Exhibit 99.1
1
J.P. Morgan Sixth Annual Diversified
Industries Conference
Industries Conference
June 7, 2011
2
Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon a number of
assumptions, risks and uncertainties, including those mentioned within this presentation. Performance estimates are also
based upon internal forecasts and analyses of current and future market conditions and trends (including the ability to
recover raw-material cost increases through price increases); management plans and strategies; operating efficiencies,
economic conditions and the impact of natural disasters; and legal proceedings and claims (including environmental and
asbestos matters). These statements also include those that refer to Ashland’s current expectations about the acquisition
of International Specialty Products Inc. (ISP). Although Ashland believes its expectations are based on what management
believes to be reasonable assumptions, Ashland cannot assure that the expectations reflected in this presentation or in
any oral statements related to the acquisition of ISP will be achieved, as they are subject to risks and uncertainties that
are difficult to predict and may be outside of Ashland’s control. These risks and uncertainties may cause actual results to
differ materially from those stated, projected or implied. Such risks and uncertainties include, among other things, the
possibility that the benefits anticipated from the acquisition of ISP will not be fully realized, the possibility that the
transaction may not close, and the possibility that financing may not be available on the terms committed. Other factors,
uncertainties and risks affecting Ashland are contained in its periodic filings made with the Securities and Exchange
Commission (SEC), including Ashland’s Form 10-K for the fiscal year ended Sept. 30, 2010, and Ashland’s quarterly Form
and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon a number of
assumptions, risks and uncertainties, including those mentioned within this presentation. Performance estimates are also
based upon internal forecasts and analyses of current and future market conditions and trends (including the ability to
recover raw-material cost increases through price increases); management plans and strategies; operating efficiencies,
economic conditions and the impact of natural disasters; and legal proceedings and claims (including environmental and
asbestos matters). These statements also include those that refer to Ashland’s current expectations about the acquisition
of International Specialty Products Inc. (ISP). Although Ashland believes its expectations are based on what management
believes to be reasonable assumptions, Ashland cannot assure that the expectations reflected in this presentation or in
any oral statements related to the acquisition of ISP will be achieved, as they are subject to risks and uncertainties that
are difficult to predict and may be outside of Ashland’s control. These risks and uncertainties may cause actual results to
differ materially from those stated, projected or implied. Such risks and uncertainties include, among other things, the
possibility that the benefits anticipated from the acquisition of ISP will not be fully realized, the possibility that the
transaction may not close, and the possibility that financing may not be available on the terms committed. Other factors,
uncertainties and risks affecting Ashland are contained in its periodic filings made with the Securities and Exchange
Commission (SEC), including Ashland’s Form 10-K for the fiscal year ended Sept. 30, 2010, and Ashland’s quarterly Form
10-Q filings, which are available on Ashland’s Investor Relations website at http://investor.ashland.com or the SEC’s
website at www.sec.gov. Ashland undertakes no obligation to subsequently update or revise the forward-looking
statements made in this presentation to reflect events or circumstances after the date of this presentation.
statements made in this presentation to reflect events or circumstances after the date of this presentation.
Regulation G: Adjusted and Pro Forma Results
The information presented herein regarding certain unaudited adjusted and pro forma results does not conform to
generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results
determined in accordance with GAAP. Management has included this non-GAAP and pro forma information to assist in
understanding the operating performance of the company and its reporting segments. The non-GAAP and pro forma
information provided may not be consistent with the methodologies used by other companies. All non-GAAP information
related to previous Ashland filings with the SEC has been reconciled with reported GAAP results.
generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results
determined in accordance with GAAP. Management has included this non-GAAP and pro forma information to assist in
understanding the operating performance of the company and its reporting segments. The non-GAAP and pro forma
information provided may not be consistent with the methodologies used by other companies. All non-GAAP information
related to previous Ashland filings with the SEC has been reconciled with reported GAAP results.
3
Strong Leadership Positions
in Markets We Serve
in Markets We Serve
Ashland
Aqualon
Functional
Ingredients
Functional
Ingredients
#1 global
producer
of cellulose
ethers
producer
of cellulose
ethers
Ashland
Hercules
Water
Technologies
Water
Technologies
#1 global
producer
of specialty
papermaking
chemicals
producer
of specialty
papermaking
chemicals
Ashland
Performance
Materials
Materials
#1 global leader
in unsaturated
polyester resins
and vinyl ester
resins
in unsaturated
polyester resins
and vinyl ester
resins
Ashland
Consumer
Markets
Consumer
Markets
(Valvoline)
#3 passenger-car
motor oil and
#2 franchised
quick-lube chain
in the United States
motor oil and
#2 franchised
quick-lube chain
in the United States
3
4
June Quarter Update
· Raw material costs have increased during quarter
- Consumer Markets and Water Technologies
particularly affected
particularly affected
· Flooding of Mississippi and Ohio river system
negatively affecting Consumer Markets
negatively affecting Consumer Markets
- Supply constraints and increased costs expected
to unfavorably affect operating income
by $5 million to $6 million
to unfavorably affect operating income
by $5 million to $6 million
· Corporate/Unallocated and Other
- Stranded costs expected to be approximately $10 million
- Pension and other postretirement benefit expenses
expected to be approximately $4 million to $5 million
expected to be approximately $4 million to $5 million
5
ISP Transaction Overview
Expanding our specialty chemical foundation
Expanding our specialty chemical foundation
· Ashland to acquire privately owned International Specialty Products Inc.
- Specialty chemical manufacturer of innovative functional ingredients
- Solutions provider to key growth markets such as personal care
and pharmaceutical
and pharmaceutical
- Trailing 12-month financials for the period ended March 31, 2011
• Sales: $1.6 billion
• EBITDA: $360 million
· Purchase price of $3.2 billion
- All cash deal
- Includes working capital
- Immediately accretive to earnings
· Expected closing prior to end of September quarter
- Subject to regulatory approval and other customary closing conditions
6
ISP Overview
High-margin, global business
High-margin, global business
· Leading manufacturer of functional ingredients
to personal care and pharmaceutical markets
to personal care and pharmaceutical markets
- EBITDA margins ~ 21% – 22%
- Robust top-line growth
· Unique technology portfolio that meets a variety
of demanding customer applications
of demanding customer applications
- More than 400 active patents
- Approximately 275 scientists, positioned globally
· Strong global presence
- Nearly 60% of sales from outside North America
· Extensive relationships with leading consumer
brand and pharmaceutical providers
brand and pharmaceutical providers
· Approximately 2,700 employees
7
ISP Business
· Highly specialized products to meet
customers’ unique specifications
customers’ unique specifications
· Products represent a small fraction of customers’
overall costs, but provide high functionality
overall costs, but provide high functionality
· Broad technology portfolio protected by patents,
trade secrets and manufacturing know-how
trade secrets and manufacturing know-how
· High capital costs to replicate manufacturing capabilities
8
ISP Transaction Rationale
· Strengthens positions in number of important high-growth,
high-margin end markets
high-margin end markets
- Pharmaceutical: Excipients
- Personal Care: Hair Care, Skin Care, Oral Care
· Broadens Ashland’s intellectual-property portfolio of water-soluble polymers
and global R&D and applications capability
and global R&D and applications capability
- Strong pipeline of new products to drive growth of combined business
- New product development opportunities by leveraging new chemistries
· Deepens relationships with existing customers and enhances
penetration of existing markets
penetration of existing markets
- Complementary product offerings in number of areas
· Generates more consistent, predictable earnings and cash flow generation
- Stable, less-cyclical end markets
· Provides immediate EPS accretion and enhances long-term EPS growth
9
ISP Transaction Financing
Attractive, low-cost financing
Attractive, low-cost financing
· Purchase price of $3.2 billion
- $2.9 billion of new financing to be drawn at closing
• Term Loan A ~ $1.2 billion
• Term Loan B ~ $1.7 billion
- Remaining closing amounts will come from available cash
- Will optimize exact mix of financing between now and closing
• Mix of bank debt and bond offering is a possibility
· New revolver facility of $750 million to remain undrawn at closing
· Financing commitments in place
· Average cost of debt of approximately 3.8%
- Assumes we fix 70% – 80% of total outstanding debt
· Estimated Gross Debt/EBITDA ratio at closing of ~ 3.5x
- Normalized target remains 2.0x
10
Cost Synergies
History of meeting synergy targets
History of meeting synergy targets
· Expect ~$50 million annualized cost savings
· Expect to achieve full synergies
by second year of operation
by second year of operation
· History of success in delivering synergies
- Hercules integration plan and resultant synergies
11
Key Items
Clear path to completion
Clear path to completion
· Receipt of necessary regulatory approvals
- Will require EU and U.S. filings
· Completion of standard and customary closing conditions
- No financing contingency
- Reverse termination fee of $413 million
· Path to completion
- Expect to close by end of September quarter
12
Accretion
Expect immediate accretion to Ashland EPS
Expect immediate accretion to Ashland EPS
· ISP financials
- Trailing 12 months’ EBITDA of $360 million
- Depreciation and amortization of $66 million
- Tax rate of mid-30%
· Purchase accounting and financing
- Assumed intangible amortization of $50 million
- Incremental book interest expense of ~$130 million
· Cash generation focused on debt paydown
- Increases Ashland’s overall tax rate
by approximately 500 basis points
by approximately 500 basis points
- Accretion is as compared to base case which would have included share
repurchases
repurchases
• Board authorization remains in place and shares may still be repurchased over
time
time
13
Ashland EBITDA Transformation
Enhanced margin performance
Enhanced margin performance
1 For trailing 12 months ended March 31, 2011. See Slide 15 for reconciliation to amounts reported under GAAP.
Ashland
Performance
Materials
13%
Performance
Materials
13%
Ashland
Performance
Materials
13%
Performance
Materials
13%
Ashland
Consumer
Markets
37%
Consumer
Markets
37%
Ashland
Hercules Water
Technologies
Hercules Water
Technologies
Ashland
Hercules Water
Technologies
Hercules Water
Technologies
23%
23%
Ashland Aqualon
Functional
Functional
Ashland Aqualon
Functional
Functional
Ingredients
Ingredients
27%
27%
Ashland
Performance
Materials - 8%
Performance
Materials - 8%
Ashland
Performance
Materials - 8%
Performance
Materials - 8%
Ashland
Consumer
Markets
26%
Consumer
Markets
26%
Ashland
Hercules Water
Technologies
Hercules Water
Technologies
Ashland
Hercules Water
Technologies
Hercules Water
Technologies
16%
16%
ISP
32%
32%
Pro Forma1
Today1
14
® Registered trademark, Ashland or its subsidiaries, registered in various countries
™ Trademark, Ashland or its subsidiaries, registered in various countries
15
15
Ashland Inc. and Consolidated Subsidiaries
Reconciliation of Non-GAAP Data
for the 12 Months Ended March 31, 2011
Reconciliation of Non-GAAP Data
for the 12 Months Ended March 31, 2011
1 Calculation of adjusted EBITDA for each quarter has been reconciled within each quarterly earnings release filed
with the SEC and posted on Ashland's website.
with the SEC and posted on Ashland's website.