Document And Entity Information
Document And Entity Information | 6 Months Ended |
Mar. 31, 2018shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | ASHLAND GLOBAL HOLDINGS INC. |
Entity Central Index Key | 1,674,862 |
Current Fiscal Year End Date | --09-30 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 62,383,233 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q2 |
Trading Symbol | ASH |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2018 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||||
Sales | $ 974 | $ 806 | $ 1,816 | $ 1,510 | |
Cost of sales | 699 | 578 | 1,312 | 1,093 | |
Gross profit | 275 | 228 | 504 | 417 | |
Selling, general and administrative expense | 163 | 155 | 334 | 312 | |
Research and development expense | 21 | 21 | 43 | 41 | |
Equity and other income | 4 | 1 | 6 | 4 | |
Operating income | 95 | 53 | 133 | 68 | |
Net interest and other financing expense | 29 | 29 | 59 | 152 | |
Other net periodic benefit income | 1 | 0 | 1 | 3 | |
Net loss on divestitures | 0 | 0 | 1 | 1 | |
Income (loss) from continuing operations before income taxes | 67 | 24 | 74 | (82) | |
Income tax expense (benefit) | 1 | (5) | 15 | (45) | |
Income (loss) from continuing operations | 66 | 29 | 59 | (37) | |
Income from discontinued operations (net of income taxes) | 7 | 76 | 10 | 152 | |
Net income | 73 | 105 | 69 | 115 | |
Net income attributable to noncontrolling interest | [1] | 0 | 13 | 0 | 24 |
Net income attributable to Ashland | $ 73 | $ 92 | $ 69 | $ 91 | |
Basic earnings per share - Note L | |||||
Income (loss) from continuing operations | $ 1.06 | $ 0.46 | $ 0.94 | $ (0.59) | |
Income from discontinued operations attributable to Ashland | 0.11 | 1.02 | 0.16 | 2.06 | |
Net income attributable to Ashland | 1.17 | 1.48 | 1.10 | 1.47 | |
Diluted earnings per share - Note L | |||||
Income (loss) from continuing operations | 1.04 | 0.46 | 0.93 | (0.59) | |
Income from discontinued operations attributable to Ashland | 0.11 | 1.01 | 0.15 | 2.06 | |
Net income attributable to Ashland | $ 1.15 | $ 1.47 | $ 1.08 | $ 1.47 | |
COMPREHENSIVE INCOME (LOSS) | |||||
Net income | $ 73 | $ 105 | $ 69 | $ 115 | |
Other comprehensive income (loss), net of tax | |||||
Unrealized translation gain (loss) | 55 | 60 | 58 | (86) | |
Pension and postretirement obligation adjustment | 0 | (2) | 0 | (4) | |
Net change in available-for-sale securities | (6) | 6 | 2 | 6 | |
Other comprehensive income (loss) | 49 | 64 | 60 | (84) | |
Comprehensive income | 122 | 169 | 129 | 31 | |
Comprehensive income attributable to noncontrolling interest | 0 | 14 | 0 | 24 | |
Comprehensive income attributable to Ashland | $ 122 | $ 155 | $ 129 | $ 7 | |
[1] | For the three and six months ended March 31, 2017, this represents the income attributable to the previous noncontrolling interest in Valvoline Inc., whose results are now included within discontinued operations. See Note B for more information. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | |
Current assets | |||
Cash and cash equivalents | $ 225 | $ 566 | |
Accounts receivable | [1] | 717 | 612 |
Inventories - Note F | 649 | 634 | |
Other assets | 122 | 91 | |
Total current assets | 1,713 | 1,903 | |
Property, plant and equipment | |||
Cost | 3,859 | 3,762 | |
Accumulated depreciation | 1,919 | 1,792 | |
Net property, plant and equipment | 1,940 | 1,970 | |
Goodwill - Note G | 2,503 | 2,465 | |
Intangibles - Note G | 1,290 | 1,319 | |
Restricted investments - Note E | 303 | 302 | |
Asbestos insurance receivable - Note K | 203 | 209 | |
Deferred and other income taxes | 28 | 28 | |
Other assets | 461 | 422 | |
Total noncurrent assets | 6,728 | 6,715 | |
Total assets | 8,441 | 8,618 | |
Current liabilities | |||
Short-term debt - Note H | 59 | 235 | |
Trade and other payables | 387 | 409 | |
Accrued expenses and other liabilities | 266 | 324 | |
Total current liabilities | 712 | 968 | |
Noncurrent liabilities | |||
Long-term debt - Note H | 2,579 | 2,584 | |
Asbestos litigation reserve - Note K | 665 | 694 | |
Deferred and other income taxes | 243 | 375 | |
Employee benefit obligations - Note J | 190 | 191 | |
Other liabilities | 541 | 400 | |
Total noncurrent liabilities | 4,218 | 4,244 | |
Commitments and contingencies - Note K | |||
Stockholders’ equity | 3,511 | 3,406 | |
Total liabilities and stockholders' equity | $ 8,441 | $ 8,618 | |
[1] | Accounts receivable includes an allowance for doubtful accounts of $9 million at both March 31, 2018 and September 30, 2017. |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Current assets | ||
Allowance for doubtful accounts | $ 9 | $ 9 |
STATEMENT OF CONSOLIDATED EQUIT
STATEMENT OF CONSOLIDATED EQUITY (unaudited) - 6 months ended Mar. 31, 2018 - USD ($) $ in Millions | Total | Common stock [Member] | Paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive income (loss) [Member] | [1] | |
Beginning Balance at Sep. 30, 2017 | $ 3,406 | $ 1 | $ 931 | $ 2,696 | $ (222) | ||
Total comprehensive income (loss) | |||||||
Net income | 69 | 69 | |||||
Other comprehensive income (loss) | 60 | 60 | |||||
Regular dividends, $0.45 per common share | (28) | (28) | |||||
Common shares issued under stock incentive and other plans | [2] | 4 | 4 | ||||
Ending Balance at Mar. 31, 2018 | $ 3,511 | $ 1 | $ 935 | $ 2,737 | $ (162) | ||
[1] | At March 31, 2018 and September 30, 2017, the after-tax accumulated other comprehensive loss attributable to Ashland of $162 million and $222 million, respectively, was each comprised of net unrealized translation losses of $188 million and $246 million, respectively, net unrealized gains on available-for-sale securities of $23 million and $21 million, respectively, and unrecognized prior service credits as a result of certain employee benefit plan amendments of $3 million for each period. | ||||||
[2] | Common shares issued were 265,821 for the six months ended March 31, 2018. |
STATEMENT OF CONSOLIDATED EQUI6
STATEMENT OF CONSOLIDATED EQUITY (unaudited) (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2017 | |
Statement Of Stockholders Equity [Abstract] | ||
Dividends on common stock | $ 0.45 | |
Accumulated other comprehensive loss | $ (162) | $ (222) |
Unrecognized prior service credits | 3 | 3 |
Net unrealized translation loss | (188) | (246) |
Available-for-sale securities unrealized gain | $ 23 | $ 21 |
Common shares issued (in shares) | 265,821 |
STATEMENTS OF CONDENSED CONSOLI
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (unaudited) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | |||
Net income | $ 69 | $ 115 | |
Income from discontinued operations (net of income taxes) | (10) | (152) | |
Adjustments to reconcile income from continuing operations to cash flows from operating activities | |||
Depreciation and amortization | 161 | 134 | |
Original issue discount and debt issuance costs amortization | 4 | 97 | |
Deferred income taxes | 4 | 0 | |
Stock based compensation expense | 13 | 9 | |
Excess tax benefit on stock based compensation | 2 | 2 | |
Gain on early retirement of debt | 0 | (3) | |
Realized gains and investment income on available-for-sale securities | (8) | (7) | |
Net loss on divestitures | 1 | 1 | |
Pension contributions | (7) | (4) | |
Gain on post-employment plan remeasurement | 0 | (2) | |
Change in operating assets and liabilities | [1] | (229) | (192) |
Total cash flows used by operating activities from continuing operations | 0 | (2) | |
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | |||
Additions to property, plant and equipment | (60) | (73) | |
Proceeds from disposal of property, plant and equipment | 1 | 0 | |
Purchase of operations - net of cash acquired | (11) | 0 | |
Proceeds (uses) from sale of operations | 1 | (1) | |
Life insurance payments | (37) | 0 | |
Net purchase of funds restricted for specific transactions | (8) | (2) | |
Reimbursement from restricted investments | 17 | 12 | |
Proceeds from sales of available-for-sale securities | 17 | 19 | |
Purchase of available-for-sale securities | (17) | (19) | |
Proceeds from the settlement of derivative instruments | 0 | 4 | |
Payments for the settlement of derivative instruments | (3) | (3) | |
Total cash flows used by investing activities from continuing operations | (100) | (63) | |
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS | |||
Repayment of long-term debt | (3) | (254) | |
Premium on long-term debt | 0 | (5) | |
Repayment of short-term debt | (181) | (151) | |
Debt issuance costs | 0 | (2) | |
Cash dividends paid | (28) | (48) | |
Stock based compensation employee withholding taxes paid in cash | (8) | (13) | |
Total cash flows used by financing activities from continuing operations | (220) | (473) | |
CASH PROVIDED (USED) BY CONTINUING OPERATIONS | (320) | (538) | |
Cash provided (used) by discontinued operations | |||
Operating cash flows | (24) | 60 | |
Investing cash flows | 0 | (79) | |
Financing cash flows | 0 | (17) | |
Total cash used by discontinued operations | (24) | (36) | |
Effect of currency exchange rate changes on cash and cash equivalents | 3 | (10) | |
DECREASE IN CASH AND CASH EQUIVALENTS | (341) | (584) | |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 566 | 1,017 | |
Change in cash and cash equivalents held by Valvoline | 0 | 37 | |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 225 | $ 470 | |
[1] | Excludes changes resulting from operations acquired or sold. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Significant Accounting Policies | NOTE A – SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Securities and Exchange Commission (SEC) regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Additionally, certain prior period data, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation, as further described in this section. These statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017. Results of operations for the period ended March 31, 2018 are not necessarily indicative of the expected results for the remaining quarters in the fiscal year. On May 12, 2017, Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. which represented approximately 83% of the total outstanding shares of Valvoline Inc.'s common stock. This separation from Valvoline represented a strategic shift in Ashland's business and qualified as a discontinued operation. Accordingly, Valvoline's operating results and cash flows for the three and six months ended March 31, 2017 have been classified as discontinued operations within the Condensed Consolidated Financial Statements. See Note B for additional information on the separation of Valvoline Inc. Subsequent to completing the separation from Valvoline Inc., Ashland's operations are managed within the following three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. Use of estimates, risks and uncertainties 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, revenues 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 and liabilities and receivables associated with asbestos litigation and environmental remediation. 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. Ashland’s results are affected by domestic and international economic, political, legislative, regulatory and legal actions. 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. While Ashland maintains reserves for anticipated liabilities and carries various levels of insurance, Ashland could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings relating to asbestos, environmental remediation or other matters. New accounting standards A description of new U.S. GAAP accounting standards issued or adopted during the current year is required in interim financial reporting. A detailed listing of new accounting standards relevant to Ashland is included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The following standards relevant to Ashland were either issued or adopted in the current period, or will become effective in a subsequent period. In May 2014, the FASB issued accounting guidance outlining a single comprehensive five step model for entities to use in accounting for revenue arising from contracts with customers (ASC 606 Revenue from Contracts with Customers). The new guidance supersedes most current revenue recognition guidance, in an effort to converge the revenue recognition principles within U.S. GAAP. This new guidance also requires entities to disclose certain quantitative and qualitative information regarding the nature, amount, timing and uncertainty of qualifying revenue and cash flows arising from contracts with customers. Entities have the option of using a full retrospective or a modified retrospective approach to adopt the new guidance. Ashland has identified an implementation team that is currently evaluating the impact of the new standard on the Condensed Consolidated Financial Statements and the adoption method options available as well as the overall impact the new guidance will have on the organization. The assessment process consists of categorizing Ashland’s revenue streams and reviewing the current internal accounting policies and practices to determine potential differences that would result from applying the requirements of the new standard to revenue contracts. Additional discussions and meetings with each revenue stream team have occurred to solicit input, identify potential impacts and appropriate changes to Ashland’s business processes, systems and controls to support the revenue recognition and disclosure requirements under the new standard. Based on various preliminary assessments conducted to date, Ashland has identified agreements with distributors and customers that are subject to rebate and incentive programs that could contain elements of material rights and/or variable consideration. Ashland does not currently believe that these elements would result in a material change to how revenue would be recognized for these agreements. Ashland currently intends to adopt this standard using the modified retrospective approach and does not believe the impact will be material to the Condensed Consolidated Financial Statements but does expect there to be significant additional disclosures within the Notes to Condensed Consolidated Financial Statements. This guidance becomes effective for Ashland on October 1, 2018. In February 2018, the FASB issued guidance which permits entities to reclassify tax effects stranded in accumulated other comprehensive income (AOCI) as a result of U.S. tax reform legislation to retained earnings. Additionally, this guidance requires entities to disclose whether they made an election to reclassify the tax effects and to disclose their accounting policy for releasing income tax effects from AOCI. This guidance becomes effective for Ashland on October 1, 2019. Ashland is currently evaluating the impact this guidance may have on Ashland’s Condensed Consolidated Financial Statements. In March 2017, the FASB issued accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Statement of Consolidated Comprehensive Income (Loss). This guidance requires employers to present the service cost component of net periodic benefit cost in the same caption within the Statement of Consolidated Comprehensive Income (Loss) as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost will be presented separately outside of the operating income caption. This guidance must be applied retrospectively. Ashland elected to early adopt this guidance on October 1, 2017, which resulted in a reclassification of $3 million in income from the selling, general and administrative expense and cost of sales captions to the other net periodic benefit income caption in the Statement of Consolidated Comprehensive Income (Loss) for the six months ended March 31, 2017. The components of net periodic benefits income (costs) reclassified primarily relate to interest cost, expected return on assets, curtailments, settlements and actuarial gains and losses. Ashland did not have to adjust the classification of service cost since it previously was recorded within the caption required by the new guidance. See Note J for additional information on net periodic benefit costs. In March 2016, the FASB issued new accounting guidance for certain aspects of share-based payments to employees. This guidance requires all excess tax benefits and tax deficiencies related to share-based payments to be recognized as income tax expense in the Statements of Consolidated Comprehensive Income (Loss) instead of additional paid-in capital, and changes the classification of excess tax benefits from a financing activity to an operating activity within the Statements of Condensed Consolidated Cash Flows. This guidance also allows entities to make an accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, this guidance increases the amount an employer can withhold to cover income taxes on awards and still qualify for equity classification and requires that cash paid by an employer when directly withholding shares for tax-withholding purposes be classified as a financing activity within the Statements of Condensed Consolidated Cash Flows. The guidance became effective for Ashland and was adopted on October 1, 2017. The guidance specifically related to the Statements of Consolidated Comprehensive Income (Loss) was adopted prospectively while the guidance related to the Statements of Condensed Consolidated Cash Flows was adopted retrospectively, as required by the guidance. Additionally, Ashland made a policy election to account for forfeitures when they occur across all share-based awards. Upon adoption, the overall impact on Ashland's Condensed Consolidated Financial Statements was not significant. |
Valvoline
Valvoline | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Valvoline | NOTE B Ashland Separation of Valvoline On September 22, 2015, Ashland announced that the Board of Directors approved proceeding with a plan to separate Ashland into two independent, publicly traded companies comprising of the new Ashland (now known as Ashland Global Holdings Inc.) and Valvoline Inc. The initial step of the separation, the initial public offering (IPO) of Valvoline Inc., closed on September 28, 2016. As discussed further within the Final Separation section of this Note, Ashland completed the distribution of its remaining shares in Valvoline Inc. on May 12, 2017. The new Ashland is a premier global leader in providing specialty chemical solutions to customers in a wide range of consumer and industrial markets. Key markets and applications include pharmaceutical, personal care, food and beverage, architectural coatings, adhesives, automotive, construction and energy. After completing the IPO on September 28, 2016 and before the distribution of its remaining shares on May 12, 2017, Ashland owned 170 million shares of Valvoline Inc.’s common stock which represented approximately 83% of the total outstanding shares of Valvoline Inc.’s common stock. As a result, Ashland continued to consolidate Valvoline within the Condensed Consolidated Financial Statements up until the distribution 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 the Condensed Consolidated Balance Sheets up until the distribution of the remaining shares. The amount of consolidated net income attributable to these minority holders is presented as a separate caption on the Statements of Consolidated Comprehensive Income (Loss) for the three and six months ended March 31, 2017. Final Separation Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. as a pro rata dividend on shares of Ashland common stock outstanding at the close of business on the record date of May 5, 2017. Based on the shares of Ashland common stock outstanding as of May 5, 2017, the record date for the distribution, each share of Ashland common stock received 2.745338 shares of Valvoline common stock in the distribution. The distribution was recorded at the carrying amount of Valvoline Inc.'s net assets which was a deficit of $187 million as of May 12, 2017, as follows: May 12 (In millions) 2017 ASSETS Current assets Cash and cash equivalents $ 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 ) A Tax Matters Agreement between Ashland and Valvoline Inc. governs the rights and obligations after the separation regarding certain income taxes and other taxes, including certain tax liabilities and benefits, attributes, returns and contests. Discontinued Operations Assessment Valvoline met the criteria to qualify as a discontinued operation and accordingly, its operating results and cash flows for the three and six months ended March 31, 2017 have been classified as discontinued operations within the Condensed Consolidated Financial Statements. See Note D for more information. Costs of transaction Ashland recognized separation costs of $2 million and $26 million for the three months ended March 31, 2018 and 2017, respectively, and $8 million and $54 million for the six months ended March 31, 2018 and 2017, respectively. Of these amounts, $7 million and $12 million of separation costs directly related to Valvoline and were included within the discontinued operations caption of the Statement of Consolidated Comprehensive Income (Loss) for the three and six months ended March 31, 2017, respectively. Otherwise, separation costs are recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). |
Acquisitions
Acquisitions | 6 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE C Pharmachem Background On May 17, 2017, Ashland completed its acquisition of the stock of Pharmachem Laboratories, Inc. (Pharmachem), a leading provider of quality ingredients 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. Ashland has included Pharmachem within the Specialty Ingredients reportable segment. Purchase price allocation The acquisition was recorded by Ashland using the purchase method of accounting in accordance with applicable U.S. GAAP whereby the total purchase price was allocated to tangible and intangible assets and liabilities acquired based on respective fair values. The all-cash purchase price of Pharmachem was $680 million which included working capital adjustments of approximately $20 million. The following table summarizes the current preliminary values of the assets acquired and liabilities assumed at the date of acquisition. 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 288 Property, plant and equipment 97 Other noncurrent assets 20 Liabilities: Accounts payable (33 ) Deferred tax - net (138 ) Other noncurrent liabilities (14 ) Total purchase price $ 680 As of March 31, 2018, the purchase price allocation for the acquisition was preliminary. Adjustments to the current fair value estimates in the above table may occur as the process conducted for various valuations and assessments, including certain tangible and intangible assets, are finalized. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were based on strategic benefits that are expected to be realized from the acquisition. None of the goodwill is expected to be deductible for income tax purposes. During the current quarter, adjustments of $1 million were made to goodwill and accounts payable. Intangible assets identified The purchase price allocation included $330 million of certain definite-lived intangible assets which are being amortized over the estimated useful life in proportion to the economic benefits consumed. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future cash flows of the combined company. In addition, Ashland reviewed certain technological trends and considered the relative stability in the current Pharmachem customer base. The following details the total intangible assets identified as of May 17, 2017. Weighted-average amortization period Intangible asset type (in millions) Value (years) Trademarks and trade names $ 26 15 Intellectual property 68 22 Customer and supplier relationships 236 20 Total $ 330 Vornia Limited In January 2018, Ashland completed the acquisition of Vornia Limited for $12 million, of which $1 million will be paid in future periods. Vornia Limited’s principal activity is the design, development and fabrication of customized biomaterial solutions. The purchase price allocation primarily included $8 million of intellectual property and $4 million of goodwill and has been included within the Specialty Ingredients reportable segment. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | NOTE D – DISCONTINUED OPERATIONS In previous periods, Ashland has divested certain businesses that have qualified as discontinued operations. The operating results from these divested businesses and subsequent adjustments related to ongoing assessments of certain retained liabilities and tax items have been recorded within the discontinued operations caption in the Statements of Consolidated Comprehensive Income (Loss) for all periods presented and are discussed further within this note. As previously discussed in Notes A and B, Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. on May 12, 2017. Ashland determined that the Valvoline separation qualified as a discontinued operation, in accordance with U.S. GAAP, since it represents a strategic shift for Ashland and has a major effect on Ashland's operations and financial results. Accordingly, Valvoline's operating results and cash flows for the three and six months ended March 31, 2017 have been classified as discontinued operations within the Condensed Consolidated Financial Statements. The activity during the three and six months ended March 31, 2018 generally represents subsequent adjustments that were made in conjunction with the Tax Matters Agreement. 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 of Ashland, which qualified as a discontinued operation, and from the 2009 acquisition of Hercules LLC (formerly Hercules Incorporated), a wholly-owned subsidiary of Ashland. During the three and six months ended March 31, 2018, Ashland recorded $3 million of income within the discontinued operations caption related to receipts from insurance carriers for asbestos-related litigation. On July 31, 2014, Ashland completed the sale of the Ashland Water Technologies (Water Technologies) business to Clayton, Dubilier & Rice. Ashland made subsequent post-closing adjustments to the discontinued operations caption as defined by the definitive agreement during the three and six months ended March 31, 2017. Components of amounts reflected in the Statements of Consolidated Comprehensive Income (Loss) related to discontinued operations are presented in the following table for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Income from discontinued operations (net of tax) Valvoline $ 4 $ 73 $ 7 $ 149 Asbestos-related litigation 3 — 3 — Water Technologies — 3 — 3 Total income from discontinued operations (net of tax) $ 7 $ 76 $ 10 $ 152 The following table presents a reconciliation of the historically reported captions within Ashland's Statements of Consolidated Income (Loss) for the income from discontinued operations attributable to Valvoline for the three and six months ended March 31, 2017. Three Six months ended months ended (In millions) March 31, 2017 March 31, 2017 Income (loss) from discontinued operations attributable to Valvoline Sales $ 514 $ 1,003 Cost of sales (310 ) (603 ) Selling, general and administrative expense (90 ) (172 ) Research and development expense (3 ) (6 ) Equity and other income 6 15 Pretax operating income of discontinued operations 117 237 Net interest and other financing expense (9 ) (18 ) Pretax income of discontinued operations 108 219 Income tax expense (35 ) (70 ) Income from discontinued operations $ 73 $ 149 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE E – FAIR VALUE MEASUREMENTS As required by U.S. GAAP, Ashland uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value and related disclosures for instruments measured at fair value. Fair value accounting guidance establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The three levels within the fair value hierarchy are described as follows. Level 1 – Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect Ashland’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include Ashland’s own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment. For assets that are measured using quoted prices in active markets (Level 1), the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs (Level 2) are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability. For all other assets and liabilities for which unobservable inputs are used (Level 3), fair value is derived using fair value models, such as a discounted cash flow model or other standard pricing models that Ashland deems reasonable. The following table summarizes financial instruments subject to recurring fair value measurements as of March 31, 2018. 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 $ 225 $ 225 $ 225 $ — $ — Restricted investments (a) 333 333 333 — — Deferred compensation investments (b) 160 160 — 160 — Investment of captive insurance company 4 4 4 — — Foreign currency derivatives 4 4 — 4 — Total assets at fair value $ 726 $ 726 $ 562 $ 164 $ — Liabilities Foreign currency derivatives $ 21 $ 21 $ — $ 21 $ — (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. The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2017. 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 $ 566 $ 566 $ 566 $ — $ — Restricted investments (a) 332 332 332 — — Deferred compensation investments (b) 158 158 — 158 — Investment of captive insurance company 3 3 3 — — Foreign currency derivatives 2 2 — 2 — Total assets at fair value $ 1,061 $ 1,061 $ 901 $ 160 $ — Liabilities Foreign currency derivatives $ 36 $ 36 $ — $ 36 $ — (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. Restricted investments During 2015, Ashland and Hercules entered into a comprehensive settlement agreement related to certain insurance coverage for asbestos bodily injury claims with Underwriters at Lloyd’s, certain London Companies and Chartis (AIG) member companies, along with National Indemnity Company and Resolute Management, Inc., under which Ashland and Hercules received a total of $398 million (the January 2015 asbestos insurance settlement). Ashland placed $335 million of the settlement funds from the January 2015 asbestos insurance settlement into a renewable annual trust restricted for the purpose of paying ongoing and future litigation defense and claim settlement costs incurred in conjunction with asbestos claims. These funds were classified primarily as noncurrent restricted investment assets, with $30 million classified within other current assets, in the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017, respectively. During 2015, Ashland diversified the 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 are reported in the net interest and other financing expense caption in the Statements of Consolidated Comprehensive Income (Loss). The following table provides a summary of the available-for-sale securities portfolio as of March 31, 2018 and September 30, 2017: (In millions) March 31 2018 September 30 2017 Original cost $ 335 $ 335 Accumulated adjustments, net (38 ) (24 ) Adjusted cost, beginning of year (a) 297 311 Investment income (b) 4 9 Net unrealized gain 37 35 Realized gains 4 2 Settlement funds 8 2 Disbursements (17 ) (27 ) Fair value $ 333 $ 332 (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. The following table presents gross unrealized gains and losses for the restricted investment available-for-sale securities as of March 31, 2018 and September 30, 2017: Gross Gross (In millions) Adjusted Cost Unrealized Gain Unrealized Loss Fair Value As of March 31, 2018 Demand deposit $ 22 $ — $ — $ 22 Equity mutual fund 154 40 — 194 Corporate bond mutual fund 120 — (3 ) 117 Fair value $ 296 $ 40 $ (3 ) $ 333 As of September 30, 2017 Demand deposit $ 9 $ — $ — $ 9 Equity mutual fund 168 34 — 202 Corporate bond mutual fund 120 1 — 121 Fair value $ 297 $ 35 $ — $ 332 The unrealized gains and losses as of March 31, 2018 and September 30, 2017 were recognized within AOCI. Ashland invests in highly-rated investment grade mutual funds. No other-than-temporary impairment was recognized in AOCI during the three and six months ended March 31, 2018 and 2017. The following table presents the investment income, realized gains and disbursements related to the investments within the portfolio for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Investment income $ 2 $ 2 $ 4 $ 5 Realized gains 3 2 4 2 Disbursements (12 ) (12 ) (17 ) (12 ) Deferred compensation investments Deferred compensation investments consist of Level 2 measurements within the fair value hierarchy which are comprised primarily of a guaranteed interest fund, a common stock index fund and an intermediate government bond fund. Gains and losses related to deferred compensation investments are immediately recognized within the Statements of Consolidated Comprehensive Income (Loss). Foreign currency derivatives Ashland conducts business in a variety of foreign currencies. Accordingly, Ashland regularly uses foreign currency derivative instruments to manage exposure on certain transactions denominated in foreign currencies to curtail potential earnings volatility effects on certain assets and liabilities, including short-term inter-company loans, denominated in currencies other than Ashland’s functional currency of an entity. These derivative contracts generally require exchange of one foreign currency for another at a fixed rate at a future date and generally have maturities of less than twelve months. All contracts are valued at fair value with net changes in fair value recorded within the selling, general and administrative expense caption. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in non-functional currencies. The following table summarizes the net gains and losses recognized during the three and six months ended March 31, 2018 and 2017 within the Statements of Consolidated Comprehensive Income (Loss). Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Foreign currency derivative gains (losses) $ (16 ) $ 8 $ (27 ) $ — The following table summarizes the fair values of the outstanding foreign currency derivatives as of March 31, 2018 and September 30, 2017 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets. March 31 September 30 (In millions) 2018 2017 Foreign currency derivative assets $ 4 $ 2 Notional contract values 302 79 Foreign currency derivative liabilities $ 21 $ 36 Notional contract values 958 1,601 Other financial instruments At March 31, 2018 and September 30, 2017, Ashland's long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying value of $2,613 million and $2,615 million, respectively, compared to a fair value of $2,710 million and $2,768 million, respectively. The fair values of long-term debt are based on quoted market prices or, if market prices are not available, the present values of the underlying cash flows discounted at Ashland’s incremental borrowing rates, which are deemed to be Level 2 measurements within the fair value hierarchy. |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE F – INVENTORIES Inventories are carried at the lower of cost or net realizable value. Inventories are primarily stated at cost using the weighted-average cost method. In addition, certain inventories are valued at cost using the last-in, first-out (LIFO) method. The following table summarizes Ashland’s inventories as of the reported Condensed Consolidated Balance Sheet dates. (In millions) March 31, 2018 September 30, 2017 Finished products $ 404 $ 390 Raw materials, supplies and work in process 248 245 LIFO carrying values (3 ) (1 ) $ 649 $ 634 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 6 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | NOTE G – GOODWILL AND OTHER INTANGIBLES Goodwill Ashland reviews goodwill and indefinite-lived intangible assets for impairment annually or when events and circumstances indicate an impairment may have occurred. This annual assessment is performed as of July 1 and consists of Ashland determining each reporting unit’s current fair value compared to its current carrying value. For its July 1, 2017 assessment, Ashland determined that its reporting units for the allocation of goodwill are its three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. At that time, Ashland determined no additional impairment existed. The following is a progression of goodwill by reportable segment for the six months ended March 31, 2018. Specialty Intermediates (In millions) Ingredients Composites and Solvents (a) Total Balance at September 30, 2017 $ 2,315 $ 150 $ — $ 2,465 Acquisitions (b) 4 — — 4 Currency translation 33 1 — 34 Balance at March 31, 2018 $ 2,352 $ 151 $ — $ 2,503 (a) As of March 31, 2018, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment. (b) Relates to the acquisition of Vornia Limited during the six months ended March 31, 2018. See Note C for more information. Other intangible assets Intangible assets principally consist of trademarks and trade names, intellectual property and customer and supplier relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 25 years, and customer and supplier relationships over 3 to 24 years. Ashland annually reviews indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. Intangible assets were comprised of the following as of March 31, 2018 and September 30, 2017. March 31, 2018 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangibles Trademarks and trade names $ 67 $ (23 ) $ 44 Intellectual property 773 (354 ) 419 Customer and supplier relationships 786 (260 ) 526 Total definite-lived intangibles 1,626 (637 ) 989 Indefinite-lived intangibles Trademarks and trade names 301 — 301 Total intangible assets $ 1,927 $ (637 ) $ 1,290 September 30, 2017 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangibles Trademarks and trade names $ 67 $ (22 ) $ 45 Intellectual property 757 (326 ) 431 Customer and supplier relationships 777 (235 ) 542 Total definite-lived intangibles 1,601 (583 ) 1,018 Indefinite-lived intangibles Trademarks and trade names 301 — 301 Total intangible assets $ 1,902 $ (583 ) $ 1,319 Amortization expense recognized on intangible assets was $24 million and $19 million for the three months ended March 31, 2018 and 2017, respectively, and $48 million and $38 million for the six months ended March 31, 2018 and 2017, respectively, and is included in the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). Estimated amortization expense for future periods is $95 million in 2018 (includes six months actual and six months estimated), $91 million in 2019, $90 million in 2020, $90 million in 2021 and $88 million in 2022. The amortization expense for future periods is an estimate. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions and divestitures, potential impairment, accelerated amortization, or other events. |
Debt
Debt | 6 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | NOTE H – DEBT The following table summarizes Ashland’s current and long-term debt as of the dates reported in the Condensed Consolidated Balance Sheets. (In millions) March 31, 2018 September 30, 2017 4.750% notes, due 2022 $ 1,082 $ 1,082 Term Loan B, due 2024 596 599 6.875% notes, due 2043 376 376 Revolving Credit Facility — 173 Term Loan A, due 2022 250 250 Term Loan A, due 2020 250 250 Accounts receivable securitization 48 56 6.50% junior subordinated notes, due 2029 51 51 Medium-term notes, due 2019, interest of 9.4% 5 5 Other (a) (20 ) (23 ) Total debt 2,638 2,819 Short-term debt (includes current portion of long-term debt) (59 ) (235 ) Long-term debt (less current portion) $ 2,579 $ 2,584 (a) Other includes $23 million and $25 million of debt issuance cost discounts as of March 31, 2018 and September 30, 2017, respectively. The scheduled aggregate maturities of long-term debt by year (including the current portion and excluding debt issuance costs) are as follows: $3 million remaining in 2018, $11 million in 2019, $269 million in 2020, $56 million in 2021 and $1,279 million in 2022. Ashland Financing Activities Accounts receivable securitization During March 2018, the termination date of the accounts receivable securitization facility was extended from March 2018 to March 2020. The available funding for qualified receivables under the accounts receivable securitization facility increased from $100 million to $115 million. No other changes to the agreement are expected to have a significant impact to Ashland's results of operations and financial position. Cash repatriation During January 2018, Ashland repatriated approximately $300 million in cash that was primarily used to repay the outstanding balance of the 2017 Revolving Credit Facility and a portion of the accounts receivable securitization during the current quarter. 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 six months ended March 31, 2017. Open market repurchases of 4.750% notes due 2022 and 3.875% notes due 2018 During the six months ended March 31, 2017, 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 $39 million and $41 million, respectively. Ashland recognized a $3 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 six months ended March 31, 2017. Remaining borrowing capacity The borrowing capacity remaining under the 2017 Revolving Credit Facility was $752 million due to a reduction of $48 million for letters of credit outstanding at March 31, 2018. Ashland's total borrowing capacity at March 31, 2018 was $819 million, which included $67 million of available capacity from the accounts receivable securitization facility. Covenants related to current Ashland debt agreements Ashland's debt contains usual and customary representations, warranties and affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional subsidiary indebtedness, restrictions on subsidiary distributions, investments, mergers, sale of assets and restricted payments and other customary limitations. As of March 31, 2018, Ashland is in compliance with all debt agreement covenant restrictions. The maximum consolidated net leverage ratio permitted under Ashland's most recent credit agreement (the 2017 Credit Agreement) is 4.5. At March 31, 2018, Ashland’s calculation of the consolidated net leverage ratio was 3.8. The minimum required consolidated interest coverage ratio under the 2017 Credit Agreement during its entire duration is 3.0. At March 31, 2018, Ashland’s calculation of the interest coverage ratio was 4.8. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE I – INCOME TAXES 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% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. At March 31, 2018, 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 for the six months ended March 31, 2018, which is included as a component of income tax expense from continuing operations. Ashland recorded net unfavorable tax adjustments of $16 million during the six months ended March 31, 2018 primarily related to deferred tax rate changes and a one-time transition tax assessed on foreign cash and unremitted earnings. Provisional amounts - Deferred and other income tax assets and liabilities Ashland remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, Ashland is still analyzing certain aspects of the Tax Act and refining certain calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the deferred tax balance was a favorable tax adjustment of $126 million during the six months ended March 31, 2018. Provisional amounts - Foreign tax effects The one-time transition tax is based on Ashland's total post-1986 earnings and profits (E&P) of foreign subsidiaries that were previously deferred from U.S. income taxes. Ashland recorded a provisional amount for this one-time transition tax liability of $142 million during the six months ended March 31, 2018, which is primarily included within the other liabilities caption on the Condensed Consolidated Balance Sheet. Ashland has not yet completed its calculation of the total post-1986 E&P for these foreign subsidiaries. In addition, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when Ashland finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalizes the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Ashland determined that the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable at this time. Current fiscal year Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was 1% and 20% for the three and six months ended March 31, 2018, respectively. The current quarter tax rate was primarily impacted by income mix and a favorable tax discrete adjustment of $4 million related to a deferred tax rate change for a foreign entity. In addition to these current quarter items, the current six month period tax rate was significantly impacted by net unfavorable tax discrete adjustments of $16 million related to the Tax Act. Prior fiscal year The overall effective tax rate was a benefit of 21% for the three months ended March 31, 2017 and 55% for the six months ended March 31, 2017. The prior quarter and six month period tax rate was impacted by income mix and net favorable tax discrete items of $4 million primarily related to unrecognized tax benefits due to lapse of the statute of limitations. Unrecognized tax benefits Changes in unrecognized tax benefits are summarized as follows for the six months ended March 31, 2018. (In millions) Balance at October 1, 2017 $ 194 Increases related to positions taken on items from prior years 3 Decreases related to positions taken on items from prior years (1 ) Increases related to positions taken in the current year 6 Lapse of statute of limitations (1 ) Balance at March 31, 2018 $ 201 From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount accrued for uncertain tax positions of between $21 million and $31 million for continuing operations. It is reasonably possible that there could be other material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues or the reassessment of existing uncertain tax positions; however, Ashland is not able to estimate the impact of these items at this time. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Mar. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE J - EMPLOYEE BENEFIT PLANS For the six months ended March 31, 2018, Ashland contributed $6 million to its non-U.S. pension plans and $1 million to its U.S. pension plans. Ashland expects to make additional contributions of approximately $2 million to its non-U.S. plans during the remainder of 2018. Plan Remeasurements Effective January 1, 2017, Ashland discontinued certain post-employment health and life insurance benefits. The effect of these plan changes resulted in a remeasurement gain of $2 million recorded within the other net period benefit income caption on the Statement of Consolidated Comprehensive Income (Loss) for the six months ended March 31, 2017. Components of net periodic benefit costs (income) The following table details the components of pension and other postretirement benefit costs for continuing operations. Pension benefits Other postretirement benefits (In millions) 2018 2017 2018 2017 Three months ended March 31 Service cost (a) $ 2 $ 2 $ — $ — Interest cost (b) 2 2 — — Expected return on plan assets (b) (3 ) (2 ) — — Total net periodic benefit costs $ 1 $ 2 $ — $ — Six months ended March 31 Service cost (a) $ 4 $ 4 $ 1 $ — Interest cost (b) 5 4 — 1 Expected return on plan assets (b) (6 ) (6 ) — — Actuarial gain (b) — — — (2 ) Total net periodic benefit costs (income) $ 3 $ 2 $ 1 $ (1 ) (a) Service cost was not impacted by new accounting guidance adopted in 2018 and is therefore still classified within the selling, general and administrative expense and cost of sales captions on the Statements of Consolidated Comprehensive Income (Loss). See Note A for additional information. (b) These components are now classified within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in the current quarter. See Note A for additional information. For segment reporting purposes, service cost for continuing operations is proportionately allocated to each segment, excluding the Unallocated and other segment, while all other costs for continuing operations are recorded within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss). |
Litigation, Claims and Continge
Litigation, Claims and Contingencies | 6 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Litigation, Claims and Contingencies | NOTE K Asbestos litigation Ashland and Hercules have liabilities from claims alleging personal injury caused by exposure to asbestos. To assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions, Ashland retained third party actuarial experts. Prior to 2018, Ashland retained Hamilton, Rabinovitz & Associates, Inc. (HR&A). During 2018, Ashland transitioned these responsibilities to Nathan Associates, Inc. (Nathan). The processes and methodologies used by Nathan are similar to the ones historically employed by HR&A. The methodology used by Nathan to project future asbestos costs is based largely on recent experience, including claim-filing and settlement rates, disease mix, enacted legislation, open claims and litigation defense. The claim experience of Ashland and Hercules are separately compared to the results of previously conducted third party epidemiological studies estimating the number of people likely to develop asbestos-related diseases. Those studies were undertaken in connection with national analyses of the population expected to have been exposed to asbestos. Using that information, Nathan estimates a range of the number of future claims that may be filed, as well as the related costs that may be incurred in resolving those claims. Changes in asbestos-related liabilities and receivables are recorded on an after-tax basis within the discontinued operations caption in the Statements of Consolidated Comprehensive Income (Loss). Ashland asbestos-related litigation The claims alleging personal injury caused by exposure to asbestos asserted against Ashland result primarily from indemnification obligations undertaken in 1990 in connection with the sale of Riley. The amount and timing of settlements and number of open claims can fluctuate from period to period. A summary of Ashland asbestos claims activity, excluding Hercules claims, follows. Six months ended March 31 Years ended September 30 (In thousands) 2018 2017 2017 2016 2015 Open claims - beginning of year 54 57 57 60 65 New claims filed 1 1 2 2 2 Claims settled — — (1 ) — — Claims dismissed (2 ) (2 ) (4 ) (5 ) (7 ) Open claims - end of period 53 56 54 57 60 Ashland asbestos-related liability From the range of estimates, Ashland records the amount it believes to be the best estimate of future payments for litigation defense and claim settlement costs, which generally approximates the mid-point of the estimated range of exposure from model results. Ashland reviews this estimate and related assumptions quarterly and annually updates the results of a non-inflated, non-discounted approximate 50-year model developed with the assistance of Nathan. During the most recent annual update of this estimate completed during the June 2017 quarter, it was determined that the liability for Ashland asbestos-related claims should be increased by $36 million. Total reserves for asbestos claims were $402 million at March 31, 2018 compared to $419 million at September 30, 2017. A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Asbestos reserve - beginning of year $ 419 $ 415 $ 415 $ 409 $ 438 Reserve adjustment — — 36 37 — Amounts paid (17 ) (18 ) (32 ) (31 ) (29 ) Asbestos reserve - end of period (a) $ 402 $ 397 $ 419 $ 415 $ 409 (a) Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. Ashland asbestos-related receivables Ashland has insurance coverage for certain litigation defense and claim settlement costs incurred in connection with its asbestos claims, and coverage-in-place agreements exist with the insurance companies that provide substantially all of the coverage that will be accessed. For the Ashland asbestos-related obligations, Ashland has estimated the value of probable insurance recoveries associated with its asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. Substantially all of the estimated receivables from insurance companies are expected to be due from domestic insurers, all of which are solvent. At March 31, 2018, Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers amounted to $149 million (excluding the Hercules receivable for asbestos claims) compared to $155 million at September 30, 2017. During the June 2017 quarter, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $15 million increase in the receivable for probable insurance recoveries. A progression of activity in the Ashland insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Insurance receivable - beginning of year $ 155 $ 151 $ 151 $ 150 $ 402 Receivable adjustment — — 15 16 (3 ) Insurance settlement — (5 ) (5 ) (4 ) (227 ) Amounts collected (6 ) (2 ) (6 ) (11 ) (22 ) Insurance receivable - end of period (a) $ 149 $ 144 $ 155 $ 151 $ 150 (a) Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. Hercules asbestos-related litigation Hercules has liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims 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. The amount and timing of settlements and number of open claims can fluctuate from period to period. A summary of Hercules’ asbestos claims activity follows. Six months ended March 31 Years ended September 30 (In thousands) 2018 2017 2017 2016 2015 Open claims - beginning of year 12 15 15 20 21 New claims filed 1 1 1 1 1 Claims dismissed (1 ) (3 ) (4 ) (6 ) (2 ) Open claims - end of period 12 13 12 15 20 Hercules asbestos-related liability From the range of estimates, Ashland records the amount it believes to be the best estimate of future payments for litigation defense and claim settlement costs, which generally approximates the mid-point of the estimated range of exposure from model results. Ashland reviews this estimate and related assumptions quarterly and annually updates the results of a non-inflated, non-discounted approximate 50-year model developed with the assistance of Nathan. As a result of the most recent annual update of this estimate, completed during the June 2017 quarter, it was determined that the liability for Hercules asbestos-related claims should be increased by $16 million. Total reserves for asbestos claims were $311 million at March 31, 2018 compared to $323 million at September 30, 2017. A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Asbestos reserve - beginning of year $ 323 $ 321 $ 321 $ 311 $ 329 Reserve adjustments — — 16 25 4 Amounts paid (12 ) (5 ) (14 ) (15 ) (22 ) Asbestos reserve - end of period (a) $ 311 $ 316 $ 323 $ 321 $ 311 (a) Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. Hercules asbestos-related receivables For the Hercules asbestos-related obligations, certain reimbursement obligations pursuant to coverage-in-place agreements with insurance carriers exist. As a result, any increases in the asbestos reserve have been partially offset by probable insurance recoveries. Ashland has estimated the value of probable insurance recoveries associated with its asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. The estimated receivable consists exclusively of solvent domestic insurers. As of March 31, 2018 and September 30, 2017, the receivables from insurers amounted to $68 million. During the June 2017 quarter, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $5 million increase in the receivable for probable insurance recoveries. A progression of activity in the Hercules insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Insurance receivable - beginning of year $ 68 $ 63 $ 63 $ 56 $ 77 Receivable adjustment — — 5 7 1 Insurance settlement — — — — (22 ) Insurance receivable - end of period $ 68 $ 63 $ 68 $ 63 $ 56 Asbestos litigation cost projection Projecting future asbestos costs is subject to numerous variables that are extremely difficult to predict. In addition to the significant uncertainties surrounding the number of claims that might be received, other variables include the type and severity of the disease alleged by each claimant, the long latency period associated with asbestos exposure, mortality rates, dismissal rates, costs of medical treatment, the impact of bankruptcies of other companies that are co-defendants in claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, and the impact of potential changes in legislative or judicial standards. Furthermore, any predictions with respect to these variables are subject to even greater uncertainty as the projection period lengthens. Considering these inherent uncertainties, Ashland believes that the asbestos reserves for Ashland and Hercules represent the best estimate within a range of possible outcomes. As a part of the process to develop these estimates of future asbestos costs, a range of long-term cost models was developed. These models are based on national studies that predict the number of people likely to develop asbestos-related diseases and are heavily influenced by assumptions regarding long-term inflation rates for indemnity payments and legal defense costs, as well as other variables mentioned previously. Ashland has currently estimated in various models ranging from approximately 40 to 50 year periods that it is reasonably possible that total future litigation defense and claim settlement costs on an inflated and undiscounted basis could range as high as approximately $660 million for the Ashland asbestos-related litigation (current reserve of $402 million) and approximately $510 million for the Hercules asbestos-related litigation (current reserve of $311 million), depending on the combination of assumptions selected in the various models. If actual experience is worse than projected, relative to the number of claims filed, the severity of alleged disease associated with those claims or costs incurred to resolve those claims, or actuarial refinement or improvements to the assumptions used within these models are initiated, Ashland may need to further increase the estimates of the costs associated with asbestos claims and these increases could be material over time. Environmental remediation and asset retirement obligations Ashland is subject to various federal, state and local environmental laws and regulations that require environmental assessment or remediation efforts (collectively environmental remediation) at multiple locations. At March 31, 2018, such locations included 83 waste treatment or disposal sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 117 current and former operating facilities (including certain operating facilities conveyed as part of the MAP Transaction) and about 1,225 service station properties, of which 36 are being actively remediated. Ashland’s reserves for environmental remediation and related environmental litigation amounted to $164 million at March 31, 2018 compared to $163 million at September 30, 2017, of which $122 million at March 31, 2018 and $121 million at September 30, 2017 were classified in other noncurrent liabilities on the Condensed Consolidated Balance Sheets. The remaining reserves were classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets. The following table provides a reconciliation of the changes in the environmental remediation reserves during the six months ended March 31, 2018 and 2017. Six months ended March 31 (In millions) 2018 2017 Reserve - beginning of period $ 163 $ 177 Disbursements (16 ) (15 ) Revised obligation estimates and accretion 17 5 Reserve - end of period $ 164 $ 167 The total reserves for environmental remediation reflect Ashland’s estimates of the most likely costs that will be incurred over an extended period to remediate identified conditions for which the costs are reasonably estimable, without regard to any third-party recoveries. Engineering studies, probability techniques, historical experience and other factors are used to identify and evaluate remediation alternatives and their related costs in determining the estimated reserves for environmental remediation. Ashland continues to discount certain environmental sites and regularly adjusts its reserves as environmental remediation continues. Ashland has estimated the value of its probable insurance recoveries associated with its environmental reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. At March 31, 2018 and September 30, 2017, Ashland’s recorded receivable for these probable insurance recoveries was $14 million and $15 million, respectively, of which $13 million at March 31, 2018 and $14 million at September 30, 2017 were classified in other noncurrent assets on the Condensed Consolidated Balance Sheets. Components of environmental remediation expense included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss) are presented in the following table for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Environmental expense $ 4 $ 1 $ 16 $ 5 Accretion — — 1 — Legal expense 2 4 3 5 Total expense 6 5 20 10 Insurance receivable (a) (1 ) — (1 ) — Total expense, net of receivable activity (b) $ 5 $ 5 $ 19 $ 10 (a) Activity of $0 denotes value less than $1 million. (b) Net expense of $1 million for both the three and six months ended March 31, 2018, and $1 million and $2 million for the three and six months ended March 31, 2017, respectively, relates to divested businesses which qualified for treatment as discontinued operations and 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). 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 $409 million. The largest reserve for any site is approximately 15% 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 March 31, 2018 and September 30, 2017. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, Ashland believes that such potential losses were immaterial as of March 31, 2018. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE L 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 million and 0.1 million at March 31, 2018 and 2017, respectively. Earnings per share is reported under the treasury stock method. Three months ended Six months ended March 31 March 31 (In millions, except per share data) 2018 2017 2018 2017 Numerator Numerator for basic and diluted EPS - Income (loss) from continuing operations $ 66 $ 29 $ 59 $ (37 ) Denominator Denominator for basic EPS - Weighted-average common shares outstanding 63 62 63 62 Share based awards convertible to common shares (a) 1 1 1 — Denominator for diluted EPS - Adjusted weighted- average shares and assumed conversions 64 63 64 62 EPS from continuing operations Basic $ 1.06 $ 0.46 $ 0.94 $ (0.59 ) Diluted 1.04 0.46 0.93 (0.59 ) (a) As a result of the loss from continuing operations attributable to Ashland during the six months ended March 31, 2017, 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. |
Equity Items
Equity Items | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Equity Items | NOTE M 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). During September 2017, Ashland's Board of Directors extended the 2015 stock repurchase program indefinitely, at which point $500 million of share repurchase authorization remained under the 2015 stock repurchase program. During March 2018, Ashland’s Board of Directors approved a new $1 billion stock repurchase program, which replaced the 2015 stock repurchase program. Under the new program, Ashland’s common shares may be repurchased in open market transactions, privately negotiated transactions or pursuant to one or more accelerated stock repurchase programs or Rule 10b5-1 plans. Stockholder dividends In May 2017, subsequent to the final distribution of Valvoline Inc.'s common stock, the Board of Directors of Ashland announced a quarterly cash dividend of 22.5 cents per share to eligible stockholders at record which was paid for quarterly dividends in the first and second quarters of fiscal 2018 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. 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. 2018 2017 (In millions) Before tax Tax (expense) benefit Net of tax Before tax Tax (expense) benefit Net of tax Three months ended March 31 Other comprehensive income (loss) Unrealized translation gain $ 55 $ — $ 55 $ 58 $ 2 $ 60 Amortization of unrecognized prior service credit (a) — — — (3 ) 1 (2 ) Net change in available-for-sale securities: Unrealized loss (5 ) 1 (4 ) 9 (2 ) 7 Reclassification adjustment for gains included in net income (3 ) 1 (2 ) (2 ) 1 (1 ) Total other comprehensive income $ 47 $ 2 $ 49 $ 62 $ 2 $ 64 Six months ended March 31 Other comprehensive income (loss) Unrealized translation gain (loss) $ 58 $ — $ 58 $ (92 ) $ 6 $ (86 ) Amortization of unrecognized prior service credit (a) — — — (6 ) 2 (4 ) Net change in available-for-sale securities: Unrealized gain 6 (1 ) 5 9 (2 ) 7 Reclassification adjustment for gains included in net income (4 ) 1 (3 ) (2 ) 1 (1 ) Total other comprehensive income (loss) $ 60 $ — $ 60 $ (91 ) $ 7 $ (84 ) (a) For the three and six months ended March 31, 2017, the amortization of unrecognized prior services credits was related to pension and other postretirement benefit plans that transferred to Valvoline and was classified within the discontinued operations caption on the Statements of Consolidated Comprehensive Income (Loss). |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Incentive Plans | NOTE N – STOCK INCENTIVE PLANS Ashland has stock incentive plans under which key employees or directors are granted stock appreciation rights (SARs), performance awards or nonvested stock awards. Each program is typically a long-term incentive plan designed to link employee compensation with increased shareholder value or reward superior performance and encourage continued employment with Ashland. Ashland recognizes compensation expense for the grant date fair value of stock-based awards over the applicable vesting period. The components of Ashland’s pretax stock-based compensation expense included in continuing operations are as follows: Three months ended Six months ended March 31 March 31 (In millions) 2018 (a) 2017 (b) 2018 (a) 2017 (b) SARs $ 2 $ 2 $ 3 $ 3 Nonvested stock awards 5 3 11 7 Performance share awards 2 2 6 4 $ 9 $ 7 $ 20 $ 14 (a) Included $2 million and $4 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $3 million of expense related to cash-settled performance units during the three and six months ended March 31, 2018, respectively. (b) Included $2 million and $3 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $2 million of expense related to cash-settled performance units during the three and six months ended March 31, 2017, respectively. SARs SARs are granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and typically become exercisable over periods of one to three years. Unexercised SARs lapse ten years and one month after the date of grant. No SARs granted for the three months ended March 31, 2018 and 2017. SARs granted for the six months ended March 31, 2018 and 2017 were 470 thousand and 422 thousand, respectively. As of March 31, 2018, there was $11 million of total unrecognized compensation costs related to SARs. That cost is expected to be recognized over a weighted-average period of 2.2 years. Ashland estimates the fair value of SARs granted using the Black-Scholes option-pricing model. This model requires several assumptions, which Ashland has developed and updates based on historical trends and current market observations. The accuracy of these assumptions is critical to the estimate of fair value for these equity instruments. Nonvested stock awards Nonvested stock awards are granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and generally vest over a one-to-five-year period. However, such shares or units are subject to forfeiture upon termination of service before the vesting period ends. Only nonvested stock awards granted in the form of shares entitle employees or directors to vote the shares. Dividends on nonvested stock awards granted are in the form of additional units or shares of nonvested stock awards, which are subject to vesting and forfeiture provisions. Stock-settled nonvested stock awards Nonvested stock awards granted in the form of shares were 2 thousand and 3 thousand for the three months ended March 31, 2018 and 2017, respectively, and 144 thousand and 84 thousand for the six months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there was $10 million of total unrecognized compensation costs related to these nonvested stock awards. That cost is expected to be recognized over a weighted-average period of 2.0 years. Cash-settled nonvested stock awards Certain nonvested stock awards are granted to employees and are settled in cash upon vesting. As of March 31, 2018, 229 thousand cash-settled nonvested stock awards were outstanding. The value of these cash-settled nonvested stock awards changes in connection with changes in the fair market value of the Ashland Common Stock. These awards generally vest over a period of three years. The expense recognized related to cash-settled nonvested stock awards was $2 million during both the three months ended March 31, 2018 and 2017, and $4 million and $3 million during the six months ended March 31, 2018 and 2017, respectively. Executive performance incentive and retention program During 2016, certain executives were granted performance-based restricted shares of Ashland in order to provide an incentive to remain employed in the period after the full separation. At March 31, 2018, there were 61 thousand shares outstanding in connection with these awards, which includes forfeitures and the cumulative value of forfeitable dividends. The expense recognition for these awards commenced upon completing the full separation of Valvoline which occurred on May 12, 2017, as discussed further in Note B, and resulted in $1 million and $3 million of expense for the three and six months ended March 31, 2018, respectively. As of March 31, 2018, there was $6 million of total unrecognized compensation costs related to these awards. Performance awards Ashland sponsors a long-term incentive plan that awards performance shares/units to certain key employees that are primarily tied to Ashland’s overall financial performance relative to internal targets. Additionally, certain outstanding performance awards are tied to Ashland's overall financial performance relative to the financial performance of selected industry peer groups. Awards are granted annually, with each award covering a three-year vesting period. For awards granted in fiscal 2016, each performance share/unit is convertible to one share of Ashland Common Stock. These plans are recorded as a component of stockholders’ equity in the Condensed Consolidated Balance Sheets. Performance measures used to determine the actual number of performance shares issuable upon vesting include an equal weighting of Ashland’s total shareholder return (TSR) performance and Ashland’s return on investment (ROI) performance as compared to the internal targets. TSR relative to peers is considered a market condition while ROI is considered a performance condition under applicable U.S. GAAP. For awards granted in fiscal 2017 and 2018, the performance measure used to determine the actual number of performance shares/units issuable upon vesting is the financial performance of Ashland compared to award targets. The financial performance award metric is considered a performance condition under applicable U.S. GAAP. Additionally, the actual number of performance shares/units issuable upon vesting can be potentially increased or decreased based on a TSR performance modifier relative to peers of Ashland. For awards granted in fiscal 2017, each performance unit will be settled in cash based on the fair value of Ashland common stock. For awards granted in fiscal 2018, each performance share/unit is convertible to one share of Ashland Common Stock. Nonvested performance shares/units do not entitle employees to vote the shares or to receive any dividends thereon. No performance shares/units were granted for the three months ended March 31, 2018 and 2017. Performance shares/units granted for the six months ended March 31, 2018 and 2017 were 101 thousand and 56 thousand, respectively. As of March 31, 2018, there was $15 million of total unrecognized compensation costs related to performance shares/units. That cost is expected to be recognized over a weighted-average period of 2.0 years. |
Reportable Segment Information
Reportable Segment Information | 6 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | NOTE O – REPORTABLE SEGMENT INFORMATION Ashland determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by the chief operating decision maker, which includes determining resource allocation methodologies used for reportable segments. Operating income is the primary measure on the Statements of Consolidated Comprehensive Income (Loss) that is reviewed by the chief operating decision maker in assessing each reportable segment's financial performance. Ashland does not aggregate operating segments to arrive at these reportable segments. Change in Reportable Segments Subsequent to completing the separation from Valvoline Inc. on May 12, 2017, Ashland's operations are managed by the chief operating decision maker within the following three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. As a result, the financial information for the new reportable segments (Composites and Intermediates and Solvents) has been disclosed for all periods presented. Prior to the separation from Valvoline Inc., Composites and Intermediates and Solvents were reporting units included within the previous Ashland Performance Materials reportable segment. Reportable segment business descriptions Specialty Ingredients is a global leader in cellulose ethers, vinyl pyrrolidones and biofunctionals. It offers industry-leading products, technologies 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 and innovative solutions for today’s demanding consumer and industrial applications. Key customers include: pharmaceutical companies; makers of personal care products, food and beverages; makers of nutraceuticals and supplements; manufacturers of paint, coatings 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 to the global health and wellness industries and high-value differentiated products to fragrance and flavor houses. With 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 for more information. 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, alkenyl succinic anhydrides, malic acid, fumaric acid and numerous derivative chemicals. Key markets include composites, personal care, dispersants and paper sizing. Intermediates and Solvents is a leading producer 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 to Ashland’s Specialty Ingredients business for use as a raw material. Unallocated and Other generally includes items such as certain significant company-wide restructuring activities, including internal separation costs, and legacy costs or adjustments that relate to divested businesses that are no longer operated by Ashland. Reportable segment results 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 and other costs or adjustments 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 presents various financial information for each reportable segment for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions - unaudited) 2018 2017 2018 2017 SALES Specialty Ingredients $ 646 $ 544 $ 1,196 $ 1,026 Composites 238 186 456 351 Intermediates and Solvents 90 76 164 133 $ 974 $ 806 $ 1,816 $ 1,510 OPERATING INCOME (LOSS) Specialty Ingredients $ 89 $ 74 $ 131 $ 114 Composites 19 13 36 29 Intermediates and Solvents 4 (3 ) 13 (11 ) Unallocated and other (17 ) (31 ) (47 ) (64 ) $ 95 $ 53 $ 133 $ 68 |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Securities and Exchange Commission (SEC) regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Additionally, certain prior period data, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation, as further described in this section. These statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017. Results of operations for the period ended March 31, 2018 are not necessarily indicative of the expected results for the remaining quarters in the fiscal year. On May 12, 2017, Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. which represented approximately 83% of the total outstanding shares of Valvoline Inc.'s common stock. This separation from Valvoline represented a strategic shift in Ashland's business and qualified as a discontinued operation. Accordingly, Valvoline's operating results and cash flows for the three and six months ended March 31, 2017 have been classified as discontinued operations within the Condensed Consolidated Financial Statements. See Note B for additional information on the separation of Valvoline Inc. Subsequent to completing the separation from Valvoline Inc., Ashland's operations are managed within the following three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. |
Use of Estimates, Risk and Uncertainties | Use of estimates, risks and uncertainties 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, revenues 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 and liabilities and receivables associated with asbestos litigation and environmental remediation. 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. Ashland’s results are affected by domestic and international economic, political, legislative, regulatory and legal actions. 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. While Ashland maintains reserves for anticipated liabilities and carries various levels of insurance, Ashland could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings relating to asbestos, environmental remediation or other matters. |
New Accounting Standards | New accounting standards A description of new U.S. GAAP accounting standards issued or adopted during the current year is required in interim financial reporting. A detailed listing of new accounting standards relevant to Ashland is included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The following standards relevant to Ashland were either issued or adopted in the current period, or will become effective in a subsequent period. In May 2014, the FASB issued accounting guidance outlining a single comprehensive five step model for entities to use in accounting for revenue arising from contracts with customers (ASC 606 Revenue from Contracts with Customers). The new guidance supersedes most current revenue recognition guidance, in an effort to converge the revenue recognition principles within U.S. GAAP. This new guidance also requires entities to disclose certain quantitative and qualitative information regarding the nature, amount, timing and uncertainty of qualifying revenue and cash flows arising from contracts with customers. Entities have the option of using a full retrospective or a modified retrospective approach to adopt the new guidance. Ashland has identified an implementation team that is currently evaluating the impact of the new standard on the Condensed Consolidated Financial Statements and the adoption method options available as well as the overall impact the new guidance will have on the organization. The assessment process consists of categorizing Ashland’s revenue streams and reviewing the current internal accounting policies and practices to determine potential differences that would result from applying the requirements of the new standard to revenue contracts. Additional discussions and meetings with each revenue stream team have occurred to solicit input, identify potential impacts and appropriate changes to Ashland’s business processes, systems and controls to support the revenue recognition and disclosure requirements under the new standard. Based on various preliminary assessments conducted to date, Ashland has identified agreements with distributors and customers that are subject to rebate and incentive programs that could contain elements of material rights and/or variable consideration. Ashland does not currently believe that these elements would result in a material change to how revenue would be recognized for these agreements. Ashland currently intends to adopt this standard using the modified retrospective approach and does not believe the impact will be material to the Condensed Consolidated Financial Statements but does expect there to be significant additional disclosures within the Notes to Condensed Consolidated Financial Statements. This guidance becomes effective for Ashland on October 1, 2018. In February 2018, the FASB issued guidance which permits entities to reclassify tax effects stranded in accumulated other comprehensive income (AOCI) as a result of U.S. tax reform legislation to retained earnings. Additionally, this guidance requires entities to disclose whether they made an election to reclassify the tax effects and to disclose their accounting policy for releasing income tax effects from AOCI. This guidance becomes effective for Ashland on October 1, 2019. Ashland is currently evaluating the impact this guidance may have on Ashland’s Condensed Consolidated Financial Statements. In March 2017, the FASB issued accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Statement of Consolidated Comprehensive Income (Loss). This guidance requires employers to present the service cost component of net periodic benefit cost in the same caption within the Statement of Consolidated Comprehensive Income (Loss) as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost will be presented separately outside of the operating income caption. This guidance must be applied retrospectively. Ashland elected to early adopt this guidance on October 1, 2017, which resulted in a reclassification of $3 million in income from the selling, general and administrative expense and cost of sales captions to the other net periodic benefit income caption in the Statement of Consolidated Comprehensive Income (Loss) for the six months ended March 31, 2017. The components of net periodic benefits income (costs) reclassified primarily relate to interest cost, expected return on assets, curtailments, settlements and actuarial gains and losses. Ashland did not have to adjust the classification of service cost since it previously was recorded within the caption required by the new guidance. See Note J for additional information on net periodic benefit costs. In March 2016, the FASB issued new accounting guidance for certain aspects of share-based payments to employees. This guidance requires all excess tax benefits and tax deficiencies related to share-based payments to be recognized as income tax expense in the Statements of Consolidated Comprehensive Income (Loss) instead of additional paid-in capital, and changes the classification of excess tax benefits from a financing activity to an operating activity within the Statements of Condensed Consolidated Cash Flows. This guidance also allows entities to make an accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, this guidance increases the amount an employer can withhold to cover income taxes on awards and still qualify for equity classification and requires that cash paid by an employer when directly withholding shares for tax-withholding purposes be classified as a financing activity within the Statements of Condensed Consolidated Cash Flows. The guidance became effective for Ashland and was adopted on October 1, 2017. The guidance specifically related to the Statements of Consolidated Comprehensive Income (Loss) was adopted prospectively while the guidance related to the Statements of Condensed Consolidated Cash Flows was adopted retrospectively, as required by the guidance. Additionally, Ashland made a policy election to account for forfeitures when they occur across all share-based awards. Upon adoption, the overall impact on Ashland's Condensed Consolidated Financial Statements was not significant. |
Fair Value of Financial Instruments Policy | As required by U.S. GAAP, Ashland uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value and related disclosures for instruments measured at fair value. Fair value accounting guidance establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The three levels within the fair value hierarchy are described as follows. Level 1 – Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect Ashland’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include Ashland’s own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment. For assets that are measured using quoted prices in active markets (Level 1), the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs (Level 2) are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability. For all other assets and liabilities for which unobservable inputs are used (Level 3), fair value is derived using fair value models, such as a discounted cash flow model or other standard pricing models that Ashland deems reasonable. |
Marketable Securities, Available-for-sale Securities, Policy | During 2015, Ashland diversified the 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 are reported in the net interest and other financing expense caption in the Statements of Consolidated Comprehensive Income (Loss). |
Marketable Securities, Trading Securities, Policy | Gains and losses related to deferred compensation investments are immediately recognized within the Statements of Consolidated Comprehensive Income (Loss). |
Derivatives, Methods of Accounting, Derivatives Not Designated or Qualifying as Hedges, Policy | Ashland conducts business in a variety of foreign currencies. Accordingly, Ashland regularly uses foreign currency derivative instruments to manage exposure on certain transactions denominated in foreign currencies to curtail potential earnings volatility effects on certain assets and liabilities, including short-term inter-company loans, denominated in currencies other than Ashland’s functional currency of an entity. These derivative contracts generally require exchange of one foreign currency for another at a fixed rate at a future date and generally have maturities of less than twelve months. All contracts are valued at fair value with net changes in fair value recorded within the selling, general and administrative expense caption. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in non-functional currencies. |
Inventories | Inventories are carried at the lower of cost or net realizable value. Inventories are primarily stated at cost using the weighted-average cost method. In addition, certain inventories are valued at cost using the last-in, first-out (LIFO) method. |
Goodwill and Intangible Assets, Goodwill | Ashland reviews goodwill and indefinite-lived intangible assets for impairment annually or when events and circumstances indicate an impairment may have occurred. This annual assessment is performed as of July 1 and consists of Ashland determining each reporting unit’s current fair value compared to its current carrying value. For its July 1, 2017 assessment, Ashland determined that its reporting units for the allocation of goodwill are its three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. At that time, Ashland determined no additional impairment existed. |
Finite-Lived Intangible Asset | Intangible assets principally consist of trademarks and trade names, intellectual property and customer and supplier relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 25 years, and customer and supplier relationships over 3 to 24 years. |
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived | Ashland annually reviews indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. |
Commitments and Contingencies Policy | Ashland and Hercules have liabilities from claims alleging personal injury caused by exposure to asbestos. To assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions, Ashland retained third party actuarial experts. Prior to 2018, Ashland retained Hamilton, Rabinovitz & Associates, Inc. (HR&A). During 2018, Ashland transitioned these responsibilities to Nathan Associates, Inc. (Nathan). The processes and methodologies used by Nathan are similar to the ones historically employed by HR&A. The methodology used by Nathan to project future asbestos costs is based largely on recent experience, including claim-filing and settlement rates, disease mix, enacted legislation, open claims and litigation defense. The claim experience of Ashland and Hercules are separately compared to the results of previously conducted third party epidemiological studies estimating the number of people likely to develop asbestos-related diseases. Those studies were undertaken in connection with national analyses of the population expected to have been exposed to asbestos. Using that information, Nathan estimates a range of the number of future claims that may be filed, as well as the related costs that may be incurred in resolving those claims. Changes in asbestos-related liabilities and receivables are recorded on an after-tax basis within the discontinued operations caption in the Statements of Consolidated Comprehensive Income (Loss). |
Environmental Cost Policy | The total reserves for environmental remediation reflect Ashland’s estimates of the most likely costs that will be incurred over an extended period to remediate identified conditions for which the costs are reasonably estimable, without regard to any third-party recoveries. Engineering studies, probability techniques, historical experience and other factors are used to identify and evaluate remediation alternatives and their related costs in determining the estimated reserves for environmental remediation. Ashland continues to discount certain environmental sites and regularly adjusts its reserves as environmental remediation continues. Ashland has estimated the value of its probable insurance recoveries associated with its environmental reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. |
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 million and 0.1 million at March 31, 2018 and 2017, respectively. Earnings per share is reported under the treasury stock method. |
Stock Incentive Plan Policy | Ashland has stock incentive plans under which key employees or directors are granted stock appreciation rights (SARs), performance awards or nonvested stock awards. Each program is typically a long-term incentive plan designed to link employee compensation with increased shareholder value or reward superior performance and encourage continued employment with Ashland. Ashland recognizes compensation expense for the grant date fair value of stock-based awards over the applicable vesting period. |
Segment Reporting | Ashland determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by the chief operating decision maker, which includes determining resource allocation methodologies used for reportable segments. Operating income is the primary measure on the Statements of Consolidated Comprehensive Income (Loss) that is reviewed by the chief operating decision maker in assessing each reportable segment's financial performance. Ashland does not aggregate operating segments to arrive at these reportable segments. |
Valvoline (Tables)
Valvoline (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Valvoline [Abstract] | |
Condensed Balance Sheet, Valvoline at Date of Distribution | The distribution was recorded at the carrying amount of Valvoline Inc.'s net assets which was a deficit of $187 million as of May 12, 2017, as follows: May 12 (In millions) 2017 ASSETS Current assets Cash and cash equivalents $ 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 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combination, Separately Recognized Transactions | The following table summarizes the current preliminary values of the assets acquired and liabilities assumed at the date of acquisition. 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 288 Property, plant and equipment 97 Other noncurrent assets 20 Liabilities: Accounts payable (33 ) Deferred tax - net (138 ) Other noncurrent liabilities (14 ) Total purchase price $ 680 |
Schedule of Finite-Lived Intangible Assets as Part of Business Combination | The following details the total intangible assets identified as of May 17, 2017. Weighted-average amortization period Intangible asset type (in millions) Value (years) Trademarks and trade names $ 26 15 Intellectual property 68 22 Customer and supplier relationships 236 20 Total $ 330 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Schedule of Disposal Groups Including Discontinued Operations, Income Statement and Balance Sheet Additional Disclosures | Components of amounts reflected in the Statements of Consolidated Comprehensive Income (Loss) related to discontinued operations are presented in the following table for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Income from discontinued operations (net of tax) Valvoline $ 4 $ 73 $ 7 $ 149 Asbestos-related litigation 3 — 3 — Water Technologies — 3 — 3 Total income from discontinued operations (net of tax) $ 7 $ 76 $ 10 $ 152 The following table presents a reconciliation of the historically reported captions within Ashland's Statements of Consolidated Income (Loss) for the income from discontinued operations attributable to Valvoline for the three and six months ended March 31, 2017. Three Six months ended months ended (In millions) March 31, 2017 March 31, 2017 Income (loss) from discontinued operations attributable to Valvoline Sales $ 514 $ 1,003 Cost of sales (310 ) (603 ) Selling, general and administrative expense (90 ) (172 ) Research and development expense (3 ) (6 ) Equity and other income 6 15 Pretax operating income of discontinued operations 117 237 Net interest and other financing expense (9 ) (18 ) Pretax income of discontinued operations 108 219 Income tax expense (35 ) (70 ) Income from discontinued operations $ 73 $ 149 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Subject to Recurring Fair Value Measurements | The following table summarizes financial instruments subject to recurring fair value measurements as of March 31, 2018. 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 $ 225 $ 225 $ 225 $ — $ — Restricted investments (a) 333 333 333 — — Deferred compensation investments (b) 160 160 — 160 — Investment of captive insurance company 4 4 4 — — Foreign currency derivatives 4 4 — 4 — Total assets at fair value $ 726 $ 726 $ 562 $ 164 $ — Liabilities Foreign currency derivatives $ 21 $ 21 $ — $ 21 $ — (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. The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2017. 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 $ 566 $ 566 $ 566 $ — $ — Restricted investments (a) 332 332 332 — — Deferred compensation investments (b) 158 158 — 158 — Investment of captive insurance company 3 3 3 — — Foreign currency derivatives 2 2 — 2 — Total assets at fair value $ 1,061 $ 1,061 $ 901 $ 160 $ — Liabilities Foreign currency derivatives $ 36 $ 36 $ — $ 36 $ — (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. |
Summary of Available-for-sale Securities Portfolio | The following table provides a summary of the available-for-sale securities portfolio as of March 31, 2018 and September 30, 2017: (In millions) March 31 2018 September 30 2017 Original cost $ 335 $ 335 Accumulated adjustments, net (38 ) (24 ) Adjusted cost, beginning of year (a) 297 311 Investment income (b) 4 9 Net unrealized gain 37 35 Realized gains 4 2 Settlement funds 8 2 Disbursements (17 ) (27 ) Fair value $ 333 $ 332 (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. The following table presents gross unrealized gains and losses for the restricted investment available-for-sale securities as of March 31, 2018 and September 30, 2017: Gross Gross (In millions) Adjusted Cost Unrealized Gain Unrealized Loss Fair Value As of March 31, 2018 Demand deposit $ 22 $ — $ — $ 22 Equity mutual fund 154 40 — 194 Corporate bond mutual fund 120 — (3 ) 117 Fair value $ 296 $ 40 $ (3 ) $ 333 As of September 30, 2017 Demand deposit $ 9 $ — $ — $ 9 Equity mutual fund 168 34 — 202 Corporate bond mutual fund 120 1 — 121 Fair value $ 297 $ 35 $ — $ 332 |
Summary of Investment Income, Realized Gains and Disbursements Related to Investments | The following table presents the investment income, realized gains and disbursements related to the investments within the portfolio for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Investment income $ 2 $ 2 $ 4 $ 5 Realized gains 3 2 4 2 Disbursements (12 ) (12 ) (17 ) (12 ) |
Summary of Net Gains and Losses on Foreign Currency Derivatives | The following table summarizes the net gains and losses recognized during the three and six months ended March 31, 2018 and 2017 within the Statements of Consolidated Comprehensive Income (Loss). Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Foreign currency derivative gains (losses) $ (16 ) $ 8 $ (27 ) $ — |
Summary of Fair Values of Outstanding Foreign Currency Derivatives | The following table summarizes the fair values of the outstanding foreign currency derivatives as of March 31, 2018 and September 30, 2017 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets. March 31 September 30 (In millions) 2018 2017 Foreign currency derivative assets $ 4 $ 2 Notional contract values 302 79 Foreign currency derivative liabilities $ 21 $ 36 Notional contract values 958 1,601 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | The following table summarizes Ashland’s inventories as of the reported Condensed Consolidated Balance Sheet dates. (In millions) March 31, 2018 September 30, 2017 Finished products $ 404 $ 390 Raw materials, supplies and work in process 248 245 LIFO carrying values (3 ) (1 ) $ 649 $ 634 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill by Reportable Segment | The following is a progression of goodwill by reportable segment for the six months ended March 31, 2018. Specialty Intermediates (In millions) Ingredients Composites and Solvents (a) Total Balance at September 30, 2017 $ 2,315 $ 150 $ — $ 2,465 Acquisitions (b) 4 — — 4 Currency translation 33 1 — 34 Balance at March 31, 2018 $ 2,352 $ 151 $ — $ 2,503 (a) As of March 31, 2018, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment. (b) Relates to the acquisition of Vornia Limited during the six months ended March 31, 2018. See Note C for more information. |
Summary of Intangible Assets | Intangible assets were comprised of the following as of March 31, 2018 and September 30, 2017. March 31, 2018 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangibles Trademarks and trade names $ 67 $ (23 ) $ 44 Intellectual property 773 (354 ) 419 Customer and supplier relationships 786 (260 ) 526 Total definite-lived intangibles 1,626 (637 ) 989 Indefinite-lived intangibles Trademarks and trade names 301 — 301 Total intangible assets $ 1,927 $ (637 ) $ 1,290 September 30, 2017 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangibles Trademarks and trade names $ 67 $ (22 ) $ 45 Intellectual property 757 (326 ) 431 Customer and supplier relationships 777 (235 ) 542 Total definite-lived intangibles 1,601 (583 ) 1,018 Indefinite-lived intangibles Trademarks and trade names 301 — 301 Total intangible assets $ 1,902 $ (583 ) $ 1,319 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Current and Long-term Debt | The following table summarizes Ashland’s current and long-term debt as of the dates reported in the Condensed Consolidated Balance Sheets. (In millions) March 31, 2018 September 30, 2017 4.750% notes, due 2022 $ 1,082 $ 1,082 Term Loan B, due 2024 596 599 6.875% notes, due 2043 376 376 Revolving Credit Facility — 173 Term Loan A, due 2022 250 250 Term Loan A, due 2020 250 250 Accounts receivable securitization 48 56 6.50% junior subordinated notes, due 2029 51 51 Medium-term notes, due 2019, interest of 9.4% 5 5 Other (a) (20 ) (23 ) Total debt 2,638 2,819 Short-term debt (includes current portion of long-term debt) (59 ) (235 ) Long-term debt (less current portion) $ 2,579 $ 2,584 (a) Other includes $23 million and $25 million of debt issuance cost discounts as of March 31, 2018 and September 30, 2017, respectively. |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Changes in Unrecognized Tax Benefits | Changes in unrecognized tax benefits are summarized as follows for the six months ended March 31, 2018. (In millions) Balance at October 1, 2017 $ 194 Increases related to positions taken on items from prior years 3 Decreases related to positions taken on items from prior years (1 ) Increases related to positions taken in the current year 6 Lapse of statute of limitations (1 ) Balance at March 31, 2018 $ 201 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Components of Pension and Other Postretirement Benefit Costs for Continuing Operation | The following table details the components of pension and other postretirement benefit costs for continuing operations. Pension benefits Other postretirement benefits (In millions) 2018 2017 2018 2017 Three months ended March 31 Service cost (a) $ 2 $ 2 $ — $ — Interest cost (b) 2 2 — — Expected return on plan assets (b) (3 ) (2 ) — — Total net periodic benefit costs $ 1 $ 2 $ — $ — Six months ended March 31 Service cost (a) $ 4 $ 4 $ 1 $ — Interest cost (b) 5 4 — 1 Expected return on plan assets (b) (6 ) (6 ) — — Actuarial gain (b) — — — (2 ) Total net periodic benefit costs (income) $ 3 $ 2 $ 1 $ (1 ) (a) Service cost was not impacted by new accounting guidance adopted in 2018 and is therefore still classified within the selling, general and administrative expense and cost of sales captions on the Statements of Consolidated Comprehensive Income (Loss). See Note A for additional information. (b) These components are now classified within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in the current quarter. See Note A for additional information. |
Litigation, Claims and Contin33
Litigation, Claims and Contingencies (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Loss Contingencies [Line Items] | |
Reconciliation of Changes in the Environmental Contingencies and Asset Retirement Obligations Reserve | The following table provides a reconciliation of the changes in the environmental remediation reserves during the six months ended March 31, 2018 and 2017. Six months ended March 31 (In millions) 2018 2017 Reserve - beginning of period $ 163 $ 177 Disbursements (16 ) (15 ) Revised obligation estimates and accretion 17 5 Reserve - end of period $ 164 $ 167 |
Components of Environmental Remediation Expense | Components of environmental remediation expense included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss) are presented in the following table for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions) 2018 2017 2018 2017 Environmental expense $ 4 $ 1 $ 16 $ 5 Accretion — — 1 — Legal expense 2 4 3 5 Total expense 6 5 20 10 Insurance receivable (a) (1 ) — (1 ) — Total expense, net of receivable activity (b) $ 5 $ 5 $ 19 $ 10 (a) Activity of $0 denotes value less than $1 million. (b) Net expense of $1 million for both the three and six months ended March 31, 2018, and $1 million and $2 million for the three and six months ended March 31, 2017, respectively, relates to divested businesses which qualified for treatment as discontinued operations and 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). |
Ashland [Member] | |
Loss Contingencies [Line Items] | |
Summary of Asbestos Claims Activity | A summary of Ashland asbestos claims activity, excluding Hercules claims, follows. Six months ended March 31 Years ended September 30 (In thousands) 2018 2017 2017 2016 2015 Open claims - beginning of year 54 57 57 60 65 New claims filed 1 1 2 2 2 Claims settled — — (1 ) — — Claims dismissed (2 ) (2 ) (4 ) (5 ) (7 ) Open claims - end of period 53 56 54 57 60 |
Progression of Activity in the Asbestos Reserve Accounts | A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Asbestos reserve - beginning of year $ 419 $ 415 $ 415 $ 409 $ 438 Reserve adjustment — — 36 37 — Amounts paid (17 ) (18 ) (32 ) (31 ) (29 ) Asbestos reserve - end of period (a) $ 402 $ 397 $ 419 $ 415 $ 409 (a) Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Progression of Insurance Receivable | A progression of activity in the Ashland insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Insurance receivable - beginning of year $ 155 $ 151 $ 151 $ 150 $ 402 Receivable adjustment — — 15 16 (3 ) Insurance settlement — (5 ) (5 ) (4 ) (227 ) Amounts collected (6 ) (2 ) (6 ) (11 ) (22 ) Insurance receivable - end of period (a) $ 149 $ 144 $ 155 $ 151 $ 150 (a) Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Hercules [Member] | |
Loss Contingencies [Line Items] | |
Summary of Asbestos Claims Activity | A summary of Hercules’ asbestos claims activity follows. Six months ended March 31 Years ended September 30 (In thousands) 2018 2017 2017 2016 2015 Open claims - beginning of year 12 15 15 20 21 New claims filed 1 1 1 1 1 Claims dismissed (1 ) (3 ) (4 ) (6 ) (2 ) Open claims - end of period 12 13 12 15 20 |
Progression of Activity in the Asbestos Reserve Accounts | A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Asbestos reserve - beginning of year $ 323 $ 321 $ 321 $ 311 $ 329 Reserve adjustments — — 16 25 4 Amounts paid (12 ) (5 ) (14 ) (15 ) (22 ) Asbestos reserve - end of period (a) $ 311 $ 316 $ 323 $ 321 $ 311 (a) Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Progression of Insurance Receivable | A progression of activity in the Hercules insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2018 2017 2017 2016 2015 Insurance receivable - beginning of year $ 68 $ 63 $ 63 $ 56 $ 77 Receivable adjustment — — 5 7 1 Insurance settlement — — — — (22 ) Insurance receivable - end of period $ 68 $ 63 $ 68 $ 63 $ 56 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted 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 million and 0.1 million at March 31, 2018 and 2017, respectively. Earnings per share is reported under the treasury stock method. Three months ended Six months ended March 31 March 31 (In millions, except per share data) 2018 2017 2018 2017 Numerator Numerator for basic and diluted EPS - Income (loss) from continuing operations $ 66 $ 29 $ 59 $ (37 ) Denominator Denominator for basic EPS - Weighted-average common shares outstanding 63 62 63 62 Share based awards convertible to common shares (a) 1 1 1 — Denominator for diluted EPS - Adjusted weighted- average shares and assumed conversions 64 63 64 62 EPS from continuing operations Basic $ 1.06 $ 0.46 $ 0.94 $ (0.59 ) Diluted 1.04 0.46 0.93 (0.59 ) (a) As a result of the loss from continuing operations attributable to Ashland during the six months ended March 31, 2017, 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. |
Equity Items (Tables)
Equity Items (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Components of 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. 2018 2017 (In millions) Before tax Tax (expense) benefit Net of tax Before tax Tax (expense) benefit Net of tax Three months ended March 31 Other comprehensive income (loss) Unrealized translation gain $ 55 $ — $ 55 $ 58 $ 2 $ 60 Amortization of unrecognized prior service credit (a) — — — (3 ) 1 (2 ) Net change in available-for-sale securities: Unrealized loss (5 ) 1 (4 ) 9 (2 ) 7 Reclassification adjustment for gains included in net income (3 ) 1 (2 ) (2 ) 1 (1 ) Total other comprehensive income $ 47 $ 2 $ 49 $ 62 $ 2 $ 64 Six months ended March 31 Other comprehensive income (loss) Unrealized translation gain (loss) $ 58 $ — $ 58 $ (92 ) $ 6 $ (86 ) Amortization of unrecognized prior service credit (a) — — — (6 ) 2 (4 ) Net change in available-for-sale securities: Unrealized gain 6 (1 ) 5 9 (2 ) 7 Reclassification adjustment for gains included in net income (4 ) 1 (3 ) (2 ) 1 (1 ) Total other comprehensive income (loss) $ 60 $ — $ 60 $ (91 ) $ 7 $ (84 ) (a) For the three and six months ended March 31, 2017, the amortization of unrecognized prior services credits was related to pension and other postretirement benefit plans that transferred to Valvoline and was classified within the discontinued operations caption on the Statements of Consolidated Comprehensive Income (Loss). |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Components of Stock-Based Compensation Expense Included in Continuing Operations | The components of Ashland’s pretax stock-based compensation expense included in continuing operations are as follows: Three months ended Six months ended March 31 March 31 (In millions) 2018 (a) 2017 (b) 2018 (a) 2017 (b) SARs $ 2 $ 2 $ 3 $ 3 Nonvested stock awards 5 3 11 7 Performance share awards 2 2 6 4 $ 9 $ 7 $ 20 $ 14 (a) Included $2 million and $4 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $3 million of expense related to cash-settled performance units during the three and six months ended March 31, 2018, respectively. (b) Included $2 million and $3 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $2 million of expense related to cash-settled performance units during the three and six months ended March 31, 2017, respectively. |
Reportable Segment Information
Reportable Segment Information (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of Financial Information for Each Reportable Segment | The following table presents various financial information for each reportable segment for the three and six months ended March 31, 2018 and 2017. Three months ended Six months ended March 31 March 31 (In millions - unaudited) 2018 2017 2018 2017 SALES Specialty Ingredients $ 646 $ 544 $ 1,196 $ 1,026 Composites 238 186 456 351 Intermediates and Solvents 90 76 164 133 $ 974 $ 806 $ 1,816 $ 1,510 OPERATING INCOME (LOSS) Specialty Ingredients $ 89 $ 74 $ 131 $ 114 Composites 19 13 36 29 Intermediates and Solvents 4 (3 ) 13 (11 ) Unallocated and other (17 ) (31 ) (47 ) (64 ) $ 95 $ 53 $ 133 $ 68 |
Significant Accounting Polici38
Significant Accounting Policies - Additional Information (Details) shares in Millions, $ in Millions | 6 Months Ended | 7 Months Ended | |
Mar. 31, 2018ReportableSegment | Mar. 31, 2017USD ($) | May 12, 2017shares | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Valvoline Shares Owned by Ashland | shares | 170 | ||
Sale of Stock, Percentage of Ownership after Transaction | 83.00% | ||
Number of reportable segments | ReportableSegment | 3 | ||
Expenses reclassified to other net periodic benefit income | $ | $ 3 |
Valvoline - Additional Informat
Valvoline - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 7 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | May 12, 2017 | Sep. 30, 2016 | |
Distribution of Valvoline [Line Items] | ||||||
Valvoline Shares Owned by Ashland | 170 | |||||
Sale of Stock, Percentage of Ownership after Transaction | 83.00% | |||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 2.745338 | |||||
Net assets deficit | $ (187) | |||||
Discontinued Operations [Member] | ||||||
Distribution of Valvoline [Line Items] | ||||||
Separation costs | $ 7 | $ 12 | ||||
Selling, General and Administrative Expense [Member] | ||||||
Distribution of Valvoline [Line Items] | ||||||
Separation costs | $ 2 | $ 26 | $ 8 | $ 54 | ||
Valvoline Inc. [Member] | ||||||
Distribution of Valvoline [Line Items] | ||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 17.00% |
Valvoline - Condensed Balance S
Valvoline - Condensed Balance Sheet, Valvoline at Date of Distribution (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | May 17, 2017 | May 12, 2017 | |
Current assets | |||||
Accounts receivable, net | [1] | $ 717 | $ 612 | ||
Inventories | 649 | 634 | |||
Other current assets | 122 | 91 | |||
Total current assets | 1,713 | 1,903 | |||
Noncurrent assets | |||||
Net property, plant and equipment | 1,940 | 1,970 | |||
Goodwill | 2,503 | 2,465 | $ 288 | ||
Deferred income taxes | 28 | 28 | |||
Other noncurrent assets | 461 | 422 | |||
Total noncurrent assets | 6,728 | 6,715 | |||
Total assets | 8,441 | 8,618 | |||
Current liabilities | |||||
Short-term debt | 59 | 235 | |||
Trade and other payables | 387 | 409 | |||
Other current liabilities | 266 | 324 | |||
Total current liabilities | 712 | 968 | |||
Noncurrent liabilities | |||||
Long-term debt | 2,579 | 2,584 | |||
Employee benefit obligations | 190 | 191 | |||
Other long-term liabilities | 541 | 400 | |||
Total noncurrent liabilities | $ 4,218 | $ 4,244 | |||
Net deficit | $ (187) | ||||
Valvoline [Member] | |||||
Current assets | |||||
Cash and cash equivalents | 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 | ||||
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) | ||||
[1] | Accounts receivable includes an allowance for doubtful accounts of $9 million at both March 31, 2018 and September 30, 2017. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Millions | May 17, 2017USD ($)Facility | Jan. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | $ 300 | ||||
Number of manufacturing facilities | Facility | 14 | ||||
Business acquisition, purchase price | $ 680 | ||||
Working capital adjustments | 20 | ||||
Goodwill, Purchase Accounting Adjustments | $ 1 | ||||
Accounts payable, purchase accounting adjustments | 1 | ||||
Intangible assets | 330 | ||||
Goodwill | $ 288 | $ 2,503 | $ 2,465 | ||
Vornia Limited [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Business combination, consideration transferred | $ 12 | ||||
Business acquisition future payment | 1 | ||||
Goodwill | 4 | ||||
intellectual property | $ 8 |
Acquisitions - Summary of Asset
Acquisitions - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | May 17, 2017 |
Business Combinations [Abstract] | |||
Accounts receivable | $ 52 | ||
Inventory | 74 | ||
Other current assets | 4 | ||
Intangible assets | 330 | ||
Goodwill | $ 2,503 | $ 2,465 | 288 |
Property, plant and equipment | 97 | ||
Other noncurrent assets | 20 | ||
Accounts payable | (33) | ||
Deferred tax - net | (138) | ||
Other noncurrent liabilities | (14) | ||
Total purchase price | $ 680 |
Acquisitions - Summary of Total
Acquisitions - Summary of Total Intangible Assets Identified (Details) $ in Millions | May 17, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Total intangible assets | $ 330 |
Trademarks and Trade Names [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Total intangible assets | $ 26 |
Weighted-average amortization period | 15 years |
Intellectual Property [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Total intangible assets | $ 68 |
Weighted-average amortization period | 22 years |
Customer and supplier relationships [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Total intangible assets | $ 236 |
Weighted-average amortization period | 20 years |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 7 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | May 12, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Valvoline Shares Owned by Ashland | 170 | ||||
Income from discontinued operations (net of tax) | $ 7 | $ 76 | $ 10 | $ 152 | |
Asbestos [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income from discontinued operations (net of tax) | $ 3 | $ 3 |
Discontinued Operations - Compo
Discontinued Operations - Components of Consolidated Comprehensive Income (Loss) Related to Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income from discontinued operations (net of tax) | ||||
Total income from discontinued operations (net of tax) | $ 7 | $ 76 | $ 10 | $ 152 |
Valvoline [Member] | ||||
Income from discontinued operations (net of tax) | ||||
Total income from discontinued operations (net of tax) | 4 | 73 | 7 | 149 |
Asbestos [Member] | ||||
Income from discontinued operations (net of tax) | ||||
Total income from discontinued operations (net of tax) | $ 3 | $ 3 | ||
Water Technologies [Member] | ||||
Income from discontinued operations (net of tax) | ||||
Total income from discontinued operations (net of tax) | $ 3 | $ 3 |
Discontinued Operations - Recon
Discontinued Operations - Reconciliation of Consolidated Income (Loss) From Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income (loss) from discontinued operations attributable to Valvoline | ||||
Research and development expense | $ (21) | $ (21) | $ (43) | $ (41) |
Income tax expense | (1) | 5 | (15) | 45 |
Income from discontinued operations | 7 | 76 | 10 | 152 |
Valvoline [Member] | ||||
Income (loss) from discontinued operations attributable to Valvoline | ||||
Sales | 514 | 1,003 | ||
Cost of sales | (310) | (603) | ||
Selling, general and administrative expense | (90) | (172) | ||
Research and development expense | (3) | (6) | ||
Equity and other income | 6 | 15 | ||
Pretax operating income of discontinued operations | 117 | 237 | ||
Net interest and other financing expense | (9) | (18) | ||
Pretax income of discontinued operations | 108 | 219 | ||
Income tax expense | (35) | (70) | ||
Income from discontinued operations | $ 4 | $ 73 | $ 7 | $ 149 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Instruments Subject to Recurring Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||
ASSETS | |||
Cash and cash equivalents | $ 225 | $ 566 | |
Restricted investments | [1] | 333 | 332 |
Deferred compensation investments | [2] | 160 | 158 |
Investment of captive insurance company | 4 | 3 | |
Foreign currency derivatives | 4 | 2 | |
Total assets at fair value | 726 | 1,061 | |
Liabilities | |||
Foreign currency derivatives | 21 | 36 | |
Estimate of Fair Value, Fair Value Disclosure [Member] | |||
ASSETS | |||
Cash and cash equivalents | 225 | 566 | |
Restricted investments | [1] | 333 | 332 |
Deferred compensation investments | [2] | 160 | 158 |
Investment of captive insurance company | 4 | 3 | |
Foreign currency derivatives | 4 | 2 | |
Total assets at fair value | 726 | 1,061 | |
Liabilities | |||
Foreign currency derivatives | 21 | 36 | |
Fair Value, Inputs, Level 1 [Member] | |||
ASSETS | |||
Cash and cash equivalents | 225 | 566 | |
Restricted investments | [1] | 333 | 332 |
Deferred compensation investments | [2] | 0 | 0 |
Investment of captive insurance company | 4 | 3 | |
Foreign currency derivatives | 0 | 0 | |
Total assets at fair value | 562 | 901 | |
Liabilities | |||
Foreign currency derivatives | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
ASSETS | |||
Cash and cash equivalents | 0 | 0 | |
Restricted investments | [1] | 0 | 0 |
Deferred compensation investments | [2] | 160 | 158 |
Investment of captive insurance company | 0 | 0 | |
Foreign currency derivatives | 4 | 2 | |
Total assets at fair value | 164 | 160 | |
Liabilities | |||
Foreign currency derivatives | 21 | 36 | |
Fair Value, Inputs, Level 3 [Member] | |||
ASSETS | |||
Cash and cash equivalents | 0 | 0 | |
Restricted investments | [1] | 0 | 0 |
Deferred compensation investments | [2] | 0 | 0 |
Investment of captive insurance company | 0 | 0 | |
Foreign currency derivatives | 0 | 0 | |
Total assets at fair value | 0 | 0 | |
Liabilities | |||
Foreign currency derivatives | $ 0 | $ 0 | |
[1] | Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets. | ||
[2] | Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. |
Fair Value Measurements - Sum48
Fair Value Measurements - Summary of Financial Instruments Subject to Recurring Fair Value Measurements (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Fair Value Disclosures [Abstract] | ||
Restricted Investments, Current | $ 30 | $ 30 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2015 | Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | ||||||
Litigation Settlement, Amount | $ 398,000,000 | |||||
Increase (Decrease) in Restricted Cash | $ 335,000,000 | |||||
Restricted Investments, Current | $ 30,000,000 | $ 30,000,000 | $ 30,000,000 | |||
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities | 0 | $ 0 | 0 | $ 0 | ||
Other financial instruments [Abstract] | ||||||
Long-term Debt, Carrying Value | 2,613,000,000 | 2,613,000,000 | 2,615,000,000 | |||
Long-term Debt, Fair Value | $ 2,710,000,000 | $ 2,710,000,000 | $ 2,768,000,000 |
Fair Value Measurements - Sum50
Fair Value Measurements - Summary of Available-for-sale Securities Portfolio (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||
Original cost | $ 335 | $ 335 | $ 335 | |||||
Accumulated adjustments, net | (38) | (38) | (24) | |||||
Adjusted cost | [1] | 297 | 297 | 311 | ||||
Investment income | 2 | $ 2 | 4 | [2] | $ 5 | 9 | [2] | |
Net unrealized gain | 37 | 37 | 35 | |||||
Realized gains | 3 | 2 | 4 | 2 | 2 | |||
Settlement funds | 8 | 2 | ||||||
Disbursements | (12) | $ (12) | (17) | $ (12) | (27) | |||
Fair value | 333 | 333 | 332 | |||||
Available-for-sale Securities [Member] | ||||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||
Adjusted cost | 296 | 296 | 297 | |||||
Fair value | 333 | 333 | 332 | |||||
Unrealized gain | 40 | 40 | 35 | |||||
Unrealized loss | (3) | (3) | 0 | |||||
Corporate bond mutual fund [Member] | ||||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||
Adjusted cost | 120 | 120 | 120 | |||||
Corporate bond mutual fund, unrealized gain | 0 | 0 | 1 | |||||
Corporate bond mutual fund, unrealized loss | (3) | (3) | 0 | |||||
Corporate bond mutual fund, Fair value | 117 | 117 | 121 | |||||
Equity mutual fund [Member] | ||||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||
Adjusted cost | 154 | 154 | 168 | |||||
Equity mutual fund, unrealized gain | 40 | 40 | 34 | |||||
Equity mutual fund, unrealized loss | 0 | 0 | 0 | |||||
Equity mutual fund, Fair value | 194 | 194 | 202 | |||||
Demand Deposits [Member] | ||||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||
Demand deposit | $ 22 | $ 22 | $ 9 | |||||
[1] | The accumulated adjustments include investment income, realized gains, disbursements and settlements recorded in previous periods. | |||||||
[2] | Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. |
Fair Value Measurements - Sum51
Fair Value Measurements - Summary of Investment Income, Realized Gains and Disbursements Related to Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | |||
Fair Value Disclosures [Abstract] | |||||||
Investment income | $ 2 | $ 2 | $ 4 | [1] | $ 5 | $ 9 | [1] |
Realized gains | 3 | 2 | 4 | 2 | 2 | ||
Disbursements | $ (12) | $ (12) | $ (17) | $ (12) | $ (27) | ||
[1] | Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. |
Fair Value Measurements - Sum52
Fair Value Measurements - Summary of Net Gains and Losses on Foreign Currency Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Foreign currency derivative gains (losses) | $ (16) | $ 8 | $ (27) | $ 0 |
Fair Value Measurements - Sum53
Fair Value Measurements - Summary of Fair Values of Outstanding Foreign Currency Derivatives (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Accounts Receivable [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency derivative assets | $ 4 | $ 2 |
Notional contract values | 302 | 79 |
Accrued Expenses and Other Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional contract values | 958 | 1,601 |
Foreign currency derivative liabilities | $ 21 | $ 36 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 404 | $ 390 |
Raw materials, supplies and work in process | 248 | 245 |
LIFO carrying values | (3) | (1) |
Inventory, Net | $ 649 | $ 634 |
Goodwill and Other Intangible55
Goodwill and Other Intangibles - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)ReportableSegment | Mar. 31, 2017USD ($) | |
Finite Lived Intangible Assets [Line Items] | ||||
Number of reportable segments | ReportableSegment | 3 | |||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Amortization expense recognized on intangible assets | $ 24 | $ 19 | $ 48 | $ 38 |
Expected future amortization expense [Abstract] | ||||
2018 (includes six months actual and six months estimated) | 95 | 95 | ||
2,019 | 91 | 91 | ||
2,020 | 90 | 90 | ||
2,021 | 90 | 90 | ||
2,022 | $ 88 | $ 88 | ||
Minimum [Member] | Trademarks and Trade Names [Member] | ||||
Intangible Assets, Net [Abstract] | ||||
Useful life (in years) | 3 years | |||
Minimum [Member] | Intellectual Property [Member] | ||||
Intangible Assets, Net [Abstract] | ||||
Useful life (in years) | 5 years | |||
Minimum [Member] | Customer and supplier relationships [Member] | ||||
Intangible Assets, Net [Abstract] | ||||
Useful life (in years) | 3 years | |||
Maximum [Member] | Trademarks and Trade Names [Member] | ||||
Intangible Assets, Net [Abstract] | ||||
Useful life (in years) | 25 years | |||
Maximum [Member] | Intellectual Property [Member] | ||||
Intangible Assets, Net [Abstract] | ||||
Useful life (in years) | 25 years | |||
Maximum [Member] | Customer and supplier relationships [Member] | ||||
Intangible Assets, Net [Abstract] | ||||
Useful life (in years) | 24 years |
Goodwill and Other Intangible56
Goodwill and Other Intangibles - Summary of Goodwill by Reportable Segment (Details) $ in Millions | 6 Months Ended | |
Mar. 31, 2018USD ($) | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 2,465 | |
Acquisitions | 4 | [1] |
Currency translation | 34 | |
Balance at end of period | 2,503 | |
Specialty Ingredients [Member] | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 2,315 | |
Acquisitions | 4 | [1] |
Currency translation | 33 | |
Balance at end of period | 2,352 | |
Composites [Member] | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 150 | |
Acquisitions | 0 | [1] |
Currency translation | 1 | |
Balance at end of period | 151 | |
Intermediates and Solvents [Member] | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 0 | [2] |
Acquisitions | 0 | [1],[2] |
Currency translation | 0 | [2] |
Balance at end of period | $ 0 | [2] |
[1] | Relates to the acquisition of Vornia Limited during the six months ended March 31, 2018. See Note C for more information. | |
[2] | As of March 31, 2018, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment. |
Goodwill and Other Intangible57
Goodwill and Other Intangibles - Summary of Goodwill by Reportable Segment (Parenthetical) (Details) $ in Millions | Mar. 31, 2018USD ($) |
Intermediates and Solvents [Member] | |
Goodwill [Line Items] | |
Goodwill, Impaired, Accumulated Impairment Loss | $ 171 |
Goodwill and Other Intangible58
Goodwill and Other Intangibles - Summary of Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,626 | $ 1,601 |
Accumulated amortization | (637) | (583) |
Net carrying amount | 989 | 1,018 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Intangible Assets, Gross (Excluding Goodwill) | 1,927 | 1,902 |
Intangibles | 1,290 | 1,319 |
Trademarks and Trade Names [Member] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Trademarks and trade names | 301 | 301 |
Trademarks and Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 67 | 67 |
Accumulated amortization | (23) | (22) |
Net carrying amount | 44 | 45 |
Intellectual Property [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 773 | 757 |
Accumulated amortization | (354) | (326) |
Net carrying amount | 419 | 431 |
Customer and supplier relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 786 | 777 |
Accumulated amortization | (260) | (235) |
Net carrying amount | $ 526 | $ 542 |
Debt - Summary of Current and L
Debt - Summary of Current and Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | |||
Carrying value of debt | $ 2,613 | $ 2,615 | |
Other | [1] | (20) | (23) |
Total debt | 2,638 | 2,819 | |
Short-term debt (includes current portion of long-term debt) | (59) | (235) | |
Long-term debt (less current portion) | 2,579 | 2,584 | |
Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 1,082 | 1,082 | |
Term Loan B due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 596 | 599 | |
Notes due 2043 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 376 | 376 | |
2017 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 173 | ||
Term Loan A due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 250 | 250 | |
Term Loan A due 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 250 | 250 | |
Accounts Receivable Securitization [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 48 | 56 | |
Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 51 | 51 | |
Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | $ 5 | $ 5 | |
[1] | Other includes $23 million and $25 million of debt issuance cost discounts as of March 31, 2018 and September 30, 2017, respectively. |
Debt - Summary of Current and60
Debt - Summary of Current and Long-term Debt (Parenthetical) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Expense, Long-Term Debt | $ 23 | $ 25 |
Junior Subordinated Debt [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | |
Debt Instrument, Maturity Date | Dec. 31, 2029 | |
Medium-term Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 9.40% | |
Debt Instrument, Maturity Date | Dec. 31, 2019 | |
Notes due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | |
Debt Instrument, Maturity Date | Aug. 15, 2022 | |
Term Loan B due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | May 17, 2024 | |
Debt Instrument, maturity year | 2,024 | |
Notes due 2043 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.875% | |
Debt Instrument, Maturity Date | May 15, 2043 | |
Term Loan A due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | May 17, 2022 | |
Debt Instrument, maturity year | 2,022 | |
Term Loan A due 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | May 17, 2020 | |
Debt Instrument, maturity year | 2,020 |
Debt - Summary of Current and61
Debt - Summary of Current and Long-term Debt - Additional Information (Details) $ in Millions | Mar. 31, 2018USD ($) |
Scheduled aggregate debt maturities by fiscal year [Abstract] | |
2,018 | $ 3 |
2,019 | 11 |
2,020 | 269 |
2,021 | 56 |
2,022 | $ 1,279 |
Debt - Financing Activity and C
Debt - Financing Activity and Covenants - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | Feb. 28, 2018 | May 17, 2017 | |
Debt Instrument [Line Items] | ||||||||
Cash repatriation | $ 300,000,000 | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 819,000,000 | $ 819,000,000 | ||||||
Covenant restrictions [Abstract] | ||||||||
Maximum consolidated leverage ratio | 4.5 | 4.5 | ||||||
Calculated leverage ratio | 3.8 | 3.8 | ||||||
Minimum required consolidated interest coverage ratio | 3 | 3 | ||||||
Calculated consolidated interest coverage ratio | 4.8 | 4.8 | ||||||
Junior Subordinated Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Maturity Date | Dec. 31, 2029 | |||||||
Par value of debt repurchases | $ 182,000,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | 6.50% | ||||||
Aggregate purchase price of debt | $ 177,000,000 | |||||||
Reduction in carrying value of debt | $ 90,000,000 | |||||||
Repayment of debt, accelerated accretion | 92,000,000 | |||||||
Gain (Loss) on Repurchase of Debt Instrument | 5,000,000 | |||||||
Term Loan A due 2020 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 250,000,000 | $ 250,000,000 | ||||||
Debt instrument, outstanding amount | 250,000,000 | $ 250,000,000 | ||||||
Debt instrument, term | 3 years | |||||||
Debt Instrument, Maturity Date | May 17, 2020 | |||||||
Debt Instrument, maturity year | 2,020 | |||||||
Term Loan A due 2022 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Face Amount | 250,000,000 | $ 250,000,000 | ||||||
Debt instrument, outstanding amount | 250,000,000 | $ 250,000,000 | ||||||
Debt instrument, term | 5 years | |||||||
Debt Instrument, Maturity Date | May 17, 2022 | |||||||
Debt Instrument, amortization percentage per annum (payable in equal quarterly installments) | 20.00% | |||||||
Debt Instrument, maturity year | 2,022 | |||||||
2017 Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 800,000,000 | $ 800,000,000 | $ 680,000,000 | |||||
Debt instrument, term | 5 years | |||||||
Line of credit facility, letter of credit sublimit | $ 125,000,000 | $ 125,000,000 | ||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | |||||||
2017 Revolving Credit Facility [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.175% | |||||||
2017 Revolving Credit Facility [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.40% | |||||||
2017 Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 1.75% | 1.75% | ||||||
2017 Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 1.375% | |||||||
2017 Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 2.50% | |||||||
2017 Revolving Credit Facility [Member] | Alternate base rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 0.75% | |||||||
2017 Revolving Credit Facility [Member] | Alternate base rate [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 0.375% | |||||||
2017 Revolving Credit Facility [Member] | Alternate base rate [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 1.50% | |||||||
Term Loan B due 2024 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 600,000,000 | $ 600,000,000 | ||||||
Debt Instrument, Maturity Date | May 17, 2024 | |||||||
Debt Instrument, amortization percentage per annum (payable in equal quarterly installments) | 1.00% | |||||||
Debt Instrument, maturity year | 2,024 | |||||||
Term Loan B due 2024 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 2.00% | 2.00% | ||||||
Term Loan B due 2024 [Member] | Alternate base rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instruments, percentage points added to variable rate | 1.00% | 1.00% | ||||||
Notes due 2022 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Maturity Date | Aug. 15, 2022 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | 4.75% | ||||||
Repayments of Debt | 39,000,000 | |||||||
Notes due 2018 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.875% | 3.875% | ||||||
Debt Instrument, maturity year | 2,018 | |||||||
Repayments of Debt | 41,000,000 | |||||||
Notes due 2018 and 2022 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Gain (Loss) on Repurchase of Debt Instrument | $ 3,000,000 | |||||||
Accounts Receivable Securitization [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, termination date | 2018-03 | |||||||
Debt instrument, extended termination date | 2020-03 | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 115,000,000 | $ 115,000,000 | $ 100,000,000 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | 67,000,000 | 67,000,000 | ||||||
2017 Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Remaining Borrowing Capacity | 752,000,000 | 752,000,000 | ||||||
Letters of Credit Outstanding, Amount | $ 48,000,000 | $ 48,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Contingency [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | ||
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | $ 16 | |||
Increase (Decrease) in Deferred Income Taxes | 126 | |||
Increase (Decrease) in Deferred Liabilities | 142 | |||
Unrecognized tax benefits due to lapse of the statute of limitations | $ 4 | 1 | $ 4 | |
Minimum [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 21 | 21 | ||
Maximum [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 31 | $ 31 | ||
Current Fiscal Year [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate (in hundredths) | 1.00% | 20.00% | ||
Current Fiscal Year [Member] | Foreign Entity [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | $ (4) | $ (4) | ||
Prior Fiscal Year [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate (in hundredths) | (21.00%) | 55.00% |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at October 1, 2017 | $ 194 | ||
Increases related to positions taken on items from prior years | 3 | ||
Decreases related to positions taken on items from prior years | (1) | ||
Increases related to positions taken in the current year | 6 | ||
Lapse of statute of limitations | $ (4) | (1) | $ (4) |
Balance at March 31, 2018 | $ 201 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Actuarial gain | $ 0 | $ 2 |
Foreign Pension Plans, Defined Benefit [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual contributions to benefit plans in period | 6 | |
Estimated future contributions in current fiscal year | 2 | |
United States Pension Plans of US Entity, Defined Benefit [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual contributions to benefit plans in period | $ 1 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Components of Pension and Other Postretirement Benefit Costs for Continuing Operation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | ||
Defined Benefit Plan Disclosure [Line Items] | |||||
Actuarial (gain) loss | $ 0 | $ (2) | |||
Pension Plan [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | [1] | $ 2 | $ 2 | 4 | 4 |
Interest cost | [2] | 2 | 2 | 5 | 4 |
Expected return on plan assets | [2] | (3) | (2) | (6) | (6) |
Actuarial (gain) loss | [2] | 0 | 0 | ||
Total net periodic benefit costs (income) | 1 | 2 | 3 | 2 | |
Other Postretirement Benefit Plan, Defined Benefit [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | [1] | 0 | 0 | 1 | 0 |
Interest cost | [2] | 0 | 0 | 0 | 1 |
Expected return on plan assets | [2] | 0 | 0 | 0 | 0 |
Actuarial (gain) loss | [2] | 0 | (2) | ||
Total net periodic benefit costs (income) | $ 0 | $ 0 | $ 1 | $ (1) | |
[1] | Service cost was not impacted by new accounting guidance adopted in 2018 and is therefore still classified within the selling, general and administrative expense and cost of sales captions on the Statements of Consolidated Comprehensive Income (Loss). See Note A for additional information. | ||||
[2] | These components are now classified within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in the current quarter. See Note A for additional information. |
Litigation, Claims and Contin67
Litigation, Claims and Contingencies - Summary of Asbestos Claims Activity (Details) - Claim Claim in Thousands | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Ashland [Member] | |||||
Asbestos claims [Roll Forward] | |||||
Open claims - beginning of year | 54 | 57 | 57 | 60 | 65 |
New claims filed | 1 | 1 | 2 | 2 | 2 |
Claims settled | 0 | 0 | (1) | 0 | 0 |
Claims dismissed | (2) | (2) | (4) | (5) | (7) |
Open claims - end of period | 53 | 56 | 54 | 57 | 60 |
Hercules [Member] | |||||
Asbestos claims [Roll Forward] | |||||
Open claims - beginning of year | 12 | 15 | 15 | 20 | 21 |
New claims filed | 1 | 1 | 1 | 1 | 1 |
Claims dismissed | (1) | (3) | (4) | (6) | (2) |
Open claims - end of period | 12 | 13 | 12 | 15 | 20 |
Litigation, Claims and Contin68
Litigation, Claims and Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Mar. 31, 2018USD ($)FacilityWasteTreatmentorDisposalSiteServiceStationProperty | Jun. 30, 2017USD ($) | Mar. 31, 2018USD ($)FacilityWasteTreatmentorDisposalSiteServiceStationProperty | Mar. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |||||||
Environmental Remediation Costs Recognized [Abstract] | ||||||||||||||
Number of waste treatment or disposal sites were company is identified as a potentially responsible party under the superfund or similar state laws | WasteTreatmentorDisposalSite | 83 | 83 | ||||||||||||
Number of current and former operating facilities subject to various environmental laws | Facility | 117 | 117 | ||||||||||||
Total number of service station properties subject to various environmental laws | ServiceStationProperty | 1,225 | 1,225 | ||||||||||||
Number of service stations being actively remediated | ServiceStationProperty | 36 | 36 | ||||||||||||
Accrual for environmental loss contingencies | $ 164 | $ 164 | $ 167 | $ 163 | $ 177 | |||||||||
Accrued environmental loss contingencies, noncurrent | 122 | 122 | 121 | |||||||||||
Recorded third-party environmental recoveries receivable | 14 | 14 | 15 | |||||||||||
Recorded third-party environmental recoveries, noncurrent | $ 13 | $ 13 | 14 | |||||||||||
Maximum reserve for remediation reserve related to any one site (in hundredths) | 15.00% | 15.00% | ||||||||||||
Minimum [Member] | ||||||||||||||
Asbestos litigation cost projection [Abstract] | ||||||||||||||
Number of Years Included in Asbestos Assumption | 40 years | |||||||||||||
Maximum [Member] | ||||||||||||||
Asbestos litigation cost projection [Abstract] | ||||||||||||||
Number of Years Included in Asbestos Assumption | 50 years | |||||||||||||
Environmental Remediation Costs Recognized [Abstract] | ||||||||||||||
Environmental exit costs, reasonably possible additional loss | $ 409 | |||||||||||||
Ashland [Member] | ||||||||||||||
Asbestos claims [Roll Forward] | ||||||||||||||
Increase in asbestos-related claims | $ 36 | $ 0 | 0 | 36 | 37 | $ 0 | ||||||||
Total reserves for asbestos claims | 402 | [1] | 402 | [1] | 397 | [1] | 419 | [1] | 415 | [1] | 409 | [1] | $ 438 | |
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||||||||||
Insurance receivable | 149 | [2] | 149 | [2] | 144 | [2] | 155 | [2] | 151 | [2] | 150 | [2] | 402 | |
Receivable adjustment | 15 | 0 | 0 | 15 | 16 | (3) | ||||||||
Asbestos litigation cost projection [Abstract] | ||||||||||||||
Possible total future litigation defense and claim settlement costs | 660 | 660 | ||||||||||||
Hercules [Member] | ||||||||||||||
Asbestos claims [Roll Forward] | ||||||||||||||
Increase in asbestos-related claims | 16 | 0 | 0 | 16 | 25 | 4 | ||||||||
Total reserves for asbestos claims | 311 | [3] | 311 | [3] | 316 | [3] | 323 | [3] | 321 | [3] | 311 | [3] | 329 | |
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||||||||||
Insurance receivable | 68 | 68 | 63 | 68 | 63 | 56 | $ 77 | |||||||
Receivable adjustment | $ 5 | 0 | $ 0 | $ 5 | $ 7 | $ 1 | ||||||||
Asbestos litigation cost projection [Abstract] | ||||||||||||||
Possible total future litigation defense and claim settlement costs | $ 510 | $ 510 | ||||||||||||
[1] | Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. | |||||||||||||
[2] | Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. | |||||||||||||
[3] | Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Litigation, Claims and Contin69
Litigation, Claims and Contingencies - Schedule of Progression of Activity in the Asbestos Reserve (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |||||||
Ashland [Member] | ||||||||||||
Asbestos reserve [Roll Forward] | ||||||||||||
Asbestos reserve - beginning of year | $ 397 | [1] | $ 419 | [1] | $ 415 | [1] | $ 415 | [1] | $ 409 | [1] | $ 438 | |
Reserve adjustment | 36 | 0 | 0 | 36 | 37 | 0 | ||||||
Amounts paid | (17) | (18) | (32) | (31) | (29) | |||||||
Asbestos reserve - end of period | [1] | 402 | 397 | 419 | 415 | 409 | ||||||
Hercules [Member] | ||||||||||||
Asbestos reserve [Roll Forward] | ||||||||||||
Asbestos reserve - beginning of year | 316 | [2] | 323 | [2] | 321 | [2] | 321 | [2] | 311 | [2] | 329 | |
Reserve adjustment | $ 16 | 0 | 0 | 16 | 25 | 4 | ||||||
Amounts paid | (12) | (5) | (14) | (15) | (22) | |||||||
Asbestos reserve - end of period | [2] | $ 311 | $ 316 | $ 323 | $ 321 | $ 311 | ||||||
[1] | Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. | |||||||||||
[2] | Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Litigation, Claims and Contin70
Litigation, Claims and Contingencies - Schedule of Progression of Activity in the Asbestos Reserve (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |||||
Ashland [Member] | |||||||||||
Asbestos claims [Roll Forward] | |||||||||||
Asbestos reserve | $ 402 | [1] | $ 419 | [1] | $ 397 | [1] | $ 415 | [1] | $ 409 | [1] | $ 438 |
Ashland [Member] | Other Current Liabilities [Member] | |||||||||||
Asbestos claims [Roll Forward] | |||||||||||
Asbestos reserve | 34 | 34 | |||||||||
Hercules [Member] | |||||||||||
Asbestos claims [Roll Forward] | |||||||||||
Asbestos reserve | 311 | [2] | 323 | [2] | $ 316 | [2] | $ 321 | [2] | $ 311 | [2] | $ 329 |
Hercules [Member] | Other Current Liabilities [Member] | |||||||||||
Asbestos claims [Roll Forward] | |||||||||||
Asbestos reserve | $ 14 | $ 14 | |||||||||
[1] | Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. | ||||||||||
[2] | Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Litigation, Claims and Contin71
Litigation, Claims and Contingencies - Summary of Progression of Insurance Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |||||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||||||||||
Insurance settlement | [1] | $ 1 | $ 0 | $ 1 | $ 0 | |||||||||
Ashland [Member] | ||||||||||||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||||||||||
Insurance receivable - beginning of year | $ 144 | [2] | 155 | [2] | 151 | [2] | $ 151 | [2] | $ 150 | [2] | $ 402 | |||
Receivable adjustment | 15 | 0 | 0 | 15 | 16 | (3) | ||||||||
Insurance settlement | 0 | (5) | (5) | (4) | (227) | |||||||||
Amounts collected | (6) | (2) | (6) | (11) | (22) | |||||||||
Insurance receivable - end of period | [2] | 149 | 144 | 149 | 144 | 155 | 151 | 150 | ||||||
Hercules [Member] | ||||||||||||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||||||||||
Insurance receivable - beginning of year | 63 | 68 | 63 | 63 | 56 | 77 | ||||||||
Receivable adjustment | $ 5 | 0 | 0 | 5 | 7 | 1 | ||||||||
Insurance settlement | 0 | 0 | 0 | 0 | (22) | |||||||||
Insurance receivable - end of period | $ 68 | $ 63 | $ 68 | $ 63 | $ 68 | $ 63 | $ 56 | |||||||
[1] | Activity of $0 denotes value less than $1 million. | |||||||||||||
[2] | Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Litigation, Claims and Contin72
Litigation, Claims and Contingencies - Summary of Progression of Insurance Receivable (Parenthetical) (Details) - Ashland [Member] - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | [1] | Sep. 30, 2016 | [1] | Sep. 30, 2015 | [1] | Sep. 30, 2014 | ||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||||||
Insurance receivable | $ 149 | [1] | $ 155 | [1] | $ 144 | $ 151 | $ 150 | $ 402 | |||
Accounts Receivable [Member] | |||||||||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||||||
Insurance receivable | $ 14 | $ 14 | |||||||||
[1] | Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of March 31, 2018 and September 30, 2017. |
Litigation, Claims and Contin73
Litigation, Claims and Contingencies - Summary of Reconciliation of Changes in Environmental Remediation Reserves (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Environmental Remediation Obligations [Abstract] | ||
Reserve - beginning of period | $ 163 | $ 177 |
Disbursements | (16) | (15) |
Revised obligation estimates and accretion | 17 | 5 |
Reserve - end of period | $ 164 | $ 167 |
Litigation, Claims and Contin74
Litigation, Claims and Contingencies - Summary of Components of Environmental Remediation Expense Included within Selling, General and Administrative Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | ||
Environmental Expense And Liabilities [Abstract] | |||||
Environmental expense | $ 4 | $ 1 | $ 16 | $ 5 | |
Accretion | 0 | 0 | 1 | 0 | |
Legal expense | 2 | 4 | 3 | 5 | |
Total expense | 6 | 5 | 20 | 10 | |
Insurance receivable | [1] | (1) | 0 | (1) | 0 |
Total expense, net of receivable activity | [2] | $ 5 | $ 5 | $ 19 | $ 10 |
[1] | Activity of $0 denotes value less than $1 million. | ||||
[2] | Net expense of $1 million for both the three and six months ended March 31, 2018, and $1 million and $2 million for the three and six months ended March 31, 2017, respectively, relates to divested businesses which qualified for treatment as discontinued operations and for which certain environmental liabilities were retained by Ashland.  These amounts are classified within the income from discontinued operations caption of the Statements of Consolidated Comprehensive Income (Loss). |
Litigation, Claims and Contin75
Litigation, Claims and Contingencies - Summary of Components of Environmental Remediation Expense Included within Selling, General and Administrative Expense (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Environmental Expense And Liabilities [Abstract] | ||||
Net expense relates to divested businesses | $ 1 | $ 1 | $ 1 | $ 2 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from calculation of earnings per share | 0.7 | 0.1 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | ||
Numerator | |||||
Numerator for basic and diluted EPS -Income (loss) from continuing operations | $ 66 | $ 29 | $ 59 | $ (37) | |
Denominator | |||||
Denominator for basic EPS - Weighted-average common shares outstanding | 63 | 62 | 63 | 62 | |
Share based awards convertible to common shares | [1] | 1 | 1 | 1 | 0 |
Denominator for diluted EPS - Adjusted weighted-average shares and assumed conversions | 64 | 63 | 64 | 62 | |
PER SHARE DATA | |||||
Basic (in dollars per share) | $ 1.06 | $ 0.46 | $ 0.94 | $ (0.59) | |
Diluted (in dollars per share) | $ 1.04 | $ 0.46 | $ 0.93 | $ (0.59) | |
[1] | As a result of the loss from continuing operations attributable to Ashland during the six months ended March 31, 2017, 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. |
Equity Items - Additional Infor
Equity Items - Additional Information (Details) - USD ($) | 3 Months Ended | ||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Apr. 30, 2015 | |
Accelerated Share Repurchases [Line Items] | |||||||
Common Stock, Dividends, Per Share, Declared | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.39 | $ 0.39 | |
2015 Stock Repurchase Program [Member] | |||||||
Accelerated Share Repurchases [Line Items] | |||||||
Stock Repurchase Program, Authorized Amount | $ 1,000,000,000 | ||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 500,000,000 | ||||||
2018 Stock Repurchase Program [Member] | |||||||
Accelerated Share Repurchases [Line Items] | |||||||
Stock Repurchase Program, Authorized Amount | $ 1,000,000,000 | ||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1,000,000,000 |
Equity Items - Components of Ac
Equity Items - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |||
Equity [Abstract] | ||||||
Unrealized translation gain (loss), before tax | $ 55 | $ 58 | $ 58 | $ (92) | ||
Unrealized translation gain (loss), tax | 0 | 2 | 0 | 6 | ||
Unrealized translation gain (loss), net of tax | 55 | 60 | 58 | (86) | ||
Amortization of unrecognized prior service credits included in net income, before tax | 0 | (3) | [1] | 0 | (6) | [1] |
Amortization of unrecognized prior service credits included in net income, tax | 0 | 1 | 0 | 2 | ||
Amortization of unrecognized prior service credits included in net income, net of tax | 0 | (2) | 0 | (4) | ||
Unrealized gain (loss) on available-for-sale securities, before taxes | (5) | 9 | 6 | 9 | ||
Unrealized gain (loss) on available-for-sale securities, tax | 1 | (2) | (1) | (2) | ||
Unrealized gain (loss) on available-for-sale securities, net of tax | (4) | 7 | 5 | 7 | ||
Reclassification adjustment for gains on available-for-sale securities included in net income, before tax | (3) | (2) | (4) | (2) | ||
Reclassification adjustment for gains on available-for-sale securities included in net income, tax | 1 | 1 | 1 | 1 | ||
Reclassification adjustment for gains on available-for-sale securities included in net income, net of tax | (2) | (1) | (3) | (1) | ||
Other comprehensive income (loss), before tax | 47 | 62 | 60 | (91) | ||
Other comprehensive income (loss), tax | 2 | 2 | 0 | 7 | ||
Other comprehensive income (loss) | $ 49 | $ 64 | $ 60 | $ (84) | ||
[1] | For the three and six months ended March 31, 2017, the amortization of unrecognized prior services credits was related to pension and other postretirement benefit plans that transferred to Valvoline and was classified within the discontinued operations caption on the Statements of Consolidated Comprehensive Income (Loss). |
Stock Incentive Plans - Compone
Stock Incentive Plans - Components of Stock-Based Compensation Expense Included in Continuing Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2018 | [1] | Mar. 31, 2017 | [2] | Mar. 31, 2018 | [1] | Mar. 31, 2017 | [2] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 9 | $ 7 | $ 20 | $ 14 | ||||
Stock Appreciation Rights (SARs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | 2 | 2 | 3 | 3 | ||||
Nonvested Stock Awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | 5 | 3 | 11 | 7 | ||||
Performance Shares [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 2 | $ 2 | $ 6 | $ 4 | ||||
[1] | Included $2 million and $4 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $3 million of expense related to cash-settled performance units during the three and six months ended March 31, 2018, respectively. | |||||||
[2] | Included $2 million and $3 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $2 million of expense related to cash-settled performance units during the three and six months ended March 31, 2017, respectively. |
Stock Incentive Plans - Compo81
Stock Incentive Plans - Components of Stock-Based Compensation Expense Included in Continuing Operations (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 9 | [1] | $ 7 | [2] | $ 20 | [1] | $ 14 | [2] |
Cash-settled Nonvested Stock Awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | 2 | 2 | 4 | 3 | ||||
Cash-settled Performance Shares [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 1 | $ 1 | $ 3 | $ 2 | ||||
[1] | Included $2 million and $4 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $3 million of expense related to cash-settled performance units during the three and six months ended March 31, 2018, respectively. | |||||||
[2] | Included $2 million and $3 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $2 million of expense related to cash-settled performance units during the three and six months ended March 31, 2017, respectively. |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 9 | [1] | $ 7 | [2] | $ 20 | [1] | $ 14 | [2] |
Number of common shares for each converted performance share | 1 | 1 | ||||||
Stock Appreciation Rights (SARs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unexercised SARs lapse expiration period | 10 years 1 month | |||||||
Grants of share-based payment awards in period | 0 | 0 | 470,000 | 422,000 | ||||
Total unrecognized compensation costs | $ 11 | $ 11 | ||||||
Model to fair value share-based payment awards | Black-Scholes option-pricing model | |||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 2 years 2 months 12 days | |||||||
Stock-based compensation | $ 2 | [1] | $ 2 | [2] | $ 3 | [1] | $ 3 | [2] |
Stock Appreciation Rights (SARs) [Member] | Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period of share-based payment award | 1 year | |||||||
Stock Appreciation Rights (SARs) [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period of share-based payment award | 3 years | |||||||
Nonvested Stock Awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grants of share-based payment awards in period | 2,000 | 3,000 | 144,000 | 84,000 | ||||
Total unrecognized compensation costs | $ 10 | $ 10 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 2 years | |||||||
Stock-based compensation | $ 5 | [1] | $ 3 | [2] | $ 11 | [1] | $ 7 | [2] |
Nonvested Stock Awards [Member] | Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period of share-based payment award | 1 year | |||||||
Nonvested Stock Awards [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period of share-based payment award | 5 years | |||||||
Cash-settled Nonvested Stock Awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period of share-based payment award | 3 years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 229,000 | 229,000 | ||||||
Stock-based compensation | $ 2 | $ 2 | $ 4 | $ 3 | ||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total unrecognized compensation costs | $ 6 | $ 6 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 61,000 | 61,000 | ||||||
Stock-based compensation | $ 1 | $ 3 | ||||||
Performance Shares [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period of share-based payment award | 3 years | |||||||
Grants of share-based payment awards in period | 0 | 0 | 101,000 | 56,000 | ||||
Total unrecognized compensation costs | $ 15 | $ 15 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 2 years | |||||||
Stock-based compensation | $ 2 | [1] | $ 2 | [2] | $ 6 | [1] | $ 4 | [2] |
[1] | Included $2 million and $4 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $3 million of expense related to cash-settled performance units during the three and six months ended March 31, 2018, respectively. | |||||||
[2] | Included $2 million and $3 million of expense related to cash-settled nonvested restricted stock awards and $1 million and $2 million of expense related to cash-settled performance units during the three and six months ended March 31, 2017, respectively. |
Reportable Segment Informatio83
Reportable Segment Information - Additional Information (Details) | 6 Months Ended | |
Mar. 31, 2018ReportableSegment | May 17, 2017Facility | |
Segment Reporting [Abstract] | ||
Number of reportable segments | ReportableSegment | 3 | |
Number of manufacturing facilities | Facility | 14 |
Reportable Segment Informatio84
Reportable Segment Information - Summary of Financial Information for Each Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 974 | $ 806 | $ 1,816 | $ 1,510 |
Operating Income (Loss) | 95 | 53 | 133 | 68 |
Specialty Ingredients [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 646 | 544 | 1,196 | 1,026 |
Operating Income (Loss) | 89 | 74 | 131 | 114 |
Composites [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 238 | 186 | 456 | 351 |
Operating Income (Loss) | 19 | 13 | 36 | 29 |
Intermediates and Solvents [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 90 | 76 | 164 | 133 |
Operating Income (Loss) | 4 | (3) | 13 | (11) |
Unallocated and other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | $ (17) | $ (31) | $ (47) | $ (64) |