What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-01 · 250 added, 193 removed, 611 unchanged (42% of the section changed)

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(In millions except per share data - unaudited)

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Research and development expense

Intangibles amortization expense - Note F

Intangibles amortization expense - Note G

Equity and other income

Loss on acquisitions and divestitures, net

Operating income

Loss on acquisitions and divestitures, net - Note B

Operating income (loss)

Net interest and other expense (income)

Other net periodic benefit loss - Note J

Income from continuing operations before income taxes

Income tax expense (benefit) - Note I

Other net periodic benefit loss - Note K

Income (loss) from continuing operations before income taxes

Income tax expense (benefit) - Note J

Income from continuing operations

Loss from discontinued operations, net of income taxes - Note B

Income (loss) from discontinued operations, net of income taxes - Note C

PER SHARE DATA

Basic earnings per share - Note L

Basic earnings per share - Note M

Income from continuing operations

Loss from discontinued operations

Diluted earnings per share - Note L

Income (loss) from discontinued operations

Diluted earnings per share - Note M

Income from continuing operations

Loss from discontinued operations

COMPREHENSIVE INCOME

Income (loss) from discontinued operations

COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss), net of tax

1 unchanged sentence

Unrealized gain (loss) on commodity hedges

Other comprehensive income (loss) - Note M

Comprehensive income

Other comprehensive income (loss) - Note N

Comprehensive income (loss)

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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Cash and cash equivalents

Accounts receivable (a) - Note G

Inventories - Note E

Accounts receivable (a) - Note H

Inventories - Note F

Current assets held for Sale - Note B

Total current assets

3 unchanged sentences

Net property, plant and equipment

Goodwill - Note F

Intangibles - Note F

Operating lease assets, net - Note H

Restricted investments - Note D

Asbestos insurance receivable (b) - Note K

Goodwill - Note G

Intangibles - Note G

Operating lease assets, net - Note I

Restricted investments - Note E

Asbestos insurance receivable (b) - Note L

Deferred income taxes

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Current liabilities

Short-term debt - Note G

Short-term debt - Note H

Trade and other payables

Accrued expenses and other liabilities

Current operating lease obligations - Note H

Current operating lease obligations - Note I

Current liabilities held for sale - Note B

Total current liabilities

Noncurrent liabilities

Long-term debt - Note G

Asbestos litigation reserve - Note K

Long-term debt - Note H

Asbestos litigation reserve - Note L

Deferred income taxes

Employee benefit obligations - Note J

Operating lease obligations - Note H

Employee benefit obligations - Note K

Operating lease obligations - Note I

Other liabilities

Total noncurrent liabilities

Commitments and contingencies - Note K

Stockholders’ equity - Note M

Commitments and contingencies - Note L

Stockholders’ equity - Note N

Total liabilities and stockholders' equity

(a) Accounts receivable includes an allowance for credit losses of $ 3 million at both March 31, 2024 and September 30, 2023 .

(b) Asbestos insurance receivable includes an allowance for credit losses of $ 2 million at both March 31, 2024 and September 30, 2023 .

(a) Accounts receivable includes an allowance for credit losses of $ 2 million and $ 3 million at June 30, 2024 and September 30, 2023 , respectively.

(b) Asbestos insurance receivable includes an allowance for credit losses of $ 2 million at both June 30, 2024 and September 30, 2023 .

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS

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(In millions - unaudited)

CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS

Loss from discontinued operations, net of income taxes

Loss (income) from discontinued operations, net of income taxes

Adjustments to reconcile income from continuing operations to cash flows from operating activities:

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Deferred income taxes

Gain from sales of property and equipment

Loss on acquisitions and divestitures, net

Stock based compensation expense

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Additions to property, plant and equipment

Proceeds from disposal of property, plant and equipment

Proceeds from settlement of Company-owned life insurance contracts

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Effect of currency exchange rate changes on cash and cash equivalents

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

DECREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

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and consolidated subsidiaries ("Ashland" or the "Company") Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Results of operations for the period ended March 31, 2024 are not necessarily indicative of the expected results for the remainder of the fiscal year.

Results of operations for the period ended June 30, 2024 are not necessarily indicative of the expected results for the remainder of the fiscal year.

Ashland is comprised of the following reportable segments:

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Unallocated and Other includes corporate governance activities and certain legacy matters.

For additional information about Ashland's reportable segments, see Note P.

For additional information about Ashland's reportable segments, see Note Q.

Use of estimates, risks and uncertainties

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There were no new standards that were either issued or adopted in the current fiscal year that will have a material impact on Ashland's Condensed Consolidated Financial Statements.

NOTE B – DISCONTINUED OPERATIONS

NOTE B – DIVESTITURES

Nutraceuticals business sale

In May 2024, Ashland signed a definitive agreement to sell substantially all of the net assets of its Nutraceuticals business to Turnspire Capital Partners LLC ("Turnspire").

The Nutraceuticals business is included within Ashland's Life Sciences segment and serves the broader nutrition market.

The transaction is expected to close during Ashland's fiscal fourth quarter, contingent on certain customary regulatory approvals and standard closing conditions.

Ashland determined that it has met all the criteria for its Nutraceuticals business to be classified as held for sale.

Therefore, the net assets of this business were classified as held for sale within the Condensed Consolidated Balance Sheets as of June 30, 2024.

Ashland determined this transaction did not qualify for discontinued operations

treatment since it neither represented a strategic shift nor did it have a major effect on Ashland's operations and financial results.

Ashland recorded a $ 99 million impairment charge within the loss on acquisitions and divestitures, net caption of the Statements of Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2024.

The impairment charge includes the impact of the related inside tax basis differences associated with the impaired assets.

The tax benefit associated with the expected disposition is included within the income tax expense (benefit) caption of the Statements of Consolidated Comprehensive Income (Loss).

See Note J for additional details.

Held for sale classification

The assets and liabilities of the Nutraceuticals business have been reflected as assets and liabilities held for sale, as described above, which are comprised of the following components:

(In millions)

Accounts receivable, net

Deferred income taxes

Current assets held for sale

Trade and other payables

Accrued expenses and other liabilities

Operating lease obligations

Current liabilities held for sale

NOTE C – DISCONTINUED OPERATIONS

Ashland has divested certain businesses that have qualified as discontinued operations.

The operating results from these divested businesses and subsequent adjustments related to ongoing assessments of certain retained liabilities and tax items have been recorded within the discontinued operations caption in the Statements of Consolidated Comprehensive Income (Loss) for all periods presented.

The following divested businesses represent disposal groups that qualified as discontinued operations in previous periods and impacted discontinued operations for the three and six months ended March 31, 2024 and 2023:

• The Performance Adhesives business divested in 2022;

• The Composites business and Marl facility (Composites/Marl facility) divested in 2019;

• The sale of the Ashland Distribution (Distribution) business divested in 2011;

• The sale of Ashland Water Technologies (Water Technologies) business divested in 2014;

• The separation of Valvoline Inc.

(Valvoline) business divested in 2017.

• The sale of the Ashland Distribution (Distribution) business divested in 2011.

Components of amounts reflected in the Statements of Consolidated Comprehensive Income (Loss) related to discontinued operations are presented in the following table for the three and six months ended March 31, 2024 and 2023.

Additionally, Ashland is subject to liabilities from claims alleging personal injury caused by exposure to asbestos.

Such claims result primarily from indemnification obligations undertaken in 1990 in connection with the sale of Riley Stoker Corporation, a former subsidiary, which qualified as a discontinued operation and from the acquisition during 2009 of Hercules LLC (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland.

Adjustments to the recorded litigation reserves and related insurance receivables are recorded within the discontinued operations caption.

See Note L for more information related to the adjustments on asbestos liabilities and receivables.

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(In millions)

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Composites/Marl facility

NOTE C – RESTRUCTURING ACTIVITIES

Water Technologies

Asbestos-related litigation

NOTE D – RESTRUCTURING ACTIVITIES

Ashland periodically implements restructuring programs related to acquisitions, divestitures and other cost reduction programs in order to enhance profitability through streamlined operations and an improved overall cost structure.

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Severance costs

Ashland recorded severance expense of $ 18 million and zero during the three months ended March 31, 2024 and 2023 and $ 21 million and zero during the six months ended March 31, 2024 and 2023, respectively, within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss).

As of March 31, 2024 , the severance liability associated with this program was $ 20 million and is recorded within accrued expenses and other liabilities in the Consolidated Balance Sheets.

The following table details at March 31, 2024 the amount of restructuring severance reserves related to this program.

Ashland recorded severance expense of $ 3 million and $ 1 million during the three months ended June 30, 2024 and 2023 and $ 23 million and $ 1 million during the nine months ended June 30, 2024 and 2023, respectively, within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss).

As of June 30, 2024 , the severance liability associated with this program was $ 19 million and is recorded within accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets.

The following table details at June 30, 2024 the amount of restructuring severance reserves related to this program.

(In millions)

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Utilization (cash paid)

Balance at March 31, 2024

Balance at June 30, 2024

Plant optimization actions

During the three and six months ended March 31, 2024 , Ashland incurred $ 27 million and $ 49 million, respectively, of accelerated depreciation for product line optimization activities associated with two Specialty Additives manufacturing facilities, which was recorded within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss).

During the three and nine months ended June 30, 2024 , Ashland incurred $ 7 million and $ 55 million, respectively, of accelerated depreciation for product line optimization activities associated with two Specialty Additives manufacturing facilities, which was recorded within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss).

Ashland's portfolio optimization actions include the consolidation of Ashland's carboxymethylcellulose (CMC) and industrial methylcellulose (MC) capacity and rebalancing of the hydroxyethylcellulose (HEC) network.

During the three and nine months ended June 30, 2024 , Ashland incurred $ 1 million, of accelerated depreciation for product line optimization activities associated with a Personal Care manufacturing facility in Summerville, South Carolina, which was recorded within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss).

Fiscal 2023 Life Sciences restructuring program

During the three months ended December 31, 2022, Ashland implemented a restructuring program within the Nutraceuticals business of the Life Sciences segment.

Ashland recorded severance expense of $ 1 million during the three months ended December 31, 2022, within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss).

As of March 31, 2024 , the severance reserve associated with this program was zero .

NOTE D – FAIR VALUE MEASUREMENTS

Ashland recorded severance expense of zero and $ 1 million during the three and nine months ended June 30, 2023, within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss).

As of June 30, 2024 , the severance reserve associated with this program was zero .

NOTE E – FAIR VALUE MEASUREMENTS

Ashland uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value and related disclosures for instruments measured at fair value.

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For all other assets and liabilities for which unobservable inputs are used (Level 3), fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models that Ashland deems reasonable.

The following table summarizes financial instruments subject to recurring fair value measurements as of March 31, 2024.

The following table summarizes financial instruments subject to recurring fair value measurements as of June 30, 2024.

Quoted prices

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Investment of captive insurance company (c)

Total assets at fair value

Foreign currency derivatives (d)

Commodity derivatives (d)

Total assets at fair value

Commodity derivatives (e)

Total liabilities at fair value

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(d) Included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets.

(d) Included in accounts receivable in the Condensed Consolidated Balance Sheets.

(e) Included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets.

The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2023.

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The financial instruments are designated as investment securities, classified as Level 1 measurements within the fair value hierarchy.

These securities were classified primarily as noncurrent restricted investment assets, with $ 77 million classified within other current assets, in the Condensed Consolidated Balance Sheets at both March 31, 2024 and September 30, 2023.

The following table presents gross unrealized gains and losses for the restricted securities as of March 31, 2024 and September 30, 2023:

These securities were classified primarily as noncurrent restricted investment assets, with $ 76 million and $ 77 million classified within other current assets, in the Condensed Consolidated Balance Sheets at June 30, 2024 and September 30, 2023, respectively.

The following table presents gross unrealized gains and losses for the restricted securities as of June 30, 2024 and September 30, 2023:

(In millions)

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Unrealized Loss

As of March 31, 2024

As of June 30, 2024

Demand deposit

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Fixed income mutual fund

The following table presents the investment income, net gains and losses realized, funds restricted for specific transactions, and disbursements related to the investments within the restricted investments portfolio for the three and six months ended March 31, 2024 and 2023.

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(In millions)

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The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in non-functional currencies.

The following table summarizes the gains and losses recognized during the three and six months ended March 31, 2024 and 2023 within the Statements of Consolidated Comprehensive Income (Loss).

The following table summarizes the gains and losses recognized during the three and nine months ended June 30, 2024 and 2023 within the Statements of Consolidated Comprehensive Income (Loss).

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(In millions)

Foreign currency derivative gains (losses)

The following table summarizes the fair values of the outstanding foreign currency derivatives as of March 31, 2024 and September 30, 2023 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.

Foreign currency derivative gains

The following table summarizes the fair values of the outstanding foreign currency derivatives as of June 30, 2024 and September 30, 2023 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.

(In millions)

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plants during the manufacturing process, Ashland regularly enters into forward contracts that are designated as cash flow hedges.

The following table summarizes the net gai ns and losses recognized during the three and six months ended March 31, 2024 and 2023 within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss).

The following table summarizes the net gai ns and losses recognized during the three and nine months ended June 30, 2024 and 2023 within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss).

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(In millions)

Commodity derivative losses

The following table summarizes the fair values of the outstanding commodity derivatives as of March 31, 2024, and September 30, 2023 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.

The following table summarizes the fair values of the outstanding commodity derivatives as of June 30, 2024, and September 30, 2023 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.

(In millions)

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Other financial instruments

At March 31, 2024 and September 30, 2023 , Ashland's long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying value of $ 1,340 million and $ 1,327 million, respectively, compared to a fair value of $ 1,266 million and $ 1,160 million, respectively.

At June 30, 2024 and September 30, 2023 , Ashland's long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying value of $ 1,337 million and $ 1,327 million, respectively, compared to a fair value of $ 1,255 million and $ 1,160 million, respectively.

The fair values of long-term debt are based on quoted market prices.

NOTE E – INVENTORIES

NOTE F – INVENTORIES

Inventories are carried at the lower of cost or net realizable value.

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Raw materials, supplies and work in process

NOTE F – GOODWILL AND OTHER INTANGIBLES

NOTE G – GOODWILL AND OTHER INTANGIBLES

Ashland tests goodwill and other indefinite-lived intangible assets for impairment annually as of July 1 and when events and circumstances indicate an impairment may have occurred.

N o indicators of impairment were identified in the three and six months ended March 31, 2024 .

The following is a progression of goodwill by reportable segment for the six months ended March 31, 2024.

N o indicators of impairment were identified in the three and nine months ended June 30, 2024 .

The following is a progression of goodwill by reportable segment for the nine months ended June 30, 2024.

(In millions)

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Currency translation

Balance at March 31, 2024

(a) As of March 31, 2024 and September 30, 2023 , there were accumulated impairments of $ 356 million, $ 174 million and $ 90 million related to the Personal Care, Specialty Additives and Intermediates reportable segments, respectively.

Nutraceuticals - Held for sale (b)

Balance at June 30, 2024

(a) As of June 30, 2024 and September 30, 2023 , there were accumulated impairments of $ 356 million, $ 174 million and $ 90 million related to the Personal Care, Specialty Additives and Intermediates reportable segments, respectively.

(b) Reclassified to the current assets held for sale caption of the Condensed Consolidated Balance Sheets as of June 30, 2024.

Other intangible assets

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Ashland annually reviews, as of July 1, indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

No indicators of impairment were identified in the three and six months ended March 31, 2024 .

Other intangible assets were comprised of the following as of March 31, 2024 and September 30, 2023.

March 31, 2024

No indicators of impairment were identified in the three and nine months ended June 30, 2024 .

Other intangible assets were comprised of the following as of June 30, 2024 and September 30, 2023.

June 30, 2024

September 30, 2023

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Total intangible assets

Amortization expense recognized on intangible assets was $ 20 million and $ 23 million for the three months ended March 31, 2024 and 2023 , respectively, and $ 40 million and $ 46 million for the six months ended March 31, 2024 and 2023 , respectively, and is included in the intangibles amortization expense caption of the Statements of Consolidated Comprehensive Income (Loss).

Estimated amortization expense for future periods is $ 79 million in 2024 (includes six months actual and six months estimated), $ 77 million in 2025, $ 75 million in 2026, $ 53 million in 2027 and $ 50 million in 2028.

Amortization expense recognized on intangible assets was $ 19 million and $ 24 million for the three months ended June 30, 2024 and 2023 , respectively, and $ 59 million and $ 70 million for the nine months ended June 30, 2024 and 2023 , respectively, and is included in the intangibles amortization expense caption of the Statements of Consolidated Comprehensive Income (Loss).

Estimated amortization expense for future periods is $ 76 million in 2024 (includes nine months actual and three months estimated), $ 70 million in 2025, $ 68 million in 2026, $ 46 million in 2027 and $ 43 million in 2028.

Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions and divestitures, potential impairment, accelerated amortization, or other events.

NOTE G – DEBT AND OTHER FINANCING ACTIVITIES

NOTE H – DEBT AND OTHER FINANCING ACTIVITIES

The following table summarizes Ashland’s current and long-term debt as of the dates reported in the Condensed Consolidated Balance Sheets.

(In millions)

March 31, 2024

June 30, 2024

September 30, 2023

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Long-term debt (less debt issuance costs)

(a) Other includes $ 12 million and $ 13 million of debt issuance costs as of March 31, 2024 and September 30, 2023 , respectively.

The current portion of the long-term debt was zero for both March 31, 2024 and September 30, 2023.

The scheduled aggregate maturities to 2028 for long-term debt by year (including the current portion and excluding debt issuance costs) are as follows as of March 31, 2024 :

(a) Other includes $ 12 million and $ 13 million of debt issuance costs as of June 30, 2024 and September 30, 2023 , respectively.

The current portion of the long-term debt was zero for both June 30, 2024 and September 30, 2023.

The scheduled aggregate maturities to 2028 for long-term debt by year (including the current portion and excluding debt issuance costs) are as follows as of June 30, 2024 :

zero in the next 3 years, $ 4 million in 2027, and $ 535 million in 2028.

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When applicable, Ashland discloses the amount of the receivable that serves as over-collateralization as a restricted asset.

Ashland recognized a loss of $ 1 million and less than $ 1 million within the Statements of Consolidated Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023, respectively, and $ 2 million and $ 1 million for the six months ended March 31, 2024 and 2023, respectively, within the net interest and other expense (income) caption associated with sales under the program.

Ashland has recorded $ 84 million in sales at March 31, 2024 against the buyer’s limit, which was $ 100 million at March 31, 2024 compared to $ 86 million of sales at September 30, 2023 against the buyer's limit, which was $ 115 million at September 30, 2023 .

Ashland transferred $ 102 million and $ 106 million in receivables to the special purpose entity as of March 31, 2024 and September 30, 2023, respectively.

Ashland recorded liabilities related to its service obligations and limited guarantee as of March 31, 2024 and September 30, 2023 of less than $ 1 million.

As of March 31, 2024 and 2023, the year-to-date gross cash proceeds received for receivables transferred and derecognized were $ 174 million and $ 99 million, respectively, of which $ 159 million and $ 122 million were collected, which includes collections from sales in prior years transferred to the buyer.

The difference between receivables transferred and derecognized versus collected of $ 15 million and $ 22 million for the periods ended March 31, 2024 and 2023, respectively, represents the impact of a net increase and a net reduction in accounts receivable sales volume during each period, respectively.

Ashland recognized a loss of $ 1 million and less than $ 1 million within the Statements of Consolidated Comprehensive Income (Loss) for the three months ended June 30, 2024 and 2023, respectively, and $ 3 million and $ 2 million for the nine months ended June 30, 2024 and 2023, respectively, within the net interest and other expense (income) caption associated with sales under the program.

Ashland has recorded $ 81 million in sales at June 30, 2024 against the buyer’s limit, which was $ 81 million at June 30, 2024 compared to $ 86 million of sales at September 30, 2023 against the buyer's limit, which was $ 86 million at September 30, 2023 .

Ashland transferred $ 104 million and $ 106 million in receivables to the special purpose entity as of June 30, 2024 and September 30, 2023, respectively.

Ashland recorded liabilities related to its service obligations and limited guarantee as of June 30, 2024 and September 30, 2023 of less than $ 1 million.

As of June 30, 2024 and 2023, the year-to-date gross cash proceeds received for receivables transferred and derecognized were $ 244 million and $ 150 million, respectively, of which $ 233 million and $ 164 million were collected, which includes collections from sales in prior years transferred to the buyer.

The difference between receivables transferred and derecognized versus collected of $ 11 million and $ 14 million for the periods ended June 30, 2024 and 2023, respectively, represents the impact of a net increase and a net reduction in accounts receivable sales volume during each period, respectively.

2018 Foreign Accounts Receivable Securitization Facility

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Consequently, Ashland accounts for receivables transferred to buyers as part of this agreement as sales.

Through March 31, 2024 , Ashland has sold $ 122 million in receivables under this agreement.

Accordingly, Ashland recognized $ 1 million and $ 2 million in losses within the net interest and other expense (income) caption of the Statements of Consolidated Income (Loss) for the three and six months ended March 31, 2024 , respectively.

Ashland recorded $ 122 million in sales and gross proceeds received against the buyer's limit, which was $ 122 million at March 31, 2024 .

Ashland transferred $ 168 million in receivables to the SPE as of March 31, 2024 .

Ashland recorded less than $ 1 million in liabilities related to its service obligations and limited guarantee as of March 31, 2024.

Through June 30, 2024 , Ashland has sold $ 123 million in receivables under this agreement.

Accordingly, Ashland recognized a loss of less than $ 1 million and $ 2 million within the net interest and other expense (income) caption of the Statements of Consolidated Income (Loss) for the three and nine months ended June 30, 2024 , respectively.

Ashland recorded $ 123 million in sales and gross proceeds received against the buyer's limit, which was $ 123 million at June 30, 2024 .

Ashland transferred $ 158 million in receivables to the SPE as of June 30, 2024 .

Ashland recorded less than $ 1 million in liabilities related to its service obligations and limited guarantee as of June 30, 2024.

Supply Chain Finance Program

During April 2024, Ashland authorized a financing program offered through JP Morgan and Taulia Alliance.

Under this program, JP Morgan and its affiliates may purchase certain confirmed receivables directly from suppliers pursuant to the terms of a separate arrangement entered into between JPMorgan and such Suppliers.

There were no changes to Ashland's standard payment terms with its suppliers in connection with this program.

Ashland provides no guarantees to JP Morgan under this program.

As of June 30, 2024, the program is in systems implementation phase and has not yet been offered to suppliers.

Available borrowing capacity and liquidity

The borrowing capacity remaining under the 2022 Credit Agreement was $ 596 million, which reflects the full $ 600 million Revolving Credit Facility less a reduction of $ 4 million for letters of credit outstanding as of March 31, 2024.

Ashland's total borrowing capacity at March 31, 2024 was $ 596 million.

Ashland's total borrowing capacity at June 30, 2024 was $ 596 million.

Ashland had zero of available liquidity under its current U.S.

and Foreign Accounts Receivable Sales Programs as of March 31, 2024.

and Foreign Accounts Receivable Sales Programs as of June 30, 2024.

Covenants related to current Ashland debt agreements

Ashland's debt contains usual and customary representations, warranties and affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional subsidiary indebtedness, restrictions on subsidiary distributions, investments, mergers, sale of assets and restricted payments and other customary limitations.

As of March 31, 2024, Ashland is in compliance with all debt agreement covenant restrictions.

As of June 30, 2024, Ashland is in compliance with all debt agreement covenant restrictions.

The maximum consolidated net leverage ratio permitted under Ashland's current credit agreement (the 2022 Credit Agreement) is 4.0 .

At March 31, 2024 , Ashland’s calculation of the consolidated net leverage ratio was 2.1 .

At June 30, 2024 , Ashland’s calculation of the consolidated net leverage ratio was 2.2 .

The minimum required consolidated interest coverage ratio under the 2022 Credit Agreement during its entire duration is 3.0 .

At March 31, 2024 , Ashland’s calculation of the interest coverage ratio was 7.3 .

NOTE H – LEASING ARRANGEMENTS

At June 30, 2024 , Ashland’s calculation of the interest coverage ratio was 7.3 .

NOTE I – LEASING ARRANGEMENTS

The components of lease cost recognized within the Statements of Consolidated Comprehensive Income (Loss) were as follows:

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(In millions)

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Total lease cost

(a) Includes zero and $ 1 million charges for the impairment of an abandoned right of use office building asset for the three and six months ended March 31, 2024 , respectively.

Right-of-use assets exchanged for new operating lease obligations were $ 2 million and $ 20 million for the three months ended March 31, 2024 and 2023 , respectively, and $ 3 million and $ 23 million for the six months ended March 31, 2024 and 2023 , respectively.

During the second quarter of fiscal 2024, Ashland acquired a favorable lease asset for $ 10 million, which was recorded in the property, plant and equipment caption of the Condensed Consolidated Balance Sheets as of March 31, 2024.

(a) Includes zero and $ 1 million charges for the impairment of an abandoned right of use office building asset for the three and nine months ended June 30, 2024 , respectively.

Right-of-use assets exchanged for new operating lease obligations were $ 1 million and $ 6 million for the three months ended June 30, 2024 and 2023 , respectively, and $ 4 million and $ 29 million for the nine months ended June 30, 2024 and 2023 , respectively.

The following table provides cash paid for amounts included in the measurement of lease liabilities:

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(In millions)

1 unchanged sentence

Investing cash flows from finance leases

NOTE I – INCOME TAXES

NOTE J – INCOME TAXES

Current fiscal year

Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results.

The overall effective tax rate was a benefit of 612 % and 610 % for the three and six months ended March 31, 2024.

The current quarter's tax rate was impacted by jurisdictional income mix, as well as a net $ 102 million from favorable tax discrete items primarily related to changes in foreign tax activity.

The current six month tax rate was impacted by jurisdictional income mix, as well as net $ 126 million from favorable tax discrete items primarily related to changes in foreign tax activity.

The overall effective tax rate was 144 % and 467 % for the three and nine months ended June 30, 2024.

The current quarter's tax rate was impacted by jurisdictional income mix, as well as a net $ 104 million from favorable tax discrete items primarily related to the tax impact of the held for sale classification for the Nutraceuticals business.

The current nine month tax rate was impacted by jurisdictional income mix, as well as net $ 231 million from favorable tax discrete items primarily related to changes in foreign tax activity and the tax impact of the held for sale classification for the Nutraceuticals business.

Prior fiscal year

The overall effective tax rate was a benefit of 1 % and 5 % for the three and six months ended March 31, 2023 .

The quarter tax rate was impacted by jurisdictional income mix, as well as net $ 20 million from favorable tax discrete items primarily related to changes in uncertain tax positions.

The six months tax rate was impacted by jurisdictional income mix, as well as net $ 23 million from favorable tax discrete items primarily related to changes in uncertain tax positions resulting primarily from a combination of state expirations and audit settlements.

The overall effective tax rate was 26 % and 11 % for the three and nine months ended June 30, 2023 .

The quarter tax rate was impacted by jurisdictional income mix, as well as net $ 4 million from favorable tax discrete items primarily related to changes in uncertain tax positions and adjustments to valuation allowances.

The nine months tax rate was impacted by jurisdictional income mix, as well as net $ 27 million from favorable tax discrete items primarily related to changes in uncertain tax positions .

Unrecognized tax benefits

Changes in unrecognized tax benefits are summarized as follows for the six months ended March 31, 2024.

Changes in unrecognized tax benefits are summarized as follows for the nine months ended June 30, 2024.

(In millions)

4 unchanged sentences

Lapse of statute of limitations

Balance at March 31, 2024

Balance at June 30, 2024

From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount of accrual for uncertain tax positions of between $ 4 million and $ 5 million for continuing operations.

For the remaining balance as of March 31, 2024 , it is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions or the expiration of applicable statute of limitations;

For the remaining balance as of June 30, 2024 , it is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions or the expiration of applicable statute of limitations;

however, Ashland is not able to estimate the impact of these items at this time.

NOTE J - EMPLOYEE BENEFIT PLANS

NOTE K - EMPLOYEE BENEFIT PLANS

Plan contributions

For the six months ended March 31, 2024 , Ashland contributed $ 6 million to its non-U.S.

For the nine months ended June 30, 2024 , Ashland contributed $ 7 million to its non-U.S.

pension plans and $ 7 million to its U.S.

pension plans.

Ashland expects to make additional contributions of $ 1 million to its U.S.

Ashland does no t expect to make additional contributions to its U.S.

pension plans and $ 1 million to its non-U.S.

5 unchanged sentences

(In millions)

Three months ended March 31

Three months ended June 30

Interest cost

1 unchanged sentence

Total net periodic benefit costs

Six months ended March 31

Nine months ended June 30

Interest cost

2 unchanged sentences

For segment reporting purposes, service cost is proportionately allocated to each segment, excluding the Unallocated and other segment, and is recorded within the selling, general and administrative expense and cost of sales captions on the Statements of Consolidated Comprehensive Income (Loss).

All other components are recorded within the other net periodic benefit loss caption on the Statements of Consolidated Comprehensive Income (Loss), which netted to expense of $ 2 million and $ 4 million for the three and six months ended March 31, 2024 , respectively, and expense of $ 2 million and $ 3 million for the three and six months ended March 31, 2023 , respectively.

NOTE K – LITIGATION, CLAIMS AND CONTINGENCIES

All other components are recorded within the other net periodic benefit loss caption on the Statements of Consolidated Comprehensive Income (Loss), which netted to expense of $ 2 million and $ 6 million for the three and nine months ended June 30, 2024 , respectively, and expense of $ 2 million and $ 6 million for the three and nine months ended June 30, 2023 , respectively.

NOTE L – LITIGATION, CLAIMS AND CONTINGENCIES

Asbestos litigation

14 unchanged sentences

A summary of Ashland asbestos claims activity, excluding Hercules claims, follows.

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Years ended September 30

9 unchanged sentences

During the most recent update completed in fiscal 2024, it was determined that the liability for Ashland asbestos-related claims should be increased by $ 24 million.

Total reserves for asbestos claims were $ 263 million at March 31, 2024 compared to $ 281 million at September 30, 2023.

Total reserves for asbestos claims were $ 282 million at June 30, 2024 compared to $ 281 million at September 30, 2023.

A progression of activity in the asbestos reserve is presented in the following table.

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Years ended September 30

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Asbestos reserve - end of period (a)

(a) Included $ 28 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2023.

(a) Includes $ 28 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of both June 30, 2024 and September 30, 2023 .

Ashland asbestos-related receivables

2 unchanged sentences

Substantially all of the estimated receivables from insurance companies are expected to be due from domestic insurers, all of which are solvent.

At March 31, 2024 , Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers amounted to $ 91 million (excluding the Hercules receivable for asbestos claims discussed below) compared to $ 95 million at September 30, 2023 .

At June 30, 2024 , Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers amounted to $ 100 million (excluding the Hercules receivable for asbestos claims discussed below) compared to $ 95 million at September 30, 2023 .

In fiscal 2024, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed.

1 unchanged sentence

A progression of activity in the Ashland insurance receivable is presented in the following table.

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Years ended September 30

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(a) 2021 includes a $ 2 million reserve adjustment related to allowances for credit losses as a result of Ashland's adoption of the credit measurement standard.

The total allowance for credit losses was $ 1 million as of March 31, 2024 and September 30, 2023.

(b) Includes $ 11 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2023 .

The total allowance for credit losses was $ 1 million at both of June 30, 2024 and September 30, 2023 .

(b) Includes $ 9 million and $ 11 million classified in accounts receivable on the Condensed Consolidated Balance Sheets at both June 30, 2024 and September 30, 2023 , respectively.

Hercules asbestos-related litigation

3 unchanged sentences

A summary of Hercules’ asbestos claims activity follows.

Six months ended

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Years ended September 30

7 unchanged sentences

Ashland reviews this estimate, and related assumptions quarterly and annually updates the results of a non-inflated, non-discounted approximate 40-year model developed with the assistance of Gnarus.

During the most recent update completed in fiscal 2023, it was determined that the liability for Hercules asbestos-related claims should be decreased by $ 2 million.

Total reserves for asbestos claims were $ 180 million at March 31, 2024 compared to $ 191 million at September 30, 2023.

During the most recent update completed in fiscal 2024, it was determined that the liability for Hercules asbestos-related claims should be increased by $ 14 million.

Total reserves for asbestos claims were $ 190 million at June 30, 2024 compared to $ 191 million at September 30, 2023.

A progression of activity in the asbestos reserve is presented in the following table.

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Years ended September 30

3 unchanged sentences

Asbestos reserve - end of period (a)

(a) Included $ 16 million and $ 17 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2023 , respectively.

(a) Includes $ 17 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets at both June 30, 2024 and September 30, 2023 .

Hercules asbestos-related receivables

3 unchanged sentences

The estimated receivable consists exclusively of solvent domestic insurers.

As of March 31, 2024 , Ashland’s receivable for recoveries of litigation defense and claims costs from insurers with respect to Hercules amounted to $ 45 million compared to $ 47 million at September 30, 2023 .

As of June 30, 2024 , Ashland’s receivable for recoveries of litigation defense and claims costs from insurers with respect to Hercules amounted to $ 51 million compared to $ 47 million at September 30, 2023 .

In fiscal 2024, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed.

This model update resulted in a decrease of $ 3 million in the receivable for probable insurance recoveries.

This model update resulted in a increase of $ 6 million in the receivable for probable insurance recoveries.

A progression of activity in the Hercules insurance receivable is presented in the following table.

Six months ended

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Years ended September 30

5 unchanged sentences

(a) 2021 includes a $ 1 million reserve adjustment related to allowances for credit losses as a result of Ashland's adoption of the credit measurement standard.

The total allowance for credit losses was $ 1 million as of March 31, 2024 and September 30, 2023 .

(b) Includes $ 4 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2023 .

The total allowance for credit losses was $ 1 million as of both June 30, 2024 and September 30, 2023 .

(b) Includes $ 6 million and $ 4 million classified in accounts receivable on the Condensed Consolidated Balance Sheets at both June 30, 2024 and September 30, 2023 , respectively.

Asbestos litigation cost projection

10 unchanged sentences

Ashland is subject to various federal, state and local environmental laws and regulations that require environmental assessment or remediation efforts (collectively environmental remediation) at multiple locations.

At March 31, 2024 , such locations included 53 sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 107 current and former operating facilities and about 1,225 service station properties, of which 14 are being actively remediated.

Ashland’s reserves for environmental remediation and related environmental litigation amounted to $ 198 million at March 31, 2024 compared to $ 214 million at September 30, 2023 , of which $ 149 million at March 31, 2024 and $ 165 million at September 30, 2023 were classified in other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

At June 30, 2024 , such locations included 53 sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 107 current and former operating facilities and about 1,225 service station properties, of which 15 are being actively remediated.

Ashland’s reserves for environmental remediation and related environmental litigation amounted to $ 231 million at June 30, 2024 compared to $ 214 million at September 30, 2023 , of which $ 182 million at June 30, 2024 and $ 165 million at September 30, 2023 were classified in other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

The remaining reserves were classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets.

The following table provides a reconciliation of the changes in the environmental remediation reserves during the six months ended March 31, 2024 and 2023.

Six months ended

The following table provides a reconciliation of the changes in the environmental remediation reserves during the nine months ended June 30, 2024 and 2023.

Nine months ended

(In millions)

7 unchanged sentences

Ashland has estimated the value of its probable insurance recoveries associated with its environmental reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage.

At March 31, 2024 and September 30, 2023 , Ashland’s recorded receivables for these probable insurance recoveries were $ 15 million and $ 17 million, respectively, of which $ 12 million and $ 15 million at March 31, 2024 and September 30, 2023 were classified in other noncurrent assets on the Condensed Consolidated Balance Sheets.

Components of environmental remediation expense included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss) are presented in the following table for the three and six months ended March 31, 2024 and 2023.

At June 30, 2024 and September 30, 2023 , Ashland’s recorded receivables for these probable insurance recoveries were $ 15 million and $ 17 million, respectively, of which $ 13 million and $ 15 million at June 30, 2024 and September 30, 2023 were classified in other noncurrent assets on the Condensed Consolidated Balance Sheets.

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(In millions)

4 unchanged sentences

Total expense, net of receivable activity (a)

(a) Net expense of zero and $ 1 million for the three and six months ended March 31, 2024 , respectively, and zero and $ 1 million for the three and six months ended March 31, 2023 , respectively, relates to divested businesses which qualified for treatment as discontinued operations for which certain environmental liabilities were retained by Ashland.

These amounts are classified within the loss from discontinued operations, net of income taxes caption of the Statements of Consolidated Comprehensive Income (Loss).

(a) Net expense of $ 8 million and $ 10 million for the three and nine months ended June 30, 2024 , respectively, and $ 5 million and $ 6 million for the three and nine months ended June 30, 2023 , respectively, relates to divested businesses which qualified for treatment as discontinued operations for which certain environmental liabilities were retained by Ashland.

These amounts are classified within the income (loss) from discontinued operations, net of income taxes caption of the Statements of Consolidated Comprehensive Income (Loss).

Environmental remediation reserves are subject to uncertainties that affect Ashland’s ability to estimate its share of the costs.

1 unchanged sentence

Although it is not possible to predict with certainty the ultimate costs of environmental remediation, Ashland currently estimates that the upper end of the reasonably possible range of future costs for identified sites could be as high as approximately $ 495 million.

The largest reserve for any site is 23 % of the remediation reserve as of March 31, 2024.

The largest reserve for any site is 20 % of the remediation reserve as of June 30, 2024.

Other legal proceedings and claims

1 unchanged sentence

Such actions are with respect to commercial matters, product liability, toxic tort liability, and other environmental matters, which seek remedies or damages, some of which are for substantial amounts.

While Ashland cannot predict with certainty the outcome of such actions, it believes that adequate reserves have been recorded and losses already recognized with respect to such actions were immaterial as of March 31, 2024.

There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions;

however, Ashland believes that such potential losses were immaterial as of March 31, 2024 .

NOTE L – EARNINGS PER SHARE

however, Ashland believes that such potential losses were immaterial as of June 30, 2024 .

NOTE M – EARNINGS PER SHARE

The following is the computation of basic and diluted earnings per share ("EPS") from continuing operations attributable to Ashland.

Stock appreciation rights and warrants available to purchase shares outstanding for each reporting period whose exercise price was greater than the average market price of Ashland Common Stock for each applicable period were not included in the computation of income from continuing operations per diluted share because the effect of these instruments would be antidilutive .

The total number of these shares outstanding was approximately 1 million at March 31, 2024 and 2023 , respectively.

The total number of these shares outstanding was approximately 1 million at June 30, 2024 and 2023 , respectively.

The majority of these shares are for warrants with a strike price of $ 128.66 .

1 unchanged sentence

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Nine months ended

(In millions, except per share data)

4 unchanged sentences

EPS from continuing operations

NOTE M – EQUITY ITEMS

NOTE N – EQUITY ITEMS

2023 Stock repurchase program

1 unchanged sentence

The new authorization terminated and replaced the 2022 Stock Repurchase Program, which had $ 200 million outstanding at the date of termination.

As of March 31, 2024 , $ 900 million remained available for repurchase under this authorization.

As of June 30, 2024 , $ 770 million remained available for repurchase under this authorization.

Stock repurchase program agreements

Current fiscal year

During June 2024, under the 2023 Stock Repurchase Program, Ashland initiated a Rule 10b5-1 trading plan agreement to repurchase up to $ 30 million of its outstanding shares.

The program was completed during June 2024, when Ashland paid a total of $ 30 million and received a delivery of 0.3 million shares of common stock.

During May 2024, under the 2023 Stock Repurchase Program, Ashland initiated a Rule 10b5-1 trading plan agreement to repurchase up to $ 100 million of its outstanding shares.

The program was completed during June 2024, when Ashland paid a total of $ 100 million and received a delivery of 1.0 million shares of common stock.

During November 2023, under the 2023 Stock Repurchase Program, Ashland initiated a Rule 10b5-1 trading plan agreement to repurchase up to $ 100 million of its outstanding shares.

The program was completed during December 2023, when Ashland paid a total of $ 100 million and received a delivery of 1.2 million shares of common stock.

Prior fiscal year

During May 2023, under the 2022 stock repurchase program, Ashland initiated a Rule 10b5-1 trading plan agreement to repurchase up to $ 100 million of its outstanding shares.

The program was completed during June 2023, when Ashland paid a total of $ 100 million and received a delivery of 1.1 million shares of common stock.

During March 2023, under the 2022 Stock Repurchase Program, Ashland initiated a Rule 10b5-1 trading plan agreement to repurchase up to $ 100 million of its outstanding shares.

The program was completed during April 2023, when Ashland paid a total of $ 100 million and received a delivery of 1.0 million shares of common stock.

As of March 31, 2023, Ashland purchased a total of $ 52 million (of which $ 42 million was cash settled and $ 10 million was accrued within the accrued expenses and other liabilities caption for authorized and executed share repurchases pending settlement as of period end) and received a delivery of 0.5 million shares of common stock.

During February 2023, under the 2022 Stock Repurchase Program, Ashland initiated a Rule 10b5-1 trading plan agreement to repurchase up to $ 100 million of its outstanding shares.

1 unchanged sentence

Stockholder dividends

Dividends of 38.5 cents per share were paid in the first and second quarters of fiscal 2024 and 33.5 cents per share were paid in the first and second quarters of fiscal 2023.

On May 7, 2024, Ashland's Board declared a quarterly cash dividend of $ 0.405 per share on the company's common stock representing a 5 % increase from the previous quarter.

The dividend was paid in the third quarter of fiscal 2024.

Dividends of $ 0.385 per share were paid in the first and second quarters of fiscal 2024 and the third quarter of fiscal 2023 and $ 0.335 per share were paid in the first and second quarters of fiscal 2023.

Accumulated other comprehensive income (loss)

3 unchanged sentences

(expense) benefit

Three months ended March 31

Three months ended June 30

Other comprehensive income (loss)

Unrealized translation gain (loss)

Unrealized gain (loss) on commodity hedges

Total other comprehensive income

Six months ended March 31

Unrealized translation loss

Unrealized gain on commodity hedges

Total other comprehensive income (loss)

Nine months ended June 30

Other comprehensive income (loss)

5 unchanged sentences

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Nine months ended

(In millions)

16 unchanged sentences

Cash dividends declared per common share

(a) Common shares issued were 32,458 and 16,935 for the three months ended March 31, 2024 and 2023 , respectively, and 110,807 and 144,514 for the six months ended March 31, 2024 and 2023 , respectively.

Includes $ 1 million for the three months ended March 31, 2024 and 2023 , respectively, and $ 4 million and $ 10 million for the six months ended March 31, 2024 and 2023 , respectively, associated with stock-based compensation employee withholding taxes.

(b) Common shares repurchased were zero and 1,238,212 for the three and six months ended March 31, 2024 , and 1,488,251 for the three and six months ended March 31, 2023 .

(c) Includes zero and $ 1 million in excise tax on stock repurchases for the three and six months ended March 31, 2024 , respectively, and $ 1 million for both the three and six months ended March 31, 2023 .

NOTE N – STOCK INCENTIVE PLANS

(a) Common shares issued were 18,909 and 35,420 for the three months ended June 30, 2024 and 2023 , respectively, and 129,716 and 179,934 for the nine months ended June 30, 2024 and 2023 , respectively.

Includes $ 1 million each for the three months ended June 30, 2024 and 2023 , respectively, and $ 5 million and $ 10 million for the nine months ended June 30, 2024 and 2023 , respectively, associated with stock-based compensation employee withholding taxes.

(b) Common shares repurchased were 1,314,485 and 2,552,697 for the three and nine months ended June 30, 2024 , and 1,594,677 and 3,082,928 for the three and nine months ended June 30, 2023 .

(c) Includes $ 1 million and $ 2 million in excise tax on stock repurchases for the three and nine months ended June 30, 2024 , respectively, and $ 2 million and $ 3 million for the three and nine months ended June 30, 2023 , respectively.

NOTE O – STOCK INCENTIVE PLANS

The components of Ashland’s pre-tax stock-based compensation expense included in continuing operations are as follows:

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(In millions)

1 unchanged sentence

Performance share awards

(a) Included zero and $ 1 million of expense related to cash-settled nonvested restricted stock awards during the three and six months ended March 31, 2024 , respectively, and $ 1 million of expense and zero related to cash-settled performance units during the three and six months ended March 31, 2024 , respectively.

(b) Included $ 1 million and $ 2 million of expense related to cash-settled nonvested restricted stock awards during the three and six months ended March 31, 2023 .

NOTE O – REVENUE

(a) Included $ 1 million and $ 2 million of expense related to cash-settled nonvested restricted stock awards during the three and nine months ended June 30, 2024 , respectively, and zero expense related to cash-settled performance units during both the three and nine months ended June 30, 2024 .

(b) Included $ 2 million of income and zero related to cash-settled nonvested restricted stock awards during the three and nine months ended June 30, 2023 , respectively.

NOTE P – REVENUE

Disaggregation of revenue

3 unchanged sentences

See the following tables for details.

See Note P for additional information.

See Note Q for additional information.

Sales by geography

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(In millions)

3 unchanged sentences

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(In millions)

3 unchanged sentences

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(In millions)

3 unchanged sentences

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(In millions)

2 unchanged sentences

Latin America & other

For the six months ending March 31, 2024, Ashland had two product categories that represented 10 % or greater of Ashland's total consolidated sales which were cellulosics representing 37 % of total consolidated sales and polyvinylpyrrolidones (PVP) representing 23 % of total consolidated sales.

For the nine months ending June 30, 2024 , Ashland had two product categories that represented 10 % or greater of Ashland's total consolidated sales which were cellulosics representing 37 % of total consolidated sales and polyvinylpyrrolidones (PVP) representing 22 % of total consolidated sales.

Trade receivables

Trade receivables are defined as receivables arising from contracts with customers and are recorded within the accounts receivable caption within the Condensed Consolidated Balance Sheets.

Ashland’s trade receivables were $ 225 million and $ 288 million as of March 31, 2024 and September 30, 2023 , respectively.

See Note G for additional information on Ashland’s programs to sell certain receivables on a revolving basis to third party banks up to an aggregate purchase limit (U.S and Foreign Accounts Receivable Sales Programs).

NOTE P – REPORTABLE SEGMENT INFORMATION

Ashland’s trade receivables were $ 191 million and $ 288 million as of June 30, 2024 and September 30, 2023 , respectively.

See Note H for additional information on Ashland’s programs to sell certain receivables on a revolving basis to third party banks up to an aggregate purchase limit (U.S and Foreign Accounts Receivable Sales Programs).

NOTE Q – REPORTABLE SEGMENT INFORMATION

Ashland determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by the chief operating decision maker, which includes determining resource allocation methodologies used for reportable segments.

5 unchanged sentences

Nutrition solutions include thickeners, stabilizers, emulsifiers and additives for enhancing mouthfeel, controlling moisture migration, reducing oil uptake and controlling color.

Nutraceutical solutions include products for weight management, joint comfort, stomach and intestinal health, sports nutrition and general wellness, and provide custom formulation, toll processing and particle engineering solutions.

Nutraceutical solutions, which is classified as held for sale, include products for weight management, joint comfort, stomach and intestinal health, sports nutrition and general wellness, and provide custom formulation, toll processing and particle engineering solutions.

Customers include pharmaceutical, food, beverage, nutraceuticals and supplements manufacturers, hospitals and radiologists and industrial manufacturers.

21 unchanged sentences

Significant revisions to Ashland’s methodologies are adjusted for all segments on a retrospective basis.

The following table presents various financial information for each reportable segment for the three and six months ended March 31, 2024 and 2023.

The following table presents various financial information for each reportable segment for the three and nine months ended June 30, 2024 and 2023.

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(In millions - unaudited)

9 unchanged sentences

Intermediates

Unallocated and other

Unallocated and other (b)

DEPRECIATION EXPENSE

Life Sciences

Personal Care

Specialty Additives (b)

Personal Care (c)

Specialty Additives (d)

Intermediates

17 unchanged sentences

All other intersegment sales are accounted for at cost.

(b) Depreciation includes accelerated depreciation of $ 27 million and $ 49 million for Specialty Additives for the three and six months ended March 31, 2024 , respectively.

(b) Includes a $ 99 million impairment charge within the loss on acquisitions and divestitures, net caption of the Statements of Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2024.

(c) Depreciation includes accelerated depreciation of $ 1 million for Personal Care for both the three and nine months ended June 30, 2024 .

(d) Depreciation includes accelerated depreciation of $ 7 million and $ 55 million for Specialty Additives for the three and nine months ended June 30, 2024 , respectively.

(e) Excludes income (loss) from discontinued operations and other net periodic benefit loss.

See the Statements of Consolidated Comprehensive Income (Loss) for applicable amounts excluded.

5 unchanged sentences

These forward-looking statements are based on Ashland’s expectations and assumptions, as of the date such statements are made, regarding Ashland’s future operating performance and financial condition, as well as the economy and other future events or circumstances.

Ashland’s expectations and assumptions include, without limitation, those mentioned within the MD&A, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies, cost savings and economic conditions (such as prices, supply and demand, cost of raw materials, and the ability to recover raw-material cost increases through price increases), and risks and uncertainties associated with the following:

Ashland’s expectations, beliefs, and assumptions include, without limitation, those mentioned within the MD&A, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies, cost savings and economic conditions (such as prices, supply and demand, cost of raw materials, and the ability to recover raw-material cost increases through price increases), and risks and uncertainties associated with the following:

the impact of acquisitions and/or divestitures Ashland has made or may make (including the possibility that Ashland may not realize the anticipated benefits from such transactions);

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements