EXHIBIT 99.1
® Registered trademark, Ashland or its subsidiaries, registered in various countries
* Registered trademark owned by a third party.
*
*
Lender Presentation
$750 million Revolving Credit Facility
$1,200 million Term Loan A
$1,700 million Term Loan B
June 16, 2011
$750 million Revolving Credit Facility
$1,200 million Term Loan A
$1,700 million Term Loan B
June 16, 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 statements
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.
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements
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.
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.
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.
3
Introduction
David Jaffe
Managing Director, Citi
4
1 $1,199 million of ISP total debt and $244 million of ISP cash as of 3/31/2011.
2 Includes financing fees, transaction expenses, interest-rate-swap termination cost, and change-of-control payments.
Transaction Structure
4 On May 31, 2011, Ashland announced the all-cash acquisition of International Specialty
Products (“ISP”)
Products (“ISP”)
- Specialty chemical manufacturer of innovative functional ingredients
- Solutions provider to key growth markets such as personal care and pharmaceutical
4 Combined pro forma trailing 12-month financials for the period ended March 31, 2011
- Sales: $7.6 billion
- Adjusted EBITDA: $1.1 billion
4 $3.2 billion purchase price
- $1.2 billion to pay off ISP debt ($1.0 billion net of cash)(1)
- $2.2 billion to purchase ISP equity
- 8.9x TTM 3/31/2011 Adjusted EBITDA
4 Sources of funds
- $2.9 billion of funded credit facilities
- $300 million Ashland cash for purchase price
- ~$200 million Ashland cash for transaction costs and other upfront expenses(2)
4 Expected closing prior to end of September quarter
- Subject to regulatory approval and other customary closing conditions
5
(1)
Sources and Uses
6
(3)
(2)
Pro Forma Capitalization
7
Transaction Overview
Jim O'Brien
Chairman and CEO
8
Introductions
4 Jim O'Brien, Chairman and CEO
4 Lamar Chambers, Senior Vice President and CFO
4 John Panichella, Senior Vice President, Ashland, and President,
Ashland Aqualon Functional Ingredients
Ashland Aqualon Functional Ingredients
4 Jack Joy, Vice President, Corporate Development
4 Kevin Willis, Vice President and Treasurer
4 Stan Turner, Director, Enterprise Strategy
4 Lynn Freeman, Assistant Treasurer
4 Shea Blackburn, Manager, Debt
9
Ashland’s Strategy
Furthering our long-term strategic goals
Furthering our long-term strategic goals
4Global #1 or strong #2 market position
4Broad global footprint
4Robust cash-generating businesses
4Leverage competitive strengths
4Preferably water-based or sustainable
chemistries
chemistries
ISP
ü
ü
ü
ü
ü
10
Transaction Rationale
4 Strengthens positions in a number of important high-growth,
high-margin end markets
high-margin end markets
- Pharmaceutical: Excipients
- Personal Care: Hair Care, Skin Care, Oral Care
4 Broadens our intellectual property portfolio of water-soluble polymers
and global R&D and applications capability
- Strong pipeline of new products to drive growth of the combined
business
business
- New product development opportunities by leveraging new chemistries
4 Deepens relationships with existing customers and enhances
penetration of existing markets
penetration of existing markets
- Complementary product offerings in a number of areas
4 Generates more consistent, predictable earnings and cash-flow
generation
generation
- Stable, less-cyclical end markets
11
4 Diversified business portfolio serving a wide range of end markets
4 Strengthens Functional Ingredients business and R&D efforts
4 Leading market positions in all markets served
4 Broad geographical diversity
- ISP has ~60% of revenues outside North America
- Pro forma company will generate approximately $3.5 billion in
revenues outside North America
revenues outside North America
4 Achievable synergies
- Expected annualized run-rate synergies of at least $50 million by
year 2
year 2
- We will pursue disciplined, bottom-up approach similar to that used
for Hercules
for Hercules
4 Commitment to deleveraging
- Proven track record in Hercules transaction
- Target leverage of 2.0x
4 Experienced management team
Investment Highlights
12
Ashland Overview
Jim O'Brien
Chairman and CEO
13
Ashland Overview
Ashland
Performance Materials
23%
Performance Materials
23%
Ashland
Performance Materials
23%
Performance Materials
23%
Ashland
Consumer Markets
31%
Consumer Markets
31%
By commercial unit
Ashland Hercules
Water Technologies
Water Technologies
Ashland Hercules
Water Technologies
Water Technologies
30%
30%
Ashland
Aqualon
Functional
Ingredients
Aqualon
Functional
Ingredients
Ashland
Aqualon
Functional
Ingredients
Aqualon
Functional
Ingredients
16%
16%
1 For trailing 12 months ended March 31, 2011.
North America
58%
58%
North America
58%
58%
Asia Pacific
13%
13%
Asia Pacific
13%
13%
Latin America/
Other - 5%
Other - 5%
Europe
Europe
24%
24%
Sales1: $6.0 billion
Adjusted EBITDA1: $735 million
Ashland
Performance
Materials - 13%
Performance
Materials - 13%
Ashland
Performance
Materials - 13%
Performance
Materials - 13%
Ashland Consumer
Markets
37%
Markets
37%
Ashland Hercules
Water Technologies
Water Technologies
Ashland Hercules
Water Technologies
Water Technologies
23%
23%
Ashland Aqualon Functional
Ashland Aqualon Functional
Ingredients
Ingredients
27%
27%
NYSE Ticker Symbol: | ASH |
Total Employees: | ~12,500 |
Outside North America | ~40% |
Number of Countries in Which Ashland Has Sales: | More than 100 |
14
Klucel™
6%
Latin America/
Other - 8%
North
America
America
North
America
America
35%
35%
Asia
Pacific
Pacific
Asia
Pacific
Pacific
20%
20%
Europe
37%
Coatings
Additives
33%
Additives
33%
Coatings
Additives
33%
Additives
33%
Energy &
Specialties
Solutions
19%
Specialties
Solutions
19%
Regulated
Industries
30%
Industries
30%
Regulated
Industries
30%
Industries
30%
Sales
by Geography
by Geography
Sales
by Market
by Market
Trailing 12 Months Ended March 31, 2011
Sales: $1.0 billion
Adjusted EBITDA: $208 million
Adjusted EBITDA Margin: 21.8%
· Diversified, global customer base
Customers
· Regulated markets
- Personal care
- Pharmaceutical
- Food
· Water-based paints
· Oilfield (chemicals and drilling muds)
· Construction
Markets
· Broad product line based
on renewable resources
on renewable resources
- Water-soluble polymers
(cellulose ethers and guar derivatives)
(cellulose ethers and guar derivatives)
Products
Business Overview
Sales
by Product
by Product
CMC
20%
20%
CMC
20%
20%
HEC
32%
32%
HEC
32%
32%
MC
18%
18%
MC
18%
18%
Other
16%
16%
Other
16%
16%
™ Trademark, Ashland or its subsidiaries, registered in various countries
15
Trailing 12 Months Ended March 31, 2011
Sales: $1.8 billion
Adjusted EBITDA: $180 million
Adjusted EBITDA Margin: 9.9%
Process
25%
25%
Process
25%
25%
Utility
34%
34%
Utility
34%
34%
Functional
41%
41%
Functional
41%
41%
Growth
51%
51%
Growth
51%
51%
Base
31%
31%
· Growth
- Commercial and - Packaging
institutional - Tissue and towel
- Food and beverage - Pulp
- Mining
· Base
- Printing and writing
- Specialty chemicals
- General manufacturing
· Opportunistic
- Lubricants - Basic chemicals/
- Municipal other
Customers/
Markets
Markets
· Process chemicals: microbial and
contaminant control, pulping aids,
retention aids and defoamers
contaminant control, pulping aids,
retention aids and defoamers
· Utility water treatments
· Functional chemicals: sizing/strength
Products/
Services
Services
Business Overview
North
America
America
North
America
America
49%
49%
Europe
33%
Latin
America/
America/
Other - 7%
16
Pkg. &
Converting
23%
23%
Ashland Performance Materials
A global leader in specialty chemicals
A global leader in specialty chemicals
North
America
America
North
America
America
59%
59%
Europe
25%
Latin
America/
Other -
6%
America/
Other -
6%
Industrial
Construction
29%
Construction
29%
· Auto manufacturers; foundries; pipe
and tank fabricators; packaging and
converting; bathware, countertop and
window lineal manufacturers; pipe
relining contractors; boat builders;
wide and narrow web printers
and tank fabricators; packaging and
converting; bathware, countertop and
window lineal manufacturers; pipe
relining contractors; boat builders;
wide and narrow web printers
Customers
· Construction, packaging and con-
verting, marine and transportation
verting, marine and transportation
Markets
· Composites and Adhesives
- Unsaturated polyester resins
- Vinyl ester resins
- Gelcoats
- Pressure-sensitive adhesives
- Structural adhesives
- Specialty resins
· Casting Solutions/ASK Chemicals2
- Foundry binder resins
- Chemicals
- Sleeves and filters
- Design services
Products/
Services
Services
Business Overview
Sales
by Geography1
by Geography1
Sales
by Market1
by Market1
Trailing 12 Months Ended March 31, 2011
Sales: $1.4 billion
Adjusted EBITDA: $96 million
Adjusted EBITDA Margin: 7.1%
Marine
13%
13%
Asia Pacific
10%
10%
1 Excludes sales from Casting Solutions.
2 Joint venture launched in December 2010. Ashland retains 50% interest.
17
Ashland Consumer Markets: A leading worldwide
marketer of premium-branded automotive lubricants and chemicals
marketer of premium-branded automotive lubricants and chemicals
Lubricants
86%
Filters - 2%
Valvoline
Int'l
23%
Int'l
23%
Valvoline
Int'l
23%
Int'l
23%
Do-It-
Yourself
Yourself
36%
· Retail auto parts stores and mass
merchandisers who sell to consumers
merchandisers who sell to consumers
· Installers, such as car dealers and
quick lubes; distributors
quick lubes; distributors
· Fleet owners; manufacturers and users
of industrial and power generation
equipment
of industrial and power generation
equipment
Customers
· Do-It-Yourself (DIY)
· Do-It-For-Me (DIFM)
· Valvoline International
Market
Channels
Channels
· Valvoline™ lubricants and automotive
chemicals
chemicals
· MaxLife™ lubricants
for high-mileage vehicles
for high-mileage vehicles
· SynPower™ synthetic motor oil
· Eagle One™ and Car Brite™
appearance products
appearance products
· Zerex™ antifreeze
· Valvoline Instant Oil Change™ service
· NextGenTM recycled motor oils
Products/
Services
Services
Business Overview
Sales
by Product Line
by Product Line
Sales
by Market Channel
by Market Channel
Do-It-
For-Me
38%
For-Me
38%
DIFM:
Installer channel
27%
Installer channel
27%
Specialty/
Other - 3%
Other - 3%
DIFM:
Valvoline Instant Oil
Change - 11%
Valvoline Instant Oil
Change - 11%
Antifreeze - 5%
Appearance
products - 2%
products - 2%
Chemicals - 5%
Trailing 12 Months Ended March 31, 2011
Sales: $1.9 billion
Adjusted EBITDA: $288 million
Adjusted EBITDA Margin: 15.5%
™ Trademark, Ashland or its subsidiaries, registered in various countries
18
ISP Overview
John Panichella
Senior Vice President, Ashland, and
President, Ashland Aqualon Functional Ingredients
19
ISP Overview
High-margin, global business
High-margin, global business
4Leading manufacturer of functional ingredients
to personal care and pharmaceutical markets
to personal care and pharmaceutical markets
- EBITDA margins ~ 21% - 22%
- Robust top-line growth
4Unique technology portfolio that meets a variety
of demanding customer applications
of demanding customer applications
- More than 400 active patents
- Approximately 275 scientists, positioned globally
4Strong global presence
- Nearly 60% of sales from outside North America
4Extensive relationships with leading consumer
brand and pharmaceutical providers
brand and pharmaceutical providers
4Approximately 2,700 employees
20
Personal Care | Pharma & Nutrition | Performance | Intermediates | Elastomers | |
Financial & Operating Information | |||||
2010 EBIT ($mm) | $124 | $76 | $35 | $29 | |
Key End Markets | Skin Care 4Skin lotions and anti- aging products 4Body washes 4Suncare products 4Body washes Hair Care 4Shampoo / Conditioner 4Mousses / Gels 4Hairsprays 4Body washes Oral Care 4Toothpastes 4Mouthwashes 4Denture adhesives | Pharmaceutical 4Tablets 4Dialysis membranes 4Wound care 4Capsules 4Body washes Other 4Food 4Beverages 4Fine chemicals | 4Oilfield 4Detergents and household cleaners 4Inkjet paper coatings 4Adhesives 4Agriculture 4Paints 4Chemical processing 4Electronics | 4Polyesters 4Urethanes 4Polybutylene terephthalate (PBT) plastics 4Value-added chemical products | 4Tires 4Hoses 4Belting |
Key Products | 4Biofunctional ingredients 4UV absorbers 4Bioadhesives 4Polymers 4Emulsifiers / emollients | 4Excipients 4Reaction solvents 4Bioavailability enhancers 4Clarification polymers 4Radiation-sensitive films | 4Polymers 4Monomers 4Solvents 4Biocides | 4Butanediol (BDO) | 4Emulsion SBR (ESBR) |
Key Customers | 4Alberto Culver 4Avon 4Colgate 4L’Oreal 4Playtex 4P&G 4Unilever | 4Fresenius 4GSK 4Merck 4Novartis 4Pfizer | 4Bayer 4Dow 4Halliburton 4HP 4Reckitt Benckiser | 4Bayer 4DSM 4DuPont 4Novamont | 4 Bridgestone/ Firestone 4 Cooper Tires 4 Michelin 4 Toyo Tires |
Specialty Chemicals
Industrial Chemicals
ISP Portfolio Overview
Broad Portfolio in Stable Markets
Broad Portfolio in Stable Markets
21
Global/Regional HQ
Technical Center
Manufacturing
Cologne, Germany
Memmingen, Germany
Bradford, UK
Paris, France
Sophia Antipolis, France
Hyderabad, India
Shanghai, China
Singapore
Texas City, TX
Mexico City, Mexico
Sao Paulo, Brazil
Wayne, NJ
N.A. Manufacturing
• Calvert City, KY
• Chatham, NJ
• Columbia, MD
• Columbus, OH
• Freetown, MA
• Huntsville, AL
• Leaside, Canada
• Lima, OH
• Port Neches, TX
• Texas City, TX
L.A. Manufacturing
• Cabreuva, Brazil
European. Manufacturing
• Horhausen, Germany
• Marl, Germany
• Memmingen, Germany
• Newton Aycliffe, UK
• Poole, UK
• Sophia Antipolis, France
ISP Locations
Strong global positions
Strong global positions
2010 Sales | |
North America | 41% |
Europe | 35% |
Asia Pacific | 14% |
Latin America | 10% |
~60% of sales
outside of North
America
outside of North
America
22
Personal
Care
47%
Care
47%
Personal
Care
47%
Care
47%
Pharma &
Nutrition
29%
Nutrition
29%
Pharma &
Nutrition
29%
Nutrition
29%
Performance
13%
13%
Performance
13%
13%
EBIT: $264 million
ISP 2010 EBIT by Segment
Greater than 75% of earnings from personal care & pharmaceutical
Greater than 75% of earnings from personal care & pharmaceutical
23
ISP Historical Performance1
Fast-growing, high-margin segments
Fast-growing, high-margin segments
Historical Growth
5-yr sales CAGR
5-yr sales CAGR
Operating
Margin
Margin
Pharma & Nutrition
Personal
Care
Care
Elastomers
Performance
Intermediates
Size of bubble denotes
relative 2010 Operating
Income
relative 2010 Operating
Income
1 Based on calendar-year 2010 ISP financials and historical data provided by ISP management.
24
Business Overview
2010 Sales by Product
Key Customers
Skin Care
42%
42%
Skin Care
42%
42%
Hair Care
32%
32%
Hair Care
32%
32%
Oral Care
26%
26%
Oral Care
26%
26%
Solid Reputation For Quality
4 Alberto Culver
4 Avon
4 Colgate
4 L’Oreal
4 Playtex
4 P&G
4 Unilever
Personal Care - Overview
4 Manufactures critical ingredients in well-known
cosmetic and skin-, hair- and oral-care products
cosmetic and skin-, hair- and oral-care products
4 Market is relatively noncyclical, with sustainable
growth and exceptional margins
growth and exceptional margins
4 Leading position as a strategic supplier by 8
of the top 10 global beauty care companies
of the top 10 global beauty care companies
4 Strong programs in upstream research (new
molecules), materials science, formulation
science, hair and skin biology and regional
technical support
molecules), materials science, formulation
science, hair and skin biology and regional
technical support
25
Business Overview
Pharma
59%
59%
Pharma
59%
59%
Pharma
Solvents
14%
Solvents
14%
Pharma
Solvents
14%
Solvents
14%
Beverage
14%
14%
Beverage
14%
14%
Key Customers
2010 Sales by Product
4 Fresenius
4 GSK
4 Merck
4 Novartis
4 Pfizer
Operating Income
($ in millions)
($ in millions)
Pharma and Nutrition - Overview
4 Products are key ingredients for prescription and
over-the-counter tablets, injectable prescription
drugs, antiseptics and dialysis membranes
over-the-counter tablets, injectable prescription
drugs, antiseptics and dialysis membranes
4 Strong specialty-excipients business and global
network of tablet formulation laboratories
network of tablet formulation laboratories
4 Manufactures specialty solvents for pharma API
manufacture; radiation-sensitive films for medical
imaging; clarification and stabilization aids for beer
and wine; and fine chemicals and food ingredients
manufacture; radiation-sensitive films for medical
imaging; clarification and stabilization aids for beer
and wine; and fine chemicals and food ingredients
26
Business Overview
Specialty
Solvents
45%
Solvents
45%
Specialty
Solvents
45%
Solvents
45%
Performance
33%
33%
Performance
33%
33%
Biocides
14%
14%
Biocides
14%
14%
Key Customers
2010 Sales by Product
4 Bayer
4 Dow
4 Halliburton
4 HP
4 Reckitt Benckiser
Operating Income
($ in millions)
($ in millions)
Performance Chemicals - Overview
4 ISP segment with the broadest product portfolio
and range of applications
and range of applications
4 Manufactures vinyl pyrrolidone, vinyl caprolactam
and acrylate polymers, solvents and
alkylpyrrolidones, vinyl monomers and ethers,
specialty styrene-butadiene rubber, and industrial
biocides
and acrylate polymers, solvents and
alkylpyrrolidones, vinyl monomers and ethers,
specialty styrene-butadiene rubber, and industrial
biocides
4 End markets include adhesives and sealants,
agrochemicals, coatings and inks, electronics,
HI&I cleaning, mining and mineral slurries, oilfield,
membranes, plastics, pulp and paper, and water
conditioning
agrochemicals, coatings and inks, electronics,
HI&I cleaning, mining and mineral slurries, oilfield,
membranes, plastics, pulp and paper, and water
conditioning
27
Business Overview
Elastomers
68%
68%
Elastomers
68%
68%
Intermediates
32%
32%
Intermediates
32%
32%
Key Customers
2010 Sales by Product
Intermediates:
4 Bayer
4 DSM
4 DuPont
4 Novamont
Elastomers:
4 Bridgestone /
Firestone
Firestone
4 Cooper Tires
4 Michelin
4 Toyo Tires
Operating Income
($ in millions)
($ in millions)
Industrial Chemicals - Overview
4 Engaged in the manufacture and sale of:
- Intermediates, principally butanediol, sold in the
merchant market for use in performance plastics
and synthetic fibers
merchant market for use in performance plastics
and synthetic fibers
- Elastomers, principally cold emulsion styrene-
butadiene rubber, which is used in tires and
industrial rubber products
butadiene rubber, which is used in tires and
industrial rubber products
4 Competes as a low-cost manufacturer
with its extensive manufacturing experience
and field sales organization
with its extensive manufacturing experience
and field sales organization
28
Strategic Fit with Ashland
Stan Turner
Director, Enterprise Strategy
29
Ashland EBITDA Transformation
ISP continues to build world-class specialty chemical company
ISP continues to build world-class specialty chemical company
Pre-Transformation:
2004
Pro Forma1
Divested
Segments
69%
Segments
69%
Divested
Segments
69%
Segments
69%
Ashland
Specialty
Chemicals
15%
Specialty
Chemicals
15%
Ashland
Specialty
Chemicals
15%
Specialty
Chemicals
15%
Ashland
Consumer
Markets
16%
Consumer
Markets
16%
Ashland
Consumer
Markets
16%
Consumer
Markets
16%
Specialty Chemical
Commercial Units
74%
Commercial Units
74%
Specialty Chemical
Commercial Units
74%
Commercial Units
74%
1 Pro forma Adjusted EBITDA for trailing 12 months ended March 31, 2011.
Ashland
Consumer
Markets
26%
Consumer
Markets
26%
Ashland
Consumer
Markets
26%
Consumer
Markets
26%
30
EBITDA Margin Expansion1
Strategic decisions have dramatically expanded margins over time
Strategic decisions have dramatically expanded margins over time
1 2006 through 2010 EBITDA margin as reported in the fiscal year noted and not adjusted for future transactions.
TTM - Adjusted represents adjusted results for the trailing 12 months ended March 31, 2011.
TTM - Adjusted represents adjusted results for the trailing 12 months ended March 31, 2011.
Acquired Hercules
November 2008
November 2008
Divested Distribution
March 2011
March 2011
ISP Acquisition
31
Ashland EBITDA Transformation
Enhanced margin performance
Enhanced margin performance
1 For trailing 12 months ended March 31, 2011.
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%
Ashland Aqualon
Functional
Functional
Ashland Aqualon
Functional
Functional
Ingredients
Ingredients
18%
18%
Pro Forma1
Today1
ISP
ISP
32%
32%
32
Functional Ingredients Strategy
ISP aligns with our previously stated core and adjacency goals
ISP aligns with our previously stated core and adjacency goals
· ISP strengthens our position in 5 of our 8 targeted, adjacent markets
- Surfactants, Tablet Coatings, Controlled Release, Hair Care and Skin Care
Slide extracted from
June 2010 Ashland
Analyst Day
June 2010 Ashland
Analyst Day
33
1 Approximated from management estimates, 2010 ISP sales data, and Ashland’s sales data.
· Hair Care
- Fixatives for hair gels and hairsprays
- Shampoo thickeners and conditioners
· Oral Care
- Tartar and gingivitis control
- Toothpaste thickeners, stabilizers
· Skin Care
- Actives: UV, anti-wrinkle, etc.
- Rheology modifiers
· Pharmaceutical
- Immediate release disintegrants
- Controlled release
· Energy
- Fluid loss additives, hydrate inhibitors
- Drilling aids, cement additives
· Food & Beverage
- Beverage clarifiers
- Texture modifiers and thickeners
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Significant Synergy Opportunity
4 Approximately $50 million annual synergies
- Phased in over two years
4 Main areas of synergy savings
- Back office & administrative
- Commercial & technical
- Other G&A
4 Implementation costs are approximately 1.0x to 1.5x annual
synergy savings
synergy savings
4 Disciplined, bottom-up approach similar to that used for the
Hercules acquisition
Hercules acquisition
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Clear, Focused Integration Plan
4 We will retain key managers to ensure ongoing success
4 Ashland has a proven track record in successfully
integrating acquisitions
integrating acquisitions
4 ISP will be integrated with the Ashland Aqualon
Functional Ingredients segment
Functional Ingredients segment
- John Panichella, president of Ashland Aqualon Functional
Ingredients, will lead the integration
Ingredients, will lead the integration
4 Create best practices
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Financial Overview
Lamar Chambers
Senior Vice President and CFO
37
1 Board authorization remains in place and shares may still be repurchased over time.
2 Approximately $90 million of letters of credit outstanding at close.
Financial Policy
4 Use majority of available global cash to repay debt
- We have terminated our automatic 10b5-1 stock repurchase plan1
4 Continue to target leverage of 2.0x, achieving this target
through discretionary debt paydown from free cash flow
through discretionary debt paydown from free cash flow
4 Maintain adequate liquidity ($750 million undrawn revolver2 in place
at closing and $300 million to $400 million of cash)
at closing and $300 million to $400 million of cash)
4 Expect to execute swaps to effectively fix 70% - 80% of total
outstanding debt
outstanding debt
38
Note: Net Debt and Net Debt / EBITDA are as defined in Ashland’s current credit agreement.
Proven Ability to Delever Quickly
39
(3)
Strong Pro Forma Financials
40
Functional Ingredients
Water Technologies
($ in millions)
Note: Functional Ingredients and Water Technologies include 2008 data as reported by Hercules.
Ashland Historical Financial Summary
41
Sales
($ in millions)
ISP Historical Financial Summary
42
Appendix
43
Note: TTM 3/31/2011 financials are unaudited.
ISP Summary Financials
44
™ Trademark, Ashland or its subsidiaries, registered in various countries