypothetical investment alternative under the Plan; provided, however, that if the Participant makes an election prior to a grant of Restricted Stock Units, then upon the Participant satisfying the Board’s Common Stock ownership guidelines, up to fifty percent (50%) of such Participant’s Restricted Stock Units that become non-forfeitable ,as credited to such Participant’s Restricted Stock Account, may be transferred to another hypothetical investment alternative under the Plan.
|
4.
|
PAYMENT/DISTRIBUTION
|
1.
|
Upon a Participant’s Termination, including death, as either a lump sum or in installments not exceeding fifteen (15) years; or
|
2.
|
At a specified time or under a fixed schedule not exceeding fifteen (15) years.
|
1.
|
Such a subsequent Election may not take effect until at least twelve (12) months after it is made;
|
2.
|
Any delay to the payment/distribution that would take effect because of the subsequent Election is at least to a date five (5) years after the date the payment/distribution otherwise would have begun; and
|
3.
|
In the case of a payment/distribution that would be made under paragraph (a)2. of this Section 4, such a subsequent Election may not be made less than twelve (12) months before the date of the first scheduled payment.
|
5.
|
PAYMENT COMMENCEMENT DATE
|
6.
|
CHANGE IN CONTROL
|
1.
|
BENEFICIARY
|
2.
|
INALIENABILITY; UNFUNDED PLAN
|
3.
|
GOVERNING LAW
|
4.
|
AMENDMENT AND TERMINATION
|
1.
|
materially increase the number of securities that may be issued under the Plan (except as provided in Article I, Section 3),
|
2.
|
materially modify the requirements as to eligibility for participation in the Plan, or
|
3.
|
otherwise materially increase the benefits accruing to Participants under the Plan.
|
5.
|
COMPLIANCE WITH RULE 16b-3
|
6.
|
COMPLIANCE WITH 409A
|
7.
|
EFFECTIVE DATE
|
ASHLAND GLOBAL HOLDINGS INC.,
as Guarantor
|
|
|
|
By:
|
/s/ Eric N. Boni
|
|
Name: Eric N. Boni
|
|
Title: Vice President and Treasurer
|
THE BANK OF NOVA SCOTIA,
as Administrative Agent
|
|
|
|
By:
|
/s/ Clement Yu
|
|
Name: Clement Yu
|
|
Title: Director
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Ashland Global Holdings 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
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Chairman and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Ashland Global Holdings Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ J. Kevin Willis
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J. Kevin Willis
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Chief Financial Officer
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ William A. Wulfsohn
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William A. Wulfsohn
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Chief Executive Officer
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January 27, 2017
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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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January 27, 2017
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