Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Oct. 31, 2019 | Mar. 31, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | ASHLAND GLOBAL HOLDINGS INC. | ||
Entity Central Index Key | 0001674862 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4,880,568,000 | ||
Entity Common Stock, Shares Outstanding | 60,183,754 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ASH | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2019 | ||
Title of 12(b) Security | Common Stock, par value $.01 per share | ||
Security Exchange Name | NYSE | ||
Entity File Number | 333-211719 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-2587835 | ||
Entity Address, Address Line One | 50 E. RiverCenter Boulevard | ||
Entity Address, City or Town | Covington | ||
Entity Address, State or Province | KY | ||
Entity Address, Postal Zip Code | 41011 | ||
City Area Code | 859 | ||
Local Phone Number | 815-3333 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of Registrant’s Proxy Statement (Proxy Statement) for its Annual Meeting of Stockholders are incorporated by reference into Part III of this annual report on Form 10-K to the extent described herein. |
Statements of Consolidated Comp
Statements of Consolidated Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Statement Of Income And Comprehensive Income [Abstract] | ||||
Sales | $ 2,493 | $ 2,589 | $ 2,309 | |
Cost of sales | 1,726 | 1,726 | 1,580 | |
Gross profit | 767 | 863 | 729 | |
Selling, general and administrative expense | 539 | 692 | 610 | |
Research and development expense | 66 | 73 | 73 | |
Equity and other income | 4 | 4 | 3 | |
Operating income | 166 | 102 | 49 | |
Net interest and other expense - Note J | 99 | 102 | 229 | |
Other net periodic benefit income (costs) - Note N | 5 | 15 | (6) | |
Net loss on acquisitions and divestitures - Notes C and D | (2) | (4) | (10) | |
Income (loss) from continuing operations before income taxes | 70 | 11 | (196) | |
Income tax expense (benefit) - Note M | 46 | (8) | (16) | |
Income (loss) from continuing operations | 24 | 19 | (180) | |
Income from discontinued operations (net of tax) - Note E | 481 | 95 | 208 | |
Net income | 505 | 114 | 28 | |
Net income attributable to noncontrolling interest | [1] | 0 | 0 | 27 |
Net income attributable to Ashland | $ 505 | $ 114 | $ 1 | |
Basic earnings per share | ||||
Income (loss) from continuing operations | $ 0.39 | $ 0.30 | $ (2.90) | |
Income from discontinued operations attributable to Ashland | 7.76 | 1.52 | 2.91 | |
Net income attributable to Ashland | 8.15 | 1.82 | 0.01 | |
Diluted earnings per share | ||||
Income (loss) from continuing operations | 0.39 | 0.29 | (2.90) | |
Income from discontinued operations attributable to Ashland | 7.64 | 1.50 | 2.91 | |
Net income attributable to Ashland | $ 8.03 | $ 1.79 | $ 0.01 | |
COMPREHENSIVE INCOME (LOSS) | ||||
Net income | $ 505 | $ 114 | $ 28 | |
Other comprehensive income (loss), net of tax | ||||
Unrealized translation gain (loss) | (80) | (82) | 81 | |
Pension and postretirement obligation adjustment | (5) | 0 | (4) | |
Net change in investment securities | 0 | 13 | 15 | |
Other comprehensive income (loss) | (85) | (69) | 92 | |
Comprehensive income | 420 | 45 | 120 | |
Comprehensive income attributable to noncontrolling interest | 0 | 0 | 27 | |
Comprehensive income attributable to Ashland | $ 420 | $ 45 | $ 93 | |
[1] | 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 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | |
Current assets | |||
Cash and cash equivalents | $ 232 | $ 294 | |
Accounts receivable | [1] | 481 | 522 |
Inventories - Note A | 597 | 596 | |
Other assets | 64 | 60 | |
Current assets held for sale - Note D | 59 | 240 | |
Total current assets | 1,433 | 1,712 | |
Property, plant and equipment - Note H | |||
Cost | 3,165 | 3,172 | |
Accumulated depreciation | 1,588 | 1,526 | |
Net property, plant and equipment | 1,577 | 1,646 | |
Goodwill - Note I | 2,253 | 2,304 | |
Intangibles - Note I | 1,088 | 1,185 | |
Restricted investments - Note G | 310 | 312 | |
Asbestos insurance receivable - Note O | 157 | 179 | |
Deferred income taxes - Note M | 23 | 28 | |
Other assets - Note K | 410 | 416 | |
Noncurrent assets held for sale - Note D | 477 | ||
Total noncurrent assets | 5,818 | 6,547 | |
Total assets | 7,251 | 8,259 | |
Current liabilities | |||
Short-term debt - Note J | 166 | 254 | |
Trade and other payables | 313 | 331 | |
Accrued expenses and other liabilities | 271 | 328 | |
Current liabilities held for sale - Note D | 7 | 163 | |
Total current liabilities | 757 | 1,076 | |
Noncurrent liabilities | |||
Long-term debt - Note J | 1,501 | 2,275 | |
Asbestos litigation reserve - Note O | 555 | 612 | |
Deferred income taxes - Note M | 264 | 286 | |
Employee benefit obligations - Note N | 150 | 156 | |
Other liabilities - Note K | 453 | 422 | |
Noncurrent liabilities held for sale - Note D | 26 | ||
Total noncurrent liabilities | 2,923 | 3,777 | |
Commitments and contingencies - Notes L and O | |||
Equity - Notes P and Q | |||
Common stock, par value $.01 per share, 200 million shares authorized Issued 60 million and 62 million shares in 2019 and 2018 | 1 | 1 | |
Paid-in capital | 756 | 946 | |
Retained earnings | 3,224 | 2,750 | |
Accumulated other comprehensive loss | (410) | (291) | |
Total equity | 3,571 | 3,406 | |
Total liabilities and equity | $ 7,251 | $ 8,259 | |
[1] | Accounts receivable includes an allowance for doubtful accounts of $3 million at both September 30, 2019 and 2018. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets | ||
Allowance for doubtful accounts | $ 3 | $ 3 |
Stockholders' Equity | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value per share (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares, issued | 60,000,000 | 62,000,000 |
Statements of Consolidated Equi
Statements of Consolidated Equity - USD ($) $ in Millions | Total | Common stock [Member] | Paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive income (loss) [Member] | [1] | Noncontrolling Interest [Member] | ||
Balance at Sep. 30, 2016 | $ 3,165 | $ 1 | $ 923 | $ 2,704 | $ (281) | $ (182) | [2] | ||
Total comprehensive income (loss) | |||||||||
Net income | 28 | 1 | 27 | [2] | |||||
Other comprehensive income (loss) | 92 | 92 | |||||||
Dividends, ($1.23, $.95, $1.05 per common share for 2017, 2018, 2019) | (77) | (77) | |||||||
Common shares issued under stock incentive and other plans | [3],[4] | 15 | 15 | ||||||
Distribution of Valvoline Inc. | [2] | 187 | 68 | (33) | 152 | ||||
Other | (7) | 7 | [2] | ||||||
Distributions to noncontrolling interest | (4) | $ (4) | [2] | ||||||
Balance at Sep. 30, 2017 | 3,406 | 1 | 931 | 2,696 | (222) | ||||
Total comprehensive income (loss) | |||||||||
Net income | 114 | 114 | |||||||
Other comprehensive income (loss) | (69) | (69) | |||||||
Dividends, ($1.23, $.95, $1.05 per common share for 2017, 2018, 2019) | (60) | (60) | |||||||
Common shares issued under stock incentive and other plans | [3],[4] | 15 | 15 | ||||||
Balance at Sep. 30, 2018 | 3,406 | 1 | 946 | 2,750 | (291) | ||||
Adoption of new accounting pronouncements | [5] | 34 | (34) | ||||||
Total comprehensive income (loss) | |||||||||
Net income | 505 | 505 | |||||||
Other comprehensive income (loss) | (85) | (85) | |||||||
Dividends, ($1.23, $.95, $1.05 per common share for 2017, 2018, 2019) | (65) | (65) | |||||||
Common shares issued under stock incentive and other plans | [3],[4] | 10 | 10 | ||||||
Repurchase of common stock | [6] | (200) | (200) | ||||||
Balance at Sep. 30, 2019 | $ 3,571 | $ 1 | $ 756 | $ 3,224 | $ (410) | ||||
[1] | At September 30, 2019 and 2018, the accumulated other comprehensive loss of $410 million and $291 million, respectively, was comprised of net unrealized translation losses of $408 million and $328 million, respectively, net unrealized gains on investment securities of zero and $34 million, respectively, and unrecognized prior service costs as a result of certain employee benefit plan amendments of $2 million and unrecognized prior service credits of $3 million, respectively. | ||||||||
[2] | See Note B for discussion of the noncontrolling interest and the initial public offering and distribution of Valvoline Inc. | ||||||||
[3] | Common shares issued were 336,188, 360,468 and 42,861 for 2019, 2018 and 2017, respectively. | ||||||||
[4] | Includes income tax expense resulting from the exercise of stock options of $1 million in 2019 and 2018, respectively, and income tax benefit of $4 million in 2017. | ||||||||
[5] | Represents the cumulative-effect adjustment related to the adoption of the new guidance related to the accounting for equity securities and the tax effects of intercompany transfers during fiscal 2019. See note A for more information | ||||||||
[6] | Common shares repurchased were 2,637,054 for 2019 |
Statements of Consolidated Eq_2
Statements of Consolidated Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Stockholders Equity [Abstract] | |||
Dividend per common share | $ 1.05 | $ 0.95 | $ 1.23 |
Accumulated other comprehensive loss | $ (410) | $ (291) | |
Unrecognized prior service costs (credits) | 2 | (3) | |
Net unrealized translation loss | (408) | (328) | |
Available-for-sale securities unrealized gain | 0 | 34 | |
Income tax benefits resulting from the exercise of stock options | $ 1 | $ 1 | $ 4 |
Common shares issued (in shares) | 336,188 | 360,468 | 42,861 |
Common shares repurchased (in shares) | 2,637,054 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows provided (used) by operating activities from continuing operations | ||||
Net income | $ 505 | $ 114 | $ 28 | |
Income from discontinued operations (net of tax) | (481) | (95) | (208) | |
Adjustments to reconcile income from continuing operations to cash flows from operating activities | ||||
Depreciation and amortization | 289 | 277 | 265 | |
Original issue discount and debt issuance cost amortization | 13 | 8 | 109 | |
Deferred income taxes | 20 | (100) | (26) | |
Distributions from equity affiliates | 1 | |||
Stock based compensation expense - Note Q | 21 | 27 | 20 | |
Excess tax benefits on stock based compensation | 11 | 4 | 3 | |
Loss on early retirement of debt | 9 | |||
Loss (income) from restricted investments | (17) | (14) | (11) | |
Net (income) loss on acquisitions and divestitures - Notes C and D | 1 | 4 | ||
Impairments | 8 | 16 | ||
Pension contributions | (5) | (9) | (7) | |
Loss (gain) on pension and other postretirement plan remeasurements | (7) | (14) | 8 | |
Change in operating assets and liabilities | [1] | (129) | 25 | (20) |
Total cash flows provided by operating activities from continuing operations | 228 | 241 | 174 | |
Cash flows provided (used) by investing activities from continuing operations | ||||
Additions to property, plant and equipment | (154) | (157) | (168) | |
Proceeds from disposal of property, plant and equipment | 9 | 4 | 5 | |
Purchase of operations - net of cash acquired | (2) | (11) | (680) | |
Proceeds from sale or restructuring of operations | 6 | 18 | ||
Life insurance payments | (37) | |||
Net purchases of funds restricted for specific transactions | (7) | (10) | (2) | |
Reimbursement from restricted investments | 32 | 33 | 27 | |
Proceeds from sale of securities | 348 | 26 | 19 | |
Purchase of securities | (348) | (26) | (19) | |
Proceeds from the settlement of derivative instruments | 6 | 1 | 5 | |
Payments for the settlement of derivative instruments | (2) | (3) | (3) | |
Total cash flows used by investing activities from continuing operations | (118) | (174) | (798) | |
Cash flows provided (used) by financing activities from continuing operations | ||||
Proceeds from issuance of long-term debt | 1,100 | |||
Repayment of long-term debt | (797) | (311) | (915) | |
Premium on long-term debt repayment | (17) | |||
Proceeds from (repayment of) short-term debt | (78) | 15 | 75 | |
Repurchase of common stock | (200) | |||
Debt issuance costs | (2) | (15) | ||
Cash dividends paid | (64) | (60) | (77) | |
Stock based compensation employee withholding taxes paid in cash | (10) | (10) | (15) | |
Total cash flows provided (used) by financing activities from continuing operations | (1,149) | (368) | 136 | |
Cash used by continuing operations | (1,039) | (301) | (488) | |
Cash provided (used) by discontinued operations | ||||
Operating cash flows | 13 | 56 | 209 | |
Investing cash flows | 967 | (28) | (321) | |
Financing cash flows | 0 | 0 | (17) | |
Total cash provided (used) by discontinued operations | 980 | 28 | (129) | |
Effect of currency exchange rate changes on cash and cash equivalents | (3) | 1 | (5) | |
Decrease in cash and cash equivalents | (62) | (272) | (622) | |
Cash and cash equivalents - beginning of year | 294 | 566 | 1,017 | |
Change in cash and cash equivalents held by Valvoline | 171 | |||
Cash and cash equivalents - end of year | 232 | 294 | 566 | |
Changes in assets and liabilities | ||||
Accounts receivable | [1] | 38 | (42) | (29) |
Inventories | [1] | (4) | (24) | (12) |
Trade and other payables | [1] | (79) | 48 | 33 |
Other assets and liabilities | [1] | (84) | 43 | (12) |
Change in operating assets and liabilities | [1] | (129) | 25 | (20) |
Supplemental disclosures | ||||
Interest paid | 124 | 126 | 132 | |
Income taxes paid | $ 67 | $ 77 | $ 79 | |
[1] | Excludes changes resulting from operations acquired or sold. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Significant Accounting Policies | NOTE A – SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation and basis of presentation On September 20, 2016, Ashland was reincorporated under the laws of the State of Delaware through a tax-free reorganization under a new holding company structure (the Reorganization). As a result of the Reorganization, Ashland Global Holdings Inc. replaced Ashland Inc. as the publicly held corporation and, through its subsidiaries, now conducts all of the operations that historically were conducted by Ashland Inc. Pursuant to the terms of the Reorganization, each outstanding share of Ashland common stock was automatically converted into one share of Ashland Global Holdings Inc. common stock. Following consummation of the Reorganization, (i) Ashland Inc. was converted into Ashland LLC, an indirect, wholly owned subsidiary of Ashland Global Holdings Inc., and (ii) Ashland Global Holdings Inc., as the new holding company, through its subsidiaries, conducts all of the operations conducted by Ashland Inc. immediately prior to the Reorganization. The Consolidated Financial Statements include the accounts of Ashland Global Holdings Inc. and its majority owned subsidiaries and, when applicable, entities for which Ashland has a controlling financial interest or is the primary beneficiary (Ashland). For entities for which Ashland has a controlling financial interest but owns less than 100%, the outside stockholders’ interests are shown as noncontrolling interests. Investments in joint ventures and 20% to 50% owned affiliates where Ashland has the ability to exert significant influence are accounted for under the equity method. The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and U.S. Securities and Exchange Commission (SEC) regulations. All intercompany transactions and balances have been eliminated. 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. 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 distribution of Valvoline represented a strategic shift in Ashland's business and, in accordance with U.S. GAAP, qualified as a discontinued operation. Accordingly, Valvoline's assets, liabilities, operating results and cash flows for all periods presented have been classified as discontinued operations within the Consolidated Financial Statements. See Note B for additional information on the separation of Valvoline Inc. The term Valvoline as used herein, depending on context, refers to either Valvoline Inc. or Valvoline as a previous reportable segment of Ashland. On August 30, 2019, Ashland completed the sale of its Composites business (excluding Ashland’s maleic anhydride business (Maleic business)) and its butanediol facility in Marl, Germany (Marl facility). This disposal group represented a strategic shift in Ashland’s business and in accordance with U.S. GAAP, qualified as a discontinued operation. Accordingly, Composites (including the Maleic business) and the Marl facility assets, liabilities, operating results and cash flows for all periods presented have been classified as discontinued operations within the Consolidated Financial Statements. See Note D for additional information on the Composites business and Marl facility. Subsequent to completing the separation from Valvoline Inc. and the Composites business (including the Maleic business) and Marl facility sale, Ashland's operations are managed within the following two reportable segments: Specialty Ingredients and Intermediates and Solvents. During the periods presented in the Consolidated Financial Statements, Ashland sold certain assets in its portfolio of businesses which, in accordance with U.S. GAAP, were not reflected as discontinued operations. See Notes D and S for additional information on these transactions as well as Ashland’s current reportable segment results. Use of estimates, risks and uncertainties The preparation of Ashland’s 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, environmental remediation, asbestos litigation, long-lived assets (including goodwill and other intangible assets) and income taxes. 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. Cash and cash equivalents Cash and cash equivalents include cash on hand and highly liquid investments maturing within three months after purchase. Allowance for doubtful accounts Ashland records an allowance for doubtful accounts as a best estimate of the amount of probable credit losses for accounts receivable. Ashland reviews this allowance and considers factors such as customer credit, past transaction history with the customer and changes in customer payment terms when determining whether the collection of a receivable is reasonably assured. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. The allowance for doubtful accounts is adjusted when it becomes probable a receivable will not be recovered. A progression of activity in the allowance for doubtful accounts is presented in the following table. (In millions) 2019 2018 2017 Allowance for doubtful accounts - beginning of year $ 3 $ 3 $ 5 Adjustments to net income — 1 (1 ) Reserves utilized — (1 ) (1 ) Other changes — — — Allowance for doubtful accounts - end of year $ 3 $ 3 $ 3 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 chemicals with a replacement cost of $66 million at September 30, 2019 and $70 million at September 30, 2018 are valued at cost using the last-in, first-out (LIFO) method. The following summarizes Ashland’s inventories as of the Consolidated Balance Sheet dates. (In millions) 2019 2018 Finished products $ 395 $ 381 Raw materials, supplies and work in process 197 215 LIFO benefit (reserve) 5 — $ 597 $ 596 A progression of activity in the inventory reserves, which reduce the amounts of finished products and raw materials, supplies and work in process reported, is presented in the following table. (In millions) 2019 2018 2017 Inventory reserves - beginning of year $ 23 $ 24 $ 29 Adjustments to net income 3 4 2 Reserves utilized (3 ) (5 ) (7 ) Inventory reserves - end of year $ 23 $ 23 $ 24 Property, plant and equipment The cost of property, plant and equipment is depreciated by the straight-line method over the estimated useful lives of the assets. Buildings are depreciated principally over 12 to 35 years and machinery and equipment principally over 2 to 25 years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines and technological obsolescence. Recorded values of asset groups of property, plant and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). Goodwill and other intangibles Ashland tests goodwill and other indefinite-lived intangible assets for impairment annually as of July 1 and when events and circumstances indicate an impairment may have occurred. Ashland reviews goodwill for impairment based on its identified reporting units, which are defined as operating segments or groupings of businesses one level below the operating segment level. Ashland tests goodwill for impairment by comparing the carrying value to the estimated fair value of its reporting units. In the current year, Ashland performed a quantitative goodwill impairment test and determined the fair value of its reporting units using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group, when externally quoted market prices are not readily available. If this comparison indicates that a reporting unit’s estimated fair value is less than its carrying value, it is adjusted to its calculated fair value and the adjustment represents the impairment charge. In the prior year for its July 1, 2018 goodwill impairment test, Ashland performed an extensive qualitative analysis in order to determine whether it was necessary to perform a quantitative goodwill impairment test. In performing this analysis, Ashland considered relevant events and circumstances such as macroeconomic conditions, industry and market considerations, overall financial performance and changes in management and business strategy, changes in carrying value, among others. Ashland considered how these relevant events and circumstances have changed since its most recent quantitative goodwill impairment test performed in the prior year as of July 1, 2017. After weighting the significance of these factors, Ashland determined that it was more likely than not that the fair value of its reporting units exceeds the carrying value and that a quantitative impairment test was not necessary to perform. Ashland tests at least annually its indefinite-lived intangible assets, principally trademarks and trade names. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is written down by an amount equal to such excess. Similar to goodwill, Ashland first performs a qualitative analysis in order to determine whether it is necessary to perform a quantitative goodwill impairment test for the trademarks and trade names. If a quantitative analysis is deemed necessary, trademarks and trade names are valued using a “relief-from-royalty” valuation method compared to the carrying value. Significant assumptions inherent in the valuation methodologies include, but are not limited to, such estimates as future projected business results, growth rates, the weighted-average cost of capital for a market participant, and royalty and discount rates. Finite-lived intangible assets principally consist of certain trademarks and trade names, intellectual property, and customer lists. These intangible assets 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 reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Ashland monitors these changes and events on at least a quarterly basis. For further information on goodwill and other intangible assets, see Note I. Derivative instruments Ashland regularly uses derivative instruments to manage its exposure to fluctuations in foreign currencies and certain commodities. All derivative instruments are recognized as either assets or liabilities on the balance sheet and are measured at fair value. Changes in the fair value of all derivatives are recognized immediately in the Statements of Consolidated Comprehensive Income (Loss) unless the derivative qualifies as a hedge of future cash flows or a hedge of a net investment in a foreign operation. Gains and losses related to an instrument that qualifies for hedge accounting are either recognized in the Statements of Consolidated Comprehensive Income (Loss) immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders’ equity section of the Consolidated Balance Sheets as a component of accumulated other comprehensive income and subsequently recognized in the Statements of Consolidated Comprehensive Income (Loss) when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge is recognized in income immediately. For additional information on derivative instruments, see Note G. Restricted investments On January 13, 2015, Ashland and Hercules LLC (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland that was acquired in 2009, 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). During 2015, Ashland placed $335 million of the settlement funds into a renewable annual trust that Ashland determined is restricted for the purpose of paying ongoing and future litigation defense and claim settlement costs incurred in conjunction with asbestos claims. These funds are presented primarily as noncurrent assets, with $24 million and $30 million classified within other current assets in the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. As of September 30, 2019 and 2018, the funds within the trust had a balance of $334 million and $342 million, respectively, and were primarily invested in equity, U.S. government bond and corporate bond investments with a portion maintained in demand deposits. The funds within the trust are classified as investment securities reported at fair value. Interest income and gains and losses on the investment securities are reported in the net interest and other expense caption in the Statements of Consolidated Comprehensive Income (Loss). See Note G for additional information regarding the fair value of these investments within the trust. In January 2016, the FASB issued accounting guidance related to the recognition and measurement as well as the presentation and disclosures for certain financial instruments. Most notably, the guidance requires entities to measure equity investments at fair value and to recognize any changes in fair value in net income rather than accumulated other comprehensive income (AOCI). The guidance became effective for Ashland on October 1, 2018 and resulted in Ashland recording a cumulative-effect adjustment to reclassify net after-tax unrealized gains of $34 million on its equity securities from AOCI to retained earnings. Revenue recognition 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 and subsequent amendments to it superseded most current revenue recognition guidance, in an effort to converge the revenue recognition principles within U.S. GAAP. This new guidance required 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 had the option of using a full retrospective or a modified retrospective approach to adopt the new guidance. This guidance became effective for Ashland on October 1, 2018. Ashland elected to adopt this standard using the modified retrospective approach and determined that the overall impact was not material to the Consolidated Financial Statements. Ashland’s revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods or providing services and is recognized when performance obligations are satisfied under the terms of contracts with customers. Ashland generally utilizes standardized language for the terms of contracts, unless a separate agreement has been entered into with a customer that supersedes the standard language . For additional information on revenues see Note R. Expense recognition Cost of sales include material and production costs, as well as the costs of inbound and outbound freight, purchasing and receiving, inspection, warehousing, internal transfers and all other distribution network costs. Selling, general and administrative expense includes sales and marketing costs, advertising, customer support, environmental remediation, corporate and divisional administrative and other costs. Advertising costs ($4 million in 2019, $4 million in 2018 and $5 million 2017) and research and development costs ($66 million in 2019, $73 million in 2018 and $73 million in 2017) are expensed as incurred. Income taxes Ashland is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment in the forecasting of taxable income using historical and projected future operating results is required in determining Ashland’s provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable, and deferred taxes. Ashland recognizes the income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Ashland evaluates and adjusts these accruals based on changing facts and circumstances. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets are also recognized for the estimated future effects of tax loss and credit carryforwards. The effect on deferred taxes of changes in tax rates is recognized in the period in which the enactment date occurs. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized. In the event that the actual outcome of future tax consequences differs from Ashland’s estimates and assumptions due to changes or future events such as tax legislation, geographic mix of earnings, completion of tax audits or earnings repatriation plans, the resulting change to the provision for income taxes could have a material effect on the Statements of Consolidated Comprehensive Income (Loss) and Consolidated Balance Sheets. For additional information on income taxes, see Note M. A progression of activity in the tax valuation allowances is presented in the following table. (In millions) 2019 2018 2017 Tax valuation allowances - beginning of year $ 79 $ 122 $ 136 Adjustments to income tax expense (benefit) 8 (5 ) 27 Reserves utilized (4 ) (38 ) (41 ) Tax valuation allowances - end of year $ 83 $ 79 $ 122 Asbestos-related litigation Ashland is subject to liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims result from indemnification obligations undertaken in 1990 in connection with the sale of Riley Stoker Corporation (Riley) and the acquisition of Hercules in November 2008. Although Riley, a former subsidiary, was neither a producer nor a manufacturer of asbestos, its industrial boilers contained some asbestos-containing components provided by other companies. Hercules, an indirect wholly-owned subsidiary of Ashland, 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 sold by one of Hercules’ former subsidiaries to a limited industrial market. Prior to 2018, Ashland retained Hamilton, Rabinovitz & Associates, Inc. (HR&A) to assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions. During 2018, Ashland transitioned these responsibilities to Nathan Associates, Inc. (Nathan). The processes and methodologies used by Nathan are consistent with the ones historically employed by HR&A. The methodology used to project future asbestos costs is based largely on Ashland’s recent experience, including claim-filing and settlement rates, disease mix, enacted legislation, open claims, and litigation defense. Ashland’s claim experience is compared to the results of previously conducted 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. 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. For additional information on asbestos-rel ated litigation, see Note O . Environmental remediation Accruals for environmental remediation are recognized when it is probable a liability has been incurred and the amount of that liability can be reasonably estimated. Such costs are charged to expense if they relate to the remediation of conditions caused by past operations or are not expected to mitigate or prevent contamination from future operations. Liabilities are recorded at estimated cost values based on experience, assessments and current technology, without regard to any third-party recoveries and are regularly adjusted as environmental assessments and remediation efforts continue. For additional information on environmental remediation, see Note O. Pension and other postretirement benefits The funded status of Ashland’s pension and other postretirement benefit plans is recognized in the Consolidated Balance Sheets. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at September 30, the measurement date. For defined benefit pension plans, the benefit obligation is the projected benefit obligation (PBO) and for the other postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation (APBO). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The APBO represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The measurement of the benefit obligation is based on Ashland’s estimates and actuarial valuations. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain key assumptions that require significant judgment, including, but not limited to, estimates of discount rates, expected return on plan assets, rate of compensation increases, interest rates and mortality rates. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. For additional information regarding plan assumptions and the current financial position of the pension and other postretirement plans, see Note N. Ashland recognizes the change in the fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each fiscal year and whenever a plan is determined to qualify for a remeasurement. The remaining components of pension and other postretirement benefits expense are recorded ratably on a quarterly basis. Pension and other postretirement benefits adjustments charged directly to cost of sales that are applicable to inactive participants are excluded from inventoriable costs. 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 (costs) caption on the Statements of Consolidated Comprehensive Income (Loss). Foreign currency translation Operations outside the United States are measured primarily using the local currency as the functional currency. Upon consolidation, the results of operations of the subsidiaries and affiliates whose functional currency is other than the U.S. dollar are translated into U.S. dollars at the average exchange rates for the year while assets and liabilities are translated at year-end exchange rates. Consistent with U.S. GAAP standards, adjustments to translate assets and liabilities into U.S. dollars are recorded in the stockholders’ equity section of the Consolidated Balance Sheets as a component of accumulated other comprehensive income and are included in net earnings only upon sale or substantial liquidation of the underlying foreign subsidiary or affiliated company. Stock incentive plans Ashland recognizes compensation expense for stock incentive plans awarded to key employees and directors, primarily in the form of stock appreciation rights (SARs), restricted stock and restricted stock units, performance shares and other non-vested stock awards, that are generally based upon the grant-date fair value over the appropriate vesting period. Ashland utilizes several industry accepted valuation models to determine the fair value. For further information concerning stock incentive plans, see Note Q. Earnings per share The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Earnings per share are reported under the treasury stock method. Stock options and SARs for each reported year whose grant price was greater than the market price of Ashland Common Stock at the end of each fiscal year were not included in the computation of loss from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was 1.0 million for 2019, 0.7 million for 2018 and 1.1 million for 2017. (In millions except per share data) 2019 2018 2017 Numerator Numerator for basic and diluted EPS - Income (loss) from continuing operations, net of tax $ 24 $ 19 $ (180 ) Denominator Denominator for basic EPS - Weighted-average common shares outstanding 62 63 62 Share based awards convertible to common shares (a) 1 1 — Denominator for diluted EPS - Adjusted weighted - average shares and assumed conversions 63 64 62 EPS from continuing operations Basic $ 0.39 $ 0.30 $ (2.90 ) Diluted 0.39 0.29 (2.90 ) (a) As a result of the loss from continuing operations for 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. New accounting pronouncements Revenue recognition 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 and subsequent amendments to it 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. This guidance became effective for Ashland on October 1, 2018. Ashland formed an implementation team that evaluated the impact of the new standard on the Consolidated Financial Statements and the adoption method options available as well as the overall impact the new guidance will have on the organization. T Ashland has elected to adopt this standard using the modified retrospective approach. Ashland has finalized its assessment of the standard and determined that the overall impact was not material to the Consolidated Financial Statements. As a result, no cumulative-effect adjustment was made to retained earnings in the Consolidated Balance Sheet. Additionally, Ashland had no significant change to its internal controls or the manner and timing of recognizing revenue. However, there are significant additional disclosures within the Notes to Consolidated Financial Statements moving forward. For additional information on revenues see Note R. Upon adoption, Ashland utilized the following applicable practical expedients, as permitted by ASC 606, Revenue from Contracts with Customers: • Sales and other similar taxes collected from customers on behalf of third parties are excluded from the contract price; • Costs for shipping and handling activities, whether performed before or after the customer obtains control of the goods, are accounted for as fulfillment costs when not reimbursed; and • Costs incurred to obtain contracts with customers are expensed immediately when the amortization period is one year or less. Leases In February 2016, the FASB issued new accounting guidance related to lease transactions. The main objective of this guidance is to increase transparency and comparability among organizations by requiring lessees to recognize assets and liabilities on the balance sheet for the right to use assets and obligations created by leases and to disclose key information about leasing arrangements. The presentation of the Statements of Consolidated Comprehensive Income (Loss) and the Statements of Consolidated Cash Flows is largely unchanged under this guidance. This guidance retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. In July 2018, the FASB amended this guidance to give entities the option to apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Ashland will utilize this transition method upon adopting the guidance. Ashland will also elect the practical expedient package related to the identification, classification and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As Ashland will not reassess such conclusions, Ashland does not plan to adopt the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended, terminated or whether a purchase option will be exercised. While Ashland is still finalizing the evaluation of the impact that this guidance will have within its Consolidated Financial Statements, Ashland expects the adoption of this guidance will result in the recognition of operating lease liabilities in the range of $140 million to $180 million based on the present value of the remaining minimum lease commitments. See Note L for additional information on lease co |
Valvoline
Valvoline | 12 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Valvoline | NOTE B – VALVOLINE 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 B, Ashland completed the distribution of its remaining shares in Valvoline Inc. on May 12, 2017. 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 Consolidated Financial Statements up until the distribution of the remaining shares. The resulting outside stockholders’ interests in Valvoline Inc., which were approximately 17%, was presented separately as a noncontrolling interest within Ashland’s equity in the Consolidated Balance Sheets up until the distribution of the remaining shares. The amount of consolidated net income attributed to these previous minority holders is presented as a separate caption on the Statements of Consolidated Comprehensive Income (Loss) for 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 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 have been classified as discontinued operations within the Consolidated Financial Statements. See Note E for more information. Costs of transaction Ashland recognized separation costs of $10 million and $95 million during 2018 and 2017, respectively, which were primarily related to transaction, consulting and legal fees. During 2017, $13 million of the separation costs directly related to Valvoline were included within the discontinued operations caption of the Statements of Consolidated Comprehensive Income (Loss). Otherwise, separation costs are primarily recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE C – ACQUISITIONS Pharmachem 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. At the acquisition date, Pharmachem had approximately $300 million in annual revenues and 14 manufacturing facilities located 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 reporting segment. Purchase price allocation The acquisition was recorded by Ashland using the purchase method of accounting in accordance with U.S. GAAP whereby the total purchase price was allocated to tangible and intangible assets and liabilities acquired based on respective fair values. 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. The all-cash purchase price of Pharmachem was $680 million which included working capital adjustments of approximately $20 million. Ashland incurred $5 million of transaction costs during 2017 related to the acquisition, which was recorded within the net loss on acquisitions and divestitures caption in the Statement of Consolidated Comprehensive Income (Loss). The purchase price allocation was finalized during 2018 and the following table summarizes the values of the assets acquired and liabilities assumed at the date of acquisition. At May 17, 2017 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 94 Other noncurrent assets 17 Liabilities: Accounts payable (33 ) Deferred tax - net (132 ) Other noncurrent liabilities (14 ) Total purchase price $ 680 Subsequent adjustments to initial purchase price allocation During the September 2017 quarter, Ashland updated certain valuations and reserve estimates as part of the purchase accounting process and procedures. As a result of these updates, Ashland increased the intangible assets associated with the purchase by $18 million. The remaining updates to the Consolidated Balance Sheet during the September 2017 quarter related to certain liabilities that in total, along with the intangible assets impact, increased goodwill by $11 million. These adjustments did not have a significant effect on the Statement of Consolidated Comprehensive Income (Loss) during 2017. During 2018, there were subsequent adjustments of $6 million to deferred tax liabilities, $3 million to property, plant and equipment, $3 million to other noncurrent assets and $1 million to accounts payable. The combined impact of these adjustments resulted in an increase to goodwill of $1 million. These adjustments did not have a significant effect on the Statement of Consolidated Comprehensive Income (Loss) during 2018. 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 also considered 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 Impact on operating results The results of Pharmachem’s operations have been included in Ashland’s Consolidated Financial Statements since the May 17, 2017 closing date. The following table provides sales and operating income from the acquired Pharmachem operations included in Ashland’s 2017 results. Pharmachem results of operations (In millions) 2017 (a) Sales $ 104 Operating income 7 (a) Amounts represent the sales and results of operations for the period May 17, 2017 through September 30, 2017, the period for which Pharmachem was owned during 2017. The following unaudited pro forma information for 2017 assumes the acquisition of Pharmachem occurred at the beginning of the respective periods presented. Unaudited pro forma information (In millions) 2017 Sales $ 2,483 Net income 31 These amounts have been calculated after applying Ashland’s accounting policies and adjusting the results of Pharmachem to reflect the additional depreciation, amortization and interest expense that would have been charged assuming the fair value adjustments to tangible and intangible assets, and the related debt incurred had been applied on October 1, 2015, together with an estimate of the various tax effects. The unaudited pro forma information presented above is for illustrative purposes only and does not purport to be indicative of the results of future operations of Ashland or the results that would have been attained had the operations been combined during the periods presented. Vornia Limited In January 2018, Ashland completed the acquisition of Vornia Limited for $12 million, of which $1 million was paid in 2019. 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. |
Divestitures
Divestitures | 12 Months Ended |
Sep. 30, 2019 | |
Divestitures [Abstract] | |
Divestitures | NOTE D – DIVESTITURES Composites and Marl facility On November 15, 2018, Ashland announced that it had signed a definitive agreement to sell its Composites segment and Intermediates and Solvents Marl facility to INEOS Enterprises (INEOS) in a transaction valued at $1.1 billion. Ashland was to retain the remaining Intermediates and Solvents facility in Lima, Ohio primarily for its own internal business use. In late July of 2019, Ashland and INEOS agreed to certain additional changes to the sale agreement. As part of the proposed changes, the purchase price was adjusted to $1.015 billion while Ashland retained the right to the Maleic business, including the retention of any subsequent sale proceeds. On August 30, 2019 Ashland completed the previously announced sale of its Composites business (excluding the Maleic business) and butanediol manufacturing facility in Marl, Germany to INEOS. Net proceeds from the sale were approximately $1 billion and were used primarily for debt reductions. Approximately $0.9 billion of debt has been retired by September 30, 2019. As a result of the sale, Ashland recognized a $372 million after-tax gain within the Statement of Consolidated Comprehensive Income (Loss) within the income from discontinued operations caption. Since this disposal group signifies a strategic shift in Ashland’s business and had a major effect on Ashland’s operations and financial results, the operating results and cash flows related to Composites and the Marl facility, including the Maleic business, have been reflected as discontinued operations in the Statements of Consolidated Comprehensive Income (Loss) and Statements of Consolidated Cash Flows. See Note E of the Notes to Condensed Consolidated Financial Statements for the results of operations for Composites and the Marl facility, including the Maleic business, for all periods presented. Certain indirect corporate costs included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss) that were previously allocated to the Composites segment and Marl facility do not qualify for classification within discontinued operations and are now reported as selling, general and administrative expense within continuing operations on a consolidated basis and within the Unallocated and other segment. These costs were $41 million, $46 million and $36 million during the twelve months ended September 30, 2019, 2018, and 2017, respectively. Ashland is currently implementing plans to eliminate these costs as part of the global restructuring program. Subsequent to the completion of the sale, Ashland is providing certain transition services to INEOS for a fee. While the transition services are expected to vary in duration depending upon the type of service provided, Ashland expects to reduce costs as the transition services are completed. Ashland recognized transition service fees of $1 million during 2019 for the one month period since the completion of the divestiture. Specialty Ingredients Facility During 2017, Ashland committed to a plan to reorganize certain operations within the Specialty Ingredients reportable segment resulting in the closure of a manufacturing facility that was previously operational. As a result of this closure, Ashland recorded accelerated depreciation of $13 million for the remaining value of the machinery and equipment related to this facility, as well as an additional $1 million reserve for employee costs associated with the facility closure during 2017. During 2018, Ashland entered into a definitive sale agreement to sell the facility and recognized a loss of $2 million before tax. The loss was reported within the net loss on acquisitions and divestitures caption within the Statement of Consolidated Comprehensive Income (Loss) for 2018. Ashland determined this transaction did not qualify for discontinued operations treatment since it did not represent a strategic shift that had or will have a major effect on Ashland’s operations and financial results. Specialty Ingredients Joint Venture During September 2016, Ashland entered into a definitive sale agreement to sell its ownership interest in a Specialty Ingredients consolidated joint venture. Ashland recognized a loss of $12 million before tax in 2016 to recognize the assets at fair value less cost to sell, using Level 2 nonrecurring fair value measurements. During 2017, Ashland completed the transfer of its ownership interest in the joint venture and recognized an additional loss of $4 million primarily related to a license fee and tax adjustments. The loss in 2017 was reported within the net loss on acquisitions and divestitures caption within the Statements of Consolidated Comprehensive Income (Loss). Ashland determined this transaction did not qualify for discontinued operations treatment since it did not represent a strategic shift that had or will have a major effect on Ashland’s operations and financial results. Other corporate assets Ashland is currently in the process of pursuing options to divest several corporate assets, primarily related to land and buildings, that are expected to close within the next 12 months. The net property, plant and equipment value related to these sites was $6 million at September 30, 2019 and $9 million at September 30, 2018. During 2019, a $5 million impairment charge was recorded within the selling, general and administrative expense caption of the Statement of Consolidated Comprehensive Income (Loss) for one of these corporate assets. Held for sale classification The assets and liabilities of Composites and the Marl facility, including the Maleic business, along with other corporate asset divestitures for current and prior periods have been reflected as assets and liabilities held for sale. As a result, in accordance with U.S. GAAP standards, depreciation and amortization were not being recorded within the Statements of Consolidated Comprehensive Income (Loss) and the Consolidated Balance Sheets. These assets and liabilities are comprised of the following components: (In millions) 2019 2018 Accounts receivable, net (a) $ 5 $ 159 Inventories 3 67 Net property, plant and equipment 34 — Goodwill 14 — Intangibles — — Deferred income taxes — — Other assets 3 14 Current assets held for sale $ 59 $ 240 Net property, plant and equipment $ — $ 254 Goodwill — 144 Intangibles — 40 Deferred income taxes — 7 Other assets — 32 Noncurrent assets held for sale $ — $ 477 Trade and other payables $ 6 $ 152 Employee benefit obligations — — Accrued expenses and other liabilities 1 11 Other liabilities — — Current liabilities held for sale $ 7 $ 163 Employee benefit obligations — 23 Other liabilities — 3 Noncurrent liabilities held for sale $ — $ 26 (a) Accounts receivable included an allowance for doubtful accounts of $3 million as of September 30, 2018. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | NOTE E – DISCONTINUED OPERATIONS 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 and activities 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 described in Note D, Ashland has completed the previously announced sale of its Composites business (excluding the Maleic business) and butanediol manufacturing facility in Marl, Germany to INEOS. Ashland determined that this disposal group qualified as a discontinued operation, in accordance with U.S. GAAP, since it represented a strategic shift for Ashland and had a major effect on Ashland's operations and financial results. Accordingly, the operating results and cash flows for the Composites business (including the Maleic business) and the Marl facility have been classified as discontinued operations within the Consolidated Financial Statements for all periods presented. 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 all periods presented have been classified as discontinued operations within the Consolidated Financial Statements. The activity during 2019 and 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, which qualified as a discontinued operation and from the acquisition during 2009 of Hercules LLC (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland. Adjustments to the recorded litigation reserves and related insurance receivables are recorded within the discontinued operations caption. See Note O for more information related to the adjustments on asbestos liabilities and receivables. During 2014, Ashland completed the sale of the Ashland Water Technologies (Water Technologies) business. Ashland determined that this sale qualified as a discontinued operation, in accordance with U.S. GAAP, since Ashland does not have significant continuing involvement in the Water Technologies business. Ashland has made subsequent adjustments to the discontinued operations caption related to the sale. During 2011, Ashland completed the sale of substantially all of the assets and certain liabilities of its global distribution business, which previously comprised the Ashland Distribution (Distribution) reportable segment. Ashland determined that this sale qualified as a discontinued operation, in accordance with U.S. GAAP, since Ashland does not have significant continuing involvement in the Distribution business. Ashland has made subsequent adjustments to the discontinued operations caption related to the sale. Due to the ongoing assessment of certain matters associated with previous divestitures, subsequent adjustments to these divestitures may continue in future periods in the discontinued operations caption in the Statements of Consolidated Comprehensive Income (Loss). Components of amounts reflected in the Statements of Consolidated Comprehensive Income (Loss) related to discontinued operations are presented in the following table for each of the years ended September 30. (In millions) 2019 2018 2017 Income (loss) from discontinued operations Composites/Marl facility $ 118 $ 103 $ 98 Valvoline — (1 ) 240 Asbestos-related litigation — 14 (31 ) Water Technologies (1 ) — 1 Distribution 18 (11 ) (5 ) Gain on disposal of discontinued operations Composites/Marl facility 423 — — Income before taxes 558 105 303 Income tax benefit (expense) Benefit (expense) related to income (loss) from discontinued operations Composites/Marl facility (24 ) (17 ) (23 ) Valvoline — — (81 ) Asbestos-related litigation — (1 ) 6 Water Technologies 2 3 1 Distribution (4 ) 5 2 Expense related to gain on disposal of discontinued operations Composites/Marl facility (51 ) — — Income from discontinued operations (net of taxes) $ 481 $ 95 $ 208 Composites and Marl divestiture The following table presents a reconciliation of the captions within Ashland's Statements of Consolidated Income (Loss) for the income (loss) from discontinued operations attributable to the Composites business and the Marl facility disposal group for each of the years ended September 30. Interest expense was allocated to discontinued operations based on Ashland’s mandatory debt prepayments upon the disposition of the Composites business and the Marl facility. Although the Maleic business was not sold to INEOS, this business was operated under the Composites business and Marl facility disposal group and will continue to be reported in discontinued operations along with the Composites business and Marl facility. (In millions) 2019 2018 2017 Income(loss) from discontinued operations attributable to Composites/Marl facility disposal group Sales $ 1,012 $ 1,154 $ 951 Cost of sales (785 ) (942 ) (783 ) Selling, general and administrative expense (74 ) (79 ) (65 ) Research and development expense (11 ) (12 ) (10 ) Equity and other income 3 4 4 Pretax operating income of discontinued operations 145 125 97 Net interest and other financing expense (21 ) (20 ) (5 ) Other net periodic benefit income (costs) (6 ) (2 ) 2 Net gain on acquisitions and divestitures — — 4 Pretax income of discontinued operations 118 103 98 Income tax expense (24 ) (17 ) (23 ) Income from discontinued operations $ 94 $ 86 $ 75 Valvoline Separation The following table presents a reconciliation of the captions within Ashland’s Statements of Consolidated Income for the income from discontinued operations attributable to Valvoline for the year ended September 30, 2017. (In millions) 2017 (a) Income from discontinued operations attributable to Valvoline Sales $ 1,237 Cost of sales (750 ) Selling, general and administrative expense (234 ) Research and development expense (8 ) Equity and other income 17 Operating income of discontinued operations 262 Net loss on acquisitions and divestitures — Net interest and other financing expense (22 ) Pretax income of discontinued operations 240 Income tax expense (81 ) Income from discontinued operations $ 159 (a) Results in 2017 reflect activity through May 12, 2017 when Valvoline was fully separated, as previously discussed. |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Sep. 30, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Activities | NOTE F – RESTRUCTURING ACTIVITIES Ashland periodically implements company-wide restructuring programs related to acquisitions, divestitures and other cost reduction programs in order to enhance profitability through streamlined operations and an improved overall cost structure. Severance costs During 2018, Ashland announced and initiated a company-wide restructuring program as a result of ongoing strategic asset plans and activities. As part of this restructuring program, Ashland announced a voluntary severance offer (VSO) to certain qualifying employees that were formally approved during 2018. Additionally, during 2018, an involuntary program for employees was also initiated as part of the restructuring program. The VSO and involuntary programs resulted in expense of $6 million and $36 million being recognized during 2019 and 2018, respectively, which were primarily recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). As of September 30, 2019, the severance reserve for the company-wide restructuring program was $7 million, respectively. Facility costs Ashland incurred $7 million and $9 million of lease abandonment charges during 2019 and 2018, respectively due to the exit from certain office facilities in conjunction with the company-wide restructuring program. The costs related to this reserve were recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss) and will be paid over the remaining lease terms. As of September 30, 2019, the remaining restructuring reserve for all qualifying facility costs totaled $7 million. The following table details at September 30, 2019, the amount of restructuring reserves related to the programs discussed above, and the related activity in these reserves during 2019. The severance reserves and facility cost reserves were primarily included in accrued expenses and other liabilities in the Consolidated Balance Sheet as of September 30, 2019. (In millions) Severance costs Facility costs Total Balance as of September 30, 2018 $ 36 $ 7 $ 43 Restructuring reserve 6 7 13 Utilization (cash paid) (35 ) (7 ) (42 ) Balance as of September 30, 2019 $ 7 $ 7 $ 14 Impairments During 2018, Ashland incurred $16 million of asset impairment charges primarily related to restructuring activities which were recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). Of these impairment charges, $12 million was related to the sale of an office facility. Consistent with historical policies and U.S. GAAP provisions, Ashland recognized the building at fair value using Level 2 nonrecurring fair value measurements. Plant restructuring During 2019, Specialty Ingredients committed to a cost reduction plan within an existing manufacturing facility. As a result, Ashland incurred restructuring charges of $47 million as of September 30, 2019. These charges were recorded primarily within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss) consisting of $38 million of accelerated depreciation and amortization, $5 million of severance and $4 million of plant closure costs during 2019. As of September 30, 2019, there was a restructuring reserve of $2 million related to the $4 million of plant closure costs. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE G – 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 through the use of 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 September 30, 2019. For additional information on fair value hierarchy measurements of pension plan asset holdings, see Note N. Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying Total fair assets inputs inputs (In millions) value value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 232 $ 232 $ 232 $ — $ — Restricted investments (a) 334 334 334 — — Investments of captive insurance company (b) 5 5 5 — — Foreign currency derivatives 2 2 — 2 — Total assets at fair value $ 573 $ 573 $ 571 $ 2 $ — Liabilities Foreign currency derivatives $ 2 $ 2 $ — $ 2 $ — (a) Included in restricted investments and $24 million within other current assets in the Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Consolidated Balance Sheets. The following table summarizes financial instruments subject to recurring fair value measurements as of September 30, 2018 . Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying Total fair assets inputs inputs (In millions) value value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 294 $ 294 $ 294 $ — $ — Restricted investments (a) 342 342 342 — — Investments of captive insurance company (b) 3 3 3 — — Foreign currency derivatives 11 11 — 11 — Total assets at fair value $ 650 $ 650 $ 639 $ 11 $ — Liabilities Foreign currency derivatives $ 3 $ 3 $ — $ 3 $ — (a) Included in restricted investments and $30 million within other current assets in the Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Consolidated Balance Sheets. Restricted investments As discussed in Note A, Ashland maintains certain investments in a company restricted renewable annual trust for the purpose of paying future asbestos indemnity and defense costs. The investments are designated as available-for-sale securities, classified as Level 1 measurements within the fair value hierarchy. These securities were classified primarily as noncurrent restricted investment assets, with $24 million classified within other current assets, in the Consolidated Balance Sheets. The current year included a portfolio rebalancing between equity and bond funds held within the portfolio resulting in significant purchases and sales of investment securities totaling $348 million each. The following table provides a summary of the activity within the available-for-sale securities portfolio as of September 30, 2019 and 2018: (In millions) 2019 2018 Original cost $ 335 $ 335 Accumulated adjustments, net (47 ) (38 ) Adjusted cost, beginning of year (a) 288 297 Investment income (b) 10 8 Net unrealized gain (c) 29 54 Realized gain (c) 32 6 Settlement funds 7 10 Disbursements (32 ) (33 ) Fair value $ 334 $ 342 (a) The adjusted cost of the demand deposit includes accumulated investment income, realized gains, disbursements and settlements recorded in previous periods. (b) Investment income relates to the demand deposit and includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. (c) Presented under the original cost method. The following table presents gross unrealized gains and losses for the available-for-sale securities as of September 30, 2019 and 2018: Gross Gross (In millions) Adjusted Cost Unrealized Gain Unrealized Loss Fair Value As of September 30, 2019 Demand Deposit $ 9 $ — $ — $ 9 Equity Mutual Fund 120 24 (2 ) 142 Bond Mutual Fund 176 7 — 183 Fair value $ 305 $ 31 $ (2 ) $ 334 As of September 30, 2018 Demand Deposit $ 20 $ — $ — $ 20 Equity Mutual Fund 148 59 — 207 Bond Mutual Fund 120 — (5 ) 115 Fair value $ 288 $ 59 $ (5 ) $ 342 The unrealized gains and losses of $54 million, net of the related deferred income taxes of $20 million, as of September 30, 2018, were reclassified from AOCI to retained earnings within the Consolidated Balance Sheets due to the new accounting guidance adopted in the first quarter of fiscal year 2019. The following table presents the investment income, net unrealized gains and losses, realized gains and disbursements related to the investments within the portfolio during 2019, 2018 and 2017. (In millions) 2019 2018 2017 Investment income $ 10 $ 8 $ 9 Net unrealized gains (losses) (a) 7 18 25 Realized gains (b) — 6 2 Disbursements (32 ) (33 ) (27 ) (a) Ashland determined that all unrealized gains and losses were related to equity securities with readily determinable fair values. Due to the new accounting guidance adopted in the first quarter of fiscal year 2019, the net unrealized losses during the year ended September 30, 2019 were recorded within the net interest and other expense (income) caption in the Statements of Consolidated Income (Loss). In 2018 and 2017 these net unrealized gains (losses) were in AOCI. (b) Relates only to the years ended September 30, 2018 and 2017 prior to adoption of the new accounting guidance for equity securities. 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 of 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 gains and losses recognized during 2019, 2018 and 2017 within the Statements of Consolidated Comprehensive Income (Loss). (In millions) 2019 2018 2017 Foreign currency derivative gain (loss) $ 2 $ (32 ) $ 3 The following table summarizes the fair values of the outstanding foreign currency derivatives as of September 30, 2019 and 2018 included in accounts receivable and accrued expenses and other liabilities of the Consolidated Balance Sheets. (In millions) 2019 2018 Foreign currency derivative assets $ 2 $ 11 Notional contract values 271 1,209 Foreign currency derivative liabilities $ 2 $ 3 Notional contract values 168 755 Other financial instruments At September 30, 2019 and 2018, Ashland’s long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying values of $1,513 million and $2,307 million, respectively, compared to a fair value of $1,680 million and $2,372 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. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | NOTE H – PROPERTY, PLANT AND EQUIPMENT The following table describes the various components of property, plant and equipment within the Consolidated Balance Sheets. (In millions) 2019 2018 Land $ 148 $ 150 Buildings 461 496 Machinery and equipment 2,361 2,353 Construction in progress 195 173 Total property, plant and equipment (gross) 3,165 3,172 Accumulated depreciation (1,588 ) (1,526 ) Total property, plant and equipment (net) $ 1,577 $ 1,646 The following table summarizes various property, plant and equipment charges included within the Statements of Consolidated Comprehensive Income. (In millions) 2019 2018 2017 Depreciation $ 203 $ 184 $ 185 Capitalized interest — — 1 Accelerated Depreciation During 2019, Ashland committed to a cost reduction plan within an existing manufacturing facility. As a result, depreciation included $38 million of accelerated depreciation for the remaining value of this facility primarily related to machinery and equipment. See Note F for additional information related to this facility. This charge related to the Specialty Ingredients reportable segment and was recorded primarily within the cost of sales caption of the Statement of Consolidated Comprehensive Income (Loss) for 2019. During 2018 and 2017, the termination of a contract at a manufacturing facility resulted in $6 million and $1 million, respectively, of accelerated depreciation for the remaining value of the related machinery and equipment. These charges related to the Specialty Ingredients reportable segment and were recorded within the equity and other income (loss) caption of the Statements of Consolidated Comprehensive Income (Loss). During 2017, Ashland committed to a plan to reorganize certain operations which resulted in the closure of a manufacturing facility that was previously operational. Due to this closure, depreciation included $13 million of accelerated depreciation for the remaining value of this facility primarily related to machinery and equipment. See Note D for additional information related to this facility. This charge related to the Specialty Ingredients reportable segment and was recorded within the cost of sales caption of the Statement of Consolidated Comprehensive Income (Loss) for 2017. During 2019, 2018 and 2017, depreciation also included $1 million, $8 million and $5 million, respectively, of accelerated depreciation within Unallocated and other and was recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | NOTE I – GOODWILL AND OTHER INTANGIBLES Goodwill The following is a progression of goodwill by reportable segment for the years ended September 30, 2019 and 2018. Specialty Intermediates (In millions) Ingredients and Solvents (a) Total Balance at September 30, 2017 $ 2,315 $ — $ 2,315 Acquisition (b) 5 — 5 Currency translation (16 ) — (16 ) Balance at September 30, 2018 2,304 — 2,304 Currency translation (51 ) — (51 ) Balance at September 30, 2019 $ 2,253 $ — $ 2,253 (a) As of September 30, 2019 and 2018, there was accumulated impairment of $90 million related to the Intermediates and Solvents reportable segment. (b) Relates to the acquisition of Pharmachem during 2017 and Vornia Limited during 2018. See Note C for more information. Other intangible assets Other intangible assets were comprised of the following as of September 30, 2019 and 2018. 2019 2018 Gross Net Gross Net carrying Accumulated carrying carrying Accumulated carrying (In millions) amount amortization amount amount amortization amount Definite-lived intangible assets Trademarks and trade names $ 66 $ (29 ) $ 37 $ 66 $ (25 ) $ 41 Intellectual property 712 (391 ) 321 721 (350 ) 371 Customer and supplier relationships 744 (292 ) 452 759 (264 ) 495 Total definite-lived intangible assets 1,522 (712 ) 810 1,546 (639 ) 907 Indefinite-lived intangible assets Trademarks and trade names 278 — 278 278 — 278 Total intangible assets $ 1,800 $ (712 ) $ 1,088 $ 1,824 $ (639 ) $ 1,185 Intangible assets classified as definite-lived are amortized on a straight-line basis over their estimated useful lives. Useful lives range from 3 to 25 years for trademarks and trade names; 5 to 25 years for intellectual property; and 3 to 24 years for customer and supplier relationships. Amortization expense recognized on intangible assets was $86 million for 2019, $93 million for 2018 and $80 million for 2017, and is primarily included in the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income. As of September 30, 2019, all of Ashland’s intangible assets that had a carrying value were being amortized except for certain trademarks and trade names that have been determined to have indefinite lives. Estimated amortization expense for future periods is $86 million in 2020, $85 million in 2021, $85 million in 2022, $85 million in 2023 and $71 million in 2024. 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. Impairment of long-lived (indefinite-lived) assets Goodwill Ashland reviews goodwill 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. Ashland tests goodwill either quantitatively or qualitatively for impairment. For the qualitative approach, Ashland considers relevant events and circumstances such as macroeconomic conditions, industry and market considerations, overall financial performance and changes in management and business strategy, changes in carrying value, among others. Ashland considers how these relevant events and circumstances change between quantitative goodwill impairment tests. Ashland decides whether it is more likely than not that the fair value of its reporting units exceeds the carrying values. If not, a quantitative assessment must be performed. For the quantitative approach, Ashland makes various estimates and assumptions in determining the estimated fair value of each reporting unit using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group, when externally quoted market prices are not readily available. Discounted cash flow models are highly reliant on various assumptions, including projected business results and future industry direction, long-term growth factors and weighted-average cost of capital. Significant management judgement is involved in estimating these variables, and they include inherent uncertainties since they are forecasting future events. Ashland performs sensitivity analyses by using a range of inputs to confirm reasonableness of these estimates. Additionally, Ashland compares the indicated equity value to Ashland’s market capitalization, and implied control premium/discount, to determine if the estimated enterprise value is reasonable compared to external market indicators. If this comparison indicates that a reporting unit’s estimated fair value is less than its carrying value, it is adjusted to its calculated fair value and the adjustment represents the impairment charge. Ashland performed its annual goodwill impairment test using the quantitative approach as of July 1, 2019 and concluded that the reporting unit fair values far exceeded their carrying values. No impairment existed as of that date. Other indefinite-lived intangible assets Ashland reviews these intangible assets for possible impairment annually or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, the asset is written down to its fair value and the amount of the write-down is the impairment charge. Similar to its annual assessment for goodwill, Ashland performs either a qualitative or quantitative test for impairment. If a quantitative analysis is performed, Ashland tests these assets using a “relief-from-royalty” valuation method to determine the fair value. Significant assumptions inherent in the valuation methodologies include, but are not limited to, future projected business results, growth rates, the weighted-average cost of capital for a market participant, and royalty and discount rates. In conjunction with the July 1 annual assessment of indefinite-lived intangible assets, Ashland’s models did not indicate any impairment, as each indefinite-lived intangible asset’s fair value exceeded their carrying values. Ashland performed its annual other intangibles impairment test using the quantitative approach as of July 1, 2019 and concluded that the assets fair values far exceeded their carrying values. No impairment existed as of that date. Ashland’s assessment of an impairment on any of these assets classified currently as having indefinite lives, including goodwill, could change in future periods if significant events happen and/or circumstances change that effect the previously mentioned assumptions such as: a significant change in projected business result, a divestiture decision, increase in Ashland’s weighted-average cost of capital rates, decrease in growth rates or assumptions, economic deterioration that is more severe or of a longer duration than anticipated, or another significant economic event. |
Debt
Debt | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE J – DEBT The following table summarizes Ashland’s current and long-term debt at September 30, 2019 and 2018. (In millions) 2019 2018 4.750% notes, due 2022 $ 1,080 $ 1,083 Term loan B, due 2024 — 593 6.875% notes, due 2043 374 376 Term loan A, due 2022 — 195 Accounts receivable securitizations 144 195 6.50% junior subordinated notes, due 2029 54 52 Revolving credit facility — 25 Medium-term notes, due 2019, interest of 9.35% at September 30, 2019 — 5 Other (a) 15 5 Total debt 1,667 2,529 Short-term debt (includes current portion of long-term debt) (166 ) (254 ) Long-term debt (less current portion and debt issuance costs) $ 1,501 $ 2,275 (a) Other includes $12 million and $21 million of debt issuance costs as of September 30, 2019 and 2018, respectively. Additionally, as of September 30, 2019 and 2018, Other included a European short-term loan facility with an outstanding balances of $22 million and $23 million, respectively. At September 30, 2019, Ashland’s total debt had an outstanding principal balance of $1,726 million, discounts of $47 million and debt issuance costs of $12 million. The scheduled aggregate maturities of long-term debt for the next five fiscal years (including the current portion and excluding debt issuance costs) are as follows: zero in 2020, zero in 2021, $1,083 million in 2022, zero in 2023 and zero in 2024. Credit Agreements and Refinancing 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 five-year five-year 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 fluctuates 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 had a due date of 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. Ashland incurred $15 million of new debt issuance costs in connection with the 2017 Credit Agreement, of which $2 million was expensed immediately during 2017 within the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income (Loss). The remaining balance is amortized using the effective interest method. Additionally, as a result of the termination of the 2015 Senior Credit Agreement, Ashland recognized a $5 million charge for the accelerated amortization of previously capitalized debt issuance costs during 2017, which is included in the net interest and other expense caption of the Statements of Consolidated Comprehensive Income (Loss). The credit facilities under the 2017 Credit Agreement are guaranteed by Ashland Global Holdings Inc., Ashland Chemco Inc. and Ashland LLC's existing and future subsidiaries (other than certain immaterial subsidiaries, joint ventures, special purpose financing subsidiaries, regulated subsidiaries, foreign subsidiaries and certain other subsidiaries) and are secured by a first-priority security interest in substantially all of the personal property assets of Ashland and the guarantors, including all or a portion of the equity interests of certain of Ashland’s domestic subsidiaries and first-tier foreign subsidiaries and, in certain cases, a portion of the equity interests of other foreign subsidiaries. The guarantees by Ashland’s subsidiaries and pledge of security interests by such guarantors may, at Ashland’s option, be released upon and during the occurrence of a Collateral Release Event (as defined in the 2017 Credit Agreement). 2018 financing activity related to the 2017 Credit Agreement On May 22, 2018, Ashland entered into Amendment No. 3 to the 2017 Credit Agreement which provided for the re-pricing of the 2017 TLB Facility. Due to this amendment, loans issued under the 2017 TLB Facility bear interest at LIBOR plus 1.75% per annum (previously LIBOR plus 2.00% per annum). All other significant terms of the agreement remained unchanged. Ashland incurred $1 million of new debt issuance costs in connection with the re-pricing, which was expensed during 2018 within the net interest and other expense caption of the Statements of Consolidated Comprehensive Income (Loss). During 2018, Ashland utilized cash primarily from repatriations and borrowings from the accounts receivable securitization facilities to fully repay the $250 million outstanding balance of the Three-Year TLA Facility and to repay $55 million of the Five-Year TLA Facility. As a result of these repayments, Ashland recognized accelerated amortization of previously capitalized debt issuance costs of less than $1 million during 2018, which was included in the net interest and other expense caption of the Statements of Consolidated Comprehensive Income (Loss). 2019 financing activity related to the 2017 Credit Agreement During 2019, Ashland utilized proceeds from the sale of its Composites business (excluding the Maleic business) and the Marl facility to repay the remaining principal balance of the TLA Facility and the TLB Facility. As a result of these repayments, Ashland recognized accelerated amortization of previously capitalized debt issuance costs of $6 million during 2019, which was included in the net interest and other expense caption of the Statements of Consolidated Comprehensive Income (Loss). Debt repayments and repurchases Cash repatriation During 2019 and 2018, Ashland repatriated approximately $900 million and $590 million, respectively, in cash that was primarily used to repay existing debt, principally the TLA Facility and TLB Facility in 2019 and the 2017 Revolving Credit Facility and the outstanding balance of the Three-Year TLA Facility (as previously discussed). Repayment of the Term loan A due 2022 During 2019, Ashland repaid all of the outstanding principal balance of its term loan A for a total of $195 million. As a result of these repayments, Ashland recognized accelerated amortization of previously capitalized debt issuance costs of $1 million during 2019, which was included in the net interest and other expense caption of the Statements of Consolidated Comprehensive Income (Loss). Repayment of the Term loan B due 2024 During 2019, Ashland repaid all of the outstanding principal balance of its term loan B for a total of $593 million. As a result of these repayments, Ashland recognized accelerated amortization of previously capitalized debt issuance costs of $5 million during 2019, which was included in the net interest and other expense caption of the Statements of Consolidated Comprehensive Income (Loss). Redemption of 9.35% notes due 2019 During 2019, Ashland redeemed all of its outstanding 9.35% medium term notes due 2019, of which approximately $5 million were outstanding. Cash on hand was used to pay for the redemption. Redemption of 3.875% notes due 2018 During 2017, Ashland redeemed all of its outstanding 3.875% senior notes due 2018 (2018 Senior Notes), of which approximately $659 million were outstanding. Proceeds of borrowings under the 2017 TLB Facility, together with cash on hand, were used to pay for the redemption. Ashland recognized a $13 million charge related to premiums paid and accelerated amortization of previously capitalized debt issuance costs during 2017, which is included in the net interest and other expense caption of the Statement of Consolidated Comprehensive Income (Loss). Open market repurchases of 4.750% notes due 2022, 3.875% notes due 2018 and 6.875% notes due 2043 During 2017, Ashland executed open market repurchases of its 4.750% notes due 2022 (2022 Senior Notes) and its 3.875% notes due 2018 (2018 Senior Notes). As a result of these repurchases, the carrying values of the 2022 and 2018 Senior 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 during 2017, which is included in the net interest and other expense caption of the Statement of Consolidated Comprehensive Income (Loss). As previously discussed, the remaining outstanding amount of the 2018 Senior Notes was redeemed during 2017. During 2019, Ashland executed open market repurchases of its 4.750% notes due 2022 (2022 Senior Notes) and its 6.875% notes due 2043 (2043 Senior Notes). As a result of these repurchases, the carrying values of the 2022 and 2043 Senior Notes were reduced by $3 million and $1 million, respectively. 6.50% junior subordinated notes due 2029 In December 2016, Hercules, an indirect wholly-owned subsidiary of Ashland, repurchased, through a cash 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, 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 during 2017. The charge and net gain are included in the net interest and other expense caption of the Statement of Consolidated Comprehensive Income (Loss). Accounts receivable securitizations 2018 accounts receivable securitization During July 2018, Ashland entered into a €115 million accounts receivable securitization facility (the Program) for the transfer by certain subsidiaries of Ashland (the Sellers) directly or indirectly to Ester Finance Titrisation (the Purchaser), a wholly-owned subsidiary of Crédit Agricole Corporate and Investment Bank (the Arranger), of certain receivables and/or collections originated by the Sellers towards certain corporate debtors located in multiple European jurisdictions and denominated in multiple currencies. The Program originally had a term of two years, but was extended to August 2021 in September 2019. Under the Program, each Seller will assign, on an ongoing basis, certain of its accounts receivable and the right to the collections on those accounts receivable to the Purchaser. Under the terms of the Program, the Sellers could, from time to time, obtain up to €115 million from the Purchaser through the sale of an undivided interest in such accounts receivable and collections. Ashland accounts for the securitization facility as secured borrowings, and the receivables sold pursuant to the facility are included in the Consolidated Balance Sheets as accounts receivable. Fundings under the Program will be repaid as accounts receivable are collected, with new fundings being advanced (through daily advanced purchase price) as new accounts receivable are originated by the Sellers and assigned to the Purchaser, with settlement occurring monthly. Ashland classifies any borrowings under this facility as a short-term debt instrument within the Consolidated Balance Sheets. Once sold to the Purchaser, the accounts receivable and rights to collection described above are separate and distinct from each Sellers’ own assets and are not available to its creditors should such Sellers become insolvent. At September 30, 2019 and 2018, the outstanding amount of accounts receivable transferred by Ashland to the Purchaser was $133 million and $153 million, respectively, and there were $94 million and $109 million, respectively, of borrowings (denominated in multiple currencies) under the facility. The weighted-average interest rate for this instrument was 1.2% for 2019 and 1.8% for 2018. 2012 accounts receivable securitization On August 31, 2012, Ashland entered into a $350 million accounts receivable securitization facility pursuant to (i) a Sale Agreement, among Ashland and certain of its direct and indirect subsidiaries (each an Originator and collectively, the Originators) and CVG Capital III LLC, a wholly-owned “bankruptcy remote” special purpose subsidiary of the Originators (CVG) and (ii) a Transfer and Administration Agreement, among CVG, each Originator, Ashland, as Master Servicer, certain Conduit Investors, Uncommitted Investors, Letter of Credit Issuers, Managing Agents, Administrators and Committed Investors, and The Bank of Nova Scotia, as agent for various secured parties (the Agent). The Transfer and Administration Agreement had a term of three years, but was extendable at the discretion of Ashland and the Investors. Under the Sale Agreement, each Originator transfers, on an ongoing basis, certain of its accounts receivable, certain related assets and the right to the collections on those accounts receivable to CVG. Ashland accounts for the securitization facility as secured borrowings, and the receivables sold pursuant to the facility are included in the Consolidated Balance Sheets as accounts receivable. Fundings under the Transfer and Administration Agreement will be repaid as accounts receivable are collected, with new fundings being advanced (through daily reinvestments) as new accounts receivable are originated by the Originators and transferred to CVG, with settlement generally occurring monthly. Ashland continues to classify any borrowings under this facility as a short-term debt instrument within the Consolidated Balance Sheets. Once sold to CVG, the accounts receivable, related assets and rights to collection described above are separate and distinct from each Originator’s own assets and are not available to its creditors should such Originator become insolvent. Substantially all of CVG’s assets have been pledged to the Agent in support of its obligations under the Transfer and Administration Agreement. During 2016, the termination date of the commitments under the Transfer and Administration Agreement was extended from December 31, 2015, the previous termination extension date, to March 22, 2017. During March 2017, this facility was extended for an additional year with similar terms as the previous facility agreement. 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, however this was decreased back to $100 million on August 30, 2019 in conjunction with the Composites and Marl facility divestiture. No other changes to the agreement are expected to have a significant impact to Ashland's results of operations and financial position. At September 30, 2019 and 2018, the outstanding amount of accounts receivable transferred by Ashland to CVG was $147 million and $166 million, respectively. There were $50 million of borrowings under the facility as of September 30, 2019, while Ashland had $86 million of borrowings under the facility as of September 30, 2018. The weighted-average interest rate for this instrument was 3.3% for 2019 and 2.7% for 2018. Other debt At September 30, 2019 and 2018, Ashland held other debt totaling $81 million and $83 million, respectively, comprised primarily of a European short-term loan facility, the 6.50% notes due 2029 and other notes. Available borrowing capacity The borrowing capacity remaining under the Revolving Credit Facility was $752 million due to an outstanding balance of zero, as well as a reduction of $48 million for letters of credit outstanding at September 30, 2019. Ashland's total borrowing capacity at September 30, 2019 was $800 million, which included $48 million of available capacity under the two accounts receivable securitization facilities. 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 September 30, 2019, Ashland was 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. The 2017 Credit Agreement defines the consolidated net leverage ratio as the ratio of consolidated indebtedness minus unrestricted cash and cash equivalents to consolidated EBITDA (Covenant Adjusted EBITDA) for any measurement period. In general, the 2017 Credit Agreement defines Covenant Adjusted EBITDA as net income plus consolidated interest charges, taxes, depreciation and amortization expense, fees and expenses related to capital market transactions and proposed or actual acquisitions and divestitures, restructuring and integration charges, non-cash stock and equity compensation expense, and any other nonrecurring expenses or losses that do not represent a cash item in such period or any future period; less any non-cash gains or other items increasing net income. The computation of Covenant Adjusted EBITDA differs from the calculation of EBITDA and Adjusted EBITDA, which have been reconciled on page M-8. In general, consolidated indebtedness includes debt plus all purchase money indebtedness, banker’s acceptances and bank guaranties, deferred purchase price of property or services, attributable indebtedness and guarantees. At September 30, 2019, Ashland’s calculation of the consolidated net leverage ratio was 2.6. The minimum required consolidated interest coverage ratio under the 2017 Credit Agreement is 3.0. The 2017 Credit Agreement defines the consolidated interest coverage ratio as the ratio of Covenant Adjusted EBITDA to consolidated interest charges for any measurement period. At September 30, 2019, Ashland’s calculation of the consolidated interest coverage ratio was 6.1. Guarantee of senior notes Ashland Global Holdings Inc. fully and unconditionally guaranteed the 3.875% notes due 2018 (which were fully repaid during 2017), 4.750% notes due 2022 and 6.875% notes due 2043 and has no significant independent assets or operations. Net interest and other expense (income) (In millions) 2019 2018 2017 Interest expense (a) $ 114 $ 116 $ 227 Interest income (2 ) (4 ) (4 ) Investment securities income (b) (17 ) (14 ) (11 ) Other financing costs (c) 4 4 17 $ 99 $ 102 $ 229 (a) Includes $6 million , (b) Represents investment income related to the restricted investments discussed in Note G. (c) Includes costs of $16 million related to early redemption premium payments and bondholder consent fees for the 2022 and 2018 Senior Notes and a net gain of $5 million related to the repayment of the 2029 Notes during 2017. The following table details the debt issuance cost and original issue discount amortization included in interest expense during 2019 , 2018 and 2017 . (In millions) 2019 2018 2017 Normal amortization $ 7 $ 7 $ 8 Accelerated amortization (a) 6 1 101 Total $ 13 $ 8 $ 109 (a) Fiscal year 2017 includes $92 million of accelerated accretion of the recorded debt discount for the 2029 Notes, while the remaining amounts in each year related to the accelerated amortization of debt issuance costs. |
Other Noncurrent Assets and Lia
Other Noncurrent Assets and Liabilities | 12 Months Ended |
Sep. 30, 2019 | |
Other Noncurrent Assets And Liabilities [Abstract] | |
Other Noncurrent Assets and Liabilities | NOTE K – OTHER NONCURRENT ASSETS AND LIABILITIES The following table provides the components of other noncurrent assets in the Consolidated Balance Sheets as of September 30. (In millions) 2019 2018 Deferred compensation investments $ 170 $ 165 Tax and tax indemnity receivables 68 74 Life insurance policies 56 52 Manufacturing catalyst supplies 38 35 Defined benefit plan assets 33 35 Equity and other unconsolidated investments 6 8 Land use rights 6 11 Environmental insurance receivables 12 11 Debt issuance costs 4 6 Other 17 19 $ 410 $ 416 Deferred compensation investments Deferred compensation investments consist of insurance policies valued at cash surrender value. Gains and losses related to deferred compensation investments are immediately recognized within the selling, general and administrative expense caption on the Statements of Consolidated Comprehensive Income (Loss). The gains on these investments were $7 million, $10 million and $11 million during 2019, 2018 and 2017, respectively. The following table provides the components of other noncurrent liabilities in the Consolidated Balance Sheets as of September 30. (In millions) 2019 2018 Tax liabilities $ 220 $ 176 Environmental remediation reserves 143 147 Deferred compensation 42 47 Other 48 52 $ 453 $ 422 |
Lease Commitments
Lease Commitments | 12 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease Commitments | NOTE L – LEASE COMMITMENTS Ashland and its subsidiaries are lessees of office buildings, transportation equipment, warehouses and storage facilities, other equipment, facilities and properties under leasing agreements that expire at various dates. Capitalized lease obligations are not significant and are included in long-term debt while capital lease assets are included in property, plant and equipment. Future minimum rental payments at September 30, 2019 were $28 million in 2020, $25 million in 2021, $33 million in 2022, $13 million in 2023, $11 million in 2024 and $103 million in 2025 and later years. Rental expense under operating leases for continuing operations was as follows: (In millions) 2019 2018 2017 Minimum rentals (including rentals under short-term leases) $ 42 $ 46 $ 40 Sublease rental income (1 ) (1 ) (2 ) $ 41 $ 45 $ 38 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE M – 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 September 30, 2018, Ashland had 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 Ashland’s existing deferred tax balances and the one-time transition tax. Due to the Tax Act, Ashland recognized a provisional amount during 2018, which is included as a component of income tax expense from continuing operations. Ashland recorded net unfavorable tax adjustments of $2 million during 2018 primarily related to deferred tax rate changes and a one-time transition tax assessed on foreign cash and unremitted earnings. This adjustment included an expense of $128 million related to the one-time transition tax, a benefit of $139 million related to the tax deferred rate change and other tax expense of $13 million. The one-time transition tax and deferred rate change associated with the Tax Act are discussed in greater detail below. During 2019, Ashland completed its internal accounting assessment for the tax effects of enactment of the Tax Act and recorded adjustments to provisional amounts previously recorded. Ashland’s final assessment resulted in net unfavorable tax adjustments of $29 million during the twelve months ended September 30, 2019. These adjustments primarily related to the one-time transition tax assessed on foreign cash and unremitted earnings. There could be additional guidance issued subsequent to September 30, 2019 that could impact Ashland’s interpretation of the Tax Act and such changes could affect the amounts recorded. The impact, if any, of further transitional tax guidance that may be issued by the U.S. Treasury would be reflected in the Company’s provision for income tax in the period such guidance is effective. Provisional amounts - Deferred 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%. The provisional amount recorded related to the remeasurement of the deferred tax balance was a favorable tax adjustment of $139 million during 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 of $128 million during 2018, which includes the one-time transition tax expense of $187 million, a foreign tax credit benefit of $46 million, a reversal of uncertain tax position benefits of $9 million, state tax expense of $2 million and a benefit for other miscellaneous items of $6 million. Ashland completed its calculation of the total post-1986 E&P for these foreign subsidiaries and recorded an additional unfavorable $29 million adjustment in 2019. 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 management intends to indefinitely reinvest all foreign earnings. Ashland determined that estimating 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. Global Intangible Low-Taxed Income Regarding new Global Intangible Low-Taxed Income (GILTI) tax rules, Ashland has made an accounting policy election to treat taxes due on future GILTI exclusions in U.S. taxable income as a current period expense when incurred. Income Tax Provision A summary of the provision for income taxes related to continuing operations follows. (In millions) 2019 2018 2017 Current Federal $ (2 ) $ 20 $ (26 ) State (7 ) (2 ) (1 ) Foreign 35 74 37 26 92 10 Deferred 20 (100 ) (26 ) Income tax expense (benefit) $ 46 $ (8 ) $ (16 ) Foreign net operating loss carryforwards primarily relate to certain European and Asian Pacific operations and generally may be carried forward. U.S. state net operating loss carryforwards relate to losses within certain states and generally may be carried forward. Temporary differences that give rise to significant deferred tax assets and liabilities as of September 30 are presented in the following table. (In millions) 2019 2018 Deferred tax assets Foreign net operating loss carryforwards (a) $ 36 $ 39 Employee benefit obligations 29 28 Environmental, self-insurance and litigation reserves (net of receivables) 114 119 State net operating loss carryforwards (net of unrecognized tax benefits) (b) 38 48 Compensation accruals 28 31 Credit carryforwards (net of unrecognized tax benefits) (c) 10 10 Other items 38 32 Valuation allowances (d) (83 ) (79 ) Total deferred tax assets 210 228 Deferred tax liabilities Goodwill and other intangibles (e) 243 269 Property, plant and equipment 207 217 Unremitted earnings 1 — Total deferred tax liabilities 451 486 Net deferred tax liability $ (241 ) $ (258 ) (a) Gross net operating loss carryforwards of $133 million will expire in future years beyond 2021 or have no expiration. (b) Apportioned net operating loss carryforwards generated of $0.9 billion will expire in future years as follows: $48 million in 2020, $57 million in 2021 and the remaining balance in other future years. (c) Credit carryforwards consist primarily of foreign tax credits of $4 million expiring in future years beyond 2020, and miscellaneous tax credits that will expire in 2024 or other future years. (d) Valuation allowances primarily relate to certain state and foreign net operating loss carryforwards. (e) The total gross amount of goodwill as of September 30, 2019 expected to be deductible for tax purposes is $8 million. The U.S. and foreign components of income from continuing operations before income taxes and a reconciliation of the statutory federal income tax with the provision for income taxes follow. The foreign components of income from continuing operations disclosed in the following table exclude any allocations of certain corporate expenses incurred in the U.S. (In millions) 2019 2018 2017 Income (loss) from continuing operations before income taxes United States $ (76 ) $ (214 ) $ (433 ) Foreign 146 225 237 Income (loss) from continuing operations before income taxes $ 70 $ 11 $ (196 ) Income taxes computed at U.S. statutory rate (a) $ 15 $ 3 $ (69 ) Increase (decrease) in amount computed resulting from Tax reform (b) 29 44 — Uncertain tax positions 10 (13 ) 12 Foreign dividends, deemed inclusions and other restructuring (c) 11 48 125 Foreign tax credits (17 ) (54 ) (29 ) Valuation allowance changes (d) 14 (2 ) (3 ) Research and development credits (6 ) (5 ) (6 ) State taxes (e) (5 ) (3 ) (16 ) International rate differential (30 ) (50 ) (57 ) Other items (f) 25 24 27 Income tax expense (benefit) $ 46 $ (8 ) $ (16 ) (a) The domestic tax rates are 35% (b) 2019 includes an expense of $29 million related to a return to provision adjustment for transition tax. 2018 includes expense of $187 million related to the one-time transition tax, a benefit of $139 million related to the deferred rate change and a benefit of $4 million related to tax reform in a foreign jurisdiction. Foreign tax credits of $46 million related to the transition tax were included within the foreign tax credits caption. Other items related to the transition tax or other U.S. tax reform offset to immaterial amounts within the state taxes, uncertain tax positions and other captions and net to zero in the aggregate. In summary, total U.S. tax reform expense was $2 million related to transition tax expense of $187 million, a deferred rate change benefit of $139 million and a foreign tax credit benefit of $46 million. Ashland completed its calculation of the total post-1986 E&P for these foreign subsidiaries and recorded an additional unfavorable $29 million adjustment in 2019. (c) 2018 includes a gain recognition of $6 million, deemed inclusions of $13 million and tax restructuring costs of $23 million. (d) 2019 includes $5 million related to state tax NOL’s and $9 million related to a foreign jurisdiction. 2018 includes a $5 million benefit for the release of a foreign tax credit valuation allowance; 2017 includes $25 million of benefit for the release of a foreign tax credit valuation allowance and $22 million of expense for state, foreign and domestic federal deferred tax asset valuation allowances net of a NOL write-off offset. (e) 2018 includes a $27 million tax benefit for a valuation reserve release against state net operating losses and $26 million of tax expense for state tax rate changes; 2017 includes $6 million of benefit for state tax rate changes primarily related to the final distribution of Valvoline. (f) 2019 includes $19 million primarily related to GILTI permanent adjustments. The 2019 effective tax rate was impacted by jurisdictional income mix, restructuring activities, and the impact of U.S. tax reform. The 2018 effective tax rate was impacted by jurisdictional income mix and restructuring activities, while U.S. tax reform and other items netted together to have an insignificant tax impact. The 2017 effective tax rate was impacted by jurisdictional income mix, tax expense related to deemed dividend inclusions and a tax benefit for the reversal of a valuation allowance related to the utilization of foreign tax credits. Unrecognized tax benefits U.S. GAAP prescribes a recognition threshold and measurement attribute for the accounting and financial statement disclosure of tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step requires Ashland to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. The second step requires Ashland to recognize in the financial statements each tax position that meets the more likely than not criteria, measured at the amount of benefit that has a greater than 50% likelihood of being realized. Ashland had $165 million and $164 million of unrecognized tax benefits at September 30, 2019 and 2018, respectively. As of September 30, 2019, the total amount of unrecognized tax benefits that, if recognized, would affect the tax rate for continuing and discontinued operations was $155 million. The remaining unrecognized tax benefits relate to tax positions for which ultimate deductibility is highly certain but for which there is uncertainty as to the timing of such deductibility. Recognition of these tax benefits would not have an impact on the effective tax rate. Ashland recognizes interest and penalties related to uncertain tax positions as a component of income tax expense (benefit) in the Statements of Consolidated Comprehensive Income. Such interest and penalties totaled a $5 million expense in 2019, $1 million benefit in 2018 and $3 million expense in 2017. Ashland had $26 million and $25 million in interest and penalties related to unrecognized tax benefits accrued as of September 30, 2019 and 2018, respectively. Changes in unrecognized tax benefits were as follows: (In millions) Balance at September 30, 2017 (a) $ 194 Increases related to positions taken on items from prior years 5 Decreases related to positions taken on items from prior years (40 ) Increases related to positions taken in the current year 14 Lapse of statute of limitations (5 ) Settlement of uncertain tax positions with tax authorities (4 ) Balance at September 30, 2018 (a) 164 Increases related to positions taken on items from prior years 1 Decreases related to positions taken on items from prior years (5 ) Increases related to positions taken in the current year 21 Lapse of statute of limitations (10 ) Disposition of Composites and Marl facility (6 ) Balance at September 30, 2019 $ 165 (a) Ashland has indemnity receivables from Valvoline and Pharmachem for $32 million and $39 million of the gross unrecognized tax benefits at September 30, 2019 and 2018, respectively. From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount of accrual for uncertain tax positions of between $1 million and $2 million for continuing operations. For the remaining balance as of September 30, 2019, it is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions or the expiration of applicable statute of limitations; however, Ashland is not able to estimate the impact of these items at this time. Ashland or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Foreign taxing jurisdictions significant to Ashland include Brazil, Canada, China, Germany, Mexico, Netherlands, Spain, Switzerland and United Kingdom. Ashland is subject to U.S. federal income tax examinations by tax authorities for periods after September 30, 2013 and U.S. state income tax examinations by tax authorities for periods after September 30, 2010. With respect to countries outside of the United States, with certain exceptions, Ashland’s foreign subsidiaries are subject to income tax audits for years after 2008. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE N – EMPLOYEE BENEFIT PLANS Pension plans Ashland and its subsidiaries have several contributory and noncontributory qualified defined benefit pension plans that generally cover international employees and a small portion of certain U.S. manufacturing union employees. Pension obligations for applicable employees of non-U.S. consolidated subsidiaries are provided for in accordance with local practices and regulations of the respective countries. The majority of these foreign pension plans are closed to new participants while those that remain open relate to areas where jurisdictions require plans to operate within the applicable country. Benefits for those eligible for Ashland’s U.S. pension plans generally are based on employees’ years of service and compensation during the years immediately preceding their retirement. The remaining U.S. plans are still open for enrollment for qualifying union employees within certain manufacturing sites. Other postretirement benefit plans Ashland and its subsidiaries maintain limited health care for certain eligible employees in the U.S. who are retired or disabled. Ashland shares the costs of providing health care coverage with certain eligible retired employees through premiums, deductibles and coinsurance provisions. Ashland funds its share of the costs of the postretirement benefit plans as the benefits are paid. This benefit obligation was significantly reduced due to the transfer of a substantial portion to Valvoline. Postretirement health care plans include a limit on Ashland’s share of costs for recent and future retirees. The assumed pre-65 health care cost increase trend rate as of September 30, 2019 was 6.6% and continues to be reduced to 4.5% in 2037 and thereafter. The assumptions used to project the liability anticipate future cost-sharing changes to the written plans that are consistent with the increase in health care costs. Plan Amendments and Remeasurements During 2019, Ashland settled a non-U.S. plan, which required the plan to be remeasured. This remeasurement resulted in a curtailment gain of $18 million recorded within the other net periodic benefit (costs) caption of the Statements of Consolidated Comprehensive Income. During 2017, Ashland discontinued certain post-employment health and life insurance benefits which resulted in a remeasurement gain of $2 million within the Statements of Consolidated Comprehensive Income. Plan Transfers During August 2019, Ashland transferred a substantial portion of its non-qualified non-U.S. pension plans to INEOS as part of the sale of its Composites business (excluding the Maleic business) and the Marl facility. As of September 30, 2019, the net pension and other postretirement plan liabilities that transferred to INEOS totaled $27 million. The disclosures within this footnote exclude these amounts that were transferred and only relate to plans Ashland currently records within continuing operations. Net periodic benefit costs (income) allocation Consistent with Ashland’s historical accounting policies, service cost for continuing operations is proportionately allocated to each reportable segment, excluding the Unallocated and other segment, while all other costs for continuing operations are recorded within the Unallocated and other segment. The following table summarizes the components of pension and other postretirement benefit costs for continuing operations and the assumptions used to determine net periodic benefit costs (income) for the plans. Pension benefits Other postretirement benefits (In millions) 2019 2018 2017 2019 2018 2017 Net periodic benefit costs (income) Service cost (a) $ 6 $ 9 $ 8 $ 1 $ 1 $ 1 Interest cost (b) 10 10 8 2 1 2 Curtailment, settlement and other (b) (18 ) — — — — — Expected return on plan assets (b) (10 ) (12 ) (12 ) — — — Amortization of prior service credit (b) — — — — — — Actuarial (gain) loss (b) 18 (14 ) 2 (7 ) — 6 $ 6 $ (7 ) $ 6 $ (4 ) $ 2 $ 9 Weighted-average plan assumptions (c) Discount rate for service cost 2.40 % 2.54 % 1.93 % 4.37 % 3.93 % 3.93 % Discount rate for interest cost 3.02 % 2.55 % 2.25 % 3.91 % 3.13 % 2.86 % Rate of compensation increase 2.52 % 2.53 % 2.81 % Expected long-term rate of return on plan assets 3.44 % 3.36 % 3.44 % (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 (costs) caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in 2018. See Note A for additional information. (c) The plan assumptions discussed are a blended weighted-average rate for Ashland’s U.S. and non-U.S. plans. There were no changes in prior service credit recognized in accumulated other comprehensive income during both 2019 and 2018. At September 30, 2019, Ashland expects to recognize less than $1 million of the prior service credit in accumulated other comprehensive income as net periodic benefit cost (income) during the next fiscal year. At September 30, 2019 and 2018, the amounts included in accumulated other comprehensive income are shown in the following table. Pension Postretirement (In millions) 2019 2018 2019 2018 Prior service credit $ 3 $ (4 ) $ — $ — Obligations and funded status Actuarial valuations are performed for the pension and other postretirement benefit plans to determine Ashland’s obligation for each plan. In accordance with U.S. GAAP, Ashland recognizes the unfunded status of the plans as a liability in the Consolidated Balance Sheets. Summaries of the change in benefit obligations, plan assets, funded status of the plans, amounts recognized in the balance sheet, and assumptions used to determine the benefit obligations for 2019 and 2018 are as follows. Other postretirement Pension plans benefit plans (In millions) 2019 2018 2019 2018 Change in benefit obligations Benefit obligations at October 1 $ 404 $ 428 $ 58 $ 62 Service cost 5 8 1 1 Interest cost 10 10 2 1 Participant contributions 1 1 — — Benefits paid (16 ) (14 ) (2 ) (6 ) Actuarial (gain) loss 65 (14 ) (7 ) — Curtailments (18 ) Foreign currency exchange rate changes (18 ) (6 ) — — Other (1 ) (1 ) — — Settlements (27 ) (8 ) — — Benefit obligations at September 30 $ 405 $ 404 $ 52 $ 58 Change in plan assets Value of plan assets at October 1 $ 341 $ 349 $ — $ — Actual return on plan assets 50 10 — — Employer contributions 5 9 — — Participant contributions 1 1 — — Benefits paid (16 ) (14 ) — — Foreign currency exchange rate changes (15 ) (6 ) — — Settlements (27 ) (8 ) — — Other (2 ) — — — Value of plan assets at September 30 $ 337 $ 341 $ — $ — Unfunded status of the plans $ (68 ) $ (63 ) $ (52 ) $ (58 ) Amounts recognized in the balance sheet Noncurrent benefit assets $ 33 $ 35 $ — $ — Current benefit liabilities (3 ) (3 ) (3 ) (4 ) Noncurrent benefit liabilities (98 ) (95 ) (49 ) (54 ) Net amount recognized $ (68 ) $ (63 ) $ (52 ) $ (58 ) Weighted-average plan assumptions Discount rate 1.96 % 2.97 % 3.11 % 4.24 % Rate of compensation increase 2.52 % 2.53 % The accumulated benefit obligation for all pension plans was $400 million at September 30, 2019 and $394 million at September 30, 2018. All Ashland pension plans are either qualified U.S. or non-US plans. Information for pension plans with an accumulated benefit obligation in excess of plan assets follows: (In millions) 2019 2018 Projected benefit obligation $ 207 $ 227 Accumulated benefit obligation 202 217 Fair value of plan assets 106 129 Plan assets The expected long-term rate of return on pension plan assets was 3.44% and 3.36% for 2019 and 2018, respectively. The basis for determining the expected long-term rate of return is a combination of future return assumptions for various asset classes in Ashland’s investment portfolio, historical analysis of previous returns, market indices and a projection of inflation. The following table summarizes the various investment categories that the pension plan assets are invested in and the applicable fair value hierarchy that the financial instruments are classified within these investment categories as of September 30, 2019. For additional information and a detailed description of each level within the fair value hierarchy, see Note G. Quoted prices in active Significant markets for other Significant identical observable unobservable Total fair assets inputs inputs (In millions) value Level 1 Level 2 Level 3 Cash and cash equivalents $ 5 $ 5 $ — $ — U.S. Government securities 29 — 29 — Non-U.S. Government securities 73 — 73 — Corporate debt instruments 145 — 145 — Listed real assets 11 — 11 — Asset-backed securities 22 — 22 — Corporate stocks 29 — 29 — Insurance contracts 23 — 23 — Total assets at fair value $ 337 $ 5 $ 332 $ — The following table summarizes the various investment categories that the pension plan assets are invested in and the applicable fair value hierarchy that the financial instruments are classified within these investment categories as of September 30, 2018. Quoted prices in active Significant markets for other Significant identical observable unobservable Total fair assets inputs inputs (In millions) value Level 1 Level 2 Level 3 Cash and cash equivalents $ 6 $ 6 $ — $ — U.S. Government securities 19 — 19 $ — Non-U.S. Government securities 56 — 56 — Corporate debt instruments 147 — 147 — Listed real assets 10 — 10 — Asset-backed securities 22 — 22 — Corporate stocks 31 — 31 — Insurance contracts 50 — 50 — Total assets at fair value $ 341 $ 6 $ 335 $ — Ashland’s pension plan holds a variety of investments designed to diversify risk. Investments classified as a Level 1 fair value measure principally represent marketable securities priced in active markets. Cash and cash equivalents and public equity and debt securities are well diversified and invested in U.S. and international small-to-large companies across various asset managers and styles. Investments classified as a Level 2 fair value measure principally represents fixed-income securities and other investment grade corporate bonds and debt obligations. Investments and Strategy In developing an investment strategy for its defined benefit plans, Ashland has considered the following factors: the nature of the plans’ liabilities, the allocation of liabilities between active, deferred and retired members, the funded status of the plans, the applicable investment horizon, the respective size of the plans and historical and expected capital market returns. Ashland’s U.S. pension plan assets are managed by outside investment managers, which are monitored against investment return benchmarks and Ashland’s established investment strategy. Investment managers are selected based on an analysis of, among other things, their investment process, historical investment results, frequency of management turnover, cost structure and assets under management. Assets are periodically reallocated between investment managers to maintain an appropriate asset mix and diversification of investments and to optimize returns. The current target asset allocation for the U.S. plans is 49% fixed income securities, 38% equity securities and 13% other securities. Fixed income securities primarily includes cash and cash equivalents, long duration corporate debt obligations and U.S. government debt obligations. In addition, Ashland’s non-U.S. plan fixed income securities include insurance contracts. Equity securities are comprised solely of traditional public equity investments. Investment managers may employ a limited use of derivatives to gain efficient exposure to markets. Ashland’s investment strategy and management practices relative to plan assets of non-U.S. plans generally are consistent with those for U.S. plans, except in those countries where investment of plan assets is dictated by applicable regulations. Although the investment allocation may vary based on funding percentages and whether plans are still accruing additional liabilities, the weighted-average asset allocations for Ashland’s U.S. and non-U.S. plans at September 30, 2019 and 2018 by asset category follow. Actual at September 30 (In millions) Target 2019 2018 Plan assets allocation Equity securities 5 - 45% 9 % 9 % Fixed income securities 55 - 95% 88 % 88 % Other 0 - 5% 3 % 3 % 100 % 100 % Cash flows During 2019 and 2018, Ashland contributed $1 million to its U.S. pension plans each year and $4 million and $8 million, respectively, to its non-U.S. pension plans. Ashland expects to contribute approximately $1 million to its U.S. pension plans and $5 million to its non-U.S. pension plans during 2020. The following benefit payments, which reflect future service expectations, are projected to be paid from plan assets in each of the next five years and in aggregate for five years thereafter. Other Pension postretirement (In millions) benefits benefits 2020 $ 18 $ 3 2021 18 3 2022 18 3 2023 19 4 2024 19 4 2025 - 2029 99 18 Other plans Ashland sponsors savings plans to assist eligible employees in providing for retirement or other future needs. Under such plans, company contributions amounted to $26 million in 2019, $25 million in 2018 and $26 million in 2017. Ashland also sponsors various other employee benefit plans, some of which are required by different countries. The total noncurrent liabilities associated with these plans were $3 million and $7 million as of September 30, 2019 and 2018, respectively. |
Litigation, Claims and Continge
Litigation, Claims and Contingencies | 12 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Litigation, Claims and Contingencies | NOTE O – LITIGATION, CLAIMS AND CONTINGENCIES 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 consistent with 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, a former subsidiary. 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. (In thousands) 2019 2018 2017 Open claims - beginning of year 53 54 57 New claims filed 2 2 2 Claims settled (1 ) (1 ) (1 ) Claims dismissed (1 ) (2 ) (4 ) Open claims - end of year 53 53 54 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 update completed during 2019, it was determined that the liability for Ashland asbestos-related claims should be increased by $1 million. Total reserves for asbestos claims were $352 million at September 30, 2019 compared to $380 million at September 30, 2018. A progression of activity in the asbestos reserve is presented in the following table. (In millions) 2019 2018 2017 Asbestos reserve - beginning of year $ 380 $ 419 $ 415 Reserve adjustment 1 (8 ) 36 Amounts paid (29 ) (31 ) (32 ) Asbestos reserve - end of year (a) $ 352 $ 380 $ 419 (a) Included $28 million and $30 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. 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 September 30, 2019, Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers amounted to $123 million (excluding the Hercules receivable for asbestos claims). Receivables from insurers amounted to $140 million at September 30, 2018. During 2019, 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 decrease in the receivable for probable insurance recoveries. A progression of activity in the Ashland insurance receivable is presented in the following table. (In millions) 2019 2018 2017 Insurance receivable - beginning of year $ 140 $ 155 $ 151 Receivable adjustment (5 ) (5 ) 15 Insurance settlement — — (5 ) Amounts collected (12 ) (10 ) (6 ) Insurance receivable - end of year (a) $ 123 $ 140 $ 155 (a) Included $15 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. (In thousands) 2019 2018 2017 Open claims - beginning of year 13 12 15 New claims filed 1 2 1 Claims dismissed (1 ) (1 ) (4 ) Open claims - end of year 13 13 12 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 2019, it was determined that the liability for Hercules asbestos-related claims should be decreased by $10 million. Total reserves for asbestos claims were $252 million at September 30, 2019 compared to $282 million at September 30, 2018. A progression of activity in the asbestos reserve is presented in the following table. (In millions) 2019 2018 2017 Asbestos reserve - beginning of year $ 282 $ 323 $ 321 Reserve adjustments (10 ) (19 ) 16 Amounts paid (20 ) (22 ) (14 ) Asbestos reserve - end of year (a) $ 252 $ 282 $ 323 (a) Included $21 million and $20 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. 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 September 30, 2019 and 2018, the receivables from insurers amounted to $49 million and $54 million, respectively. During 2019, 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 decrease in the receivable for probable insurance recoveries. A progression of activity in the Hercules insurance receivable is presented in the following table. (In millions) 2019 2018 2017 Insurance receivable - beginning of year $ 54 $ 68 $ 63 Receivable adjustment (5 ) (14 ) 5 Insurance receivable - end of year $ 49 $ 54 $ 68 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. In light of 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 $ 550 million for the Ashland asbestos-related litigation (current reserve of $ 352 million) and approximately $ 390 million for the Hercules asbestos-related litigation (current reserve of $ 252 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 September 30, 2019, such locations included 80 waste treatment or disposal sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 113 current and former operating facilities and about 1,225 service station properties, of which 29 are being actively remediated. Ashland’s reserves for environmental remediation and related environmental litigation amounted to $186 million at September 30, 2019 compared to $187 million at September 30, 2018, of which $143 million at September 30, 2019 and $147 million at September 30, 2018 were classified in other noncurrent liabilities on the Consolidated Balance Sheets. The remaining reserves were classified in accrued expenses and other liabilities on the Consolidated Balance Sheets. The following table provides a reconciliation of the changes in the environmental remediation reserves during 2019 and 2018. (In millions) 2019 2018 Environmental remediation reserve - beginning of year $ 187 $ 163 Disbursements (32 ) (37 ) Revised obligation estimates and accretion 31 61 Environmental remediation reserve - end of year $ 186 $ 187 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 September 30, 2019 and 2018, Ashland’s recorded receivable for these probable insurance recoveries was $13 million and $12 million, respectively, of which $12 million and $11 million, respectively, were classified in other noncurrent assets in the Consolidated Balance Sheets. During 2019, Ashland recognized $30 million of expense for certain environmental liabilities related to normal ongoing remediation cost estimate updates for sites, which is consistent with Ashland’s historical environmental accounting policy. During 2018, Ashland recognized $60 million of expense for certain environmental liabilities. Of that amount, $18 million related to one site where, after significant research and analysis as part of Ashland’s normal process and protocol for these matters, the estimated cost for the ongoing remediation was finalized. As such, Ashland recorded the expense for this remediation project during 2018 since a reasonable estimate that is in accordance with U.S. GAAP provisions could be determined. The remaining charges in 2018 related to normal ongoing remediation cost estimate updates for sites, which is consistent with Ashland’s historical environmental accounting policy. 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 years ended September 30, 2019, 2018 and 2017. (In millions) 2019 2018 2017 Environmental expense $ 30 $ 60 $ 17 Accretion 1 1 1 Legal expense 6 6 8 Total expense 37 67 26 Insurance receivable (3 ) (2 ) (2 ) Total expense, net of receivable activity (a) $ 34 $ 65 $ 24 (a) Net expense of $7 million, $5 million and $3 million for the fiscal years ended September 30, 2019, 2018 and 2017, respectively, related 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 $440 million. The largest reserve for any site is 14% 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 September 30, 2019 and 2018. 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 September 30, 2019 and 2018. |
Equity Items
Equity Items | 12 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Equity Items | NOTE P – EQUITY ITEMS Stock repurchase programs During March 2018, Ashland’s Board of Directors approved a new $1 billion 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. As of September 30, 2019, $800 million remained available for repurchase under the 2018 stock repurchase program. Stock repurchase program agreements In May 2019, under the 2018 stock repurchase program, Ashland announced that it entered into an accelerated share repurchase agreement (2019 ASR Agreement). Under the 2019 ASR Agreement, Ashland paid an initial purchase price of $200 million and received an initial delivery of 2.2 million shares of common stock during May 2019. The bank exercised its early termination option under the 2019 ASR Agreement in August 2019, and an additional 400 thousand shares were repurchased, bringing the total shares repurchased upon settlement to 2.6 million. This was the first stock repurchase under the 2018 stock repurchase program. Stockholder dividends Ashland paid dividends per common share of $1.05, $0.95 and $1.23 during 2019, 2018 and 2017, respectively. In May 2019, the Board of Directors of Ashland announced a quarterly cash dividend of 27.5 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 25.0 cents per share. This dividend was paid in the third and fourth quarters of fiscal 2019. In May 2018, the Board of Directors of Ashland announced a quarterly cash dividend of 25 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 22.5 cents per share. This dividend was paid in the third and fourth quarters of fiscal 2018. During May 2017, subsequent to the final distribution of Valvoline Inc.’s common stock, the Board of Directors announced a quarterly cash dividend of 22.5 cents per share to eligible shareholders 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 paid during the first and second quarters of fiscal 2017. Shares reserved for issuance At September 30, 2019, 14.8 million common shares were reserved for issuance under stock incentive and deferred compensation plans. Other comprehensive income (loss) Components of other comprehensive income (loss) recorded in the Statements of Consolidated Comprehensive Income (Loss) are presented in the following table, before tax and net of tax effects. Tax Before (expense) Net of (In millions) tax benefit tax Year ended September 30, 2019 Other comprehensive income (loss) Unrealized translation loss $ (80 ) $ — $ (80 ) Pension and postretirement obligation adjustment (7 ) 2 (5 ) Total other comprehensive loss $ (87 ) $ 2 $ (85 ) Year ended September 30, 2018 Other comprehensive income (loss) Unrealized translation loss $ (82 ) $ — $ (82 ) Net change in investment securities: Unrealized gain on investment securities (a) 24 (7 ) 17 Reclassification adjustment for gains included in net income (6 ) 2 (4 ) Total other comprehensive loss $ (64 ) $ (5 ) $ (69 ) Year ended September 30, 2017 Other comprehensive income (loss) Unrealized translation loss $ 80 $ 1 $ 81 Amortization of unrecognized prior service credits included in net income (7 ) 3 (4 ) Net change in investment securities: Unrealized gain on investment securities (a) 24 (8 ) 16 Reclassification adjustment for gains included in net income (2 ) 1 (1 ) Total other comprehensive income $ 95 $ (3 ) $ 92 (a) Due to the adoption of new accounting guidance in fiscal 2019, unrealized gains and losses on Ashland’s equity securities are now recognized in net income rather than other comprehensive income. See Notes A and G for more information. Summary of Stockholders’ Equity A reconciliation of changes in stockholders’ equity are as follows: (In millions) 2019 2018 2017 Common stock and paid in capital Balance, beginning of period $ 947 $ 932 $ 924 Common shares issued under stock incentive and other plans (a) 10 15 8 Common shares purchased under repurchase program (b) (200 ) — — Balance, end of period 757 947 932 Retained earnings Balance, beginning of period 2,750 2,696 2,704 Adoption of new accounting pronouncements (c) 34 — — Net income 505 114 1 Regular dividends (65 ) (60 ) (77 ) Distribution of Valvoline Inc. (d) — — 68 Balance, end of period 3,224 2,750 2,696 Accumulated other comprehensive income (loss) Balance, beginning of period (291 ) (222 ) (281 ) Adoption of new accounting pronouncements (c) (34 ) — — Unrealized translation gain (loss) (80 ) (82 ) 81 Distribution of Valvoline Inc. (d) — — (33 ) Net change in investment securities — 13 15 Pension and postretirement obligation adjustment (5 ) — (4 ) Balance, end of period (410 ) (291 ) (222 ) Noncontrolling interest Balance, beginning of period — — (182 ) Net income — — 27 Distribution of Valvoline Inc. (d) — — 152 Other — — 7 Distributions to noncontrolling interest — — (4 ) Balance, end of period — — — Total stockholders' equity $ 3,571 $ 3,406 $ 3,406 Cash dividends declared per common share $ 1.05 $ 0.95 $ 1.23 (a) Common shares issued were 336,188, 360,468 and 42,861 for 2019, 2018 and 2017, respectively. (b) Common shares repurchased were 2,637,054 for 2019. (c) Represents the cumulative-effect adjustment related to the adoption of the new guidance related to the accounting for equity securities and tax effects of intercompany transfers during fiscal 2019. See Note A for more information. (d) See Note B for discussion of the noncontrolling interest and the initial public offering and distribution of Valvoline Inc. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Incentive Plans | NOTE Q – STOCK INCENTIVE PLANS Ashland has stock incentive plans under which key employees or directors are granted stock appreciation rights (SARs), performance share 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 and accounts for forfeitures when they occur across all stock-based awards. The components of Ashland’s pretax stock-based awards (net of forfeitures) and associated income tax benefits are as follows: (In millions) 2019 (a) 2018 (b) 2017 (c) SARs $ 7 $ 7 $ 5 Nonvested stock awards 18 24 15 Performance share awards 1 13 8 $ 26 $ 44 $ 28 Income tax benefit $ 6 $ 14 $ 11 (a) The year ended September 30, 2019 included $5 million and zero of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. (b) The year ended September 30, 2018 included $9 million and $8 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. (c) The year ended September 30, 2017 included $5 million and $3 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. Conversion of Equity Awards Outstanding from Valvoline Distribution On May 12, 2017, the date of the final distribution of Valvoline common stock, certain of Ashland's outstanding equity awards held by Valvoline Inc. employees were converted to equivalent equity awards, as applicable, with respect to Valvoline Inc.’s common stock. These modified awards otherwise retained substantially the same terms and conditions, including term and vesting provisions, as the existing Ashland equity awards had at the time of conversion. Ashland transferred all Valvoline awards and will not incur any future compensation cost related to the conversion of Ashland equity awards held by Valvoline Inc. employees and directors in connection with the final Valvoline Inc. distribution. Additionally, in connection with this transaction, Ashland proportionately adjusted the number and exercise prices of SARs, nonvested stock awards and performance awards granted to Ashland employees and directors that were outstanding at the time of this transaction to maintain the approximate aggregate intrinsic value of such awards. To calculate the exchange ratio for all outstanding stock based compensation awards, Ashland utilized a 10-day volume weighted average stock price (VWAP), using the 10 consecutive trading days following the distribution. The ratio used to adjust these awards differs slightly from the exchange ratio that would have resulted had the ratio been calculated based on Ashland's stock price immediately following the transaction. On the date of the final distribution, and in accordance with U.S. GAAP, Ashland reassessed all outstanding equity awards to determine if additional compensation expense had been incurred due to the transaction causing a modification to the outstanding equity awards. The additional stock compensation expense as a result of this modification and assessment performed during 2017 for all outstanding equity awards was not significant. Stock Appreciation Rights 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 after the date of grant. 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. The following table illustrates the weighted-average of key assumptions used within the Black-Scholes option-pricing model. The risk-free interest rate assumption was based on the U.S. Treasury yield curve in effect at the time of the grant for the expected term of the instrument. The dividend yield reflects the assumption that the current dividend payout will continue with no anticipated increases. The volatility assumption was calculated by utilizing peer companies because historical volatility was not considered reflective of future volatility as a result of the Valvoline IPO discussed in Note B. The expected life is based on the mid-point of the weighted average time to vest and contractual term. (In millions except per share data) 2019 2018 2017 Weighted-average fair value per share of SARs granted (a) $ 21.95 $ 19.62 $ 21.25 Assumptions (weighted-average) Risk-free interest rate 3.0 % 2.1 % 1.8 % Expected dividend yield 1.2 % 1.3 % 1.4 % Expected volatility 25.9 % 31.8 % 22.8 % Expected life (in years) 6 6 5 (a) The weighted-average fair values per share are as of the grant date and have not been adjusted for the Valvoline separation if the SARs were granted prior to the final distribution on May 12, 2017. A progression of activity and various other information relative to SARs and previously issued and vested stock options is presented in the following table. 2019 2018 2017 Number Weighted- Number Weighted- Number Weighted- of average of average of average common exercise price common exercise price common exercise price (In thousands except per share data) shares per share shares per share shares per share Outstanding - beginning of year 2,263 $ 53.21 2,261 $ 47.98 1,511 $ 83.64 Granted 299 82.34 470 67.16 422 109.15 Exercised (380 ) 46.15 (421 ) 40.10 (330 ) 70.55 Forfeitures and expirations (80 ) 71.38 (47 ) 58.73 (70 ) 105.98 Transfer to Valvoline Inc. (a) — — — — (352 ) 94.28 Conversion adjustment (b) — — — — 1,080 — Outstanding - end of year (c) 2,102 57.94 2,263 53.21 2,261 47.98 Exercisable - end of year 1,579 53.04 1,472 47.76 1,456 42.10 (a) Represents the transfer of SARs held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. ( b ) The number and exercise prices of SARs outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. (c) Exercise prices per share for SARs outstanding at September 30, 2019 ranged from $20.02 to $29.5 for 172 thousand shares, from $37.37 to $47.63 for 350 thousand shares, from $57.96 to $59.95 for 871 thousand shares, and from $62.33 to $82.34 for 709 thousand shares. The weighted-average remaining contractual life of outstanding SARs and stock options was 6.2 years and exercisable SARs and stock options was 5.4 years. The total intrinsic value of SARs exercised was $12 million in 2019, $15 million in 2018 and $14 million in 2017. The actual tax benefit realized from the exercised SARs was $3 million in 2019, $5 million in 2018 and $2 million in 2017. The total grant date fair value of SARs that vested during 2019, 2018 and 2017 was $8 million, $4 million and $8 million, respectively. As of September 30, 2019, there was $6 million of total unrecognized compensation costs related to SARs. That cost is expected to be recognized over a weighted-average period of 1.6 years. As of September 30, 2019, the aggregate intrinsic value of outstanding SARs was $42 million and exercisable SARs was $38 million. 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 A progression of activity and various other information relative to nonvested stock awards is presented in the following table. 2019 2018 2017 Number Weighted- Number Weighted- Number Weighted- of average of average of average common grant date common grant date common grant date (In thousands except per share data) shares fair value shares fair value shares fair value Nonvested - beginning of year 291 $ 66.98 219 $ 59.16 293 $ 109.12 Granted 96 81.31 192 71.36 92 105.10 Vested (151 ) 66.24 (107 ) 59.46 (189 ) 99.69 Forfeitures (21 ) 73.63 (13 ) 62.22 (24 ) 104.19 Transfer to Valvoline Inc. (a) — — — — (71 ) 111.97 Conversion adjustment (b) — — — — 118 — Nonvested - end of year 215 73.26 291 66.98 219 59.16 (a) Represents the transfer of nonvested stock awards held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. ( b ) The number and exercise prices of nonvested stock awards outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. The total fair value of nonvested stock awards that vested during 2019, 2018 and 2017 was $10 million, $6 million and $19 million, respectively. As of September 30, 2019, there was $6 million of total unrecognized compensation costs related to nonvested stock awards. That cost is expected to be recognized over a weighted-average period of 1.9 years. Executive performance incentive and retention program During 2016, certain executives were granted 260 thousand performance-based restricted shares of Ashland in order to provide an incentive to remain employed in the period after the full separation of Ashland and Valvoline. At September 30, 2019, total nonvested shares outstanding were 30 thousand shares, which include 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 expense of $3 million, $6 million and $3 million during 2019, 2018 and 2017, respectively. As of September 30, 2019, there was less than $1 million of total unrecognized compensation costs related to these awards. Cash-settled nonvested stock awards Certain nonvested stock awards are granted to employees and are settled in cash upon vesting. As of September 30, 2019, 95 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 $5 million, $9 million, and $5 million during 2019, 2018 and 2017, respectively. Performance awards Ashland sponsors a long-term incentive plan that awards performance shares/units to certain key employees that are tied to Ashland’s overall financial performance relative to the financial performance of selected industry peer groups and/or internal targets. Awards are granted annually, with each award covering a three-year For awards granted in 2019, 2018 and 2017, upon vesting, each performance unit will be settled in stock or cash based on the fair market value of Ashland common stock. The awards granted in 2019 and 2018 are settled in stock and recorded as a component of stockholders’ equity while the awards granted in 2017 are settled in cash and recorded within the other liabilities caption in the Consolidated Balance Sheets. For these awards, the performance measure used to determine the actual number of performance 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 units issuable upon vesting can be potentially increased or decreased based on a total shareholder return (TSR) performance modifier relative to peers for Ashland. The following table shows the performance shares/units granted for all plans that award Ashland Common Stock or cash. Weighted- Target average shares/units fair value per (In thousands) Vesting period granted (a) share/unit (a) Fiscal Year 2019 October 1, 2018 - September 30, 2021 78 $ 84.93 Fiscal Year 2018 October 1, 2017 - September 30, 2020 101 $ 68.93 Fiscal Year 2017 October 1, 2016 - September 30, 2019 56 $ 103.72 (a) At the end of the performance period, the actual number of shares/units awarded can range from zero to 200% of the target shares/units granted, which is assumed to be 100%. Both the shares granted and weighted-average fair value per share/unit are as of the grant date and have not been adjusted for the Valvoline separation that occurred during 2017. For awards granted in 2016, the fair value of the ROI portion of the performance share awards is equal to the fair market value of Ashland’s Common Stock on the date of the grant discounted for the dividends forgone during the vesting period of the three-year The fair values of the TSR portion of the performance share awards and TSR modifier of the performance unit awards are calculated using a Monte Carlo simulation valuation model using key assumptions included in the following table. Compensation cost is recognized over the requisite service period regardless of whether the market condition is satisfied. 2019 2018 2017 Risk-free interest rate 2.9 1.6% - 1.8% 1.3% - 1.4% Expected dividend yield 1.3% 1.4% 1.4% Expected life (in years) 3 3 3 Expected volatility 24.6% 25.0% 25.1% The following table shows changes in nonvested performance shares/units for all plans that award Ashland Common Stock or cash. 2019 2018 2017 Weighted- Weighted- Weighted- average average average Shares/ grant date Shares/ grant date Shares/ grant date (In thousands except per share data) Units fair value Units fair value Units fair value Nonvested - beginning of year 260 $ 64.55 268 $ 63.00 199 $ 106.91 Granted (a) 78 84.93 101 68.93 71 99.86 Vested (a) (68 ) 61.67 (104 ) 65.53 (69 ) 85.86 Forfeitures (b) (10 ) 65.16 (5 ) 66.24 (54 ) 75.52 Transfer to Valvoline Inc. (c) — — — — (21 ) 115.68 Conversion adjustment (d) — — — — 142 — Nonvested - end of year 260 76.59 260 64.55 268 63.00 (a) 2017 includes 15 thousand additional shares from the fiscal year 2014 since a portion of the payouts for this plan was in excess of the initial 100% target. ( b ) During 2017, Ashland determined that zero percent of the TSR portion of the fiscal year 2016 plan will be paid out upon vesting which resulted in the forfeiture of 35 thousand shares. (c) Represents the transfer of performance shares from the fiscal year 2016 plans held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. (d) The number and exercise prices of performance shares/units outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. As of September 30, 2019, there was $3 million of total unrecognized compensation costs related to nonvested performance share/unit awards. That cost is expected to be recognized over a weighted-average period of approximately 1.5 years. |
Revenue
Revenue | 12 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | NOTE R – REVENUE Effective October 1, 2018, Ashland adopted 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). As a result of the adoption, there was no material impact to Ashland’s Consolidated Financial Statements. The additional disclosures that Ashland is required to disclose on an annual basis are contained within this Note R. Revenue recognition Ashland’s revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods or providing services and is recognized when performance obligations are satisfied under the terms of contracts with customers. Ashland generally utilizes standardized language for the terms of contracts, unless a separate agreement has been entered into with a customer that supersedes the standard language. A performance obligation is deemed to be satisfied by Ashland when control of the product or service is transferred to the customer. The transaction price of a contract, or the amount Ashland expects to receive upon satisfaction of all performance obligations, is determined by reference to the contract’s terms and includes adjustments, if applicable, for any variable consideration, such as volume discounts, rebates, refunds and rights to return. Where a contract contains more than one distinct performance obligation, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation, although these situations do not occur frequently and are generally not included within Ashland’s contracts. Any unsatisfied performance obligations were not material. Standalone selling prices are based on prices Ashland charges to customers, which in some cases are based on established market prices. Ashland generally collects the cash from its customers within 60 days of the product delivery date. Sales and other similar taxes collected from customers on behalf of third parties are excluded from the contract price. All of Ashland’s revenue is derived from contracts with customers, and nearly all contracts with customers contain one performance obligation for the transfer of goods where such performance obligation is satisfied at a point in time. Control of a product is deemed to be transferred to the customer generally upon shipment or delivery. Costs for shipping and handling activities, whether performed before or after the customer obtains control of the goods, are accounted for as fulfillment costs when not reimbursed. Costs incurred to obtain contracts with customers have historically not been significant and are expensed immediately as the period of performance is generally one year or less. Ashland records bad debt expense in specific situations when it is determined that the customer is unable to meet its financial obligation. Practical expedients Upon adoption, Ashland utilized the following applicable practical expedients, as permitted by ASC 606, Revenue from Contracts with Customers: • Sales and other similar taxes collected from customers on behalf of third parties are excluded from the contract price; • Costs for shipping and handling activities, whether performed before or after the customer obtains control of the goods, are accounted for as fulfillment costs when not reimbursed; and • Costs incurred to obtain contracts with customers are expensed immediately when the amortization period is one year or less. Trade receivables Trade receivables are defined as receivables arising from contracts with customers and are recorded within the accounts receivable caption within the Condensed Consolidated Balance Sheets. Ashland’s trade receivables were $435 million and $482 million as of September 30, 2019 and September 30, 2018, respectively. Disaggregation of revenue Ashland disaggregates its revenue from contracts with customers by segment, geographical region and product category, as Ashland believes these categories best depict how management reviews the financial performance of its operations for the twelve months ended September 30, 2019, 2018 and 2017. Ashland includes only U.S. and Canada in its North America designation. See the following tables for details: Sales by geography (In millions) Specialty Ingredients Intermediates and Solvents Geography 2019 2018 2017 2019 2018 2017 Twelve Months Ended North America $ 945 $ 988 $ 883 $ 58 $ 58 $ 34 Europe 779 806 683 23 24 21 Asia Pacific 458 454 432 25 31 32 Latin America & other 200 222 218 5 6 6 $ 2,382 $ 2,470 $ 2,216 $ 111 $ 119 $ 93 Sales by product category (In millions) 2019 2018 2017 Twelve Months Ended Specialty Ingredients Cellulosics $ 839 $ 837 $ 794 Poly-vinyl pyrrolidones 413 422 402 Adhesives 345 351 336 Actives 156 153 128 Vinyl ethers 106 139 139 Pharmachem 231 248 104 Other (a) 292 320 313 $ 2,382 $ 2,470 $ 2,216 Intermediates and Solvents Derivatives $ 92 $ 99 $ 77 Butanediol 19 20 16 $ 111 $ 119 $ 93 Total $ 2,493 $ 2,589 $ 2,309 (a) Other includes no product category in excess of 10% of sales. |
Reportable Segment Information
Reportable Segment Information | 12 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | NOTE S – 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 Ashland’s reportable segments were impacted in the current year due to the disposal of the Composites reportable segment and Intermediates and Solvents Marl facility and reclassification to discontinued operations. As a result, Ashland's operations are managed by the chief operating decision maker within the following two reportable segments: Specialty Ingredients and Intermediates and Solvents. Reportable segment business descriptions Specialty Ingredients offers industry-leading products, technologies and resources for solving formulation and product-performance challenges. Using 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 offers comprehensive and innovative solutions for consumer and industrial applications. Key customers include pharmaceutical companies; makers of personal care products, food and beverages manufacturers; makers of nutraceuticals and supplements; manufacturers of paint, coatings and construction materials; packaging and converting; and oilfield service companies. Intermediates and Solvents is a leading producer of 1,4 butanediol and related derivatives, including n-methylpyrrolidone. These products are used as chemical intermediates in the production of engineering polymers and polyurethanes, and as specialty process solvents in a wide array of applications including electronics, pharmaceuticals, water filtration membranes and more. Butanediol is also supplied to Ashland’s Specialty Ingredients business for use as a raw material at cost. On August 30, 2019, Ashland completed the sale if its Composites segment (excluding the Maleic business) and Intermediates and Solvents Marl facility. As a result, the financial information for Intermediates and Solvents excludes the activity from the Marl facility due to the divestiture and have been restated in prior periods. 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 . 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, including stranded costs, 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. International data Information about Ashland’s domestic and international operations follows. Ashland has no operations in any individual international country or single customer that represented more than 10% of sales in 2019, 2018 or 2017. Sales to external customers Net assets (liabilities) Property, plant and equipment - net (In millions) 2019 2018 2017 2019 2018 2019 2018 United States $ 959 $ 997 $ 880 $ 1,789 $ 1,142 $ 1,231 $ 1,250 International 1,534 1,592 1,429 1,782 2,264 346 396 $ 2,493 $ 2,589 $ 2,309 $ 3,571 $ 3,406 $ 1,577 $ 1,646 Reportable segment results The following tables present various financial information for each reportable segment for the years ended September 30, 2019, 2018 and 2017 and as of September 30, 2019, 2018 and 2017. 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 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 to Unallocated and other. 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. Ashland determined that disclosing sales by specific product was impracticable due to the highly customized and extensive portfolio of products offered to customers and since no one product or a small group of products could be aggregated together to represent a majority of revenue within a reportable segment. As such, see Note S for sales by product category for each reportable segment. The following table presents various financial information for each reportable segment. The operating results of divested divisions and assets during 2019, 2018 and 2017 that did not qualify for discontinued operations accounting treatment are included in the financial information until the date of sale. Ashland Global Holdings Inc. and Consolidated Subsidiaries Reportable Segment Information Years Ended September 30 (In millions) 2019 2018 2017 Sales Specialty Ingredients $ 2,382 $ 2,470 $ 2,216 Intermediates and Solvents 111 119 93 $ 2,493 $ 2,589 $ 2,309 Equity income Specialty Ingredients $ — $ 1 $ — Intermediates and Solvents — — — — 1 — Other income (expense) Specialty Ingredients $ (1 ) $ (5 ) $ (2 ) Intermediates and Solvents — — — Unallocated and other 5 8 5 4 3 3 Equity and other income $ 4 $ 4 $ 3 Operating income (loss) Specialty Ingredients $ 272 $ 314 $ 233 Intermediates and Solvents 16 17 (6 ) Unallocated and other (122 ) (229 ) (178 ) $ 166 $ 102 $ 49 Assets Specialty Ingredients $ 5,705 $ 5,955 $ 6,050 Intermediates and Solvents 185 192 188 Unallocated and other 1,361 2,112 2,380 $ 7,251 $ 8,259 $ 8,618 Depreciation and amortization Specialty Ingredients $ 273 $ 252 $ 243 Intermediates and Solvents 13 14 14 Unallocated and other 3 11 8 $ 289 $ 277 $ 265 Property, plant and equipment - net Specialty Ingredients $ 1,377 $ 1,434 $ 1,470 Intermediates and Solvents 78 83 90 Unallocated and other 122 129 157 $ 1,577 $ 1,646 $ 1,717 Additions to property, plant and equipment Specialty Ingredients $ 137 $ 138 $ 148 Intermediates and Solvents 7 5 5 Unallocated and other 10 14 15 $ 154 $ 157 $ 168 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE T – SUBSEQUENT EVENTS On October 8, 2019, Ashland announced that the Board of Directors elected Guillermo Novo as chairman and CEO of Ashland, effective December 31, 2019. William A. Wulfsohn will continue to serve as chairman and CEO through the end of this calendar year. Costs associated with this transition will be incurred in the first quarter of fiscal 2020. On November 19, 2019, Ashland received notice that it was named as one of seventeen defendants in a lawsuit seeking roughly $100 million in monetary damages related to a plant fire at an Israeli facility. This claim allegedly relates to a product of Ashland’s now divested Composites business. Ashland is currently in the process of retaining outside counsel, reviewing the merits of the claim, and reviewing its contractual rights and obligations under the Stock and Asset Purchase Agreement with respect to this matter. No reserves have been established for this lawsuit at this time. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Principles of consolidation and basis of presentation | Principles of consolidation and basis of presentation On September 20, 2016, Ashland was reincorporated under the laws of the State of Delaware through a tax-free reorganization under a new holding company structure (the Reorganization). As a result of the Reorganization, Ashland Global Holdings Inc. replaced Ashland Inc. as the publicly held corporation and, through its subsidiaries, now conducts all of the operations that historically were conducted by Ashland Inc. Pursuant to the terms of the Reorganization, each outstanding share of Ashland common stock was automatically converted into one share of Ashland Global Holdings Inc. common stock. Following consummation of the Reorganization, (i) Ashland Inc. was converted into Ashland LLC, an indirect, wholly owned subsidiary of Ashland Global Holdings Inc., and (ii) Ashland Global Holdings Inc., as the new holding company, through its subsidiaries, conducts all of the operations conducted by Ashland Inc. immediately prior to the Reorganization. The Consolidated Financial Statements include the accounts of Ashland Global Holdings Inc. and its majority owned subsidiaries and, when applicable, entities for which Ashland has a controlling financial interest or is the primary beneficiary (Ashland). For entities for which Ashland has a controlling financial interest but owns less than 100%, the outside stockholders’ interests are shown as noncontrolling interests. Investments in joint ventures and 20% to 50% owned affiliates where Ashland has the ability to exert significant influence are accounted for under the equity method. The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and U.S. Securities and Exchange Commission (SEC) regulations. All intercompany transactions and balances have been eliminated. 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. 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 distribution of Valvoline represented a strategic shift in Ashland's business and, in accordance with U.S. GAAP, qualified as a discontinued operation. Accordingly, Valvoline's assets, liabilities, operating results and cash flows for all periods presented have been classified as discontinued operations within the Consolidated Financial Statements. See Note B for additional information on the separation of Valvoline Inc. The term Valvoline as used herein, depending on context, refers to either Valvoline Inc. or Valvoline as a previous reportable segment of Ashland. On August 30, 2019, Ashland completed the sale of its Composites business (excluding Ashland’s maleic anhydride business (Maleic business)) and its butanediol facility in Marl, Germany (Marl facility). This disposal group represented a strategic shift in Ashland’s business and in accordance with U.S. GAAP, qualified as a discontinued operation. Accordingly, Composites (including the Maleic business) and the Marl facility assets, liabilities, operating results and cash flows for all periods presented have been classified as discontinued operations within the Consolidated Financial Statements. See Note D for additional information on the Composites business and Marl facility. Subsequent to completing the separation from Valvoline Inc. and the Composites business (including the Maleic business) and Marl facility sale, Ashland's operations are managed within the following two reportable segments: Specialty Ingredients and Intermediates and Solvents. During the periods presented in the Consolidated Financial Statements, Ashland sold certain assets in its portfolio of businesses which, in accordance with U.S. GAAP, were not reflected as discontinued operations. See Notes D and S for additional information on these transactions as well as Ashland’s current reportable segment results. |
Use of estimates, risks and uncertainties | Use of estimates, risks and uncertainties The preparation of Ashland’s 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, environmental remediation, asbestos litigation, long-lived assets (including goodwill and other intangible assets) and income taxes. 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. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand and highly liquid investments maturing within three months after purchase. |
Allowance for doubtful accounts | Allowance for doubtful accounts Ashland records an allowance for doubtful accounts as a best estimate of the amount of probable credit losses for accounts receivable. Ashland reviews this allowance and considers factors such as customer credit, past transaction history with the customer and changes in customer payment terms when determining whether the collection of a receivable is reasonably assured. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. The allowance for doubtful accounts is adjusted when it becomes probable a receivable will not be recovered. |
Inventories | 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 chemicals with a replacement cost of $66 million at September 30, 2019 and $70 million at September 30, 2018 are valued at cost using the last-in, first-out (LIFO) method. |
Property, Plant and Equipment | Property, plant and equipment The cost of property, plant and equipment is depreciated by the straight-line method over the estimated useful lives of the assets. Buildings are depreciated principally over 12 to 35 years and machinery and equipment principally over 2 to 25 years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines and technological obsolescence. Recorded values of asset groups of property, plant and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). |
Goodwill and other intangibles | Goodwill and other intangibles Ashland tests goodwill and other indefinite-lived intangible assets for impairment annually as of July 1 and when events and circumstances indicate an impairment may have occurred. Ashland reviews goodwill for impairment based on its identified reporting units, which are defined as operating segments or groupings of businesses one level below the operating segment level. Ashland tests goodwill for impairment by comparing the carrying value to the estimated fair value of its reporting units. In the current year, Ashland performed a quantitative goodwill impairment test and determined the fair value of its reporting units using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group, when externally quoted market prices are not readily available. If this comparison indicates that a reporting unit’s estimated fair value is less than its carrying value, it is adjusted to its calculated fair value and the adjustment represents the impairment charge. In the prior year for its July 1, 2018 goodwill impairment test, Ashland performed an extensive qualitative analysis in order to determine whether it was necessary to perform a quantitative goodwill impairment test. In performing this analysis, Ashland considered relevant events and circumstances such as macroeconomic conditions, industry and market considerations, overall financial performance and changes in management and business strategy, changes in carrying value, among others. Ashland considered how these relevant events and circumstances have changed since its most recent quantitative goodwill impairment test performed in the prior year as of July 1, 2017. After weighting the significance of these factors, Ashland determined that it was more likely than not that the fair value of its reporting units exceeds the carrying value and that a quantitative impairment test was not necessary to perform. Ashland tests at least annually its indefinite-lived intangible assets, principally trademarks and trade names. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is written down by an amount equal to such excess. Similar to goodwill, Ashland first performs a qualitative analysis in order to determine whether it is necessary to perform a quantitative goodwill impairment test for the trademarks and trade names. If a quantitative analysis is deemed necessary, trademarks and trade names are valued using a “relief-from-royalty” valuation method compared to the carrying value. Significant assumptions inherent in the valuation methodologies include, but are not limited to, such estimates as future projected business results, growth rates, the weighted-average cost of capital for a market participant, and royalty and discount rates. Finite-lived intangible assets principally consist of certain trademarks and trade names, intellectual property, and customer lists. These intangible assets 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 reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Ashland monitors these changes and events on at least a quarterly basis. For further information on goodwill and other intangible assets, see Note I. |
Derivative instruments | Derivative instruments Ashland regularly uses derivative instruments to manage its exposure to fluctuations in foreign currencies and certain commodities. All derivative instruments are recognized as either assets or liabilities on the balance sheet and are measured at fair value. Changes in the fair value of all derivatives are recognized immediately in the Statements of Consolidated Comprehensive Income (Loss) unless the derivative qualifies as a hedge of future cash flows or a hedge of a net investment in a foreign operation. Gains and losses related to an instrument that qualifies for hedge accounting are either recognized in the Statements of Consolidated Comprehensive Income (Loss) immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders’ equity section of the Consolidated Balance Sheets as a component of accumulated other comprehensive income and subsequently recognized in the Statements of Consolidated Comprehensive Income (Loss) when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge is recognized in income immediately. For additional information on derivative instruments, see Note G. |
Restricted investments | Restricted investments On January 13, 2015, Ashland and Hercules LLC (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland that was acquired in 2009, 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). During 2015, Ashland placed $335 million of the settlement funds into a renewable annual trust that Ashland determined is restricted for the purpose of paying ongoing and future litigation defense and claim settlement costs incurred in conjunction with asbestos claims. These funds are presented primarily as noncurrent assets, with $24 million and $30 million classified within other current assets in the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. As of September 30, 2019 and 2018, the funds within the trust had a balance of $334 million and $342 million, respectively, and were primarily invested in equity, U.S. government bond and corporate bond investments with a portion maintained in demand deposits. The funds within the trust are classified as investment securities reported at fair value. Interest income and gains and losses on the investment securities are reported in the net interest and other expense caption in the Statements of Consolidated Comprehensive Income (Loss). See Note G for additional information regarding the fair value of these investments within the trust. In January 2016, the FASB issued accounting guidance related to the recognition and measurement as well as the presentation and disclosures for certain financial instruments. Most notably, the guidance requires entities to measure equity investments at fair value and to recognize any changes in fair value in net income rather than accumulated other comprehensive income (AOCI). The guidance became effective for Ashland on October 1, 2018 and resulted in Ashland recording a cumulative-effect adjustment to reclassify net after-tax unrealized gains of $34 million on its equity securities from AOCI to retained earnings. |
Revenue recognition | Revenue recognition 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 and subsequent amendments to it superseded most current revenue recognition guidance, in an effort to converge the revenue recognition principles within U.S. GAAP. This new guidance required 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 had the option of using a full retrospective or a modified retrospective approach to adopt the new guidance. This guidance became effective for Ashland on October 1, 2018. Ashland elected to adopt this standard using the modified retrospective approach and determined that the overall impact was not material to the Consolidated Financial Statements. Ashland’s revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods or providing services and is recognized when performance obligations are satisfied under the terms of contracts with customers. Ashland generally utilizes standardized language for the terms of contracts, unless a separate agreement has been entered into with a customer that supersedes the standard language . For additional information on revenues see Note R. |
Expense recognition | Expense recognition Cost of sales include material and production costs, as well as the costs of inbound and outbound freight, purchasing and receiving, inspection, warehousing, internal transfers and all other distribution network costs. Selling, general and administrative expense includes sales and marketing costs, advertising, customer support, environmental remediation, corporate and divisional administrative and other costs. Advertising costs ($4 million in 2019, $4 million in 2018 and $5 million 2017) and research and development costs ($66 million in 2019, $73 million in 2018 and $73 million in 2017) are expensed as incurred. |
Income taxes | Income taxes Ashland is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment in the forecasting of taxable income using historical and projected future operating results is required in determining Ashland’s provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable, and deferred taxes. Ashland recognizes the income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Ashland evaluates and adjusts these accruals based on changing facts and circumstances. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets are also recognized for the estimated future effects of tax loss and credit carryforwards. The effect on deferred taxes of changes in tax rates is recognized in the period in which the enactment date occurs. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized. In the event that the actual outcome of future tax consequences differs from Ashland’s estimates and assumptions due to changes or future events such as tax legislation, geographic mix of earnings, completion of tax audits or earnings repatriation plans, the resulting change to the provision for income taxes could have a material effect on the Statements of Consolidated Comprehensive Income (Loss) and Consolidated Balance Sheets. For additional information on income taxes, see Note M. |
Asbestos-related litigation | Asbestos-related litigation Ashland is subject to liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims result from indemnification obligations undertaken in 1990 in connection with the sale of Riley Stoker Corporation (Riley) and the acquisition of Hercules in November 2008. Although Riley, a former subsidiary, was neither a producer nor a manufacturer of asbestos, its industrial boilers contained some asbestos-containing components provided by other companies. Hercules, an indirect wholly-owned subsidiary of Ashland, 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 sold by one of Hercules’ former subsidiaries to a limited industrial market. Prior to 2018, Ashland retained Hamilton, Rabinovitz & Associates, Inc. (HR&A) to assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions. During 2018, Ashland transitioned these responsibilities to Nathan Associates, Inc. (Nathan). The processes and methodologies used by Nathan are consistent with the ones historically employed by HR&A. The methodology used to project future asbestos costs is based largely on Ashland’s recent experience, including claim-filing and settlement rates, disease mix, enacted legislation, open claims, and litigation defense. Ashland’s claim experience is compared to the results of previously conducted 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. 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. For additional information on asbestos-rel ated litigation, see Note O . 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 consistent with 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 remediation | Environmental remediation Accruals for environmental remediation are recognized when it is probable a liability has been incurred and the amount of that liability can be reasonably estimated. Such costs are charged to expense if they relate to the remediation of conditions caused by past operations or are not expected to mitigate or prevent contamination from future operations. Liabilities are recorded at estimated cost values based on experience, assessments and current technology, without regard to any third-party recoveries and are regularly adjusted as environmental assessments and remediation efforts continue. For additional information on environmental remediation, see Note O. |
Pension and other postretirement benefits | Pension and other postretirement benefits The funded status of Ashland’s pension and other postretirement benefit plans is recognized in the Consolidated Balance Sheets. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at September 30, the measurement date. For defined benefit pension plans, the benefit obligation is the projected benefit obligation (PBO) and for the other postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation (APBO). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The APBO represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The measurement of the benefit obligation is based on Ashland’s estimates and actuarial valuations. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain key assumptions that require significant judgment, including, but not limited to, estimates of discount rates, expected return on plan assets, rate of compensation increases, interest rates and mortality rates. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. For additional information regarding plan assumptions and the current financial position of the pension and other postretirement plans, see Note N. Ashland recognizes the change in the fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each fiscal year and whenever a plan is determined to qualify for a remeasurement. The remaining components of pension and other postretirement benefits expense are recorded ratably on a quarterly basis. Pension and other postretirement benefits adjustments charged directly to cost of sales that are applicable to inactive participants are excluded from inventoriable costs. 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 (costs) caption on the Statements of Consolidated Comprehensive Income (Loss). |
Foreign currency translation | Foreign currency translation Operations outside the United States are measured primarily using the local currency as the functional currency. Upon consolidation, the results of operations of the subsidiaries and affiliates whose functional currency is other than the U.S. dollar are translated into U.S. dollars at the average exchange rates for the year while assets and liabilities are translated at year-end exchange rates. Consistent with U.S. GAAP standards, adjustments to translate assets and liabilities into U.S. dollars are recorded in the stockholders’ equity section of the Consolidated Balance Sheets as a component of accumulated other comprehensive income and are included in net earnings only upon sale or substantial liquidation of the underlying foreign subsidiary or affiliated company. |
Stock incentive plans | Stock incentive plans Ashland recognizes compensation expense for stock incentive plans awarded to key employees and directors, primarily in the form of stock appreciation rights (SARs), restricted stock and restricted stock units, performance shares and other non-vested stock awards, that are generally based upon the grant-date fair value over the appropriate vesting period. Ashland utilizes several industry accepted valuation models to determine the fair value. For further information concerning stock incentive plans, see Note Q. Ashland has stock incentive plans under which key employees or directors are granted stock appreciation rights (SARs), performance share 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 and accounts for forfeitures when they occur across all stock-based awards. |
Earnings per share | Earnings per share The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Earnings per share are reported under the treasury stock method. Stock options and SARs for each reported year whose grant price was greater than the market price of Ashland Common Stock at the end of each fiscal year were not included in the computation of loss from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was 1.0 million for 2019, 0.7 million for 2018 and 1.1 million for 2017. |
New accounting pronouncements | New accounting pronouncements Revenue recognition 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 and subsequent amendments to it 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. This guidance became effective for Ashland on October 1, 2018. Ashland formed an implementation team that evaluated the impact of the new standard on the Consolidated Financial Statements and the adoption method options available as well as the overall impact the new guidance will have on the organization. T Ashland has elected to adopt this standard using the modified retrospective approach. Ashland has finalized its assessment of the standard and determined that the overall impact was not material to the Consolidated Financial Statements. As a result, no cumulative-effect adjustment was made to retained earnings in the Consolidated Balance Sheet. Additionally, Ashland had no significant change to its internal controls or the manner and timing of recognizing revenue. However, there are significant additional disclosures within the Notes to Consolidated Financial Statements moving forward. For additional information on revenues see Note R. Upon adoption, Ashland utilized the following applicable practical expedients, as permitted by ASC 606, Revenue from Contracts with Customers: • Sales and other similar taxes collected from customers on behalf of third parties are excluded from the contract price; • Costs for shipping and handling activities, whether performed before or after the customer obtains control of the goods, are accounted for as fulfillment costs when not reimbursed; and • Costs incurred to obtain contracts with customers are expensed immediately when the amortization period is one year or less. Leases In February 2016, the FASB issued new accounting guidance related to lease transactions. The main objective of this guidance is to increase transparency and comparability among organizations by requiring lessees to recognize assets and liabilities on the balance sheet for the right to use assets and obligations created by leases and to disclose key information about leasing arrangements. The presentation of the Statements of Consolidated Comprehensive Income (Loss) and the Statements of Consolidated Cash Flows is largely unchanged under this guidance. This guidance retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. In July 2018, the FASB amended this guidance to give entities the option to apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Ashland will utilize this transition method upon adopting the guidance. Ashland will also elect the practical expedient package related to the identification, classification and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As Ashland will not reassess such conclusions, Ashland does not plan to adopt the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended, terminated or whether a purchase option will be exercised. While Ashland is still finalizing the evaluation of the impact that this guidance will have within its Consolidated Financial Statements, Ashland expects the adoption of this guidance will result in the recognition of operating lease liabilities in the range of $140 million to $180 million based on the present value of the remaining minimum lease commitments. See Note L for additional information on lease commitments. Ashland anticipates recognizing a corresponding right-of-use asset based on the operating lease liabilities adjusted for prepaid and deferred rent and unamortized other accrued costs. Ashland does not currently believe that the guidance will have a material impact on the results from operations, liquidity or debt covenants compliance under Ashland’s current debt agreements. The majority of Ashland’s lease spend related to certain real estate with the remaining lease spend primarily related to equipment. Ashland’s implementation team is continuing to finalize policy elections, implement changes to business processes and controls, and the impact that this guidance will have within its Consolidated Financial Statements. This guidance will become effective for Ashland on October 1, 2019. Other pronouncements 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 Consolidated Financial Statements, however this is not anticipated to have a significant impact. In August 2017, the FASB issued accounting guidance amending the existing hedge accounting model to simplify various hedge documentation requirements while also expanding hedging abilities for certain nonfinancial and financial risk components. This guidance will become effective for Ashland on October 1, 2019. Ashland is currently evaluating the impact this guidance may have on Ashland's Consolidated Financial Statements, however this is not anticipated to have a significant impact. In March 2017, the FASB issued accounting guidance that changes 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. 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 $4 million from the selling, general and administrative expense and cost of sales captions to the other net periodic benefit income (costs) caption in the Statement of Consolidated Comprehensive Income (Loss) for 2017. The components of net periodic benefit 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 K for additional information on net periodic benefit income (costs). In October 2016, the FASB issued new accounting guidance which requires entities to recognize income tax effects of intercompany transfers of assets other than inventory when the transfer occurs. This guidance eliminates the exception under previous U.S. GAAP that the income tax effects of all intercompany transfers of assets other than inventory be deferred until the assets are sold to a third party or otherwise recovered through use. This guidance became effective for Ashland on October 1, 2018 and was applied using a modified retrospective approach. Consequently, Ashland recorded a cumulative-effect adjustment to reclassify less than $1 million from other current assets and deferred taxes to retained earnings. In June 2016, the FASB issued amended accounting guidance related to the measurement of credit losses on financial instruments. The amended accounting guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held. The amended accounting guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Ashland is in the process of evaluating the effect this amended accounting guidance will have on our consolidated financial position and results of operations; however, we do not expect the amended accounting guidance to have a material impact on our ongoing financial reporting. 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 statement of 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 Statements of 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 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 Consolidated Financial Statements was not significant. In January 2016, the FASB issued accounting guidance related to the recognition and measurement as well as the presentation and disclosures for certain financial instruments. Most notably, the guidance requires entities to measure equity investments as fair value and to recognize any changes in fair value in net income rather than accumulated other comprehensive income (AOCI). The guidance became effective for Ashland on October 1, 2018 and resulted in Ashland recording a cumulative-effect adjustment to reclassify net after-tax unrealized gains of $34 million on its equity securities from AOCI to retained earnings. In the current period, the adoption of this guidance resulted in a significant impact to net income as Ashland recognized investment gains of $7 million in 2019 within the net interest and other expense caption on the Statement of Consolidated Comprehensive Income (Loss). The impact of this guidance could continue to have a material impact on Ashland’s Statements of Consolidated Comprehensive Income (Loss) in prospective periods depending on the fluctuations of unrealized gains and losses within the investment securities portfolio. For current and future periods, the changes in fair value of the equity securities will no longer be classified within other comprehensive income under the new guidance. For further information on Ashland’s equity securities, see Note G. |
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 through the use of fair value models, such as a discounted cash flow model or other standard pricing models that Ashland deems reasonable. |
Finite-Lived Intangible Asset | Intangible assets classified as definite-lived are amortized on a straight-line basis over their estimated useful lives. Useful lives range from 3 to 25 years for trademarks and trade names; 5 to 25 years for intellectual property; and 3 to 24 years for customer and supplier relationships. |
Goodwill and Intangible Assets, Goodwill | Ashland reviews goodwill 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. Ashland tests goodwill either quantitatively or qualitatively for impairment. For the qualitative approach, Ashland considers relevant events and circumstances such as macroeconomic conditions, industry and market considerations, overall financial performance and changes in management and business strategy, changes in carrying value, among others. Ashland considers how these relevant events and circumstances change between quantitative goodwill impairment tests. Ashland decides whether it is more likely than not that the fair value of its reporting units exceeds the carrying values. If not, a quantitative assessment must be performed. For the quantitative approach, Ashland makes various estimates and assumptions in determining the estimated fair value of each reporting unit using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group, when externally quoted market prices are not readily available. Discounted cash flow models are highly reliant on various assumptions, including projected business results and future industry direction, long-term growth factors and weighted-average cost of capital. Significant management judgement is involved in estimating these variables, and they include inherent uncertainties since they are forecasting future events. Ashland performs sensitivity analyses by using a range of inputs to confirm reasonableness of these estimates. Additionally, Ashland compares the indicated equity value to Ashland’s market capitalization, and implied control premium/discount, to determine if the estimated enterprise value is reasonable compared to external market indicators. If this comparison indicates that a reporting unit’s estimated fair value is less than its carrying value, it is adjusted to its calculated fair value and the adjustment represents the impairment charge. Ashland performed its annual goodwill impairment test using the quantitative approach as of July 1, 2019 and concluded that the reporting unit fair values far exceeded their carrying values. No impairment existed as of that date. |
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived | Ashland reviews these intangible assets for possible impairment annually or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, the asset is written down to its fair value and the amount of the write-down is the impairment charge. Similar to its annual assessment for goodwill, Ashland performs either a qualitative or quantitative test for impairment. If a quantitative analysis is performed, Ashland tests these assets using a “relief-from-royalty” valuation method to determine the fair value. Significant assumptions inherent in the valuation methodologies include, but are not limited to, future projected business results, growth rates, the weighted-average cost of capital for a market participant, and royalty and discount rates. In conjunction with the July 1 annual assessment of indefinite-lived intangible assets, Ashland’s models did not indicate any impairment, as each indefinite-lived intangible asset’s fair value exceeded their carrying values. Ashland performed its annual other intangibles impairment test using the quantitative approach as of July 1, 2019 and concluded that the assets fair values far exceeded their carrying values. No impairment existed as of that date. Ashland’s assessment of an impairment on any of these assets classified currently as having indefinite lives, including goodwill, could change in future periods if significant events happen and/or circumstances change that effect the previously mentioned assumptions such as: a significant change in projected business result, a divestiture decision, increase in Ashland’s weighted-average cost of capital rates, decrease in growth rates or assumptions, economic deterioration that is more severe or of a longer duration than anticipated, or another significant economic event. |
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. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Summary of Inventories | The following summarizes Ashland’s inventories as of the Consolidated Balance Sheet dates. (In millions) 2019 2018 Finished products $ 395 $ 381 Raw materials, supplies and work in process 197 215 LIFO benefit (reserve) 5 — $ 597 $ 596 |
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. Earnings per share are reported under the treasury stock method. Stock options and SARs for each reported year whose grant price was greater than the market price of Ashland Common Stock at the end of each fiscal year were not included in the computation of loss from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was 1.0 million for 2019, 0.7 million for 2018 and 1.1 million for 2017. (In millions except per share data) 2019 2018 2017 Numerator Numerator for basic and diluted EPS - Income (loss) from continuing operations, net of tax $ 24 $ 19 $ (180 ) Denominator Denominator for basic EPS - Weighted-average common shares outstanding 62 63 62 Share based awards convertible to common shares (a) 1 1 — Denominator for diluted EPS - Adjusted weighted - average shares and assumed conversions 63 64 62 EPS from continuing operations Basic $ 0.39 $ 0.30 $ (2.90 ) Diluted 0.39 0.29 (2.90 ) (a) As a result of the loss from continuing operations for 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. |
Allowance for Doubtful Accounts [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Schedule of Valuation and Qualifying Accounts Disclosure | A progression of activity in the allowance for doubtful accounts is presented in the following table. (In millions) 2019 2018 2017 Allowance for doubtful accounts - beginning of year $ 3 $ 3 $ 5 Adjustments to net income — 1 (1 ) Reserves utilized — (1 ) (1 ) Other changes — — — Allowance for doubtful accounts - end of year $ 3 $ 3 $ 3 |
Inventory Reserve [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Schedule of Valuation and Qualifying Accounts Disclosure | A progression of activity in the inventory reserves, which reduce the amounts of finished products and raw materials, supplies and work in process reported, is presented in the following table. (In millions) 2019 2018 2017 Inventory reserves - beginning of year $ 23 $ 24 $ 29 Adjustments to net income 3 4 2 Reserves utilized (3 ) (5 ) (7 ) Inventory reserves - end of year $ 23 $ 23 $ 24 |
Valuation Allowance of Deferred Tax Assets [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Schedule of Valuation and Qualifying Accounts Disclosure | A progression of activity in the tax valuation allowances is presented in the following table. (In millions) 2019 2018 2017 Tax valuation allowances - beginning of year $ 79 $ 122 $ 136 Adjustments to income tax expense (benefit) 8 (5 ) 27 Reserves utilized (4 ) (38 ) (41 ) Tax valuation allowances - end of year $ 83 $ 79 $ 122 |
Valvoline (Tables)
Valvoline (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
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 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) | 12 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Assets Acquired and Liabilities Assumed | The purchase price allocation was finalized during 2018 and the following table summarizes the values of the assets acquired and liabilities assumed at the date of acquisition. At May 17, 2017 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 94 Other noncurrent assets 17 Liabilities: Accounts payable (33 ) Deferred tax - net (132 ) 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 |
Results of Operations | The following table provides sales and operating income from the acquired Pharmachem operations included in Ashland’s 2017 results. Pharmachem results of operations (In millions) 2017 (a) Sales $ 104 Operating income 7 (a) Amounts represent the sales and results of operations for the period May 17, 2017 through September 30, 2017, the period for which Pharmachem was owned during 2017. |
Business Acquisition, Pro Forma Information | The following unaudited pro forma information for 2017 assumes the acquisition of Pharmachem occurred at the beginning of the respective periods presented. Unaudited pro forma information (In millions) 2017 Sales $ 2,483 Net income 31 |
Divestitures (Tables)
Divestitures (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Divestitures [Abstract] | |
Summary of Assets and Liabilities Held for Sale | The assets and liabilities of Composites and the Marl facility, including the Maleic business, along with other corporate asset divestitures for current and prior periods have been reflected as assets and liabilities held for sale. As a result, in accordance with U.S. GAAP standards, depreciation and amortization were not being recorded within the Statements of Consolidated Comprehensive Income (Loss) and the Consolidated Balance Sheets. These assets and liabilities are comprised of the following components: (In millions) 2019 2018 Accounts receivable, net (a) $ 5 $ 159 Inventories 3 67 Net property, plant and equipment 34 — Goodwill 14 — Intangibles — — Deferred income taxes — — Other assets 3 14 Current assets held for sale $ 59 $ 240 Net property, plant and equipment $ — $ 254 Goodwill — 144 Intangibles — 40 Deferred income taxes — 7 Other assets — 32 Noncurrent assets held for sale $ — $ 477 Trade and other payables $ 6 $ 152 Employee benefit obligations — — Accrued expenses and other liabilities 1 11 Other liabilities — — Current liabilities held for sale $ 7 $ 163 Employee benefit obligations — 23 Other liabilities — 3 Noncurrent liabilities held for sale $ — $ 26 (a) Accounts receivable included an allowance for doubtful accounts of $3 million as of September 30, 2018. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Components of Amounts in the Statements of Consolidated Income (Loss) Related To Discontinued Operations | Components of amounts reflected in the Statements of Consolidated Comprehensive Income (Loss) related to discontinued operations are presented in the following table for each of the years ended September 30. (In millions) 2019 2018 2017 Income (loss) from discontinued operations Composites/Marl facility $ 118 $ 103 $ 98 Valvoline — (1 ) 240 Asbestos-related litigation — 14 (31 ) Water Technologies (1 ) — 1 Distribution 18 (11 ) (5 ) Gain on disposal of discontinued operations Composites/Marl facility 423 — — Income before taxes 558 105 303 Income tax benefit (expense) Benefit (expense) related to income (loss) from discontinued operations Composites/Marl facility (24 ) (17 ) (23 ) Valvoline — — (81 ) Asbestos-related litigation — (1 ) 6 Water Technologies 2 3 1 Distribution (4 ) 5 2 Expense related to gain on disposal of discontinued operations Composites/Marl facility (51 ) — — Income from discontinued operations (net of taxes) $ 481 $ 95 $ 208 |
Composites/Marl facility [Member] | |
Components of Amounts in the Statements of Consolidated Income (Loss) Related To Discontinued Operations | The following table presents a reconciliation of the captions within Ashland's Statements of Consolidated Income (Loss) for the income (loss) from discontinued operations attributable to the Composites business and the Marl facility disposal group for each of the years ended September 30. Interest expense was allocated to discontinued operations based on Ashland’s mandatory debt prepayments upon the disposition of the Composites business and the Marl facility. Although the Maleic business was not sold to INEOS, this business was operated under the Composites business and Marl facility disposal group and will continue to be reported in discontinued operations along with the Composites business and Marl facility. (In millions) 2019 2018 2017 Income(loss) from discontinued operations attributable to Composites/Marl facility disposal group Sales $ 1,012 $ 1,154 $ 951 Cost of sales (785 ) (942 ) (783 ) Selling, general and administrative expense (74 ) (79 ) (65 ) Research and development expense (11 ) (12 ) (10 ) Equity and other income 3 4 4 Pretax operating income of discontinued operations 145 125 97 Net interest and other financing expense (21 ) (20 ) (5 ) Other net periodic benefit income (costs) (6 ) (2 ) 2 Net gain on acquisitions and divestitures — — 4 Pretax income of discontinued operations 118 103 98 Income tax expense (24 ) (17 ) (23 ) Income from discontinued operations $ 94 $ 86 $ 75 |
Valvoline [Member] | |
Components of Amounts in the Statements of Consolidated Income (Loss) Related To Discontinued Operations | The following table presents a reconciliation of the captions within Ashland’s Statements of Consolidated Income for the income from discontinued operations attributable to Valvoline for the year ended September 30, 2017. (In millions) 2017 (a) Income from discontinued operations attributable to Valvoline Sales $ 1,237 Cost of sales (750 ) Selling, general and administrative expense (234 ) Research and development expense (8 ) Equity and other income 17 Operating income of discontinued operations 262 Net loss on acquisitions and divestitures — Net interest and other financing expense (22 ) Pretax income of discontinued operations 240 Income tax expense (81 ) Income from discontinued operations $ 159 (a) Results in 2017 reflect activity through May 12, 2017 when Valvoline was fully separated, as previously discussed. |
Restructuring Activities (Table
Restructuring Activities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Restructuring And Related Activities [Abstract] | |
Summary of Amount of Restructuring Reserves Related to Program | The following table details at September 30, 2019, the amount of restructuring reserves related to the programs discussed above, and the related activity in these reserves during 2019. The severance reserves and facility cost reserves were primarily included in accrued expenses and other liabilities in the Consolidated Balance Sheet as of September 30, 2019. (In millions) Severance costs Facility costs Total Balance as of September 30, 2018 $ 36 $ 7 $ 43 Restructuring reserve 6 7 13 Utilization (cash paid) (35 ) (7 ) (42 ) Balance as of September 30, 2019 $ 7 $ 7 $ 14 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019. For additional information on fair value hierarchy measurements of pension plan asset holdings, see Note N. Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying Total fair assets inputs inputs (In millions) value value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 232 $ 232 $ 232 $ — $ — Restricted investments (a) 334 334 334 — — Investments of captive insurance company (b) 5 5 5 — — Foreign currency derivatives 2 2 — 2 — Total assets at fair value $ 573 $ 573 $ 571 $ 2 $ — Liabilities Foreign currency derivatives $ 2 $ 2 $ — $ 2 $ — (a) Included in restricted investments and $24 million within other current assets in the Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Consolidated Balance Sheets. The following table summarizes financial instruments subject to recurring fair value measurements as of September 30, 2018 . Quoted prices in active Significant markets for other Significant identical observable unobservable Carrying Total fair assets inputs inputs (In millions) value value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 294 $ 294 $ 294 $ — $ — Restricted investments (a) 342 342 342 — — Investments of captive insurance company (b) 3 3 3 — — Foreign currency derivatives 11 11 — 11 — Total assets at fair value $ 650 $ 650 $ 639 $ 11 $ — Liabilities Foreign currency derivatives $ 3 $ 3 $ — $ 3 $ — (a) Included in restricted investments and $30 million within other current assets in the Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Consolidated Balance Sheets. |
Summary of Available-for-sale Securities Portfolio | The following table provides a summary of the activity within the available-for-sale securities portfolio as of September 30, 2019 and 2018: (In millions) 2019 2018 Original cost $ 335 $ 335 Accumulated adjustments, net (47 ) (38 ) Adjusted cost, beginning of year (a) 288 297 Investment income (b) 10 8 Net unrealized gain (c) 29 54 Realized gain (c) 32 6 Settlement funds 7 10 Disbursements (32 ) (33 ) Fair value $ 334 $ 342 (a) The adjusted cost of the demand deposit includes accumulated investment income, realized gains, disbursements and settlements recorded in previous periods. (b) Investment income relates to the demand deposit and includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. (c) Presented under the original cost method. The following table presents gross unrealized gains and losses for the available-for-sale securities as of September 30, 2019 and 2018: Gross Gross (In millions) Adjusted Cost Unrealized Gain Unrealized Loss Fair Value As of September 30, 2019 Demand Deposit $ 9 $ — $ — $ 9 Equity Mutual Fund 120 24 (2 ) 142 Bond Mutual Fund 176 7 — 183 Fair value $ 305 $ 31 $ (2 ) $ 334 As of September 30, 2018 Demand Deposit $ 20 $ — $ — $ 20 Equity Mutual Fund 148 59 — 207 Bond Mutual Fund 120 — (5 ) 115 Fair value $ 288 $ 59 $ (5 ) $ 342 |
Summary of Investment Income, Net Unrealized Gains and Losses, Realized Gains and Disbursements Related to Investments | The following table presents the investment income, net unrealized gains and losses, realized gains and disbursements related to the investments within the portfolio during 2019, 2018 and 2017. (In millions) 2019 2018 2017 Investment income $ 10 $ 8 $ 9 Net unrealized gains (losses) (a) 7 18 25 Realized gains (b) — 6 2 Disbursements (32 ) (33 ) (27 ) (a) Ashland determined that all unrealized gains and losses were related to equity securities with readily determinable fair values. Due to the new accounting guidance adopted in the first quarter of fiscal year 2019, the net unrealized losses during the year ended September 30, 2019 were recorded within the net interest and other expense (income) caption in the Statements of Consolidated Income (Loss). In 2018 and 2017 these net unrealized gains (losses) were in AOCI. (b) Relates only to the years ended September 30, 2018 and 2017 prior to adoption of the new accounting guidance for equity securities. |
Summary of Net Gains and Losses on Foreign Currency Derivatives | The following table summarizes the gains and losses recognized during 2019, 2018 and 2017 within the Statements of Consolidated Comprehensive Income (Loss). (In millions) 2019 2018 2017 Foreign currency derivative gain (loss) $ 2 $ (32 ) $ 3 |
Summary of Fair Values of Outstanding Foreign Currency Derivatives | The following table summarizes the fair values of the outstanding foreign currency derivatives as of September 30, 2019 and 2018 included in accounts receivable and accrued expenses and other liabilities of the Consolidated Balance Sheets. (In millions) 2019 2018 Foreign currency derivative assets $ 2 $ 11 Notional contract values 271 1,209 Foreign currency derivative liabilities $ 2 $ 3 Notional contract values 168 755 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Property, Plant and Equipment in Consolidated Balance Sheets | The following table describes the various components of property, plant and equipment within the Consolidated Balance Sheets. (In millions) 2019 2018 Land $ 148 $ 150 Buildings 461 496 Machinery and equipment 2,361 2,353 Construction in progress 195 173 Total property, plant and equipment (gross) 3,165 3,172 Accumulated depreciation (1,588 ) (1,526 ) Total property, plant and equipment (net) $ 1,577 $ 1,646 |
Summary of Property, Plant and Equipment Charges Included in Statements of Consolidated Comprehensive Income | The following table summarizes various property, plant and equipment charges included within the Statements of Consolidated Comprehensive Income. (In millions) 2019 2018 2017 Depreciation $ 203 $ 184 $ 185 Capitalized interest — — 1 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill by Reportable Segment | The following is a progression of goodwill by reportable segment for the years ended September 30, 2019 and 2018. Specialty Intermediates (In millions) Ingredients and Solvents (a) Total Balance at September 30, 2017 $ 2,315 $ — $ 2,315 Acquisition (b) 5 — 5 Currency translation (16 ) — (16 ) Balance at September 30, 2018 2,304 — 2,304 Currency translation (51 ) — (51 ) Balance at September 30, 2019 $ 2,253 $ — $ 2,253 (a) As of September 30, 2019 and 2018, there was accumulated impairment of $90 million related to the Intermediates and Solvents reportable segment. (b) Relates to the acquisition of Pharmachem during 2017 and Vornia Limited during 2018. See Note C for more information. |
Summary of Other Intangible Assets | Other intangible assets were comprised of the following as of September 30, 2019 and 2018. 2019 2018 Gross Net Gross Net carrying Accumulated carrying carrying Accumulated carrying (In millions) amount amortization amount amount amortization amount Definite-lived intangible assets Trademarks and trade names $ 66 $ (29 ) $ 37 $ 66 $ (25 ) $ 41 Intellectual property 712 (391 ) 321 721 (350 ) 371 Customer and supplier relationships 744 (292 ) 452 759 (264 ) 495 Total definite-lived intangible assets 1,522 (712 ) 810 1,546 (639 ) 907 Indefinite-lived intangible assets Trademarks and trade names 278 — 278 278 — 278 Total intangible assets $ 1,800 $ (712 ) $ 1,088 $ 1,824 $ (639 ) $ 1,185 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Current and Long-term Debt | The following table summarizes Ashland’s current and long-term debt at September 30, 2019 and 2018. (In millions) 2019 2018 4.750% notes, due 2022 $ 1,080 $ 1,083 Term loan B, due 2024 — 593 6.875% notes, due 2043 374 376 Term loan A, due 2022 — 195 Accounts receivable securitizations 144 195 6.50% junior subordinated notes, due 2029 54 52 Revolving credit facility — 25 Medium-term notes, due 2019, interest of 9.35% at September 30, 2019 — 5 Other (a) 15 5 Total debt 1,667 2,529 Short-term debt (includes current portion of long-term debt) (166 ) (254 ) Long-term debt (less current portion and debt issuance costs) $ 1,501 $ 2,275 (a) Other includes $12 million and $21 million of debt issuance costs as of September 30, 2019 and 2018, respectively. Additionally, as of September 30, 2019 and 2018, Other included a European short-term loan facility with an outstanding balances of $22 million and $23 million, respectively. |
Summary of Net Interest and Other Expense (Income) | Net interest and other expense (income) (In millions) 2019 2018 2017 Interest expense (a) $ 114 $ 116 $ 227 Interest income (2 ) (4 ) (4 ) Investment securities income (b) (17 ) (14 ) (11 ) Other financing costs (c) 4 4 17 $ 99 $ 102 $ 229 (a) Includes $6 million , (b) Represents investment income related to the restricted investments discussed in Note G. (c) Includes costs of $16 million related to early redemption premium payments and bondholder consent fees for the 2022 and 2018 Senior Notes and a net gain of $5 million related to the repayment of the 2029 Notes during 2017. |
Summary of Debt Issuance Cost Amortization | The following table details the debt issuance cost and original issue discount amortization included in interest expense during 2019 , 2018 and 2017 . (In millions) 2019 2018 2017 Normal amortization $ 7 $ 7 $ 8 Accelerated amortization (a) 6 1 101 Total $ 13 $ 8 $ 109 (a) Fiscal year 2017 includes $92 million of accelerated accretion of the recorded debt discount for the 2029 Notes, while the remaining amounts in each year related to the accelerated amortization of debt issuance costs. |
Other Noncurrent Assets and L_2
Other Noncurrent Assets and Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Other Noncurrent Assets And Liabilities [Abstract] | |
Schedule of Other Assets and Other Liabilities | The following table provides the components of other noncurrent assets in the Consolidated Balance Sheets as of September 30. (In millions) 2019 2018 Deferred compensation investments $ 170 $ 165 Tax and tax indemnity receivables 68 74 Life insurance policies 56 52 Manufacturing catalyst supplies 38 35 Defined benefit plan assets 33 35 Equity and other unconsolidated investments 6 8 Land use rights 6 11 Environmental insurance receivables 12 11 Debt issuance costs 4 6 Other 17 19 $ 410 $ 416 The following table provides the components of other noncurrent liabilities in the Consolidated Balance Sheets as of September 30. (In millions) 2019 2018 Tax liabilities $ 220 $ 176 Environmental remediation reserves 143 147 Deferred compensation 42 47 Other 48 52 $ 453 $ 422 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Rent Expense | Rental expense under operating leases for continuing operations was as follows: (In millions) 2019 2018 2017 Minimum rentals (including rentals under short-term leases) $ 42 $ 46 $ 40 Sublease rental income (1 ) (1 ) (2 ) $ 41 $ 45 $ 38 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Provision for Income Taxes Related to Continuing Operations | A summary of the provision for income taxes related to continuing operations follows. (In millions) 2019 2018 2017 Current Federal $ (2 ) $ 20 $ (26 ) State (7 ) (2 ) (1 ) Foreign 35 74 37 26 92 10 Deferred 20 (100 ) (26 ) Income tax expense (benefit) $ 46 $ (8 ) $ (16 ) |
Summary of Temporary Differences of Deferred Tax Assets and Liabilities | Temporary differences that give rise to significant deferred tax assets and liabilities as of September 30 are presented in the following table. (In millions) 2019 2018 Deferred tax assets Foreign net operating loss carryforwards (a) $ 36 $ 39 Employee benefit obligations 29 28 Environmental, self-insurance and litigation reserves (net of receivables) 114 119 State net operating loss carryforwards (net of unrecognized tax benefits) (b) 38 48 Compensation accruals 28 31 Credit carryforwards (net of unrecognized tax benefits) (c) 10 10 Other items 38 32 Valuation allowances (d) (83 ) (79 ) Total deferred tax assets 210 228 Deferred tax liabilities Goodwill and other intangibles (e) 243 269 Property, plant and equipment 207 217 Unremitted earnings 1 — Total deferred tax liabilities 451 486 Net deferred tax liability $ (241 ) $ (258 ) (a) Gross net operating loss carryforwards of $133 million will expire in future years beyond 2021 or have no expiration. (b) Apportioned net operating loss carryforwards generated of $0.9 billion will expire in future years as follows: $48 million in 2020, $57 million in 2021 and the remaining balance in other future years. (c) Credit carryforwards consist primarily of foreign tax credits of $4 million expiring in future years beyond 2020, and miscellaneous tax credits that will expire in 2024 or other future years. (d) Valuation allowances primarily relate to certain state and foreign net operating loss carryforwards. (e) The total gross amount of goodwill as of September 30, 2019 expected to be deductible for tax purposes is $8 million. |
Summary of Income from Continuing Operations Before Income Taxes and Reconciliation of Provision for Income Taxes | The U.S. and foreign components of income from continuing operations before income taxes and a reconciliation of the statutory federal income tax with the provision for income taxes follow. The foreign components of income from continuing operations disclosed in the following table exclude any allocations of certain corporate expenses incurred in the U.S. (In millions) 2019 2018 2017 Income (loss) from continuing operations before income taxes United States $ (76 ) $ (214 ) $ (433 ) Foreign 146 225 237 Income (loss) from continuing operations before income taxes $ 70 $ 11 $ (196 ) Income taxes computed at U.S. statutory rate (a) $ 15 $ 3 $ (69 ) Increase (decrease) in amount computed resulting from Tax reform (b) 29 44 — Uncertain tax positions 10 (13 ) 12 Foreign dividends, deemed inclusions and other restructuring (c) 11 48 125 Foreign tax credits (17 ) (54 ) (29 ) Valuation allowance changes (d) 14 (2 ) (3 ) Research and development credits (6 ) (5 ) (6 ) State taxes (e) (5 ) (3 ) (16 ) International rate differential (30 ) (50 ) (57 ) Other items (f) 25 24 27 Income tax expense (benefit) $ 46 $ (8 ) $ (16 ) (a) The domestic tax rates are 35% (b) 2019 includes an expense of $29 million related to a return to provision adjustment for transition tax. 2018 includes expense of $187 million related to the one-time transition tax, a benefit of $139 million related to the deferred rate change and a benefit of $4 million related to tax reform in a foreign jurisdiction. Foreign tax credits of $46 million related to the transition tax were included within the foreign tax credits caption. Other items related to the transition tax or other U.S. tax reform offset to immaterial amounts within the state taxes, uncertain tax positions and other captions and net to zero in the aggregate. In summary, total U.S. tax reform expense was $2 million related to transition tax expense of $187 million, a deferred rate change benefit of $139 million and a foreign tax credit benefit of $46 million. Ashland completed its calculation of the total post-1986 E&P for these foreign subsidiaries and recorded an additional unfavorable $29 million adjustment in 2019. (c) 2018 includes a gain recognition of $6 million, deemed inclusions of $13 million and tax restructuring costs of $23 million. (d) 2019 includes $5 million related to state tax NOL’s and $9 million related to a foreign jurisdiction. 2018 includes a $5 million benefit for the release of a foreign tax credit valuation allowance; 2017 includes $25 million of benefit for the release of a foreign tax credit valuation allowance and $22 million of expense for state, foreign and domestic federal deferred tax asset valuation allowances net of a NOL write-off offset. (e) 2018 includes a $27 million tax benefit for a valuation reserve release against state net operating losses and $26 million of tax expense for state tax rate changes; 2017 includes $6 million of benefit for state tax rate changes primarily related to the final distribution of Valvoline. (f) 2019 includes $19 million primarily related to GILTI permanent adjustments. |
Summary of Changes in Unrecognized Tax Benefits | Changes in unrecognized tax benefits were as follows: (In millions) Balance at September 30, 2017 (a) $ 194 Increases related to positions taken on items from prior years 5 Decreases related to positions taken on items from prior years (40 ) Increases related to positions taken in the current year 14 Lapse of statute of limitations (5 ) Settlement of uncertain tax positions with tax authorities (4 ) Balance at September 30, 2018 (a) 164 Increases related to positions taken on items from prior years 1 Decreases related to positions taken on items from prior years (5 ) Increases related to positions taken in the current year 21 Lapse of statute of limitations (10 ) Disposition of Composites and Marl facility (6 ) Balance at September 30, 2019 $ 165 (a) Ashland has indemnity receivables from Valvoline and Pharmachem for $32 million and $39 million of the gross unrecognized tax benefits at September 30, 2019 and 2018, respectively. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Costs of Retirement Plans | The following table summarizes the components of pension and other postretirement benefit costs for continuing operations and the assumptions used to determine net periodic benefit costs (income) for the plans. Pension benefits Other postretirement benefits (In millions) 2019 2018 2017 2019 2018 2017 Net periodic benefit costs (income) Service cost (a) $ 6 $ 9 $ 8 $ 1 $ 1 $ 1 Interest cost (b) 10 10 8 2 1 2 Curtailment, settlement and other (b) (18 ) — — — — — Expected return on plan assets (b) (10 ) (12 ) (12 ) — — — Amortization of prior service credit (b) — — — — — — Actuarial (gain) loss (b) 18 (14 ) 2 (7 ) — 6 $ 6 $ (7 ) $ 6 $ (4 ) $ 2 $ 9 Weighted-average plan assumptions (c) Discount rate for service cost 2.40 % 2.54 % 1.93 % 4.37 % 3.93 % 3.93 % Discount rate for interest cost 3.02 % 2.55 % 2.25 % 3.91 % 3.13 % 2.86 % Rate of compensation increase 2.52 % 2.53 % 2.81 % Expected long-term rate of return on plan assets 3.44 % 3.36 % 3.44 % (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 (costs) caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in 2018. See Note A for additional information. (c) The plan assumptions discussed are a blended weighted-average rate for Ashland’s U.S. and non-U.S. plans. |
Total Prior Service Credits Recognized In Accumulated Other Comprehensive Income | At September 30, 2019 and 2018, the amounts included in accumulated other comprehensive income are shown in the following table. Pension Postretirement (In millions) 2019 2018 2019 2018 Prior service credit $ 3 $ (4 ) $ — $ — |
Schedule of Defined Benefit Plans Disclosures | Actuarial valuations are performed for the pension and other postretirement benefit plans to determine Ashland’s obligation for each plan. In accordance with U.S. GAAP, Ashland recognizes the unfunded status of the plans as a liability in the Consolidated Balance Sheets. Summaries of the change in benefit obligations, plan assets, funded status of the plans, amounts recognized in the balance sheet, and assumptions used to determine the benefit obligations for 2019 and 2018 are as follows. Other postretirement Pension plans benefit plans (In millions) 2019 2018 2019 2018 Change in benefit obligations Benefit obligations at October 1 $ 404 $ 428 $ 58 $ 62 Service cost 5 8 1 1 Interest cost 10 10 2 1 Participant contributions 1 1 — — Benefits paid (16 ) (14 ) (2 ) (6 ) Actuarial (gain) loss 65 (14 ) (7 ) — Curtailments (18 ) Foreign currency exchange rate changes (18 ) (6 ) — — Other (1 ) (1 ) — — Settlements (27 ) (8 ) — — Benefit obligations at September 30 $ 405 $ 404 $ 52 $ 58 Change in plan assets Value of plan assets at October 1 $ 341 $ 349 $ — $ — Actual return on plan assets 50 10 — — Employer contributions 5 9 — — Participant contributions 1 1 — — Benefits paid (16 ) (14 ) — — Foreign currency exchange rate changes (15 ) (6 ) — — Settlements (27 ) (8 ) — — Other (2 ) — — — Value of plan assets at September 30 $ 337 $ 341 $ — $ — Unfunded status of the plans $ (68 ) $ (63 ) $ (52 ) $ (58 ) Amounts recognized in the balance sheet Noncurrent benefit assets $ 33 $ 35 $ — $ — Current benefit liabilities (3 ) (3 ) (3 ) (4 ) Noncurrent benefit liabilities (98 ) (95 ) (49 ) (54 ) Net amount recognized $ (68 ) $ (63 ) $ (52 ) $ (58 ) Weighted-average plan assumptions Discount rate 1.96 % 2.97 % 3.11 % 4.24 % Rate of compensation increase 2.52 % 2.53 % |
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | The accumulated benefit obligation for all pension plans was $400 million at September 30, 2019 and $394 million at September 30, 2018. All Ashland pension plans are either qualified U.S. or non-US plans. Information for pension plans with an accumulated benefit obligation in excess of plan assets follows: (In millions) 2019 2018 Projected benefit obligation $ 207 $ 227 Accumulated benefit obligation 202 217 Fair value of plan assets 106 129 |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect future service expectations, are projected to be paid from plan assets in each of the next five years and in aggregate for five years thereafter. Other Pension postretirement (In millions) benefits benefits 2020 $ 18 $ 3 2021 18 3 2022 18 3 2023 19 4 2024 19 4 2025 - 2029 99 18 |
Plan Asset Fair Value Heirarchy [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the various investment categories that the pension plan assets are invested in and the applicable fair value hierarchy that the financial instruments are classified within these investment categories as of September 30, 2019. For additional information and a detailed description of each level within the fair value hierarchy, see Note G. Quoted prices in active Significant markets for other Significant identical observable unobservable Total fair assets inputs inputs (In millions) value Level 1 Level 2 Level 3 Cash and cash equivalents $ 5 $ 5 $ — $ — U.S. Government securities 29 — 29 — Non-U.S. Government securities 73 — 73 — Corporate debt instruments 145 — 145 — Listed real assets 11 — 11 — Asset-backed securities 22 — 22 — Corporate stocks 29 — 29 — Insurance contracts 23 — 23 — Total assets at fair value $ 337 $ 5 $ 332 $ — The following table summarizes the various investment categories that the pension plan assets are invested in and the applicable fair value hierarchy that the financial instruments are classified within these investment categories as of September 30, 2018. Quoted prices in active Significant markets for other Significant identical observable unobservable Total fair assets inputs inputs (In millions) value Level 1 Level 2 Level 3 Cash and cash equivalents $ 6 $ 6 $ — $ — U.S. Government securities 19 — 19 $ — Non-U.S. Government securities 56 — 56 — Corporate debt instruments 147 — 147 — Listed real assets 10 — 10 — Asset-backed securities 22 — 22 — Corporate stocks 31 — 31 — Insurance contracts 50 — 50 — Total assets at fair value $ 341 $ 6 $ 335 $ — |
Plan Asset Allocation by Asset Type [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Allocation of Plan Assets | Ashland’s investment strategy and management practices relative to plan assets of non-U.S. plans generally are consistent with those for U.S. plans, except in those countries where investment of plan assets is dictated by applicable regulations. Although the investment allocation may vary based on funding percentages and whether plans are still accruing additional liabilities, the weighted-average asset allocations for Ashland’s U.S. and non-U.S. plans at September 30, 2019 and 2018 by asset category follow. Actual at September 30 (In millions) Target 2019 2018 Plan assets allocation Equity securities 5 - 45% 9 % 9 % Fixed income securities 55 - 95% 88 % 88 % Other 0 - 5% 3 % 3 % 100 % 100 % |
Litigation, Claims and Contin_2
Litigation, Claims and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Loss Contingencies [Line Items] | |
Reconciliation of Changes in Environmental Contingencies and Asset Retirement Obligations Reserve | The following table provides a reconciliation of the changes in the environmental remediation reserves during 2019 and 2018. (In millions) 2019 2018 Environmental remediation reserve - beginning of year $ 187 $ 163 Disbursements (32 ) (37 ) Revised obligation estimates and accretion 31 61 Environmental remediation reserve - end of year $ 186 $ 187 |
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 years ended September 30, 2019, 2018 and 2017. (In millions) 2019 2018 2017 Environmental expense $ 30 $ 60 $ 17 Accretion 1 1 1 Legal expense 6 6 8 Total expense 37 67 26 Insurance receivable (3 ) (2 ) (2 ) Total expense, net of receivable activity (a) $ 34 $ 65 $ 24 (a) Net expense of $7 million, $5 million and $3 million for the fiscal years ended September 30, 2019, 2018 and 2017, respectively, related 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. (In thousands) 2019 2018 2017 Open claims - beginning of year 53 54 57 New claims filed 2 2 2 Claims settled (1 ) (1 ) (1 ) Claims dismissed (1 ) (2 ) (4 ) Open claims - end of year 53 53 54 |
Progression of Activity in Asbestos Reserve Accounts | A progression of activity in the asbestos reserve is presented in the following table. (In millions) 2019 2018 2017 Asbestos reserve - beginning of year $ 380 $ 419 $ 415 Reserve adjustment 1 (8 ) 36 Amounts paid (29 ) (31 ) (32 ) Asbestos reserve - end of year (a) $ 352 $ 380 $ 419 (a) Included $28 million and $30 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. |
Progression of Insurance Receivable | A progression of activity in the Ashland insurance receivable is presented in the following table. (In millions) 2019 2018 2017 Insurance receivable - beginning of year $ 140 $ 155 $ 151 Receivable adjustment (5 ) (5 ) 15 Insurance settlement — — (5 ) Amounts collected (12 ) (10 ) (6 ) Insurance receivable - end of year (a) $ 123 $ 140 $ 155 (a) Included $15 |
Hercules [Member] | |
Loss Contingencies [Line Items] | |
Summary of Asbestos Claims Activity | A summary of Hercules’ asbestos claims activity follows. (In thousands) 2019 2018 2017 Open claims - beginning of year 13 12 15 New claims filed 1 2 1 Claims dismissed (1 ) (1 ) (4 ) Open claims - end of year 13 13 12 |
Progression of Activity in Asbestos Reserve Accounts | A progression of activity in the asbestos reserve is presented in the following table. (In millions) 2019 2018 2017 Asbestos reserve - beginning of year $ 282 $ 323 $ 321 Reserve adjustments (10 ) (19 ) 16 Amounts paid (20 ) (22 ) (14 ) Asbestos reserve - end of year (a) $ 252 $ 282 $ 323 (a) Included $21 million and $20 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. |
Progression of Insurance Receivable | A progression of activity in the Hercules insurance receivable is presented in the following table. (In millions) 2019 2018 2017 Insurance receivable - beginning of year $ 54 $ 68 $ 63 Receivable adjustment (5 ) (14 ) 5 Insurance receivable - end of year $ 49 $ 54 $ 68 |
Equity Items (Tables)
Equity Items (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
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 in the following table, before tax and net of tax effects. Tax Before (expense) Net of (In millions) tax benefit tax Year ended September 30, 2019 Other comprehensive income (loss) Unrealized translation loss $ (80 ) $ — $ (80 ) Pension and postretirement obligation adjustment (7 ) 2 (5 ) Total other comprehensive loss $ (87 ) $ 2 $ (85 ) Year ended September 30, 2018 Other comprehensive income (loss) Unrealized translation loss $ (82 ) $ — $ (82 ) Net change in investment securities: Unrealized gain on investment securities (a) 24 (7 ) 17 Reclassification adjustment for gains included in net income (6 ) 2 (4 ) Total other comprehensive loss $ (64 ) $ (5 ) $ (69 ) Year ended September 30, 2017 Other comprehensive income (loss) Unrealized translation loss $ 80 $ 1 $ 81 Amortization of unrecognized prior service credits included in net income (7 ) 3 (4 ) Net change in investment securities: Unrealized gain on investment securities (a) 24 (8 ) 16 Reclassification adjustment for gains included in net income (2 ) 1 (1 ) Total other comprehensive income $ 95 $ (3 ) $ 92 (a) Due to the adoption of new accounting guidance in fiscal 2019, unrealized gains and losses on Ashland’s equity securities are now recognized in net income rather than other comprehensive income. See Notes A and G for more information. |
Summary of Reconciliation of Changes in Stockholders' Equity | Summary of Stockholders’ Equity A reconciliation of changes in stockholders’ equity are as follows: (In millions) 2019 2018 2017 Common stock and paid in capital Balance, beginning of period $ 947 $ 932 $ 924 Common shares issued under stock incentive and other plans (a) 10 15 8 Common shares purchased under repurchase program (b) (200 ) — — Balance, end of period 757 947 932 Retained earnings Balance, beginning of period 2,750 2,696 2,704 Adoption of new accounting pronouncements (c) 34 — — Net income 505 114 1 Regular dividends (65 ) (60 ) (77 ) Distribution of Valvoline Inc. (d) — — 68 Balance, end of period 3,224 2,750 2,696 Accumulated other comprehensive income (loss) Balance, beginning of period (291 ) (222 ) (281 ) Adoption of new accounting pronouncements (c) (34 ) — — Unrealized translation gain (loss) (80 ) (82 ) 81 Distribution of Valvoline Inc. (d) — — (33 ) Net change in investment securities — 13 15 Pension and postretirement obligation adjustment (5 ) — (4 ) Balance, end of period (410 ) (291 ) (222 ) Noncontrolling interest Balance, beginning of period — — (182 ) Net income — — 27 Distribution of Valvoline Inc. (d) — — 152 Other — — 7 Distributions to noncontrolling interest — — (4 ) Balance, end of period — — — Total stockholders' equity $ 3,571 $ 3,406 $ 3,406 Cash dividends declared per common share $ 1.05 $ 0.95 $ 1.23 (a) Common shares issued were 336,188, 360,468 and 42,861 for 2019, 2018 and 2017, respectively. (b) Common shares repurchased were 2,637,054 for 2019. (c) Represents the cumulative-effect adjustment related to the adoption of the new guidance related to the accounting for equity securities and tax effects of intercompany transfers during fiscal 2019. See Note A for more information. (d) See Note B for discussion of the noncontrolling interest and the initial public offering and distribution of Valvoline Inc. |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Components of Stock-Based Compensation Expense Associated With Income Tax Benefits | The components of Ashland’s pretax stock-based awards (net of forfeitures) and associated income tax benefits are as follows: (In millions) 2019 (a) 2018 (b) 2017 (c) SARs $ 7 $ 7 $ 5 Nonvested stock awards 18 24 15 Performance share awards 1 13 8 $ 26 $ 44 $ 28 Income tax benefit $ 6 $ 14 $ 11 (a) The year ended September 30, 2019 included $5 million and zero of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. (b) The year ended September 30, 2018 included $9 million and $8 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. (c) The year ended September 30, 2017 included $5 million and $3 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. |
Stock Appreciation Rights (SARs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average of key assumptions used in pricing model | The following table illustrates the weighted-average of key assumptions used within the Black-Scholes option-pricing model. The risk-free interest rate assumption was based on the U.S. Treasury yield curve in effect at the time of the grant for the expected term of the instrument. The dividend yield reflects the assumption that the current dividend payout will continue with no anticipated increases. The volatility assumption was calculated by utilizing peer companies because historical volatility was not considered reflective of future volatility as a result of the Valvoline IPO discussed in Note B. The expected life is based on the mid-point of the weighted average time to vest and contractual term. (In millions except per share data) 2019 2018 2017 Weighted-average fair value per share of SARs granted (a) $ 21.95 $ 19.62 $ 21.25 Assumptions (weighted-average) Risk-free interest rate 3.0 % 2.1 % 1.8 % Expected dividend yield 1.2 % 1.3 % 1.4 % Expected volatility 25.9 % 31.8 % 22.8 % Expected life (in years) 6 6 5 (a) The weighted-average fair values per share are as of the grant date and have not been adjusted for the Valvoline separation if the SARs were granted prior to the final distribution on May 12, 2017. |
Stock appreciation rights award activity | A progression of activity and various other information relative to SARs and previously issued and vested stock options is presented in the following table. 2019 2018 2017 Number Weighted- Number Weighted- Number Weighted- of average of average of average common exercise price common exercise price common exercise price (In thousands except per share data) shares per share shares per share shares per share Outstanding - beginning of year 2,263 $ 53.21 2,261 $ 47.98 1,511 $ 83.64 Granted 299 82.34 470 67.16 422 109.15 Exercised (380 ) 46.15 (421 ) 40.10 (330 ) 70.55 Forfeitures and expirations (80 ) 71.38 (47 ) 58.73 (70 ) 105.98 Transfer to Valvoline Inc. (a) — — — — (352 ) 94.28 Conversion adjustment (b) — — — — 1,080 — Outstanding - end of year (c) 2,102 57.94 2,263 53.21 2,261 47.98 Exercisable - end of year 1,579 53.04 1,472 47.76 1,456 42.10 (a) Represents the transfer of SARs held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. ( b ) The number and exercise prices of SARs outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. (c) Exercise prices per share for SARs outstanding at September 30, 2019 ranged from $20.02 to $29.5 for 172 thousand shares, from $37.37 to $47.63 for 350 thousand shares, from $57.96 to $59.95 for 871 thousand shares, and from $62.33 to $82.34 for 709 thousand shares. The weighted-average remaining contractual life of outstanding SARs and stock options was 6.2 years and exercisable SARs and stock options was 5.4 years. |
Nonvested Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested stock awards and performance shares activity | A progression of activity and various other information relative to nonvested stock awards is presented in the following table. 2019 2018 2017 Number Weighted- Number Weighted- Number Weighted- of average of average of average common grant date common grant date common grant date (In thousands except per share data) shares fair value shares fair value shares fair value Nonvested - beginning of year 291 $ 66.98 219 $ 59.16 293 $ 109.12 Granted 96 81.31 192 71.36 92 105.10 Vested (151 ) 66.24 (107 ) 59.46 (189 ) 99.69 Forfeitures (21 ) 73.63 (13 ) 62.22 (24 ) 104.19 Transfer to Valvoline Inc. (a) — — — — (71 ) 111.97 Conversion adjustment (b) — — — — 118 — Nonvested - end of year 215 73.26 291 66.98 219 59.16 (a) Represents the transfer of nonvested stock awards held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. ( b ) The number and exercise prices of nonvested stock awards outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average of key assumptions used in pricing model | The fair values of the TSR portion of the performance share awards and TSR modifier of the performance unit awards are calculated using a Monte Carlo simulation valuation model using key assumptions included in the following table. Compensation cost is recognized over the requisite service period regardless of whether the market condition is satisfied. 2019 2018 2017 Risk-free interest rate 2.9 1.6% - 1.8% 1.3% - 1.4% Expected dividend yield 1.3% 1.4% 1.4% Expected life (in years) 3 3 3 Expected volatility 24.6% 25.0% 25.1% |
Nonvested stock awards and performance shares activity | The following table shows changes in nonvested performance shares/units for all plans that award Ashland Common Stock or cash. 2019 2018 2017 Weighted- Weighted- Weighted- average average average Shares/ grant date Shares/ grant date Shares/ grant date (In thousands except per share data) Units fair value Units fair value Units fair value Nonvested - beginning of year 260 $ 64.55 268 $ 63.00 199 $ 106.91 Granted (a) 78 84.93 101 68.93 71 99.86 Vested (a) (68 ) 61.67 (104 ) 65.53 (69 ) 85.86 Forfeitures (b) (10 ) 65.16 (5 ) 66.24 (54 ) 75.52 Transfer to Valvoline Inc. (c) — — — — (21 ) 115.68 Conversion adjustment (d) — — — — 142 — Nonvested - end of year 260 76.59 260 64.55 268 63.00 (a) 2017 includes 15 thousand additional shares from the fiscal year 2014 since a portion of the payouts for this plan was in excess of the initial 100% target. ( b ) During 2017, Ashland determined that zero percent of the TSR portion of the fiscal year 2016 plan will be paid out upon vesting which resulted in the forfeiture of 35 thousand shares. (c) Represents the transfer of performance shares from the fiscal year 2016 plans held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. (d) The number and exercise prices of performance shares/units outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. |
Performance shares/units granted | The following table shows the performance shares/units granted for all plans that award Ashland Common Stock or cash. Weighted- Target average shares/units fair value per (In thousands) Vesting period granted (a) share/unit (a) Fiscal Year 2019 October 1, 2018 - September 30, 2021 78 $ 84.93 Fiscal Year 2018 October 1, 2017 - September 30, 2020 101 $ 68.93 Fiscal Year 2017 October 1, 2016 - September 30, 2019 56 $ 103.72 (a) At the end of the performance period, the actual number of shares/units awarded can range from zero to 200% of the target shares/units granted, which is assumed to be 100%. Both the shares granted and weighted-average fair value per share/unit are as of the grant date and have not been adjusted for the Valvoline separation that occurred during 2017. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregation of Revenue | Ashland disaggregates its revenue from contracts with customers by segment, geographical region and product category, as Ashland believes these categories best depict how management reviews the financial performance of its operations for the twelve months ended September 30, 2019, 2018 and 2017. Ashland includes only U.S. and Canada in its North America designation. See the following tables for details: Sales by geography (In millions) Specialty Ingredients Intermediates and Solvents Geography 2019 2018 2017 2019 2018 2017 Twelve Months Ended North America $ 945 $ 988 $ 883 $ 58 $ 58 $ 34 Europe 779 806 683 23 24 21 Asia Pacific 458 454 432 25 31 32 Latin America & other 200 222 218 5 6 6 $ 2,382 $ 2,470 $ 2,216 $ 111 $ 119 $ 93 Sales by product category (In millions) 2019 2018 2017 Twelve Months Ended Specialty Ingredients Cellulosics $ 839 $ 837 $ 794 Poly-vinyl pyrrolidones 413 422 402 Adhesives 345 351 336 Actives 156 153 128 Vinyl ethers 106 139 139 Pharmachem 231 248 104 Other (a) 292 320 313 $ 2,382 $ 2,470 $ 2,216 Intermediates and Solvents Derivatives $ 92 $ 99 $ 77 Butanediol 19 20 16 $ 111 $ 119 $ 93 Total $ 2,493 $ 2,589 $ 2,309 (a) Other includes no product category in excess of 10% of sales. |
Reportable Segment Information
Reportable Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Information About Domestic and International Operations | Information about Ashland’s domestic and international operations follows. Ashland has no operations in any individual international country or single customer that represented more than 10% of sales in 2019, 2018 or 2017. Sales to external customers Net assets (liabilities) Property, plant and equipment - net (In millions) 2019 2018 2017 2019 2018 2019 2018 United States $ 959 $ 997 $ 880 $ 1,789 $ 1,142 $ 1,231 $ 1,250 International 1,534 1,592 1,429 1,782 2,264 346 396 $ 2,493 $ 2,589 $ 2,309 $ 3,571 $ 3,406 $ 1,577 $ 1,646 |
Summary of Financial Information for Each Reportable Segment | The following table presents various financial information for each reportable segment. The operating results of divested divisions and assets during 2019, 2018 and 2017 that did not qualify for discontinued operations accounting treatment are included in the financial information until the date of sale. Ashland Global Holdings Inc. and Consolidated Subsidiaries Reportable Segment Information Years Ended September 30 (In millions) 2019 2018 2017 Sales Specialty Ingredients $ 2,382 $ 2,470 $ 2,216 Intermediates and Solvents 111 119 93 $ 2,493 $ 2,589 $ 2,309 Equity income Specialty Ingredients $ — $ 1 $ — Intermediates and Solvents — — — — 1 — Other income (expense) Specialty Ingredients $ (1 ) $ (5 ) $ (2 ) Intermediates and Solvents — — — Unallocated and other 5 8 5 4 3 3 Equity and other income $ 4 $ 4 $ 3 Operating income (loss) Specialty Ingredients $ 272 $ 314 $ 233 Intermediates and Solvents 16 17 (6 ) Unallocated and other (122 ) (229 ) (178 ) $ 166 $ 102 $ 49 Assets Specialty Ingredients $ 5,705 $ 5,955 $ 6,050 Intermediates and Solvents 185 192 188 Unallocated and other 1,361 2,112 2,380 $ 7,251 $ 8,259 $ 8,618 Depreciation and amortization Specialty Ingredients $ 273 $ 252 $ 243 Intermediates and Solvents 13 14 14 Unallocated and other 3 11 8 $ 289 $ 277 $ 265 Property, plant and equipment - net Specialty Ingredients $ 1,377 $ 1,434 $ 1,470 Intermediates and Solvents 78 83 90 Unallocated and other 122 129 157 $ 1,577 $ 1,646 $ 1,717 Additions to property, plant and equipment Specialty Ingredients $ 137 $ 138 $ 148 Intermediates and Solvents 7 5 5 Unallocated and other 10 14 15 $ 154 $ 157 $ 168 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) shares in Millions | 8 Months Ended | 12 Months Ended | ||||
May 12, 2017shares | Sep. 30, 2019USD ($)ReportableSegmentshares | Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($)shares | Sep. 30, 2015USD ($) | ||
Principles of consolidation and basis of presentation [Abstract] | ||||||
Distribution of shares | shares | 170 | |||||
Sale of Stock, Percentage of Ownership after Transaction | 83.00% | |||||
Number of reportable segments | ReportableSegment | 2 | |||||
Allowance for doubtful accounts [Abstract] | ||||||
Past due balances reviewed individually (in days) | 90 days | |||||
Inventories [Abstract] | ||||||
Inventory replacement cost | $ 66,000,000 | $ 70,000,000 | ||||
Restricted Cash and Investments [Abstract] | ||||||
Litigation Settlement, Amount | $ 398,000,000 | |||||
Increase (Decrease) in Restricted Cash | $ 335,000,000 | |||||
Restricted Investments, Current | 24,000,000 | 30,000,000 | ||||
Available-for-sale securities, fair value | $ 334,000,000 | 342,000,000 | ||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||||
Cost incurred to obtain contract with customer amortization period of practical expedients | true | |||||
Expenses reclassified to other net periodic benefit income | $ 4,000,000 | |||||
Recognition of investment gain within net interest and other expense | $ 7,000,000 | |||||
Expense Recognition [Abstract] | ||||||
Advertising costs | 4,000,000 | 4,000,000 | 5,000,000 | |||
Research and development expense | $ 66,000,000 | $ 73,000,000 | $ 73,000,000 | |||
Earnings Per Share [Abstract] | ||||||
Antidilutive securities excluded from calculation of earnings per share | shares | 1 | 0.7 | 1.1 | |||
ASC 606 [Member] | ||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||||
Cumulative-effect adjustment to retained earnings | $ 0 | |||||
Accumulated other comprehensive income (loss) [Member] | ||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||||
Unrealized gains on equity securities on reclassification from AOCI to retained earnings | [1],[2] | $ 34,000,000 | ||||
Minimum [Member] | ||||||
Principles of consolidation and basis of presentation [Abstract] | ||||||
Percentage of ownership under equity method | 20.00% | |||||
Leases [Abstract] | ||||||
Expected operating lease liabilities | $ 140,000,000 | |||||
Minimum [Member] | Trademarks and Trade Names [Member] | ||||||
Goodwill and other intangibles [Abstract] | ||||||
Useful life (in years) | 3 years | |||||
Minimum [Member] | Intellectual Property [Member] | ||||||
Goodwill and other intangibles [Abstract] | ||||||
Useful life (in years) | 5 years | |||||
Minimum [Member] | Customer and supplier relationships [Member] | ||||||
Goodwill and other intangibles [Abstract] | ||||||
Useful life (in years) | 3 years | |||||
Minimum [Member] | Buildings [Member] | ||||||
Property, Plant and Equipment [Abstract] | ||||||
Property, Plant and Equipment, Useful Life | 12 years | |||||
Minimum [Member] | Machinery and Equipment [Member] | ||||||
Property, Plant and Equipment [Abstract] | ||||||
Property, Plant and Equipment, Useful Life | 2 years | |||||
Maximum [Member] | ||||||
Principles of consolidation and basis of presentation [Abstract] | ||||||
Percentage of ownership under equity method | 50.00% | |||||
Leases [Abstract] | ||||||
Expected operating lease liabilities | $ 180,000,000 | |||||
Maximum [Member] | Accounting Standards Update 2016-16 [Member] | ||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||||
Cumulative-effect adjustment, reclassification from other current assets and deferred taxes to retained earnings | $ 1,000,000 | |||||
Maximum [Member] | Trademarks and Trade Names [Member] | ||||||
Goodwill and other intangibles [Abstract] | ||||||
Useful life (in years) | 25 years | |||||
Maximum [Member] | Intellectual Property [Member] | ||||||
Goodwill and other intangibles [Abstract] | ||||||
Useful life (in years) | 25 years | |||||
Maximum [Member] | Customer and supplier relationships [Member] | ||||||
Goodwill and other intangibles [Abstract] | ||||||
Useful life (in years) | 24 years | |||||
Maximum [Member] | Buildings [Member] | ||||||
Property, Plant and Equipment [Abstract] | ||||||
Property, Plant and Equipment, Useful Life | 35 years | |||||
Maximum [Member] | Machinery and Equipment [Member] | ||||||
Property, Plant and Equipment [Abstract] | ||||||
Property, Plant and Equipment, Useful Life | 25 years | |||||
Ashland Limited Liability Company [Member] | ||||||
Principles of consolidation and basis of presentation [Abstract] | ||||||
Ownership Percentage | 100.00% | |||||
[1] | At September 30, 2019 and 2018, the accumulated other comprehensive loss of $410 million and $291 million, respectively, was comprised of net unrealized translation losses of $408 million and $328 million, respectively, net unrealized gains on investment securities of zero and $34 million, respectively, and unrecognized prior service costs as a result of certain employee benefit plan amendments of $2 million and unrecognized prior service credits of $3 million, respectively. | |||||
[2] | Represents the cumulative-effect adjustment related to the adoption of the new guidance related to the accounting for equity securities and the tax effects of intercompany transfers during fiscal 2019. See note A for more information |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Activity in Allowance for Doubtful Accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reserves deducted from asset accounts [Roll Forward] | |||
Beginning balance | $ 3 | $ 3 | $ 5 |
Adjustments to net income | 0 | 1 | (1) |
Reserves utilized | 0 | (1) | (1) |
Other changes | 0 | 0 | 0 |
Ending balance | $ 3 | $ 3 | $ 3 |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Inventories [Abstract] | ||
Finished products | $ 395 | $ 381 |
Raw materials, supplies and work in process | 197 | 215 |
LIFO benefit (reserve) | 5 | 0 |
Total | $ 597 | $ 596 |
Significant Accounting Polici_7
Significant Accounting Policies - Summary of Activity in Inventory Reserves (Details) - Inventory Reserve [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reserves deducted from asset accounts [Roll Forward] | |||
Beginning balance | $ 23 | $ 24 | $ 29 |
Adjustments to net income | 3 | 4 | 2 |
Reserves utilized | (3) | (5) | (7) |
Ending balance | $ 23 | $ 23 | $ 24 |
Significant Accounting Polici_8
Significant Accounting Policies - Summary of Activity in Tax Valuation Allowances (Details) - Valuation Allowance of Deferred Tax Assets [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reserves deducted from asset accounts [Roll Forward] | |||
Beginning balance | $ 79 | $ 122 | $ 136 |
Adjustments to net income | 8 | (5) | 27 |
Reserves utilized | (4) | (38) | (41) |
Ending balance | $ 83 | $ 79 | $ 122 |
Significant Accounting Polici_9
Significant Accounting Policies - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Numerator | ||||
Income (loss) from continuing operations attributable to Ashland, net of tax | $ 24 | $ 19 | $ (180) | |
Denominator | ||||
Denominator for basic EPS - Weighted-average common shares outstanding | 62 | 63 | 62 | |
Share based awards convertible to common shares | [1] | 1 | 1 | 0 |
Denominator for diluted EPS - Adjusted weighted - average shares and assumed conversions | 63 | 64 | 62 | |
EPS from continuing operations | ||||
Income (loss) from continuing operations | $ 0.39 | $ 0.30 | $ (2.90) | |
Income (loss) from continuing operations | $ 0.39 | $ 0.29 | $ (2.90) | |
[1] | As a result of the loss from continuing operations for 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. |
Valvoline - Additional Informat
Valvoline - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 8 Months Ended | 12 Months Ended | ||
May 12, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Distribution of Valvoline [Line Items] | ||||
Distribution of shares | 170 | |||
Sale of Stock, Percentage of Ownership after Transaction | 83.00% | |||
Dividends Payable, fate of record | May 5, 2017 | |||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 2.745338 | |||
Net assets deficit | $ 3,571 | $ 3,406 | ||
Discontinued Operations [Member] | ||||
Distribution of Valvoline [Line Items] | ||||
Separation costs | $ 13 | |||
Selling, General and Administrative Expense [Member] | ||||
Distribution of Valvoline [Line Items] | ||||
Separation costs | $ 10 | $ 95 | ||
Valvoline Inc. [Member] | ||||
Distribution of Valvoline [Line Items] | ||||
Net assets deficit | $ (187) | |||
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 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | May 12, 2017 | |
Current assets | |||||
Accounts receivable, net | [1] | $ 481 | $ 522 | ||
Inventories | 597 | 596 | |||
Other current assets | 64 | 60 | |||
Total current assets | 1,433 | 1,712 | |||
Noncurrent assets | |||||
Net property, plant and equipment | 1,577 | 1,646 | |||
Goodwill | 2,253 | 2,304 | $ 2,315 | ||
Equity and other unconsolidated investments | 6 | 8 | |||
Deferred income taxes | 23 | 28 | |||
Other noncurrent assets | 410 | 416 | |||
Total noncurrent assets | 5,818 | 6,547 | |||
Total assets | 7,251 | 8,259 | $ 8,618 | ||
Current liabilities | |||||
Short-term debt | 166 | 254 | |||
Trade and other payables | 313 | 331 | |||
Other current liabilities | 271 | 328 | |||
Total current liabilities | 757 | 1,076 | |||
Noncurrent liabilities | |||||
Long-term debt | 1,501 | 2,275 | |||
Employee benefit obligations | 150 | 156 | |||
Other long-term liabilities | 453 | 422 | |||
Total noncurrent liabilities | 2,923 | 3,777 | |||
Net deficit | $ 3,571 | $ 3,406 | |||
Valvoline [Member] | |||||
Current assets | |||||
Cash | $ 179 | ||||
Accounts receivable, net | 385 | ||||
Inventories | 153 | ||||
Other current assets | 24 | ||||
Total current assets | 741 | ||||
Noncurrent assets | |||||
Net property, plant and equipment | 357 | ||||
Goodwill | 329 | ||||
Equity and other unconsolidated investments | 31 | ||||
Deferred income taxes | 391 | ||||
Other noncurrent assets | 93 | ||||
Total noncurrent assets | 1,201 | ||||
Total assets | 1,942 | ||||
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 $3 million at both September 30, 2019 and 2018. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Millions | May 17, 2017USD ($)Facility | Jan. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) |
Business Acquisition [Line Items] | |||||
Goodwill | $ 2,315 | $ 2,304 | $ 2,253 | ||
Pharmachem [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, revenue reported by acquired entity for last annual period | $ 300 | ||||
Number of manufacturing facilities | Facility | 14 | ||||
Business acquisition, purchase price in cash | $ 680 | ||||
Working capital adjustments | 20 | ||||
Business acquisition, transaction costs | 5 | ||||
Finite-lived intangible assets, purchase accounting adjustments | 18 | ||||
Goodwill, purchase accounting adjustments | $ 11 | 1 | |||
Property, plant and equipment, purchase accounting adjustments | 3 | ||||
Accounts payable, purchase accounting adjustments | 1 | ||||
Deferred tax liabilities, purchase accounting adjustments | 6 | ||||
Other non current asset, purchase accounting adjustments | $ 3 | ||||
Intangible assets | 330 | ||||
Goodwill | $ 288 | ||||
Vornia Limited [Member] | |||||
Business Acquisition [Line Items] | |||||
Business combination, consideration transferred | $ 12 | ||||
Business acquisition future payment | 1 | ||||
Intellectual property | 8 | ||||
Goodwill | $ 4 |
Acquisitions - Summary of Asset
Acquisitions - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | May 17, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,253 | $ 2,304 | $ 2,315 | |
Pharmachem [Member] | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 52 | |||
Inventory | 74 | |||
Other current assets | 4 | |||
Intangible assets | 330 | |||
Goodwill | 288 | |||
Property, plant and equipment | 94 | |||
Other noncurrent assets | 17 | |||
Accounts payable | (33) | |||
Deferred tax - net | (132) | |||
Other noncurrent liabilities | (14) | |||
Total purchase price | $ 680 |
Acquisitions - Summary of Intan
Acquisitions - Summary of Intangible Assets Identified (Details) - Pharmachem [Member] $ in Millions | May 17, 2017USD ($) |
Business Acquisition [Line Items] | |
Total intangible assets | $ 330 |
Trademarks and Trade Names [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 26 |
Weighted-average amortization period | 15 years |
Intellectual Property [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 68 |
Weighted-average amortization period | 22 years |
Customer and supplier relationships [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 236 |
Weighted-average amortization period | 20 years |
Acquisitions - Summary of Sales
Acquisitions - Summary of Sales and Operating Income from Acquired Operations (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Business Acquisition [Line Items] | ||||
Operating income | $ 166 | $ 102 | $ 49 | |
Pharmachem [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | [1] | 104 | ||
Operating income | [1] | $ 7 | ||
[1] | Amounts represent the sales and results of operations for the period May 17, 2017 through September 30, 2017, the period for which Pharmachem was owned during 2017. |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Proforma Information (Details) - Pharmachem [Member] $ in Millions | 12 Months Ended |
Sep. 30, 2017USD ($) | |
Unaudited pro forma information | |
Business acquisition, pro forma revenue | $ 2,483 |
Business acquisition, pro forma net income | $ 31 |
Divestitures - Additional Infor
Divestitures - Additional Information (Details) - USD ($) $ in Millions | Aug. 30, 2019 | Jul. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Nov. 15, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Stranded divestitures costs | $ 41 | $ 46 | $ 36 | |||||
Restructuring and related cost, accelerated depreciation | 13 | |||||||
Restructuring charges | 1 | |||||||
Net loss on divestitures | (2) | (4) | (10) | |||||
Impairment charge | 5 | |||||||
Property, plant and equipment | $ 1,577 | 1,577 | 1,646 | |||||
Composites Segment and the Intermediates and Solvents Marl Facility [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Retired debt | 900 | |||||||
Gain on divestitures after-tax recognized in comprehensive income (loss) | 372 | |||||||
Composites Segment and the Intermediates and Solvents Marl Facility [Member] | Land and Buildings [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Property, plant and equipment | 6 | $ 6 | 9 | |||||
Composites Segment and the Intermediates and Solvents Marl Facility [Member] | INEOS Enterprises [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Transaction value in sale of business | $ 1,100 | |||||||
Adjusted purchase price from additional proposed changes to sale agreement | $ 1,015 | |||||||
Net proceeds from sale of business | $ 1,000 | |||||||
Transition service fees recognized | $ 1 | |||||||
Specialty Ingredients Facility [Member] | Specialty Ingredients [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Net loss on divestitures | $ (2) | |||||||
Specialty Ingredients Joint Venture [Member] | Specialty Ingredients [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Net loss on divestitures | $ (4) | $ (12) |
Divestitures - Summary of Asset
Divestitures - Summary of Assets and Liabilities Held for Sale (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | |
Divestitures [Abstract] | |||
Accounts receivable, net | [1] | $ 5 | $ 159 |
Inventories | 3 | 67 | |
Net property, plant and equipment | 34 | ||
Goodwill | 14 | ||
Other assets | 3 | 14 | |
Current assets held for sale | 59 | 240 | |
Net property, plant and equipment | 254 | ||
Goodwill | 144 | ||
Intangibles | 40 | ||
Deferred income taxes | 7 | ||
Other assets | 32 | ||
Noncurrent assets held for sale | 477 | ||
Trade and other payables | 6 | 152 | |
Accrued expenses and other liabilities | 1 | 11 | |
Current liabilities held for sale | $ 7 | 163 | |
Employee benefit obligations | 23 | ||
Other liabilities | 3 | ||
Noncurrent liabilities held for sale | $ 26 | ||
[1] | Accounts receivable included an allowance for doubtful accounts of $3 million as of September 30, 2018 |
Divestitures - Summary of Ass_2
Divestitures - Summary of Assets and Liabilities Held for Sale (Parenthetical) (Details) $ in Millions | Sep. 30, 2018USD ($) |
Divestitures [Abstract] | |
Allowance for doubtful accounts | $ 3 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) shares in Millions | 8 Months Ended |
May 12, 2017shares | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Distribution of shares | 170 |
Valvoline Inc. [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Distribution of shares | 170 |
Discontinued Operations - Compo
Discontinued Operations - Components of Consolidated Comprehensive Income (Loss) Related to Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) before taxes | $ 558 | $ 105 | $ 303 | ||
Income from discontinued operations (net of taxes) | 481 | 95 | 208 | ||
Composites/Marl facility [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) before taxes | 118 | 103 | 98 | ||
Gain on disposal of discontinued operations | 423 | ||||
Benefit (expense) related to income (loss) from discontinued operations | (24) | (17) | (23) | ||
Expense related to gain on disposal of discontinued operations | (51) | ||||
Income from discontinued operations (net of taxes) | 94 | 86 | 75 | ||
Valvoline [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) before taxes | (1) | 240 | [1] | ||
Benefit (expense) related to income (loss) from discontinued operations | [1] | (81) | |||
Income from discontinued operations (net of taxes) | [1] | 159 | |||
Asbestos [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) before taxes | 14 | (31) | |||
Benefit (expense) related to income (loss) from discontinued operations | (1) | 6 | |||
Water Technologies [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) before taxes | (1) | 1 | |||
Benefit (expense) related to income (loss) from discontinued operations | 2 | 3 | 1 | ||
Distribution [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) before taxes | 18 | (11) | (5) | ||
Benefit (expense) related to income (loss) from discontinued operations | $ (4) | $ 5 | $ 2 | ||
[1] | Results in 2017 reflect activity through May 12, 2017 when Valvoline was fully separated, as previously discussed. |
Discontinued Operations - Recon
Discontinued Operations - Reconciliation of Consolidated Income (Loss) From Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |||
Income(loss) from discontinued operations attributable to Composites/Marl facility disposal group | |||||
Pretax income of discontinued operations | $ 558 | $ 105 | $ 303 | ||
Income from discontinued operations | 481 | 95 | 208 | ||
Composites/Marl facility [Member] | |||||
Income(loss) from discontinued operations attributable to Composites/Marl facility disposal group | |||||
Sales | 1,012 | 1,154 | 951 | ||
Cost of sales | (785) | (942) | (783) | ||
Selling, general and administrative expense | (74) | (79) | (65) | ||
Research and development expense | (11) | (12) | (10) | ||
Equity and other income | 3 | 4 | 4 | ||
Pretax operating income of discontinued operations | 145 | 125 | 97 | ||
Net interest and other financing expense | (21) | (20) | (5) | ||
Other net periodic benefit income (costs) | (6) | (2) | 2 | ||
Net gain on acquisitions and divestitures | 4 | ||||
Pretax income of discontinued operations | 118 | 103 | 98 | ||
Benefit (expense) related to income (loss) from discontinued operations | (24) | (17) | (23) | ||
Income from discontinued operations | $ 94 | 86 | 75 | ||
Valvoline [Member] | |||||
Income(loss) from discontinued operations attributable to Composites/Marl facility disposal group | |||||
Sales | [1] | 1,237 | |||
Cost of sales | [1] | (750) | |||
Selling, general and administrative expense | [1] | (234) | |||
Research and development expense | [1] | (8) | |||
Equity and other income | [1] | 17 | |||
Pretax operating income of discontinued operations | [1] | 262 | |||
Net interest and other financing expense | [1] | (22) | |||
Pretax income of discontinued operations | $ (1) | 240 | [1] | ||
Benefit (expense) related to income (loss) from discontinued operations | [1] | (81) | |||
Income from discontinued operations | [1] | $ 159 | |||
[1] | Results in 2017 reflect activity through May 12, 2017 when Valvoline was fully separated, as previously discussed. |
Restructuring Activities - Addi
Restructuring Activities - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost And Reserve [Line Items] | ||
Restructuring reserve | $ 14 | $ 43 |
Asset impairment charges | 8 | 16 |
Severance Costs [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring reserve | 7 | 36 |
Facility Costs [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring reserve | 7 | 7 |
Restructuring costs | 7 | 9 |
Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Asset impairment charges | 16 | |
Selling, General and Administrative Expenses [Member] | Facility Costs [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Asset impairment charges | 12 | |
Voluntary Severance Offer [Member] | Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Severance costs | 6 | $ 36 |
Plant Restructuring [Member] | Severance Costs [Member] | Specialty Ingredients [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | 5 | |
Plant Restructuring [Member] | Accelerated Depreciation And Amortization | Specialty Ingredients [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | 38 | |
Plant Restructuring [Member] | Plant Closure Costs [Member] | Specialty Ingredients [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring reserve | 2 | |
Restructuring costs | 4 | |
Plant Restructuring [Member] | Cost of Sales [Member] | Specialty Ingredients [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | $ 47 |
Restructuring Activities - Summ
Restructuring Activities - Summary of Severance Reserves and Facility Cost Reserves (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2019USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Beginning balance | $ 43 |
Restructuring reserve | 13 |
Utilization (cash paid) | (42) |
Ending balance | 14 |
Severance Costs [Member] | |
Restructuring Cost And Reserve [Line Items] | |
Beginning balance | 36 |
Restructuring reserve | 6 |
Utilization (cash paid) | (35) |
Ending balance | 7 |
Facility Costs [Member] | |
Restructuring Cost And Reserve [Line Items] | |
Beginning balance | 7 |
Restructuring reserve | 7 |
Utilization (cash paid) | (7) |
Ending balance | $ 7 |
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 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||||
Assets | |||||
Cash and cash equivalents | $ 232 | $ 294 | |||
Restricted investments | 334 | [1] | 342 | [2] | |
Investments of captive insurance company | [3] | 5 | 3 | ||
Foreign currency derivatives | 2 | 11 | |||
Total assets at fair value | 573 | 650 | |||
Liabilities | |||||
Foreign currency derivatives | 2 | 3 | |||
Estimate of Fair Value, Fair Value Disclosure [Member] | |||||
Assets | |||||
Cash and cash equivalents | 232 | 294 | |||
Restricted investments | 334 | [1] | 342 | [2] | |
Investments of captive insurance company | [3] | 5 | 3 | ||
Foreign currency derivatives | 2 | 11 | |||
Total assets at fair value | 573 | 650 | |||
Liabilities | |||||
Foreign currency derivatives | 2 | 3 | |||
Fair Value, Inputs, Level 1 [Member] | |||||
Assets | |||||
Cash and cash equivalents | 232 | 294 | |||
Restricted investments | 334 | [1] | 342 | [2] | |
Investments of captive insurance company | [3] | 5 | 3 | ||
Foreign currency derivatives | 0 | 0 | |||
Total assets at fair value | 571 | 639 | |||
Liabilities | |||||
Foreign currency derivatives | 0 | 0 | |||
Fair Value, Inputs, Level 2 [Member] | |||||
Assets | |||||
Cash and cash equivalents | 0 | 0 | |||
Restricted investments | 0 | [1] | 0 | [2] | |
Investments of captive insurance company | [3] | 0 | 0 | ||
Foreign currency derivatives | 2 | 11 | |||
Total assets at fair value | 2 | 11 | |||
Liabilities | |||||
Foreign currency derivatives | 2 | 3 | |||
Fair Value, Inputs, Level 3 [Member] | |||||
Assets | |||||
Cash and cash equivalents | 0 | 0 | |||
Restricted investments | 0 | [1] | 0 | [2] | |
Investments of captive insurance company | [3] | 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 and $24 million within other current assets in the Consolidated Balance Sheets. | ||||
[2] | Included in restricted investments and $30 million within other current assets in the Consolidated Balance Sheets. | ||||
[3] | Included in other noncurrent assets in the Consolidated Balance Sheets. |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Financial Instruments Subject to Recurring Fair Value Measurements (Parenthetical) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Fair Value Disclosures [Abstract] | ||
Restricted Investments, Current | $ 24 | $ 30 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Fair Value Disclosures [Abstract] | ||||
Restricted Investments, Current | $ 24 | $ 30 | ||
Purchases of investment securities | 348 | 26 | $ 19 | |
Sales of investment securities | 348 | 26 | 19 | |
Restricted Investment [Abstract] | ||||
Unrealized gains on equity securities | [1] | 7 | 18 | 25 |
Deferred income taxes | 20 | (100) | $ (26) | |
Other financial instruments [Abstract] | ||||
Long-term Debt, Carrying Value | 1,513 | 2,307 | ||
Long-term Debt, Fair Value | $ 1,680 | 2,372 | ||
Accounting Standards Update 2016-01 | Reclassified from AOCI to Retained Earnings [Member] | ||||
Restricted Investment [Abstract] | ||||
Unrealized gains on equity securities | 54 | |||
Deferred income taxes | $ 20 | |||
[1] | Ashland determined that all unrealized gains and losses were related to equity securities with readily determinable fair values. Due to the new accounting guidance adopted in the first quarter of fiscal year 2019, the net unrealized losses during the year ended September 30, 2019 were recorded within the net interest and other expense (income) caption in the Statements of Consolidated Income (Loss). In 2018 and 2017 these net unrealized gains (losses) were in AOCI. |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Available-for-sale Securities Portfolio (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Original cost | $ 335 | $ 335 | ||||
Accumulated adjustments, net | (47) | (38) | ||||
Adjusted cost | [1] | 288 | 297 | |||
Investment income | 10 | [2] | 8 | [2] | $ 9 | |
Net unrealized gain | [3] | 29 | 54 | |||
Realized gain | [3] | 32 | 6 | |||
Settlement funds | 7 | 10 | ||||
Disbursements | (32) | (33) | $ (27) | |||
Fair value | 334 | 342 | ||||
Available-for-sale Securities [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Adjusted cost | 305 | 288 | ||||
Fair value | 334 | 342 | ||||
Unrealized gain | 31 | 59 | ||||
Unrealized loss | (2) | (5) | ||||
Bond Mutual Fund [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Adjusted cost | 176 | 120 | ||||
Fair value | 183 | 115 | ||||
Unrealized gain | 7 | 0 | ||||
Unrealized loss | 0 | (5) | ||||
Equity Mutual Fund [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Adjusted cost | 120 | 148 | ||||
Fair value | 142 | 207 | ||||
Unrealized gain | 24 | 59 | ||||
Unrealized loss | (2) | 0 | ||||
Demand Deposits [Member] | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Demand Deposit | $ 9 | $ 20 | ||||
[1] | The adjusted cost of the demand deposit includes accumulated investment income, realized gains, disbursements and settlements recorded in previous periods. | |||||
[2] | Investment income relates to the demand deposit and includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. | |||||
[3] | Presented under the original cost method. |
Fair Value Measurements - Sum_4
Fair Value Measurements - Summary of Investment Income, Net Unrealized Gains and Losses, Realized Gains and Disbursements Related to Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||||
Fair Value Disclosures [Abstract] | ||||||
Investment income | $ 10 | [1] | $ 8 | [1] | $ 9 | |
Net unrealized gains (losses) | [2] | 7 | 18 | 25 | ||
Realized gains | [3] | 0 | 6 | 2 | ||
Disbursements | $ (32) | $ (33) | $ (27) | |||
[1] | Investment income relates to the demand deposit and includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. | |||||
[2] | Ashland determined that all unrealized gains and losses were related to equity securities with readily determinable fair values. Due to the new accounting guidance adopted in the first quarter of fiscal year 2019, the net unrealized losses during the year ended September 30, 2019 were recorded within the net interest and other expense (income) caption in the Statements of Consolidated Income (Loss). In 2018 and 2017 these net unrealized gains (losses) were in AOCI. | |||||
[3] | Relates only to the years ended September 30, 2018 and 2017 prior to adoption of the new accounting guidance for equity securities. |
Fair Value Measurements - Sum_5
Fair Value Measurements - Summary of Gains and Losses on Foreign Currency Derivatives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 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 gain (loss) | $ 2 | $ (32) | $ 3 |
Fair Value Measurements - Sum_6
Fair Value Measurements - Summary of Fair Values of Outstanding Foreign Currency Derivatives (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Accounts Receivable [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency derivative assets | $ 2 | $ 11 |
Notional contract values | 271 | 1,209 |
Accrued Expenses and Other Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional contract values | 168 | 755 |
Foreign currency derivative liabilities | $ 2 | $ 3 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Property, Plant and Equipment in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 3,165 | $ 3,172 |
Accumulated depreciation | (1,588) | (1,526) |
Net property, plant and equipment | 1,577 | 1,646 |
Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 148 | 150 |
Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 461 | 496 |
Machinery and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,361 | 2,353 |
Construction in Progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 195 | $ 173 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Summary of Property, Plant and Equipment Charges Included in Statements of Consolidated Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |||
Depreciation | $ 203 | $ 184 | $ 185 |
Capitalized interest | $ 1 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property Plant And Equipment [Line Items] | |||
Accelerated depreciation | $ 13 | ||
Selling, General and Administrative Expenses [Member] | Unallocated and other [Member] | |||
Property Plant And Equipment [Line Items] | |||
Accelerated depreciation | $ 1 | $ 8 | 5 |
Machinery and Equipment [Member] | |||
Property Plant And Equipment [Line Items] | |||
Accelerated depreciation | $ 38 | ||
Machinery and Equipment [Member] | Equity and Other Income (Expense) [Member] | Specialty Solutions [Member] | |||
Property Plant And Equipment [Line Items] | |||
Accelerated depreciation | $ 6 | 1 | |
Machinery and Equipment [Member] | Cost of Sales [Member] | Functional Materials [Member] | |||
Property Plant And Equipment [Line Items] | |||
Accelerated depreciation | $ 13 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Summary of Goodwill by Reportable Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
Goodwill [Roll Forward] | |||
Balance at beginning of period | $ 2,304 | $ 2,315 | |
Acquisition | [1] | 5 | |
Currency translation | (51) | (16) | |
Balance at end of period | 2,253 | 2,304 | |
Specialty Ingredients [Member] | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | 2,304 | 2,315 | |
Acquisition | [1] | 5 | |
Currency translation | (51) | (16) | |
Balance at end of period | 2,253 | 2,304 | |
Intermediates and Solvents [Member] | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | [2] | 0 | 0 |
Acquisition | [1],[2] | 0 | |
Currency translation | [2] | 0 | 0 |
Balance at end of period | [2] | $ 0 | $ 0 |
[1] | Relates to the acquisition of Pharmachem during 2017 and Vornia Limited during 2018. See Note C for more information. | ||
[2] | As of September 30, 2019 and 2018, there was accumulated impairment of $90 million related to the Intermediates and Solvents reportable segment. |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Summary of Goodwill by Reportable Segment (Parenthetical) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Intermediates and Solvents [Member] | ||
Goodwill [Line Items] | ||
Accumulated impairment | $ 90 | $ 90 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles - Summary of Other Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,522 | $ 1,546 |
Accumulated amortization | (712) | (639) |
Net carrying amount | 810 | 907 |
Intangible Assets Net Excluding Goodwill [Abstract] | ||
Gross carrying amount | 1,800 | 1,824 |
Net carrying amount | 1,088 | 1,185 |
Trademarks and Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 66 | 66 |
Accumulated amortization | (29) | (25) |
Net carrying amount | 37 | 41 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite-lived intangible assets | 278 | 278 |
Intellectual Property [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 712 | 721 |
Accumulated amortization | (391) | (350) |
Net carrying amount | 321 | 371 |
Customer and supplier relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 744 | 759 |
Accumulated amortization | (292) | (264) |
Net carrying amount | $ 452 | $ 495 |
Goodwill and Other Intangible_5
Goodwill and Other Intangibles - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense recognized on intangible assets | $ 86 | $ 93 | $ 80 |
Expected future amortization expense [Abstract] | |||
2020 | 86 | ||
2021 | 85 | ||
2022 | 85 | ||
2023 | 85 | ||
2024 | $ 71 | ||
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 |
Debt - Summary of Current and L
Debt - Summary of Current and Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | |||
Carrying value of debt | $ 1,513 | $ 2,307 | |
Other | [1] | 15 | 5 |
Total debt | 1,667 | 2,529 | |
Short-term debt (includes current portion of long-term debt) | (166) | (254) | |
Long-term debt (less current portion and debt issuance costs) | 1,501 | 2,275 | |
Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 1,080 | 1,083 | |
Term Loan A due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 195 | ||
Term Loan B due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 593 | ||
Notes due 2043 [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 374 | 376 | |
2017 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 25 | ||
Accounts Receivable Securitization [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 144 | 195 | |
Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | $ 54 | 52 | |
Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | $ 5 | ||
[1] | Other includes $12 million and $21 million of debt issuance costs as of September 30, 2019 and 2018, respectively. Additionally, as of September 30, 2019 and 2018, Other included a European short-term loan facility with an outstanding balances of $22 million and $23 million, respectively. |
Debt - Summary of Current and_2
Debt - Summary of Current and Long-term Debt (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | |||
Unamortized debt issuance expense, long-term debt | $ 12 | $ 21 | |
Short-term debt outstanding balances | $ 166 | 254 | |
Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 6.50% | ||
Debt instrument, maturity year | 2029 | ||
Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 9.35% | ||
Debt instrument, maturity year | 2019 | ||
Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 4.75% | 4.75% | |
Debt instrument, maturity year | 2022 | ||
Term Loan B due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, maturity year | 2024 | ||
Notes due 2043 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 6.875% | ||
Debt instrument, maturity year | 2043 | ||
Term Loan A due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, maturity year | 2022 | ||
European Facility [Member] | |||
Debt Instrument [Line Items] | |||
Short-term debt outstanding balances | $ 22 | $ 23 |
Debt - Summary of Current and_3
Debt - Summary of Current and Long-term Debt - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Debt Disclosure [Abstract] | ||
Total debt outstanding principal balance | $ 1,726 | |
Discounts on outstanding debt balance | 47 | |
Unamortized debt issuance expense, long-term debt | 12 | $ 21 |
Scheduled aggregate debt maturities by fiscal year [Abstract] | ||
2020 | 0 | |
2021 | 0 | |
2022 | 1,083 | |
2023 | 0 | |
2024 | $ 0 |
Debt - Financing Activity and C
Debt - Financing Activity and Covenants - Additional Information (Details) | Jul. 31, 2018EUR (€) | Aug. 31, 2012USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Aug. 30, 2019USD ($) | Mar. 31, 2018USD ($) | May 17, 2017USD ($) |
Debt Instrument [Line Items] | ||||||||||
Payments of debt issuance costs | $ 2,000,000 | $ 15,000,000 | ||||||||
Repayment of debt, accelerated amortization | 13,000,000 | |||||||||
Cash repatriation | $ 900,000,000 | 590,000,000 | ||||||||
Carrying value of debt | $ 1,513,000,000 | 1,513,000,000 | 2,307,000,000 | |||||||
Line of credit facility, remaining borrowing capacity | $ 800,000,000 | $ 800,000,000 | ||||||||
Covenant restrictions [Abstract] | ||||||||||
Maximum consolidated leverage ratio | 4.5 | 4.5 | ||||||||
Consolidated net leverage ratio | 2.6 | 2.6 | ||||||||
Minimum required consolidated interest coverage ratio | 3 | 3 | ||||||||
Consolidated interest coverage ratio | 6.1 | 6.1 | ||||||||
Junior Subordinated Debt [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, maturity date | Dec. 31, 2029 | |||||||||
Debt instrument, interest rate, stated percentage | 6.50% | 6.50% | ||||||||
Debt instrument, maturity year | 2029 | |||||||||
Carrying value of debt | $ 54,000,000 | $ 54,000,000 | 52,000,000 | |||||||
Gain (loss) on repurchase of debt instrument | 5,000,000 | |||||||||
Par value of debt repurchases | $ 182,000,000 | |||||||||
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 | |||||||||
2018 Accounts Receivable Securitization [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, outstanding amount | 94,000,000 | 94,000,000 | 109,000,000 | |||||||
Outstanding amount of receivables sold to affiliate | $ 133,000,000 | $ 133,000,000 | $ 153,000,000 | |||||||
Debt, weighted average interest rate | 1.20% | 1.20% | 1.80% | |||||||
Accounts Receivable Securitization [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Carrying value of debt | $ 144,000,000 | $ 144,000,000 | $ 195,000,000 | |||||||
Line of credit facility, remaining borrowing capacity | $ 48,000,000 | 48,000,000 | ||||||||
2018 Accounts Receivable Securitization [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, term | 2 years | |||||||||
Line of credit facility, maximum borrowing capacity | € | € 115,000,000 | |||||||||
Extended maturity period | 2021-08 | |||||||||
2012 Accounts Receivable Securitization [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, outstanding amount | $ 50,000,000 | 50,000,000 | 86,000,000 | |||||||
Debt instrument, term | 3 years | |||||||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | $ 100,000,000 | $ 100,000,000 | $ 115,000,000 | ||||||
Outstanding amount of receivables sold to affiliate | $ 147,000,000 | $ 147,000,000 | $ 166,000,000 | |||||||
Debt, weighted average interest rate | 3.30% | 3.30% | 2.70% | |||||||
2017 Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, outstanding amount | $ 0 | $ 0 | ||||||||
Line of credit facility, remaining borrowing capacity | 752,000,000 | 752,000,000 | ||||||||
Letters of credit outstanding, amount | 48,000,000 | 48,000,000 | ||||||||
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 | |||||||||
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% | |||||||||
Repayment of debt, accelerated amortization | $ 1,000,000 | |||||||||
Repayment of outstanding principal balance | 195,000,000 | $ 195,000,000 | ||||||||
Debt instrument, maturity year | 2022 | |||||||||
Carrying value of debt | $ 195,000,000 | |||||||||
2017 Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, term | 5 years | |||||||||
Line of credit facility, maximum borrowing capacity | 800,000,000 | $ 800,000,000 | $ 680,000,000 | |||||||
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% | |||||||||
Payments of debt issuance costs | 1,000,000 | $ 15,000,000 | ||||||||
Debt issuance costs immediately recognized | $ 2,000,000 | |||||||||
Repayments of debt | 55,000,000 | |||||||||
Carrying value of debt | 25,000,000 | |||||||||
2017 Revolving Credit Facility [Member] | Accounts Receivable Securitization [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 250,000,000 | |||||||||
Repayment of debt, accelerated amortization | $ 6,000,000 | |||||||||
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] | Maximum [Member] | Accounts Receivable Securitization [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt, accelerated amortization | 1,000,000 | |||||||||
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 | 1.75% | 1.75% | 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 | 2.00% | 2.00% | 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% | |||||||||
Repayment of debt, accelerated amortization | $ 5,000,000 | |||||||||
Repayment of outstanding principal balance | $ 593,000,000 | $ 593,000,000 | ||||||||
Debt instrument, maturity year | 2024 | |||||||||
Carrying value of debt | 593,000,000 | |||||||||
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% | ||||||||
2015 Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt, accelerated amortization | $ 5,000,000 | |||||||||
Medium-term Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, interest rate, stated percentage | 9.35% | 9.35% | ||||||||
Debt instrument, maturity year | 2019 | |||||||||
Carrying value of debt | $ 5,000,000 | $ 5,000,000 | ||||||||
Senior Notes due 2018 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, interest rate, stated percentage | 3.875% | |||||||||
Debt instrument, maturity year | 2018 | |||||||||
Carrying value of debt | $ 659,000,000 | |||||||||
Notes due 2022 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of debt | $ 3,000,000 | $ 39,000,000 | ||||||||
Debt instrument, interest rate, stated percentage | 4.75% | 4.75% | 4.75% | |||||||
Debt instrument, maturity year | 2022 | |||||||||
Carrying value of debt | $ 1,080,000,000 | $ 1,080,000,000 | 1,083,000,000 | |||||||
Notes due 2018 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of debt | $ 41,000,000 | |||||||||
Debt instrument, interest rate, stated percentage | 3.875% | 3.875% | 3.875% | |||||||
Notes due 2018 and 2022 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gain (loss) on repurchase of debt instrument | $ (3,000,000) | |||||||||
Notes due 2043 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of debt | $ 1,000,000 | |||||||||
Debt instrument, interest rate, stated percentage | 6.875% | 6.875% | ||||||||
Debt instrument, maturity year | 2043 | |||||||||
Carrying value of debt | $ 374,000,000 | $ 374,000,000 | 376,000,000 | |||||||
Other Debt [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, outstanding amount | $ 81,000,000 | $ 81,000,000 | $ 83,000,000 |
Debt - Summary of Net Interest
Debt - Summary of Net Interest and Other Expense (Income) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Debt Disclosure [Abstract] | ||||
Interest expense | [1] | $ 114 | $ 116 | $ 227 |
Interest income | (2) | (4) | (4) | |
Investment securities income | [2] | (17) | (14) | (11) |
Other financing costs | [3] | 4 | 4 | 17 |
Interest Income (Expense), Net | $ 99 | $ 102 | $ 229 | |
[1] | Includes $6 million , | |||
[2] | Represents investment income related to the restricted investments discussed in Note G. | |||
[3] | Includes costs of $16 million related to early redemption premium payments and bondholder consent fees for the 2022 and 2018 Senior Notes and a net gain of $5 million related to the repayment of the 2029 Notes during 2017. |
Debt - Summary of Net Interes_2
Debt - Summary of Net Interest and Other Expense (Income) (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Debt Instrument [Line Items] | ||||
Accelerated amortization | [1] | $ 6 | $ 1 | $ 101 |
Notes due 2018 and 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Loss on early retirement of debt | 16 | |||
Gain (loss) on repurchase of debt instrument | (3) | |||
Junior Subordinated Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Gain (loss) on repurchase of debt instrument | $ 5 | |||
[1] | Fiscal year 2017 includes $92 million of accelerated accretion of the recorded debt discount for the 2029 Notes, while the remaining amounts in each year related to the accelerated amortization of debt issuance costs. |
Debt - Summary of Debt Issuance
Debt - Summary of Debt Issuance Cost Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Debt Disclosure [Abstract] | ||||
Normal amortization | $ 7 | $ 7 | $ 8 | |
Accelerated amortization | [1] | 6 | 1 | 101 |
Total | $ 13 | $ 8 | $ 109 | |
[1] | Fiscal year 2017 includes $92 million of accelerated accretion of the recorded debt discount for the 2029 Notes, while the remaining amounts in each year related to the accelerated amortization of debt issuance costs. |
Debt - Summary of Debt Issuan_2
Debt - Summary of Debt Issuance Cost Amortization (Parenthetical) (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2017USD ($) | |
Junior Subordinated Debt [Member] | |
Debt Instrument [Line Items] | |
Repayment of debt, accelerated accretion | $ 92 |
Other Noncurrent Assets and L_3
Other Noncurrent Assets and Liabilities - Components of Other Noncurrent Assets in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Other Assets Noncurrent [Abstract] | ||
Deferred compensation investments | $ 170 | $ 165 |
Tax and tax indemnity receivables | 68 | 74 |
Life insurance policies | 56 | 52 |
Manufacturing catalyst supplies | 38 | 35 |
Defined benefit plan assets | 33 | 35 |
Equity and other unconsolidated investments | 6 | 8 |
Land use rights | 6 | 11 |
Environmental insurance receivables | 12 | 11 |
Debt issuance costs | 4 | 6 |
Other | 17 | 19 |
Other noncurrent assets, Total | $ 410 | $ 416 |
Other Noncurrent Assets and L_4
Other Noncurrent Assets and Liabilities - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Assets Noncurrent [Abstract] | |||
Gains (loss) related to deferred compensation investments | $ 7 | $ 10 | $ 11 |
Other Noncurrent Assets and L_5
Other Noncurrent Assets and Liabilities - Components of Other Noncurrent Liabilities in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Other Liabilities Noncurrent [Abstract] | ||
Tax liabilities | $ 220 | $ 176 |
Environmental remediation reserves | 143 | 147 |
Deferred compensation | 42 | 47 |
Other | 48 | 52 |
Other noncurrent liabilities, Total | $ 453 | $ 422 |
Lease Commitments - Additional
Lease Commitments - Additional Information (Details) $ in Millions | Sep. 30, 2019USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | $ 28 |
2021 | 25 |
2022 | 33 |
2023 | 13 |
2024 | 11 |
2025 and later years | $ 103 |
Lease Commitments - Schedule of
Lease Commitments - Schedule of Rent Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Leases, Rent Expense [Abstract] | |||
Minimum rentals (including rentals under short-term leases) | $ 42 | $ 46 | $ 40 |
Sublease rental income | (1) | (1) | (2) |
Rent expense | $ 41 | $ 45 | $ 38 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Income Tax Contingency [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 24.50% | 35.00% | 35.00% | ||
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | $ 2 | $ 5 | ||||
One-time transition tax liability, unfavorable tax adjustment | $ 29 | |||||
Increase (Decrease) in Deferred Income Taxes | (139) | |||||
Increase (Decrease) in Deferred Liabilities | 128 | |||||
Additional unfavorable adjustment | 29 | |||||
Unrecognized tax benefits | 165 | 164 | [1] | 194 | [1] | |
Total amount of unrecognized tax benefits that, if recognized, would affect the tax rate for continuing and discontinued operations | 155 | |||||
Interest and penalties related to uncertain tax positions | (5) | 1 | $ (3) | |||
Interest and penalties related to unrecognized tax benefits accrued | 26 | 25 | ||||
Minimum [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 1 | |||||
Maximum [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 2 | |||||
Transition Tax [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Provisional income tax expense benefit | 128 | |||||
One-time transition tax liability, income tax expense benefit | 187 | |||||
Deferred Rate [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Provisional income tax expense benefit | 139 | |||||
Other Tax Expense [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Provisional income tax expense benefit | 13 | |||||
Foreign Tax Authority [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
One-time transition tax liability, income tax expense benefit | 46 | |||||
Uncertain Tax Position [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
One-time transition tax liability, income tax expense benefit | 9 | |||||
State and Local Jurisdiction [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
One-time transition tax liability, income tax expense benefit | 2 | |||||
Other Miscellaneous Items [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
One-time transition tax liability, income tax expense benefit | $ 6 | |||||
[1] | Ashland has indemnity receivables from Valvoline and Pharmachem for $32 million and $39 million of the gross unrecognized tax benefits at September 30, 2019 and 2018, respectively. |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Income Taxes Related to Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current | |||
Federal | $ (2) | $ 20 | $ (26) |
State | (7) | (2) | (1) |
Foreign | 35 | 74 | 37 |
Total current income tax expense (benefit) | 26 | 92 | 10 |
Deferred | 20 | (100) | (26) |
Income tax expense (benefit) | $ 46 | $ (8) | $ (16) |
Income Taxes - Summary of Tempo
Income Taxes - Summary of Temporary Differences of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | |
Deferred tax assets | |||
Foreign net operating loss carryforwards | [1] | $ 36 | $ 39 |
Employee benefit obligations | 29 | 28 | |
Environmental, self-insurance and litigation reserves (net of receivables) | 114 | 119 | |
State net operating loss carryforwards (net of unrecognized tax benefits) | [2] | 38 | 48 |
Compensation accruals | 28 | 31 | |
Credit carryforwards (net of unrecognized tax benefits) | [3] | 10 | 10 |
Other items | 38 | 32 | |
Valuation allowances | [4] | (83) | (79) |
Total deferred tax assets | 210 | 228 | |
Deferred tax liabilities | |||
Goodwill and other intangibles | [5] | 243 | 269 |
Property, plant and equipment | 207 | 217 | |
Unremitted earnings | 1 | 0 | |
Total deferred tax liabilities | 451 | 486 | |
Net deferred tax liability | $ (241) | $ (258) | |
[1] | Gross net operating loss carryforwards of $133 million will expire in future years beyond 2021 or have no expiration. | ||
[2] | Apportioned net operating loss carryforwards generated of $0.9 billion will expire in future years as follows: $48 million in 2020, $57 million in 2021 and the remaining balance in other future years. | ||
[3] | Credit carryforwards consist primarily of foreign tax credits of $4 million expiring in future years beyond 2020, and miscellaneous tax credits that will expire in 2024 or other future years. | ||
[4] | Valuation allowances primarily relate to certain state and foreign net operating loss carryforwards. | ||
[5] | The total gross amount of goodwill as of September 30, 2019 expected to be deductible for tax purposes is $8 million. |
Income Taxes - Summary of Tem_2
Income Taxes - Summary of Temporary Differences of Deferred Tax Assets and Liabilities (Parenthetical) (Details) $ in Millions | Sep. 30, 2019USD ($) |
Tax Credit Carryforward [Line Items] | |
Goodwill expected to be deductible for tax purposes | $ 8 |
Foreign Tax Authority [Member] | |
Tax Credit Carryforward [Line Items] | |
Operating Loss Carryforwards | 133 |
Tax credits | 4 |
State and Local Jurisdiction [Member] | |
Tax Credit Carryforward [Line Items] | |
Operating Loss Carryforwards | 900 |
Operating loss carryforwards expiring in next fiscal year | 48 |
Operating loss carryforwards expiring in fiscal year two | $ 57 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income from Continuing Operations Before Income Taxes and Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | ||||
United States | $ (76) | $ (214) | $ (433) | |
Foreign | 146 | 225 | 237 | |
Income (loss) from continuing operations before income taxes | 70 | 11 | (196) | |
Income taxes computed at U.S. statutory rate | [1] | 15 | 3 | (69) |
Tax reform | [2] | 29 | 44 | 0 |
Uncertain tax positions | 10 | (13) | 12 | |
Foreign dividends, deemed inclusions and other restructuring | [3] | 11 | 48 | 125 |
Foreign tax credits | (17) | (54) | (29) | |
Valuation allowance changes | [4] | 14 | (2) | (3) |
Research and development credits | (6) | (5) | (6) | |
State taxes | [5] | (5) | (3) | (16) |
International rate differential | (30) | (50) | (57) | |
Other items | [6] | 25 | 24 | 27 |
Income tax expense (benefit) | $ 46 | $ (8) | $ (16) | |
[1] | The domestic tax rates are 35% | |||
[2] | 2019 includes an expense of $29 million related to a return to provision adjustment for transition tax. 2018 includes expense of $187 million related to the one-time transition tax, a benefit of $139 million related to the deferred rate change and a benefit of $4 million related to tax reform in a foreign jurisdiction. Foreign tax credits of $46 million related to the transition tax were included within the foreign tax credits caption. Other items related to the transition tax or other U.S. tax reform offset to immaterial amounts within the state taxes, uncertain tax positions and other captions and net to zero in the aggregate. In summary, total U.S. tax reform expense was $2 million related to transition tax expense of $187 million, a deferred rate change benefit of $139 million and a foreign tax credit benefit of $46 million. Ashland completed its calculation of the total post-1986 E&P for these foreign subsidiaries and recorded an additional unfavorable $29 million adjustment in 2019. | |||
[3] | 2018 includes a gain recognition of $6 million, deemed inclusions of $13 million and tax restructuring costs of $23 million. | |||
[4] | 2019 includes $5 million related to state tax NOL’s and $9 million related to a foreign jurisdiction. 2018 includes a $5 million benefit for the release of a foreign tax credit valuation allowance; 2017 includes $25 million of benefit for the release of a foreign tax credit valuation allowance and $22 million of expense for state, foreign and domestic federal deferred tax asset valuation allowances net of a NOL write-off offset. | |||
[5] | 2018 includes a $27 million tax benefit for a valuation reserve release against state net operating losses and $26 million of tax expense for state tax rate changes; 2017 includes $6 million of benefit for state tax rate changes primarily related to the final distribution of Valvoline. | |||
[6] | 2019 includes $19 million primarily related to GILTI permanent adjustments. |
Income Taxes - Summary of Inc_2
Income Taxes - Summary of Income from Continuing Operations Before Income Taxes and Reconciliation of Provision for Income Taxes (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Tax Credit Carryforward [Line Items] | |||||
Valuation allowance charges | [1] | $ 14 | $ (2) | $ (3) | |
State taxes | [2] | (5) | (3) | (16) | |
Other items | [3] | 25 | 24 | 27 | |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | 2 | 5 | |||
Domestic items | [4] | $ 15 | $ 3 | $ (69) | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 24.50% | 35.00% | 35.00% | |
Foreign tax credits | $ 17 | $ 54 | $ 29 | ||
Additional unfavorable adjustment | 29 | ||||
Gain recognition in foreign dividend and other restructuring | 6 | ||||
Deemed inclusions | 13 | ||||
Tax restructuring costs | 23 | ||||
Valvoline [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
State taxes | 26 | 6 | |||
Other items | 4 | ||||
GILTI [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
Other items | 19 | ||||
Foreign Tax Authority [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
Valuation allowance charges | 9 | 5 | 25 | ||
Other items | 22 | 7 | |||
Tax reform benefit and expense | 4 | ||||
State and Local Jurisdiction [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
Valuation allowance charges | 5 | 22 | |||
Other items | 27 | ||||
Domestic Tax Authority [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
Domestic items | $ 6 | ||||
Tax reform benefit and expense | 2 | ||||
Transition Tax [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
Tax reform benefit and expense | $ 29 | 187 | |||
Foreign tax credits | 46 | ||||
Deferred Rate [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
Tax reform benefit and expense | $ 139 | ||||
[1] | 2019 includes $5 million related to state tax NOL’s and $9 million related to a foreign jurisdiction. 2018 includes a $5 million benefit for the release of a foreign tax credit valuation allowance; 2017 includes $25 million of benefit for the release of a foreign tax credit valuation allowance and $22 million of expense for state, foreign and domestic federal deferred tax asset valuation allowances net of a NOL write-off offset. | ||||
[2] | 2018 includes a $27 million tax benefit for a valuation reserve release against state net operating losses and $26 million of tax expense for state tax rate changes; 2017 includes $6 million of benefit for state tax rate changes primarily related to the final distribution of Valvoline. | ||||
[3] | 2019 includes $19 million primarily related to GILTI permanent adjustments. | ||||
[4] | The domestic tax rates are 35% |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | |||
Balance at beginning of period | [1] | $ 164 | $ 194 | |
Increases related to positions taken on items from prior years | 1 | 5 | ||
Decreases related to positions taken on items from prior years | (5) | (40) | ||
Increases related to positions taken in the current year | 21 | 14 | ||
Lapse of statute of limitations | (10) | (5) | ||
Settlement of uncertain tax positions with tax authorities | (4) | |||
Balance at end of period | 165 | $ 164 | [1] | |
Composites/Marl facility [Member] | ||||
Disposition of Composites and Marl facility | $ (6) | |||
[1] | Ashland has indemnity receivables from Valvoline and Pharmachem for $32 million and $39 million of the gross unrecognized tax benefits at September 30, 2019 and 2018, respectively. |
Income Taxes - Summary of Cha_2
Income Taxes - Summary of Changes in Unrecognized Tax Benefits (Parenthetical) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Tax and tax indemnity receivables | $ 68 | $ 74 |
Valvoline [Member] | ||
Tax and tax indemnity receivables | $ 32 | $ 39 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pre-65 health care cost increase trend rate | 6.60% | |||
Future Pre-65 health care cost trend rate | 4.50% | |||
Prior service credit recognized in accumulated other comprehensive income | $ 0 | $ 0 | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||||
Historical investment strategy asset mix, fixed income (in hundredths) | 49.00% | |||
Historical investment strategy asset mix, risk assets (in hundredths) | 38.00% | |||
Historical investment strategy asset mix, other securities assets (in hundredths) | 13.00% | |||
United States Pension Plans of US Entity, Defined Benefit [Member] | ||||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||||
Actual contributions to benefit plans in period | $ 1,000,000 | 1,000,000 | ||
Estimated future contributions in current next fiscal year | 1,000,000 | |||
Foreign Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||||
Actual contributions to benefit plans in period | 4,000,000 | 8,000,000 | ||
Estimated future contributions in current next fiscal year | 5,000,000 | |||
Maximum [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, expects to recognize of prior service credit in accumulated other comprehensive income as next fiscal year | 1,000,000 | |||
INEOS Enterprises [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, actuarial gain (loss) | 27,000,000 | |||
Employee benefit obligations | 27,000,000 | |||
Other Postretirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Prior service credit recognized in accumulated other comprehensive income | 0 | 0 | ||
Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Prior service credit recognized in accumulated other comprehensive income | 3,000,000 | (4,000,000) | ||
Weighted-Average Plan Assumptions [Abstract] | ||||
Defined benefit plan, accumulated benefit obligation | $ 400,000,000 | $ 394,000,000 | ||
Expected long-term rate of return on plan assets | [1] | 3.44% | 3.36% | 3.44% |
U.S. Benefit Plans [Member] | ||||
Weighted-Average Plan Assumptions [Abstract] | ||||
Expected long-term rate of return on plan assets | 3.44% | 3.36% | ||
Other Pension Plan, Postretirement or Supplemental Plans [Member] | ||||
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | ||||
Company contributions to other employee benefit savings plans | $ 26,000,000 | $ 25,000,000 | $ 26,000,000 | |
Postemployment benefits liability, noncurrent | 3,000,000 | $ 7,000,000 | ||
Amendments to Plan [Member] | Other Postretirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, actuarial gain (loss) | 2,000,000 | |||
Employee benefit obligations | $ 2,000,000 | |||
Amendments to Plan [Member] | Foreign Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Remeasurement due to curtailment gain | $ 18,000,000 | |||
[1] | The plan assumptions discussed are a blended weighted-average rate for Ashland’s U.S. and non-U.S. plans. |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Pension Plans [Member] | ||||
Net Periodic Benefit Costs [Abstract] | ||||
Service cost | [1] | $ 6 | $ 9 | $ 8 |
Interest cost | [2] | 10 | 10 | 8 |
Curtailment, settlement and other | [2] | (18) | 0 | 0 |
Expected return on plan assets | [2] | (10) | (12) | (12) |
Amortization of prior service credit | [2] | 0 | 0 | 0 |
Actuarial (gain) loss | [2] | $ 18 | $ (14) | $ 2 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Immediate Recognition of Actuarial Gain (Loss), Statement of Income or Comprehensive Income [Extensible List] | ash:OtherNetPeriodicBenefitIncomeCostsMember | ash:OtherNetPeriodicBenefitIncomeCostsMember | ash:OtherNetPeriodicBenefitIncomeCostsMember | |
Total net periodic benefit cost (income) | $ 6 | $ (7) | $ 6 | |
Weighted-Average Plan Assumptions [Abstract] | ||||
Discount rate for service cost | [3] | 2.40% | 2.54% | 1.93% |
Discount rate for interest cost | [3] | 3.02% | 2.55% | 2.25% |
Rate of compensation increase | [3] | 2.52% | 2.53% | 2.81% |
Expected long-term rate of return on plan assets | [3] | 3.44% | 3.36% | 3.44% |
Other Postretirement Benefit Plans [Member] | ||||
Net Periodic Benefit Costs [Abstract] | ||||
Service cost | [1] | $ 1 | $ 1 | $ 1 |
Interest cost | [2] | 2 | 1 | 2 |
Curtailment, settlement and other | [2] | 0 | 0 | 0 |
Expected return on plan assets | [2] | 0 | 0 | 0 |
Amortization of prior service credit | [2] | 0 | 0 | 0 |
Actuarial (gain) loss | [2] | $ (7) | $ 0 | $ 6 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Immediate Recognition of Actuarial Gain (Loss), Statement of Income or Comprehensive Income [Extensible List] | ash:OtherNetPeriodicBenefitIncomeCostsMember | ash:OtherNetPeriodicBenefitIncomeCostsMember | ash:OtherNetPeriodicBenefitIncomeCostsMember | |
Total net periodic benefit cost (income) | $ (4) | $ 2 | $ 9 | |
Weighted-Average Plan Assumptions [Abstract] | ||||
Discount rate for service cost | [3] | 4.37% | 3.93% | 3.93% |
Discount rate for interest cost | [3] | 3.91% | 3.13% | 2.86% |
[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 (costs) caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in 2018. See Note A for additional information. | |||
[3] | The plan assumptions discussed are a blended weighted-average rate for Ashland’s U.S. and non-U.S. plans. |
Employee Benefit Plans - Prior
Employee Benefit Plans - Prior Service Credits Recognized in Accumulated Other Comprehensive Income (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Prior service credit recognized in accumulated other comprehensive income [Abstract] | ||
Prior service credit | $ 0 | $ 0 |
Pension [Member] | ||
Prior service credit recognized in accumulated other comprehensive income [Abstract] | ||
Prior service credit | 3,000,000 | (4,000,000) |
Postretirement [Member] | ||
Prior service credit recognized in accumulated other comprehensive income [Abstract] | ||
Prior service credit | $ 0 | $ 0 |
Employee Benefit Plans - Obliga
Employee Benefit Plans - Obligations and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Change in plan assets | ||||
Value of plan assets at October 1 | $ 341 | |||
Value of plan assets at September 30 | 337 | $ 341 | ||
Amounts recognized in the balance sheet | ||||
Noncurrent benefit assets | 33 | 35 | ||
Noncurrent benefit liabilities | (150) | (156) | ||
Pension Plans [Member] | ||||
Change in benefit obligations | ||||
Service cost | [1] | 6 | 9 | $ 8 |
Interest cost | [2] | 10 | 10 | 8 |
Other Postretirement Benefit Plans [Member] | ||||
Change in benefit obligations | ||||
Service cost | [1] | 1 | 1 | 1 |
Interest cost | [2] | 2 | 1 | 2 |
Continuing Operations [Member] | Pension Plans [Member] | ||||
Change in benefit obligations | ||||
Benefit obligations at October 1 | 404 | 428 | ||
Service cost | 5 | 8 | ||
Interest cost | 10 | 10 | ||
Participant contributions | 1 | 1 | ||
Benefits paid | (16) | (14) | ||
Actuarial (gain) loss | 65 | (14) | ||
Curtailments | (18) | |||
Foreign currency exchange rate changes | (18) | (6) | ||
Other | (1) | (1) | ||
Settlements | (27) | (8) | ||
Benefit obligations at September 30 | 405 | 404 | 428 | |
Change in plan assets | ||||
Value of plan assets at October 1 | 341 | 349 | ||
Actual return on plan assets | 50 | 10 | ||
Employer contributions | 5 | 9 | ||
Participant contributions | 1 | 1 | ||
Benefits paid | (16) | (14) | ||
Foreign currency exchange rate changes | (15) | (6) | ||
Settlements | (27) | (8) | ||
Other | (2) | |||
Value of plan assets at September 30 | 337 | 341 | 349 | |
Unfunded status of the plans | (68) | (63) | ||
Amounts recognized in the balance sheet | ||||
Noncurrent benefit assets | 33 | 35 | ||
Current benefit liabilities | (3) | (3) | ||
Noncurrent benefit liabilities | (98) | (95) | ||
Net amount recognized | $ (68) | $ (63) | ||
Weighted-average plan assumptions | ||||
Discount rate | 1.96% | 2.97% | ||
Rate of compensation increase | 2.52% | 2.53% | ||
Continuing Operations [Member] | Other Postretirement Benefit Plans [Member] | ||||
Change in benefit obligations | ||||
Benefit obligations at October 1 | $ 58 | $ 62 | ||
Service cost | 1 | 1 | ||
Interest cost | 2 | 1 | ||
Benefits paid | (2) | (6) | ||
Actuarial (gain) loss | (7) | |||
Benefit obligations at September 30 | 52 | 58 | $ 62 | |
Change in plan assets | ||||
Unfunded status of the plans | (52) | (58) | ||
Amounts recognized in the balance sheet | ||||
Current benefit liabilities | (3) | (4) | ||
Noncurrent benefit liabilities | (49) | (54) | ||
Net amount recognized | $ (52) | $ (58) | ||
Weighted-average plan assumptions | ||||
Discount rate | 3.11% | 4.24% | ||
[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 (costs) caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in 2018. See Note A for additional information. |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets (Details) - Pension Plans [Member] - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets [Abstract] | ||
Projected benefit obligation | $ 207 | $ 227 |
Accumulated benefit obligation | 202 | 217 |
Fair value of plan assets | $ 106 | $ 129 |
Employee Benefit Plans - Plan A
Employee Benefit Plans - Plan Assets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | $ 337 | $ 341 |
Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 5 | 6 |
Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 332 | 335 |
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Cash and Cash Equivalents [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 5 | 6 |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 5 | 6 |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
U.S. Government Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 29 | 19 |
U.S. Government Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
U.S. Government Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 29 | 19 |
U.S. Government Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Non-U.S. Government Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 73 | 56 |
Non-U.S. Government Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Non-U.S. Government Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 73 | 56 |
Non-U.S. Government Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Corporate Debt Instruments [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 145 | 147 |
Corporate Debt Instruments [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Corporate Debt Instruments [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 145 | 147 |
Corporate Debt Instruments [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Corporate Stocks [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 29 | 31 |
Corporate Stocks [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Corporate Stocks [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 29 | 31 |
Corporate Stocks [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Listed Real Assets [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 11 | 10 |
Listed Real Assets [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Listed Real Assets [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 11 | 10 |
Listed Real Assets [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Insurance Contracts [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 23 | 50 |
Insurance Contracts [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Insurance Contracts [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 23 | 50 |
Insurance Contracts [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Accounts Receivable Securitization [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 22 | 22 |
Accounts Receivable Securitization [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 0 | 0 |
Accounts Receivable Securitization [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | 22 | 22 |
Accounts Receivable Securitization [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, assets for plan benefits | $ 0 | $ 0 |
Employee Benefit Plans - Plan_2
Employee Benefit Plans - Plan Assets Allocations (Details) | Sep. 30, 2019 | Sep. 30, 2018 |
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, actual | 100.00% | 100.00% |
Equity Securities [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, actual | 9.00% | 9.00% |
Equity Securities [Member] | Minimum [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, minimum | 5.00% | |
Equity Securities [Member] | Maximum [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, minimum | 45.00% | |
Fixed Income Securities [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, actual | 88.00% | 88.00% |
Fixed Income Securities [Member] | Minimum [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, minimum | 55.00% | |
Fixed Income Securities [Member] | Maximum [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, minimum | 95.00% | |
Other [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, actual | 3.00% | 3.00% |
Other [Member] | Minimum [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, minimum | 0.00% | |
Other [Member] | Maximum [Member] | ||
Defined Benefit Plan, Plan Assets Allocation [Abstract] | ||
Asset target allocation, minimum | 5.00% |
Employee Benefit Plans - Cash F
Employee Benefit Plans - Cash Flows (Details) - Valvoline [Member] $ in Millions | Sep. 30, 2019USD ($) |
Pension Plans [Member] | |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |
2020 | $ 18 |
2021 | 18 |
2022 | 18 |
2023 | 19 |
2024 | 19 |
2025 - 2029 | 99 |
Other Postretirement Benefit Plans [Member] | |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |
2020 | 3 |
2021 | 3 |
2022 | 3 |
2023 | 4 |
2024 | 4 |
2025 - 2029 | $ 18 |
Litigation, Claims and Contin_3
Litigation, Claims and Contingencies - Summary of Asbestos Claims Activity (Details) - Claim Claim in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Ashland [Member] | |||
Asbestos claims [Roll Forward] | |||
Open claims - beginning of year | 53 | 54 | 57 |
New claims filed | 2 | 2 | 2 |
Claims settled | (1) | (1) | (1) |
Claims dismissed | (1) | (2) | (4) |
Open claims - end of year | 53 | 53 | 54 |
Hercules [Member] | |||
Asbestos claims [Roll Forward] | |||
Open claims - beginning of year | 13 | 12 | 15 |
New claims filed | 1 | 2 | 1 |
Claims dismissed | (1) | (1) | (4) |
Open claims - end of year | 13 | 13 | 12 |
Litigation, Claims and Contin_4
Litigation, Claims and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | ||||||
Sep. 30, 2019USD ($)FacilityWasteTreatmentorDisposalSiteServiceStationProperty | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | ||||
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 | 80 | ||||||
Number of current and former operating facilities subject to various environmental laws | Facility | 113 | ||||||
Total number of service station properties subject to various environmental laws | ServiceStationProperty | 1,225 | ||||||
Number of service stations being actively remediated | ServiceStationProperty | 29 | ||||||
Accrual for environmental loss contingencies | $ 186 | $ 187 | $ 163 | ||||
Accrued environmental loss contingencies, noncurrent | 143 | 147 | |||||
Recorded third-party environmental recoveries receivable | 13 | 12 | |||||
Recorded third-party environmental recoveries, noncurrent | 12 | 11 | |||||
Environmental liabilities recognized | $ 30 | 60 | 17 | ||||
Environmental expense related to one site after significant research and analysis | 18 | ||||||
Maximum reserve for remediation reserve related to any one site (in hundredths) | 14.00% | ||||||
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 | $ 440 | ||||||
Ashland [Member] | |||||||
Asbestos claims [Roll Forward] | |||||||
Increase (Decrease) in asbestos-related claims | 1 | (8) | 36 | ||||
Total reserves for asbestos claims | 352 | [1] | 380 | [1] | 419 | [1] | $ 415 |
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||
Insurance receivable | 123 | [2] | 140 | [2] | 155 | [2] | 151 |
Receivable adjustment | (5) | (5) | 15 | ||||
Asbestos litigation cost projection [Abstract] | |||||||
Possible total future litigation defense and claim settlement costs | 550 | ||||||
Total reserves for asbestos claims | 352 | [1] | 380 | [1] | 419 | [1] | 415 |
Hercules [Member] | |||||||
Asbestos claims [Roll Forward] | |||||||
Increase (Decrease) in asbestos-related claims | (10) | (19) | 16 | ||||
Total reserves for asbestos claims | 252 | [3] | 282 | [3] | 323 | [3] | 321 |
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||
Insurance receivable | 49 | 54 | 68 | 63 | |||
Receivable adjustment | (5) | (14) | 5 | ||||
Asbestos litigation cost projection [Abstract] | |||||||
Possible total future litigation defense and claim settlement costs | 390 | ||||||
Total reserves for asbestos claims | $ 252 | [3] | $ 282 | [3] | $ 323 | [3] | $ 321 |
[1] | Included $28 million and $30 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. | ||||||
[2] | Included $15 | ||||||
[3] | Included $21 million and $20 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. |
Litigation, Claims and Contin_5
Litigation, Claims and Contingencies - Schedule of Progression of Activity in the Asbestos Reserve (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||||
Ashland [Member] | ||||||
Asbestos reserve [Roll Forward] | ||||||
Beginning balance | $ 380 | [1] | $ 419 | [1] | $ 415 | |
Reserve adjustment | 1 | (8) | 36 | |||
Amounts paid | (29) | (31) | (32) | |||
Ending balance | [1] | 352 | 380 | 419 | ||
Hercules [Member] | ||||||
Asbestos reserve [Roll Forward] | ||||||
Beginning balance | 282 | [2] | 323 | [2] | 321 | |
Reserve adjustment | (10) | (19) | 16 | |||
Amounts paid | (20) | (22) | (14) | |||
Ending balance | [2] | $ 252 | $ 282 | $ 323 | ||
[1] | Included $28 million and $30 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. | |||||
[2] | Included $21 million and $20 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. |
Litigation, Claims and Contin_6
Litigation, Claims and Contingencies - Schedule of Progression of Activity in the Asbestos Reserve (Parenthetical) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Ashland [Member] | |||||||
Asbestos claims [Roll Forward] | |||||||
Asbestos reserve | $ 352 | [1] | $ 380 | [1] | $ 419 | [1] | $ 415 |
Ashland [Member] | Other Current Liabilities [Member] | |||||||
Asbestos claims [Roll Forward] | |||||||
Asbestos reserve | 28 | 30 | |||||
Hercules [Member] | |||||||
Asbestos claims [Roll Forward] | |||||||
Asbestos reserve | 252 | [2] | 282 | [2] | $ 323 | [2] | $ 321 |
Hercules [Member] | Other Current Liabilities [Member] | |||||||
Asbestos claims [Roll Forward] | |||||||
Asbestos reserve | $ 21 | $ 20 | |||||
[1] | Included $28 million and $30 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. | ||||||
[2] | Included $21 million and $20 million classified in accrued expenses and other liabilities on the Consolidated Balance Sheets as of September 30, 2019 and 2018, respectively. |
Litigation, Claims and Contin_7
Litigation, Claims and Contingencies - Summary of Progression of Insurance Receivable (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||
Insurance settlement | $ 3 | $ 2 | $ 2 | |||
Ashland [Member] | ||||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||
Insurance receivable - beginning of year | 140 | [1] | 155 | [1] | 151 | |
Receivable adjustment | (5) | (5) | 15 | |||
Insurance settlement | 0 | 0 | (5) | |||
Amounts collected | (12) | (10) | (6) | |||
Insurance receivable - end of year | [1] | 123 | 140 | 155 | ||
Hercules [Member] | ||||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||||||
Insurance receivable - beginning of year | 54 | 68 | 63 | |||
Receivable adjustment | (5) | (14) | 5 | |||
Insurance receivable - end of year | $ 49 | $ 54 | $ 68 | |||
[1] | Included $15 |
Litigation, Claims and Contin_8
Litigation, Claims and Contingencies - Summary of Progression of Insurance Receivable (Parenthetical) (Details) - Ashland [Member] - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | [1] | Sep. 30, 2016 | ||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||
Insurance receivable | $ 123 | [1] | $ 140 | [1] | $ 155 | $ 151 | |
Accounts Receivable [Member] | |||||||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||
Insurance receivable | $ 15 | $ 15 | |||||
[1] | Included $15 |
Litigation, Claims and Contin_9
Litigation, Claims and Contingencies - Summary of Reconciliation of Changes in Environmental Remediation Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Environmental Remediation Obligations [Abstract] | ||
Environmental remediation reserve - beginning of year | $ 187 | $ 163 |
Disbursements | (32) | (37) |
Revised obligation estimates and accretion | 31 | 61 |
Environmental remediation reserve - end of year | $ 186 | $ 187 |
Litigation, Claims and Conti_10
Litigation, Claims and Contingencies - Summary of Components of Environmental Remediation Expense Included within Selling, General and Administrative Expense (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Environmental Expense And Liabilities [Abstract] | ||||
Environmental expense | $ 30 | $ 60 | $ 17 | |
Accretion | 1 | 1 | 1 | |
Legal expense | 6 | 6 | 8 | |
Total expense | 37 | 67 | 26 | |
Insurance receivable | (3) | (2) | (2) | |
Total expense, net of receivable activity | [1] | $ 34 | $ 65 | $ 24 |
[1] | Net expense of $7 million, $5 million and $3 million for the fiscal years ended September 30, 2019, 2018 and 2017, respectively, related to divested businesses which qualified for treatment as discontinued operations and for which certain environmental liabilities were retained by Ashland. These amounts are classified within the income from discontinued operations caption of the Statements of Consolidated Comprehensive Income (Loss). |
Litigation, Claims and Conti_11
Litigation, Claims and Contingencies - Summary of Components of Environmental Remediation Expense Included within Selling, General and Administrative Expense (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Environmental Expense And Liabilities [Abstract] | |||
Net expense relates to divested businesses | $ 7 | $ 5 | $ 3 |
Equity Items - Additional Infor
Equity Items - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
May 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Accelerated Share Repurchases [Line Items] | |||||||||||||||
Stock Repurchase During Period Value | [1] | $ 200,000,000 | |||||||||||||
Common shares repurchased | 2,637,054 | ||||||||||||||
Dividend per common share | $ 1.05 | $ 0.95 | $ 1.23 | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.275 | $ 0.250 | $ 0.25 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.39 | $ 0.39 | |||||
Common shares reserved (in shares) | 14,800,000 | 14,800,000 | |||||||||||||
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 | $ 800,000,000 | $ 800,000,000 | |||||||||||||
2019 Accelerated Share Repurchase Agreement [Member] | |||||||||||||||
Accelerated Share Repurchases [Line Items] | |||||||||||||||
Stock Repurchase During Period Value | $ 200,000,000 | ||||||||||||||
Stock Repurchased And Retired During Period Shares | 2,200,000 | 2,600,000 | |||||||||||||
Common shares repurchased | 400,000 | ||||||||||||||
[1] | Common shares repurchased were 2,637,054 for 2019 |
Equity Items - Components of Ac
Equity Items - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Equity [Abstract] | ||||
Unrealized translation gain (loss), before tax | $ (80) | $ (82) | $ 80 | |
Unrealized translation gain (loss), tax | 0 | 0 | 1 | |
Unrealized translation gain (loss), net of tax | (80) | (82) | 81 | |
Amortization unrecognized prior service credit included in net income, before Tax | (7) | |||
Amortization of unrecognized prior service credits included in net income, tax | 3 | |||
Amortization of unrecognized prior service credits included in net income, net of tax | (4) | |||
Unrealized gain on investment securities before tax | [1] | 24 | 24 | |
Unrealized gain on investment securities tax | [1] | (7) | (8) | |
Unrealized gain on investment securities net of tax | [1] | 17 | 16 | |
Reclassification adjustment for gains included in net income, before tax | (6) | (2) | ||
Reclassification adjustment for gains included in net income, tax | 2 | 1 | ||
Reclassification adjustment for gains included in net income, net of tax | (4) | (1) | ||
Pension and postretirement obligation adjustment, before tax | (7) | |||
Pension and postretirement obligation adjustment, tax | 2 | |||
Pension and postretirement obligation adjustment, net of tax | (5) | |||
Total other comprehensive income (loss), before tax | (87) | (64) | 95 | |
Total other comprehensive income (loss), tax | 2 | (5) | (3) | |
Other comprehensive income (loss) | $ (85) | $ (69) | $ 92 | |
[1] | Due to the adoption of new accounting guidance in fiscal 2019, unrealized gains and losses on Ashland’s equity securities are now recognized in net income rather than other comprehensive income. See Notes A and G for more information. |
Equity Items - Summary of Recon
Equity Items - Summary of Reconciliation of Changes in Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Balance, beginning of period | $ 3,406 | $ 3,406 | ||
Balance, end of period | $ 3,571 | $ 3,406 | $ 3,406 | |
Cash dividends declared per common share | $ 1.05 | $ 0.95 | $ 1.23 | |
Common Stock and Paid in Capital [Member] | ||||
Balance, beginning of period | $ 947 | $ 932 | $ 924 | |
Common shares issued under stock incentive and other plans | [1] | 10 | 15 | 8 |
Common shares purchased under repurchase program | [2] | (200) | ||
Balance, end of period | 757 | 947 | 932 | |
Retained earnings [Member] | ||||
Balance, beginning of period | 2,750 | 2,696 | 2,704 | |
Adoption of new accounting pronouncements | [3] | 34 | ||
Net income (loss) | 505 | 114 | 1 | |
Regular dividends | (65) | (60) | (77) | |
Distribution of Valvoline Inc | [4] | 68 | ||
Balance, end of period | 3,224 | 2,750 | 2,696 | |
Accumulated other comprehensive income (loss) [Member] | ||||
Balance, beginning of period | (291) | (222) | (281) | |
Adoption of new accounting pronouncements | [3] | (34) | ||
Unrealized translation gain (loss) | (80) | (82) | 81 | |
Distribution of Valvoline Inc | [4] | (33) | ||
Net change in investment securities | 13 | 15 | ||
Pension and postretirement obligation adjustment | (5) | (4) | ||
Balance, end of period | $ (410) | $ (291) | (222) | |
Noncontrolling Interest [Member] | ||||
Balance, beginning of period | (182) | |||
Net income (loss) | 27 | |||
Distribution of Valvoline Inc | [4] | 152 | ||
Other | 7 | |||
Distributions to noncontrolling interest | $ (4) | |||
[1] | Common shares issued were 336,188, 360,468 and 42,861 for 2019, 2018 and 2017, respectively | |||
[2] | Common shares repurchased were 2,637,054 for 2019 | |||
[3] | Represents the cumulative-effect adjustment related to the adoption of the new guidance related to the accounting for equity securities and tax effects of intercompany transfers during fiscal 2019. See Note A for more information. | |||
[4] | See Note B for discussion of the noncontrolling interest and the initial public offering and distribution of Valvoline Inc |
Equity Items - Summary of Rec_2
Equity Items - Summary of Reconciliation of Changes in Stockholders' Equity (Parenthetical) (Details) - shares | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Equity [Abstract] | |||
Common shares issued | 336,188 | 360,468 | 42,861 |
Common shares repurchased (in shares) | 2,637,054 |
Stock Incentive Plans - Compone
Stock Incentive Plans - Components of Pretax Stock-Based Award (Net of Forfeitures) and Associated Income Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2019 | [1] | Sep. 30, 2018 | [2] | Sep. 30, 2017 | [3] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | $ 26 | $ 44 | $ 28 | |||
Income tax benefit | 6 | 14 | 11 | |||
Stock Appreciation Rights (SARs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | 7 | 7 | 5 | |||
Nonvested Stock Awards [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | 18 | 24 | 15 | |||
Performance Shares [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | $ 1 | $ 13 | $ 8 | |||
[1] | The year ended September 30, 2019 included $5 million and zero of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. | |||||
[2] | The year ended September 30, 2018 included $9 million and $8 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. | |||||
[3] | The year ended September 30, 2017 included $5 million and $3 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. |
Stock Incentive Plans - Compo_2
Stock Incentive Plans - Components of Pretax Stock-Based Award (Net of Forfeitures) and Associated Income Tax Benefits (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | $ 26 | [1] | $ 44 | [2] | $ 28 | [3] |
Cash-settled Nonvested Stock Awards [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | 5 | 9 | 5 | |||
Cash-settled Performance Shares [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | $ 0 | $ 8 | $ 3 | |||
[1] | The year ended September 30, 2019 included $5 million and zero of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. | |||||
[2] | The year ended September 30, 2018 included $9 million and $8 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. | |||||
[3] | The year ended September 30, 2017 included $5 million and $3 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 26 | [1] | $ 44 | [2] | $ 28 | [3] | |
Stock Appreciation Rights (SARs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unexercised SARs lapse expiration period | 10 years | ||||||
Model to fair value share-based payment awards | Black-Scholes option-pricing model | ||||||
Intrinsic value of stock appreciation rights and stock options exercised | $ 12 | 15 | 14 | ||||
Tax benefit realized from the exercised stock appreciation rights and stock options | 3 | 5 | 2 | ||||
Total grant date fair value of SARs and stock options that vested | 8 | $ 4 | $ 8 | ||||
Total unrecognized compensation costs | $ 6 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 1 year 7 months 6 days | ||||||
Aggregate intrinsic value of outstanding stock appreciation rights and stock options | $ 42 | ||||||
Aggregate intrinsic value of exercisable stock appreciation rights and stock options | $ 38 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 2,102 | 2,263 | [4] | 2,261 | 1,511 | ||
Stock-based compensation | $ 7 | [1] | $ 7 | [2] | $ 5 | [3] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||||||
Total unrecognized compensation costs | $ 6 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 1 year 7 months 6 days | ||||||
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] | |||||||
Total unrecognized compensation costs | $ 6 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 1 year 10 months 24 days | ||||||
Total fair value of nonvested stock awards that vested | $ 10 | $ 6 | $ 19 | ||||
Granted (in shares) | 96 | 192 | 92 | ||||
Stock-based compensation | $ 18 | [1] | $ 24 | [2] | $ 15 | [3] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||||||
Total unrecognized compensation costs | $ 6 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 1 year 10 months 24 days | ||||||
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 | ||||||
Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 260 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 30 | ||||||
Stock-based compensation | $ 3 | 6 | 3 | ||||
Restricted Stock [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation costs | 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||||||
Total unrecognized compensation costs | $ 1 | ||||||
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 | 95 | ||||||
Stock-based compensation | $ 5 | $ 9 | $ 5 | ||||
Performance Shares [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period of share-based payment award | 3 years | ||||||
Model to fair value share-based payment awards | Monte Carlo simulation valuation model | ||||||
Total unrecognized compensation costs | $ 3 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 1 year 6 months | ||||||
Granted (in shares) | 78 | 101 | 71 | ||||
Stock-based compensation | $ 1 | [1] | $ 13 | [2] | $ 8 | [3] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||||||
Total unrecognized compensation costs | $ 3 | ||||||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 1 year 6 months | ||||||
[1] | The year ended September 30, 2019 included $5 million and zero of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. | ||||||
[2] | The year ended September 30, 2018 included $9 million and $8 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. | ||||||
[3] | The year ended September 30, 2017 included $5 million and $3 million of expense related to cash-settled nonvested restricted stock awards and cash-settled performance units, respectively. | ||||||
[4] | Exercise prices per share for SARs outstanding at September 30, 2019 ranged from $20.02 to $29.5 for 172 thousand shares, from $37.37 to $47.63 for 350 thousand shares, from $57.96 to $59.95 for 871 thousand shares, and from $62.33 to $82.34 for 709 thousand shares. The weighted-average remaining contractual life of outstanding SARs and stock options was 6.2 years and exercisable SARs and stock options was 5.4 years. |
Stock Incentive Plans - Stock A
Stock Incentive Plans - Stock Appreciation Rights (Details) - $ / shares shares in Thousands | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||||
Assumptions (weighted-average) [Abstract] | ||||||
Risk-free interest rate | 2.90% | |||||
Expected dividend yield | 1.30% | 1.40% | 1.40% | |||
Expected volatility | 24.60% | 25.00% | 25.10% | |||
Expected life (in years) | 3 years | 3 years | 3 years | |||
Stock Appreciation Rights (SARs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||||
Weighted-average fair value per share of SARs granted | [1] | $ 21.95 | $ 19.62 | $ 21.25 | ||
Assumptions (weighted-average) [Abstract] | ||||||
Risk-free interest rate | 3.00% | 2.10% | 1.80% | |||
Expected dividend yield | 1.20% | 1.30% | 1.40% | |||
Expected volatility | 25.90% | 31.80% | 22.80% | |||
Expected life (in years) | 6 years | 6 years | 5 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||
Outstanding - beginning of year (in shares) | 2,263 | [2] | 2,261 | 1,511 | ||
Granted (in shares) | 299 | 470 | 422 | |||
Exercised (in shares) | (380) | (421) | (330) | |||
Forfeitures and expirations (in shares) | (80) | (47) | (70) | |||
Transfer to Valvoline Inc. | [3] | (352) | ||||
Conversion adjustment (in shares) | [4] | 1,080 | ||||
Outstanding - end of year (in shares) | 2,102 | 2,263 | [2] | 2,261 | ||
Exercisable - end of year (in shares) | 1,579 | 1,472 | 1,456 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||||
Weighted-average exercise price per share, outstanding - beginning of year (in usd per share) | $ 53.21 | [2] | $ 47.98 | $ 83.64 | ||
Weighted-average exercise price per share, granted (in usd per share) | 82.34 | 67.16 | 109.15 | |||
Weighted-average exercise price per share, exercised (in usd per share) | 46.15 | 40.10 | 70.55 | |||
Weighted-average exercise price per share, forfeitures and expirations (in usd per share) | 71.38 | 58.73 | 105.98 | |||
Weighted-average exercise price per share, transfer to Valvoline Inc. (in usd per share) | [3] | 94.28 | ||||
Weighted-average exercise price per share, outstanding - end of year (in usd per share) | 57.94 | 53.21 | [2] | 47.98 | ||
Weighted-average exercise price per share, exercisable - end of year (in usd per share) | $ 53.04 | $ 47.76 | $ 42.10 | |||
[1] | The weighted-average fair values per share are as of the grant date and have not been adjusted for the Valvoline separation if the SARs were granted prior to the final distribution on May 12, 2017. | |||||
[2] | Exercise prices per share for SARs outstanding at September 30, 2019 ranged from $20.02 to $29.5 for 172 thousand shares, from $37.37 to $47.63 for 350 thousand shares, from $57.96 to $59.95 for 871 thousand shares, and from $62.33 to $82.34 for 709 thousand shares. The weighted-average remaining contractual life of outstanding SARs and stock options was 6.2 years and exercisable SARs and stock options was 5.4 years. | |||||
[3] | Represents the transfer of SARs held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. | |||||
[4] | The number and exercise prices of SARs outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. |
Stock Incentive Plans - Stock_2
Stock Incentive Plans - Stock Appreciation Rights (Parenthetical) (Details) - Stock Appreciation Rights (SARs) [Member] | 12 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average remaining contractual life of outstanding SARs and stock options (in years) | 6 years 2 months 12 days |
Weighted-average remaining contractual life of outstanding, exercisable SARs and stock options (in years) | 5 years 4 months 24 days |
Exercise Price Range 1 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share range, minimum (in usd per share) | $ 20.02 |
Exercise price per share range, maximum (in usd per share) | $ 29.5 |
Exercise price per share range, number of exercisable SARs and options | shares | 172,000 |
Exercise Price Range 2 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share range, minimum (in usd per share) | $ 37.37 |
Exercise price per share range, maximum (in usd per share) | $ 47.63 |
Exercise price per share range, number of exercisable SARs and options | shares | 350,000 |
Exercise Price Range 3 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share range, minimum (in usd per share) | $ 57.96 |
Exercise price per share range, maximum (in usd per share) | $ 59.95 |
Exercise price per share range, number of exercisable SARs and options | shares | 871,000 |
Exercise Price Range 4 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share range, minimum (in usd per share) | $ 62.33 |
Exercise price per share range, maximum (in usd per share) | $ 82.34 |
Exercise price per share range, number of exercisable SARs and options | shares | 709,000 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Progression of Activity and Various Other Information Relative Nonvested Stock Awards (Details) - Nonvested Stock Awards [Member] - $ / shares shares in Thousands | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Nonvested - beginning of year | 291 | 219 | 293 | |
Granted | 96 | 192 | 92 | |
Vested | (151) | (107) | (189) | |
Forfeitures | (21) | (13) | (24) | |
Transfer to Valvoline Inc. | [1] | (71) | ||
Conversion adjustment | [2] | 118 | ||
Nonvested - end of year | 215 | 291 | 219 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted-average grant date fair value, nonvested - beginning of year | $ 66.98 | $ 59.16 | $ 109.12 | |
Weighted-average grant date fair value, granted | 81.31 | 71.36 | 105.10 | |
Weighted-average grant date fair value, vested | 66.24 | 59.46 | 99.69 | |
Weighted-average grant date fair value, forfeitures | 73.63 | 62.22 | 104.19 | |
Weighted-average grant date fair value, transfer to Valvoline Inc. | [1] | 111.97 | ||
Weighted-average grant date fair value, nonvested - end of year | $ 73.26 | $ 66.98 | $ 59.16 | |
[1] | Represents the transfer of nonvested stock awards held by Valvoline Inc. employees at the time of the final Valvoline Inc. distribution in 2017. | |||
[2] | The number and exercise prices of nonvested stock awards outstanding at the time of the final Valvoline Inc. distribution in 2017 were proportionately adjusted to maintain the aggregate intrinsic value before and after the transaction. |
Stock Incentive Plans - Sumamry
Stock Incentive Plans - Sumamry of Performance Shares/units Granted (Details) - Performance Shares [Member] - $ / shares shares in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period, start date | Oct. 1, 2018 | Oct. 1, 2017 | Oct. 1, 2016 | |
Vesting period, end date | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Target shares granted | [1] | 78 | 101 | 56 |
Weighted-average fair value per share | [1] | $ 84.93 | $ 68.93 | $ 103.72 |
[1] | At the end of the performance period, the actual number of shares/units awarded can range from zero to 200% of the target shares/units granted, which is assumed to be 100%. Both the shares granted and weighted-average fair value per share/unit are as of the grant date and have not been adjusted for the Valvoline separation that occurred during 2017. |
Stock Incentive Plans - Sumam_2
Stock Incentive Plans - Sumamry of Performance Shares/units Granted (Parenthetical) (Details) - Performance Shares [Member] | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Actual to Target Number of Shares Issued Percentage, Minimum | 0.00% | |
Actual to Target Number of Shares Issued Percentage, Maximum | 200.00% | |
Target Number of Shares Issued Percentage | 100.00% | 100.00% |
Stock Incentive Plans - Summa_2
Stock Incentive Plans - Summary of Fair Values Assumptions Using Monte Carlo Simulation Valuation Model (Details) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Assumptions (weighted-average) [Abstract] | |||
Risk-free interest rate | 2.90% | ||
Risk-free interest rate, Minimum | 1.60% | 1.30% | |
Risk-free interest rate, Maximum | 1.80% | 1.40% | |
Expected dividend yield | 1.30% | 1.40% | 1.40% |
Expected life (in years) | 3 years | 3 years | 3 years |
Expected volatility | 24.60% | 25.00% | 25.10% |
Stock Incentive Plans - Summa_3
Stock Incentive Plans - Summary of Nonvested Stock Awards and Performance Shares Activity (Details) - Performance Shares [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested - beginning of year | 260 | 268 | 199 |
Granted | 78 | 101 | 71 |
Vested | (68) | (104) | (69) |
Forfeitures | (10) | (5) | (54) |
Transfer to Valvoline Inc. | (21) | ||
Conversion adjustment | 142 | ||
Nonvested - end of year | 260 | 260 | 268 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted-average grant date fair value, nonvested - beginning of year | $ 64.55 | $ 63 | $ 106.91 |
Weighted-average grant date fair value, granted | 84.93 | 68.93 | 99.86 |
Weighted-average grant date fair value, vested | 61.67 | 65.53 | 85.86 |
Weighted-average grant date fair value, forfeitures | 65.16 | 66.24 | 75.52 |
Weighted-average grant date fair value, transfer to Valvoline Inc. | 115.68 | ||
Weighted-average grant date fair value, nonvested - end of year | $ 76.59 | $ 64.55 | $ 63 |
Stock Incentive Plans - Summa_4
Stock Incentive Plans - Summary of Nonvested Stock Awards and Performance Shares Activity (Parenthetical) (Details) - Performance Shares [Member] - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options, Grants In Perior Relating to Prior Periods | 15 | ||
Shares forfeiture | 10 | 5 | 54 |
Target Number of Shares Issued Percentage | 100.00% | 100.00% | |
Total Shareholder Return (TSR) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Payment upon vesting precentage on 2016 plan | 0.00% | ||
Shares forfeiture | 35 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue From Contracts With Customers [Line Items] | ||
Maximum cash collection period from customer | 60 days | |
Cost incurred to obtain contract with customer amortization period of practical expedients | true | |
Trade Receivable [Member] | ||
Revenue From Contracts With Customers [Line Items] | ||
Trade receivables | $ 435 | $ 482 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Disaggregation Of Revenue [Line Items] | ||||
Sales | $ 2,493 | $ 2,589 | $ 2,309 | |
Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 2,382 | 2,470 | 2,216 | |
Intermediates and Solvents [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 111 | 119 | 93 | |
North America [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 945 | 988 | 883 | |
North America [Member] | Intermediates and Solvents [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 58 | 58 | 34 | |
Europe [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 779 | 806 | 683 | |
Europe [Member] | Intermediates and Solvents [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 23 | 24 | 21 | |
Asia Pacific [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 458 | 454 | 432 | |
Asia Pacific [Member] | Intermediates and Solvents [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 25 | 31 | 32 | |
Latin America & Other [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 200 | 222 | 218 | |
Latin America & Other [Member] | Intermediates and Solvents [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 5 | 6 | 6 | |
Cellulosics [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 839 | 837 | 794 | |
Poly-vinyl pyrrolidones [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 413 | 422 | 402 | |
Adhesives [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 345 | 351 | 336 | |
Actives [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 156 | 153 | 128 | |
Vinyl Ethers [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 106 | 139 | 139 | |
Pharmachem [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 231 | 248 | 104 | |
Other [Member] | Specialty Ingredients [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | [1] | 292 | 320 | 313 |
Derivatives [Member] | Intermediates and Solvents [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | 92 | 99 | 77 | |
Butanediol [Member] | Intermediates and Solvents [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Sales | $ 19 | $ 20 | $ 16 | |
[1] | Other includes no product category in excess of 10% of sales. |
Reportable Segment Informatio_2
Reportable Segment Information - Additional Information (Details) | 12 Months Ended |
Sep. 30, 2019ReportableSegment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Reportable Segment Informatio_3
Reportable Segment Information - Schedule of Information About Domestic and International Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales to external customers | $ 2,493 | $ 2,589 | $ 2,309 |
Net assets (liabilities) | 3,571 | 3,406 | |
Property, plant and equipment, net | 1,577 | 1,646 | |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales to external customers | 959 | 997 | 880 |
Net assets (liabilities) | 1,789 | 1,142 | |
Property, plant and equipment, net | 1,231 | 1,250 | |
International [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales to external customers | 1,534 | 1,592 | $ 1,429 |
Net assets (liabilities) | 1,782 | 2,264 | |
Property, plant and equipment, net | $ 346 | $ 396 |
Reportable Segment Informatio_4
Reportable Segment Information - Summary of Financial Information for Each Reportable Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |||
Sales | $ 2,493 | $ 2,589 | $ 2,309 |
Equity income | 0 | 1 | 0 |
Other income (expense) | 4 | 3 | 3 |
Equity and other income | 4 | 4 | 3 |
Operating income (loss) | 166 | 102 | 49 |
Assets | 7,251 | 8,259 | 8,618 |
Property, plant and equipment, net | 1,577 | 1,646 | |
Additions to property, plant and equipment | 154 | 157 | 168 |
Continuing Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 289 | 277 | 265 |
Property, plant and equipment, net | 1,577 | 1,646 | 1,717 |
Additions to property, plant and equipment | 154 | 157 | 168 |
Specialty Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 2,382 | 2,470 | 2,216 |
Equity income | 0 | 1 | 0 |
Other income (expense) | (1) | (5) | (2) |
Operating income (loss) | 272 | 314 | 233 |
Assets | 5,705 | 5,955 | 6,050 |
Specialty Ingredients [Member] | Continuing Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 273 | 252 | 243 |
Property, plant and equipment, net | 1,377 | 1,434 | 1,470 |
Additions to property, plant and equipment | 137 | 138 | 148 |
Intermediates and Solvents [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 111 | 119 | 93 |
Equity income | 0 | 0 | 0 |
Other income (expense) | 0 | 0 | 0 |
Operating income (loss) | 16 | 17 | (6) |
Assets | 185 | 192 | 188 |
Intermediates and Solvents [Member] | Continuing Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 13 | 14 | 14 |
Property, plant and equipment, net | 78 | 83 | 90 |
Additions to property, plant and equipment | 7 | 5 | 5 |
Unallocated and other [Member] | |||
Segment Reporting Information [Line Items] | |||
Other income (expense) | 5 | 8 | 5 |
Operating income (loss) | (122) | (229) | (178) |
Assets | 1,361 | 2,112 | 2,380 |
Unallocated and other [Member] | Continuing Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 3 | 11 | 8 |
Property, plant and equipment, net | 122 | 129 | 157 |
Additions to property, plant and equipment | $ 10 | $ 14 | $ 15 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event [Member] - Plant Fire [Member] - Israeli Facility [Member] | Nov. 19, 2019USD ($)Defendant |
Subsequent Event [Line Items] | |
Description of damages sought under lawsuit | On November 19, 2019, Ashland received notice that it was named as one of seventeen defendants in a lawsuit seeking roughly $100 million in monetary damages related to a plant fire at an Israeli facility. |
Name of defendant | Ashland |
Number of defendants | Defendant | 17 |
Damages sought, value | $ 100,000,000 |
Reserves established for lawsuit | $ 0 |