What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-29 · 373 added, 348 removed, 497 unchanged (59% of the section changed)

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With approximately 2,900 employees worldwide, Ashland serves customers in more than 100 countries.

Ashland’s sales generated outside of North America were 73% for both the three and six months ended March 31, 2026, and 72% for both the three and six months ended March 31, 2025.

Ashland’s sales generated outside of North America were 73% for both the three and nine months ended June 30, 2026, and 73% and 72% for the three and nine months ended June 30, 2025, respectively.

Sales by region expressed as a percentage of total consolidated sales were as follows:

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Sales by Geography

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North America (a)

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Sales by Reportable Segment

Nine months ended

Life Sciences

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Uncertainty related to tariffs and global trade policy changes

The three months ended March 31, 2026, saw continuing regulatory activity involving notable changes to U.S.

The three and nine months ended June 30, 2026, saw continuing regulatory activity involving notable changes to U.S.

and foreign trade policy, leading to significant uncertainty in the macroeconomic and geopolitical environments.

Beginning in the second quarter of fiscal 2025, the U.S.

instituted a series of tariffs on imports from China, the E.U., India, and other countries which has resulted in the imposition of retaliatory measures against U.S.

instituted a series of tariffs on imports

from China, the E.U., India, and other countries which has resulted in the imposition of retaliatory measures against U.S.

During fiscal 2026, certain previously announced tariff measures have been modified, suspended, challenged, or reversed, while additional trade actions remain under consideration, contributing to continued uncertainty regarding the future trade policy environment and its potential impact on our business.

As a global business, we are exposed to risks associated with tariffs and other trade conflicts.

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Ashland is closely monitoring these situations and maintains business continuity plans that are intended to continue operations or mitigate the effects of events that could disrupt its business.

Ashland does not have manufacturing operations in Iran, Israel, Russia, Ukraine, Venezelua or Belarus.

Ashland does not have manufacturing operations in Iran, Israel, Russia, Ukraine, Venezuela or Belarus.

Ashland sells (or previously sold) additives and specialty ingredients to manufacturers in these countries for their use in pharmaceuticals, personal care, and coatings applications.

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As previously announced, Ashland initiated a $30 million pre-tax restructuring plan to offset the impact from the Nutraceuticals business sale completed in fiscal 2024, the Avoca business sale completed in fiscal 2025, and other portfolio optimization actions, which were expected to be realized 50 percent in fiscal 2025 and 50 percent in fiscal 2026.

These actions are substantially complete.

See Note D of the Notes to Condensed Consolidated Financial Statements for severance reserves associated with this program.

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These previously announced actions include initiatives focused on carboxymethylcellulose ("CMC"), methylcellulose ("MC"), the Nutraceuticals business sale and the Avoca business sale (collectively, "Portfolio Optimization").

Overall, these Portfolio Optimization actions reduced sales and Adjusted EBITDA by approximately $2 million and zero, respectively, for the three months ended March 31, 2026, and approximately $11 million and $1 million, respectively, for the six months ended March 31, 2026, compared to the prior year periods.

Operating income (loss) was positively impacted by $2 million and $4 million for the three and six months ended March 31, 2026, respectively, compared to the prior year periods.

These actions are substantially complete.

Overall, these Portfolio Optimization actions had no impact on sales, Adjusted EBITDA and operating income (loss) for the three months ended June 30,

2026, compared to the prior year quarter.

These actions reduced sales and Adjusted EBITDA by approximately $11 million and $1 million for the nine months ended June 30, 2026, respectively, compared to the prior year periods.

Operating income (loss) was positively impacted by $4 million for the nine months ended June 30, 2026, compared to the prior year periods.

Ashland is also advancing a multi-year manufacturing network optimization to improve operational cost and strengthen its competitive position.

This optimization plan is expected to generate pre-tax savings of $50 million to $55 million with $60 million being achievable as market conditions improve, particularly within China.

Ashland realized savings of approximately $10 million and $15 million during the three and six months ended March 31, 2026, compared to the prior year periods.

Ashland realized savings of approximately $2 million and $10 million during the three and nine months ended June 30, 2026, respectively, compared to the prior year periods as a result of these multi-year manufacturing network optimizations.

The following table summarizes the expense impact of these actions:

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Adjusted Diluted EPS from Continuing Operations Excluding Intangibles Amortization Expense (b)

(a) As a result of the loss from continuing operations attributable to Ashland during the six months ended March 31, 2025, the effect of the share-based awards convertible to common stock would be antidilutive and have been excluded from the diluted EPS calculation.

(a) As a result of the loss from continuing operations attributable to Ashland during the three and nine months ended June 30, 2025, the effect of the share-based awards convertible to common stock would be antidilutive and have been excluded from the diluted EPS calculation.

(b) These are non-GAAP financial measures.

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Business results

Ashland's net income of $16 million ($0.34 diluted EPS) and $31 million ($0.65 diluted EPS) included income from discontinued operations of $1 million ($0.02 diluted EPS) and $1 million ($0.02 diluted EPS) in the three months ended March 31, 2026 and 2025, respectively.

Results for Ashland’s continuing operations, diluted EPS from continuing operations and operating income for the three months ended March 31, 2026 and 2025, included certain key items that were excluded to arrive at Adjusted EBITDA and are quantified in the “Use of Non-GAAP Financial Measures” section below.

These pre-tax key items totaled expense of $20 million and $6 million for the three months ended March 31, 2026 and 2025, respectively, impacting continuing operations.

Continuing operations was also impacted by favorable tax specific key items for discrete tax items totaling zero and $1 million for the three months ended March 31, 2026 and 2025, respectively.

Excluding these key items, the decrease in continuing operations, diluted EPS from continuing operations and operating income was primarily driven by softer pricing, the Calvert City startup delay and weather-related operational disruptions during the quarter, partially offset by favorable foreign exchange currency and lower selling, general and administrative expenses.

In addition, diluted EPS from continuing operations was also impacted by common stock reductions from repurchases of Ashland common stock over the last twelve months.

These common stock repurchases reduced the number of weighted average shares from 47 million diluted shares at March 31, 2025 to 46 million diluted shares at March 31, 2026.

Ashland’s Adjusted EBITDA was $98 million for the three months ended March 31, 2026 compared to $108 million for the three months ended March 31, 2025 (see U.S.

GAAP reconciliation under “Use of Non-GAAP Financial

Measures” below).

The $10 million decrease in Adjusted EBITDA was primarily driven by softer pricing, the Calvert City startup delay and weather-related operational disruptions during the quarter, offset by favorable foreign exchange currency and lower selling, general and administrative expenses.

Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these factors along with the impact of common stock repurchases noted above.

Ashland's net income of $16 million ($0.35 diluted EPS) and net loss of $742 million (loss of $16.21 diluted EPS) included loss from discontinued operations of $25 million (loss of $0.54 diluted EPS) and $23 million (loss of $0.51 diluted EPS) in the three months ended June 30, 2026 and 2025, respectively.

Results for Ashland’s continuing operations, diluted EPS from continuing operations and operating income (loss) for the three months ended June 30, 2026 and 2025, included certain key items that were excluded to arrive at Adjusted EBITDA and are quantified in the “Use of Non-GAAP Financial Measures” section below.

These pre-tax key items totaled income of $5 million and expense of $754 million for the three months ended June 30, 2026 and 2025, respectively, impacting continuing operations, including a non-cash goodwill impairment charge of $706 million in the three months ended June 30, 2025 ($375 million for the Life Sciences and $331 million for the Specialty Additives reportable segments).

Continuing operations was also impacted by unfavorable tax specific key items for discrete tax items totaling zero and $13 million for the three months ended June 30, 2026 and 2025, respectively.

Excluding these key items, the decrease in continuing operations, diluted EPS from continuing operations and operating income (loss) was primarily driven by unfavorable production costs and higher selling, general and administrative expenses, partially offset by higher sales volumes, price/mix and foreign currency exchange.

The number of weighted-average common shares outstanding was 46 million diluted shares at both June 30, 2026 and 2025.

Ashland’s Adjusted EBITDA was $109 million for the three months ended June 30, 2026 compared to $113 million for the three months ended June 30, 2025 (see U.S.

GAAP reconciliation under “Use of Non-GAAP Financial Measures” below).

The $4 million decrease in Adjusted EBITDA was primarily driven by unfavorable production costs and higher selling, general and administrative expenses, partially offset by higher sales volumes, price/mix and foreign currency exchange.

Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these factors.

For further information on the items reported above, see the discussion in the comparative Statements of Condensed Consolidated Comprehensive Income (Loss) caption review analysis.

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A comparative analysis of the Statements of Condensed Consolidated Comprehensive Income (Loss) by caption is provided as follows:

Three months ended March 31

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March 31, 2026

Avoca business

June 30, 2026

Foreign currency exchange

Avoca business

Change in sales

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Sales for the three months ended March 31, 2026 increased $3 million compared to the three months ended March 31, 2025.

The increase was driven by favorable foreign currency exchange which was partially offset by unfavorable pricing.

Portfolio Optimization initiatives had a negative $2 million impact on sales in the three months ended March 31, 2026.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Sales for the six months ended March 31, 2026 decreased $16 million compared to the six months ended March 31, 2025.

The decrease was driven by unfavorable pricing, lower volume and the impact of the Avoca business sale, which was partially offset by favorable foreign currency exchange.

Portfolio Optimization initiatives had a negative $11 million impact on sales in the six months ended March 31, 2026.

Three months ended March 31

Six months ended March 31

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Sales for the three months ended June 30, 2026 increased $34 million compared to the three months ended June 30, 2025.

The increase was driven by higher volume, favorable foreign currency exchange and price/mix.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Sales for the nine months ended June 30, 2026 increased $18 million compared to the nine months ended June 30, 2025.

The increase was driven by favorable foreign currency exchange and higher volume, which was partially offset by unfavorable price/mix and the impact of the Avoca business sale.

Portfolio Optimization initiatives had a negative $11 million impact on sales in the nine months ended June 30, 2026.

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(In millions)

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March 31, 2026

June 30, 2026

Cost of sales change

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Change in cost of sales

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Cost of sales for the three months ended March 31, 2026, increased $3 million compared to the three months ended March 31, 2025.

The increase was primarily driven by a $10 million negative combined impact from the Calvert City startup delay and weather-related operational disruptions during the quarter as well as unfavorable foreign exchange currency, partially offset by favorable price/mix.

The three months ended March 31, 2026, operating costs were affected by $10 million of other plant optimization costs while the three months ended March 31, 2025 included $13 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life Sciences reportable segment and $6 million of other plant optimization costs.

Gross profit as a percentage of sales decreased 0.2% primarily due to higher operating costs compared to the three months ended March 31, 2025.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Cost of sales for the six months ended March 31, 2026, decreased $10 million compared to the six months ended March 31, 2025.

The decrease was primarily driven by the impact of the Avoca business sale, favorable price/mix and lower sales volume, partially offset by unfavorable foreign exchange currency and unfavorable operating costs.

The six months ended March 31, 2026, operating costs were affected by $3 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Specialty Additives reportable segment and $15 million of other plant optimization costs while the six months ended March 31, 2025 included $13 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life Sciences reportable segment and $9 million of other plant optimization costs.

Gross profit as a percentage of sales decreased 0.2% primarily due to lower sales volume, higher operating costs and other plant optimization costs compared to the six months ended March 31, 2025.

Three months ended March 31

Six months ended March 31

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Cost of sales for the three months ended June 30, 2026, decreased $4 million compared to the three months ended June 30, 2025.

The decrease was primarily driven by lower operating costs and favorable price/mix partially offset by higher volumes and unfavorable foreign currency.

The three months ended June 30, 2026, included $3 million of other plant optimization costs while the three months ended June 30, 2025 included $27 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life Sciences, Personal Care and Specialty Additives reportable segments and $3 million of other plant optimization costs.

Gross profit as a percentage of sales increased 5.7% compared to the three months ended June 30, 2025 as a result of the sales and cost of sales factors noted above.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Cost of sales for the nine months ended June 30, 2026, decreased $14 million compared to the nine months ended June 30, 2025.

The decrease was primarily driven by favorable price/mix, the divestiture of the Avoca business and lower operating costs, partially offset by higher volumes and unfavorable foreign currency.

The nine months ended June 30, 2026, operating costs were affected by $4 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Specialty Additives and Personal Care and $18 million of other plant optimization costs while the nine months ended June 30, 2025 included $40 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life Sciences, Personal Care and Specialty Additives reportable segments and $12 million of other plant optimization costs.

Gross profit as a percentage of sales increased 1.9% compared to the nine months ended June 30, 2025, as a result of the sales and cost of sales factors notes above.

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As a percent of sales

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Selling, general and administrative expense for the three months ended March 31, 2026, decreased $6 million compared to the three months ended March 31, 2025, with expenses as a percent of sales decreasing 1.3%.

Key drivers of the fluctuation in selling, general and administrative expense compared to the three months ended March 31, 2025, were:

• $2 million in net environmental-related expenses during both the three months ended March 31, 2026 and 2025 (see Note L of the Notes to Condensed Consolidated Financial Statements for more information);

• Expense of $3 million and $8 million comprised of key items for severance, lease abandonment and other restructuring costs during the three months ended March 31, 2026 and 2025, respectively;

• Increased income associated with company-owned life insurance contracts and realized cost reductions associated with restructuring actions partially offset by increased bad debt expense, higher variable compensation expense and lower transition services income.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Selling, general and administrative expense for the six months ended March 31, 2026, increased $3 million compared to the six months ended March 31, 2025, with expenses as a percent of sales increasing 0.7%.

Key drivers of the fluctuation in selling, general and administrative expense compared to the six months ended March 31, 2025 were:

• $12 million and $3 million in net environmental-related expenses during the six months ended March 31, 2026 and 2025, respectively (see Note L of the Notes to Condensed Consolidated Financial Statements for more information);

• Expense of $7 million and $11 million comprised of key items for severance, lease abandonment and other restructuring costs during the six months ended March 31, 2026 and 2025, respectively;

• Higher variable compensation expense, increased bad debt expense, lower transition services income and unfavorable currency exchange partially offset by increased income associated with company-owned life insurance contracs and realized cost reductions, including the Avoca business sale, associated with restructuring actions.

Three months ended March 31

Six months ended March 31

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Selling, general and administrative expense for the three months ended June 30, 2026, decreased $7 million compared to the three months ended June 30, 2025, with expenses as a percent of sales decreasing 3.0%.

Key drivers of the fluctuation in selling, general and administrative expense compared to the three months ended June 30, 2025, were:

• $17 million and $30 million in net environmental-related expenses during the three months ended June 30, 2026 and 2025, respectively (see Note L of the Notes to Condensed Consolidated Financial Statements for more information);

• Expense of $8 million and $7 million comprised of key items for severance, lease abandonment and other restructuring costs during the three months ended June 30, 2026 and 2025, respectively;

• $8 million benefit related to domestic tax credits during the three months ended June 30, 2026;

• Offset by higher variable compensation expense and lower transition services income.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Selling, general and administrative expense for the nine months ended June 30, 2026, decreased $4 million compared to the nine months ended June 30, 2025, with expenses as a percent of sales decreasing 0.6%.

Key drivers of the fluctuation in selling, general and administrative expense compared to the nine months ended June 30, 2025 were:

• $28 million and $33 million in net environmental-related expenses during the nine months ended June 30, 2026 and 2025, respectively (see Note L of the Notes to Condensed Consolidated Financial Statements for more information);

• Expense of $15 million and $18 million comprised of key items for severance, lease abandonment and other restructuring costs during the nine months ended June 30, 2026 and 2025, respectively;

• $8 million benefit related to domestic tax credits during the nine months ended June 30, 2026;

• Increased income associated with company-owned life insurance contracts and realized cost reductions, including the Avoca business sale, associated with restructuring actions, offset by higher variable compensation expense, increased bad debt expense and lower transition services income.

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(In millions)

Research and development expense

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Research and development expense is generally consistent between the three months ended March 31, 2026 and 2025.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Research and development expense is generally consistent between the six months ended March 31, 2026 and 2025.

Three months ended March 31

Six months ended March 31

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Research and development expense increased mostly due to higher incentive compensation between the three months ended June 30, 2026 and 2025.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Research and development expense is generally consistent between the nine months ended June 30, 2026 and 2025.

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Nine months ended June 30

(In millions)

Intangibles amortization expense

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Intangibles amortization expense is generally consistent between the three months ended March 31, 2026 and 2025.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

The lower intangibles amortization expense in the six months ended March 31, 2026, is driven by the impact of amortization related to the divested Avoca business in the six months ended March 31, 2025.

Three months ended March 31

Six months ended March 31

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Intangibles amortization expense is generally consistent between the three months ended June 30, 2026 and 2025.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

The lower intangibles amortization expense in the nine months ended June 30, 2026, is driven by the impact of amortization related to the divested Avoca business in the nine months ended June 30, 2025.

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Nine months ended June 30

(In millions)

Equity and other income

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Equity and other income was zero in both three months ended March 31, 2026 and 2025.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Equity and other income is generally consistent between the six months ended March 31, 2026 and 2025.

Three months ended March 31

Six months ended March 31

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Equity and other income is generally consistent between the three months ended June 30, 2026 and 2025.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Equity and other income is generally consistent between the nine months ended June 30, 2026 and 2025.

Three months ended June 30

Nine months ended June 30

(In millions)

Goodwill impairment

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Ashland recorded a $706 million goodwill impairment charge during the three months ended June 30, 2025.

See Note G of the Notes to Condensed Consolidated Financial Statements for more information.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Ashland recorded a $706 million goodwill impairment charge during the nine months ended June 30, 2025.

See Note G of the Notes to Condensed Consolidated Financial Statements for more information.

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Nine months ended June 30

(In millions)

Income (loss) on divestitures, net

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Income (loss) on divestitures, net for the three months ended March 31, 2025, primarily relates to a pre-tax gain on sale of $8 million associated with the Avoca business and a pre-tax gain on sale of excess corporate real estate of $11 million, partially offset by $1 million adjustment related to the Nutraceuticals business sale completed in fiscal 2024.

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Income (loss) on divestitures, net for the three months ended June 30, 2026 primarily relates to income related to sales activity of excess corporate real estate.

See Note B of the Notes to Condensed Consolidated Financial Statements for more information.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Income (loss) on divestitures, net for the six months ended March 31, 2026, primarily relates to a pre-tax gain on sale of excess corporate real estate while the three months ended March 31, 2025, primarily relates to a $183 million impairment charge, a pre-tax gain on sale of $8 million associated with the Avoca business and a pre-tax gain on sale of excess corporate real estate of $11 million, partially offset by $1 million adjustment related to the Nutraceuticals business sale completed in fiscal 2024.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Income (loss) on divestitures, net for the nine months ended June 30, 2026, primarily relates to sales activity and a pre-tax gain on sale of excess corporate real estate while the three months ended June 30, 2025, primarily relates to a $183 million impairment charge, a pre-tax gain on sale of $8 million associated with the Avoca business and a pre-tax gain on sale of excess corporate real estate of $11 million, partially offset by $1 million adjustment related to the Nutraceuticals business sale completed in fiscal 2024.

See Note B of the Notes to Condensed Consolidated Financial Statements for more information.

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Six months ended March 31

Three months ended June 30

Nine months ended June 30

(In millions)

Net interest and other expense (income)

Net interest and other (income) expense

Interest expense

Interest income

Investment securities (income) expense

Investment securities income

Other financing costs

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Net interest and other expense increased by $7 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Interest expense and interest income are generally consistent between the three months ended March 31, 2026 and 2025.

Investment securities expense of $2 million and income of $6 million included realized losses of $5 million and gains of $3 million for the three months ended March 31, 2026 and 2025, respectively, and was the primary change.

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Net interest and other (income) expense increased by $3 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Interest expense and interest income are generally consistent between the three months ended June 30, 2026 and 2025.

Investment securities income of $23 million and $22 million included realized gains of $20 million and $19 million for the three months ended June 30, 2026 and 2025, respectively.

Other financing costs decreased $2 million due to lower losses on receivable sales and was the primary change.

See Note E of the Notes to Condensed Consolidated Financial Statements for more information.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Net interest and other expense decreased by $13 million during the six months ended March 31, 2026, compared to the six months ended March 31, 2025.

Interest expense and interest income are generally consistent between the six months ended March 31, 2026 and 2025.

Investment securities income of $5 million and expense of $7 million included realized losses of $3 million and $14 million for the six months ended March 31, 2026 and 2025, respectively, and was the primary change.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Net interest and other (income) expense decreased by $15 million during the nine months ended June 30, 2026, compared to the nine months ended June 30, 2025.

Interest expense and interest income are generally consistent between the nine months ended June 30, 2026 and 2025.

Investment securities income of $28 million and $15 million included realized gains of $18 million and $5 million for the nine months ended June 30, 2026 and 2025, respectively, and was the primary change.

See Note E of the Notes to Condensed Consolidated Financial Statements for more information.

Three months ended March 31

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(In millions)

Other net periodic benefit loss

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Other net periodic benefit loss for the three months ended March 31, 2026, primarily included interest cost of $3 million, which was partially offset by expected return on plan assets of $2 million.

Other net periodic benefit loss for the three months ended March 31, 2025, primarily included interest cost of $4 million, which was partially offset by expected return on plan assets of $3 million.

Other net periodic benefit (income) loss

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Other net periodic benefit income for the three months ended June 30, 2026, primarily included an actuarial gain of $3 million, expected return on plan assets of $3 million and a settlement gain of $2 million, which was partially offset by interest cost of $3 million.

Other net periodic benefit loss for the three months ended June 30, 2025, primarily included interest cost of $3 million, which was partially offset by expected return on plan assets of $2 million.

See Note K of the Notes to Condensed Consolidated Financial Statements for more information.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Other net periodic benefit loss for the six months ended March 31, 2026, primarily included interest cost of $7 million, which was partially offset by expected return on plan assets of $5 million.

Other net periodic benefit loss for the six months ended March 31, 2025, primarily included interest cost of $7 million and a $1 million curtailment loss, which was partially offset by expected return on plan assets of $5 million.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Other net periodic benefit income for the nine months ended June 30, 2026, primarily included expected return on plan assets of $8 million, an actuarial gain of $3 million and a settlement gain of $2 million, which was partially offset by interest cost of $10 million.

Other net periodic benefit loss for the nine months ended June 30, 2025, primarily included interest cost of $10 million and a $1 million curtailment loss, which was partially offset by expected return on plan assets of $7 million.

See Note K of the Notes to Condensed Consolidated Financial Statements for more information.

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Three months ended June 30

Nine months ended June 30

(In millions)

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Effective tax rate

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Three months ended June 30, 2026 compared to three months ended June 30, 2025

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 effective tax rate was 25% for the three months ended March 31, 2026,

and was primarily impacted by jurisdictional income mix and a net $1 million from favorable tax discrete items primarily related to equity compensation adjustments and changes in uncertain tax positions.

The effective tax rate was 23% for the three months ended March 31, 2025, and was primarily impacted by jurisdictional income mix.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

The effective tax rate was 80% for the six months ended March 31, 2026, and was primarily impacted by jurisdictional income mix and a net $1 million from unfavorable tax discrete items primarily related to equity compensation adjustments and changes in uncertain tax positions.

The effective tax rate was 20% for the six months ended March 31, 2025, and was primarily impacted by jurisdictional income mix as well as a net $7 million from unfavorable tax discrete items primarily related to final regulations issued in the U.S.

during the six months ended March 31, 2025, impacting the recognition of deferred taxes on certain unrealized foreign exchange gains and losses.

The effective tax rate was 27% for the three months ended June 30, 2026, and was primarily impacted by jurisdictional income mix and a net $3 million from unfavorable tax discrete items primarily related to cash repatriation and changes in uncertain tax positions.

The effective tax rate was negative 2% for the three months ended June 30, 2025, and was primarily impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million charge and a net $16 million from unfavorable tax discrete items primarily related to return to provision adjustments and changes in uncertain tax positions.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

The effective tax rate was 30% for the nine months ended June 30, 2026, and was primarily impacted by jurisdictional income mix and a net $4 million from unfavorable tax discrete items primarily related to equity compensation adjustments and changes in uncertain tax positions.

The effective tax rate was 2% for the nine months ended June 30, 2025, and was primarily impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million, and a net $23 million from unfavorable tax discrete items primarily related to cash repatriation, return to provision adjustments and changes to uncertain tax positions.

Adjusted income tax expense (benefit)

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Management believes investors and analysts use this financial measure in assessing Ashland's business performance and that presenting this non-GAAP financial measure on a consolidated basis assists investors in better understanding Ashland’s ongoing business performance enhancing their ability to compare period-to-period financial results.

The effective tax rate during the three and six months ended March 31, 2025 was significantly impacted by the following tax specific key items:

There were no tax specific key items affecting the three and nine months ended June 30, 2026.

The effective tax rate during the three and nine months ended June 30, 2025 was significantly impacted by the following tax specific key items:

• Uncertain tax position – Includes the impact from the settlement of uncertain tax positions with various tax authorities;

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Three months ended

Six months ended

Nine months ended

(In millions)

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(d) Due to rounding conventions, the effective tax rate presented may not recalculate precisely based on the numbers disclosed within this table.

Three months ended March 31

Six months ended March 31

Three months ended June 30

Nine months ended June 30

(In millions)

Income from discontinued operations, net of income taxes

Water Technologies

Loss from discontinued operations, net of income taxes

Performance Adhesives

Three months ended March 31, 2026 compared to three months ended March 31, 2025

The activity for Performance Adhesives and Valvoline represents subsequent adjustments that were made in conjunction with tax related reserves.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

The activity for Water Technologies, Performance Adhesives and Valvoline represents represents subsequent adjustments that were made in conjunction with environmental and tax related reserves.

Water Technologies

Asbestos-related litigation

Three months ended June 30, 2026 compared to three months ended June 30, 2025

The activity for Distribution represents subsequent adjustments that were made in conjunction with environmental related reserves.

Asbestos-related litigation activity primarily relates to Ashland's annual update.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

The activity for Performance Adhesives, Distribution, Water Technologies and Valvoline represents subsequent adjustments that were made in conjunction with environmental and tax related reserves.

Asbestos-related litigation activity primarily relates to Ashland's annual update.

Other comprehensive income (loss)

Three months ended March 31

Six months ended March 31

Three months ended June 30

Nine months ended June 30

(In millions)

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Unrealized translation gain (loss)

Unrealized gain on commodity hedges

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Total other comprehensive income (loss), net of tax, for the three months ended March 31, 2026, decreased $63 million compared to the three months ended March 31, 2025, primarily as a result of the following:

• For the three months ended March 31, 2026 and 2025, the change in unrealized gain (loss) from foreign currency translation adjustments resulted in losses of $12 million and gains of $49 million, respectively.

Unrealized (loss) gain on commodity hedges

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Total other comprehensive income (loss), net of tax, for the three months ended June 30, 2026, decreased $88 million compared to the three months ended June 30, 2025, primarily as a result of the following:

• For the three months ended June 30, 2026 and 2025, the change in unrealized gain (loss) from foreign currency translation adjustments resulted in gains of $4 million and $91 million, respectively.

The fluctuations in unrealized translation gains and losses are primarily due to translating foreign subsidiary financial statements from local currencies to U.S.

• For the three months ended March 31, 2026 and 2025, the change in commodity hedges is primarily due to the fluctuations of the market prices of the underlying commodities.

Commodity hedges resulted in unrealized gains of zero and $2 million for the three months ended March 31, 2026 and 2025, respectively.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Total other comprehensive income (loss), net of tax, for the six months ended March 31, 2026, increased $32 million compared to the six months ended March 31, 2025, primarily as a result of the following:

• For the six months ended March 31, 2026 and 2025, the change in unrealized gain (loss) from foreign currency translation adjustments resulted in losses of $10 million and $45 million, respectively.

• For the three months ended June 30, 2026 and 2025, the change in commodity hedges is primarily due to the fluctuations of the market prices of the underlying commodities.

Commodity hedges resulted in unrealized losses of $2 million and $1 million for the three months ended June 30, 2026 and 2025, respectively.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Total other comprehensive income (loss), net of tax, for the nine months ended June 30, 2026, decreased $56 million compared to the nine months ended June 30, 2025, primarily as a result of the following:

• For the nine months ended June 30, 2026 and 2025, the change in unrealized gain (loss) from foreign currency translation adjustments resulted in losses of $6 million and gains of $46 million, respectively.

The fluctuations in unrealized translation gains and losses are primarily due to translating foreign subsidiary financial statements from local currencies to U.S.

• For the six months ended March 31, 2026 and 2025, the change in commodity hedges is primarily due to the fluctuations of the market prices of the underlying commodities.

Commodity hedges resulted in unrealized gains of zero and $3 million for the six months ended March 31, 2026 and 2025, respectively.

• For the nine months ended June 30, 2026 and 2025, the change in commodity hedges is primarily due to the fluctuations of the market prices of the underlying commodities.

Commodity hedges resulted in unrealized losses of $2 million and gains of $2 million for the nine months ended June 30, 2026 and 2025, respectively.

Use of Non-GAAP Financial Measures

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EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

EBITDA is defined as net income (loss), plus income tax expense (benefit), net interest and other expense, and depreciation and amortization.

EBITDA is defined as net income (loss), plus income tax expense (benefit), net interest and other (income) expense, and depreciation and amortization.

Adjusted EBITDA is EBITDA adjusted for discontinued operations and key items.

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Management believes the use of EBITDA and Adjusted EBITDA measures on a consolidated and reportable segment basis assists investors in understanding the ongoing operating performance by presenting comparable financial results between periods.

Ashland believes that by removing the impact of depreciation and amortization and excluding certain non-cash charges, amounts spent on interest and taxes and certain other charges that are highly variable from year to year, EBITDA and Adjusted EBITDA provide Ashland’s investors with performance measures that reflect the impact to operations from trends in changes in sales, margin and operating expenses, providing a perspective not immediately apparent from net income (loss) and operating income (loss).

margin and operating expenses, providing a perspective not immediately apparent from net income (loss) and operating income (loss).

The adjustments Ashland makes to derive the non-GAAP financial measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in net income (loss) and operating income (loss) and which Ashland does not consider to be the fundamental attributes or primary drivers of its business.

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These liquidity measures are used regularly by Ashland's stakeholders and industry peers to measure the efficiency at providing cash from regular business activity.

Free Cash Flow, Ongoing Free Cash Flow, and Free Cash Flow Conversion have certain limitations, including that they

do not reflect adjustments for certain non-discretionary cash flows such as mandatory debt repayments.

Free Cash Flow, Ongoing Free Cash Flow, and Free Cash Flow Conversion have certain limitations, including that they do not reflect adjustments for certain non-discretionary cash flows such as mandatory debt repayments.

The amount of mandatory versus discretionary expenditures can vary significantly between periods.

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GAAP measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items that affect these metrics such as domestic and international economic, political, legislative, regulatory and legal actions.

In addition, certain economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of certain key raw materials, can have a significant effect on operations and are difficult to predict with certainty.

In addition, certain economic conditions, such as

recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of certain key raw materials, can have a significant effect on operations and are difficult to predict with certainty.

These non-GAAP financial measures should be considered supplemental in nature and should not be construed as more significant than comparable measures defined by U.S.

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EBITDA and Adjusted EBITDA

EBITDA totaled $84 million and $100 million for the three months ended March 31, 2026 and 2025, respectively, and income of $124 million and loss of $30 million for the six months ended March 31, 2026 and 2025, respectively.

EBITDA totaled $69 million and loss of $683 million for the three months ended June 30, 2026 and 2025, respectively, and income of $193 million and loss of $713 million for the nine months ended June 30, 2026 and 2025, respectively.

EBITDA and Adjusted EBITDA results in the table below have been prepared to illustrate the ongoing effects of Ashland’s operations, which exclude certain key items previously described.

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These operating key items for the applicable periods are summarized as follows:

• Other plant optimization costs – Ashland incurred inventory adjustments and production costs associated with product line optimization actions;

• Environmental reserve adjustments – 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.

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See Note L of the Notes to Condensed Consolidated Financial Statements for more information;

• Other plant optimization costs – Ashland incurred inventory adjustments and production costs associated with product line optimization actions;

• Restructuring, separation and other costs – Ashland periodically implements company-wide and targeted cost reduction 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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See Note D of the Notes to Condensed Consolidated Financial Statements for further information;

• Accelerated depreciation – As a result of product line optimization activities at manufacturing facilities within the Life Sciences and Specialty Additives reportable segment, Ashland recorded accelerated depreciation due to changes in the expected useful life of certain property, plant and equipment during the six months ended March 31, 2026 and during the three and six months ended March 31, 2025.

• Accelerated depreciation – As a result of product line optimization activities at manufacturing facilities within the Life Sciences and Specialty Additives reportable segments and unallocated and other, Ashland recorded accelerated depreciation due to changes in the expected useful life of certain property, plant and equipment during the three and nine months ended June 30, 2026 and during the three and nine months ended June 30, 2025.

See Note D of the Notes to Condensed Consolidated Financial Statements for more information;

• Goodwill impairment – Ashland recorded a non-cash goodwill impairment charge of $706 million within the goodwill impairment caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2025.

See Note G of the Notes to Condensed Consolidated Financial Statements for more information;

• Avoca business impairment and sale – During March 2025, Ashland sold substantially all of the net assets of its Avoca business.

As a result, Ashland recorded an impairment charge and a gain on sale within the income (loss) on divestitures, net caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and six months ended March 31, 2025.

As a result, Ashland recorded an impairment charge and a gain on sale within the income (loss) on divestitures, net caption of the Statement of Condensed Consolidated Comprehensive Income (Loss) for the nine months ended June 30, 2025.

See Note B of the Notes to Condensed Consolidated Financial Statements for more information;

• Held for sale depreciation and amortization – Represents the depreciation and amortization for the Avoca business assets during the six months ended March 31, 2025.

See Note B of the Notes to the Condensed Consolidated Financial Statements for more information;

• Income (loss) on divestitures, net – Ashland recorded income of zero and $2 million during the three and six months ended March 31, 2026, respectively, and income of $10 million during both the three and six months ended March 31, 2025.

The income was related to the pre-tax gains in connection with the sale of excess corporate properties.

• Held for sale depreciation and amortization – Represents the depreciation and amortization for the Avoca business assets during the nine months ended June 30, 2025.

See Note B of the Notes to Condensed Consolidated Financial Statements for more information;

• Income on divestitures, net – During the nine months ended June 30, 2026 and 2025, Ashland recorded income relating to the pre-tax gains in connection with the sale of excess corporate properties.

See Note B of the Notes to Condensed Consolidated Financial Statements for more information;

• Tax credit – During the three and nine months ended June 30, 2026, Ashland recorded a $8 million benefit related to domestic tax credits;

Non-operating key items affecting EBITDA

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These non-operating key items for the applicable periods are summarized as follows:

• Loss on pension plan remeasurements – During the six months ended March 31, 2025, Ashland recognized a curtailment loss for pension plan remeasurement for defined benefit pension plan.

• (Gain) loss on pension plan remeasurements – During the three and nine months ended June 30, 2026, Ashland recognized a settlement gain and a gain for pension plan remeasurement from a buy-out transaction affecting certain defined benefit pension plans.

During the nine months ended June 30, 2025, Ashland recognized a curtailment loss for pension plan remeasurement for a defined benefit pension plan.

See Note K of the Notes to Condensed Consolidated Financial Statements for more information.

Three months ended

Six months ended

Nine months ended

(In millions)

1 unchanged sentence

Income tax expense (benefit)

Net interest and other expense

Net interest and other (income) expense

Depreciation and amortization (a)

Income from discontinued operations, net of income taxes

Loss from discontinued operations, net of income taxes

Key items included in EBITDA:

Other plant optimization costs

Environmental reserve adjustments

Other plant optimization costs

Restructuring, separation and other costs

Accelerated depreciation

Goodwill impairment

Avoca business impairment and sale

Loss on pension plan remeasurements

Held for sale depreciation and amortization

Income on divestitures, net

(Gain) loss on pension plan remeasurements

Total key items included in EBITDA

1 unchanged sentence

Total key items included in EBITDA

Unrealized losses (gains) on securities

Unrealized gains on securities

Total key items, before tax

(a) Depreciation and amortization excludes accelerated depreciation of $3 million for Specialty Additives reportable segment for the six months ended March 31, 2026, and $13 million for Life Sciences for both the three and six months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA.

Depreciation and amortization includes $2 million for Personal Care associated with the Avoca business for both the three and six months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA.

(a) Depreciation and amortization excludes accelerated depreciation of $1 million for Unallocated and other for both the three months and nine months ended June 30, 2026, respectively, $3 million for Specialty Additives reportable segment for the nine months ended June 30, 2026, $1 million for Personal Care reportable segment for the nine months ended June 30, 2026, $19 million for Specialty Additives for both the three and nine months ended June 30, 2025, and $8 million and $21 million for Life Sciences for the three and nine months ended June 30, 2025, respectively, which are included as a key item within this table as a component of Adjusted EBITDA.

Depreciation and amortization includes $2 million for Personal Care associated with the Avoca business for the nine months ended June 30, 2025, which is included as a key item within this table as a component of Adjusted EBITDA.

Diluted EPS and Adjusted Diluted EPS

The following table reflects the U.S.

GAAP calculation for the income (loss) from continuing operations adjusted for the cumulative diluted EPS effect for key items after tax that have been identified in the Adjusted EBITDA table

in the previous section.

GAAP calculation for the income (loss) from continuing operations adjusted for the cumulative diluted EPS effect for key items after tax that have been identified in the Adjusted EBITDA table in the previous section.

Key items are defined as the financial effects from significant transactions that may have caused short-term fluctuations in net income (loss) and/or operating income (loss) which Ashland believes do not accurately reflect Ashland’s underlying business performance and trends.

2 unchanged sentences

In addition to the operating key items previously described, additional non-operating key items for the applicable periods are summarized as follows:

• Unrealized losses (gains) on securities – represents (gains) or losses recognized on restricted investments related to the Asbestos trust and Environmental trust for each period.

• Unrealized gains on securities – represents gains recognized on restricted investments related to the Asbestos trust and Environmental trust for each period.

See Note E of the Notes to Condensed Consolidated Financial Statements for more information;

• Uncertain tax positions – represents the impact from the settlement of uncertain tax positions with various tax authorities for the three and six months ended March 31, 2025;

• Other and tax reform related activity – primarily represents tax specific key items associated with final tax regulations and tax reform related activity for the three and six months ended March 31, 2025.

• Uncertain tax positions – represents the impact from the settlement of uncertain tax positions with various tax authorities for the three and nine months ended June 30, 2025;

• Other and tax reform related activity – primarily represents tax specific key items associated with final tax regulations and tax reform related activity for the three and nine months ended June 30, 2025.

Three months ended

Six months ended

Nine months ended

Diluted EPS from continuing operations (as reported)

Key items, before tax:

Other plant optimization costs

Environmental reserve adjustments

Other plant optimization costs

Restructuring, separation and other costs

Unrealized losses (gains) on securities

Accelerated depreciation

Goodwill impairment

Avoca business impairment and sale

Loss on pension plan remeasurements

Held for sale depreciation and amortization

Income on divestitures, net

(Gain) loss on pension plan remeasurements

Unrealized gains on securities

Key items, before tax

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For additional explanation of these tax specific key items, see the income tax expense (benefit) discussion within the Statements of Condensed Consolidated Comprehensive Income (Loss) caption review section above.

(c) Amortization expense adjustment (net of tax) tax rates were 20% for both the three and six months ended March 31, 2026, and 21% for both the three and six months ended March 31, 2025.

(c) Amortization expense adjustment (net of tax) tax rates were 20% for both the three and nine months ended June 30, 2026, and 20% and 21% for the three and nine months ended June 30, 2025, respectively.

RESULTS OF OPERATIONS – REPORTABLE SEGMENT REVIEW

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The service cost component of pension and other postretirement benefits costs is allocated to each reportable segment on a ratable basis;

while the remaining components of pension and other postretirement benefits costs are recorded within the other net periodic benefit loss caption on the Statements of Condensed Consolidated Comprehensive Income (Loss).

while the remaining components of pension and other postretirement benefits costs are recorded within the other net periodic benefit (income) loss caption on the Statements of Condensed Consolidated Comprehensive Income (Loss).

Ashland refines its expense allocation methodologies to the reportable segments from time to time as internal accounting practices are improved, more refined information becomes available and the industry or market changes.

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

There were no material changes in methodology for the three and six months ended March 31, 2026 or 2025.

There were no material changes in methodology for the three and nine months ended June 30, 2026 or 2025.

The following table discloses sales, operating income (loss), depreciation and amortization and EBITDA by reportable segment:

Three months ended

Six months ended

Nine months ended

(In millions - unaudited)

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OPERATING INCOME (LOSS)

Life Sciences

Life Sciences (b)

Personal Care

Specialty Additives

Specialty Additives (c)

Intermediates

Unallocated and other (b)

Unallocated and other (d)

DEPRECIATION EXPENSE

Life Sciences (c)

Personal Care

Specialty Additives (d)

Life Sciences (e)

Personal Care (f)

Specialty Additives (f)

Intermediates

Unallocated and other (g)

AMORTIZATION EXPENSE

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All other intersegment sales are accounted for at cost.

(b) Includes a $2 million gain on sale of excess corporate property for the six months ended March 31, 2026, a $8 million gain on sale of excess corporate property for both the three and six months ended March 31, 2025, and a $183 million impairment charge related to the Avoca business for the six months ended March 31, 2025, within the income (loss) on divestitures, net caption of the Statements of Condensed Consolidated Income (Loss).

(c) Depreciation includes accelerated depreciation of $13 million for Life Sciences for both the three and six months ended March 31, 2025.

(d) Depreciation includes accelerated depreciation of $3 million for Specialty Additives for the six months ended March 31, 2026.

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

(b) Includes goodwill impairment of $375 million for Life Sciences for both the three and nine months ended June 30, 2025.

(c) Includes goodwill impairment of $331 million for Specialty Additives for both the three and nine months ended June 30, 2025.

(d) Includes a $2 million gain for post-closing adjustments related to the Avoca business sale, a $2 million gain on sale of excess corporate property for the nine months ended June 30, 2026, a $8 million gain on sale and a $183 million impairment charge related to the Avoca business for the nine months ended June 30, 2025, within the income (loss) on divestitures, net caption of the Statements of Condensed Consolidated Income (Loss).

(e) Depreciation includes accelerated depreciation of $8 million and $21 million for Life Sciences for the three and nine months ended June 30, 2025, respectively.

(f) Depreciation includes accelerated depreciation of $1 million for Personal Care and $3 million for Specialty Additives for the nine months ended June 30, 2026, and $19 million for both the three and nine months ended June 30, 2025.

(g) Depreciation includes accelerated depreciation of $1 million for Unallocated and other for both the three and nine months ended June 30, 2026.

(h) Excludes loss from discontinued operations, net of income taxes and other net periodic benefit (income) loss.

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

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Three months ended

Six months ended

Nine months ended

(In millions)

March 31, 2026

June 30, 2026

Foreign currency exchange

1 unchanged sentence

Three months ended

Six months ended

Nine months ended

(In millions)

March 31, 2026

Operating income change

June 30, 2026

Operating income (loss) change

Goodwill impairment

Foreign currency exchange

EBITDA and Adjusted EBITDA reconciliation

The following EBITDA presentation is provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison for the results of Life Sciences.

Life Sciences had key items in the three and six months ended March 31, 2026 and 2025.

Life Sciences, Personal Care and Specialty Additives had key items in the three and nine months ended June 30, 2026 and 2025.

These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.

Life Sciences

Three months ended March 31

Six months ended March 31

Three months ended June 30

Nine months ended June 30

(In millions)

1 unchanged sentence

Depreciation and amortization (a)

Goodwill impairment

Accelerated depreciation

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Operating income as a percent of sales

Not meaningful

Adjusted EBITDA as a percent of sales

(a) Depreciation and amortization for Life Sciences excludes accelerated depreciation of $13 million for both the three and six months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA.

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Life Sciences' sales remained consistent compared to the prior quarter.

Operating income increased in the current quarter primarily due to lower costs associated with plant optimization and favorable foreign currency exchange partially offset by unfavorable price/mix.

Adjusted EBITDA decreased in the current quarter primarily due to higher costs, including the Calvert City startup delay and weather-related operational disruptions during the quarter and unfavorable price/mix, partially offset by favorable foreign currency exchange.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Life Sciences' sales increased primarily due to favorable foreign currency exchange.

Operating income increased in the current period primarily due to lower costs associated with plant optimization and favorable foreign currency exchange partially offset by unfavorable price/mix.

Adjusted EBITDA decreased in the current period primarily due to higher costs, including the Calvert City startup delay and weather-related operational disruptions during the period and unfavorable price/mix, partially offset by favorable foreign currency exchange.

(a) Depreciation and amortization for Life Sciences excludes accelerated depreciation of $8 million and $21 million for the three and nine months ended June 30, 2025, respectively, which is included as a key item within this table as a component of Adjusted EBITDA.

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Life Sciences sales for the current quarter increased as a result of higher volume and favorable price/mix.

Operating income (loss) and Adjusted EBITDA increased in the current quarter as a result of the prior period goodwill impairment, higher volume and favorable price/mix.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Life Sciences' sales increased in the current period due to higher volume and favorable foreign currency exchange, partially offset by unfavorable price/mix.

Operating income (loss) and Adjusted EBITDA for the current period increased as a result of the prior period goodwill impairment, higher volume, lower cost, favorable foreign currency exchange and favorable price/mix.

Personal Care

4 unchanged sentences

The Avoca business was sold in March 2025.

See Note B of the Notes to Condensed Consolidated Financial Statements for additional information.

The following table provides a reconciliation of the change in sales for the Personal Care reportable segment.

Three months ended

Six months ended

Nine months ended

(In millions)

March 31, 2026

June 30, 2026

Foreign currency exchange

2 unchanged sentences

Three months ended

Six months ended

Nine months ended

(In millions)

March 31, 2026

June 30, 2026

Operating income change

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There were key items in the three and six months ended March 31, 2026 and 2025.

There were key items in the three and nine months ended June 30, 2026 and 2025.

These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.

Personal Care

Three months ended March 31

Six months ended March 31

Three months ended June 30

Nine months ended June 30

(In millions)

6 unchanged sentences

Adjusted EBITDA as a percent of sales

(a) Depreciation and amortization includes $2 million for Personal Care associated with the Avoca business assets for both the three and six months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA.

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Personal Care's sales increased in the current quarter primarily due to higher volume and favorable foreign currency exchange, partially offset by unfavorable price/mix and the divestiture of the Avoca business in the prior period.

Operating income and Adjusted EBITDA remained relatively consistent compared to prior year quarter.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Personal Care's sales decreased primarily due to the Avoca business sale in the prior period.

Operating income and Adjusted EBITDA decreased in the current period primarily due to higher costs, including the continued effects of other plant optimization costs, and unfavorable price/mix partially offset by higher volume and favorable foreign currency exchange.

(a) Depreciation and amortization includes $1 million and $2 million for Personal Care associated with the Avoca business assets for the nine months ended June 30, 2026 and 2025, respectively, which is included as a key item within this table as a component of Adjusted EBITDA.

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Personal Care's sales increased as a result of higher volume and favorable foreign currency exchange, partially offset by unfavorable price/mix.

Operating income and Adjusted EBITDA for the current quarter increased primarily as a result higher volume, favorable price/mix partially offset by higher costs.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Personal Care's sales increased as a result of higher volume and favorable foreign currency exchange, partially offset by unfavorable price/mix and the impact of the Avoca divestiture.

Operating income for the current period increased primarily due to higher volume and favorable foreign currency exchange and the impact of the Avoca divestiture, partially offset by higher costs.

Adjusted EBITDA decreased primarily due to higher operating costs, partially offset by higher volume, the positive impact of the Avoca divestiture and favorable foreign exchange currency.

Specialty Additives

Specialty Additives is comprised of rheology and performance-enhancing additives serving the architectural coatings, construction, energy, automotive and various industrial markets.

Solutions include coatings additives for architectural paints, finishes and lacquers, cement- and gypsum-based dry mortars, ready-mixed joint compounds, synthetic plasters for commercial and residential construction, and specialty materials for industrial applications.

Solutions include coatings additives

for architectural paints, finishes and lacquers, cement- and gypsum-based dry mortars, ready-mixed joint compounds, synthetic plasters for commercial and residential construction, and specialty materials for industrial applications.

Products include rheology modifiers (cellulosic and associative thickeners), foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, and environmental filters, ingredients that aid the manufacturing process of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals and alloys for welding.

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Three months ended

Six months ended

Nine months ended

(In millions)

March 31, 2026

June 30, 2026

Foreign currency exchange

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Three months ended

Six months ended

Nine months ended

(In millions)

March 31, 2026

June 30, 2026

Operating income (loss) change

Goodwill impairment

Foreign currency exchange

1 unchanged sentence

There were key items in the three and six months ended March 31, 2026 and 2025.

There were key items in the three and nine months ended June 30, 2026 and 2025.

These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.

Specialty Additives

Three months ended March 31

Six months ended March 31

Three months ended June 30

Nine months ended June 30

(In millions)

1 unchanged sentence

Depreciation and amortization (a)

Goodwill impairment

Accelerated depreciation

Environmental reserve adjustments

Other plant optimization costs

1 unchanged sentence

Operating income (loss) as a percent of sales

Not meaningful

Adjusted EBITDA as a percent of sales

(a) Depreciation and amortization for Specialty Additives excludes accelerated depreciation of $3 million for the six months ended March 31, 2026, which is included as a key item within this table as a component of Adjusted EBITDA.

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Specialty Additives' sales remained consistent compared to the prior quarter.

Operating loss and Adjusted EBITDA for the current quarter decreased as a result of higher costs, including the continued effects of other plant optimization costs, and unfavorable price/mix.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Specialty Additives sales, operating loss and Adjusted EBITDA for the current period decreased as a result of higher costs, including the continued effects of plant optimization costs, lower volume, and unfavorable price/mix, partially offset by favorable foreign currency exchange.

(a) Depreciation and amortization for Specialty Additives excludes accelerated depreciation of $3 million for the nine months ended June 30, 2026, and $19 million for both the three and nine months ended June 30, 2025 which is included as a key item within this table as a component of Adjusted EBITDA.

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Specialty Additives' sales increased as a result of favorable price/mix and higher volume.

Operating income (loss) increased in the current quarter due to the prior period goodwill impairment, lower costs, including accelerated depreciation and other plant optimization costs, favorable price/mix and higher volume.

Adjusted EBITDA decreased as a result of higher costs, excluding accelerated depreciation and other plant optimization costs, partially offset by higher volume and favorable price/mix.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Specialty Additives sales decreased as a result of lower volume, unfavorable price/mix, partially offset by favorable foreign currency exchange.

Operating income (loss) remained constant excluding the impact of the prior period goodwill impairment charge.

Adjusted EBITDA decreased in the current period primarily due to higher costs, lower volume and unfavorable price mix, partially offset by favorable foreign currency exchange.

Intermediates

Intermediates is comprised of the production of 1,4 butanediol ("BDO") and related derivatives, including n-methylpyrrolidone.

These products are used as chemical intermediates in the production of engineering polymers and polyurethanes, and as specialty process solvents in a wide array of applications including electronics, agriculture, pharmaceuticals, water filtration membranes and more.

Intermediates is comprised of the production of 1,4 butanediol (BDO) and related derivatives, including nmethylpyrrolidone.

These products are used as chemical intermediates in the production of engineering polymers and polyurethanes, and as specialty process solvents in a wide array of applications including electronics, pharmaceuticals, water filtration membranes and more.

BDO is also supplied to Life Sciences, Personal Care, and Specialty Additives for use as a raw material.

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(In millions)

March 31, 2026

June 30, 2026

Foreign currency exchange

The following table provides a reconciliation of the change in operating income (loss) for the Intermediates reportable segment.

The following table provides a reconciliation of the change in operating income for the Intermediates reportable segment.

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June 30, 2026

Operating income (loss) change

Foreign currency exchange

EBITDA reconciliation

EBITDA and Adjusted EBITDA reconciliation

Intermediates had no key items for the three or six months ended March 31, 2026 or 2025.

Intermediates had no key items for the three and nine months ended June 30, 2026 or 2025.

Intermediates

Three months ended March 31

Six months ended March 31

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Nine months ended June 30

(In millions)

Operating income (loss)

Operating income

Depreciation and amortization

Operating income (loss) as a percent of sales

Operating income as a percent of sales

EBITDA as a percent of sales

Three months ended March 31, 2026 compared to three months ended March 31, 2025

Intermediates' sales decreased in the current quarter primarily due to lower volume while operating income and EBITDA increased primarily due to lower costs.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Intermediates' sales and EBITDA decreased in the current period primarily due to lower volume while operating income increased primarily due to favorable price/mix.

Three months ended June 30, 2026 compared to three months ended June 30, 2025

Intermediates' sales increased in the current quarter primarily due to higher volume while operating income and EBITDA decreased primarily due to higher costs.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

Intermediates' sales decreased due to lower volume and unfavorable price/mix partially offset by favorable foreign currency exchange.

Operating income remained consistent while EBITDA decreased in the current period primarily due to lower volume and higher costs partially offset by favorable foreign currency exchange.

Unallocated and other

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Unallocated and other

Three months ended March 31

Six months ended March 31

Three months ended June 30

Nine months ended June 30

(In millions)

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Environmental expenses

Accelerated depreciation

Income (loss) on divestitures, net

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Total expense

Three months ended March 31, 2026 compared to three months ended March 31, 2025

The current and prior year quarter included expense of $3 million and $8 million, respectively, for restructuring activities mainly comprised of severance, lease abandonment and other restructuring costs related to company-wide cost reduction programs.

The current and prior year quarter both included $2 million for environmental expenses.

The prior year quarter included gains of $18 million from divestitures primarily related to the sale of the Avoca business and excess corporate land property.

See Note B of the Notes to the Condensed Consolidated Financial Statements for more information.

Other expenses between quarters were driven by changes in governance and legacy expenses primarily associated with fluctuations in foreign currency, deferred compensation, company-owned life insurance contracts and variable incentive compensation.

Six months ended March 31, 2026 compared to six months ended March 31, 2025

Three months ended June 30, 2026 compared to three months ended June 30, 2025

The current and prior year quarter both included expense of $7 million for restructuring activities mainly comprised of severance, lease abandonment and other restructuring costs related to company-wide cost reduction programs.

The current and prior year quarter included $17 million and $28 million for environmental expenses, respectively.

Other items in the current quarter included accelerated depreciation of $1 million and a tax credit of $8 million.

Nine months ended June 30, 2026 compared to nine months ended June 30, 2025

The current and prior year period included expense of $14 million and $18 million, respectively, for restructuring activities mainly comprised of severance, lease abandonment and other restructuring costs related to company-wide cost reduction programs.

The current and prior year period included $28 million and $31 million for environmental expenses, respectively.

The current year period included a $2 million income on the sale of excess corporate property.

Other items in the current year period included accelerated depreciation of $1 million, a tax credit of $8 million, and a $3 million income related to excess corporate real estate sales.

See Note B of the Notes to Condensed Consolidated Financial Statements for more information.

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The timing and size of any new business ventures or acquisitions that the Company may complete may also impact its cash requirements.

During May 2026, Ashland entered into a Second Amended and Restated Credit Agreement (the "2026 Credit Agreement").

The 2026 Credit Agreement provides for a $500 million five-year revolving credit facility (including a $125 million letter of credit sublimit) (the “Revolving Credit Facility”).

Proceeds of borrowings under the 2026 Revolving Credit Facility are intended to provide ongoing working capital and for other general corporate purposes.

See Note H of the Notes to Condensed Consolidated Financial Statements for more information.

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

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Ashland provides no guarantees to JP Morgan and Taulia Alliance under this program.

The program was implemented during June 2025 and has been actively offered to suppliers.

There were $5 million and $10 million, respectively, of confirmed invoices, of which $4 million and $5 million, respectively, were paid during the three and six months ended March 31, 2026.

There were $5 million and less than $1 million of confirmed invoices remaining under this program at March 31, 2026 and September 30, 2025, respectively.

There were $6 million and $16 million, respectively, of confirmed invoices, of which $6 million and $11 million, respectively, were paid during the three and nine months ended June 30, 2026, respectively.

There were $5 million and less than $1 million of confirmed invoices remaining under this program at June 30, 2026 and September 30, 2025, respectively.

Ashland’s cash flows from operating, investing and financing activities, as reflected in the Statements of Condensed Consolidated Cash Flows, are summarized as follows:

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(In millions)

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(a) Zero denotes less than $1 million of activity.

Cash and cash equivalents increased $128 million for the six months ended March 31, 2026 and decreased $132 million for the six months ended March 31, 2025.

The $128 million increase for the six months ended March 31, 2026, was primarily driven by favorable changes in working capital (fluctuations within accounts receivable, inventory, trade payables and accrued expenses) and other operating cash flows from continuing operations which amounted to inflows of $175 million.

Cash and cash equivalents increased $225 million for the nine months ended June 30, 2026 and decreased $93 million for the nine months ended June 30, 2025.

The $225 million increase for the nine months ended June 30, 2026, was primarily driven by favorable changes in working capital (fluctuations within accounts receivable, inventory, trade payables and accrued expenses) and other operating cash flows from continuing operations which amounted to inflows of $295 million.

The current period was also affected by inflows of $25 million for the settlement of company-owned life insurance policies and $52 million of reimbursements from restricted investments.

These inflows were partially offset from outflows from payment of cash dividends, additions to property, plant and equipment and discontinued operations primarily related to retained liabilities for asbestos and environmental claims of $57 million, $51 million and $31 million, respectively.

The $132 million decrease for the six months ended March 31, 2025, was primarily driven by payment of cash dividends, additions to property, plant and equipment and stock repurchase activity of $38 million, $44 million and $100 million, respectively.

Operating cash flows from continuing operations were outflows of $21 million, while discontinued operations cash flows were outflows of $18 million.

These outflows were partially offset by inflows from short-term debt, proceeds from the sale of the Avoca business, and proceeds from the sale of a land proprerty of $50 million, $16 million and $11 million, respectively.

The $93 million decrease for the nine months ended June 30, 2025 was primarily driven by payment of cash dividends, additions to property, plant and equipment and stock repurchase activity of $57 million, $64 million and $100 million, respectively, while discontinued operations cash flows were outflows of $27 million.

These outflows were partially offset by inflows from operating activities from continuing operations, proceeds from the sale of Avoca and proceeds from the sale of a land property of $94 million, $16 million and $11 million, respectively.

The change in cash flows from operating activities from continuing operations was primarily driven by favorable working capital, including the favorable impact between periods of the U.S.

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Free Cash Flow does not reflect adjustments for certain non-discretionary cash flows such as mandatory debt repayments.

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(In millions)

Total cash flows provided (used) by operating activities from continuing operations

Total cash flows provided by operating activities from continuing operations

Additions to property, plant and equipment

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Not meaningful

Ongoing Free Cash Flow Conversion (h)

(b) Represents receipt of tax refund related to the capital loss carryback from the Nutraceutical divestiture.

(a) Represents receipt of tax refund related to the capital loss carryback from the Nutraceutical business divestiture.

(b) Represents activity associated with the U.S.

Accounts Receivable Sales Program impacting each period presented.

(d) Represents activity associated with the Foreign Accounts Receivable Sales Program impacting each period presented.

(e) Restructuring payments incurred during each period.

(f) Represents cash outflows associated with environmental and related litigation payments which will be reimbursed by the environmental trust.

(g) See Adjusted EBITDA reconciliation.

(h) Operating Cash Flow Conversion is defined as Cash flows provided (used) by operating activities from continuing operations divided by net income (loss).

(i) Ongoing Free Cash Flow Conversion is defined as Ongoing Free Cash Flow divided by Adjusted EBITDA.

Working capital (current assets minus current liabilities, excluding long-term debt due within one year) amounted to $814 million and $782 million as of March 31, 2026 and September 30, 2025, respectively.

Liquid assets (cash and cash equivalents and accounts receivable) amounted to 149% and 108% of current liabilities as of March 31, 2026 and September 30, 2025, respectively.

(d) Restructuring payments incurred during each period.

(e) Represents cash outflows associated with environmental and related litigation payments which will be reimbursed by the environmental trust.

(f) See Adjusted EBITDA reconciliation.

(g) Operating Cash Flow Conversion is defined as Cash flows provided (used) by operating activities from continuing operations divided by net income (loss).

(h) Ongoing Free Cash Flow Conversion is defined as Ongoing Free Cash Flow divided by Adjusted EBITDA.

Working capital (current assets minus current liabilities, excluding long-term debt due within one year) amounted to $868 million and $782 million as of June 30, 2026 and September 30, 2025, respectively.

Liquid assets (cash and cash equivalents and accounts receivable) amounted to 164% and 108% of current liabilities as of June 30, 2026 and September 30, 2025, respectively.

The increase in Ongoing Free Cash Flows was primarily a result of favorable working capital, lower additions to property, plant and equipment and lower variable compensation payouts between periods.

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Foreign Accounts Receivable Sales Program

(a) Includes $213 million and $231 million related to the Asbestos trust and $113 million and $116 million related to the Environmental trust as of March 31, 2026 and September 30, 2025, respectively.

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 at March 31, 2026.

In total, Ashland’s available liquidity position, which includes cash and cash equivalents and the revolving credit facility, was $939 million at March 31, 2026, compared to $811 million at September 30, 2025.

(a) Includes $220 million and $231 million related to the Asbestos trust and $112 million and $116 million related to the Environmental trust as of June 30, 2026 and September 30, 2025, respectively.

The borrowing capacity remaining under the 2026 Credit Agreement was $496 million, which reflects the full $500 million revolving credit facility less a reduction of $4 million for letters of credit outstanding at June 30, 2026.

In total, Ashland’s available liquidity position, which includes cash and cash equivalents and the revolving credit facility, was $936 million at June 30, 2026, compared to $811 million at September 30, 2025.

Ashland had no available liquidity under the U.S.

and Foreign Accounts Receivable Sales Programs as of March 31, 2026.

Ashland also maintained $326 million of restricted investments at March 31, 2026, to pay for future asbestos claims and environmental remediation and related litigation.

and Foreign Accounts Receivable Sales Programs as of June 30, 2026.

Ashland also maintained $332 million of restricted investments at June 30, 2026, to pay for future asbestos claims and environmental remediation and related litigation.

Capital resources

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Long-term debt (less debt issuance cost discounts) (a)

(a) Includes $9 million and $10 million of debt issuance cost discounts as of March 31, 2026 and September 30, 2025 , respectively.

Debt as a percent of capital employed was 42% at both March 31, 2026 and September 30, 2025.

At March 31, 2026, Ashland’s total debt had an outstanding principal balance of $1,405 million, discounts of $22 million, and debt issuance costs of $9 million.

(a) Includes $9 million and $10 million of debt issuance cost discounts as of June 30, 2026 and September 30, 2025, respectively.

Debt as a percent of capital employed was 42% at both June 30, 2026 and September 30, 2025.

At June 30, 2026, Ashland’s total debt had an outstanding principal balance of $1,403 million, discounts of $20 million, and debt issuance costs of $9 million.

Ashland has no long-term debt (excluding debt issuance costs) maturing within 2026, $4 million in 2027, $571 million due in fiscal 2028, $97 million due in 2029, zero in 2030, and $450 million in 2031.

Ashland credit ratings

Ashland’s corporate credit rating by Standard & Poor’s was downgraded to BB during the three months ended March 31, 2026, and Moody’s Investor Services was downgraded to Ba2 during the six months ended March 31, 2026.

As of March 31, 2026, both Moody’s Investor Services and Standard & Poor's outlook remained at stable.

Ashland’s corporate credit rating by Standard & Poor’s was downgraded to BB during the nine months ended June 30, 2026, and Moody’s Investor Services was downgraded to Ba2 during the nine months ended June 30, 2026.

As of June 30, 2026, both Moody’s Investor Services and Standard & Poor's outlook remained at stable.

Subsequent changes to these ratings or outlook may have an effect on Ashland’s borrowing rate or ability to access capital markets in the future.

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Ashland's 2026 Credit Agreement 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, 2026, Ashland is in compliance with all debt agreement covenant restrictions under the 2022 Credit Agreement.

As of June 30, 2026, Ashland is in compliance with all debt agreement covenant restrictions under the 2026 Credit Agreement.

The maximum consolidated net leverage ratio permitted under the 2026 Credit Agreement is 4.0.

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In general, consolidated indebtedness includes debt plus all purchase money indebtedness, banker’s acceptances and bank guaranties, deferred purchase price of property or services, attributable indebtedness and guarantees.

At March 31, 2026, Ashland’s calculation of the consolidated net leverage ratio was 2.6.

At June 30, 2026, Ashland’s calculation of the consolidated net leverage ratio was 2.3.

The minimum required consolidated interest coverage ratio under the 2026 Credit Agreement is 3.0.

The 2022 Credit Agreement defines the consolidated interest coverage ratio as the ratio of Covenant Adjusted EBITDA to

consolidated interest charges for any measurement period.

At March 31, 2026, Ashland’s calculation of the consolidated interest coverage ratio was 6.5.

The 2026 Credit Agreement defines the consolidated interest coverage ratio as the ratio of Covenant Adjusted EBITDA to consolidated interest charges for any measurement period.

At June 30, 2026, Ashland’s calculation of the consolidated interest coverage ratio was 6.9.

Any change in Covenant Adjusted EBITDA of $100 million would have an approximate 0.5x effect on the consolidated net leverage ratio and a 1.7x effect on the consolidated interest coverage ratio.

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Additional capital resources

Total equity decreased by $38 million since September 30, 2025 to $1,866 million at March 31, 2026.

The decrease of $38 million was due to dividends of $38 million and $10 million of translation losses partially offset by $6 million of common stock issued and $4 net income.

Total equity decreased by $34 million since September 30, 2025 to $1,870 million at June 30, 2026.

The decrease of $34 million was due to dividends of $57 million, $6 million of translation losses and $2 million for unrealized losses on commodity hedges partially offset by $11 million of common stock issued and $20 million of net income.

2023 Stock Repurchase program

On June 28, 2023, Ashland's board of directors authorized a new evergreen $1 billion common share repurchase program ("2023 Stock Repurchase Program").

As of March 31, 2026, $520 million remained available for repurchase under the 2023 Stock Repurchase Program.

As of June 30, 2026, $520 million remained available for repurchase under the 2023 Stock Repurchase Program.

Stock repurchase program agreements

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(In millions, except per share data)

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Stockholder dividends

Ashland paid dividends of 41.5 cents per share for the first and second quarters of fiscal 2026 and 40.5 cents per share in the first and second quarters of fiscal 2025.

On May 5, 2026, Ashland's Board declared a quarterly cash dividend of 42.0 cents per share on the company's common stock representing a 1% increase from the previous quarter.

The dividend was paid in the third quarter of fiscal 2026.

Dividends of 41.5 cents per share were paid in the first and second quarters of fiscal 2026, and the third and fourth quarters of fiscal 2025.

Dividends of 40.5 cents per share were paid in both the first and second quarters of fiscal 2025.

Capital expenditures

Capital expenditures were $31 million for the six months ended March 31, 2026, compared to $44 million for the six months ended March 31, 2025.

Capital expenditures were $51 million for the nine months ended June 30, 2026, compared to $64 million for the nine months ended June 30, 2025.

CRITICAL ACCOUNTING POLICIES

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Management has reviewed the estimates affecting these items with the Audit Committee of Ashland’s Board of Directors.

No material changes have been made to the valuation techniques during the three and six months ended March 31, 2026.

Ashland is updating its full-year fiscal 2026 sales guidance to a range of $1,835 to $1,870 million and its Adjusted EBITDA guidance to a range of $385 to $400 million.

The updated outlook reflects productivity challenges associated with the Hopewell scale-up, as well as softer energy-related demand tied to the Middle East conflict and

reduced EV driven demand for BDO based derivatives.

These impacts are partially offset by resilient demand in core end markets, ongoing pricing actions, and continued growth across the globalize and innovate platforms.

Despite a mixed macroeconomic backdrop, Ashland’s core Personal Care and Life Sciences end markets continue to show resilience, underpinned by stable fundamentals and sustained momentum in innovation‑led and globalized product offerings.

Second quarter sales trends were encouraging, reflecting solid momentum across several consumer‑focused markets, with early third quarter activity showing a continuation of this commercial strength.

While cost‑savings initiatives remain in progress, a slower‑than‑anticipated productivity ramp‑up associated with the Hopewell HEC manufacturing site is delaying the pace of benefit realization.

Ashland continues to expect the year to follow a typical seasonal cadence, with stronger performance anticipated in the second half as commercial activity builds and operational stability improves.

Updating prior guidance

$1,835 to $1,870 million

No material changes have been made to the valuation techniques during the three and nine months ended June 30, 2026.

Ashland is reaffirming its full year fiscal 2026 sales guidance of $1,835 to $1,870 million and its Adjusted EBITDA guidance of $385 to $400 million.

Ashland is also revising its adjusted EPS outlook to low-to-mid-single digit growth from mid-to-high-single digit growth, reflecting a higher tax rate associated with unfavorable discrete items.

The outlook reflects continued growth across the portfolio, ongoing momentum in higher value applications, increasing realization of recent pricing actions and strong cash generation.

Despite a mixed macroeconomic backdrop, Ashland’s core Life Sciences and Personal Care end markets continue to demonstrate resilient demand, supported by stable fundamentals, continued innovation adoption from customers and strong commercial execution.

Specialty Additives trends continue to improve, driven by share gains in coatings and performance specialties.

Ashland continues to benefit from growth in differentiated, higher value applications, including biofunctional actives, microbial protection, injectables and tablet coatings.

Recent pricing actions are contributing to results and are expected to provide greater benefit in the fourth quarter as realization increases.

Raw material and

freight costs are expected to remain elevated amid geopolitical supply pressures, although Ashland expects pricing actions to offset these impacts over time.

Updated guidance

$1,835 to $1,870 million (no change)

• Adjusted EBITDA:

$385 million to $400 million

$385 million to $400 million (no change)

• Adjusted Diluted Earnings Per Share Excluding Intangibles Amortization:

mid-to-high single-digit growth

low-to-mid single-digit growth

• Ongoing Free Cash Flow Conversion:

approximately 50 percent of Adjusted EBITDA with capital expenditures of approximately $100 million

Key planning assumptions

• Portfolio Optimization initiatives completed last year continue to support mix improvement and structural margin resiliency

• Demand in Life Sciences and Personal Care is expected to remain resilient, supported by stable fundamentals and progress across innovation-driven and globalized product lines

• Specialty Additives and Intermediates markets remain stable at trough levels, with a coatings recovery expected to be regionally uneven until broader industrial and housing activity improves.

In Specialty Additives the company is expanding its coatings product offering to shift momentum to overall growth.

Against this backdrop, the outlook differs across key end markets, with specific areas under pressure:

o Construction is expected to remain a year‑over‑year headwind as the company actively manages product mix toward higher‑value, pharma‑grade applications.

o Energy, a smaller end market exposure, is expected to decline in the second half due to the evolving conflict in the Middle East.

o EV battery manufacturing build‑outs continue to be delayed amid softer demand.

• Growth in high-value globalized platforms including biofunctional actives, microbial protection, injectables, and tablet coatings is expected to outpace underlying markets

• The manufacturing optimization program is progressing;

however, fiscal 2026 savings expectations have been reduced by approximately $10 to $12 million, reflecting delayed benefit realization driven primarily by a slower‑than‑anticipated productivity ramp‑up at the Hopewell HEC site.

Corrective actions are underway, with gradual improvement expected as operational stability is restored over time

• Raw material and freight costs are expected to trend higher amid geopolitically related supply pressures in the Middle East

• Ashland believes it is favorably positioned on the global cost curve and has implemented recent pricing actions that are expected to substantially offset these impacts

• Tariff-related uncertainty remains elevated, and the outlook assumes no material incremental impacts beyond known exposures, with mitigation actions aligned to current regulatory expectations

greater than 50 percent of Adjusted EBITDA with capital expenditures of approximately $~90 million

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Ashland’s market risk exposure at March 31, 2026 is generally consistent with the types of market risk exposures presented in Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

Ashland’s market risk exposure at June 30, 2026 is generally consistent with the types of market risk exposures presented in Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

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 2. Management’s Discussion and Analysis