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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
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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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Emerging Growth Company
o
|
|
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Three months ended
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Six months ended
|
||||||||||||
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March 31
|
|
March 31
|
||||||||||||
(In millions except per share data - unaudited)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Sales
|
$
|
1,320
|
|
|
$
|
1,247
|
|
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$
|
2,513
|
|
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$
|
2,410
|
|
Cost of sales
|
887
|
|
|
823
|
|
|
1,694
|
|
|
1,595
|
|
||||
Gross profit
|
433
|
|
|
424
|
|
|
819
|
|
|
815
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense
|
245
|
|
|
258
|
|
|
483
|
|
|
483
|
|
||||
Research and development expense
|
24
|
|
|
25
|
|
|
47
|
|
|
49
|
|
||||
Equity and other income
|
6
|
|
|
6
|
|
|
18
|
|
|
15
|
|
||||
Operating income
|
170
|
|
|
147
|
|
|
307
|
|
|
298
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net interest and other financing expense
|
38
|
|
|
43
|
|
|
170
|
|
|
85
|
|
||||
Net loss on divestitures
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Income from continuing operations before income taxes
|
132
|
|
|
102
|
|
|
136
|
|
|
213
|
|
||||
Income tax expense - Note I
|
30
|
|
|
15
|
|
|
24
|
|
|
35
|
|
||||
Income from continuing operations
|
102
|
|
|
87
|
|
|
112
|
|
|
178
|
|
||||
Income (loss) from discontinued operations (net of tax) - Note D
|
3
|
|
|
—
|
|
|
3
|
|
|
(2
|
)
|
||||
Net income
|
105
|
|
|
87
|
|
|
115
|
|
|
176
|
|
||||
Net income attributable to noncontrolling interest
|
13
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Net income attributable to Ashland
|
$
|
92
|
|
|
$
|
87
|
|
|
$
|
91
|
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
||||||||
PER SHARE DATA
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share - Note L
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from continuing operations attributable to Ashland
|
$
|
1.43
|
|
|
$
|
1.39
|
|
|
$
|
1.42
|
|
|
$
|
2.79
|
|
Income (loss) from discontinued operations
|
0.05
|
|
|
—
|
|
|
0.05
|
|
|
(0.03
|
)
|
||||
Net income attributable to Ashland
|
$
|
1.48
|
|
|
$
|
1.39
|
|
|
$
|
1.47
|
|
|
$
|
2.76
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share - Note L
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from continuing operations attributable to Ashland
|
$
|
1.42
|
|
|
$
|
1.38
|
|
|
$
|
1.41
|
|
|
$
|
2.76
|
|
Income (loss) from discontinued operations
|
0.05
|
|
|
—
|
|
|
0.05
|
|
|
(0.03
|
)
|
||||
Net income attributable to Ashland
|
$
|
1.47
|
|
|
$
|
1.38
|
|
|
$
|
1.46
|
|
|
$
|
2.73
|
|
|
|
|
|
|
|
|
|
||||||||
DIVIDENDS PAID PER COMMON SHARE
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
$
|
0.78
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
||||||||
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
105
|
|
|
$
|
87
|
|
|
$
|
115
|
|
|
$
|
176
|
|
Other comprehensive income (loss), net of tax - Note M
|
|
|
|
|
|
|
|
||||||||
Unrealized translation gain (loss)
|
60
|
|
|
80
|
|
|
(86
|
)
|
|
19
|
|
||||
Pension and postretirement obligation adjustment
|
(2
|
)
|
|
24
|
|
|
(4
|
)
|
|
21
|
|
||||
Net change in available-for-sale securities
|
6
|
|
|
3
|
|
|
6
|
|
|
9
|
|
||||
Other comprehensive income (loss)
|
64
|
|
|
107
|
|
|
(84
|
)
|
|
49
|
|
||||
Comprehensive income
|
169
|
|
|
194
|
|
|
31
|
|
|
225
|
|
||||
Comprehensive income attributable to noncontrolling interest
|
14
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Comprehensive income attributable to Ashland
|
$
|
155
|
|
|
$
|
194
|
|
|
$
|
7
|
|
|
$
|
225
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions - unaudited)
|
2017
|
|
|
2016
|
|
||
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
605
|
|
|
$
|
1,188
|
|
Accounts receivable
(a)
|
972
|
|
|
894
|
|
||
Inventories - Note F
|
687
|
|
|
671
|
|
||
Other assets
|
113
|
|
|
113
|
|
||
Total current assets
|
2,377
|
|
|
2,866
|
|
||
Noncurrent assets
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
||||
Cost
|
4,364
|
|
|
4,343
|
|
||
Accumulated depreciation
|
2,159
|
|
|
2,119
|
|
||
Net property, plant and equipment
|
2,205
|
|
|
2,224
|
|
||
Goodwill - Note G
|
2,413
|
|
|
2,401
|
|
||
Intangibles - Note G
|
1,017
|
|
|
1,064
|
|
||
Restricted investments - Note E
|
298
|
|
|
292
|
|
||
Asbestos insurance receivable - Note K
|
193
|
|
|
196
|
|
||
Equity and other unconsolidated investments
|
61
|
|
|
57
|
|
||
Deferred income taxes
|
199
|
|
|
177
|
|
||
Other assets
|
423
|
|
|
420
|
|
||
Total noncurrent assets
|
6,809
|
|
|
6,831
|
|
||
Total assets
|
$
|
9,186
|
|
|
$
|
9,697
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Short-term debt - Note H
|
$
|
95
|
|
|
$
|
170
|
|
Current portion of long-term debt - Note H
|
16
|
|
|
19
|
|
||
Trade and other payables
|
520
|
|
|
541
|
|
||
Accrued expenses and other liabilities
|
406
|
|
|
486
|
|
||
Total current liabilities
|
1,037
|
|
|
1,216
|
|
||
Noncurrent liabilities
|
|
|
|
|
|
||
Long-term debt - Note H
|
2,812
|
|
|
3,055
|
|
||
Employee benefit obligations - Note J
|
1,017
|
|
|
1,080
|
|
||
Asbestos litigation reserve - Note K
|
663
|
|
|
686
|
|
||
Deferred income taxes
|
69
|
|
|
69
|
|
||
Other liabilities
|
445
|
|
|
426
|
|
||
Total noncurrent liabilities
|
5,006
|
|
|
5,316
|
|
||
Commitments and contingencies - Note K
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Total Ashland stockholders' equity
|
3,300
|
|
|
3,347
|
|
||
Noncontrolling interest
|
(157
|
)
|
|
(182
|
)
|
||
Total equity
|
3,143
|
|
|
3,165
|
|
||
Total liabilities and equity
|
$
|
9,186
|
|
|
$
|
9,697
|
|
|
|
|
|
(a)
|
Accounts receivable includes an allowance for doubtful accounts of
$14 million
at
March 31, 2017
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
|
|
|
|
|
|
91
|
|
|
|
|
24
|
|
|
115
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
(84
|
)
|
|
—
|
|
|
(84
|
)
|
|||||||||
Regular dividends, $0.78 per common share
|
|
|
|
|
|
|
(48
|
)
|
|
|
|
|
|
|
(48
|
)
|
|||||||
Common shares issued under stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
incentive and other plans
(c)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
(1
|
)
|
||||||||
Other
|
|
|
(5
|
)
|
|
|
|
|
|
5
|
|
|
—
|
|
|||||||||
Distributions to noncontrolling interest
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||||||
BALANCE AT MARCH 31, 2017
|
$
|
1
|
|
|
$
|
917
|
|
|
$
|
2,747
|
|
|
$
|
(365
|
)
|
|
$
|
(157
|
)
|
|
$
|
3,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
At
March 31, 2017
and
September 30, 2016
, the after-tax accumulated other comprehensive loss attributable to Ashland of
$365 million
and
$281 million
, respectively, was comprised of unrecognized prior service credits as a result of certain employee benefit plan amendments of
$43 million
and
$46 million
, respectively, net unrealized translation losses of
$420 million
and
$333 million
, respectively, and net unrealized gain on available-for-sale securities of
$12 million
and
$6 million
, respectively. At
March 31, 2017
and
September 30, 2016
, amounts attributable to noncontrolling interest included unrecognized prior service credits of
$8 million
and
$9 million
, respectively, and net unrealized translation losses of
$1 million
and
$2 million
, respectively.
|
(b)
|
See Note B for discussion of Valvoline Inc. noncontrolling interest.
|
(c)
|
Common shares issued were
56,661
for the
six
months ended
March 31, 2017
.
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions - unaudited)
|
2017
|
|
|
2016
|
|
||
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM
|
|
|
|
||||
CONTINUING OPERATIONS
|
|
|
|
||||
Net income
|
$
|
115
|
|
|
$
|
176
|
|
Loss (income) from discontinued operations (net of tax)
|
(3
|
)
|
|
2
|
|
||
Adjustments to reconcile income from continuing operations to
|
|
|
|
|
|
||
cash flows from operating activities
|
|
|
|
|
|
||
Depreciation and amortization
|
153
|
|
|
168
|
|
||
Original issue discount and debt issuance cost amortization
|
98
|
|
|
6
|
|
||
Deferred income taxes
|
1
|
|
|
1
|
|
||
Equity income from affiliates
|
(7
|
)
|
|
(8
|
)
|
||
Distributions from equity affiliates
|
4
|
|
|
9
|
|
||
Stock based compensation expense
|
12
|
|
|
17
|
|
||
Gain on early retirement of debt
|
(3
|
)
|
|
—
|
|
||
Gain on available-for-sale securities
|
(7
|
)
|
|
(4
|
)
|
||
Net loss on divestitures
|
1
|
|
|
—
|
|
||
Pension contributions
|
(14
|
)
|
|
(15
|
)
|
||
Loss (gain) on pension and other postretirement plan remeasurements
|
(10
|
)
|
|
23
|
|
||
Change in operating assets and liabilities
(a)
|
(278
|
)
|
|
(125
|
)
|
||
Total cash flows provided by operating activities from continuing operations
|
62
|
|
|
250
|
|
||
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(104
|
)
|
|
(103
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
1
|
|
|
3
|
|
||
Purchase of operations - net of cash acquired
|
(48
|
)
|
|
(66
|
)
|
||
Proceeds (uses) from sale of operations or equity investments
|
(1
|
)
|
|
12
|
|
||
Net purchase of funds restricted for specific transactions
|
(2
|
)
|
|
—
|
|
||
Reimbursements from restricted investments
|
12
|
|
|
23
|
|
||
Purchases of available-for-sale securities
|
(19
|
)
|
|
(4
|
)
|
||
Proceeds from sales of available-for-sale securities
|
19
|
|
|
4
|
|
||
Proceeds from the settlement of derivative instruments
|
4
|
|
|
7
|
|
||
Payments for the settlement of derivative instruments
|
(3
|
)
|
|
—
|
|
||
Total cash flows used by investing activities from continuing operations
|
(141
|
)
|
|
(124
|
)
|
||
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES FROM
|
|
|
|
|
|
||
CONTINUING OPERATIONS
|
|
|
|
|
|
||
Repayment of long-term debt
|
(337
|
)
|
|
(36
|
)
|
||
Premium on long-term debt repayment
|
(5
|
)
|
|
—
|
|
||
Proceeds (repayment) from short-term debt
|
(75
|
)
|
|
368
|
|
||
Repurchase of common stock
|
—
|
|
|
(500
|
)
|
||
Debt issuance costs
|
(4
|
)
|
|
—
|
|
||
Cash dividends paid
|
(48
|
)
|
|
(48
|
)
|
||
Distributions to noncontrolling interest
|
(4
|
)
|
|
—
|
|
||
Excess tax benefits related to share-based payments
|
(2
|
)
|
|
(1
|
)
|
||
Total cash flows used by financing activities from continuing operations
|
(475
|
)
|
|
(217
|
)
|
||
CASH USED BY CONTINUING OPERATIONS
|
(554
|
)
|
|
(91
|
)
|
||
Cash used by discontinued operations
|
|
|
|
|
|
||
Operating cash flows
|
(21
|
)
|
|
(19
|
)
|
||
Investing cash flows
|
—
|
|
|
—
|
|
||
Total cash used by discontinued operations
|
(21
|
)
|
|
(19
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(8
|
)
|
|
(11
|
)
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(583
|
)
|
|
(121
|
)
|
||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
1,188
|
|
|
1,257
|
|
||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
605
|
|
|
$
|
1,136
|
|
|
|
|
|
(a)
|
Excludes changes resulting from operations acquired or sold.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Income (loss) from discontinued operations (net of tax)
|
|
|
|
|
|
|
|
||||||||
Water Technologies
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
Gain (loss) on disposal of discontinued operations (net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Water Technologies
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
||||
Total income (loss) from discontinued operations (net of tax)
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
(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
|
$
|
605
|
|
|
$
|
605
|
|
|
$
|
605
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted investments
(a)
|
328
|
|
|
328
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|||||
Deferred compensation investments
(b)
|
186
|
|
|
186
|
|
|
33
|
|
|
153
|
|
|
—
|
|
|||||
Investments of captive insurance company
(b)
|
2
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency derivatives
|
6
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
1,127
|
|
|
$
|
1,127
|
|
|
$
|
968
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency derivatives
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2017
|
|
|
2016
|
|
||
Original cost
|
$
|
335
|
|
|
$
|
335
|
|
Accumulated investment income, settlement funds
|
|
|
|
||||
and disbursements, net
|
(24
|
)
|
|
(3
|
)
|
||
Adjusted cost
(a)
|
311
|
|
|
332
|
|
||
Investment income
(b)
|
5
|
|
|
8
|
|
||
Unrealized gain
|
21
|
|
|
11
|
|
||
Unrealized loss
|
(1
|
)
|
|
—
|
|
||
Realized gain
|
2
|
|
|
—
|
|
||
Settlement funds
|
2
|
|
|
4
|
|
||
Disbursements
|
(12
|
)
|
|
(33
|
)
|
||
Fair value
|
$
|
328
|
|
|
$
|
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 March 31, 2017
|
|
|
|
|
|
|
|
||||||||
Demand Deposit
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Equity Mutual Fund
|
168
|
|
|
21
|
|
|
—
|
|
|
189
|
|
||||
Corporate bond Mutual Fund
|
120
|
|
|
—
|
|
|
(1
|
)
|
|
119
|
|
||||
Fair value
|
$
|
308
|
|
|
$
|
21
|
|
|
$
|
(1
|
)
|
|
$
|
328
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Foreign currency derivative gain
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
4
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2017
|
|
|
2016
|
|
||
Foreign currency derivative assets
|
$
|
6
|
|
|
$
|
3
|
|
Notional contract values
|
781
|
|
|
333
|
|
||
|
|
|
|
||||
Foreign currency derivative liabilities
|
$
|
3
|
|
|
$
|
4
|
|
Notional contract values
|
312
|
|
|
530
|
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
Consolidated balance sheet caption
|
2017
|
|
|
2016
|
|
||
Net investment hedge assets
(a)
|
Accounts receivable
|
$
|
—
|
|
|
$
|
—
|
|
Net investment hedge liabilities
|
Accrued expenses and other liabilities
|
1
|
|
|
1
|
|
||
|
|
|
|
|
(a)
|
Fair value of $0 denotes a value less than $1 million.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Change in unrealized loss in AOCI
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
Tax impact of change in unrealized loss in AOCI
(a)
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
|
|
|
|
|
|
|
|
(a)
|
$0 denotes a value less than $1 million.
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2017
|
|
|
2016
|
|
||
Finished products
|
$
|
514
|
|
|
$
|
516
|
|
Raw materials, supplies and work in process
|
200
|
|
|
184
|
|
||
LIFO reserves
|
(27
|
)
|
|
(29
|
)
|
||
|
$
|
687
|
|
|
$
|
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)
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
||||
Currency translation adjustment
|
(36
|
)
|
|
(1
|
)
|
|
—
|
|
|
(37
|
)
|
||||
Balance as of March 31, 2017
|
$
|
1,955
|
|
|
$
|
146
|
|
|
$
|
312
|
|
|
$
|
2,413
|
|
|
|
|
|
|
|
|
|
(a)
|
As of
March 31, 2017
, 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
March 31, 2017
, goodwill consisted of
$89 million
for the Core North America reporting unit,
$183 million
for the Quick Lubes reporting unit and
$40 million
for the International reporting unit.
|
(c)
|
Relates to
$44 million
for the acquisition of Time-It Lube and
$5 million
for Valvoline Instant Oil Change
SM
center acquisitions during the
six
months ended
March 31, 2017
. See Note B for more information on the acquisition of Time-It Lube.
|
|
March 31, 2017
|
||||||||||
|
Gross
|
|
|
|
|
Net
|
|
||||
|
carrying
|
|
|
Accumulated
|
|
|
carrying
|
|
|||
(In millions)
|
amount
|
|
|
amortization
|
|
|
amount
|
|
|||
Definite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
(a)
|
$
|
43
|
|
|
$
|
(20
|
)
|
|
$
|
23
|
|
Intellectual property
|
663
|
|
|
(297
|
)
|
|
366
|
|
|||
Customer relationships
(a)
|
538
|
|
|
(211
|
)
|
|
327
|
|
|||
Total definite-lived intangible assets
|
1,244
|
|
|
(528
|
)
|
|
716
|
|
|||
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
||||||
Trademarks and trade names
|
301
|
|
|
—
|
|
|
301
|
|
|||
Total intangible assets
|
$
|
1,545
|
|
|
$
|
(528
|
)
|
|
$
|
1,017
|
|
|
|
|
|
|
|
(a)
|
Acquired customer relationships and trade names during the six months ended
March 31, 2017
had gross carrying amounts of
$2 million
and
$1 million
, respectively, for Time-It Lube. See Note B for more information on the acquisition of Time-It Lube.
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2017
|
|
|
2016
|
|
||
4.750% notes, due 2022
|
$
|
1,082
|
|
|
$
|
1,121
|
|
3.875% notes, due 2018
|
659
|
|
|
700
|
|
||
6.875% notes, due 2043
|
376
|
|
|
376
|
|
||
5.500% notes, due 2024
(a)
|
375
|
|
|
375
|
|
||
Term Loan, due 2021
(a)
|
293
|
|
|
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 March 31, 2017 (4.8% to 5.0%)
|
20
|
|
|
20
|
|
||
Medium-term notes, due 2019, interest of 9.4% at March 31, 2017
|
5
|
|
|
5
|
|
||
Term Loan, due 2017
|
—
|
|
|
150
|
|
||
Other
(b)
|
(12
|
)
|
|
(18
|
)
|
||
Total debt
|
2,923
|
|
|
3,244
|
|
||
Short-term debt
|
(95
|
)
|
|
(170
|
)
|
||
Current portion of long-term debt
|
(16
|
)
|
|
(19
|
)
|
||
Long-term debt (less current portion and debt issuance cost discounts)
|
$
|
2,812
|
|
|
$
|
3,055
|
|
|
|
|
|
(a)
|
These debt instruments were issued by Valvoline during 2016 and 2017 in connection with the separation process.
|
(b)
|
Other includes
$27 million
and
$29 million
of debt issuance cost discounts as of
March 31, 2017
and
September 30, 2016
, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
As a result of the remeasurement of the affected U.S. pension plans, Ashland recognized a curtailment gain of
$65 million
and actuarial loss of
$123 million
during the three and six months ended March 31, 2016.
|
•
|
As a result of the remeasurement of other postretirement benefit plans, Ashland recognized a curtailment gain of
$39 million
and actuarial loss of
$7 million
during the three and six months ended March 31, 2016. This remeasurement reduced the benefit obligations by
$86 million
, which will be amortized to income in future periods.
|
•
|
Ashland was also required to remeasure a non-U.S. pension plan during the prior year quarter and as a result recognized a curtailment gain of
$6 million
and actuarial loss of
$3 million
during the three and six months ended March 31, 2016.
|
|
|
|
|
|
Other postretirement
|
||||||||||
|
Pension benefits
|
|
benefits
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Three months ended March 31
|
|
|
|
|
|
|
|
||||||||
Service cost
(a)
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
24
|
|
|
31
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(39
|
)
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
(a)
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
||||
Curtailment gain
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
(39
|
)
|
||||
Actuarial loss
|
—
|
|
|
126
|
|
|
—
|
|
|
7
|
|
||||
|
$
|
(13
|
)
|
|
$
|
44
|
|
|
$
|
(2
|
)
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
|
|
||||||||
Six months ended March 31
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
(a)
|
$
|
5
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
47
|
|
|
62
|
|
|
2
|
|
|
3
|
|
||||
Expected return on plan assets
|
(78
|
)
|
|
(96
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
(a)
|
—
|
|
|
(1
|
)
|
|
(6
|
)
|
|
(8
|
)
|
||||
Curtailment gain
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
(39
|
)
|
||||
Actuarial (gain) loss
|
—
|
|
|
126
|
|
|
(10
|
)
|
|
7
|
|
||||
|
$
|
(26
|
)
|
|
$
|
33
|
|
|
$
|
(14
|
)
|
|
$
|
(37
|
)
|
|
|
|
|
|
|
|
|
(a)
|
Activity of $0 denote values less than $1 million.
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|||||||
|
March 31
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Open claims - beginning of period
|
57
|
|
|
60
|
|
|
60
|
|
|
65
|
|
|
65
|
|
New claims filed
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Claims settled
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
Claims dismissed
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|
(1
|
)
|
Open claims - end of period
|
56
|
|
|
58
|
|
|
57
|
|
|
60
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Asbestos reserve - beginning of period
|
$
|
415
|
|
|
$
|
409
|
|
|
$
|
409
|
|
|
$
|
438
|
|
|
$
|
463
|
|
Reserve adjustment
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
4
|
|
|||||
Amounts paid
|
(18
|
)
|
|
(17
|
)
|
|
(31
|
)
|
|
(29
|
)
|
|
(29
|
)
|
|||||
Asbestos reserve - end of period
|
$
|
397
|
|
|
$
|
392
|
|
|
$
|
415
|
|
|
$
|
409
|
|
|
$
|
438
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Insurance receivable - beginning of period
|
$
|
151
|
|
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
402
|
|
|
$
|
408
|
|
Receivable adjustment
|
—
|
|
|
—
|
|
|
16
|
|
|
(3
|
)
|
|
22
|
|
|||||
Insurance settlement
|
(5
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(227
|
)
|
|
—
|
|
|||||
Amounts collected
|
(2
|
)
|
|
(7
|
)
|
|
(11
|
)
|
|
(22
|
)
|
|
(28
|
)
|
|||||
Insurance receivable - end of period
|
$
|
144
|
|
|
$
|
139
|
|
|
$
|
151
|
|
|
$
|
150
|
|
|
$
|
402
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|||||||
|
March 31
|
|
Years ended September 30
|
|||||||||||
(In thousands)
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Open claims - beginning of period
|
15
|
|
|
20
|
|
|
20
|
|
|
21
|
|
|
21
|
|
New claims filed
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Claims dismissed
|
(3
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
(1
|
)
|
Open claims - end of period
|
13
|
|
|
20
|
|
|
15
|
|
|
20
|
|
|
21
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Asbestos reserve - beginning of period
|
$
|
321
|
|
|
$
|
311
|
|
|
$
|
311
|
|
|
$
|
329
|
|
|
$
|
342
|
|
Reserve adjustment
|
—
|
|
|
—
|
|
|
25
|
|
|
4
|
|
|
10
|
|
|||||
Amounts paid
|
(5
|
)
|
|
(8
|
)
|
|
(15
|
)
|
|
(22
|
)
|
|
(23
|
)
|
|||||
Asbestos reserve - end of period
|
$
|
316
|
|
|
$
|
303
|
|
|
$
|
321
|
|
|
$
|
311
|
|
|
$
|
329
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
||||||||||||
|
March 31
|
|
Years ended September 30
|
||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Reserve - beginning of period
|
$
|
177
|
|
|
$
|
186
|
|
Disbursements
|
(15
|
)
|
|
(24
|
)
|
||
Revised obligation estimates and accretion
|
5
|
|
|
14
|
|
||
Reserve - end of period
|
$
|
167
|
|
|
$
|
176
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Environmental expense
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
13
|
|
Accretion
(a)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Legal expense
|
4
|
|
|
3
|
|
|
5
|
|
|
5
|
|
||||
Total expense
|
5
|
|
|
13
|
|
|
10
|
|
|
19
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Insurance receivable
(a)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Total expense, net of receivable activity
(b)
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
(a)
|
Activity of $0 denotes value less than $1 million.
|
(b)
|
Net expense of
$1 million
and
$2 million
for the three and
six
months ended
March 31, 2017
, respectively, 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 (loss) 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)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Numerator for basic and diluted EPS –
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
102
|
|
|
$
|
87
|
|
|
$
|
112
|
|
|
$
|
178
|
|
Less: Income from continuing operations
|
|
|
|
|
|
|
|
||||||||
attributable to noncontrolling interest
|
13
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Income from continuing operations
|
|
|
|
|
|
|
|
||||||||
attributable to Ashland, net of tax
|
$
|
89
|
|
|
$
|
87
|
|
|
$
|
88
|
|
|
$
|
178
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|||||
Denominator for basic EPS – Weighted-average
|
|
|
|
|
|
|
|
|
|
|
|||||
common shares outstanding
|
62
|
|
|
62
|
|
|
62
|
|
|
63
|
|
||||
Share-based awards convertible to common shares
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Denominator for diluted EPS – Adjusted weighted-
|
|
|
|
|
|
|
|
|
|
|
|||||
average shares and assumed conversions
|
63
|
|
|
63
|
|
|
63
|
|
|
64
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EPS from continuing operations attributable
|
|
|
|
|
|
|
|
|
|
|
|
||||
to Ashland
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.43
|
|
|
$
|
1.39
|
|
|
$
|
1.42
|
|
|
$
|
2.79
|
|
Diluted
|
1.42
|
|
|
1.38
|
|
|
1.41
|
|
|
2.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
|
|
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 gain
|
$
|
58
|
|
|
$
|
2
|
|
|
$
|
60
|
|
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
80
|
|
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjustment of unrecognized prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
(31
|
)
|
|
55
|
|
||||||
Amortization of unrecognized prior service
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
credits included in net income
(a)
|
(3
|
)
|
|
1
|
|
|
(2
|
)
|
|
(45
|
)
|
|
14
|
|
|
(31
|
)
|
||||||
Net change in available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gain during period
|
9
|
|
|
(2
|
)
|
|
7
|
|
|
5
|
|
|
(2
|
)
|
|
3
|
|
||||||
Reclassification adjustment for gains
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
included in net income
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive income
|
$
|
62
|
|
|
$
|
2
|
|
|
$
|
64
|
|
|
$
|
126
|
|
|
$
|
(19
|
)
|
|
$
|
107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six months ended March 31
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized translation gain (loss)
|
$
|
(92
|
)
|
|
$
|
6
|
|
|
$
|
(86
|
)
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
19
|
|
Pension and postretirement obligation adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjustment of unrecognized prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
(31
|
)
|
|
55
|
|
||||||
Amortization of unrecognized prior service
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
credits included in net income
(a)
|
(6
|
)
|
|
2
|
|
|
(4
|
)
|
|
(49
|
)
|
|
15
|
|
|
(34
|
)
|
||||||
Net change in available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gain during period
|
9
|
|
|
(2
|
)
|
|
7
|
|
|
14
|
|
|
(5
|
)
|
|
9
|
|
||||||
Reclassification adjustment for gains
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
included in net income
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive income (loss)
|
$
|
(91
|
)
|
|
$
|
7
|
|
|
$
|
(84
|
)
|
|
$
|
68
|
|
|
$
|
(19
|
)
|
|
$
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Cost of sales
|
$
|
(1
|
)
|
|
$
|
(18
|
)
|
|
$
|
(2
|
)
|
|
$
|
(20
|
)
|
Selling, general and administrative expense
|
(2
|
)
|
|
(27
|
)
|
|
(4
|
)
|
|
(29
|
)
|
||||
Total amortization of unrecognized prior service credits
|
$
|
(3
|
)
|
|
$
|
(45
|
)
|
|
$
|
(6
|
)
|
|
$
|
(49
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions - unaudited)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
SALES
|
|
|
|
|
|
|
|
||||||||
Specialty Ingredients
|
$
|
544
|
|
|
$
|
529
|
|
|
$
|
1,026
|
|
|
$
|
1,004
|
|
Performance Materials
|
262
|
|
|
239
|
|
|
484
|
|
|
470
|
|
||||
Valvoline
|
514
|
|
|
479
|
|
|
1,003
|
|
|
936
|
|
||||
|
$
|
1,320
|
|
|
$
|
1,247
|
|
|
$
|
2,513
|
|
|
$
|
2,410
|
|
OPERATING INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
74
|
|
|
$
|
65
|
|
|
$
|
114
|
|
|
$
|
103
|
|
Performance Materials
|
10
|
|
|
20
|
|
|
18
|
|
|
43
|
|
||||
Valvoline
|
106
|
|
|
105
|
|
|
205
|
|
|
197
|
|
||||
Unallocated and other
|
(20
|
)
|
|
(43
|
)
|
|
(30
|
)
|
|
(45
|
)
|
||||
|
$
|
170
|
|
|
$
|
147
|
|
|
$
|
307
|
|
|
$
|
298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|||||||||||
Three months ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
Sales
|
$
|
—
|
|
|
$
|
165
|
|
|
$
|
1,088
|
|
|
$
|
(6
|
)
|
|
$
|
1,247
|
|
Cost of sales
|
—
|
|
|
117
|
|
|
712
|
|
|
(6
|
)
|
|
823
|
|
|||||
Gross profit
|
—
|
|
|
48
|
|
|
376
|
|
|
—
|
|
|
424
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expense
|
—
|
|
|
60
|
|
|
198
|
|
|
—
|
|
|
258
|
|
|||||
Research and development expense
|
—
|
|
|
4
|
|
|
21
|
|
|
—
|
|
|
25
|
|
|||||
Equity and other income (loss)
|
—
|
|
|
(4
|
)
|
|
10
|
|
|
—
|
|
|
6
|
|
|||||
Operating income (loss)
|
—
|
|
|
(20
|
)
|
|
167
|
|
|
—
|
|
|
147
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest and other financing expense
|
—
|
|
|
40
|
|
|
3
|
|
|
—
|
|
|
43
|
|
|||||
Net loss on divestitures
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
before income taxes
|
—
|
|
|
(62
|
)
|
|
164
|
|
|
—
|
|
|
102
|
|
|||||
Income tax expense (benefit)
|
—
|
|
|
(35
|
)
|
|
50
|
|
|
—
|
|
|
15
|
|
|||||
Equity in net income (loss) of subsidiaries
|
87
|
|
|
(32
|
)
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
87
|
|
|
(59
|
)
|
|
114
|
|
|
(55
|
)
|
|
87
|
|
|||||
Income (loss) from discontinued
|
|
|
|
|
|
|
|
|
|
||||||||||
operations (net of tax)
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
87
|
|
|
$
|
(58
|
)
|
|
$
|
113
|
|
|
$
|
(55
|
)
|
|
$
|
87
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
194
|
|
|
$
|
(35
|
)
|
|
$
|
197
|
|
|
$
|
(162
|
)
|
|
$
|
194
|
|
|
|
|
|
|
|
|
|
|
Condensed Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|||||||||||
Six months ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
Sales
|
$
|
—
|
|
|
$
|
294
|
|
|
$
|
2,237
|
|
|
$
|
(18
|
)
|
|
$
|
2,513
|
|
Cost of sales
|
—
|
|
|
209
|
|
|
1,502
|
|
|
(17
|
)
|
|
1,694
|
|
|||||
Gross profit
|
—
|
|
|
85
|
|
|
735
|
|
|
(1
|
)
|
|
819
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expense
|
14
|
|
|
70
|
|
|
399
|
|
|
—
|
|
|
483
|
|
|||||
Research and development expense
|
—
|
|
|
7
|
|
|
40
|
|
|
—
|
|
|
47
|
|
|||||
Equity and other income (loss)
|
—
|
|
|
(30
|
)
|
|
48
|
|
|
—
|
|
|
18
|
|
|||||
Operating income (loss)
|
(14
|
)
|
|
(22
|
)
|
|
344
|
|
|
(1
|
)
|
|
307
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest and other financing expense
|
—
|
|
|
64
|
|
|
106
|
|
|
—
|
|
|
170
|
|
|||||
Net loss on divestitures
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
before income taxes
|
(14
|
)
|
|
(87
|
)
|
|
238
|
|
|
(1
|
)
|
|
136
|
|
|||||
Income tax expense
|
—
|
|
|
7
|
|
|
17
|
|
|
—
|
|
|
24
|
|
|||||
Equity in net income (loss) of subsidiaries
|
105
|
|
|
77
|
|
|
—
|
|
|
(182
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
91
|
|
|
(17
|
)
|
|
221
|
|
|
(183
|
)
|
|
112
|
|
|||||
Income (loss) from discontinued
|
|
|
|
|
|
|
|
|
|
||||||||||
operations (net of tax)
|
—
|
|
|
4
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|||||
Net income (loss)
|
91
|
|
|
(13
|
)
|
|
220
|
|
|
(183
|
)
|
|
115
|
|
|||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|||||
Net income (loss) attributable to Ashland
|
$
|
91
|
|
|
$
|
(13
|
)
|
|
$
|
196
|
|
|
$
|
(183
|
)
|
|
$
|
91
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
31
|
|
|
157
|
|
|
(34
|
)
|
|
(123
|
)
|
|
31
|
|
|||||
Comprehensive income attributable
|
|
|
|
|
|
|
|
|
|
||||||||||
to noncontrolling interest
|
24
|
|
|
—
|
|
|
24
|
|
|
(24
|
)
|
|
24
|
|
|||||
Comprehensive income (loss) attributable
|
|
|
|
|
|
|
|
|
|
||||||||||
to Ashland
|
$
|
7
|
|
|
$
|
157
|
|
|
$
|
(58
|
)
|
|
$
|
(99
|
)
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
Condensed Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|||||||||||
Six months ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions)
|
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
Sales
|
$
|
—
|
|
|
$
|
321
|
|
|
$
|
2,102
|
|
|
$
|
(13
|
)
|
|
$
|
2,410
|
|
Cost of sales
|
—
|
|
|
219
|
|
|
1,388
|
|
|
(12
|
)
|
|
1,595
|
|
|||||
Gross profit
|
—
|
|
|
102
|
|
|
714
|
|
|
(1
|
)
|
|
815
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expense
|
—
|
|
|
92
|
|
|
391
|
|
|
—
|
|
|
483
|
|
|||||
Research and development expense
|
—
|
|
|
7
|
|
|
42
|
|
|
—
|
|
|
49
|
|
|||||
Equity and other income (loss)
|
—
|
|
|
(6
|
)
|
|
21
|
|
|
—
|
|
|
15
|
|
|||||
Operating income (loss)
|
—
|
|
|
(3
|
)
|
|
302
|
|
|
(1
|
)
|
|
298
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest and other financing expense
|
—
|
|
|
78
|
|
|
7
|
|
|
—
|
|
|
85
|
|
|||||
Net gain (loss) on divestitures
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
before income taxes
|
—
|
|
|
(82
|
)
|
|
296
|
|
|
(1
|
)
|
|
213
|
|
|||||
Income tax expense (benefit)
|
—
|
|
|
(62
|
)
|
|
97
|
|
|
—
|
|
|
35
|
|
|||||
Equity in net income (loss) of subsidiaries
|
176
|
|
|
63
|
|
|
—
|
|
|
(239
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations
|
176
|
|
|
43
|
|
|
199
|
|
|
(240
|
)
|
|
178
|
|
|||||
Loss from discontinued operations (net of tax)
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss)
|
$
|
176
|
|
|
$
|
43
|
|
|
$
|
197
|
|
|
$
|
(240
|
)
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
225
|
|
|
$
|
65
|
|
|
$
|
224
|
|
|
$
|
(289
|
)
|
|
$
|
225
|
|
|
|
|
|
|
|
|
|
|
Condensed Balance Sheets
|
|
|
|
|
|
|
|
|
|
||||||||||
At March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions) |
Ashland Global Holdings Inc. (Parent Guarantor)
|
|
|
Ashland LLC (Issuer)
|
|
|
Other Non-Guarantor
Subsidiaries |
|
|
Eliminations
|
|
|
Consolidated
|
|
|||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
108
|
|
|
$
|
497
|
|
|
$
|
—
|
|
|
$
|
605
|
|
Accounts receivable
|
—
|
|
|
17
|
|
|
955
|
|
|
—
|
|
|
972
|
|
|||||
Inventories
|
—
|
|
|
47
|
|
|
640
|
|
|
—
|
|
|
687
|
|
|||||
Other assets
|
—
|
|
|
6
|
|
|
110
|
|
|
(3
|
)
|
|
113
|
|
|||||
Total current assets
|
—
|
|
|
178
|
|
|
2,202
|
|
|
(3
|
)
|
|
2,377
|
|
|||||
Noncurrent assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
240
|
|
|
1,965
|
|
|
—
|
|
|
2,205
|
|
|||||
Goodwill
|
—
|
|
|
141
|
|
|
2,272
|
|
|
—
|
|
|
2,413
|
|
|||||
Intangibles
|
—
|
|
|
34
|
|
|
983
|
|
|
—
|
|
|
1,017
|
|
|||||
Restricted investments
|
—
|
|
|
—
|
|
|
298
|
|
|
—
|
|
|
298
|
|
|||||
Asbestos insurance receivable
|
—
|
|
|
130
|
|
|
63
|
|
|
—
|
|
|
193
|
|
|||||
Equity and other unconsolidated investments
|
—
|
|
|
2
|
|
|
59
|
|
|
—
|
|
|
61
|
|
|||||
Investment in subsidiaries
|
3,195
|
|
|
7,635
|
|
|
—
|
|
|
(10,830
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
31
|
|
|
96
|
|
|
199
|
|
|
(127
|
)
|
|
199
|
|
|||||
Intercompany receivables
|
—
|
|
|
13
|
|
|
2,517
|
|
|
(2,530
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
256
|
|
|
167
|
|
|
—
|
|
|
423
|
|
|||||
Total noncurrent assets
|
3,226
|
|
|
8,547
|
|
|
8,523
|
|
|
(13,487
|
)
|
|
6,809
|
|
|||||
Total assets
|
$
|
3,226
|
|
|
$
|
8,725
|
|
|
$
|
10,725
|
|
|
$
|
(13,490
|
)
|
|
$
|
9,186
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short-term debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
95
|
|
Current portion of long-term debt
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Accounts payable and other accrued liabilities
|
64
|
|
|
214
|
|
|
651
|
|
|
(3
|
)
|
|
926
|
|
|||||
Total current liabilities
|
64
|
|
|
214
|
|
|
762
|
|
|
(3
|
)
|
|
1,037
|
|
|||||
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Long-term debt
|
—
|
|
|
2,103
|
|
|
709
|
|
|
—
|
|
|
2,812
|
|
|||||
Employee benefit obligations
|
—
|
|
|
38
|
|
|
979
|
|
|
—
|
|
|
1,017
|
|
|||||
Asbestos litigation reserve
|
—
|
|
|
363
|
|
|
300
|
|
|
—
|
|
|
663
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
196
|
|
|
(127
|
)
|
|
69
|
|
|||||
Intercompany payables
|
19
|
|
|
2,498
|
|
|
13
|
|
|
(2,530
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
224
|
|
|
221
|
|
|
—
|
|
|
445
|
|
|||||
Total noncurrent liabilities
|
19
|
|
|
5,226
|
|
|
2,418
|
|
|
(2,657
|
)
|
|
5,006
|
|
|||||
Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Ashland stockholders’ equity
|
3,143
|
|
|
3,285
|
|
|
7,702
|
|
|
(10,830
|
)
|
|
3,300
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
(157
|
)
|
|
—
|
|
|
(157
|
)
|
|||||
Total equity
|
3,143
|
|
|
3,285
|
|
|
7,545
|
|
|
(10,830
|
)
|
|
3,143
|
|
|||||
Total liabilities and equity
|
$
|
3,226
|
|
|
$
|
8,725
|
|
|
$
|
10,725
|
|
|
$
|
(13,490
|
)
|
|
$
|
9,186
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
||||||||||
Six months ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(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
|
$
|
—
|
|
|
$
|
(109
|
)
|
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
62
|
|
Cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant and equipment
|
—
|
|
|
(10
|
)
|
|
(94
|
)
|
|
—
|
|
|
(104
|
)
|
|||||
Purchase of operations - net of cash acquired
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(48
|
)
|
|||||
Intercompany dividends
|
17
|
|
|
17
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|||||
Net purchases of funds restricted for
|
|
|
|
|
|
|
|
|
|
||||||||||
specific transactions
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Reimbursements from restricted investments
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Proceeds from sales of available-for-sale
|
|
|
|
|
|
|
|
|
|
||||||||||
securities
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|||||
Purchases of available-for-sale securities
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Other investing activities, net
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
17
|
|
|
18
|
|
|
(142
|
)
|
|
(34
|
)
|
|
(141
|
)
|
|||||
Cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of long-term debt
|
—
|
|
|
(80
|
)
|
|
(257
|
)
|
|
—
|
|
|
(337
|
)
|
|||||
Premium on long-term debt repayment
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Repayment from short-term debt
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
—
|
|
|
(75
|
)
|
|||||
Cash dividends paid
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Intercompany dividends
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|
34
|
|
|
—
|
|
|||||
Other intercompany activity, net
|
48
|
|
|
226
|
|
|
(274
|
)
|
|
—
|
|
|
—
|
|
|||||
Other financing activities, net
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Total cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
(17
|
)
|
|
139
|
|
|
(631
|
)
|
|
34
|
|
|
(475
|
)
|
|||||
Cash provided (used) by continuing operations
|
—
|
|
|
48
|
|
|
(602
|
)
|
|
—
|
|
|
(554
|
)
|
|||||
Cash used by discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating cash flows
|
—
|
|
|
(16
|
)
|
|
(5
|
)
|
|
—
|
|
|
(21
|
)
|
|||||
Investing cash flows
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total cash used by discontinued operations
|
—
|
|
|
(16
|
)
|
|
(5
|
)
|
|
—
|
|
|
(21
|
)
|
|||||
Effect of currency exchange rate changes on
|
|
|
|
|
|
|
|
|
|
||||||||||
cash and cash equivalents
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Increase (decrease) in cash and cash equivalents
|
—
|
|
|
32
|
|
|
(615
|
)
|
|
—
|
|
|
(583
|
)
|
|||||
Cash and cash equivalents - beginning of period
|
—
|
|
|
76
|
|
|
1,112
|
|
|
—
|
|
|
1,188
|
|
|||||
Cash and cash equivalents - end of period
|
$
|
—
|
|
|
$
|
108
|
|
|
$
|
497
|
|
|
$
|
—
|
|
|
$
|
605
|
|
|
|
|
|
|
|
|
|
|
Condensed Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Six months ended March 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
|
$
|
—
|
|
|
$
|
(121
|
)
|
|
$
|
371
|
|
|
$
|
—
|
|
|
$
|
250
|
|
Cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant and equipment
|
—
|
|
|
(7
|
)
|
|
(96
|
)
|
|
—
|
|
|
(103
|
)
|
|||||
Purchase of operations - net of cash acquired
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|
(66
|
)
|
|||||
Proceeds from sale of operations
|
|
|
|
|
|
|
|
|
|
||||||||||
or equity investments
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||
Reimbursements from restricted investments
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Proceeds from sales of available-for-sale
|
|
|
|
|
|
|
|
|
|
||||||||||
securities
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Purchases of available-for-sale securities
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Other investing activities, net
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
10
|
|
|||||
Total cash flows provided (used) by investing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
—
|
|
|
21
|
|
|
(145
|
)
|
|
—
|
|
|
(124
|
)
|
|||||
Cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
activities from continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of long-term debt
|
—
|
|
|
(27
|
)
|
|
(9
|
)
|
|
—
|
|
|
(36
|
)
|
|||||
Proceeds (repayment) from short-term debt
|
—
|
|
|
439
|
|
|
(71
|
)
|
|
—
|
|
|
368
|
|
|||||
Repurchase of common stock
|
—
|
|
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||
Cash dividends paid
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||||
Other intercompany activity, net
|
—
|
|
|
238
|
|
|
(238
|
)
|
|
—
|
|
|
—
|
|
|||||
Other financing activities, net
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Total cash flows provided (used) by financing
|
|
|
|
|
|
|
|
|
|
||||||||||
activities from continuing operations
|
—
|
|
|
101
|
|
|
(318
|
)
|
|
—
|
|
|
(217
|
)
|
|||||
Cash provided (used) by continuing operations
|
—
|
|
|
1
|
|
|
(92
|
)
|
|
—
|
|
|
(91
|
)
|
|||||
Cash used by discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating cash flows
|
—
|
|
|
(11
|
)
|
|
(8
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Investing cash flows
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total cash used by discontinued operations
|
—
|
|
|
(11
|
)
|
|
(8
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Effect of currency exchange rate changes on
|
|
|
|
|
|
|
|
|
|
||||||||||
cash and cash equivalents
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Decrease in cash and cash equivalents
|
—
|
|
|
(10
|
)
|
|
(111
|
)
|
|
—
|
|
|
(121
|
)
|
|||||
Cash and cash equivalents - beginning of period
|
—
|
|
|
21
|
|
|
1,236
|
|
|
—
|
|
|
1,257
|
|
|||||
Cash and cash equivalents - end of period
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
1,125
|
|
|
$
|
—
|
|
|
$
|
1,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
March 31
|
|
March 31
|
||||||||
Sales by Geography
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
North America
(a)
|
54
|
%
|
|
53
|
%
|
|
54
|
%
|
|
53
|
%
|
Europe
|
23
|
%
|
|
24
|
%
|
|
22
|
%
|
|
24
|
%
|
Asia Pacific
|
16
|
%
|
|
16
|
%
|
|
17
|
%
|
|
16
|
%
|
Latin America & other
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
March 31
|
|
March 31
|
||||||||
Sales by Reportable Segment
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Specialty Ingredients
|
41
|
%
|
|
43
|
%
|
|
41
|
%
|
|
42
|
%
|
Performance Materials
|
20
|
%
|
|
19
|
%
|
|
19
|
%
|
|
19
|
%
|
Valvoline
|
39
|
%
|
|
38
|
%
|
|
40
|
%
|
|
39
|
%
|
|
100
|
%
|
|
100
|
%
|
|
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 attributable to Ashland amounted to
$92 million
and
$87 million
for the three months ended
March 31, 2017
and
2016
, respectively, or
$1.47
and
$1.38
diluted earnings per share, respectively.
|
•
|
Ashland’s net income attributable to noncontrolling interest amounted to
$13 million
for the three months ended
March 31, 2017
and reflects the noncontrolling interest of Valvoline Inc.
|
•
|
Income from continuing operations, which excludes results from discontinued operations, amounted to
$102 million
and
$87 million
for the three months ended
March 31, 2017
and
2016
, respectively.
|
•
|
The effective income tax expense rates of
23%
and
15%
for the three months ended
March 31, 2017
and
2016
, respectively, were both affected by certain discrete items.
|
•
|
Ashland incurred pretax net interest and other financing expense of
$38 million
and
$43 million
for the three months ended
March 31, 2017
and
2016
, respectively.
|
•
|
Operating income was
$170 million
and
$147 million
for the three months ended
March 31, 2017
and
2016
, respectively.
|
•
|
Ashland’s net income attributable to Ashland amounted to
$91 million
and
$176 million
for the
six
months ended
March 31, 2017
and
2016
, respectively, or
$1.46
and
$2.73
diluted earnings per share, respectively.
|
•
|
Ashland’s net income attributable to noncontrolling interest amounted to
$24 million
for the six months ended
March 31, 2017
and reflects the noncontrolling interest of Valvoline Inc.
|
•
|
Income from continuing operations, which excludes results from discontinued operations, amounted to
$112 million
and
$178 million
for the
six
months ended
March 31, 2017
and
2016
, respectively.
|
•
|
The effective income tax expense rates of
18%
and
16%
for the
six
months ended
March 31, 2017
and
2016
, respectively, were both affected by certain discrete items.
|
•
|
Ashland incurred pretax net interest and other financing expense of
$170 million
and
$85 million
for the
six
months ended
March 31, 2017
and
2016
, respectively. The current period was impacted by $92 million of net charges associated with current period debt financing activity.
|
•
|
Operating income was
$307 million
and
$298 million
for the
six
months ended
March 31, 2017
and
2016
, respectively.
|
|
|
|
|
|
|
|
|
|
◦
|
$26 million, including $1 million of accelerated depreciation, and
$12 million
of costs related to the separation of Valvoline during the three months ended
March 31, 2017
and
2016
, respectively;
|
◦
|
$4 million of restructuring charges related to office buildings and $2 million of accelerated depreciation related to a restructuring plan within an existing manufacturing facility during the three months ended
March 31, 2016
;
|
•
|
$23 million
of key items related to pension and other postretirement plan remeasurement losses during the three months ended
March 31, 2016
, representing the net impact of a curtailment gain of $110 million related to the prior year quarter plan amendments and an $133 million actuarial loss due to changes in discount rates and asset values; and
|
•
|
$5 million
charge for a legal reserve during the three months ended
March 31, 2016
.
|
|
Three months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Net income
|
$
|
105
|
|
|
$
|
87
|
|
Income tax expense
|
30
|
|
|
15
|
|
||
Net interest and other financing expense
|
38
|
|
|
43
|
|
||
Depreciation and amortization
(a)
|
75
|
|
|
83
|
|
||
EBITDA
|
248
|
|
|
228
|
|
||
Net income attributable to noncontrolling interest
|
(13
|
)
|
|
—
|
|
||
Adjusted EBITDA adjustments attributable to noncontrolling interest
(b)
|
(11
|
)
|
|
—
|
|
||
Income from discontinued operations (net of tax)
|
(3
|
)
|
|
—
|
|
||
Separation, restructuring and other costs, net
|
25
|
|
|
16
|
|
||
Loss on pension and other postretirement plan remeasurements
|
—
|
|
|
23
|
|
||
Legal reserve
|
—
|
|
|
5
|
|
||
Accelerated depreciation
|
1
|
|
|
2
|
|
||
Adjusted EBITDA
(c)
|
$
|
247
|
|
|
$
|
274
|
|
|
|
|
|
(a)
|
Excludes
$1 million
and
$2 million
of accelerated depreciation for the three months ended
March 31, 2017
and
2016
, respectively.
|
(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 and separation costs.
|
(c)
|
Includes $12 million and
$14 million
during the
three
months ended
March 31, 2017
and
2016
, 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.
|
|
|
|
|
|
|
|
|
|
◦
|
an additional $28 million and $6 million of costs related to the separation of Valvoline during the
six
months ended
March 31, 2017
and
2016
, respectively;
|
◦
|
additional adjustments related to a restructuring plan within an existing manufacturing facility of a $5 million reversal of the previous severance accrual and $2 million of accelerated depreciation during the
six
months ended
March 31, 2016
;
|
•
|
Remeasurement gain of $10 million associated with the discontinuation of certain post-employment health and life insurance benefits during the
six
months ended
March 31, 2017
; and
|
•
|
Additional charges for legal reserves of $5 million and $10 million during the
six
months ended
March 31, 2017
and
2016
, respectively.
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Net income
|
$
|
115
|
|
|
$
|
176
|
|
Income tax expense
|
24
|
|
|
35
|
|
||
Net interest and other financing expense
|
170
|
|
|
85
|
|
||
Depreciation and amortization
(a)
|
152
|
|
|
164
|
|
||
EBITDA
|
461
|
|
|
460
|
|
||
Net income attributable to noncontrolling interest
|
(24
|
)
|
|
—
|
|
||
Adjusted EBITDA adjustments attributable to noncontrolling interest
(b)
|
(20
|
)
|
|
—
|
|
||
Loss (income) from discontinued operations (net of tax)
|
(3
|
)
|
|
2
|
|
||
Separation, restructuring and other costs, net
|
53
|
|
|
17
|
|
||
Loss (gain) on pension and other postretirement plan remeasurements
|
(10
|
)
|
|
23
|
|
||
Legal reserve
|
5
|
|
|
15
|
|
||
Accelerated depreciation
|
1
|
|
|
4
|
|
||
Adjusted EBITDA
(c)
|
$
|
463
|
|
|
$
|
521
|
|
|
|
|
|
(a)
|
Excludes
$1 million
and
$4 million
of accelerated depreciation for the
six
months ended
March 31, 2017
and
2016
, respectively.
|
(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 and separation costs.
|
(c)
|
Includes $24 million and
$27 million
during the
six
months ended
March 31, 2017
and
2016
, 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 March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Sales
|
$
|
1,320
|
|
|
$
|
1,247
|
|
|
$
|
73
|
|
|
$
|
2,513
|
|
|
$
|
2,410
|
|
|
$
|
103
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
||||
(In millions)
|
March 31, 2017
|
|
|
March 31, 2017
|
|
||||
Volume
|
|
$
|
59
|
|
|
|
$
|
118
|
|
Pricing
|
|
13
|
|
|
|
(15
|
)
|
||
Product mix
|
|
3
|
|
|
|
(5
|
)
|
||
Currency exchange
|
|
(9
|
)
|
|
|
(15
|
)
|
||
Acquisitions and divestitures
|
|
7
|
|
|
|
20
|
|
||
Change in sales
|
|
$
|
73
|
|
|
|
$
|
103
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Cost of sales
|
$
|
887
|
|
|
$
|
823
|
|
|
$
|
64
|
|
|
$
|
1,694
|
|
|
$
|
1,595
|
|
|
$
|
99
|
|
Gross profit as a percent of sales
|
32.8
|
%
|
|
34.0
|
%
|
|
|
|
|
32.6
|
%
|
|
33.8
|
%
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
||||
(In millions)
|
March 31, 2017
|
|
|
March 31, 2017
|
|
||||
Changes in:
|
|
|
|
|
|
||||
Volume
|
|
$
|
41
|
|
|
|
$
|
82
|
|
Production costs
|
|
33
|
|
|
|
27
|
|
||
Acquisitions and divestitures
|
|
6
|
|
|
|
15
|
|
||
Currency exchange
|
|
(5
|
)
|
|
|
(11
|
)
|
||
Product mix
|
|
(1
|
)
|
|
|
(5
|
)
|
||
Pension and other postretirement benefit plans expense (income)
|
|
|
|
|
|
||||
(including remeasurements)
|
|
(8
|
)
|
|
|
(10
|
)
|
||
Severance and other costs
|
|
—
|
|
|
|
5
|
|
||
Accelerated depreciation
|
|
(2
|
)
|
|
|
(4
|
)
|
||
Change in cost of sales
|
|
$
|
64
|
|
|
|
$
|
99
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Selling, general and administrative
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
expense
|
$
|
245
|
|
|
$
|
258
|
|
|
$
|
(13
|
)
|
|
$
|
483
|
|
|
$
|
483
|
|
|
$
|
—
|
|
As a percent of sales
|
18.6
|
%
|
|
20.7
|
%
|
|
|
|
|
19.2
|
%
|
|
20.0
|
%
|
|
|
|
•
|
$26 million of costs related to the separation of Valvoline during the current quarter compared to $12 million in the prior year quarter;
|
•
|
pension and other postretirement plan remeasurements losses of $14 million in the prior year quarter, which consisted of a curtailment gain of $65 million and an actuarial loss of $79 million;
|
•
|
a $5 million charge for a legal reserve during the prior year quarter; and
|
•
|
a $4 million charge for restructuring related to office buildings during the prior year quarter.
|
|
|
|
|
|
|
|
|
|
•
|
$54 million of costs related to the separation of Valvoline during the current period compared to
$18 million
in the prior year period;
|
•
|
decreased costs of $20 million due to a post-employment remeasurement gain of $6 million during the current period and pension and other postretirement plan remeasurement losses of $14 million during the prior year period (see discussion within current quarter analysis);
|
•
|
$5 million and $15 million charges for legal reserves during the current and prior year period, respectively; and
|
•
|
$4 million of restructuring charges related to office buildings during the prior year period.
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Research and development expense
|
$
|
24
|
|
|
$
|
25
|
|
|
$
|
(1
|
)
|
|
$
|
47
|
|
|
$
|
49
|
|
|
$
|
(2
|
)
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Equity and other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity income
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
(1
|
)
|
Other income
|
3
|
|
|
3
|
|
|
—
|
|
|
11
|
|
|
7
|
|
|
4
|
|
||||||
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
15
|
|
|
$
|
3
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Net interest and other
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
financing expense (income)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
40
|
|
|
$
|
44
|
|
|
$
|
(4
|
)
|
|
$
|
175
|
|
|
$
|
87
|
|
|
$
|
88
|
|
Interest income
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Available-for-sale securities income
|
(4
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(7
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||||
Other financing costs
|
3
|
|
|
2
|
|
|
1
|
|
|
5
|
|
|
4
|
|
|
1
|
|
||||||
|
$
|
38
|
|
|
$
|
43
|
|
|
$
|
(5
|
)
|
|
$
|
170
|
|
|
$
|
85
|
|
|
$
|
85
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Net gain (loss) on divestitures
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MAP Transaction adjustments
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Castings Solutions joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
||||||
Pinova
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
||||||
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Income tax expense
|
$
|
30
|
|
|
$
|
15
|
|
|
$
|
15
|
|
|
$
|
24
|
|
|
$
|
35
|
|
|
$
|
(11
|
)
|
Effective tax rate
|
23
|
%
|
|
15
|
%
|
|
|
|
|
18
|
%
|
|
16
|
%
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Income (loss) from discontinued
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
operations (net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Water Technologies
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Net income attributable to
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
noncontrolling interest
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
Three months ended March 31
|
|
Six months ended March 31
|
||||||||||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(loss) (net of taxes)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized translation gain (loss)
|
$
|
60
|
|
|
$
|
80
|
|
|
$
|
(20
|
)
|
|
$
|
(86
|
)
|
|
$
|
19
|
|
|
$
|
(105
|
)
|
Pension and postretirement
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
obligation adjustment
|
(2
|
)
|
|
24
|
|
|
(26
|
)
|
|
(4
|
)
|
|
21
|
|
|
(25
|
)
|
||||||
Net change in available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
securities
|
6
|
|
|
3
|
|
|
3
|
|
|
6
|
|
|
9
|
|
|
(3
|
)
|
||||||
|
$
|
64
|
|
|
$
|
107
|
|
|
$
|
(43
|
)
|
|
$
|
(84
|
)
|
|
$
|
49
|
|
|
$
|
(133
|
)
|
•
|
For the three months ended
March 31, 2017
, the unrealized gain from foreign currency translation adjustments was
$60 million
compared to a gain of
$80 million
for the three months ended
March 31, 2016
. 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 a loss of
$2 million
for the three months ended
March 31, 2017
compared to income of
$24 million
for the three months ended
March 31, 2016
. Of these amounts,
$2 million
and $31 million during the current quarter and prior year quarter, respectively, of unrecognized prior service credits, net of tax, relating to pension and other postretirement benefit plans were amortized and reclassified into net income. Additional unrecognized prior service credits, net of tax, of $55 million during the prior year quarter were included in other comprehensive income as a result of the pension and other postretirement plan remeasurements.
|
•
|
Gains of
$6 million
and
$3 million
on available-for-sale securities, net of tax, related to restricted investments, were recognized within other comprehensive income during the three months ended
March 31, 2017
and
2016
, respectively. Of these amounts, $1 million, net of tax, during the current quarter was reclassified into net income, while $7 million and $3 million of unrealized gains, net of tax, were included within other comprehensive income during the current and prior year quarters, respectively.
|
|
|
|
|
|
|
|
|
|
•
|
For the
six
months ended
March 31, 2017
, the unrealized loss from foreign currency translation adjustments was
$86 million
compared to a gain of
$19 million
for the
six
months ended
March 31, 2016
, mainly as a result of the strengthening of the U.S. Dollar against other global currencies, including the Euro. The fluctuations in unrealized translation gains and losses are primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars.
|
•
|
Pension and postretirement obligation adjustment was a loss of
$4 million
for the
six
months ended
March 31, 2017
compared to income of
$21 million
for the
six
months ended
March 31, 2016
. Of these amounts, $4 million and $34 million during the current and prior year periods, respectively, of unrecognized prior service credits, net of tax, relating to pension and other postretirement benefit plans were amortized and reclassified into net income. Additional unrecognized prior service credits, net of tax, of $55 million during the prior year period were included in other comprehensive income (loss) as a result of the pension and other postretirement plan remeasurements.
|
•
|
Gains of
$6 million
and
$9 million
on available-for-sale securities, net of tax, related to restricted investments, were recognized within other comprehensive income (loss) during the
six
months ended
March 31, 2017
and
2016
, respectively. Of these amounts, $1 million, net of tax, during the current period was reclassified into net income, while $7 million and $9 million of unrealized gains, net of tax, were included within other comprehensive income (loss) during the current and prior year periods, respectively.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Sales
|
|
|
|
|
|
|
|
||||||||
Specialty Ingredients
|
$
|
544
|
|
|
$
|
529
|
|
|
$
|
1,026
|
|
|
$
|
1,004
|
|
Performance Materials
|
262
|
|
|
239
|
|
|
484
|
|
|
470
|
|
||||
Valvoline
|
514
|
|
|
479
|
|
|
1,003
|
|
|
936
|
|
||||
|
$
|
1,320
|
|
|
$
|
1,247
|
|
|
$
|
2,513
|
|
|
$
|
2,410
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
74
|
|
|
$
|
65
|
|
|
$
|
114
|
|
|
$
|
103
|
|
Performance Materials
|
10
|
|
|
20
|
|
|
18
|
|
|
43
|
|
||||
Valvoline
|
106
|
|
|
105
|
|
|
205
|
|
|
197
|
|
||||
Unallocated and other
|
(20
|
)
|
|
(43
|
)
|
|
(30
|
)
|
|
(45
|
)
|
||||
|
$
|
170
|
|
|
$
|
147
|
|
|
$
|
307
|
|
|
$
|
298
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
$
|
53
|
|
|
$
|
62
|
|
|
$
|
107
|
|
|
$
|
123
|
|
Performance Materials
|
13
|
|
|
13
|
|
|
26
|
|
|
26
|
|
||||
Valvoline
|
9
|
|
|
10
|
|
|
18
|
|
|
19
|
|
||||
Unallocated and other
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
|
$
|
76
|
|
|
$
|
85
|
|
|
$
|
153
|
|
|
$
|
168
|
|
Operating information
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Ingredients
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales per shipping day
|
$
|
8.5
|
|
|
$
|
8.3
|
|
|
$
|
8.2
|
|
|
$
|
8.0
|
|
Metric tons sold (thousands)
|
80.7
|
|
|
77.3
|
|
|
153.3
|
|
|
146.0
|
|
||||
Gross profit as a percent of sales
(a)
|
34.8
|
%
|
|
34.6
|
%
|
|
33.5
|
%
|
|
33.8
|
%
|
||||
Performance Materials
|
|
|
|
|
|
|
|
|
|
||||||
Sales per shipping day
|
$
|
4.1
|
|
|
$
|
3.7
|
|
|
$
|
3.9
|
|
|
$
|
3.7
|
|
Metric tons sold (thousands)
|
127.9
|
|
|
116.3
|
|
|
238.5
|
|
|
222.5
|
|
||||
Gross profit as a percent of sales
(a)
|
14.7
|
%
|
|
20.6
|
%
|
|
15.0
|
%
|
|
21.3
|
%
|
||||
Valvoline
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lubricant sales gallons
|
44.9
|
|
|
43.7
|
|
|
88.1
|
|
|
84.2
|
|
||||
Premium lubricants (percent of U.S. branded volumes)
|
49.5
|
%
|
|
44.6
|
%
|
|
48.4
|
%
|
|
43.9
|
%
|
||||
Gross profit as a percent of sales
(a)
|
38.5
|
%
|
|
40.0
|
%
|
|
38.2
|
%
|
|
39.2
|
%
|
||||
|
|
|
|
|
|
|
|
(a)
|
Gross profit is defined as sales, less cost of sales divided by sales.
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
|
Six months ended March 31, 2017
|
||||||||||||||
Sales by Geography
|
Specialty Ingredients
|
|
Performance Materials
|
|
Valvoline
|
|
Specialty Ingredients
|
|
Performance Materials
|
|
Valvoline
|
||||||
North America
|
39
|
%
|
|
43
|
%
|
|
74
|
%
|
|
39
|
%
|
|
43
|
%
|
|
74
|
%
|
Europe
|
31
|
%
|
|
38
|
%
|
|
7
|
%
|
|
30
|
%
|
|
37
|
%
|
|
7
|
%
|
Asia Pacific
|
20
|
%
|
|
15
|
%
|
|
14
|
%
|
|
21
|
%
|
|
16
|
%
|
|
14
|
%
|
Latin America & other
|
10
|
%
|
|
4
|
%
|
|
5
|
%
|
|
10
|
%
|
|
4
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Three months ended March 31, 2016
|
|
Six months ended March 31, 2016
|
||||||||||||||
Sales by Geography
|
Specialty Ingredients
|
|
Performance Materials
|
|
Valvoline
|
|
Specialty Ingredients
|
|
Performance Materials
|
|
Valvoline
|
||||||
North America
|
39
|
%
|
|
42
|
%
|
|
75
|
%
|
|
39
|
%
|
|
41
|
%
|
|
75
|
%
|
Europe
|
31
|
%
|
|
40
|
%
|
|
7
|
%
|
|
32
|
%
|
|
39
|
%
|
|
7
|
%
|
Asia Pacific
|
19
|
%
|
|
13
|
%
|
|
13
|
%
|
|
19
|
%
|
|
14
|
%
|
|
13
|
%
|
Latin America & other
|
11
|
%
|
|
5
|
%
|
|
5
|
%
|
|
10
|
%
|
|
6
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Operating income
|
$
|
74
|
|
|
$
|
65
|
|
|
$
|
114
|
|
|
$
|
103
|
|
Depreciation and amortization
(a)
|
53
|
|
|
60
|
|
|
107
|
|
|
119
|
|
||||
EBITDA
|
127
|
|
|
125
|
|
|
221
|
|
|
222
|
|
||||
Severance
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Accelerated depreciation
|
—
|
|
|
2
|
|
|
—
|
|
|
4
|
|
||||
Adjusted EBITDA
|
$
|
127
|
|
|
$
|
127
|
|
|
$
|
221
|
|
|
$
|
221
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes
$2 million
and
$4 million
of accelerated depreciation for the three and
six
months ended
March 31, 2016
, respectively.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Operating income
|
$
|
10
|
|
|
$
|
20
|
|
|
$
|
18
|
|
|
$
|
43
|
|
Depreciation and amortization
|
13
|
|
|
13
|
|
|
26
|
|
|
26
|
|
||||
EBITDA
|
$
|
23
|
|
|
$
|
33
|
|
|
$
|
44
|
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Operating income
|
$
|
106
|
|
|
$
|
105
|
|
|
$
|
205
|
|
|
$
|
197
|
|
Depreciation and amortization
|
9
|
|
|
10
|
|
|
18
|
|
|
19
|
|
||||
EBITDA
|
$
|
115
|
|
|
$
|
115
|
|
|
$
|
223
|
|
|
$
|
216
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 31
|
|
March 31
|
||||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Pension and other postretirement net periodic income
|
|
|
|
|
|
|
|
||||||||
(excluding service cost)
|
$
|
17
|
|
|
$
|
20
|
|
|
$
|
35
|
|
|
$
|
40
|
|
Gain (loss) on pension and other postretirement
|
|
|
|
|
|
|
|
||||||||
plan remeasurements
|
—
|
|
|
(23
|
)
|
|
10
|
|
|
(23
|
)
|
||||
Restructuring activities (includes separation and
|
|
|
|
|
|
|
|
||||||||
severance costs)
|
(26
|
)
|
|
(16
|
)
|
|
(54
|
)
|
|
(22
|
)
|
||||
Environmental expense for divested businesses
|
(4
|
)
|
|
(11
|
)
|
|
(8
|
)
|
|
(16
|
)
|
||||
Legal reserve
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
(15
|
)
|
||||
Other expense
|
(7
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|
(9
|
)
|
||||
Total expense
|
$
|
(20
|
)
|
|
$
|
(43
|
)
|
|
$
|
(30
|
)
|
|
$
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash provided (used) by:
|
|
|
|
||||
Operating activities from continuing operations
|
$
|
62
|
|
|
$
|
250
|
|
Investing activities from continuing operations
|
(141
|
)
|
|
(124
|
)
|
||
Financing activities from continuing operations
|
(475
|
)
|
|
(217
|
)
|
||
Discontinued operations
|
(21
|
)
|
|
(19
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(8
|
)
|
|
(11
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(583
|
)
|
|
$
|
(121
|
)
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash flows provided (used) by operating activities from continuing operations
|
|
|
|
||||
Net income
|
$
|
115
|
|
|
$
|
176
|
|
Loss (income) from discontinued operations (net of tax)
|
(3
|
)
|
|
2
|
|
||
Adjustments to reconcile income from continuing operations to
|
|
|
|
|
|
||
cash flows from operating activities
|
|
|
|
|
|
||
Depreciation and amortization
|
153
|
|
|
168
|
|
||
Original issue discount and debt issuance cost amortization
|
98
|
|
|
6
|
|
||
Deferred income taxes
|
1
|
|
|
1
|
|
||
Equity income from affiliates
|
(7
|
)
|
|
(8
|
)
|
||
Distributions from equity affiliates
|
4
|
|
|
9
|
|
||
Stock based compensation expense
|
12
|
|
|
17
|
|
||
Gain on early retirement of debt
|
(3
|
)
|
|
—
|
|
||
Gain on available-for-sale securities
|
(7
|
)
|
|
(4
|
)
|
||
Net loss on divestitures
|
1
|
|
|
—
|
|
||
Pension contributions
|
(14
|
)
|
|
(15
|
)
|
||
Loss (gain) on pension and other postretirement plan remeasurements
|
(10
|
)
|
|
23
|
|
||
Change in operating assets and liabilities
(a)
|
(278
|
)
|
|
(125
|
)
|
||
Total cash flows provided by operating activities from continuing operations
|
$
|
62
|
|
|
$
|
250
|
|
|
|
|
|
•
|
Accounts receivable - The current period had a cash outflow of $66 million compared to a cash inflow of $27 million during the prior year period. The cash outflow during the current period is primarily due to higher sales compared to the prior year period.
|
•
|
Inventory - The cash outflows of $8 million and $9 million during the current and prior year periods, respectively, were primarily due to sales volumes and inventory management strategies.
|
•
|
Trade and other payables - The cash outflows of $81 million and $116 million during the current and prior year periods, 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.
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash flows provided (used) by investing activities from continuing operations
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
(104
|
)
|
|
$
|
(103
|
)
|
Proceeds from disposal of property, plant and equipment
|
1
|
|
|
3
|
|
||
Purchase of operations - net of cash acquired
|
(48
|
)
|
|
(66
|
)
|
||
Proceeds (uses) from sale of operations or equity investments
|
(1
|
)
|
|
12
|
|
||
Net purchase of funds restricted for specific transactions
|
(2
|
)
|
|
—
|
|
||
Reimbursements from restricted investments
|
12
|
|
|
23
|
|
||
Purchases of available-for-sale securities
|
(19
|
)
|
|
(4
|
)
|
||
Proceeds from sales of available-for-sale securities
|
19
|
|
|
4
|
|
||
Proceeds from the settlement of derivative instruments
|
4
|
|
|
7
|
|
||
Payments for the settlement of derivative instruments
|
(3
|
)
|
|
—
|
|
||
Total cash flows used by investing activities from continuing operations
|
$
|
(141
|
)
|
|
$
|
(124
|
)
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash flows provided (used) by financing activities from continuing operations
|
|
|
|
||||
Repayment of long-term debt
|
$
|
(337
|
)
|
|
$
|
(36
|
)
|
Premium on long-term debt repayment
|
(5
|
)
|
|
—
|
|
||
Proceeds (repayment) from short-term debt
|
(75
|
)
|
|
368
|
|
||
Repurchase of common stock
|
—
|
|
|
(500
|
)
|
||
Debt issuance costs
|
(4
|
)
|
|
—
|
|
||
Cash dividends paid
|
(48
|
)
|
|
(48
|
)
|
||
Distributions to noncontrolling interest
|
(4
|
)
|
|
—
|
|
||
Excess tax benefits related to share-based payments
|
(2
|
)
|
|
(1
|
)
|
||
Total cash flows used by financing activities from continuing operations
|
$
|
(475
|
)
|
|
$
|
(217
|
)
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash used by discontinued operations
|
|
|
|
||||
Operating cash flows
|
$
|
(21
|
)
|
|
$
|
(19
|
)
|
Investing cash flows
|
—
|
|
|
—
|
|
||
Total cash used by discontinued operations
|
$
|
(21
|
)
|
|
$
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
March 31
|
||||||
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash flows provided by operating activities from continuing operations
|
$
|
62
|
|
|
$
|
250
|
|
Adjustments:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(104
|
)
|
|
(103
|
)
|
||
Free cash flows
|
$
|
(42
|
)
|
|
$
|
147
|
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash and cash equivalents
|
$
|
605
|
|
|
$
|
1,188
|
|
|
|
|
|
||||
Unused borrowing capacity
|
|
|
|
|
|
||
2015 Revolving credit facility
|
$
|
748
|
|
|
$
|
742
|
|
2016 Revolving credit facility
(a)
|
436
|
|
|
435
|
|
||
2012 Accounts receivable securitization facility
|
99
|
|
|
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.
|
|
March 31
|
|
|
September 30
|
|
||
(In millions)
|
2017
|
|
|
2016
|
|
||
Short-term debt
|
$
|
95
|
|
|
$
|
170
|
|
Long-term debt (including current portion and debt issuance cost discounts)
(a)
|
2,828
|
|
|
3,074
|
|
||
Total debt
|
$
|
2,923
|
|
|
$
|
3,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2017 to January 31, 2017:
|
|
|
|
|
|
|
|
$
|
500
|
|
|
|||||
Employee Tax Withholdings
|
14,986
|
|
(2
|
)
|
|
$
|
111.56
|
|
|
—
|
|
|
|
|
||
February 1, 2017 to February 28, 2017:
|
|
|
|
|
|
|
|
|
500
|
|
|
|||||
Employee Tax Withholdings
|
326
|
|
(2
|
)
|
|
120.64
|
|
|
—
|
|
|
|
|
|||
March 1, 2017 to March 31, 2017:
|
|
|
|
|
|
|
|
500
|
|
|
||||||
Employee Tax Withholdings
|
8,604
|
|
(2
|
)
|
|
120.66
|
|
|
—
|
|
|
|
|
|||
Total
|
23,916
|
|
|
|
|
|
—
|
|
|
$
|
500
|
|
|
|
Ashland Global Holdings Inc.
|
|
(Registrant)
|
April 26, 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)
|
(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
|
(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.
|
I.
|
Section 7.11(a) – Consolidated Leverage Ratio.
|
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A.
|
Consolidated Indebtedness at the Statement Date
2
3
:
|
|
|
|
|
|
|
|
|
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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:
|
$______
|
|
|
|
|
|
|
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2.
|
all purchase money Indebtedness:
|
$______
|
|
|
|
|
|
|
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3.
|
all direct (but, for the avoidance of doubt, not contingent) obligations arising under bankers’ acceptances and bank guaranties:
|
$______
|
|
|
|
|
|
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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
|
$______
|
2
3
Consolidated Indebtedness shall (i) be calculated on a Pro Forma Basis unless otherwise specified, (ii) not include the 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 included in Consolidated 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.
|
||||
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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.b):
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|
|
|
|
e.
any after-tax gain (after-tax loss) realized as a result of the cumulative effect of a change in accounting principles or the implementation of new accounting standards related to revenue and lease accounting:
|
$______
|
|
|
|
|
|
|
|
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f.
any after-tax gain (after-tax loss) attributable to any foreign currency hedging arrangements or currency fluctuations:
|
$______
|
|
|
|
|
|
|
|
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g.
after-tax extinguishment charges relating to the early extinguishment of Indebtedness and obligations under Swap Contracts and after-tax extinguishment charges relating to upfront fees and original issue discount on Indebtedness:
|
$______
|
|
|
|
|
|
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|
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h.
any pension or other post-retirement after-tax gain (after-tax expense) for such Subject Period:
|
$______
|
|
|
|
|
|
|
|
|
i.
the amount of any cash payments made during such Subject Period relating to pension and other post-retirement costs (other than any payments made in respect of the Pension Funding in excess of the amount of required regulatory contributions during such Subject Period (as reasonably determined by the Borrower)):
|
$______
|
|
|
|
|
|
|
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j.
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):
|
$______
|
|
|
|
|
|
|
|
To the extent not included in Consolidated Net Income for the Subject Period:
|
|
|
|
|
|
|
|
|
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2.
|
proceeds of business interruption insurance received during the Subject Period:
|
$______
|
|
|
|
|
|
|
|
To the extent deducted in calculating Consolidated Net Income for
|
|
|
|
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|
|
|
|
|
|
the Subject Period, but without duplication and in each case for the Subject Period:
|
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|
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3.
|
Consolidated Interest Charges (not calculated on a Pro Forma Basis):
|
$______
|
|
|
|
|
|
|
|
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
5
6
:
|
$______
|
|
|
|
|
|
|
|
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
|
$______
|
5
6
In the case of cash restructuring and integration charges, not to exceed $100,000,000 in any twelve-month period.
|
||||
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|
|
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):
|
$______
|
|
|
|
|
|
|
C.
|
Consolidated Leverage Ratio as of the Statement Date:
|
|
|
|
|
|
|
|
|
|
1.
|
Consolidated Indebtedness at the Statement Date (Line I.A.
8
7
):
|
$______
|
|
|
|
|
|
|
|
2.
|
the amount of the Borrower’s and its Subsidiaries’ unrestricted cash and Cash Equivalents as of such date that are or would be included on a balance sheet of the Borrower and its Subsidiaries as of such date:
|
$______
|
|
|
|
|
|
|
|
3.
|
Consolidated EBITDA for the Subject Period (Line I.B.20):
|
$______
|
|
|
|
|
|
|
|
4.
|
Consolidated Leverage Ratio as of the Statement Date ((Line I.C.1 - I.C.2) ÷ Line I.C.3):
|
____:1.00
|
|
|
|
|
|
|
Maximum Permitted Consolidated Leverage Ratio:
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.
|
For any fiscal quarter ending after the Closing Date and on or prior to December 31, 2016:
|
3.75:1.00
|
|
|
|
|
|
|
|
B.
|
For any fiscal quarter ending after December 31, 2016
|
3.50:1.00
|
|
|
|
|
|
|
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
6
7
:
|
$______
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
III.
|
Consolidated Gross Leverage Ratio.
|
|||
|
|
|
|
|
|
A.
|
Consolidated Indebtedness at the Statement Date (Line I.A.7):
|
$______
|
|
|
|
|
|
|
|
B.
|
Consolidated EBITDA for the Subject Period (Line I.B.20):
|
$______
|
|
|
|
|
|
|
|
C.
|
Consolidated Gross Leverage Ratio as of the Statement Date (Line III.A ÷ Line III.B):
|
____:1.00
|
|
6
7
For all purposes hereunder, Consolidated Interest Charges shall be calculated on a Pro Forma Basis unless otherwise specified.
|
|
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
|
|
|
|
|
|
– 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 after-tax income (after-tax loss) for such Subject Period of any Person if such Person is not a Subsidiary
|
|
|
|
|
|
+ the Borrower’s equity in such 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 second row of this Schedule 2)
|
|
|
|
|
|
– any after-tax gain (after-tax loss) realized as a result of the cumulative effect of a change in accounting principles or the implementation of new accounting standards related to revenue and lease accounting
|
|
|
|
|
|
– any after-tax gain (after-tax loss) attributable to any foreign currency hedging arrangements or currency fluctuations
|
|
|
|
|
|
|
Quarter
Ended __________ |
Quarter
Ended __________ |
Quarter
Ended __________ |
Quarter
Ended __________ |
Twelve
Months Ended __________ |
– after-tax extinguishment charges relating to the early extinguishment of Indebtedness and obligations under Swap Contracts and after-tax extinguishment charges relating to upfront fees and original issue discount on Indebtedness
|
|
|
|
|
|
– any pension or other post-retirement after-tax gain (after-tax expense) for such Subject Period
|
|
|
|
|
|
– the amount of any cash payments made during such Subject Period relating to pension and other post-retirement costs (except for any payments made in respect of the Pension Funding in excess of the amount of required regulatory contributions during such Subject Period (as reasonably determined by the Borrower))
|
|
|
|
|
|
= Consolidated
Net Income |
|
|
|
|
|
+ proceeds of business interruption insurance received during the Subject Period, to the extent not included in Consolidated Net Income
|
|
|
|
|
|
+Consolidated Interest Charges (not calculated on a Pro Forma Basis)
|
|
|
|
|
|
|
Quarter
Ended __________ |
Quarter
Ended __________ |
Quarter
Ended __________ |
Quarter
Ended __________ |
Twelve
Months Ended __________ |
+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)
|
|
|
|
|
|
+ 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
7
8
|
|
|
|
|
|
7
In the case of cash restructuring and integration charges, not to exceed $100,000,000 in any twelve-month period.
8
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 __________ |
+ 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
|
|
|
|
|
|
+ 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
|
|
|
|
|
|
|
Quarter
Ended __________ |
Quarter
Ended __________ |
Quarter
Ended __________ |
Quarter
Ended __________ |
Twelve
Months Ended __________ |
- 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
|
|
|
|
|
|
I.
|
Sections 7.03(k) and/or 7.06(g) – Available Amount.
|
|||
|
|
|
|
|
|
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):
|
$______
|
(a)
|
General Release.
In exchange for these special severance benefits offered in this Separation Agreement, I completely release all claims I may have at this time against Ashland Global Holdings, and any of its subsidiaries, affiliates predecessors, successors and assigns (collectively the “Company”), and against any of the Company’s insurers, officers, directors and employees (collectively with the Company referred to hereafter as “Releasees”). This Release is intended to be a broad release and shall apply to any relief from the Releasees, no matter how denominated, including, but not limited to, claims for future employment, rights or causes of action for wages, backpay, front pay, compensatory damages, punitive damages, or attorneys’ fees. I also agree that I will not file any such claim and I hereby agree to indemnify and hold Releasees harmless from any such claim.
|
(b)
|
Extent of Release.
This Release includes any and all claims I may have against Releasees which relate either to the time of my employment or to my termination, except the claims mentioned in Section 2(c) below. Some of the types of claims that I am releasing, although there also may be others not listed here, are claims under local, state or federal law relating to:
|
1.
|
Discrimination on the basis of age, sex, race, color, national origin, religion, disability or veteran status;
|
2.
|
Restrictions, if any, upon the rights of Releasees to terminate their employees at will, including (i) violation of public policy, (ii) breach of any express or implied covenant of the employment contract, and (iii) breach of any covenant of good faith and fair dealing;
|
3.
|
Discrimination on the basis of age, including claims under the Age Discrimination in Employment Act (the “ADEA”), which is located at 29 United States Code, Sections 621 through 634;
|
4.
|
Payments, if any, that might otherwise be owed and payable to me pursuant to the Workers’ Adjustment and Retraining Notification (WARN) Act; and
|
5.
|
Civil actions relating to negligence, defamation, invasion of privacy, fraud, misrepresentation, or infliction of emotional or mental distress.
|
(c)
|
Exceptions to Release.
The only claims against Releasees that this release does not include are claims related to:
|
1.
|
Claims for benefits to which I am entitled under this special severance offer;
|
2.
|
Any applicable worker’s compensation or unemployment compensation laws;
|
3.
|
Any rights I have under those benefit plans offered to employees of the Company that are governed by the Employee Retirement Income Security Act of 1974, as amended (ERISA), in effect as of my Termination Date; and
|
4.
|
Any claims that the law states may not be waived.
|
Section 3.
|
CONSEQUENCES OF BREACHING MY PROMISES IN SECTION 2
|
Section 5.
|
RETURN OF COMPANY INFORMATION AND PROPERTY
|
Section 8.
|
EFFECTIVE DATE AND MY RIGHT TO REVOKE GENERAL RELEASE
|
1.
|
Postmarked within the seven (7) day period;
|
2.
|
Properly addressed as noted above; and
|
3.
|
Sent by Certified Mail, Return Receipt Requested.
|
·
|
I have read this Separation Agreement and General Release and understand fully its final and binding effect;
|
·
|
The only promises made to me to sign this Separation Agreement and General Release are those stated herein;
|
·
|
I am signing this Separation Agreement and General Release knowingly and voluntarily; and
|
·
|
I have no other claim or expectation of any additional pay or benefits incident to my employment. The benefits I am receiving for this Separation Agreement and General Release are in lieu of, and fully satisfy, all monetary amounts, if any, to which I might otherwise be entitled under federal or state statute or common law.
|
(a)
|
General Release.
In exchange for these special severance benefits offered in this Separation Agreement, I completely release all claims I may have at this time against Ashland Global Holdings, and any of its subsidiaries, affiliates predecessors, successors and assigns (collectively the “Company”), and against any of the Company’s insurers, officers, directors and employees (collectively with the Company referred to hereafter as “Releasees”). This Release is intended to be a broad release and shall apply to any relief from the Releasees, no matter how denominated, including, but not limited to, claims for future employment, rights or causes of action for wages, backpay, front pay, compensatory damages, punitive damages, or attorneys’ fees. I also agree that I will not file any such claim and I hereby agree to indemnify and hold Releasees harmless from any such claim.
|
(b)
|
Extent of Release.
This Release includes any and all claims I may have against Releasees which relate either to the time of my employment or to my termination, except the claims mentioned in Section 2(c) below. Some of the types of claims that I am releasing, although there also may be others not listed here, are claims under local, state or federal law relating to:
|
1.
|
Discrimination on the basis of age, sex, race, color, national origin, religion, disability or veteran status;
|
2.
|
Restrictions, if any, upon the rights of Releasees to terminate their employees at will, including (i) violation of public policy, (ii) breach of any express or implied covenant of the employment contract, and (iii) breach of any covenant of good faith and fair dealing;
|
3.
|
Discrimination on the basis of age, including claims under the Age Discrimination in Employment Act (the “ADEA”), which is located at 29 United States Code, Sections 621 through 634;
|
4.
|
Payments, if any, that might otherwise be owed and payable to me pursuant to the Workers’ Adjustment and Retraining Notification (WARN) Act; and
|
5.
|
Civil actions relating to negligence, defamation, invasion of privacy, fraud, misrepresentation, or infliction of emotional or mental distress.
|
(c)
|
Exceptions to Release.
The only claims against Releasees that this release does not include are claims related to:
|
1.
|
Claims for benefits to which I am entitled under this special severance offer;
|
2.
|
Any applicable worker’s compensation or unemployment compensation laws;
|
3.
|
Any rights I have under those benefit plans offered to employees of the Company that are governed by the Employee Retirement Income Security Act of 1974, as amended (ERISA), in effect as of my Termination Date; and
|
4.
|
Any claims that the law states may not be waived.
|
Section 3.
|
CONSEQUENCES OF BREACHING MY PROMISES IN SECTION 2
|
Section 5.
|
RETURN OF COMPANY INFORMATION AND PROPERTY
|
Section 8.
|
EFFECTIVE DATE AND MY RIGHT TO REVOKE GENERAL RELEASE
|
1.
|
Postmarked within the seven (7) day period;
|
2.
|
Properly addressed as noted above; and
|
3.
|
Sent by Certified Mail, Return Receipt Requested.
|
•
|
I have read this Separation Agreement and General Release and understand fully its final and binding effect;
|
•
|
The only promises made to me to sign this Separation Agreement and General Release are those stated herein;
|
•
|
I am signing this Separation Agreement and General Release knowingly and voluntarily; and
|
*
|
I have no other claim or expectation of any additional pay or benefits incident to my employment. The benefits I am receiving for this Separation Agreement and General Release are in lieu of, and fully satisfy, all monetary amounts, if any, to which I might otherwise be entitled under federal or state statute or common law.
|
Section 2.
|
Confidential Information; Developments; RETURN OF MATERIALS
|
ASHLAND GLOBAL HOLDINGS INC.
|
|
By: /s/ Peter J. Ganz
|
Its: Senior Vice President, General Counsel and Secretary
|
|
- And -
|
|
/s/ Luis Fernandez-Moreno
|
LUIS FERNANDEZ-MORENO
|
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
|
|
Chairman and Chief Executive Officer
|
|
(Principal Executive Officer)
|
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/ J. Kevin Willis
|
|
J. Kevin Willis
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ William A. Wulfsohn
|
|
|
William A. Wulfsohn
|
|
|
Chief Executive Officer
|
|
|
April 26, 2017
|
|
|
|
|
|
|
|
|
/s/ J. Kevin Willis
|
|
|
J. Kevin Willis
|
|
|
Chief Financial Officer
|
|
|
April 26, 2017
|
|
|
|
|
|