Under the ~~distribution~~new expected credit loss model, Ashland records an allowance for credit losses inherent in its receivables from revenue transactions and reinsurance recoverables. The allowance for credit losses is a valuation account deducted from the amortized cost basis of the ~~remaining shares. The resulting outside stockholders’ interests in Valvoline Inc., which was approximately 17%, was presented separately as a noncontrolling interest within Ashland’s equity in~~assets to present their net carrying value at the ~~Condensed Consolidated Balance Sheets up until~~amount expected to be collected. Ashland estimates expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the ~~distribution~~collectability of the reported amount. When measuring expected credit losses, Ashland pools assets with similar country risk and credit risk characteristics. Each period the allowance for credit losses is adjusted through earnings to reflect expected credit losses over the remaining ~~shares. The amount~~lives of ~~consolidated net income attributable to these minority holders is presented as a separate caption on~~ the ~~Statement of Consolidated Comprehensive Income (Loss) for~~assets. For the three and nine months ~~ended December 31, 2016.~~

Restricted investments received from the January 2015 asbestos insurance settlement into primarily equity and corporate bond mutual funds that are designated as available-for-sale securities, classified as Level 1 measurements within the fair value hierarchy. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related deferred income taxes, included in the stockholders' equity section of the Condensed Consolidated Balance Sheets as a component of accumulated other comprehensive income (AOCI).

Investment income and realized gains and losses on ~~the available-for-sale securities~~these company-restricted investments are reported inwithin the net interest and other ~~financing~~ expense caption inon the Statements of Consolidated Comprehensive ~~Income.~~ Income (Loss). The following table provides a summary of the ~~available-for-sale securities~~activity within the investment portfolio as of ~~December 31, 2017~~June 30, 2021 and September 30, ~~2017:~~2020:

Components of environmental remediation expense included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss) are presented in the following table for the three and nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016~~2020.


	Three months ended					Nine months ended
	June 30					June 30
(In millions)	2021			2020		2021				2020
Environmental expense	$	24	$	29		$	39		$	39
Accretion		0		0			1			1
Legal expense		1		1			2			4
Total expense		25		30			42			44

Insurance receivable		0		(1	)		(1	)		(4	)
Total expense, net of receivable activity (a)	$	25	$	29		$	41		$	40

(a)

Net expense of $3 million and $6 million for the three and nine months ended June 30, 2021, respectively, and $8 million and $10 million for the three and nine months ended June 30, 2020, relates to divested businesses which qualified for treatment as discontinued operations for which certain environmental liabilities were retained by Ashland. These amounts are classified within the income from discontinued operations caption of the Statements of Consolidated Comprehensive Income (loss).

Three months ended
December 31
(In millions) 2017
2016
Environmental expense $ 12
$ 4
Accretion 1
—
Legal expense 1
2
Total expense 14
6

Insurance receivable (a)
—
—
Total expense, net of receivable activity $ 14
$ 6


~~(a)~~	~~Activity of $0 denotes value less than $1 million.~~

Environmental remediation reserves are subject to numerous inherent uncertainties that affect Ashland’s ability to estimate its share of the costs. Such uncertainties involve the nature and extent of contamination at each site, the extent of required cleanup efforts under existing environmental regulations, widely varying costs of alternate cleanup methods, changes in environmental regulations, the potential effect of continuing improvements in remediation technology, and the number and financial strength of other potentially responsible parties at multiparty sites. Although it is not possible to predict with certainty the ultimate costs of environmental remediation, Ashland currently estimates that the upper end of the reasonably possible range of future costs for identified sites could be as high as approximately ~~$412~~$490 million. The largest reserve for any site is ~~approximately 15%~~13% of the remediation reserve.

Other legal proceedings and claims

In addition to the matters described above, there are other various claims, lawsuits and administrative proceedings pending or threatened against Ashland and its current and former subsidiaries. Such actions are with respect to commercial matters, product liability, toxic tort liability, and other environmental matters, which seek remedies or damages, some of which are for substantial amounts. While Ashland cannot predict with certainty the outcome of such actions, it believes that adequate reserves have been recorded and losses already recognized with respect to such actions were immaterial as of ~~December 31, 2017~~June 30, 2021 and September 30, ~~2017~~.2020. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, Ashland believes that such potential losses were immaterial as of ~~December 31, 2017~~.June 30, 2021.

NOTE LM– EARNINGS PER SHARE

The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Stock appreciation rights (SARs), stock options and warrants available to purchase shares outstanding for each reporting period whose grant price was greater than the average market price of Ashland Common Stock for each applicable period were not included in the computation of income from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these

shares outstanding was approximately ~~0.7~~ 1million and ~~0.9~~2 million at ~~December 31, 2017~~June 30, 2021 and ~~2016,~~2020, respectively. Earnings per share is reported under the treasury stock method.


	Three months ended				Nine months ended
	June 30				June 30
(In millions, except per share data)	2021		2020		2021		2020
Numerator
Numerator for basic and diluted EPS -
Income (loss) from continuing operations	$	87	$	50	$	190	$	(491	)
Denominator
Denominator for basic EPS - Weighted- average common shares outstanding		61		60		61		61
Share based awards convertible to common shares (a)		1		1		1		0
Denominator for diluted EPS - Adjusted weighted- average shares and assumed conversions		62		61		62		61
EPS from continuing operations
Basic	$	1.42	$	0.82	$	3.13	$	(8.11	)
Diluted		1.40		0.81		3.09		(8.11	)

(a)

As a result of the loss from continuing operations attributable to Ashland during the nine months ended June 30, 2020, the effect of the share-based awards convertible to common shares would be antidilutive and have been excluded from the diluted EPS calculation.

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

NOTE L – ~~EARNINGS PER SHARE (continued)~~

Three months ended
December 31
(In millions except per share data) 2017
2016
Numerator
Numerator for basic and diluted EPS –
Loss from continuing operations $ (7 ) $ (65 )
Denominator

Denominator for basic EPS – Weighted-average

common shares outstanding 62
62
Share-based awards convertible to common shares (a)
—
—
Denominator for diluted EPS – Adjusted weighted-

average shares and assumed conversions 62
62

EPS from continuing operations attributable to Ashland
Basic $ (0.12 ) $ (1.05 )
Diluted (0.12 ) (1.05 )


~~(a)~~	As a result of the loss from continuing operations attributable to Ashland during the three months ended December 31, 2017 and 2016, the effect of the share-based awards convertible to common shares would be antidilutive. In accordance with U.S. GAAP, they have been excluded from the diluted EPS calculation.

~~NOTE M~~N– EQUITY ITEMS

~~Stock repurchase programs~~

In April 2015, Ashland's Board of Directors approved a $1 billion share repurchase authorization that was set to expire on December 31, 2017 (the 2015 stock repurchase program). This authorization allows for Ashland’s common shares to be repurchased in open market transactions, privately negotiated transactions or pursuant to one or more accelerated stock repurchase programs or Rule 10b5-1 plans.

During 2017, Ashland's Board of Directors extended the 2015 stock repurchase program indefinitely. As of December 31, 2017, $500 million of share repurchase authorization remains under the 2015 stock repurchase program.

Stockholder dividends

In May ~~2017, subsequent to the final distribution of Valvoline Inc.'s common stock,~~2021, the Board of Directors of Ashland announced a quarterly cash dividend of ~~22.5~~30 cents per share to eligible ~~shareholders at~~stockholders of record, which was paid ~~for quarterly dividends~~in the third quarter of fiscal 2021. This dividend represented a 9% increase over the previous quarter's dividend. Dividends of 27.5 cents per share were paid in the first and second quarters of fiscal 2021, each quarter of fiscal ~~2018~~2020, and the third and fourth quarters of fiscal ~~2017. This represented a reduction from the previous quarterly dividend of 39 cents per share which was paid for quarterly dividends in the first and second quarters of fiscal 2017.~~

2019.

Accumulated other comprehensive income (loss)

Components of other comprehensive income (loss) recorded in the Statements of Consolidated Comprehensive Income (Loss) are presented below, before tax and net of tax effects.


	2021							2020
(In millions)	Before tax		Tax (expense) benefit			Net of tax		Before tax			Tax (expense) benefit		Net of tax
Three months ended June 30
Other comprehensive income (loss)
Unrealized translation gain (loss)	$	23	$	0		$	23	$	7		$	0	$	7
Total other comprehensive income (loss)	$	23	$	0		$	23	$	7		$	0	$	7

Nine months ended June 30
Other comprehensive income (loss)
Unrealized translation gain (loss)	$	38	$	(1	)	$	37	$	(7	)	$	0	$	(7	)
Total other comprehensive income (loss)	$	38	$	(1	)	$	37	$	(7	)	$	0	$	(7	)

Summary of stockholders’ equity

A reconciliation of changes in stockholders’ equity are as follows:


	Three months ended						Nine months ended
	June 30						June 30
(In millions)	2021			2020			2021			2020
Common stock and paid in capital
Balance, beginning of period	$	773		$	766		$	770		$	757
Common shares issued under stock incentive and other plans (a)		4			3			7			12
Balance, end of period		777			769			777			769
Retained earnings
Balance, beginning of period		2,710			2,641			2,649			3,224
Adoption of new accounting pronouncements (b)		—			—			(2	)		—
Net income (loss)		80			37			176			(513	)
Regular dividends		(19	)		(17	)		(52	)		(50	)
Balance, end of period		2,771			2,661			2,771			2,661
Accumulated other comprehensive income (loss)
Balance, beginning of period		(369	)		(424	)		(383	)		(410	)
Unrealized translation gain (loss)		23			7			37			(7	)
Balance, end of period		(346	)		(417	)		(346	)		(417	)
Total stockholders' equity	$	3,202	��	$	3,013		$	3,202		$	3,013
Cash dividends declared per common share	$	0.300		$	0.275		$	0.850		$	0.825

(a)

Common shares issued were 24,452 shares and 14,460 for the three months ended June 30, 2021 and 2020, respectively, and 165,158 shares and 293,485 shares for the nine months ended June 30, 2021 and 2020, respectively.

(b)

Represents adjustment related to the adoption of the new guidance related to allowances for credit losses described in Note A.

Ashland recorded net income of $80 million (income of $87 million in continuing operations and loss of $7 million in discontinued operations) and net income of $37 million (income of $50 million in continuing operations and loss of $13 million in discontinued operations) in the current and prior year quarters, respectively. Ashland’s EBITDA of $122 million increased by $25 million, while Ashland’s Adjusted EBITDA was $148 million for the current quarter compared to $143 million in the prior year quarter (see U.S. GAAP reconciliation below under consolidated review). These increases were primarily driven by improved industrial volumes and favorable foreign currency, partially offset by weaker personal care volumes and increased plant, manufacturing, and shipping costs.

Ashland continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business and geographies, including how it will impact customers, employees, suppliers, vendors, business partners and distribution channels. Ashland is unable to predict the impact that the COVID-19 pandemic will have on its future financial position and operating results due to numerous uncertainties. These uncertainties include the severity of the virus, the duration of the outbreak, governmental, business or other actions, impacts on Ashland’s supply chain, the effect on customer demand, or changes to Ashland’s operations. The health of Ashland’s workforce and its ability to meet staffing needs throughout the critical functions cannot be predicted and is vital to operations. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain unknown. In addition, Ashland cannot predict the impact that the COVID-19 pandemic will have on its customers, vendors, suppliers and other business partners; however, any material effect on these parties could adversely impact Ashland.

Ashland continues to successfully navigate the uncertain environment associated with the COVID-19 pandemic. This includes the execution of shelter in place, social distancing and deep cleaning process requirements. Through the third quarter of fiscal year 2021, Ashland has not experienced any additional major operating surprises related to the COVID-19 pandemic, continues to maintain a robust supply chain in a challenging environment, had strong safety performance in the face of unprecedented pressures and improved operating discipline across each of its businesses. The consumer specialties businesses continued to show resiliency in the face of difficult economic circumstances. The industrial specialties businesses and the Intermediates and Solvents business experienced downward pressure on demand as a result of the COVID-19 pandemic’s impact on those businesses’ end markets in 2020, with improved conditions through the third quarter of 2021. Ashland’s overall liquidity remains strong and Ashland is able to meet its operating cash needs and other investing and financing cash requirements at this time, including those necessary to grow the business as economic conditions continue to improve.

The situation surrounding the COVID-19 pandemic remains fluid, and Ashland is actively managing its response in collaboration with customers, government officials, team members and business partners. For further information regarding the impact of the COVID-19 pandemic on the Company, please see Item 1A, Risk Factors in Ashland’s most recent Form 10-K filed with the SEC.

During the second quarter of fiscal year 2020, Ashland changed the manner in which it manages the business moving from a functionally led to a business led organization. This new business-centric operational redesign of core operating systems and processes lead to a realignment in both the selling, general and administrative and research and development costs (SARD) associated with each business. In addition to the realignment of SARD, a productivity review with a focus on cost of goods sold (COGS) was also initiated. Based on these initiatives, Ashland is currently targeting the following savings:

Year-to-date – Key financial results for the nine months ended June 30, 2021 and 2020 included the following:

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

Current Quarter – Operating income/loss amounted to income of $62 million and $48 million for the three months ended June 30, 2021 and 2020, respectively. The current and prior year quarters’ operating income included certain key items that were excluded to arrive at Adjusted EBITDAand are quantified in the table below in the “EBITDA and Adjusted EBITDA” section. These operating key items for the applicable periods are summarized as follows:

Operating income/loss for both the three months ended June 30, 2021 and 2020 included depreciation and amortization of $65 million and $62 million, respectively.

Year-to-date – Operating income/loss amounted to income of $174 million and loss of $403 million for the nine months ended June 30, 2021 and 2020, respectively. The current and prior year periods’ operating income included certain key items that were excluded to arrive at Adjusted EBITDAand are quantified in the table below in the “EBITDA and Adjusted EBITDA” section. These operating key items for the applicable periods are summarized as follows:

Operating income/loss for the nine months ended June 30, 2021 and 2020 included depreciation and amortization of $189 million and $183 million, respectively.

A comparative analysis of the Statements of Consolidated Comprehensive Income (Loss) by caption is provided as follows for the three and nine months ended June 30, 2021 and 2020.

The following table provides a reconciliation of the change in sales for the three and nine months ended June 30, 2021 and 2020.

Current Quarter – Sales for the current quarter increased $63 million compared to the prior year quarter. Favorable volume, including the acquisition of Schülke within the Personal Care and Household reportable segment, product pricing and foreign currency exchange increased sales by $31 million, $13 million and $19 million, respectively.

Year-to-date – Sales for the current year increased $69 million compared to the prior year period. Favorable volume, including the acquisition of Schülke within the Personal Care and Household reportable segment, product pricing and foreign currency exchange increased sales by $17 million, $6 million and $46 million, respectively.

The following table provides a reconciliation of the change in cost of sales between the three and nine months ended June 30, 2021 and 2020.

Current Quarter – Cost of sales for the current quarter increased $61 million compared to the prior year quarter. Foreign currency exchange, price/mix, higher volume, including Schülke, and higher operating costs, principally related to current global supply-chain and logistics disruptions, increased cost of sales by $9 million, $13 million, $26 million and $13 million, respectively.

Year-to-date – Cost of sales for the current year increased $49 million compared to the prior year period. Foreign currency exchange, higher volume, including Schülke, and higher operating costs, including the winter storm impact of $11 million and current global supply-chain and logistics disruptions, increased cost of sales by $22 million, $22 million and $22 million, respectively. These increases were offset by the impact of lower price/mix, which decreased cost of sales by $17 million.

Current Quarter – Selling, general and administrative expense for the current quarter decreased $15 million compared to the prior year quarter with expenses as a percent of sales decreasing 4.3 percentage points. Key drivers of the fluctuation in selling, general and administrative expense compared to the prior year quarter were:

The remaining decrease was mainly due to achieved cost savings during the three months ended June 30, 2021 from restructuring programs initiated in fiscal year 2020 offset by higher incentive compensation.

Year-to-date – Selling, general and administrative expense for the current year decreased $26 million compared to the prior year period with expenses as a percent of sales decreasing 2.1 percentage points. Key drivers of the fluctuation in selling, general and administrative expense compared to the prior year period were:

The remaining decrease was mainly due to achieved cost savings during the nine months ended June 30, 2021 from restructuring programs initiated in fiscal year 2020 offset by higher incentive compensation.

Current Quarter – Research and development expense is relatively consistent with the prior year quarter.

Year-to-date – The decrease is due to $2 million of one-time research and development credit charges in the prior year period and achieved cost savings from the restructuring programs initiated in fiscal 2020.

Current Quarter – The increase in amortization expense in the current quarter is due to the amortization of intangible assets associated with the Schülke acquisition.

Year-to-date – The increase in amortization expense in the current year period is due to the amortization of intangible assets associated with the Schülke acquisition.

Current Quarter – Other income is relatively consistent with the prior year quarter.

Year-to-date – Other income was primarily related to a gain on sale of excess corporate property of roughly $4 million in the current ~~quarter compared to net income~~year and a liquidation gain of ~~$10~~$3 million in the prior year period. Both periods included income from China subsidies.

Current Quarter – Ashland did not record an impairment charge in the current or prior year quarter. ~~Ashland’s Adjusted EBITDA~~

Year-to-Date – Ashland recorded an impairment charge of $530 million in the prior year period. See Note G for additional information.

Current Quarter - Net interest and other expense increased by ~~25% to $136~~$15 million (see U.S. GAAP reconciliation on page 41). The increase in Adjusted EBITDA was primarily due to growth in the Intermediates and Solvents and Specialty Ingredients reportable segments, which reported increases to Adjusted EBITDA of $16 million and $10 million, respectively. The significant improvement in the performance of Intermediates and Solvents was primarily driven by improved product pricing and reduced costs induring the current quarter compared to the prior year quarter. ~~Excluding~~Interest expense decreased $1 million primarily due to lower cost of debt and lower debt levels during the current quarter compared to the prior year quarter. Restricted investments included gains of $15 million compared to $31 million for the three months ended June 30, 2021 and 2020, respectively. See Note E for more information on the restricted investments.

Year-to-date - Net interest and other expense decreased by $95 million during the current year compared to the prior year period. Interest expense decreased $20 million primarily due to lower cost of debt and lower debt levels during the current year compared to the prior year period excluding accelerated debt issuance costs and original issuance discount costs. Ashland incurred $8 million of accelerated debt issuance costs and original issuance discount costs, as well as $59 million of debt refinancing costs during the prior year period. Restricted investments included gains of $26 million compared to $9 million for the nine months ended June 30, 2021 and 2020, respectively. See Note E for more information on the restricted investments.

Current Quarter – Other net periodic benefit income is consistent with the prior year quarter.

Year-to-date – Other net periodic benefit income is consistent with the prior year period.

Current Quarter – The activity in the current quarter relates to a $2 million gain in transaction net costs associated with the personal care acquisition of ~~Pharmachem,~~Schülke, including a gain of $4 million associated with foreign currency derivatives entered into to mitigate the ~~increase~~foreign exchange exposure of the purchase price.

Year-to-date – The activity in ~~profitability~~the current year relates to a $3 million expense in transaction net costs associated with the personal care acquisition of Schülke, including a gain of $1 million associated with foreign currency derivatives entered into to mitigate the foreign exchange exposure of the purchase price. In addition there was also a $14 million gain related to the sale of a Specialty Additives facility within the current period. The activity in the prior year related to post-closing adjustments for certain divestitures.

Current Quarter – Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was a benefit of 38% for

the three months ended June 30, 2021. The current quarter tax rate was impacted by jurisdictional income mix, as well as favorable discrete items of $33 million primarily related to uncertain tax positions.

The overall effective tax rate was an expense of 19% for the three months ended June 30, 2020 and was impacted primarily by income mix and unfavorable discrete items of $4 million.

Year-to-date – Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was a benefit 13% for the nine months ended June 30, 2021 and was impacted by jurisdictional income mix, as well as favorable discrete items of $53 million primarily related to the sale of a Specialty ~~Ingredients~~Additives facility and uncertain tax positions.

The overall effective tax rate was a benefit of 4% for the nine months ended June 30, 2020 and was primarily impacted by nondeductible goodwill impairment of $527 million as well as $20 million favorable tax discrete items from the tax benefit related to the Swiss Tax Reform enacted in the first quarter of fiscal 2020.

Key items are defined as the financial effects from significant transactions that may have caused short-term fluctuations in net income and/or operating income which Ashland believes do not accurately reflect Ashland’s underlying business performance and trends. Tax specific key items are defined as the financial effects from tax specific financial transactions, tax law changes or other matters that fall within the definition of key items as previously described. The effective tax rate, excluding key items, which is a non-GAAP measure, has been prepared to illustrate the ongoing tax effects of Ashland’s operations. Management believes investors and analysts use this financial measure in assessing Ashland's business performance and that presenting this non-GAAP measure on a consolidated basis assists investors in better understanding Ashland’s ongoing business performance and enhancing their ability to compare period-to-period financial results.

The effective tax rate during the three and nine months ended June 30, 2021 and 2020 was significantly impacted by the following tax specific key items:

The following table is a calculation of the effective tax rate, excluding these key items.

Current Quarter – The activity for Water Technologies, Distribution and Composites/Marl facility during the current and prior year quarters was related to post-closing adjustments. In the prior year quarter,as a result of the divestiture of the Composites segment and Marl facility, the related operating results were reflected as discontinued operations (net of tax) within the Statements of Consolidated Comprehensive Income (Loss). For the Maleic business component of the Composites business not sold to INEOS, the sales and pre-tax operating income included in discontinued operations were $10 million and $2 million, respectively, for the prior year quarter. Asbestos activity in the current and prior year quarter relates to Ashland's annual update associated with asbestos related litigation.

Year-to-date – The activity for Valvoline, Water Technologies, Distribution and Composites/Marl facility during the current and prior year periods was related to post-closing adjustments. In the prior year period,as a result of the divestiture of the Composites segment and Marl facility, the related operating results were reflected as discontinued operations (net of tax) within the Statements of Consolidated Comprehensive Income (Loss). For the Maleic business component of the Composites business not sold to INEOS, the sales and pre-tax operating income included in discontinued operations were $38 million and $9 million, respectively, for the prior year period. Asbestos activity in the current and prior year period primarily relates to Ashland's annual update associated with asbestos related litigation.

A comparative analysis of the components of other comprehensive income is provided below for the three and nine months ended June 30, 2021 and 2020.

Current Quarter – Total other comprehensive income (loss), net of tax, for the current quarter increased $16 million compared to the prior year quarter ~~was~~ primarily ~~driven by improvements~~as a result of the following:



For the three months ended June 30, 2021, the change in ~~volume and mix and favorable~~unrealized gain (loss) from foreign currency ~~exchange.~~

~~Tax law changes~~

~~The Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35%~~translation adjustments resulted in a gain of $23 million compared to ~~21%, requires companies to pay~~ a ~~one-time transition tax on earnings~~gain of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. At December 31, 2017, Ashland has not completed the internal accounting assessment for the tax effects of enactment of the Tax Act; however, Ashland determined a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. Ashland recognized a provisional amount$7 million for the three months ended ~~December 31, 2017, which is included~~June 30, 2020. The fluctuations in unrealized translation gains and losses are primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars.

Year-to-date – Total other comprehensive income (loss), net of tax, for the current year increased $44 million compared to the prior year period primarily as a ~~component~~result of ~~income tax expense~~the following:



For the nine months ended June 30, 2021, the change in unrealized gain (loss) from ~~continuing operations. Ashland recorded net unfavorable tax~~foreign currency translation adjustments resulted in a gain of ~~$16~~$37 million compared to a loss of $7 million for the nine months ended June 30, 2020. The fluctuations in unrealized translation gains and losses are primarily ~~related~~due to ~~deferred tax rate changes and a one-time transition tax assessed on~~translating foreign ~~cash and unremitted earnings.~~subsidiary financial statements from local currencies to U.S. Dollars.

~~RESULTS OF OPERATIONS – CONSOLIDATED REVIEW~~

Use of non-GAAP measures

Ashland has included within this document the following non-GAAP measures, on both a consolidated and reportable segment basis, which are not defined within U.S. GAAP and do not purport to be alternatives to net income or cash flows from operating activities as a measure of operating performance or cash flows:



EBITDA -– net income (loss), plus income tax expense (benefit), net interest and other ~~financing~~ expenses, and depreciation and amortization.



Adjusted EBITDA -– EBITDA adjusted for noncontrolling interests, discontinued operations, net ~~gain~~income (loss) on acquisitions and divestitures, other income and (expense) and key items (including the remeasurement gains and losses related to pension and other postretirement plans).



Adjusted EBITDA margin -– Adjusted EBITDA ~~which can include pro forma adjustments,~~ divided by sales.



Adjusted diluted earnings per share (EPS) -– income (loss) from continuing operations, adjusted for key items, net of tax, divided by the average outstanding diluted shares for the applicable period.



Adjusted diluted earnings per share (EPS) excluding intangibles amortization expense – Adjusted earnings per share adjusted for intangibles amortization expense net of tax, divided by the average outstanding diluted shares for the applicable period.



Free cash flow -– operating cash flows less capital expenditures and certain other adjustments as applicable.

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

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

operating expenses, providing a perspective not immediately apparent from net income and operating income. The adjustments Ashland makes to derive the non-GAAP measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in net income and operating income and which Ashland does not consider to be the fundamental attributes or primary drivers of its business. EBITDA and Adjusted EBITDA provide disclosure on the same basis as that used by Ashland’s management to evaluate financial performance on a consolidated and reportable segment basis and provide consistency in our financial reporting, facilitate internal and external comparisons of Ashland’s historical operating performance and its business units and provide continuity to investors for comparability purposes.

The Adjusted diluted EPS metric enables Ashland to demonstrate what effect key items have on an earnings per diluted share basis by taking income (loss) from continuing operations, adjusted for key items after tax that have been identified in the Adjusted EBITDA table, and dividing by the average outstanding diluted shares for the applicable period. Ashland’s management believes this presentation is helpful to illustrate how the key items have impacted this metric during the applicable period.

The Adjusted diluted EPS, excluding intangibles amortization expense metric enables Ashland to demonstrate the impact of non-cash intangibles amortization expense on EPS, in addition to the key items previously mentioned. Ashland’s management believes this presentation is helpful to illustrate how previous acquisitions impact applicable period results.

The free cash flow metric enables Ashland to provide a better indication of the ongoing cash being generated that is ultimately available for both debt and equity holders as well as other investment opportunities. Unlike cash flow provided by operating activities, free cash flow includes the impact of capital expenditures from continuing operations, providing a more complete picture of cash generation. Free cash flow has certain limitations, including that it does not reflect adjustment for certain non-discretionary cash flows such as mandatory debt repayments. The amount of mandatory versus discretionary expenditures can vary significantly between periods.

Although Ashland ~~provides~~may provide forward-looking guidance for Adjusted EBITDA, Adjusted diluted EPS and free cash flow, Ashland is not reaffirming or providing forward-looking guidance for U.S. GAAP-reported financial measures or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. 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.

These non-GAAP measures should be considered supplemental in nature and should not be construed as more significant than comparable measures defined by U.S. GAAP. Limitations associated with the use of these non-GAAP measures include that these measures do not present all of the amounts associated with our results as determined in accordance with U.S. GAAP. The non-GAAP measures provided are used by Ashland management and may not be determined in a manner consistent with the methodologies used by other companies. EBITDA and Adjusted EBITDA provide a supplemental presentation of Ashland’s operating performance on a consolidated and reportable segment basis. Adjusted EBITDA generally includes adjustments for items that impact comparability between periods. In addition, certain financial covenants related to Ashland’s ~~2017~~2020 Credit Agreement are based on similar non-GAAP measures and are defined further in the sections that ~~reference~~refer to this metric.

~~In accordance with U.S. GAAP, Ashland recognizes actuarial gains~~

EBITDA and ~~losses for defined benefit pension and other postretirement benefit plans annually in the fourth quarter~~Adjusted EBITDA

EBITDA totaled income of each fiscal year and whenever a plan is determined to qualify for a remeasurement during a fiscal year. Actuarial gains and losses occur when actual experience differs from the estimates used to allocate the change in value of pension and other postretirement benefit plans to expense throughout the year or when assumptions change, as they may each year. Significant factors that can contribute to the recognition of actuarial gains and losses include changes in discount rates used to remeasure pension and other postretirement obligations on an annual basis or upon a qualifying remeasurement, differences between actual and expected returns on plan assets and other changes in actuarial assumptions, for example, the life expectancy of plan participants. Management believes Adjusted EBITDA,

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

which includes the expected return on pension plan assets yet excludes both the actual return on pension plan assets and the impact of actuarial gains and losses, provides investors with a meaningful supplemental presentation of Ashland’s operating performance (see the Adjusted EBITDA reconciliation table on page 41 for additional details on exact amounts included within this non-GAAP measure related to pension and other postretirement plans.) Management believes these actuarial gains and losses are primarily financing activities that are more reflective of changes in current conditions in global financial markets (and in particular interest rates) that are not directly related to the underlying business. For further information on the actuarial assumptions and plan assets referenced above, see Note M of the Notes to Consolidated Financial Statements within the 2017 Form 10-K.

~~Consolidated review~~

~~Net income~~

Ashland’s net income is primarily affected by results within operating income, net interest and other financing expense, income taxes, discontinued operations and other significant events or transactions that are unusual or nonrecurring.

~~Key financial results for the three months ended December 31, 2017 and 2016 included the following:~~

~~Ashland’s net loss attributable to Ashland amounted to $4~~$122 million and $1$97 million for the three months ended ~~December 31, 2017~~June 30, 2021 and ~~2016,~~2020, respectively, orand income of $361 million and a loss of ~~$0.07 and $0.01 diluted earnings per share, respectively.~~

~~Ashland’s net income attributable to noncontrolling interest amounted to $11~~$238 million for the ~~three~~nine months ended ~~December 31, 2016~~June 30, 2021 and ~~reflects the noncontrolling interest of Valvoline Inc. before the final separation occurred on May 12, 2017.~~

Discontinued operations, which are reported net of taxes, resulted in income of $3 million and $75 million during the three months ended December 31, 2017 and 2016, respectively. The activity within discontinued operations for the three months ended December 31, 2016 includes the operating results of Valvoline Inc.

~~Loss from continuing operations, which excludes results from discontinued operations, amounted to $7 million and $65 million for the three months ended December 31, 2017 and 2016, respectively.~~

The effective income tax rate was 200% and 39% for the three months ended December 31, 2017 and 2016, and was impacted by certain discrete items in both the current and prior year quarters. The current quarter rate was primarily impacted by income mix and net unfavorable tax discrete adjustments of $16 million related to the Tax Act.

Ashland incurred pretax net interest and other financing expense of $31 million and $122 million for the three months ended December 31, 2017 and 2016, respectively. The prior year quarter was impacted by $92 million of net charges associated with debt financing activity.

~~Operating income was $39 million and $15 million for the three months ended December 31, 2017 and 2016, respectively.~~

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

~~Operating income~~

Operating income amounted to $39 million and $15 million for the three months ended December 31, 2017 and 2016, respectively. The current and prior year quarters' operating income included certain key items that were excluded to arrive at Adjusted EBITDA. These key items are summarized as follows:

•~~$11 million of environmental charges during the three months ended December 31, 2017;~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

•~~Separation, restructuring and other costs and accelerated depreciation include the following:~~


◦	~~$6 million and $22 million of costs related to the separation of Valvoline during the three months ended December 31, 2017 and 2016, respectively;~~


◦	~~$4 million of accelerated depreciation related to the planned closure of an office building during the three months ended December 31, 2017;~~


◦	~~$2 million of accelerated depreciation for the termination of a contract at a manufacturing facility during the three months ended December 31, 2017;~~


◦	~~$1 million of severance and other restructuring charges for the closure of a manufacturing plant during the three months ended December 31, 2017; and~~


◦	~~$1 million of integration costs related to the acquisition of Pharmachem for the three months ended December 31, 2017;~~

~~Remeasurement gain of $2 million associated with the discontinuation of certain post-employment health and life insurance benefits during the three months ended December 31, 2016; and~~

~~a $5 million charge for a legal reserve during the three months ended December 31, 2016.~~

Operating income for the three months ended December 31, 2017 and 2016 included depreciation and amortization of $73 million and $68 million, respectively (which excluded accelerated depreciation of $6 million for the three months ended December 31, 2017).

~~EBITDA and Adjusted EBITDA~~

~~EBITDA totaled $114 million and $159 million for the three months ended December 31, 2017 and 2016,~~2020, 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. Management believes the use of such non-GAAP measures on a consolidated and reportable segment basis assists investors in understanding the ~~impact of Ashland's previous noncontrolling interest in Valvoline Inc.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Three months ended
December 31
(In millions) 2017
2016
Net income (loss) $ (4 ) $ 10
Income tax expense (benefit) 14
(41 )
Net interest and other financing expense 31
122
Depreciation and amortization (a)
73
68
EBITDA 114
159
Income from discontinued operations (net of tax) (3 ) (75 )
Environmental reserve adjustments 11
—
Separation, restructuring and other costs 8
22
Accelerated depreciation 6
—
Legal reserve —
5
Gain on post-employment plan remeasurement —
(2 )
Adjusted EBITDA (b)
$ 136
$ 109


~~(a)~~	~~Excludes $6 million of accelerated depreciation for the three months ended December 31, 2017.~~

ongoing operating performance by presenting the financial results between periods on a more comparable basis.


	Three months ended						Nine months ended
	June 30						June 30
(In millions)	2021			2020			2021				2020
Net income (loss)	$	80		$	37		$	176		$	(513	)
Income tax expense (benefit)		(24	)		12			(22	)		(21	)
Net interest and other expense		1			(14	)		18			113
Depreciation and amortization		65			62			189			183
EBITDA		122			97			361			(238	)
Loss from discontinued operations (net of tax)		7			13			14			22
Key items included in EBITDA:
Restructuring, separation and other costs		(2	)		14			10			36
Goodwill impairment		—			—			—			530
Inventory adjustment		2			—			2			4
Capital project impairment		—			—			9			—
Environmental reserve adjustments		21			19			21			19
Net gain (loss) on acquisitions and divestitures		(2	)		—			(11	)		—
Total key items included in EBITDA		19			33			31			589
Adjusted EBITDA	$	148		$	143		$	406		$	373

Total key items included in EBITDA	$	19		$	33		$	31		$	589
Accelerated amortization of debt issuance costs		—			—			—			8
Debt refinancing costs		—			—			—			59
Unrealized (gain) loss on securities		(15	)		(31	)		(26	)		(9	)
Total key items, before tax	$	4		$	2		$	5		$	647

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. Key items are defined as the financial effects from significant transactions that may have caused short-term fluctuations in net income and/or operating income which Ashland believes do not accurately reflect Ashland’s underlying business performance and trends. The Adjusted diluted EPS for the income (loss) from continuing operations in the following table has been prepared to illustrate the ongoing effects of Ashland’s ~~operations since management~~operations. Management believes ~~the~~investors and analysts use ofthis financial measure in assessing Ashland's business performance and that presenting this non-GAAP ~~measures~~measure on a consolidated ~~and reportable segment~~ basis assists investors in better understanding Ashland’s ongoing business performance and enhances their ability to compare period-to-period financial results.


	Three months ended						Nine months ended
	June 30						June 30
	2021			2020			2021				2020
Diluted EPS from continuing operations (as reported)	$	1.40		$	0.81		$	3.09		$	(8.11	)
Key items, before tax:
Restructuring, separation and other costs		(0.04	)		0.23			0.16			0.58
Environmental reserve adjustments		0.33			0.32			0.33			0.32
Capital project impairment		—			—			0.16			—
Unrealized (gain) loss on securities		(0.24	)		(0.51	)		(0.42	)		(0.15	)
Goodwill impairment		—			—			—			8.75
Inventory adjustment		0.03			—			0.03			0.06
Accelerated amortization of debt issuance costs		—			—			—			0.13
Debt refinancing costs		—			—			—			0.97
Net gain (loss) on acquisitions and divestitures		(0.03	)		—			(0.17	)		—
Key items, before tax		0.05			0.04			0.09			10.66
Tax effect of key items (a)		(0.02	)		(0.01	)		0.02			(0.33	)
Key items, after tax		0.03			0.03			0.11			10.33
Tax specific key items:
Restructuring and separation activity		—			—			(0.22	)		—
Uncertain tax positions		(0.52	)		—			(0.63	)		—
Other tax reform related activity		—			—			—			(0.41	)
Tax specific key items (b)		(0.52	)		—			(0.85	)		(0.41	)
Total key items		(0.49	)		0.03			(0.74	)		9.92
Adjusted diluted EPS from continuing operations (non-GAAP)	$	0.91		$	0.84		$	2.35		$	1.81
Amortization expense adjustment (net of tax) (c)	$	0.31		$	0.28		$	0.86		$	0.83
Adjusted diluted EPS from continuing operations (non-GAAP) excluding intangibles amortization expense	$	1.22		$	1.12		$	3.21		$	2.64

(a)

Represents the ~~ongoing operating performance by presenting~~diluted EPS impact from the ~~financial results between periods on a more comparable basis.~~

tax effect of the key items that are identified above.

Three months ended
December 31
2017
2016
Diluted EPS from continuing operations (as reported) $ (0.12 ) $ (1.05 )
Key items 0.54
1.19
Adjusted diluted EPS from continuing operations (non-GAAP) $ 0.42
$ 0.14

(b)

~~Statements~~Represents the diluted EPS impact from tax specific financial transactions, tax law changes or other matters that fall within the definition of ~~Consolidated Comprehensive Income – caption review~~

~~A comparative analysis~~key items. For additional explanation of these tax specific key items, see the income tax expense (benefit) discussion within the Statements of Consolidated Comprehensive Income by(Loss) caption ~~is provided as follows~~review section above.

(c)

Amortization expense adjustment (net of tax) tax rates were 21% for the three and nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

Three months ended December 31
(In millions) 2017
2016
Change

Sales $ 842
$ 704
$ 138

~~The following table provides a reconciliation of the change in sales between the three months ended December 31, 2017 and 2016.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Three months ended
(In millions) December 31, 2017
Acquisitions and divestitures $ 63
Pricing 30
Currency exchange 20
Volume 18
Product mix 7
Change in sales $ 138

Sales for the current quarter increased $138 million compared to the prior year quarter. The acquisition of Pharmachem within the Specialty Ingredients reportable segment increased sales by $58 million, or 8%, while the net impact of other acquisitions and divestitures increased sales by $5 million. Improvements in pricing increased sales by $30 million, or 4%, while favorable foreign currency exchange increased sales by $20 million, or 3%. Higher volumes and changes in product mix increased sales by $18 million and $7 million, respectively.

Three months ended December 31
(In millions) 2017
2016
Change
Cost of sales $ 613
$ 515
$ 98
Gross profit as a percent of sales 27.2 % 26.8 %

Fluctuations in cost of sales are driven primarily by raw material prices, volume and changes in product mix, currency exchange, acquisitions and divestitures and other certain charges incurred as a result of changes or events within the businesses or restructuring activities. The following table provides a quantified reconciliation of the changes in cost of sales between the three months ended December 31, 2017 and 2016.

Three months ended
(In millions) December 31, 2017
Changes in:
Acquisitions and divestitures $ 50
Production costs 20
Currency exchange 15
Volume 8
Product mix 4
Severance and other restructuring costs 1
Change in cost of sales $ 98

Cost of sales for the current quarter increased $98 million compared to the prior year quarter. The Pharmachem acquisition increased cost of sales by $44 million, or 9%, while the net impact of other acquisitions and divestitures increased cost of sales by $6 million. Unfavorable production costs and foreign currency exchange increased cost of sales by $20 million, or 4%, and $15 million, or 3%, respectively. Higher volumes and changes in product mix increased cost of sales by $8 million and $4 million, respectively, while the current quarter also included $1 million of severance and other restructuring charges related to a plant closure.

Three months ended December 31
(In millions) 2017
2016
Change
Selling, general and administrative expense $ 171
$ 157
$ 14
As a percent of sales 20.3 % 22.3 %

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Selling, general and administrative expense for the current quarter increased $14 million compared to the prior year quarter with expenses as a percent of sales decreasing 2.0 percentage points. Key drivers of the fluctuation in selling, general and administrative expense compared to the prior year quarter were:

~~$10 million of incremental costs related to Pharmachem’s operations and $1 million of Pharmachem integration costs during the current quarter;~~

~~$14 million and $6 million in net environmental-related expenses during the current and prior year quarters, respectively;~~

~~an increase of $7 million due to higher employee-related costs in the current quarter;~~

~~an increase of $5 million due to unfavorable foreign currency exchange in the current quarter;~~

~~$4 million of accelerated depreciation related to the planned closure of an office building during the current quarter;~~

~~$6 million of costs related to the separation of Valvoline during the current quarter compared to $22 million in the prior year quarter; and~~

~~a $5 million charge for a legal reserve during the prior year quarter.~~

Three months ended December 31
(In millions) 2017
2016
Change
Research and development expense $ 21
$ 20
$ 1

~~Research and development expense remained relatively consistent with the prior year quarter.~~

Three months ended December 31
(In millions) 2017
2016
Change
Equity and other income

Equity income (a)
$ —
$ —
$ —
Other income 2
3
(1 )
$ 2
$ 3
$ (1 )


~~(a)~~	~~Activity of $0 denotes value less than $1 million.~~

~~Equity and other income remained relatively consistent with the prior year quarter.~~

Three months ended December 31
(In millions) 2017
2016
Change
Net interest and other financing expense (income)
Interest expense $ 34
$ 126
$ (92 )
Interest income (1 ) (1 ) —
Available-for-sale securities income (3 ) (3 ) —
Other financing costs 1
—
1
$ 31
$ 122
$ (91 )

Net interest and other financing expense decreased $91 million during the current quarter compared to the prior year quarter. The current quarter decrease in interest expense was primarily due to the prior year quarter including $92 million of accelerated accretion related to the December 2016 tender offer of the 2029 notes. Available-for-sale securities income of $3 million during both the current and the prior year quarters represents investment income and realized gains related to restricted investments discussed in Note E of the Notes to Condensed Consolidated Financial Statements.

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Three months ended December 31
(In millions) 2017
2016
Change
Other net periodic benefit income $ —
$ 2
$ (2 )

~~The income in the prior year quarter primarily related to a $2 million gain on the remeasurement of certain post-employment health and life insurance benefit plans that were discontinued.~~

Three months ended December 31
(In millions) 2017
2016
Change
Net loss on divestitures $ 1
$ 1
$ —

~~The activity in the current and prior year quarters primarily related to post-closing adjustments for certain divestitures.~~

Three months ended December 31
(In millions) 2017
2016
Change
Income tax expense (benefit) $ 14
$ (41 ) $ 55
Effective tax rate 200 % 39 %

~~The overall effective tax expense rate was 200%~~20% for the three and nine months ended December 31, 2017 and was primarily impacted by the current quarter income mix and net unfavorable tax discrete adjustments of $16 million related to the enactment of the Tax Act. These net unfavorable adjustments primarily included deferred tax rate changes and a one-time transition tax assessed on foreign cash and unremitted earnings.

~~The overall effective tax benefit rate was 39% for the three months ended December 31, 2016 and was primarily impacted by income mix.~~

June 30, 2020.

Three months ended December 31
(In millions) 2017
2016
Change
Income from discontinued operations (net of tax)
Valvoline $ 3
$ 75
$ (72 )

As a result of the full separation of Valvoline Inc. on May 12, 2017, the operating results related to Valvoline Inc., including the operating results of the former Valvoline reportable segment, have been reflected as discontinued operations (net of tax) within the Statement of Consolidated Comprehensive Income (Loss). The activity within the current quarter represents subsequent adjustments that were made in conjunction with the Tax Matters Agreement. See Note B for more information on the Tax Matters Agreement. During the prior year quarter, Valvoline's sales and pre-tax operating income included in discontinued operations were $489 million and $120 million, respectively.

Three months ended December 31
(In millions) 2017
2016
Change
Net income attributable to noncontrolling interest $ —
$ 11
$ (11 )

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Since Ashland's ownership interest in Valvoline Inc. was approximately 83% until the final separation on May 12, 2017, the amount of net income attributable to the outside stockholders' approximately 17% noncontrolling interest in Valvoline Inc. is presented within this caption on the Statement of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016.

~~Other comprehensive income (loss)~~

~~A comparative analysis of the components of other comprehensive income (loss) is provided below for the three months ended December 31, 2017 and 2016.~~

Three months ended December 31
(In millions) 2017
2016
Change
Other comprehensive income (loss) (net of taxes)
Unrealized translation gain (loss) $ 3
$ (146 ) $ 149
Net change in available-for-sale securities 8
—
8
Pension and postretirement obligation adjustment —
(1 ) 1
$ 11
$ (147 ) $ 158

~~Total other comprehensive income, net of tax, for the current quarter increased $158 million compared to the prior year quarter as a result of the following components:~~

For the three months ended December 31, 2017, the change in unrealized gain (loss) from foreign currency translation adjustments was a gain of $3 million compared to a loss of $146 million for the three months ended December 31, 2016. The fluctuations in unrealized translation gains and losses are primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars.

~~Gains on available-for-sale securities related to restricted investments amounted to $8 million, net of tax, during the three months ended December 31, 2017.~~

Pension and postretirement obligation adjustment was $1 million for the three months ended December 31, 2016. This amount related to amortization of unrecognized prior services credits for pension and other postretirement benefit plans and was reclassified into net income during the prior year quarter.

RESULTS OF OPERATIONS – REPORTABLE SEGMENT REVIEW

~~Subsequent to completing the separation from Valvoline Inc. on May 12, 2017, Ashland's operations are managed within the following three~~

Ashland’s reportable ~~segments:~~segments include Life Sciences, Personal Care & Household, Specialty ~~Ingredients, Composites~~Additives, Performance Adhesives and Intermediates and Solvents.

Unallocated and Other includes corporate governance activities and certain legacy matters. Ashland has also provided subtotals by its consumer and industrial businesses to reflect the end markets served by each reportable segment.

Results of Ashland’s reportable segments are presented based on its management and internal accounting structure. The structure is specific to Ashland; therefore, the financial results of Ashland’s reportable segments are not necessarily comparable with similar information for other ~~comparable~~ companies. Ashland allocates all significant costs to its reportable segments except for certain significant company-wide restructuring activities, certain corporate governance costs and other costs or ~~adjustments~~activities that relate to former businesses that Ashland no longer operates. 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 income caption on the Statements of 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.

The following table discloses sales, operating income, depreciation and amortization and EBITDA by reportable segment for the three and nine months ended June 30, 2021 and 2020.


	Three months ended						Nine months ended
	June 30						June 30
(In millions - unaudited)	2021			2020			2021			2020
SALES
Life Sciences	$	193		$	189		$	548		$	528
Personal Care & Household		147			155			409			451
Consumer Specialties		340			344			957			979
Specialty Additives		169			135			474			429
Performance Adhesives		94			70			267			229
Industrial Specialties		263			205			741			658
Intermediates and Solvents		49			37			118			102
Intersegment sales (a)
Intermediates and Solvents		(15	)		(12	)		(30	)		(22	)
	$	637		$	574		$	1,786		$	1,717
OPERATING INCOME (LOSS)
Life Sciences	$	37		$	40		$	101		$	97
Personal Care & Household		16			16			49			(309	)
Consumer Specialties		53			56			150			(212	)
Specialty Additives (b)		15			15			36			(137	)
Performance Adhesives		13			13			52			40
Industrial Specialties		28			28			88			(97	)
Intermediates and Solvents		11			7			17			(7	)
Unallocated and other		(30	)		(43	)		(81	)		(87	)
	$	62		$	48		$	174		$	(403	)
DEPRECIATION EXPENSE
Life Sciences	$	9		$	8		$	26		$	24
Personal Care & Household		10			10			29			30
Consumer Specialties		19			18			55			54
Specialty Additives		16			15			49			46
Performance Adhesives		2			4			9			10
Industrial Specialties		18			19			58			56
Intermediates and Solvents		4			4			10			10
	$	41		$	41		$	123		$	120
AMORTIZATION EXPENSE
Life Sciences	$	7		$	7		$	21		$	21
Personal Care & Household		11			9			30			27
Consumer Specialties		18			16			51			48
Specialty Additives		5			5			14			14
Performance Adhesives		1			—			1			1
Industrial Specialties		6			5			15			15
Intermediates and Solvents		—			—			—			—
	$	24		$	21		$	66		$	63
EBITDA (c)
Life Sciences	$	53		$	55		$	148		$	142
Personal Care & Household		37			35			108			(252	)
Consumer Specialties		90			90			256			(110	)
Specialty Additives		36			35			99			(77	)
Performance Adhesives		16			17			62			51
Industrial Specialties		52			52			161			(26	)
Intermediates and Solvents		15			11			27			3
Unallocated and other		(30	)		(43	)		(81	)		(87	)
	$	127		$	110		$	363		$	(220	)

(a)

Intersegment sales from Intermediates and Solvents are accounted for at prices that approximate fair value. All other intersegment sales are accounted for at cost.

(b)

Includes a capital project impairment of $9 million for the nine months ended June 30, 2021 relating to a long-term capital project plan change at a plant facility.

(c)

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Excludes income (loss) from discontinued operations, other net periodic benefit income (expense) and net income (loss) on divestitures. See the Statement of Consolidated Comprehensive Income (Loss) for applicable amounts excluded.

Consumer Specialties

The Consumer Specialties business is comprised of the following reportable segments:

Life Sciences

Life Sciences is comprised of pharmaceuticals, nutrition, nutraceuticals, agricultural chemicals, advanced materials and fine chemicals. Pharmaceutical solutions include controlled release polymers, disintegrants, film coatings, solubilizers, and tablet binders. Nutrition solutions include thickeners, stabilizers, emulsifiers and additives for enhancing mouthfeel, controlling moisture migration, reducing oil uptake and controlling color. Nutraceutical solutions include products for weight management, joint comfort, stomach and intestinal health, sports nutrition and general wellness, and providing custom formulation, toll processing and particle engineering solutions. Customers include pharmaceutical, food, beverage, nutraceuticals and supplements manufacturers, hospitals and radiologists and industrial manufacturers.

Personal Care & Household

Personal Care & Household is comprised of biofunctionals, preservatives, skin care, sun care, oral care, hair care and household. These businesses have a broad range of nature-based, biodegradable, and performance-enhancing ingredients for customer-driven solutions to help protect, renew, moisturize and revitalize skin and hair, and provide solutions for toothpastes, mouth washes and rinses, denture cleaning and care for teeth. Household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers for household, industrial and institutional cleaning products. Customers include formulators at large multinational branded consumer products companies and smaller, independent boutique companies.

On April 30, 2021, Ashland completed its acquisition of the Schülke personal care business. See Note B within the Notes to the Condensed Consolidated Financial Statements for more information.

June 2021 quarter compared to June 2020 quarter

Consumer Specialties’ sales decreased $4 million to $340 million in the current quarter. Life Sciences represented an increase of $4 million, offset by a decrease of $8 million for Personal Care & Household. Lower volume, net of the Schülke acquisition, decreased sales by $15 million. Favorable currency exchange and product pricing increased sales for Consumer Specialties by $10 million and $1 million, respectively.

Operating income decreased $3 million to income of $53 million for the current quarter. Life Sciences and Personal Care & Household recorded income of $37 million and $16 million, respectively. Favorable foreign currency exchange and lower costs increased operating income by $7 million and $10 million, respectively. These increases were more than offset by an inventory adjustment related to the Schülke acquisition, unfavorable price/mix and lower volume which decreased operating income by $2 million, $10 million and $8 million, respectively. Current quarter EBITDA remained consistent at $90 million while Adjusted EBITDA increased $2 million to $92 million, of which $53 million was in Life Sciences and $39 million in Personal Care & Household. Adjusted EBITDA margin increased 0.9 percentage points in the current quarter to 27.1%.

Fiscal 2021 year-to-date compared to fiscal 2020 year-to-date

Consumer Specialties’ sales decreased $22 million to $957 million in the current period. Life Sciences represented an increase of $20 million, offset by a decrease of $42 million for Personal Care & Household. Favorable currency exchange increased sales for Consumer Specialties by $24 million. These increases were more than offset by product pricing and lower volume, net of the Schülke acquisition, which decreased sales by $2 million and $44 million, respectively.

Operating income increased $362 million to income of $150 million for the current period. Life Sciences and Personal Care & Household recorded income of $101 million and $49 million, respectively. Favorable foreign currency exchange, lower costs, a prior year goodwill impairment and prior year restructuring costs increased operating income by $18 million, $20 million, $356 million and $1 million, respectively. These increases were partially offset by an inventory adjustment related to the Schülke acquisition, lower volume, unfavorable price/mix and storm related unplanned plant shutdown costs which decreased operating income by $2 million, $18 million, $2 million and $11 million, respectively. Current period EBITDA increased $366 million to $256 million, and Adjusted EBITDA increased $11 million to $258 million of which $5 million was in Life Sciences and $6 million in Personal Care & Household. Adjusted EBITDA margin increased 1.8 percentage points in the current period to 27.0%.

EBITDA and Adjusted EBITDA reconciliation

The EBITDA and Adjusted EBITDA amounts presented within this business section are provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison for each segment. Each of these non-GAAP measures is defined as follows: EBITDA (operating income ~~(loss)~~ plus depreciation and amortization), Adjusted EBITDA (EBITDA adjusted for key items, which may include pro forma effects for significant acquisitions or divestitures, as applicable), and Adjusted EBITDA margin (Adjusted EBITDA, which may include pro forma adjustments, divided by sales or sales adjusted for pro forma results). Ashland does not allocate items to each reportable segment below operating income, such as interest expense and income taxes. As a result, reportable segment EBITDA and Adjusted EBITDA are reconciled directly to operating income since it is the most directly comparable ~~caption to the~~ Statements of Consolidated Comprehensive ~~Income.~~

Income (Loss) caption.

The following ~~table discloses sales, operating income, depreciation and amortization and statistical operating information by reportable segment~~EBITDA presentation for the three and nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

Three months ended
December 31
(In millions) 2017
2016
Sales
Specialty Ingredients $ 550
$ 482
Composites 218
165
Intermediates and Solvents 74
57
$ 842
$ 704
Operating income (loss)

Specialty Ingredients $ 42
$ 40
Composites 18
15
Intermediates and Solvents 8
(7 )
Unallocated and other (29 ) (33 )
$ 39
$ 15
Depreciation and amortization

Specialty Ingredients $ 62
$ 55
Composites 5
6
Intermediates and Solvents 8
7
Unallocated and other 4
—
$ 79
$ 68
Operating information

Specialty Ingredients

Sales per shipping day $ 9.0
$ 7.9
Metric tons sold (thousands) 73.0
72.6
Gross profit as a percent of sales (a)
31.5 % 32.0 %
Composites

Sales per shipping day $ 3.6
$ 2.7
Metric tons sold (thousands) 91.2
78.4
Gross profit as a percent of sales (a)
18.4 % 21.1 %
Intermediates and Solvents

Sales per shipping day $ 1.2
$ 0.9
Metric tons sold (thousands) 32.7
32.2
Gross profit as a percent of sales (a)
21.3 % (0.9 )%


~~(a)~~	~~Gross profit is defined as sales, less cost of sales divided by sales.~~

~~Sales by region expressed~~2020 is provided as a ~~percentage~~means to enhance the understanding of ~~reportable segment sales~~financial measurements that Ashland has internally determined to be relevant measures of comparison for the results of Consumer Specialties. The key items during the three and nine months ended ~~December 31, 2017~~June 30, 2021 related to inventory adjustments within Personal Care & Household. The key items during the nine months ended June 30, 2020 related to a goodwill impairment of $356 million for Personal Care & Household and ~~2016 were as follows. Ashland includes only U.S.~~$1 million in restructuring costs for Life Sciences.


	Life Sciences				Personal Care & Household					Consumer Specialties
	Three months ended June 30
(In millions)	2021		2020		2021		2020			2021		2020
Operating income	$	37	$	40	$	16	$	16		$	53	$	56
Depreciation and amortization		16		15		21		19			37		34
EBITDA		53		55		37		35			90		90
Restructuring and other costs		—		—		—		—			—		—
Inventory adjustment		—		—		2		—			2		—
Adjusted EBITDA	$	53	$	55	$	39	$	35		$	92	$	90

	Life Sciences				Personal Care & Household					Consumer Specialties
	Nine months ended June 30
(In millions)	2021		2020		2021		2020			2021		2020
Operating income	$	101	$	97	$	49	$	(309	)	$	150	$	(212	)
Depreciation and amortization		47		45		59		57			106		102
EBITDA		148		142		108		(252	)		256		(110	)
Restructuring and other costs		—		1		—		—			—		1
Goodwill impairment		—		—		—		356			—		356
Inventory adjustment		—		—		2		—			2		—
Adjusted EBITDA	$	148	$	143	$	110	$	104		$	258	$	247

Industrial Specialties

The Industrial Specialties business is comprised of the below reportable segments:

Specialty Additives

Specialty Additives is comprised of rheology- and ~~Canada~~performance-enhancing additives serving the 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. Products include rheology modifiers (cellulosic and associative thickeners), foam-control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in ~~its North American designation.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Three months ended December 31, 2017

Sales by Geography
Specialty Ingredients Composites Intermediates and Solvents
North America 41 % 45 % 21 %
Europe 30 % 34 % 59 %
Asia Pacific 19 % 14 % 17 %
Latin America & other 10 % 7 % 3 %
100 % 100 % 100 %

Three months ended December 31, 2016

Sales by Geography
Specialty Ingredients Composites Intermediates and Solvents
North America 39 % 48 % 23 %
Europe 29 % 28 % 57 %
Asia Pacific 22 % 16 % 17 %
Latin America & other 10 % 8 % 3 %
100 % 100 % 100 %

~~Specialty Ingredients~~

~~Specialty Ingredients~~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. Products help improve desired functional outcomes through rheology modification and control, water retention, workability, adhesive strength, binding power, film formation, deposition and suspension and emulsification. Customers include global paint manufacturers, electronics and automotive manufacturers, textile mills, the construction industry, and welders.

Performance Adhesives

Performance Adhesives is ~~a global leader~~comprised of adhesives used in ~~cellulose ethers, vinyl pyrrolidones~~packaging, converting and ~~biofunctionals. It offers industry-leading products, technologies~~structural applications. Packaging adhesives has an extensive line of pressure sensitive adhesives, functional coatings and resources for solving formulation and product-performance challenges. Specialty Ingredients uses natural, synthetic and semisynthetic polymers derived from cellulose ethers, vinyl pyrrolidones, acrylic polymers, polyester and polyurethane-based adhesives, and plant and seed extract. Specialty Ingredients’ end markets offer comprehensive andprimers combined with innovative technology solutions for ~~today’s demanding consumer~~narrow-, mid- and ~~industrial~~wide-web applications. ~~Key customers include: pharmaceutical companies; makers of personal care products,~~Products meet stringent requirements in food and ~~beverages; makers~~beverage safety, shipping, transportation, health and beauty, industrial, postage and security printing. Structural adhesives include light weighting vehicles and eliminating VOCs in buildings. Customers include converters of ~~nutraceuticals and supplements;~~packaging materials, manufacturers of ~~paint, coatings~~building materials and ~~construction materials; packaging and converting; and oilfield service companies.~~

~~On May 17, 2017, Ashland completed its acquisition of the stock of Pharmachem, a leading provider of quality ingredients~~tier one suppliers to the global health and wellness industries and high-value differentiated products to fragrance and flavor houses. With annual revenues of approximately $300 million and 14 manufacturing facilities in the United States and Mexico, New Jersey-based Pharmachem develops, manufactures and supplies custom and branded nutritional and fragrance products. See Note C within the Notes to Condensed Consolidated Financial Statements for more information.

~~Additionally, Ashland completed the transfer of its ownership interest in a consolidated joint venture during the third quarter of fiscal 2017.~~

~~December 2017~~transportation industry.

June 2021 quarter compared to ~~December 2016~~June 2020 quarter

~~Specialty Ingredients’~~

Industrial Specialties’ sales increased ~~$68~~$58 million to ~~$550~~$263 million in the current quarter. ~~The acquisition~~Specialty Additives represented and increase of ~~Pharmachem increased sales by $58~~$34 million ~~or 12%. Favorable foreign~~and Performance Adhesives showed an increase of $24 million. Higher volume, favorable currency exchange ~~increased sales by $10 million, while volume~~ and ~~mix combined to increase sales by $9 million. In addition, improved~~ product pricing increased sales by ~~$2 million. These increases were partially offset by a decrease of $11~~$43 million, ~~from divestitures which was primarily related to the transfer of ownership interest in a consolidated joint venture.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

~~Gross profit during~~$8 million and $7 million, respectively.

Operating income remained consistent at $28 million for the current ~~quarter increased $19~~quarter. Specialty Additives and Performance Adhesives recorded income of $15 million ~~compared to the prior year quarter. The acquisition of Pharmachem increased gross profit by $14~~and $13 million, ~~while improved~~respectively. Higher volume, ~~and~~ favorable price/mix, ~~combined to increase gross profit by $9 million. Favorable~~and foreign currency exchange increased ~~gross profit~~operating income by ~~$4 million.~~$12 million, $2 million and $1 million, respectively. These increases were ~~partially~~ offset by ~~the net impact~~higher production costs and increased environmental of ~~pricing and costs which decreased gross profit by $6~~$14 million and the joint venture divestiture which decreased gross profit by $2 million. In total, gross profit margin during the current quarter decreased 0.5 percentage points as compared to the prior year quarter to 31.5%.

~~Selling, general and administrative expenses (which include research and development expenses throughout the reportable segment discussion and analysis) increased $15~~$1 million, in the current quarter as compared to the prior year quarter largely due to incremental costs of $10 million related to Pharmachem’s operations. The remaining increase in selling, general and administrative expenses was primarily due to higher employee-related costs and unfavorable foreign currency exchange. Equity and other income decreased $2 million compared to the prior year quarter.

~~Operating income totaled $42 million for the current quarter compared to $40 million in the prior year quarter.~~respectively. Current quarter EBITDA ~~increased $7 million to $102~~remained consistent at $52 million while Adjusted EBITDA increased ~~$10~~$1 million to ~~$105 million.~~$55 million, of which $39 million and $16 million originated from Specialty Additives and Performance Adhesives, respectively. Adjusted EBITDA margin decreased ~~0.6~~5.4 percentage points in the current quarter to ~~19.1%~~20.9%.

Fiscal 2021 year-to-date compared to fiscal 2020 year-to-date

Industrial Specialties’ sales increased $83 million to $741 million in the current period. Specialty Additives and Performance Adhesives represented $45 million and $38 million of the increase, respectively. Higher volume, favorable currency exchange and product pricing increased sales by $60 million, $20 and $3 million, respectively.

Operating income increased $185 million to $88 million for the current period. Specialty Additives and Performance Adhesives recorded income of $36 million and $52 million, respectively, up $173 million and $12 million from the prior year period, respectively. Higher volume, favorable price/mix, foreign currency exchange and a prior year goodwill impairment increased operating income by $15 million, $11 million, $2 million and $174 million, respectively. Those improvements were partially offset by higher production costs, a capital project impairment and an environmental reserve adjustment of $7 million, $9 million and $1 million, respectively. Current period EBITDA increased $187 million to $161 million, $99 million income in Specialty Additives and $62 million income in Performance Adhesives. Adjusted EBITDA increased $23 million to $173 million, of which $111 million and $62

million originated from Specialty Additives and Performance Adhesives, respectively. Adjusted EBITDA margin increased 0.6 percentage points in the current period to 23.4%.

EBITDA and adjusted EBITDA reconciliation

The following EBITDA and Adjusted EBITDA ~~reconciliation~~

~~The following EBITDA~~ presentation (as defined and described in the section above) for the three and nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016~~2020 below 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 ~~Specialty Ingredients.~~Industrial Specialties. Adjusted EBITDA results have been prepared to illustrate the ongoing effects of ~~Ashland's~~Ashland’s operations, which exclude certain key items. The key items during the three and nine months ended June 30, 2021 related to a capital project impairment and environmental reserve adjustments within the current quarter relate to $2 million of accelerated depreciation for the termination of a contract at a manufacturing facility and $1 million of severance and other restructuring charges for the closure of a manufacturing plant. There were no unusual orSpecialty Additives. The key items ~~that affected comparability for EBITDA~~ during the ~~prior year quarter.~~

Three months ended
December 31
(In millions) 2017
2016
Operating income $ 42
$ 40
Depreciation and amortization (a)
60
55
EBITDA 102
95
Accelerated depreciation 2
—
Severance and other restructuring costs 1
—
Adjusted EBITDA $ 105
$ 95


~~(a)~~	~~Excludes $2 million of accelerated depreciation for the~~ three ~~months ended December 31, 2017.~~

~~Composites~~

~~Composites is a global leader in unsaturated polyester resins, vinyl ester resins~~ and gelcoats. The Composites business manufactures and sells a broad range of general-purpose and high-performance grades of unsaturated polyester and vinyl ester resins, gelcoats and low-profile additives for the reinforced plastics industry. The products in the Composites business provide an array of functional properties including corrosion resistance, fire retardance, ultraviolet resistance, water and chemical resistance, high mechanical strength, impact and scratch resistance and high strength-to-weight ratios. Key end markets include transportation, construction, marine and infrastructure. In addition, the business manufactures and sells molten maleic anhydride for the manufacture of a variety of products such as unsaturated polyester resins, copolymers, lubricating oil additives,

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

~~alkenyl succinic anhydrides, malic acid, fumaric acid and numerous derivative chemicals. Key markets include composites, personal care, dispersants and paper sizing.~~

~~December 2017 quarter compared to December 2016 quarter~~

~~Composites’ sales increased~~$53 million to $218 million in the current quarter. Improved product pricing increased sales by $19 million, or 12%. The acquisition of an unsaturated polyester resins manufacturing facility in the third of quarter of fiscal 2017 increased sales by $16 million, or 10%. Improved volume and mix increased sales by $12 million, or 7%, as metric tons sold increased to 91.2 thousand in the current quarter, while favorable foreign currency exchange increased sales by $6 million, or 4%.

Gross profit increased $5 million in the current quarter compared to the prior year quarter. Changes in volume and mix combined to increase gross profit by $3 million, while the facility acquisition and favorable foreign currency exchange each increased gross profit by $1 million. The net effects of pricing and raw material increases did not impact gross profit in the current quarter. In total, gross profit margin decreased 2.7 percentage points as compared to the prior year quarter to 18.4%.

Selling, general and administrative expenses during the current quarter increased $3 million compared to the prior year quarter primarily due to higher employee-related costs and unfavorable foreign currency exchange. Equity and other income increased $1 million compared to the prior year quarter.

Operating income totaled $18 million in the current quarter compared to $15 million in the prior year quarter. EBITDA increased $2 million to $23 million in the current quarter, while EBITDA margin decreased 2.1 percentage points in the current quarter to 10.6%.

~~EBITDA and Adjusted EBITDA reconciliation~~

~~The following EBITDA presentation for the three~~nine months ended ~~December 31, 2017~~June 30, 2020 related to a goodwill impairment and ~~2016~~ ~~below is provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison~~environmental reserve adjustments for ~~the results of Composites. There were no unusual or key items that affected comparability for EBITDA during the current and prior year quarters.~~

Three months ended
December 31
(In millions) 2017
2016
Operating income $ 18
$ 15
Depreciation and amortization 5
6
EBITDA $ 23
$ 21

Specialty Additives.


	Specialty Additives					Performance Adhesives				Industrial Specialties
	Three months ended June 30
(In millions)	2021		2020			2021		2020		2021		2020
Operating income	$	15	$	15		$	13	$	13	$	28	$	28
Depreciation and amortization		21		20			3		4		24		24
EBITDA		36		35			16		17		52		52
Environmental reserve adjustments		3		2			—		—		3		2
Adjusted EBITDA	$	39	$	37		$	16	$	17	$	55	$	54

	Specialty Additives					Performance Adhesives				Industrial Specialties
	Nine months ended June 30
(In millions)	2021		2020			2021		2020		2021		2020
Operating income	$	36	$	(137	)	$	52	$	40	$	88	$	(97	)
Depreciation and amortization		63		60			10		11		73		71
EBITDA		99		(77	)		62		51		161		(26	)
Capital project impairment		9		—			—		—		9		—
Goodwill impairment		—		174			—		—		—		174
Environmental reserve adjustments		3		2			—		—		3		2
Adjusted EBITDA	$	111	$	99		$	62	$	51	$	173	$	150

Intermediates and Solvents

Intermediates and Solvents is ~~a leading producer~~comprised of the production of 1,4 butanediol (BDO) and related derivatives, including ~~tetrahydrofuran and~~ 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, pharmaceuticals, water filtration membranes and more. Butanediol is also ~~supplied~~provided to ~~Ashland’s~~Life Sciences, Personal Care, and Specialty ~~Ingredients business~~Additives for use as a raw material.

~~December 2017~~

June 2021 quarter compared to ~~December 2016~~June 2020 quarter

Intermediates and Solvents’ sales increased ~~$17~~$12 million to ~~$74~~$49 million in the current period primarily due to higher product pricing.

Operating income/loss increased $4 million to $11 million for the current quarter. ~~Higher product pricing~~Price/mix increased ~~sales~~operating income by $9 million ~~while~~and was partially offset by higher ~~volumes~~production costs which decreased operating income by $5 million. Current quarter EBITDA and ~~favorable foreign currency exchange each~~Adjusted EBITDA increased ~~sales by~~ $4 million to $15 million.

~~Gross profit~~Adjusted EBITDA margin for the current quarter was 30.6%.

Fiscal 2021 year-to-date compared to fiscal 2020 year-to-date

Intermediates and Solvents’ sales increased $16 million ~~during the current quarter compared~~ to ~~the prior year quarter. Lower facility turn around costs in the current quarter resulted in an $8 million increase in gross profit as a result of a significant~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

planned plant shutdown that occurred in the prior year quarter. The net impact of pricing and costs increased gross profit by $7 million primarily due to improvements in product pricing. Higher volumes contributed to a $1 million increase in gross profit. In total, gross profit margin increased 22.2 percentage points as compared to the prior year quarter to 21.3%.

~~Selling, general and administrative expenses increased by $1 million compared to the prior year quarter.~~

~~Operating income totaled $8~~$118 million in the current ~~quarter as compared~~period primarily due to a product pricing and higher volume.

Operating income/loss ~~of $7~~increased $24 million into $17 million for the current period. Pricing/mix, lower production costs and prior year ~~quarter.~~inventory adjustments increased operating income by $10 million, $13 million and $4 million,

respectively. This increase was partially offset by unfavorable volume which decreased operating income by $3 million. Current period EBITDA ~~and~~ increased $24 million to $27 million, while Adjusted EBITDA increased $20 million to $27 million.AdjustedEBITDA margin infor the current ~~quarter increased to $16 million and 21.6%, respectively.~~

period was 22.9%.

EBITDA and Adjusted EBITDA reconciliation

The following EBITDA presentation (as defined and described in the section above) for the three and nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016~~2020 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 Intermediates and Solvents. ~~There were no unusual or key~~Key items ~~that affected comparability~~ for ~~EBITDA during~~ the ~~current and prior year quarters.~~

Three months ended
December 31
(In millions) 2017
2016
Operating income (loss) $ 8
$ (7 )
Depreciation and amortization 8
7
EBITDA $ 16
$ —

nine months ended June 30, 2020 included an inventory adjustment of $4 million.


	Three months ended				Nine months ended
	June 30				June 30
(In millions)	2021		2020		2021		2020
Operating income	$	11	$	7	$	17	$	(7	)
Depreciation and amortization		4		4		10		10
EBITDA		15		11	$	27	$	3
Inventory adjustment		—		—		—		4
Adjusted EBITDA	$	15	$	11	$	27	$	7

Unallocated and other

The following table summarizes the key components of the Unallocated and other ~~segment's~~segment’s operating ~~loss~~income (loss) for the three and nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

Three months ended
December 31
(In millions) 2017
2016
Restructuring activities (includes separation, severance, integration
and stranded divestiture costs) $ 14
$ 24
Environmental expense for divested businesses 13
4
Legal reserve —
5
Other expense 2
—
Total expense $ 29
$ 33

~~December 2017~~2020.


	Three months ended						Nine months ended
	June 30						June 30
(In millions)	2021			2020			2021			2020
Restructuring activities	$	2		$	(14	)	$	(10	)	$	(36	)
Environmental expenses		(18	)		(18	)		(30	)		(26	)
Other expenses (primarily governance and legacy expenses)		(14	)		(11	)		(41	)		(25	)
Total expense	$	(30	)	$	(43	)	$	(81	)	$	(87	)

June 2021 quarter compared to ~~December 2016~~June 2020 quarter

Unallocated and other recorded expense of ~~$29~~$30 million and ~~$33~~$43 million for the three months ended ~~December 31, 2017~~June 30, 2021 and ~~2016,~~2020, respectively. The ~~unallocated items for the~~ current and prior year quarters included income of $2 million and charges of $14 million, respectively, for restructuring activities mainly comprised of ~~$14 million~~severance, lease abandonment and ~~$24 million, respectively. Restructuring activities included $6 million and $22 million of~~other restructuring costs related to ~~the separation of Valvoline and stranded divestiture costs of $3 million and $2 million~~company-wide cost reduction programs during the current and prior year quarters, respectively.

The current quarter ~~also~~and prior year quarter included $4$18 million for environmental expenses.

Other expenses increase of ~~accelerated depreciation~~$3 million is primarily as a result of higher deferred compensation expense and incentive accruals.

Fiscal 2021 year-to-date compared to fiscal 2020 year-to-date

Unallocated and other recorded expense of $81 million and $87 million for the nine months ended June 30, 2021 and 2020, respectively. The current and prior year periods included charges for restructuring activities of $10 million and $36 million, respectively, which were comprised of severance, lease abandonment and other restructuring costs related to ~~the planned closure of an office building and $1 million of integration charges related to the acquisition of Pharmachem.~~

~~The remaining unallocated items~~company-wide cost reduction programs during the current ~~quarter primarily included $13 million for environmental-related expenses while the remaining items during the~~and prior year ~~quarter primarily~~periods.

The current and prior year periods included $5$30 million ~~of expense for a legal reserve~~ and $4$26 million for environmental ~~reserve adjustments.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

expenses, respectively.

Other expenses increased $16 million primarily as a result of unfavorable foreign currency and higher employee incentive compensation expenses.

FINANCIAL POSITION

Liquidity

Ashland had ~~$601~~$262 million in cash and cash equivalents as of ~~December 31, 2017,~~June 30, 2021, of which ~~$581~~$227 million was held by foreign subsidiaries and had no significant limitations that would prohibit remitting the funds to satisfy corporate obligations. In certain circumstances, if such amounts were repatriated to the United States, additional taxes might need to be accrued and paid depending on the source of the earnings remitted. Ashland currently has no plans to repatriate any amounts for which additional taxes would need to be accrued. ~~However, due~~

Ashland has taken actions and may continue to take actions intended to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets. On March 17, 2021, Ashland terminated its U.S. accounts receivable securitization facility and entered into an agreement with a group of entities to sell certain trade receivables, without recourse, of two U.S. based Ashland subsidiaries. Under the agreement, Ashland can transfer whole receivables up to a limit established by the buyer. As of June 30, 2021, Ashland has sold $90 million of receivables under this agreement against the buyers’ limit, which was at $117 million at June 30, 2021. See Note H for more information. In January 2020, Ashland renewed and extended its Revolving Credit Agreement through 2025 and issued new 2.00% senior notes in Europe for €500 million which mature in 2028. During the nine months ended June 30, 2021, Ashland elected not to access funds on its Revolving Credit Facility. As of June 30, 2021, Ashland has total remaining borrowing capacity of $614 million, comprised of amounts remaining available under the Revolving Credit Facility and foreign Accounts Receivable Securitization Facility. Ashland also had an additional $27 million available liquidity under the U.S. Accounts Receivable Sales Program as of June 30, 2021. Ashland has no significant maturities related to our term loans, revolving credit facilities or bonds until August 2022.

Ashland believes that cash flow from operations, availability under existing credit facilities and arrangements, current cash and investment balances and the ability to obtain other financing, if necessary, will provide adequate cash funds for Ashland’s foreseeable working capital needs, capital expenditures at existing facilities, dividend payments and debt service obligations. Ashland’s cash requirements are subject to change as business conditions warrant and opportunities arise. The timing and size of any new business ventures or acquisitions that the Company may complete may also impact its cash requirements. For information regarding the impact of COVID-19 on the Company, including on its liquidity and capital resources, please see item 1A, in Ashland’s most recent ~~Tax Act, Ashland will be reassessing this position in future quarters.~~

Form 10-K filed with the SEC.

Ashland’s cash flows from operating, investing and financing activities, as reflected in the Statements of Condensed Consolidated Cash Flows, are summarized as follows for the ~~three~~nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

Three months ended
December 31
(In millions) 2017
2016
Cash provided (used) by:
Operating activities from continuing operations $ (24 ) $ (60 )
Investing activities from continuing operations (24 ) (31 )
Financing activities from continuing operations 99
(434 )
Discontinued operations (16 ) 50
Effect of currency exchange rate changes on cash and cash equivalents —
(9 )
Net increase (decrease) in cash and cash equivalents $ 35
$ (484 )

2020.


	Nine months ended
	June 30
(In millions)	2021			2020
Cash provided (used) by:
Operating activities from continuing operations	$	403		$	153
Investing activities from continuing operations		(343	)		(65	)
Financing activities from continuing operations		(243	)		192
Discontinued operations		(13	)		(97	)
Effect of currency exchange rate changes on cash and cash equivalents		4			1
Net increase (decrease) in cash and cash equivalents	$	(192	)	$	184

Operating activities

The following discloses the cash flows associated with Ashland’s operating activities for the ~~three~~nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

2020.


	Nine months ended
	June 30
(In millions)	2021			2020
Cash flows provided (used) by operating activities from continuing operations
Net income (loss)	$	176		$	(513	)
Loss from discontinued operations (net of income taxes)		14			22
Adjustments to reconcile income from continuing operations to
cash flows from operating activities:
Depreciation and amortization		189			183
Original issue discount and debt issuance costs amortization		4			14
Deferred income taxes		(3	)		(30	)
Gain from sales of property and equipment		(3	)		—
Distributions from (to) equity affiliates		1			(1	)
Stock based compensation expense		12			11
(Income) loss from restricted investments		(36	)		(17	)
Excess tax benefit on stock based compensation		1			1
Loss on early retirement of debt		—			59
(Income) loss on acquisitions and divestitures		(15	)		—
Impairments		9			530
Pension contributions		(6	)		(5	)
Change in operating assets and liabilities (a)		60			(101	)
Total cash flows provided by operating activities from continuing operations	$	403		$	153

(a)

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Three months ended
December 31
(In millions) 2017
2016
Cash flows provided (used) by operating activities from continuing operations
Net income (loss) $ (4 ) $ 10
Income from discontinued operations (net of tax) (3 ) (75 )
Adjustments to reconcile income from continuing operations to

cash flows from operating activities

Depreciation and amortization 79
68
Original issue discount and debt issuance cost amortization 2
94
Deferred income taxes 8
2
Stock based compensation expense 7
5
Gain on early retirement of debt —
(3 )
Realized gain and investment income on available-for-sale securities (3 ) (3 )
Net loss on divestitures 1
1
Pension contributions (2 ) (1 )
Gain on post-employment plan remeasurement —
(2 )
Change in operating assets and liabilities (a)
(109 ) (156 )
Total cash flows used by operating activities from continuing operations $ (24 ) $ (60 )

~~(a)~~Excludes changes resulting from operations acquired or sold.

Cash flows ~~used~~provided from operating activities from continuing operations ~~a major source of Ashland’s liquidity,~~ amounted to ~~cash~~ inflows of ~~$24~~$403 million and ~~$60~~$153 million in the current and prior year ~~quarters,~~periods, respectively.

Operating Activities -– Operating Assets and Liabilities

The cash results during each ~~quarter~~period are primarily driven by net income, ~~(loss),~~ excluding discontinued operation results, adjusted for certain non-cash items including depreciation and amortization (including original issue discount and debt issuance cost amortization), as well as changes in working capital, which are fluctuations within accounts receivable, inventory, trade payables and accrued expenses. Ashland continues to emphasize working capital management as a high priority and focus.

Changes in operating assets and liabilities accounted for inflows of $60 million compared to outflows of $101 million for the nine months ended June 30, 2021 and 2020, respectively, and were primarily driven by the following net working capital ~~accounted for outflows of $96 million and $71 million for the three months ended December 31, 2017 and 2016, respectively, and were driven by the following:~~

accounts:



Accounts receivable -– There were cash inflows of ~~$15~~$89 million and $9inflows of $23 million during the current and prior year ~~quarters, respectively, which were primarily due to collections in excess of sales during the first quarter of each fiscal year.~~

~~Inventory -~~periods, respectively. The current ~~quarter had~~period includes a ~~cash outflow of $39~~$90 million ~~compared to a~~ cash inflow ~~of $15 million during~~from accounts receivables sold under the ~~prior year quarter, which were primarily due to sales volumes and inventory management strategies.~~U.S. Accounts Receivable Sales Program.

~~Trade and other payables -~~

Inventory – There were cash inflows of $20 million and outflows of ~~$72 million and $95~~$21 million during the current and prior year ~~quarters, respectively, which~~periods, respectively.



Trade and other payables – There were ~~primarily driven by seasonal fluctuations in trade payables~~cash outflows of $21 million and ~~incentive compensation payouts from~~$91 million during the current and prior year ~~paid during~~periods, respectively, and primarily related to the ~~first quarter of each fiscal year. Additionally, the prior year quarter included the payment~~timing of certain ~~Valvoline separation costs that were incurred in the preceding fiscal year.~~

payments and management of supplier/vendor payment terms.

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

The remaining ~~outflows within~~ changes into operating assets and liabilities resulted in outflows of ~~$13~~$28 million and ~~$85~~outflows of $12 million in the current and prior year ~~quarters,~~periods, respectively, ~~relate~~and were primarily due to income taxes paid or income tax refunds, interest paid, and adjustments to certain accruals and ~~long term~~other long-term assets and ~~liabilities as well as income taxes received and paid.~~

liabilities.

Operating Activities -– Summary

Operating cash flows for the current ~~quarter~~year period included income from continuing operations of $190 million. Additionally, the current period included non-cash adjustments of $189 million for depreciation and amortization, $12 million for stock-based compensation expense, $36 million of income from restricted investments, $15 million of income on acquisitions and divestitures and $9 million for impairment charges.

Operating cash flows for the prior year period included a loss from continuing operations of ~~$7 million, noncash~~$491 million. Additionally, the prior year period included non-cash adjustments of ~~$79~~$530 million for a goodwill impairment charge, $183 million for depreciation and amortization, ~~and $2~~$59 million ~~for~~loss on early retirement of debt, ~~issuance cost amortization.~~

~~Operating cash flows for the prior year quarter included a loss from continuing operations of $65~~$14 million ~~and noncash adjustments of $68 million for depreciation and amortization and $94 million for~~ original issue ~~discount~~discounts and debt issuance cost amortization, ~~including $92~~$11 million ~~of accelerated accretion related to the tender offer of the 2029 notes.~~

for stock-based compensation expense and $17 million income on restricted investments.

Investing activities

The following discloses the cash flows associated with Ashland’s investing activities for the ~~three~~nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

Three months ended
December 31
(In millions) 2017
2016
Cash flows provided (used) by investing activities from continuing operations
Additions to property, plant and equipment $ (24 ) $ (33 )
Proceeds from disposal of property, plant and equipment 1
—
Proceeds from sale of operations 1
—
Net purchase of funds restricted for specific transactions (5 ) (2 )
Reimbursements from restricted investments 5
—
Proceeds from sales of available-for-sale securities 5
—
Purchases of available-for-sale securities (5 ) —
Proceeds from the settlement of derivative instruments —
4
Payments for the settlement of derivative instruments (2 ) —
Total cash flows used by investing activities from continuing operations $ (24 ) $ (31 )

2020.


	Nine months ended
	June 30
(In millions)	2021			2020
Cash flows provided (used) by investing activities from continuing operations
Additions to property, plant and equipment	$	(77	)	$	(94	)
Proceeds from disposal of property, plant and equipment		4			1
Purchase of operations - net of cash acquired		(308	)		—
Proceeds from sale or restructuring of operations		14			—
Proceeds from settlement of Company-owned life insurance contracts		1			7
Company-owned life insurance payments		(1	)		(2	)
Net purchase of funds restricted for specific transactions		(1	)		(3	)
Reimbursements from restricted investments		25			26
Proceeds from sale of securities		56			16
Purchases of securities		(56	)		(16	)
Total cash flows used by investing activities from continuing operations	$	(343	)	$	(65	)

Cash used by investing activities was ~~$24~~$343 million and ~~$31~~$65 million for the current and prior year ~~quarters,~~periods, respectively. The significant cash investing activities for the current ~~quarter~~period primarily related to cash outflows of ~~$24~~$308 million for the purchase of operations related to the Schülke personal care acquisition, see Note B for more information, and cash outflows of $77 million for property additions compared to ~~$33~~$94 million in the prior year ~~quarter.~~

period. Additionally, there were reimbursements from the restricted renewable annual asbestos trust of $25 million during the current period compared to $26 million in the prior year period, proceeds from disposal of property, plant and equipment of $4 million in the current period and proceeds from sale or restructuring of operations of $14 million in the current period. The current and prior year period also included a rebalancing within the asbestos trust, which resulted in $56 million and $16 million of proceeds from the sale of securities offset by $56 million and $16 million of purchases of securities, respectively.

Financing activities

The following discloses the cash flows associated with Ashland’s financing activities for the ~~three~~nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Three months ended
December 31
(In millions) 2017
2016
Cash flows provided (used) by financing activities from continuing operations
Repayment of long-term debt $ (2 ) $ (239 )
Premium on long-term debt repayment —
(5 )
Proceeds (repayment) from short-term debt 120
(154 )
Debt issuance costs —
(4 )
Cash dividends paid (14 ) (24 )
Stock based compensation employee withholding taxes paid in cash (5 ) (8 )
Total cash flows provided (used) by financing activities from continuing operations $ 99
$ (434 )

2020.


	Nine months ended
	June 30
(In millions)	2021			2020
Cash flows provided (used) by financing activities from continuing operations
Proceeds from issuance of long-term debt	$	—		$	804
Repayment of long-term debt		—			(767	)
Premium on long-term debt repayment		—			(59	)
Proceeds from (repayment of) short-term debt		(185	)		281
Debt issuance costs		—			(11	)
Cash dividends paid		(52	)		(50	)
Stock based compensation employee withholding taxes paid in cash		(6	)		(6	)
Total cash flows provided (used) by financing activities from continuing operations	$	(243	)	$	192

Cash flows ~~generated~~used by financing activities ~~was $99~~resulted in an outflow of $243 million for the current ~~quarter as~~period compared to ~~cash used~~an inflow of ~~$434~~$192 million for the prior year ~~quarter.~~

period.

Significant cash financing activities for the current ~~quarter~~period included short-term debt ~~net cash inflows~~repayments of ~~$120~~$185 million, primarily related to ~~debt outstanding on~~ the ~~2017~~2020 Revolving Credit Facility and ~~the~~ accounts receivable ~~securitization.~~securitization facilities. The current ~~quarter~~period included cash dividends paid of ~~$0.225~~$0.850 per share, for a total of ~~$14~~$52 million.

Significant cash financing activities for the prior year ~~quarter~~period included ~~cash outflows~~proceeds from issuance of ~~$239~~long-term debt, repayment of long-term debt, premiums on retirement of long-term debt, and debt issuance costs paid of $804 million, $767 million, $59 million and $11 million, respectively, all related to ~~the repayments of a portion of the 2029 notes, 2022 notes and 2018 notes. Additionally, the~~debt refinancing activity. The prior year ~~quarter~~period also included short-term ~~debt net repayments~~cash inflows of ~~$154~~$281 million, ~~which was~~ primarily related to draws on the ~~$150 million full repayment of a term loan held by a foreign subsidiary.~~2020 Revolving Credit Facility. The prior year ~~quarter~~period included cash dividends paid of ~~$0.39~~$0.825 per share, for a total of ~~$24~~$50 million.

The following discloses the cash flows associated with Ashland’s discontinued operations for the ~~three~~nine months ended ~~December 31, 2017~~June 30, 2021 and ~~2016.~~

Three months ended
December 31
(In millions) 2017
2016
Cash used by discontinued operations
Operating cash flows $ (16 ) $ 70
Investing cash flows —
(10 )
Financing cash flows —
(10 )
Total cash provided (used) by discontinued operations $ (16 ) $ 50

2020.


	Nine months ended
	June 30
(In millions)	2021			2020
Cash provided (used) by discontinued operations
Operating cash flows	$	(4	)	$	(98	)
Investing cash flows		(9	)		1
Total cash used by discontinued operations	$	(13	)	$	(97	)

Cash flows for discontinued operations in the current ~~quarter~~period primarily related to previously divested businesses, including net payments of asbestos and environmental ~~liabilities.~~

liabilities, and a $30 million cash inflow for a tax refund associated with the Composites divestiture.

Cash flows for discontinued operations in the prior year ~~quarter primarily relate to net cash inflows of $62 million~~period related to ~~the activity of Valvoline Inc. The remaining cash flows in the prior year quarter related to other~~ previously divested businesses, including net payments of asbestos, environmental liabilities and ~~environmental liabilities.~~

tax payments associated with the Composites divestiture, which was a $59 million cash outflow.

Free cash flow and other liquidity resources

The following represents Ashland’s calculation of free cash flow for the disclosed ~~quarters.~~periods. Free cash flow does not reflect adjustments for certain non-discretionary cash flows such as mandatory debt repayments.


	Nine months ended
	June 30
(In millions)	2021				2020
Total cash flows provided by operating activities from continuing operations	$	403		$	153
Adjustments:
Additions to property, plant and equipment		(77	)		(94	)
Free cash flows (a) (b)	$	326		$	59

(a)

Includes $35 million and $22 million of restructuring payments for the nine months ended June 30, 2021 and 2020, respectively.

(b)

Includes $90 million of cash inflows for the nine months ended June 30, 2021 associated with the U.S. Accounts Receivable Sales Program.

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Three months ended
December 31
(In millions) 2017
2016
Cash flows provided by operating activities from continuing operations $ (24 ) $ (60 )
Adjustments:

Additions to property, plant and equipment (24 ) (33 )
Free cash flows (a)
$ (48 ) $ (93 )


~~(a)~~	~~Includes $23 million and $29 million of restructuring payments for the three months ended December 31, 2017 and 2016, respectively.~~

~~At December 31, 2017, working~~

Working capital (current assets minus current liabilities, excluding long-term debt due within one year) amounted to ~~$967~~$639 million ~~compared to $941~~and $734 million atas of June 30, 2021 and September 30, ~~2017.~~2020, respectively. Liquid assets (cash, cash equivalents and accounts receivable) amounted to ~~119%~~107% and ~~122%~~114% of current liabilities ~~at December 31, 2017~~(excluding current liabilities held for sale) as of June 30, 2021 and September 30, ~~2017,~~2020, respectively.

The following summary reflects Ashland’s cash, ~~and~~ unused borrowing capacity and liquidity as of ~~December 31, 2017~~June 30, 2021 and September 30, ~~2017~~.

December 31
September 30
(In millions) 2017
2017
Cash and cash equivalents $ 601
$ 566

Unused borrowing capacity

2017 Revolving Credit Facility $ 467
$ 579
Accounts receivable securitization facility 31
35

2020.


(In millions)	June 30 2021		September 30 2020
Cash and investment securities
Cash and cash equivalents	$	262	$	454

Unused borrowing capacity and liquidity
Revolving credit facility	$	581	$	500
2018 accounts receivable securitization (foreign)		33		—
2012 accounts receivable securitization (U.S.)		—		—
Accounts receivable sales program (U.S.)	$	27	$	—

The borrowing capacity remaining under the ~~2017 Revolving Credit Facility~~$600 million revolving credit facility was ~~$467~~$581 million due to ~~an outstanding balance of $285 million, as well as~~ a reduction of ~~$48~~$19 million for letters of credit outstanding at ~~December 31, 2017.~~June 30, 2021. In total, Ashland’s available liquidity position, which includes cash, the revolving credit facility and ~~the~~foreign accounts receivable securitization facility, was ~~$1,099~~$876 million at ~~December 31, 2017,~~June 30, 2021, compared to ~~$1,180~~$954 million at September 30, ~~2017.~~

2020. Ashland also had an additional $27 million liquidity available under the U.S. accounts receivable sales program as of June 30, 2021.

Capital resources

Debt

The following summary reflects Ashland’s debt as of ~~December 31, 2017~~June 30, 2021 and September 30, ~~2017~~.

2020.


(In millions)	June 30 2021		September 30 2020
Short-term debt (includes current portion of long-term debt)	$	101	$	280
Long-term debt (less current portion and debt issuance cost discounts) (a)		1,578		1,573
Total debt	$	1,679	$	1,853

(a)

December 31
September 30
(In millions) 2017
2017
Short-term debt (includes current portion of long-term debt) $ 355
$ 235
Long-term debt (including current portion and debt issuance cost discounts) (a)
2,584
2,584
Total debt $ 2,939
$ 2,819

~~(a)~~Includes ~~$24~~$13 million and ~~$25~~$15 million of debt issuance cost discounts as of ~~December 31, 2017~~June 30, 2021 and September 30, ~~2017,~~ 2020, respectively.

~~The current portion of long-term debt was $6 million at December 31, 2017.~~

Debt as a percent of capital employed was ~~46%~~34% and 38% at ~~December 31, 2017~~June 30, 2021 and ~~45%~~ at September 30, ~~2017.~~2020, respectively. At ~~December 31, 2017,~~June 30, 2021, Ashland’s total debt had an outstanding principal balance of ~~$3,015~~$1,733 million, discounts of ~~$52~~$41 million, and debt issuance costs of ~~$24~~$13 million. The scheduled aggregate maturities of long-term debt by year (including the current portion and excluding debt issuance costs) are as follows: ~~$5 million~~zero remaining in ~~2018, $11~~2021, $421 million in ~~2019, $269~~2022, $22 million in ~~2020, $56~~2023, $44 million in ~~2021~~2024 and ~~$1,279~~$175 million in ~~2022.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

~~Financing Activities~~

~~2017 Credit Agreement~~

On May 17, 2017, in conjunction with the closing of the Pharmachem acquisition, Ashland entered into a secured credit agreement (the 2017 Credit Agreement) with a group of lenders. The 2017 Credit Agreement provided for (i) a $250 million three-year term loan A facility (the Three-Year TLA Facility), (ii) a $250 million five-year term loan A facility (the Five-Year TLA Facility and together with the Three-Year TLA Facility, the TLA Facilities) and (iii) a $680 million five-year revolving credit facility (including a $125 million letter of credit sublimit) (the 2017 Revolving Credit Facility). Proceeds of borrowings under the TLA Facilities were used solely to finance the acquisition of Pharmachem, while the proceeds of the 2017 Revolving Credit Facility were used to finance, in part, the acquisition of Pharmachem, to refinance the 2015 Senior Credit Agreement and for general corporate purposes. On May 19, 2017, Ashland entered into Amendment No. 1 to the 2017 Credit Agreement, which increased the aggregate commitments under the 2017 Revolving Credit Facility from $680 million to $800 million.

At Ashland’s option, loans issued under the 2017 Credit Agreement bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. Loans bear interest at LIBOR plus 1.75% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 0.75%, in the alternative, through and including the date of delivery of a quarterly compliance certificate and thereafter the interest rate will fluctuate between LIBOR plus 1.375% per annum and LIBOR plus 2.500% per annum (or between the alternate base rate plus 0.375% per annum and the alternate base rate plus 1.500% per annum), based upon Ashland’s secured facilities ratings or the consolidated net leverage ratio (as defined in the 2017 Credit Agreement) (whichever yields a lower applicable interest rate margin) at such time. In addition, Ashland was required to pay fees of 0.25% per annum on the daily unused amount of the 2017 Revolving Credit Facility through and including the date of delivery of a compliance certificate, and thereafter the fee rate will fluctuate between 0.175% and 0.40% per annum, based upon Ashland’s secured facilities rating or the consolidated net leverage ratio (whichever yields a lower applicable rate). The TLA Facilities may be prepaid at any time without premium. The Three-Year TLA Facility will not amortize and will be due on May 17, 2020. The Five-Year TLA Facility will not amortize in each of the first, second and third years and will amortize at a rate of 20% per annum in each of the fourth and fifth years (payable in equal quarterly installments), with the outstanding balance of the Five-Year TLA Facility to be paid on May 17, 2022.

On June 14, 2017, Ashland entered into Amendment No. 2 to the 2017 Credit Agreement, which provided for a new $600 million seven-year senior secured term loan B facility (the 2017 TLB Facility). At Ashland’s option, loans issued under the 2017 TLB Facility bear interest at either (x) LIBOR plus 2.00% per annum or (y) an alternate base rate plus 1.00% per annum. The 2017 TLB Facility may be prepaid at any time. The 2017 TLB Facility amortizes at a rate of 1.00% per annum (payable in equal quarterly installments) with the outstanding balance to be paid on May 17, 2024.

~~6.50% junior subordinated notes due 2029~~

In December 2016, Hercules LLC (Hercules) (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland, repurchased, through a cash tender offer (the Tender Offer), $182 million of the aggregate principal par value amount of its 6.50% junior subordinated notes due 2029 (2029 notes) for an aggregate purchase price of $177 million. As a result of the Tender Offer, the carrying value of the 2029 notes was reduced by $90 million and Ashland recognized a $92 million charge related to accelerated accretion of the recorded debt discount (compared to the total par value) and $5 million of a net gain related to the repayment of the debt. The charge and net gain are included in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016.

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

~~Open market repurchases of 4.750% notes due 2022 and 3.875% notes due 2018~~

During the three months ended December 31, 2016, Ashland executed open market repurchases of its 4.750% notes due 2022 (2022 notes) and its 3.875% notes due 2018 (2018 notes). As a result of these repurchases, the carrying values of the 2022 notes and 2018 notes were reduced by $36 million and $29 million, respectively. Ashland recognized a $2 million charge related to premiums paid in the open market repurchases and accelerated amortization of previously capitalized debt issuance costs, which is included in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016.

2025.

Ashland credit ratings

Ashland’s corporate credit ~~rating with~~ratings remained unchanged at BB+ by Standard & Poor’s ~~is BB, while~~and Ba1 by Moody’s Investor Services. As of June 30, 2021, Moody’s Investor Services ~~is Ba2. Moody’s Investor Services and~~outlook remained at stable, while Standard & Poor's ~~outlooks both~~outlook remained at ~~stable.~~negative. 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.

Ashland debt covenant restrictions

Ashland's most recent credit agreement (the ~~2017~~2020 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 ~~December 31, 2017,~~June 30, 2021, Ashland is in compliance with all debt agreement covenant restrictions under the ~~2017~~2020 Credit Agreement.

The maximum consolidated net leverage ratio permitted under the ~~2017~~2020 Credit Agreement is ~~4.5.~~4.0. The ~~2017~~2020 Credit Agreement defines the consolidated net leverage ratio as the ratio of consolidated indebtedness minus unrestricted cash and cash equivalents to consolidated EBITDA (Covenant Adjusted EBITDA) for any measurement period. In general, the ~~2017~~2020 Credit Agreement defines Covenant Adjusted EBITDA as net income plus consolidated interest charges, taxes, depreciation and amortization expense, fees and expenses related to capital market transactions and proposed or actual acquisitions and divestitures, restructuring and integration charges, noncash stock and equity compensation expense, and any other nonrecurring expenses or losses that do not represent a cash item in such period or any future period; less any noncash gains or other items increasing net income. The computation of Covenant Adjusted EBITDA differs from the calculation of EBITDA and Adjusted EBITDA, which have been reconciled ~~on page 41.~~above in the “consolidated review” section. 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 June 30, 2021, Ashland’s calculation of the consolidated net leverage ratio was 2.6.

The minimum required consolidated interest coverage ratio under the ~~2017~~2020 Credit Agreement is 3.0. The ~~2017~~2020 Credit Agreement defines the consolidated interest coverage ratio as the ratio of Covenant Adjusted EBITDA to consolidated interest charges for any measurement period.

At December 31, 2017, Ashland’s calculation of the consolidated net leverage ratio was 3.9, which is below the maximum consolidated ratio permitted under the 2017 Credit Agreement of 4.5. At December 31, 2017,June 30, 2021, Ashland’s calculation of the consolidated interest coverage ratio was ~~4.6, which exceeds the minimum required consolidated ratio of 3.0.~~

~~The average~~8.3.

Any change in Covenant Adjusted EBITDA of $100 million would have an approximate ~~0.7x~~0.4x effect on the consolidated net leverage ratio and a ~~0.8x~~1.5x effect on the consolidated interest coverage ratio. The ~~average~~ change in consolidated indebtedness of $100 million would affect the consolidated leverage ratio by approximately 0.2x.

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

Additional capital resources

Cash projection

Ashland ~~projects~~believes that cash flow from operations, availability under existing credit facilities and arrangements, current cash and investment balances and the ability to obtain other ~~available financial resources such as~~financing, if necessary, will provide adequate cash ~~on hand and revolving credit should be sufficient to meet investing and financing requirements to enable Ashland to comply with~~funds for the ~~covenants and other terms of its financing obligations. These projections are based on various assumptions that include, but are not limited to: operational results, capital expenditures,~~Company’s foreseeable working capital needs, ~~and tax~~capital expenditures at existing facilities, dividend payments and ~~receipts.~~

debt service obligations. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. The timing and size of any new business ventures or acquisitions that the Company may complete may also impact its cash requirements. For information regarding the impact of COVID-19 on the Company, including on its liquidity and capital resources, please see item 1A, in Ashland’s most recent Form 10-K filed with the SEC.

Total equity

Total equity ~~decreased $7~~increased by $166 million since September 30, ~~2017~~2020 to ~~$3,399~~$3,202 million at ~~December 31, 2017.~~June 30, 2021. The ~~decrease~~increase of $7$166 million was due to ~~cash dividends~~net income of ~~$14~~$176 million, deferred translation gain of $37 million and ~~a net loss~~$7 million of ~~$4 million, partially~~common shares issued under stock incentive plans, offset by ~~an $8~~$52 million ~~net increase in available-for-sale securities~~of dividends and $3$2 million related to ~~deferred translation gains.~~

~~Stock repurchase program~~

~~In April 2015, Ashland's Board~~the adoption of Directors approved a $1 billion share repurchase authorization that was set to expire on December 31, 2017 (the 2015 stock repurchase program). This authorization allows for Ashland’s common shares to be repurchased in open market transactions, privately negotiated transactions or pursuant to one or more accelerated stock repurchase programs or Rule 10b5-1 plans.

~~During 2017, Ashland's Board~~new accounting guidance around the measurement of ~~Directors extended the 2015 stock repurchase program indefinitely. As of December 31, 2017, $500 million of share repurchase authorization remains under the 2015 stock repurchase program.~~

credit losses.

Stockholder dividends

In May ~~2017, subsequent to the final distribution of Valvoline Inc.'s common stock,~~2021, the Board of Directors of Ashland announced a quarterly cash dividend of ~~22.5~~30 cents per share to eligible ~~shareholders at~~stockholders of record, which was paid ~~for quarterly dividends~~in the third quarter of fiscal 2021. This dividend represented a 9% increase over the previous quarter's dividend. Dividends of 27.5 cents per share were paid in the first two quarters of fiscal 2021, each quarter of fiscal ~~2018~~2020 and the third and fourth quarters of fiscal ~~2017. This represented a reduction from the previous quarterly dividend of 39 cents per share which was paid for quarterly dividends in the first and second quarters of fiscal 2017.~~

2019.

Capitalexpenditures

Capital expenditures were ~~$24~~$77 million for the ~~three~~nine months ended ~~December 31, 2017 and averaged approximately $217~~June 30, 2021 compared to $94 million ~~during~~for the ~~last three fiscal years.~~

~~Contractual obligations and commitments~~

As a result of the Tax Act that was enacted during December 2017, Ashland has currently estimated and identified that the one-time transition tax related to the new law is estimated to be approximately $160 million payable over eight years, with the first payment of approximately $13 million due during the first quarter of fiscal year 2019. Ashland will continue to reassess this estimate in future periods.

In addition, during January 2018, Ashland repatriated approximately $300 million in cash that was used to repay existing debt. There were no other significant changes to the contractual obligations table as presented at Septembernine months ended June 30, ~~2017.~~

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

2020.

CRITICAL ACCOUNTING POLICIES

The preparation of Ashland’s Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses, and the disclosures of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets (including goodwill and other intangible assets), income taxes, other liabilities and receivables associated with asbestos litigation and environmental remediation. These accounting policies are discussed in detail in “Management’s Discussion and Analysis – Critical Accounting Policies” in Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2017~~.2020. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. 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~~nine months ended ~~December 31, 2017~~.

~~OUTLOOK~~

~~Fiscal Year 2018~~

~~Ashland updated its financial outlook for fiscal 2018 as shown in the table below.~~



	~~Prior FY 2018 Outlook~~	~~Updated FY 2018 Outlook~~
~~Adjusted EBITDA~~
~~Specialty Ingredients~~	~~$560 - $590 million~~	~~No change~~
~~Composites~~	~~$85 - $95 million~~	~~No change~~
~~Intermediates & Solvents~~	~~$40 - $50 million~~	~~No change~~
~~Unallocated and other~~	~~($35 - $45 million)~~	~~No change~~

~~Key Operating Metrics~~
~~Free cash flow~~	~~>$220 million~~	~~No change~~
~~Adjusted diluted EPS~~	~~$3.20 - $3.40~~	~~$2.90 - $3.10~~

~~Corporate Items~~
~~Depreciation & amortization~~	~~~$290 million~~	~~No change~~
~~Interest expense~~	~~$125 - $135 million~~	~~No change~~
~~Effective tax rate~~	~~8 - 13%~~	~~16 - 20%~~
~~Capital expenditures~~	~~$195 - $205 million~~	~~No change~~
~~Diluted share count~~	~~~64 million~~	~~No change~~

~~Second Quarter of 2018~~

For the second quarter of fiscal 2018, Ashland expects Adjusted diluted EPS to be in the range of $0.80-$0.90 per diluted share. This estimate assumes an effective tax rate of 18% based on the new U.S. tax legislation.

June 30, 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Ashland’s market risk exposure at ~~December 31, 2017~~June 30, 2021 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, ~~2017~~.

~~ASHLAND GLOBAL HOLDINGS INC. AND CONSOLIDATED SUBSIDIARIES~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~

2020.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures - As of the end of the period covered by this quarterly report, Ashland, under the supervision and with the participation of its management, including Ashland’s Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of Ashland’s disclosure controls and procedures pursuant to Rule 13a-15(b) and 15d-15(b) promulgated under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of ~~December 31, 2017.~~

June 30, 2021.

Changes in Internal Control over Financial Reporting - During the ~~three~~nine months ended ~~December 31, 2017,~~June 30, 2021, Ashland completed its purchase of Schülke. Although management believes appropriate internal controls and procedures have been maintained, Schülke's controls and procedures for recording, processing and summarizing of financial information have not been fully evaluated by Ashland's management as of June 30, 2021. As such, there is a risk that deficiencies may exist which have not yet been identified that could constitute significant deficiencies or in the aggregate, a material weakness related to the Schülke business. Otherwise, there were no other significant changes in Ashland’s internal control over financial reporting, or in other factors, that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, Ashland’s internal control over financial reporting.

During the June 2017 quarter, Ashland completed its purchase of Pharmachem. Although management believes appropriate internal controls and procedures have been maintained, Pharmachem’s controls and procedures for the recording, processing, and summarizing of financial information have not been fully evaluated by Ashland’s management as of December 31, 2017. As such, there is a risk that deficiencies may exist and not yet be identified that could constitute significant deficiencies or in the aggregate, a material weakness related to Pharmachem's businesses.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The following is a description of Ashland’s material legal proceedings.

Ashland’s threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million.

Asbestos-Related Litigation

Ashland is subject to liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims result primarily from indemnification obligations undertaken in 1990 in connection with the sale of Riley Stoker Corporation (Riley), a former subsidiary. Although Riley was neither a producer nor a manufacturer of asbestos, its industrial boilers contained some asbestos-containing components provided by other companies.

Hercules LLC (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland, is also subject to liabilities from asbestos-related personal injury lawsuits involving claims which typically arise from alleged exposure to asbestos fibers from resin encapsulated pipe and tank products which were sold by one of Hercules’ former subsidiaries to a limited industrial market.

Ashland and Hercules are also defendants in lawsuits alleging exposure to asbestos at facilities formerly or presently owned or operated by Ashland or Hercules.

For additional detailed information regarding liabilities arising from asbestos-related litigation, see Note KL of Notes to Condensed Consolidated Financial Statements in this quarterly report on Form 10-Q.

Environmental Proceedings

(a) CERCLA and Similar State Law Sites - Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state laws, Ashland and its subsidiaries may be subject to joint and several liability for cleanup costs in connection with alleged releases of hazardous substances at sites where it has been identified as a “potentially responsible party” (PRP). As of ~~December 31, 2017,~~June 30, 2021, Ashland and its subsidiaries have been identified as a PRP by U.S. federal and state authorities, or by private parties seeking contribution, for the cost of environmental investigation and/or cleanup at 82 ~~waste treatment or disposal~~ sites. These sites are currently subject to ongoing investigation and remedial activities, overseen by the United States Environmental Protection Agency (USEPA) or a state agency, in which Ashland or its subsidiaries are typically participating as a member of a PRP group. Generally, the types of relief sought include remediation of contaminated soil and/or groundwater, reimbursement for past costs of site cleanup and administrative oversight and/or long-term monitoring of environmental conditions at the sites. The ultimate costs are not predictable with assurance.

(b) ~~Hattiesburg, Mississippi Resource Conservation and Recovery Act Matter -~~ In November 2008, the Mississippi Department of Environmental Quality (MDEQ) issued a Notice of Violation to Hercules’ now-closed Hattiesburg, Mississippi manufacturing facility alleging that a process water impoundment basin at the facility had been operated as a hazardous waste storage and treatment facility without a permit in violation of the Resource Conservation and Recovery Act. In May 2011, the USEPA issued an inspection report from a September 2010 inspection with allegations similar to those of the MDEQ and promulgated an information request. Ashland has been working with the MDEQ and USEPA to settle this matter in the context of the shutdown and ongoing remediation of the Hattiesburg facility. The USEPA proposed a settlement penalty in excess of $100,000. While it is reasonable to believe that this matter will involve a penalty from the MDEQ and/or the USEPA exceeding $100,000, the potential penalty with respect to this enforcement matter should not be material to Ashland.

~~(c)~~ Lower Passaic River, New Jersey Matters - Ashland, through two formerly owned facilities, and ISP, through a now-closed facility, have been identified as PRPs, along with approximately 70 other companies (the Cooperating Parties Group or the CPG), in a May 2007 Administrative Order of Consent (AOC) with the USEPA. The parties are required to perform a remedial investigation and feasibility study (RI/FS) of the entire 17 miles of the Passaic River. In June 2007, the USEPA separately commenced a Focused Feasibility Study (FFS) as an interim measure. In accordance with the 2007 AOC, in June 2012 the CPG voluntarily entered into another AOC for an interim removal action focused solely at mile 10.9 of the Passaic River. The allocations for the 2007 AOC and the 2012 removal action are based on interim allocations, are immaterial and have been accrued. In April 2014, the USEPA released the FFS. The CPG

submitted the Draft RI/FS Report on April 30, 2015. The USEPA has released the FFS Record of Decision for the lower 8 miles and recently reached an agreement with ~~Occidental~~another chemical company to conduct and pay for the remedial design. ~~The~~This chemical company has sued Ashland, ISP and numerous other defendants to recover past and future costs pursuant to the CERCLA. Ashland, ISP and numerous other defendants have filed a Motion to Dismiss all of the claims. Ashland and ISP are participating in an USEPA ~~has advised that it will be working to secure similar agreements with other PRPs.~~allocation process. The release of the FFS Record of Decision, ~~did not have a material adverse impact on Ashland’s business and financial operations; however, there are a number of contingencies in~~ the ~~future that could possibly have a material impact including adverse rulings or verdicts, allocation~~current allocations proceedings and ~~related orders.~~

the lawsuit are not expected to be material to Ashland.

For additional information regarding environmental matters and reserves, see Note KL of Notes to Condensed Consolidated Financial Statements in this quarterly report on Form 10-Q.

Other Pending Legal Proceedings

In addition to the matters described above, there are other various claims, lawsuits and administrative proceedings pending or threatened against Ashland and its current and former subsidiaries. Such actions are with respect to commercial matters, product liability, toxic tort liability and other environmental matters which seek remedies or damages, some of which are for substantial amounts. While Ashland cannot predict with certainty the outcome of such actions, it believes that adequate reserves have been recorded and losses already recognized with respect to such actions were immaterial as of ~~December 31, 2017.~~June 30, 2021. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, Ashland believes that such potential losses were immaterial as of ~~December 31, 2017.~~

June 30, 2021.

ITEM 1A. RISK FACTORS

During the period covered by this report, there were no material changes from the risk factors previously disclosed in Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2017.~~

2020.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Share~~

There was no share repurchase activity during the three months ended ~~December 31, 2017 was as follows:~~

June 30, 2021.


Issuer Purchases of Equity Securities
Q3 Fiscal Periods	Total Number of Shares Purchased		Average Price Paid Per Share, including commission		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Dollar Value of Shares that May Be Purchased Under the Plans or Programs (in millions)(a)
April 1, 2021 to April 30, 2021		—	$	—		—	$	800
May 1, 2021 to May 31, 2021		—		—		—		800
June 1, 2021 to June 30, 2021		—		—		—		800
Total		—				—	$	800

(a)

Issuer Purchases of Equity Securities
Q1 Fiscal Periods Total Number of Shares Purchased Average Price Paid Per Share, including commission Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)(a)
October 1, 2017 to October 31, 2017 —
$ —
—
$ 500
November 1, 2017 to November 30, 2017:

Employee Tax Withholdings 16,465
(b) 66.56
—
500
December 1, 2017 to December 31, 2017 —
—
—
500
Total.......................................................... 16,465
—
$ 500

~~(a)In April 2015, the Company's~~During March 2018, Ashland’s Board of Directors ~~authorized~~approved a ~~program to repurchase up to~~new $1 billion ofstock repurchase program, which replaced the ~~Company's~~previous stock ~~with the authorization expiring December 31, 2017. In September 2017, the Company's Board of Directors renewed the program for the remaining $500 million. The Company's share~~repurchase program. Ashland’s stock repurchase program does not obligate it to acquire any specific number of shares. Under the program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 of the Exchange Act. As of ~~December 31, 2017, $500~~June 30, 2021, $800 million remains available for repurchase under this authorization.

~~(b)Shares withheld from employees to cover their withholding requirements for personal income taxes related to the vesting of restricted stock.~~

ITEM 6. EXHIBITS



(a) Exhibits

10.1* 2.1	~~Amendment No. 1 to the~~Master Asset Purchase Agreement, dated January 18, 2021, entered into by and between Schülke & Mayr GmbH, ISP Marl Holdings GmbH, and Ashland ~~Global Holdings Inc. Non-Qualified Defined Contribution Plan~~

~~10.2~~	~~Ashland Global Holdings Inc. 2018 Omnibus Incentive Compensation Plan~~Industries Europe GmbH (filed as Exhibit ~~10.1~~2.1 to Ashland’s Form 8-K filed on January ~~26, 2018~~22, 2021 (SEC File No. 333-211719), and incorporated herein by reference).

~~10.3~~ 2.2*	~~Form~~Amendment Agreement to the Master Purchase Agreement regarding the acquisition of ~~Stock-Settled Restricted Stock Unit Award Agreement under~~ the ~~Ashland Global Holdings Inc. 2018 Omnibus Incentive Compensation Plan (filed as Exhibit 10.2 to Ashland’s Form 8-K~~Personal Care Business of Schülke & Mayr GmbH dated April 29, 2021, filed ~~on January 26, 2018 (SEC File No. 333-211719), and incorporated herein by reference).~~herewith.

~~10.4~~ 31.1*	Form of Restricted Stock Award Agreement under the Ashland Global Holdings Inc. 2018 Omnibus Incentive Compensation Plan (filed as Exhibit 10.3 to Ashland’s Form 8-K filed on January 26, 2018 (SEC File No. 333-211719), and incorporated herein by reference).

~~10.5~~	Form of Stock Appreciation Rights Award Agreement under the Ashland Global Holdings Inc. 2018 Omnibus Incentive Compensation Plan (filed as Exhibit 10.4 to Ashland’s Form 8-K filed on January 26, 2018 (SEC File No. 333-211719), and incorporated herein by reference).

~~10.6~~	Form of Performance Unit Award Agreement under the Ashland Global Holdings Inc. 2018 Omnibus Incentive Compensation Plan (filed as Exhibit 10.5 to Ashland’s Form 8-K filed on January 26, 2018 (SEC File No. 333-211719), and incorporated herein by reference).

~~10.7~~	Form of Cash-Settled Restricted Stock Unit Award Agreement under the Ashland Global Holdings Inc. 2018 Omnibus Incentive Compensation Plan (filed as Exhibit 10.6 to Ashland’s Form 8-K filed on January 26, 2018 (SEC File No. 333-211719), and incorporated herein by reference).

12*	~~Computation of Ratio of Earnings to Fixed Charges.~~

31.1*	Certificate of ~~William A. Wulfsohn,~~Guillermo Novo, Chief Executive Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certificate of J. Kevin Willis, Chief Financial Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32*	Certificate of ~~William A. Wulfsohn,~~Guillermo Novo, Chief Executive Officer of Ashland, and J. Kevin Willis, Chief Financial Officer of Ashland pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**	Inline XBRL Instance Document.

101.SCH**	Inline XBRL Taxonomy Extension Schema Document.

101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

*Filed herewith.

**Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Statements of Consolidated Comprehensive Income for the three months ended ~~December 31, 2017~~ ~~and~~ ~~December 31, 2016; (ii) Condensed Consolidated Balance Sheets at~~ ~~December 31, 2017~~ ~~and~~ ~~September 30, 2017; (iii) Statements of Consolidated Equity at~~ ~~December 31, 2017; (iv) Statements of Condensed Consolidated Cash Flows for the three months ended~~ ~~December 31, 2017~~ ~~and~~ ~~December 31, 2016; and (v) Notes to Condensed Consolidated Financial Statements.~~

^SM~~Service mark, Ashland or its subsidiaries, registered in various countries.~~

~~™ Trademark, Ashland or its subsidiaries, registered in various countries.~~


	*	Filed herewith.
	**	Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Statements of Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2021 and June 30, 2020; (ii) Condensed Consolidated Balance Sheets at June 30, 2021 and September 30, 2020; (iii) Statements of Consolidated Equity at June 30, 2021; (iv) Statements of Condensed Consolidated Cash Flows for the nine months ended June 30, 2021 and June 30, 2020; and (v) Notes to Condensed Consolidated Financial Statements.
	SM	Service mark, Ashland or its subsidiaries, registered in various countries.
	™	Trademark, Ashland or its subsidiaries, registered in various countries.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Ashland Global Holdings Inc.
		(Registrant)
~~January 30, 2018~~ July 29, 2021		/s/ J. Kevin Willis
		J. Kevin Willis
		Senior Vice President and Chief Financial Officer (on behalf of the Registrant and as principal financial officer)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	ASH	New York Stock Exchange



Large Accelerated Filerþ	☑			Accelerated Filero		☐
Non-Accelerated Filero	☐			Smaller Reporting Companyo		☐
		~~(Do not check if a smaller reporting company.)~~	Emerging Growth Companyo		☐


(In millions - unaudited)	June 30 2021		September 30 2020
ASSETS
Current assets
Cash and cash equivalents	$	262	$	454
Accounts receivable (a) - Note H		384		471
Inventories - Note F		517		529
Other assets		72		87
Current assets held for sale - Note B		0		6
Total current assets		1,235		1,547
Noncurrent assets
Property, plant and equipment
Cost		3,343		3,265
Accumulated depreciation		1,819		1,700
Net property, plant and equipment		1,524		1,565
Goodwill - Note G		1,901		1,758
Intangibles - Note G		1,133		1,013
Operating lease assets, net - Note I		134		137
Restricted investments - Note E		315		301
Asbestos insurance receivable (b) - Note L		136		136
Deferred income taxes		26		26
Other assets		362		394
Total noncurrent assets		5,531		5,330
Total assets	$	6,766	$	6,877

LIABILITIES AND EQUITY
Current liabilities
Short-term debt - Note H	$	95	$	280
Current portion of long-term debt - Note H		6		0
Trade and other payables		236		233
Accrued expenses and other liabilities		241		277
Current operating lease obligations - Note I		24		23
Total current liabilities		602		813
Noncurrent liabilities
Long-term debt - Note H		1,578		1,573
Asbestos litigation reserve - Note L		501		513
Deferred income taxes		243		229
Employee benefit obligations - Note K		158		157
Operating lease obligations - Note I		118		124
Other liabilities		364		432
Total noncurrent liabilities		2,962		3,028
Commitments and contingencies - Note L
Stockholders’ equity		3,202		3,036

Total liabilities and stockholders' equity	$	6,766	$	6,877



	December 31		September 30
(In millions - unaudited)	2017		2017

ASSETS
Current assets
Cash and cash equivalents	$	601	$	566
Accounts receivable (a)	597		612
Inventories - Note F	674		634
Other assets	92		91
Total current assets	1,964		1,903
Noncurrent assets
Property, plant and equipment
Cost	3,795		3,762
Accumulated depreciation	1,850		1,792
Net property, plant and equipment	1,945		1,970
Goodwill - Note G	2,475		2,465
Intangibles - Note G	1,298		1,319
Restricted investments - Note E	315		302
Asbestos insurance receivable - Note K	205		209
Deferred and other income taxes	28		28
Other assets	425		422
Total noncurrent assets	6,691		6,715
Total assets	$	8,655	$	8,618

LIABILITIES AND EQUITY
Current liabilities
Short-term debt - Note H	$	355	$	235
Trade and other payables	382		409
Accrued expenses and other liabilities	266		324
Total current liabilities	1,003		968
Noncurrent liabilities
Long-term debt - Note H	2,584		2,584
Asbestos litigation reserve - Note K	676		694
Deferred and other income taxes	390		375
Employee benefit obligations - Note J	194		191
Other liabilities	409		400
Total noncurrent liabilities	4,253		4,244
Commitments and contingencies - Note K
Stockholders' equity	3,399		3,406

Total liabilities and stockholders' equity	$	8,655	$	8,618



	May 12
(In millions)	2017
ASSETS
Current assets
Cash	179
Accounts receivable, net	385
Inventories	153
Other current assets	24
Total current assets	741
Noncurrent assets
Net property, plant and equipment	357
Goodwill	329
Equity and other unconsolidated investments	31
Deferred income taxes	391
Other noncurrent assets	93
Total noncurrent assets	1,201
Total assets	$	1,942
LIABILITIES AND EQUITY
Current liabilities
Short-term debt	75
Current portion of long-term debt	16
Trade and other payables	353
Other current liabilities	34
Total current liabilities	478
Noncurrent liabilities
Long-term debt	662
Employee benefit obligations	826
Other long-term liabilities	163
Total noncurrent liabilities	1,651
Total liabilities	$	2,129
Net deficit	$	(187	)



	þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Three months ended
	December 31
(In millions except per share data - unaudited)	2017			2016
Sales	$	842		$	704
Cost of sales	613			515
Gross profit	229			189

Selling, general and administrative expense	171			157
Research and development expense	21			20
Equity and other income	2			3
Operating income	39			15

Net interest and other financing expense	31			122
Other net periodic benefit income	—			2
Net loss on divestitures	1			1
Income (loss) from continuing operations before income taxes	7			(106		)
Income tax expense (benefit) - Note I	14			(41		)
Loss from continuing operations	(7		)	(65		)
Income from discontinued operations (net of tax) - Note D	3			75
Net income (loss)	(4		)	10
Net income attributable to noncontrolling interest (a)	—			11
Net loss attributable to Ashland	$	(4	)	$	(1	)

PER SHARE DATA
Basic earnings per share - Note L
Loss from continuing operations	$	(0.12	)	$	(1.05	)
Income from discontinued operations attributable to Ashland	0.05			1.04
Net loss attributable to Ashland	$	(0.07	)	$	(0.01	)

Diluted earnings per share - Note L
Loss from continuing operations	$	(0.12	)	$	(1.05	)
Income from discontinued operations attributable to Ashland	0.05			1.04
Net loss attributable to Ashland	$	(0.07	)	$	(0.01	)

COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$	(4	)	$	10
Other comprehensive income (loss), net of tax - Note M
Unrealized translation gain (loss)	3			(146		)
Net change in available-for-sale securities	8			—
Pension and postretirement obligation adjustment	—			(1		)
Other comprehensive income (loss)	11			(147		)
Comprehensive income (loss)	$	7		$	(137	)
Comprehensive income attributable to noncontrolling interest	—			10
Comprehensive income (loss) attributable to Ashland	$	7		$	(147	)


~~(a)~~	~~Accounts receivable includes an allowance for doubtful accounts of $9 million at~~ ~~December 31, 2017~~ ~~and~~ ~~September 30, 2017~~.


								Accumulated
								other
	Common		Paid-in		Retained			comprehensive
(In millions - unaudited)	stock		capital		earnings			income (loss) (a)			Total
BALANCE AT SEPTEMBER 30, 2020	$	1	$	769	$	2,649		$	(383	)	$	3,036
Adoption of new accounting pronouncement (b)						(2	)					(2	)
Total comprehensive income
Net income						176						176
Other comprehensive income									37			37
Regular dividends, $0.850 per common share						(52	)					(52	)
Common shares issued under stock incentive and other plans (c)				7								7
BALANCE AT JUNE 30, 2021	$	1	$	776	$	2,771		$	(346	)	$	3,202



(In millions - unaudited)	Common stock		Paid-in capital		Retained earnings			Accumulated other comprehensive income (loss)			(a)	Total
BALANCE AT SEPTEMBER 30, 2017	$	1	$	931	$	2,696		$	(222	)		$	3,406
Total comprehensive income (loss)
Net loss					(4		)					(4		)
Other comprehensive income								11				11
Regular dividends, $0.225 per common share					(14		)					(14		)
Common shares issued under stock incentive and other plans (b)			—									—
BALANCE AT DECEMBER 31, 2017	$	1	$	931	$	2,678		$	(211	)		$	3,399


~~(b)~~	~~Common shares issued were 111,400 for the~~ ~~three~~ ~~months ended~~ ~~December 31, 2017~~.


~~(a)~~	~~Excludes changes resulting from operations acquired or sold.~~


	At April 30,
Preliminary purchase price allocation (In millions)	2021
Assets:
Cash and cash equivalents	$	3
Accounts receivable		6
Inventories		12
Net property, plant and equipment		3
Goodwill		129
Intangibles		185
Liabilities:
Trade and other payables		(3	)
Deferred income taxes		(18	)
Employee benefit obligations		(6	)
Total purchase price	$	311



	At
	May 17, 2017
Preliminary purchase price allocation (in millions)	As Adjusted
Assets:
Accounts receivable	52
Inventory	74
Other current assets	4
Intangible assets	330
Goodwill	287
Property, plant and equipment	97
Other noncurrent assets	20
Liabilities:
Accounts payable	(32		)
Deferred tax - net	(138		)
Other noncurrent liabilities	(14		)
Total purchase price	$	680



~~(Mark One)~~


			Weighted-average
			amortization period
Intangible asset type (in millions)	Value		(years)
Trademarks and trade names	$	42	20
Intellectual property		24	9
Customer and supplier relationships		119	20
Total	$	185


(In millions)	Severance costs
Balance at of September 30, 2020		39
Restructuring reserve		2
Utilization (cash paid)		(27	)
Balance at June 30, 2021	$	14


(In millions)	Severance costs
Balance at of September 30, 2019		0
Restructuring reserve		30
Utilization (cash paid)		(8	)
Balance at June 30, 2020	$	22



	Three months ended
(In millions)	December 31, 2016
Income from discontinued operations
attributable to Valvoline
Sales	$	489
Cost of sales	(293		)
Selling, general and administrative expense	(82		)
Research and development expense	(3		)
Equity and other income	9
Operating income of discontinued operations	120
Net interest and other financing expense	(10		)
Pretax income of discontinued operations	110
Income tax expense	(35		)
Income from discontinued operations	$	75


	Carrying		Total fair		Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(In millions)	value		value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	262	$	262	$	262	$	0	$	0
Restricted investments (a)		342		342		342		0		0
Investment of captive insurance company (b)		8		8		8		0		0
Foreign currency derivatives		1		1		0		1		0
Total assets at fair value	$	613	$	613	$	612	$	1	$	0
Liabilities
Foreign currency derivatives	$	1	$	1	$	0	$	1	$	0



(In millions)	Carrying value		Total fair value		Quoted prices in active markets for identical assets Level 1		Significant other observable inputs Level 2		Significant unobservable inputs Level 3
Assets
Cash and cash equivalents	$	601	$	601	$	601	$	—	$	—
Restricted investments (a)	345		345		345		—		—
Deferred compensation investments (b)	160		160		—		160		—
Investments of captive insurance company (b)	3		3		3		—		—
Foreign currency derivatives	4		4		—		4		—
Total assets at fair value	$	1,113	$	1,113	$	949	$	164	$	—

Liabilities
Foreign currency derivatives	$	13	$	13	$	—	$	13	$	—


~~(a)~~	~~Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.~~


~~(b)~~	~~Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.~~


~~(b)~~	Included in other noncurrent ~~assets in the Condensed Consolidated Balance Sheets.~~


~~(a)~~	~~The accumulated adjustments include investment income, realized gains, disbursements and settlements recorded in previous periods.~~


~~(b)~~	~~Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds.~~


			Gross		Gross
(In millions)	Adjusted Cost		Unrealized Gain		Unrealized Loss			Fair Value
As of June 30, 2021
Demand deposit	$	6	$	0	$	0		$	6
Equity mutual fund		92		48		0			140
Fixed income mutual fund		189		7		0			196
	$	287	$	55	$	0		$	342

As of September 30, 2020
Demand deposit	$	7	$	0	$	0		$	7
Equity mutual fund		116		31		(1	)		146
Fixed income mutual fund		162		16		0			178
	$	285	$	47	$	(1	)	$	331



	Specialty				Intermediates
(In millions)	Ingredients		Composites		and Solvents		(a)	Total
Balance as of September 30, 2017	$	2,315	$	150	$	—		$	2,465
Currency translation adjustment	10		—		—			10
Balance as of December 31, 2017	$	2,325	$	150	$	—		$	2,475


~~(a)~~	~~As of December 31, 2017, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment.~~


	June 30, 2021
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount (a)		amortization			amount
Definite-lived intangibles
Trademarks and trade names	$	107	$	(35	)	$	72
Intellectual property		742		(480	)		262
Customer and supplier relationships		887		(366	)		521
Total definite-lived intangibles		1,736		(881	)		855

Indefinite-lived intangibles
Trademarks and trade names		278		—			278
Total intangible assets	$	2,014	$	(881	)	$	1,133


	September 30, 2020
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangibles
Trademarks and trade names	$	66	$	(32	)	$	34
Intellectual property		721		(442	)		279
Customer and supplier relationships		757		(335	)		422
Total definite-lived intangibles		1,544		(809	)		735

Indefinite-lived intangibles
Trademarks and trade names		278		—			278
Total intangible assets	$	1,822	$	(809	)	$	1,013



	December 31, 2017
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangible assets
Trademarks and trade names	$	67	$	(22	)	$	45
Intellectual property	758		(340		)	418
Customer and supplier relationships	780		(246		)	534
Total definite-lived intangible assets	1,605		(608		)	997

Indefinite-lived intangible assets
Trademarks and trade names	301		—			301
Total intangible assets	$	1,906	$	(608	)	$	1,298



	September 30, 2017
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangible assets
Trademarks and trade names	$	67	$	(22	)	$	45
Intellectual property	757		(326		)	431
Customer and supplier relationships	777		(235		)	542
Total definite-lived intangible assets	1,601		(583		)	1,018

Indefinite-lived intangible assets
Trademarks and trade names	301		—			301
Total intangible assets	$	1,902	$	(583	)	$	1,319


~~(a)~~	~~Other includes $24 million and $25 million of debt issuance cost discounts as of December 31, 2017 and September 30, 2017, respectively.~~


(In millions)	June 30, 2021		September 30, 2020
Assets
Operating lease assets, net	$	134	$	137
Total lease assets	$	134	$	137

Liabilities
Current operating lease obligations	$	24	$	23
Non-current operating lease obligations		118		124
Total lease liabilities	$	142	$	147