Document And Entity Information
Document And Entity Information | 6 Months Ended |
Mar. 31, 2017USD ($)shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | ASHLAND GLOBAL HOLDINGS INC. |
Entity Central Index Key | 1,674,862 |
Current Fiscal Year End Date | --09-30 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | $ | $ 7,703,078,599 |
Entity Common Stock, Shares Outstanding | shares | 62,216,934 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2017 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Sales | $ 1,320 | $ 1,247 | $ 2,513 | $ 2,410 |
Cost of sales | 887 | 823 | 1,694 | 1,595 |
Gross profit | 433 | 424 | 819 | 815 |
Selling, general and administrative expense | 245 | 258 | 483 | 483 |
Research and development expense | 24 | 25 | 47 | 49 |
Equity and other income | 6 | 6 | 18 | 15 |
Operating income | 170 | 147 | 307 | 298 |
Net interest and other financing expense | 38 | 43 | 170 | 85 |
Net loss on divestitures | 0 | (2) | (1) | 0 |
Income from continuing operations before income taxes | 132 | 102 | 136 | 213 |
Income tax expense - Note I | 30 | 15 | 24 | 35 |
Income from continuing operations | 102 | 87 | 112 | 178 |
Income (loss) from discontinued operations (net of tax) - Note D | 3 | 0 | 3 | (2) |
Net income | 105 | 87 | 115 | 176 |
Net income attributable to noncontrolling interest | 13 | 0 | 24 | 0 |
Net income (loss) attributable to Ashland | $ 92 | $ 87 | $ 91 | $ 176 |
Basic earnings per share - Note L | ||||
Income from continuing operations attributable to Ashland | $ 1.43 | $ 1.39 | $ 1.42 | $ 2.79 |
Income (loss) from discontinued operations | 0.05 | 0 | 0.05 | (0.03) |
Net income attributable to Ashland | 1.48 | 1.39 | 1.47 | 2.76 |
Diluted earnings per share - Note L | ||||
Income from continuing operations attributable to Ashland | 1.42 | 1.38 | 1.41 | 2.76 |
Income (loss) from discontinued operations | 0.05 | 0 | 0.05 | (0.03) |
Net income attributable to Ashland | 1.47 | 1.38 | 1.46 | 2.73 |
DIVIDENDS PAID PER COMMON SHARE | $ 0.39 | $ 0.39 | $ 0.78 | $ 0.78 |
COMPREHENSIVE INCOME (LOSS) | ||||
Net income | $ 105 | $ 87 | $ 115 | $ 176 |
Other comprehensive income (loss), net of tax - Note M | ||||
Unrealized translation gain (loss) | 60 | 80 | (86) | 19 |
Pension and postretirement obligation adjustment | (2) | 24 | (4) | 21 |
Net change in available-for-sale securities | 6 | 3 | 6 | 9 |
Other comprehensive income (loss) | 64 | 107 | (84) | 49 |
Comprehensive income | 169 | 194 | 31 | 225 |
Comprehensive income attributable to noncontrolling interest | 14 | 0 | 24 | 0 |
Comprehensive income attributable to Ashland | $ 155 | $ 194 | $ 7 | $ 225 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Millions | Mar. 31, 2017 | Sep. 30, 2016 | |
Current assets | |||
Cash and cash equivalents | $ 605 | $ 1,188 | |
Accounts receivable | [1] | 972 | 894 |
Inventories - Note F | 687 | 671 | |
Other assets | 113 | 113 | |
Total current assets | 2,377 | 2,866 | |
Property, plant and equipment | |||
Cost | 4,364 | 4,343 | |
Accumulated depreciation | 2,159 | 2,119 | |
Net property, plant and equipment | 2,205 | 2,224 | |
Goodwill - Note G | 2,413 | 2,401 | |
Intangibles - Note G | 1,017 | 1,064 | |
Restricted investments - Note E | 298 | 292 | |
Asbestos insurance receivable - Note K | 193 | 196 | |
Equity and other unconsolidated investments | 61 | 57 | |
Deferred income taxes | 199 | 177 | |
Other assets | 423 | 420 | |
Total noncurrent assets | 6,809 | 6,831 | |
Total assets | 9,186 | 9,697 | |
Current liabilities | |||
Short-term debt - Note H | 95 | 170 | |
Current portion of long-term debt - Note H | 16 | 19 | |
Trade and other payables | 520 | 541 | |
Accrued expenses and other liabilities | 406 | 486 | |
Total current liabilities | 1,037 | 1,216 | |
Noncurrent liabilities | |||
Long-term debt - Note H | 2,812 | 3,055 | |
Employee benefit obligations - Note J | 1,017 | 1,080 | |
Asbestos litigation reserve - Note K | 663 | 686 | |
Deferred income taxes | 69 | 69 | |
Other liabilities | 445 | 426 | |
Total noncurrent liabilities | 5,006 | 5,316 | |
Commitments and contingencies - Note K | |||
Equity | |||
Total Ashland stockholders' equity | 3,300 | 3,347 | |
Noncontrolling interest | (157) | (182) | |
Total equity | 3,143 | 3,165 | |
Total liabilities and equity | $ 9,186 | $ 9,697 | |
[1] | Accounts receivable includes an allowance for doubtful accounts of $14 million at March 31, 2017 and September 30, 2016 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Sep. 30, 2016 |
Current assets | ||
Allowance for doubtful accounts | $ 14 | $ 14 |
STATEMENT OF CONSOLIDATED EQUIT
STATEMENT OF CONSOLIDATED EQUITY (unaudited) - 6 months ended Mar. 31, 2017 - USD ($) $ in Millions | Total | Common stock [Member] | Paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive income (loss) [Member] | Noncontrolling Interest [Member] | |||
Beginning Balance at Sep. 30, 2016 | $ 3,165 | $ 1 | $ 923 | $ 2,704 | $ (281) | [1] | $ (182) | [2] | |
Net income | 115 | 91 | 24 | ||||||
Other comprehensive loss | (84) | (84) | 0 | ||||||
Regular dividends, $0.78 per common share | (48) | (48) | |||||||
Common shares issued under stock incentive and other plans | [3] | (1) | (1) | ||||||
Adjustments to Additional Paid in Capital, Other | 0 | (5) | 5 | ||||||
Distributions to noncontrolling interest | (4) | (4) | |||||||
Ending Balance at Mar. 31, 2017 | $ 3,143 | $ 1 | $ 917 | $ 2,747 | $ (365) | [1] | $ (157) | [2] | |
[1] | At March 31, 2017 and September 30, 2016, the after-tax accumulated other comprehensive loss attributable to Ashland of $365 million and $281 million, respectively, was comprised of unrecognized prior service credits as a result of certain employee benefit plan amendments of $43 million and $46 million, respectively, net unrealized translation losses of $420 million and $333 million, respectively, and net unrealized gain on available-for-sale securities of $12 million and $6 million, respectively. At March 31, 2017 and September 30, 2016, amounts attributable to noncontrolling interest included unrecognized prior service credits of $8 million and $9 million, respectively, and net unrealized translation losses of $1 million and $2 million, respectively. | ||||||||
[2] | See Note B for discussion of Valvoline Inc. noncontrolling interest. | ||||||||
[3] | Common shares issued were 56,661 for the six months ended March 31, 2017. |
STATEMENT OF CONSOLIDATED EQUI6
STATEMENT OF CONSOLIDATED EQUITY (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | |
Dividends on common stock | $ 0.39 | $ 0.78 | |
Accumulated other comprehensive loss | $ (365) | $ (365) | $ (281) |
Unrecognized prior service credits | 43 | 43 | 46 |
Net unrealized translation loss | (420) | (420) | (333) |
Available-for-sale securities unrealized gain | 12 | $ 12 | 6 |
Common shares issued (in shares) | 56,661 | ||
Noncontrolling Interest [Member] | |||
Unrecognized prior service credits | 8 | $ 8 | 9 |
Net unrealized translation loss | $ (1) | $ (1) | $ (2) |
STATEMENTS OF CONDENSED CONSOLI
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (unaudited) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | |||
Net income | $ 115 | $ 176 | |
Loss (income) from discontinued operations (net of tax) | (3) | 2 | |
Adjustments to reconcile income from continuing operations to cash flows from operating activities | |||
Depreciation and amortization | 153 | 168 | |
Original issue discount and debt issuance cost amortization | 98 | 6 | |
Deferred income taxes | 1 | 1 | |
Equity income from affiliates | (7) | (8) | |
Distributions from equity affiliates | 4 | 9 | |
Stock based compensation expense | 12 | 17 | |
Gain on early retirement of debt | (3) | 0 | |
Gain on available-for-sale securities | (7) | (4) | |
Net loss on divestitures | 1 | 0 | |
Pension contributions | (14) | (15) | |
Loss (gain) on pension and other postretirement plan remeasurements | (10) | 23 | |
Change in operating assets and liabilities | [1] | (278) | (125) |
Total cash flows provided by operating activities from continuing operations | 62 | 250 | |
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | |||
Additions to property, plant and equipment | (104) | (103) | |
Proceeds from disposal of property, plant and equipment | 1 | 3 | |
Purchase of operations - net of cash acquired | (48) | (66) | |
Proceeds (uses) from sale of operations or equity investments | (1) | 12 | |
Net purchase of funds restricted for specific transactions | (2) | 0 | |
Reimbursements from restricted investments | 12 | 23 | |
Purchases of available-for-sale securities | (19) | (4) | |
Proceeds from sales of available-for-sale securities | 19 | 4 | |
Proceeds from the settlement of derivative instruments | 4 | 7 | |
Payments for the settlement of derivative instruments | (3) | 0 | |
Total cash flows used by investing activities from continuing operations | (141) | (124) | |
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS | |||
Repayment of long-term debt | (337) | (36) | |
Premium on long-term debt repayment | (5) | 0 | |
Proceeds (repayment) from short-term debt | (75) | 368 | |
Repurchase of common stock | 0 | (500) | |
Debt issuance costs | (4) | 0 | |
Cash dividends paid | (48) | (48) | |
Distributions to noncontrolling interest | (4) | 0 | |
Excess tax benefits related to share-based payments | (2) | (1) | |
Total cash flows used by financing activities from continuing operations | (475) | (217) | |
CASH USED BY CONTINUING OPERATIONS | (554) | (91) | |
Cash used by discontinued operations | |||
Operating cash flows | (21) | (19) | |
Investing cash flows | 0 | 0 | |
Total cash used by discontinued operations | (21) | (19) | |
Effect of currency exchange rate changes on cash and cash equivalents | (8) | (11) | |
DECREASE IN CASH AND CASH EQUIVALENTS | (583) | (121) | |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 1,188 | 1,257 | |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 605 | $ 1,136 | |
[1] | Excludes changes resulting from operations acquired or sold. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 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 2016 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. The Condensed 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). The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Securities and Exchange Commission (SEC) regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. These statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 . Results of operations for the period ended March 31, 2017 are not necessarily indicative of the expected results for the remaining quarter in the fiscal year. Ashland is composed of three reportable segments: Ashland Specialty Ingredients (Specialty Ingredients), Ashland Performance Materials (Performance Materials) and Valvoline. As of March 31, 2017 , Ashland maintains an approximately 83% controlling interest in Valvoline Inc., which holds the Valvoline reportable segment. See Note B for additional information. The term Valvoline as used herein, depending on context, refers to either Valvoline Inc. or Valvoline as a reportable segment of Ashland. Use of estimates, risks and uncertainties The preparation of Ashland’s Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets (including goodwill and other intangible assets), employee benefit obligations, income taxes and liabilities and receivables associated with asbestos litigation and environmental remediation. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. Ashland’s results are affected by domestic and international economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of certain key raw materials, can have a significant effect on operations. While Ashland maintains reserves for anticipated liabilities and carries various levels of insurance, Ashland could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings relating to asbestos, environmental remediation or other matters. New accounting standards A description of new U.S. GAAP accounting standards issued or adopted during the current year is required in interim financial reporting. A detailed listing of new accounting standards relevant to Ashland is included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2016 . The following standards relevant to Ashland were either issued or adopted in the current period, or will become effective in a subsequent period. In March 2017, the FASB issued accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Statement of Consolidated Comprehensive Income. 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 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 and will become effective for Ashland on October 1, 2018, with early adoption being optional. Ashland currently intends to early adopt this guidance on October 1, 2017 and will revise the presentation of the net periodic benefit cost in previous periods to conform to the current period presentation. Ashland expects this guidance to have a significant impact on the presentation of Ashland’s Statements of Consolidated Comprehensive Income as it will result in a reclassification of expenses and income from operating income into a separate caption below operating income, but before income taxes. In January 2017, the FASB issued accounting guidance which simplifies the subsequent measurement of goodwill by eliminating the second step of the two-step impairment test under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. The guidance instead requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value. This guidance must be applied prospectively and will become effective for Ashland on October 1, 2020. Ashland is currently evaluating the impact this guidance may have on Ashland's Condensed Consolidated Financial Statements. In April 2015, the FASB issued accounting guidance to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. Cloud computing arrangements represent the delivery of hosted services over the internet which includes software, platforms, infrastructure and other hosting arrangements. Under the guidance, customers that gain access to software in a cloud computing arrangement account for the software as internal-use software only if the arrangement includes a software license. This guidance became effective prospectively for Ashland on October 1, 2016. |
VALVOLINE
VALVOLINE | 6 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
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. The new Ashland is a premier global leader in providing specialty chemical solutions to customers in a wide range of consumer and industrial markets. These markets are currently served by Specialty Ingredients and Performance Materials. Key markets and applications include pharmaceutical, personal care, food and beverage, architectural coatings, adhesives, automotive, construction and energy. Valvoline Inc., a controlled subsidiary, operates on a stand-alone basis as a premium consumer-branded lubricant supplier. After completing the IPO on September 28, 2016, Ashland owns 170 million shares of Valvoline Inc.’s common stock, representing approximately 83% of the total outstanding shares of Valvoline Inc.’s common stock. The resulting outside stockholders’ interests in Valvoline Inc., which was approximately 17% as of March 31, 2017 and September 30, 2016 , are presented separately as a noncontrolling interest within Ashland’s equity in the Condensed Consolidated Balance Sheets. As of March 31, 2017 and September 30, 2016 , the noncontrolling interest was $157 million and $182 million , respectively. The amount of consolidated net income attributable to these minority holders is presented as a separate caption on the Statement of Consolidated Comprehensive Income. Ashland recognized separation costs of $26 million and $12 million for the three months ended March 31, 2017 and 2016 , respectively, and $54 million and $18 million for the six months ended March 31, 2017 and 2016 , respectively, which are primarily related to transaction and legal fees. Separation costs are primarily recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income. Transferred Assets and Liabilities As of September 30, 2016, Valvoline Inc. included substantially all of the Valvoline business as historically reported by Ashland, as well as certain other assets and liabilities transferred to Valvoline Inc. by Ashland as a part of the separation process. The largest transferred liabilities were the net pension and other postretirement plan liabilities, which include a substantial portion of the largest U.S. qualified pension plans and non-qualified U.S. pension plans. As of September 30, 2016, Valvoline Inc.’s net pension and other postretirement plan liabilities totaled approximately $900 million . Other transferred assets and liabilities primarily consist of deferred compensation, certain Ashland legacy business insurance reserves, tax attributes and certain trade payables. The impact of these other transferring assets and liabilities during 2016 was approximately $15 million of net assets. Additionally, any deferred tax assets and liabilities that relate specifically to these assets and liabilities have been transferred to Valvoline Inc. as well as certain other tax liabilities as a result of the Tax Matters Agreement. For purposes of Ashland’s 2017 segment reporting and consistent with prior periods, these transferred assets and liabilities remain included within Unallocated and other. Final Separation On April 25, 2017, Ashland announced that the Board of Directors has authorized the distribution to Ashland stockholders of all 170 million shares of Valvoline Inc.'s common stock on May 12, 2017 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. The actual distribution ratio for the Valvoline Inc. common stock to be distributed per share of Ashland common stock will be determined based on the number of shares of Ashland common stock outstanding on the record date. This final distribution is subject to certain conditions, including receipt of a customary tax opinion and confirmation of sufficient capital adequacy and surplus to make the distribution. Ashland expects all of these conditions to be satisfied on the distribution date. Acquisitions Time-It Lube On January 31, 2017, Valvoline completed the acquisition of the business assets related to 28 quick-lube stores, primarily located in east Texas and Louisiana, from Time-It Lube LLC and Time-It Lube of Texas, LP (together, "Time-It Lube") for a purchase price of $48 million . Of the $48 million , $44 million was preliminarily allocated to goodwill and the remainder was allocated to working capital, customer relationships and trade names. Oil Can Henry's On December 11, 2015, Ashland announced that it signed a definitive agreement to acquire OCH International, Inc. (Oil Can Henry's), which was the 13 th largest quick-lube network in the United States, servicing approximately 1 million vehicles annually with 89 quick-lube stores, consisting of 47 company-owned stores and 42 franchise locations, in Oregon, Washington, California, Arizona, Idaho and Colorado. On February 1, 2016, Ashland completed the acquisition. The acquisition of Oil Can Henry's was valued at $72 million , which included acquired indebtedness of $11 million and other working capital adjustments. Net of acquired indebtedness and certain purchase price adjustments, the net cash outlay was $62 million during the six months ended March 31, 2016 . The purchase price allocation primarily included $83 million of goodwill. |
DIVESTITURES
DIVESTITURES | 6 Months Ended |
Mar. 31, 2017 | |
DIVESTITURES [Abstract] | |
DIVESTITURES | 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. The loss was reported within the net gain (loss) on divestitures caption within the Statement of Consolidated Comprehensive Income. The net assets held for sale are not material to Ashland’s Condensed Consolidated Balance Sheets. 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. Any additional gain or loss recognized as a result of the transaction is expected to be nominal and would be recognized in the period incurred. The disposition is expected to be completed during fiscal 2017. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | In previous periods, Ashland has divested certain businesses that have qualified as discontinued operations. The operating results from these divested businesses and subsequent adjustments related to ongoing assessments of certain retained liabilities and tax items have been recorded within the discontinued operations caption in the Statements of Consolidated Comprehensive Income for all periods presented and are discussed further within this note. On July 31, 2014, Ashland completed the sale of the Ashland Water Technologies (Water Technologies) business to Clayton, Dubilier & Rice. Ashland made subsequent post-closing adjustments to the discontinued operations caption as defined by the definitive agreement during the three and six months ended March 31, 2017 and 2016 . Components of amounts reflected in the Statements of Consolidated Comprehensive Income related to discontinued operations are presented in the following table for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Income (loss) from discontinued operations (net of tax) Water Technologies $ 3 $ (1 ) $ 3 $ (1 ) Gain (loss) on disposal of discontinued operations (net of tax) Water Technologies — 1 — (1 ) Total income (loss) from discontinued operations (net of tax) $ 3 $ — $ 3 $ (2 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
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 March 31, 2017 . (In millions) Carrying value Total fair value Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Significant unobservable inputs Level 3 Assets Cash and cash equivalents $ 605 $ 605 $ 605 $ — $ — Restricted investments (a) 328 328 328 — — Deferred compensation investments (b) 186 186 33 153 — Investments of captive insurance company (b) 2 2 2 — — Foreign currency derivatives 6 6 — 6 — Total assets at fair value $ 1,127 $ 1,127 $ 968 $ 159 $ — Liabilities Foreign currency derivatives $ 4 $ 4 $ — $ 4 $ — (a) Included in restricted investments and $30 million within other current assets in the Condensed Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2016 . (In millions) Carrying value Total fair value Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Significant unobservable inputs Level 3 Assets Cash and cash equivalents $ 1,188 $ 1,188 $ 1,188 $ — $ — Restricted investments (a) 322 322 322 — — Deferred compensation investments (b) 185 185 35 150 — Investments of captive insurance company (b) 4 4 4 — — Foreign currency derivatives 3 3 — 3 — Total assets at fair value $ 1,702 $ 1,702 $ 1,549 $ 153 $ — Liabilities Foreign currency derivatives $ 5 $ 5 $ — $ 5 $ — (a) Included in restricted investments and $30 million within other current assets in the Condensed Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. Restricted investments On January 13, 2015, Ashland and Hercules entered into a comprehensive settlement agreement related to certain insurance coverage for asbestos bodily injury claims with Underwriters at Lloyd’s, certain London Companies and Chartis (AIG) member companies, along with National Indemnity Company and Resolute Management, Inc., under which Ashland and Hercules received a total of $398 million (the January 2015 asbestos insurance settlement). During the March 2015 quarter, Ashland placed $335 million of the settlement funds from the January 2015 asbestos insurance settlement into a renewable annual trust restricted for the purpose of paying ongoing and future litigation defense and claim settlement costs incurred in conjunction with asbestos claims. These funds were classified primarily as noncurrent restricted investment assets, with $30 million classified within other current assets, in the Condensed Consolidated Balance Sheets as of March 31, 2017 and September 30, 2016 . During 2015, Ashland diversified the restricted investments received from the January 2015 asbestos insurance settlement into primarily equity and corporate bond mutual funds that are designated as available-for-sale securities, classified as Level 1 measurements within the fair value hierarchy. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related deferred income taxes, included in the stockholders' equity section of the Condensed Consolidated Balance Sheets as a component of accumulated other comprehensive income (AOCI). Investment income and realized gains and losses on the available-for-sale securities are reported in the net interest and other financing expense caption in the Statements of Consolidated Comprehensive Income. The following table provides a summary of the available-for-sale securities portfolio as of March 31, 2017 and September 30, 2016 : March 31 September 30 (In millions) 2017 2016 Original cost $ 335 $ 335 Accumulated investment income, settlement funds and disbursements, net (24 ) (3 ) Adjusted cost (a) 311 332 Investment income (b) 5 8 Unrealized gain 21 11 Unrealized loss (1 ) — Realized gain 2 — Settlement funds 2 4 Disbursements (12 ) (33 ) Fair value $ 328 $ 322 (a) The adjusted cost of the demand deposit includes accumulated investment income, disbursements and settlements recorded in previous periods. (b) Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. The following table presents gross unrealized gains and losses for the available-for-sale securities as of March 31, 2017 and September 30, 2016 : Gross Gross (In millions) Adjusted Cost Unrealized Gain Unrealized Loss Fair Value As of March 31, 2017 Demand Deposit $ 20 $ — $ — $ 20 Equity Mutual Fund 168 21 — 189 Corporate bond Mutual Fund 120 — (1 ) 119 Fair value $ 308 $ 21 $ (1 ) $ 328 As of September 30, 2016 Demand Deposit $ 6 $ — $ — $ 6 Equity Mutual Fund 185 8 — 193 Corporate bond Mutual Fund 120 3 — 123 Fair value $ 311 $ 11 $ — $ 322 The unrealized gains and losses as of March 31, 2017 and September 30, 2016 were recognized within AOCI. Ashland invests in highly-rated investment grade mutual funds. No other-than-temporary impairment was recognized in AOCI during the three and six months ended March 31, 2017 and 2016 . The following table presents the investment income, realized gains and disbursements related to the investments within the portfolio for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Investment income $ 2 $ 2 $ 5 $ 4 Realized gains 2 — 2 — Disbursements (12 ) (16 ) (12 ) (23 ) Deferred compensation investments Deferred compensation investments consist of Level 1 and Level 2 measurements within the fair value hierarchy. Level 1 investments consist primarily of fixed income U.S. government bonds while Level 2 investments are comprised primarily of a guaranteed interest fund, a common stock index fund and an intermediate government bond fund. Gains and losses related to deferred compensation investments are immediately recognized within the Statements of Consolidated Comprehensive Income. Derivative and hedging activities Currency hedges 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 recognized during the three and six months ended March 31, 2017 and 2016 within the Statements of Consolidated Comprehensive Income. Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Foreign currency derivative gain $ 7 $ 1 $ 9 $ 4 The following table summarizes the fair values of the outstanding foreign currency derivatives as of March 31, 2017 and September 30, 2016 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets. March 31 September 30 (In millions) 2017 2016 Foreign currency derivative assets $ 6 $ 3 Notional contract values 781 333 Foreign currency derivative liabilities $ 3 $ 4 Notional contract values 312 530 Net investment hedges Since 2014, Ashland has entered into foreign currency contracts in order to manage the foreign currency exposure of the net investment in certain foreign operations. These foreign currency contracts were primarily the result of certain proceeds from the sale of Water Technologies being received in non-U.S. denominated currencies during 2014 and ongoing management of the volatility in foreign currency exchange rates. Ashland designated the foreign currency contracts as hedges of net investments in its foreign subsidiaries. As a result, Ashland records these hedges at fair value using forward rates, with the effective portion of the gain or loss reported as a component of the cumulative translation adjustment within AOCI and subsequently recognized in the Statements of Consolidated Comprehensive Income when the hedged item affects net income . During 2017 and 2016, these foreign currency contracts were settled and for certain hedges Ashland entered into new foreign currency contracts designated as hedges of net investments in foreign subsidiaries. These settlements resulted in net gains and losses recorded within the cumulative translation adjustment within AOCI, including a net loss of $2 million for the three months ended March 31, 2017 , and net gains of $1 million and $7 million for the six months March 31, 2017 and 2016 , respectively. As of March 31, 2017 and September 30, 2016 , the total notional value of foreign currency contracts equaled $69 million and $94 million , respectively. The fair value of Ashland's net investment hedge assets and liabilities are calculated using forward rates. Accordingly, these instruments are deemed to be Level 2 measurements within the fair value hierarchy. Counterparties to these net investment hedges are highly rated financial institutions which Ashland believes carry only a nominal risk of nonperformance. The following table summarizes the fair value of the outstanding net investment hedge instruments as of March 31, 2017 and September 30, 2016 . March 31 September 30 (In millions) Consolidated balance sheet caption 2017 2016 Net investment hedge assets (a) Accounts receivable $ — $ — Net investment hedge liabilities Accrued expenses and other liabilities 1 1 (a) Fair value of $0 denotes a value less than $1 million. The following table summarizes the change in the unrealized gain (loss) on the net investment hedge instruments recognized within the cumulative translation adjustment within AOCI during the three and six months ended March 31, 2017 and 2016 . No portion of the gain or loss was reclassified to income during the three and six months ended March 31, 2017 and 2016 . There was no hedge ineffectiveness with these instruments during the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Change in unrealized loss in AOCI $ (1 ) $ (2 ) $ (1 ) $ (2 ) Tax impact of change in unrealized loss in AOCI (a) 1 1 — 1 (a) $0 denotes a value less than $1 million. Other financial instruments At March 31, 2017 and September 30, 2016 , Ashland’s consolidated long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying value of $2,855 million and $3,103 million , respectively, compared to a fair value of $3,002 million and $3,336 million , respectively. The fair values of long-term debt are based on quoted market prices or, if market prices are not available, the present values of the underlying cash flows discounted at Ashland’s incremental borrowing rates, which are deemed to be Level 2 measurements within the fair value hierarchy. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories are carried at the lower of cost or market. Inventories are primarily stated at cost using the weighted-average cost method. In addition, certain chemicals, plastics and lubricants are valued at cost using the last-in, first-out (LIFO) method. The following table summarizes Ashland’s inventories as of the reported Condensed Consolidated Balance Sheet dates. March 31 September 30 (In millions) 2017 2016 Finished products $ 514 $ 516 Raw materials, supplies and work in process 200 184 LIFO reserves (27 ) (29 ) $ 687 $ 671 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 6 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | Goodwill Ashland reviews goodwill and indefinite-lived intangible assets for impairment annually or when events and circumstances indicate an impairment may have occurred. This annual assessment is performed as of July 1 and consists of Ashland determining each reporting unit’s current fair value compared to its current carrying value. For its July 1, 2016 assessment, Ashland determined that its reporting units for the allocation of goodwill include the Specialty Ingredients reportable segment, the Composites and Intermediates/Solvents reporting units within the Performance Materials reportable segment, and the Core North America, Quick Lubes and International reporting units within the Valvoline reportable segment. Based on the results of its goodwill impairment testing as of July 1, 2016, Ashland recorded a pre-tax goodwill impairment charge of $171 million for Intermediates/Solvents during the fourth quarter of 2016. The following is a progression of goodwill by reportable segment for the six months ended March 31, 2017 . Specialty Performance (In millions) Ingredients Materials (a) Valvoline (b) Total Balance as of September 30, 2016 $ 1,991 $ 147 $ 263 $ 2,401 Acquisitions (c) — — 49 49 Currency translation adjustment (36 ) (1 ) — (37 ) Balance as of March 31, 2017 $ 1,955 $ 146 $ 312 $ 2,413 (a) As of March 31, 2017 , goodwill was completely attributable to the Composites reporting unit due to the full impairment of the goodwill for the Intermediates/Solvents reporting unit during the fourth quarter of 2016. (b) As of March 31, 2017 , goodwill consisted of $89 million for the Core North America reporting unit, $183 million for the Quick Lubes reporting unit and $40 million for the International reporting unit. (c) Relates to $44 million for the acquisition of Time-It Lube and $5 million for Valvoline Instant Oil Change SM center acquisitions during the six months ended March 31, 2017 . See Note B for more information on the acquisition of Time-It Lube. Other intangible assets Intangible assets principally consist of trademarks and trade names, intellectual property and customer relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 20 years, and customer relationships over 3 to 24 years. Ashland annually reviews indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. Intangible assets were comprised of the following as of March 31, 2017 and September 30, 2016 . March 31, 2017 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangible assets Trademarks and trade names (a) $ 43 $ (20 ) $ 23 Intellectual property 663 (297 ) 366 Customer relationships (a) 538 (211 ) 327 Total definite-lived intangible assets 1,244 (528 ) 716 Indefinite-lived intangible assets Trademarks and trade names 301 — 301 Total intangible assets $ 1,545 $ (528 ) $ 1,017 (a) Acquired customer relationships and trade names during the six months ended March 31, 2017 had gross carrying amounts of $2 million and $1 million , respectively, for Time-It Lube. See Note B for more information on the acquisition of Time-It Lube. September 30, 2016 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangible assets Trademarks and trade names $ 42 $ (19 ) $ 23 Intellectual property 667 (273 ) 394 Customer relationships 546 (200 ) 346 Total definite-lived intangible assets 1,255 (492 ) 763 Indefinite-lived intangible assets Trademarks and trade names 301 — 301 Total intangible assets $ 1,556 $ (492 ) $ 1,064 Amortization expense recognized on intangible assets was $19 million for each of the three months ended March 31, 2017 and 2016 , and $38 million for each of the six months ended March 31, 2017 and 2016 , and is included in the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income. Estimated amortization expense for future periods is $77 million in 2017 (includes six months actual and six months estimated), $76 million in 2018 , $71 million in 2019 , $70 million in 2020 and $70 million in 2021 . The amortization expense for future periods is an estimate. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions and divestitures, potential impairment, accelerated amortization, or other events. |
DEBT
DEBT | 6 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | The following table summarizes Ashland’s current and long-term debt as of the dates reported in the Condensed Consolidated Balance Sheets. March 31 September 30 (In millions) 2017 2016 4.750% notes, due 2022 $ 1,082 $ 1,121 3.875% notes, due 2018 659 700 6.875% notes, due 2043 376 376 5.500% notes, due 2024 (a) 375 375 Term Loan, due 2021 (a) 293 375 2017 accounts receivable securitization facility (a) 75 — 6.50% junior subordinated notes, due 2029 50 140 Other international loans, interest at a weighted- average rate of 4.9% at March 31, 2017 (4.8% to 5.0%) 20 20 Medium-term notes, due 2019, interest of 9.4% at March 31, 2017 5 5 Term Loan, due 2017 — 150 Other (b) (12 ) (18 ) Total debt 2,923 3,244 Short-term debt (95 ) (170 ) Current portion of long-term debt (16 ) (19 ) Long-term debt (less current portion and debt issuance cost discounts) $ 2,812 $ 3,055 (a) These debt instruments were issued by Valvoline during 2016 and 2017 in connection with the separation process. (b) Other includes $27 million and $29 million of debt issuance cost discounts as of March 31, 2017 and September 30, 2016 , respectively. The scheduled aggregate maturities of long-term debt by year (including the current portion and excluding debt issuance costs) are as follows: $8 million remaining in 2017 , $674 million in 2018 , $35 million in 2019 , $30 million in 2020 and $210 million in 2021 . Ashland Financing Activities 6.50% junior subordinated notes due 2029 In December 2016, Hercules LLC (Hercules) (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland, repurchased, through a cash tender offer (the Tender Offer), $182 million of the aggregate principal par value amount of its 6.50% junior subordinated notes due 2029 (2029 notes) for an aggregate purchase price of $177 million . As a result of the Tender Offer, the carrying value of the 2029 notes was reduced by $90 million and Ashland recognized a $92 million charge related to accelerated accretion of the recorded debt discount (compared to the total par value) and $5 million of a net gain related to the repayment of the debt. The charge and net gain are included in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income for the six months ended March 31, 2017 . Open market repurchases of 4.750% notes due 2022 and 3.875% notes due 2018 During the six months ended March 31, 2017 , Ashland executed open market repurchases of its 4.750% notes due 2022 (2022 notes) and its 3.875% notes due 2018 (2018 notes). As a result of these repurchases, the carrying values of the 2022 notes and 2018 notes were reduced by $39 million and $41 million , respectively. Ashland recognized a $3 million charge related to premiums paid in the open market repurchases and accelerated amortization of previously capitalized debt issuance costs, which is included in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income for the six months ended March 31, 2017 . Subsidiary senior unsecured term loan During August 2016, a wholly owned foreign subsidiary of Ashland entered into a credit agreement which provided for an aggregate principal amount of $150 million in a senior unsecured term loan facility. This term loan was drawn in full as of September 30, 2016 and was fully repaid during the six months ended March 31, 2017 . Accounts receivable securitization During the December 2015 quarter, the Transfer and Administration Agreement was amended to extend the termination date of the accounts receivable securitization facility from December 31, 2015 to March 22, 2017. During the March 2017 quarter, this facility was extended for an additional year with similar terms as the previous facility agreement. No other changes to the agreement within the current or prior year amendments are expected to have a significant impact to Ashland's results of operations and financial position. Remaining borrowing capacity The borrowing capacity remaining under Ashland's 2015 revolving credit facility was $748 million , which is net of $52 million for letters of credit outstanding at March 31, 2017 . Ashland's total borrowing capacity at March 31, 2017 (excluding Valvoline) was $847 million , which included $99 million of available capacity from the accounts receivable securitization facility. Covenants related to current Ashland debt agreements Ashland's debt contains usual and customary representations, warranties and affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional subsidiary indebtedness, restrictions on subsidiary distributions, investments, mergers, sale of assets and restricted payments and other customary limitations. As of March 31, 2017 , Ashland is in compliance with all debt agreement covenant restrictions. The maximum consolidated leverage ratio permitted under Ashland's most recent credit agreement (the 2015 Senior Credit Agreement) during its remaining duration is 3.50 . At March 31, 2017 , Ashland’s calculation of the consolidated leverage ratio was 3.1 , which is below the maximum consolidated leverage ratio of 3.50 . The minimum required consolidated interest coverage ratio under the 2015 Senior Credit Agreement during its entire duration is 3.0 . At March 31, 2017 , Ashland’s calculation of the interest coverage ratio was 4.5 , which exceeds the minimum required consolidated ratio of 3.0 . Valvoline Financing Activities Accounts receivable securitization In November 2016, Valvoline entered into a $125 million accounts receivable securitization facility (the 2017 accounts receivable securitization facility) pursuant to (i) a Sale Agreement, between Valvoline and LEX Capital LLC, a wholly-owned “bankruptcy remote” special purpose subsidiary of Valvoline (Lex) and (ii) a Transfer and Administration Agreement, among Lex, Valvoline, as Master Servicer, a certain Conduit Investor, Uncommitted Investor, and Letter of Credit Issuer, certain Managing Agents, Administrators and Committed Investors, and PNC Bank National Association, as agent for various secured parties (the Agent). Under the Sale Agreement, Valvoline will sell, on an ongoing basis, substantially all of its accounts receivable, certain related assets and the right to the collections on those accounts receivable to Lex. Under the terms of the Transfer and Administration Agreement, Lex may, from time to time, obtain up to $125 million (in the form of cash or letters of credit for the benefit of Valvoline) from the Conduit Investor, the Uncommitted Investor and/or the Committed Investors (together the “Investors”) through the sale of an undivided interest in such accounts receivable, related assets and collections. The Transfer and Administration Agreement has a term of one year but is extendable at the discretion of the Investors. Valvoline accounts for the 2017 accounts receivable securitization facility as secured borrowings, and the receivables sold pursuant to the facility are included in Ashland's Condensed Consolidated Balance Sheet as accounts receivable. Valvoline classifies any borrowings under this facility as short-term debt within Ashland's Condensed Consolidated Balance Sheet. During the first quarter of 2017, Valvoline borrowed $75 million under the 2017 accounts receivable securitization facility and used the net proceeds to repay an equal amount of the 2016 term loan facility. As a result, Valvoline recognized a $1 million charge related to the accelerated amortization of previously capitalized debt issuance costs, which is included in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income for the six months ended March 31, 2017 . Remaining borrowing capacity At March 31, 2017 , the total borrowing capacity remaining under Valvoline's 2016 revolving credit facility was $436 million , which is net of $14 million for letters of credit outstanding. Valvoline's total borrowing capacity at March 31, 2017 was $486 million , which included $50 million of available capacity from the 2017 accounts receivable securitization facility. Covenants related to current Valvoline debt agreements The Valvoline Credit Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including limitations on liens, additional indebtedness, investments, restricted payments, asset sales, mergers, affiliate transactions and other customary limitations, as well as financial covenants (including maintenance of a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio) and other customary limitations. As of March 31, 2017 , Valvoline Inc. was in compliance with all debt agreement covenant restrictions. The maximum consolidated leverage ratio permitted under the Valvoline Credit Agreement is 4.5 . At March 31, 2017 , Valvoline’s calculation of the consolidated leverage ratio was 1.4 , which is below the maximum consolidated leverage ratio of 4.5 . The minimum required consolidated interest coverage ratio under the Valvoline Credit Agreement during its entire duration is 3.0 . At March 31, 2017 , Valvoline’s calculation of the interest coverage ratio was 13.5 , which exceeds the minimum required consolidated ratio of 3.0 . |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Current fiscal year Ashland’s estimated annual effective income tax rate used to determine income tax expense in interim financial reporting for the year ending September 30, 2017 is 24% . Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was 23% and 18% for the three and six months ended March 31, 2017 , respectively. The current quarter and period tax rate was impacted by net favorable tax discrete items of $4 million primarily related to unrecognized tax benefits due to lapse of the statute of limitations. Prior fiscal year Ashland’s annual effective income tax rate used to determine income tax expense in interim financial reporting for the year ending September 30, 2016 was 25% . The overall effective tax rate was 15% and 16% for the three and six months ended March 31, 2016 , respectively. The prior year quarter and period tax rate was impacted by net favorable tax discrete items of $7 million and $13 million , respectively, primarily related to the law change from the reinstatement of the research and development credit, a favorable tax liquidation resolution and the reversal of unrecognized tax benefits due to lapse of the statute of limitations. Unrecognized tax benefits Changes in unrecognized tax benefits are summarized as follows for the six months ended March 31, 2017 . (In millions) Balance at October 1, 2016 $ 168 Increases related to positions taken on items from prior years 5 Decreases related to positions taken on items from prior years (2 ) Increases related to positions taken in the current year 7 Lapse of the statute of limitations (2 ) Settlement of uncertain tax positions with tax authorities (1 ) Balance at March 31, 2017 $ 175 In the next twelve months, Ashland expects a decrease in the amount accrued for uncertain tax positions of up to $1 million for continuing operations and zero for discontinued operations related primarily to audit settlements and statute of limitations expirations in various tax jurisdictions. It is reasonably possible that there could be other material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues or the reassessment of existing uncertain tax positions; however, Ashland is not able to estimate the impact of these items at this time. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | For the six months ended March 31, 2017 , Ashland contributed $7 million to its non-qualified U.S. pension plans, all of which was paid by Valvoline, and $7 million to its non-U.S. pension plans. No contributions were made to Ashland's qualified U.S. pension plans during the six months ended March 31, 2017 . Ashland expects to make additional contributions to the U.S. plans of approximately $7 million , which will primarily be paid by Valvoline, and to the non-U.S. plans of approximately $3 million during the remainder of 2017 . Plan Transfers During September 2016, Ashland transferred a substantial portion of the largest U.S. qualified pension and non-qualified U.S. pension plans as well as certain other postretirement obligations to Valvoline Inc. as part of the separation process discussed further in Note B. Plan Amendments and Remeasurements Effective January 1, 2017, Ashland discontinued certain post-employment health and life insurance benefits. The effect of these plan changes resulted in a remeasurement gain of $10 million , $4 million within cost of sales and $6 million within selling, general and administrative expense, in the Statements of Consolidated Comprehensive Income for the six months ended March 31, 2017 . During March 2016, Ashland announced plans to amend the majority of its U.S. pension plans, with the exception of certain union plans, to freeze the accrual of pension benefits for participants. The freezing of pension benefits was effective September 30, 2016. Additionally, Ashland announced plans to reduce retiree life and medical benefits effective October 1, 2016 and January 1, 2017, respectively. The net effect of the these remeasurements resulted in a loss of $23 million within the Statements of Consolidated Comprehensive Income for the three and six months ended March 31, 2016. The following details the components of the remeasurement impact: • As a result of the remeasurement of the affected U.S. pension plans, Ashland recognized a curtailment gain of $65 million and actuarial loss of $123 million during the three and six months ended March 31, 2016. • As a result of the remeasurement of other postretirement benefit plans, Ashland recognized a curtailment gain of $39 million and actuarial loss of $7 million during the three and six months ended March 31, 2016. This remeasurement reduced the benefit obligations by $86 million , which will be amortized to income in future periods. • Ashland was also required to remeasure a non-U.S. pension plan during the prior year quarter and as a result recognized a curtailment gain of $6 million and actuarial loss of $3 million during the three and six months ended March 31, 2016. Components of net periodic benefit costs (income) For segment reporting purposes, service cost for continuing operations is proportionately allocated to each segment, excluding the Unallocated and other segment, while all other costs for continuing operations are recorded within the Unallocated and other segment. The following table details the components of pension and other postretirement benefit costs. Other postretirement Pension benefits benefits (In millions) 2017 2016 2017 2016 Three months ended March 31 Service cost (a) $ 2 $ 6 $ — $ — Interest cost 24 31 1 1 Expected return on plan assets (39 ) (48 ) — — Amortization of prior service credit (a) — — (3 ) (4 ) Curtailment gain — (71 ) — (39 ) Actuarial loss — 126 — 7 $ (13 ) $ 44 $ (2 ) $ (35 ) Six months ended March 31 Service cost (a) $ 5 $ 13 $ — $ — Interest cost 47 62 2 3 Expected return on plan assets (78 ) (96 ) — — Amortization of prior service credit (a) — (1 ) (6 ) (8 ) Curtailment gain — (71 ) — (39 ) Actuarial (gain) loss — 126 (10 ) 7 $ (26 ) $ 33 $ (14 ) $ (37 ) (a) Activity of $0 denote values less than $1 million. |
LITIGATION, CLAIMS AND CONTINGE
LITIGATION, CLAIMS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 Hamilton, Rabinovitz & Associates, Inc. (HR&A). The methodology used by HR&A 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, HR&A 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. 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 Stoker Corporation, 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. Six months ended March 31 Years ended September 30 (In thousands) 2017 2016 2016 2015 2014 Open claims - beginning of period 57 60 60 65 65 New claims filed 1 1 2 2 2 Claims settled — — — — (1 ) Claims dismissed (2 ) (3 ) (5 ) (7 ) (1 ) Open claims - end of period 56 58 57 60 65 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 HR&A. During the most recent annual update of this estimate completed during the June 2016 quarter, it was determined that the liability for Ashland asbestos-related claims should be increased by $37 million . Total reserves for asbestos claims were $397 million at March 31, 2017 compared to $415 million at September 30, 2016 . A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Asbestos reserve - beginning of period $ 415 $ 409 $ 409 $ 438 $ 463 Reserve adjustment — — 37 — 4 Amounts paid (18 ) (17 ) (31 ) (29 ) (29 ) Asbestos reserve - end of period $ 397 $ 392 $ 415 $ 409 $ 438 Ashland asbestos-related receivables Ashland has insurance coverage for certain litigation defense and claim settlement costs incurred in connection with its asbestos claims, and coverage-in-place agreements exist with the insurance companies that provide substantially all of the coverage that will be accessed. For the Ashland asbestos-related obligations, Ashland has estimated the value of probable insurance recoveries associated with its asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. Substantially all of the estimated receivables from insurance companies are expected to be due from domestic insurers, all of which are solvent. At March 31, 2017 , Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers amounted to $144 million (excluding the Hercules receivable for asbestos claims), of which $4 million relates to costs previously paid. Receivables from insurers amounted to $151 million at September 30, 2016 . During the June 2016 quarter, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $16 million increase in the receivable for probable insurance recoveries. Ashland entered into settlement agreements totaling $5 million and $4 million with certain insurers during the March 2017 and 2016 quarters, respectively, which resulted in a reduction of the Ashland insurance receivable within the Condensed Consolidated Balance Sheets by the same amount. During the June 2016 quarter, Ashland placed $4 million of the settlement funds into the renewable annual trust. A progression of activity in the Ashland insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Insurance receivable - beginning of period $ 151 $ 150 $ 150 $ 402 $ 408 Receivable adjustment — — 16 (3 ) 22 Insurance settlement (5 ) (4 ) (4 ) (227 ) — Amounts collected (2 ) (7 ) (11 ) (22 ) (28 ) Insurance receivable - end of period $ 144 $ 139 $ 151 $ 150 $ 402 Hercules asbestos-related litigation Hercules has liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims typically arise from alleged exposure to asbestos fibers from resin encapsulated pipe and tank products which were sold by one of Hercules’ former subsidiaries to a limited industrial market. The amount and timing of settlements and number of open claims can fluctuate from period to period. A summary of Hercules’ asbestos claims activity follows. Six months ended March 31 Years ended September 30 (In thousands) 2017 2016 2016 2015 2014 Open claims - beginning of period 15 20 20 21 21 New claims filed 1 1 1 1 1 Claims dismissed (3 ) (1 ) (6 ) (2 ) (1 ) Open claims - end of period 13 20 15 20 21 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 HR&A. As a result of the most recent annual update of this estimate, completed during the June 2016 quarter, it was determined that the liability for Hercules asbestos-related claims should be increased by $25 million . Total reserves for asbestos claims were $316 million at March 31, 2017 compared to $321 million at September 30, 2016 . A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Asbestos reserve - beginning of period $ 321 $ 311 $ 311 $ 329 $ 342 Reserve adjustment — — 25 4 10 Amounts paid (5 ) (8 ) (15 ) (22 ) (23 ) Asbestos reserve - end of period $ 316 $ 303 $ 321 $ 311 $ 329 Hercules asbestos-related receivables For the Hercules asbestos-related obligations, certain reimbursement obligations pursuant to coverage-in-place agreements with insurance carriers exist. As a result, any increases in the asbestos reserve have been partially offset by probable insurance recoveries. Ashland has estimated the value of probable insurance recoveries associated with its asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. The estimated receivable consists exclusively of solvent domestic insurers. As of March 31, 2017 and September 30, 2016 , the receivables from insurers amounted to $63 million . During the June 2016 quarter, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $7 million increase in the receivable for probable insurance recoveries. A progression of activity in the Hercules insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Insurance receivable - beginning of period $ 63 $ 56 $ 56 $ 77 $ 75 Receivable adjustment — — 7 1 3 Insurance settlement — — — (22 ) — Amounts collected — — — — (1 ) Insurance receivable - end of period $ 63 $ 56 $ 63 $ 56 $ 77 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 $670 million for the Ashland asbestos-related litigation (current reserve of $397 million ) and approximately $490 million for the Hercules asbestos-related litigation (current reserve of $316 million ), depending on the combination of assumptions selected in the various models. If actual experience is worse than projected, relative to the number of claims filed, the severity of alleged disease associated with those claims or costs incurred to resolve those claims, or actuarial refinement or improvements to the assumptions used within these models are initiated, Ashland may need to further increase the estimates of the costs associated with asbestos claims and these increases could be material over time. Environmental remediation and asset retirement obligations Ashland is subject to various federal, state and local environmental laws and regulations that require environmental assessment or remediation efforts (collectively environmental remediation) at multiple locations. At March 31, 2017 , such locations included 84 waste treatment or disposal sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 130 current and former operating facilities (including certain operating facilities conveyed as part of the MAP Transaction) and about 1,225 service station properties, of which 64 are being actively remediated. Ashland’s reserves for environmental remediation and related environmental litigation amounted to $167 million at March 31, 2017 compared to $177 million at September 30, 2016 , of which $124 million at March 31, 2017 and $134 million at September 30, 2016 were classified in other noncurrent liabilities on the Condensed Consolidated Balance Sheets. The following table provides a reconciliation of the changes in the environmental remediation reserves during the six months ended March 31, 2017 and 2016 . Six months ended March 31 (In millions) 2017 2016 Reserve - beginning of period $ 177 $ 186 Disbursements (15 ) (24 ) Revised obligation estimates and accretion 5 14 Reserve - end of period $ 167 $ 176 The total reserves for environmental remediation reflect Ashland’s estimates of the most likely costs that will be incurred over an extended period to remediate identified conditions for which the costs are reasonably estimable, without regard to any third-party recoveries. Engineering studies, probability techniques, historical experience and other factors are used to identify and evaluate remediation alternatives and their related costs in determining the estimated reserves for environmental remediation. Ashland continues to discount certain environmental sites and regularly adjusts its reserves as environmental remediation continues. Ashland has estimated the value of its probable insurance recoveries associated with its environmental reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. At March 31, 2017 and September 30, 2016 , Ashland’s recorded receivable for these probable insurance recoveries was $22 million and $23 million , respectively, of which $14 million and $15 million at March 31, 2017 and September 30, 2016 , respectively, were classified in other noncurrent assets on the Condensed Consolidated Balance Sheets. Components of environmental remediation expense included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income are presented in the following table for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Environmental expense $ 1 $ 9 $ 5 $ 13 Accretion (a) — 1 — 1 Legal expense 4 3 5 5 Total expense 5 13 10 19 Insurance receivable (a) — (1 ) — (1 ) Total expense, net of receivable activity (b) $ 5 $ 12 $ 10 $ 18 (a) Activity of $0 denotes value less than $1 million. (b) Net expense of $1 million and $2 million for the three and six months ended March 31, 2017 , respectively, relates to divested businesses which qualified for treatment as discontinued operations and for which certain environmental liabilities were retained by Ashland. These amounts are classified within the income (loss) from discontinued operations caption of the Statements of Consolidated Comprehensive Income. 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 $375 million . No individual remediation location is significant, as the largest reserve for any site is less than 16% of the remediation reserve. Other legal proceedings and claims In addition to the matters described above, there are other various claims, lawsuits and administrative proceedings pending or threatened against Ashland and its current and former subsidiaries. Such actions are with respect to commercial matters, product liability, toxic tort liability, and other environmental matters, which seek remedies or damages, some of which are for substantial amounts. While Ashland cannot predict with certainty the outcome of such actions, it believes that adequate reserves have been recorded and losses already recognized with respect to such actions were immaterial as of March 31, 2017 and September 30, 2016 . There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, Ashland believes that such potential losses were immaterial as of March 31, 2017 . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Stock appreciation rights (SARs), stock options and warrants available to purchase shares outstanding for each reporting period whose grant price was greater than the average market price of Ashland Common Stock for each applicable period were not included in the computation of income from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was approximately 0.1 million and 1.2 million at March 31, 2017 and 2016 , respectively. Earnings per share is reported under the treasury stock method. Three months ended Six months ended March 31 March 31 (In millions except per share data) 2017 2016 2017 2016 Numerator Numerator for basic and diluted EPS – Income from continuing operations $ 102 $ 87 $ 112 $ 178 Less: Income from continuing operations attributable to noncontrolling interest 13 — 24 — Income from continuing operations attributable to Ashland, net of tax $ 89 $ 87 $ 88 $ 178 Denominator Denominator for basic EPS – Weighted-average common shares outstanding 62 62 62 63 Share-based awards convertible to common shares 1 1 1 1 Denominator for diluted EPS – Adjusted weighted- average shares and assumed conversions 63 63 63 64 EPS from continuing operations attributable to Ashland Basic $ 1.43 $ 1.39 $ 1.42 $ 2.79 Diluted 1.42 1.38 1.41 2.76 |
EQUITY ITEMS
EQUITY ITEMS | 6 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
EQUITY ITEMS | Stock repurchase programs In April 2015, Ashland's Board of Directors approved a $1 billion share repurchase authorization that will expire on December 31, 2017 (the 2015 stock repurchase program). This authorization allows for Ashland’s common shares to be repurchased in open market transactions, privately negotiated transactions or pursuant to one or more accelerated stock repurchase programs or Rule 10b5-1 plans. The following summarizes the stock repurchases under the 2015 stock repurchase program. 2015 stock repurchase program agreement In November 2015, under the 2015 stock repurchase program, Ashland announced that it entered into an accelerated share repurchase agreement (2016 ASR Agreement) with Goldman, Sachs & Co. Under the 2016 ASR Agreement, Ashland paid an initial purchase price of $500 million and received an initial delivery of approximately 3.9 million shares of common stock during November 2015. In February 2016, Goldman, Sachs & Co. exercised their early termination option under the 2016 ASR Agreement and the pricing period was closed. The settlement price, which represents the weighted average price of Ashland's common stock over the pricing period less a discount, was $99.01 per share. Based on this settlement price, the final number of shares repurchased by Ashland that were delivered by Goldman, Sachs & Co. under the 2016 ASR Agreement was 5.1 million shares. Ashland received the additional 1.2 million shares during the March 2016 quarter to settle the difference between the initial share delivery and the total number of shares repurchased. After the 2016 ASR Agreement, $500 million of share repurchase authorization remains under the 2015 stock repurchase program. Stockholder dividends Ashland dividends In May 2015, the Board of Directors of Ashland announced a quarterly cash dividend increase to 39 cents per share to eligible shareholders of record. This amount was paid for quarterly dividends in the first and second quarters of fiscal 2017 and each quarter of fiscal 2016. Valvoline dividends In November 2016, the Board of Directors of Valvoline Inc. announced a quarterly cash dividend of 4.9 cents per share to eligible shareholders of record. This was Valvoline Inc.'s first dividend declaration and was paid for quarterly dividends during the first and second quarters of fiscal 2017. Since Ashland owns approximately 83% of Valvoline Inc., the net cash outflow of $4 million was payments made to the remaining 17% of shareholders outstanding and is included within the Statements of Condensed Consolidated Cash Flows for the six months ended March 31, 2017 . Accumulated other comprehensive income (loss) Components of other comprehensive income (loss) recorded in the Statements of Consolidated Comprehensive Income are presented below, before tax and net of tax effects. 2017 2016 Tax Tax Before (expense) Net of Before (expense) Net of (In millions) tax benefit tax tax benefit tax Three months ended March 31 Other comprehensive income (loss) Unrealized translation gain $ 58 $ 2 $ 60 $ 80 $ — $ 80 Pension and postretirement obligation adjustment: Adjustment of unrecognized prior service credit — — — 86 (31 ) 55 Amortization of unrecognized prior service credits included in net income (a) (3 ) 1 (2 ) (45 ) 14 (31 ) Net change in available-for-sale securities: Unrealized gain during period 9 (2 ) 7 5 (2 ) 3 Reclassification adjustment for gains included in net income (2 ) 1 (1 ) — — — Total other comprehensive income $ 62 $ 2 $ 64 $ 126 $ (19 ) $ 107 Six months ended March 31 Other comprehensive income (loss) Unrealized translation gain (loss) $ (92 ) $ 6 $ (86 ) $ 17 $ 2 $ 19 Pension and postretirement obligation adjustment: Adjustment of unrecognized prior service credit — — — 86 (31 ) 55 Amortization of unrecognized prior service credits included in net income (a) (6 ) 2 (4 ) (49 ) 15 (34 ) Net change in available-for-sale securities: Unrealized gain during period 9 (2 ) 7 14 (5 ) 9 Reclassification adjustment for gains included in net income (2 ) 1 (1 ) — — — Total other comprehensive income (loss) $ (91 ) $ 7 $ (84 ) $ 68 $ (19 ) $ 49 (a) Amortization of unrecognized prior service credits are included in the calculation of net periodic benefit costs (income) for pension and other postretirement plans. For specific financial statement captions impacted by the amortization see the table below. As discussed in the table above, certain pension and postretirement costs (income) are amortized from accumulated other comprehensive income (loss) and recognized in net income. The captions on the Statements of Consolidated Comprehensive Income impacted by the amortization of unrecognized prior service credits for pension and other postretirement plans are disclosed within. During the three and six months ended March 31, 2016, the amortization of unrecognized prior service credits included the impact of the pension and other postretirement plan remeasurements of $40 million . See Note J for more information. Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Cost of sales $ (1 ) $ (18 ) $ (2 ) $ (20 ) Selling, general and administrative expense (2 ) (27 ) (4 ) (29 ) Total amortization of unrecognized prior service credits $ (3 ) $ (45 ) $ (6 ) $ (49 ) |
STOCK INCENTIVE PLANS
STOCK INCENTIVE PLANS | 6 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK INCENTIVE PLANS | Ashland has stock incentive plans under which key employees or directors are granted stock-settled 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 within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income. Stock-based compensation expense was $8 million for each of the three months ended March 31, 2017 and 2016 , and $17 million and $18 million for the six months ended March 31, 2017 and 2016 , respectively. Stock-based compensation expense during the three months ended March 31, 2017 included cash-settled nonvested stock awards expense of $2 million and cash-settled performance units expense of $1 million . Stock-based compensation expense during the six months ended March 31, 2017 included cash-settled nonvested stock awards expense of $3 million and cash-settled performance units expense of $2 million , while the six months ended March 31, 2016 included $1 million of expense for cash-settled nonvested stock awards. SARs SARs are granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and typically become exercisable over periods of one to three years. Unexercised SARs lapse ten years and one month after the date of grant. No SARS were granted for the three months ended March 31, 2017 and 2016 . SARs granted for the six months ended March 31, 2017 and 2016 were 0.4 million . As of March 31, 2017 , there was $12 million of total unrecognized compensation costs related to SARs. That cost is expected to be recognized over a weighted-average period of 2.1 years. Ashland estimates the fair value of SARs granted using the Black-Scholes option-pricing model . This model requires several assumptions, which Ashland has developed and updates based on historical trends and current market observations. The accuracy of these assumptions is critical to the estimate of fair value for these equity instruments. Nonvested stock awards Nonvested stock awards are granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and generally vest over a one -to- five -year period. However, such shares or units are subject to forfeiture upon termination of service before the vesting period ends. During 2016 and 2017, these awards were primarily granted as stock units that will convert to shares upon vesting, while the grants in prior years were generally made in shares. Only nonvested stock awards granted in the form of shares entitle employees or directors to vote the shares. Dividends on nonvested stock awards granted are in the form of additional units or shares of nonvested stock awards, which are subject to vesting and forfeiture provisions. Nonvested stock awards granted were 2,890 and 6,100 for the three months ended March 31, 2017 and 2016 , respectively. Nonvested stock awards granted were 83,690 and 92,950 for the six months ended March 31, 2017 and 2016 , respectively. As of March 31, 2017 , there was $12 million of total unrecognized compensation costs related to nonvested stock awards. That cost is expected to be recognized over a weighted-average period of 1.7 years. Cash-settled nonvested stock awards Certain nonvested stock awards are granted to employees and are settled in cash upon vesting. As of March 31, 2017 , 95,000 cash-settled nonvested stock awards were outstanding. The value of these cash-settled nonvested stock awards changes in connection with changes in the fair market value of the Ashland Common Stock. These awards generally vest over a period of three years. The expense recognized related to cash-settled nonvested stock awards was $2 million and $3 million during the three and six months ended March 31, 2017 , respectively, and $1 million during the six months ended March 31, 2016 . Performance awards Ashland sponsors a long-term incentive plan that awards performance shares/units to certain key employees that are primarily tied to Ashland’s overall financial performance relative to internal targets. Additionally, certain outstanding performance awards are tied to Ashland's overall financial performance relative to the financial performance of selected industry peer groups. Awards are granted annually, with each award covering a three -year vesting period. For awards granted in prior years, each performance share/unit is convertible to one share of Ashland Common Stock. These plans are recorded as a component of stockholders’ equity in the Condensed Consolidated Balance Sheets. Performance measures used to determine the actual number of performance shares issuable upon vesting include an equal weighting of Ashland’s total shareholder return (TSR) performance and Ashland’s return on investment (ROI) performance as compared to the internal targets. TSR relative to peers is considered a market condition while ROI is considered a performance condition under applicable U.S. GAAP. For awards granted in the current year, upon vesting, each performance unit will be settled in cash based on the fair market value of Ashland or Valvoline common stock. For these awards, dependent upon whether the participant is an employee of Ashland or Valvoline, the performance measure used to determine the actual number of performance units issuable upon vesting is the financial performance of Ashland or Valvoline 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 TSR performance modifier relative to peers for Ashland and Valvoline. Nonvested performance shares/units do not entitle employees to vote the shares or to receive any dividends thereon. No performance shares/units were granted during the three months ended March 31, 2017 and 2016 . Performance shares/units granted for the six months ended March 31, 2017 and 2016 were 0.1 million , respectively. As of March 31, 2017 , there was $12 million of total unrecognized compensation costs related to performance shares/units. That cost is expected to be recognized over a weighted-average period of 2.0 years. Other commitments 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. At March 31, 2017 , total nonvested shares outstanding, assuming vesting at the 100% performance level, are 238 thousand shares, which includes forfeitures and the cumulative value of forfeitable dividends. The expense associated with these awards is contingent upon the completion of the full separation and therefore will not be recorded until the full and complete separation occurs. Based on the price of Ashland’s common stock on the grant date, the total estimated unrecognized compensation expense is $13 million assuming the performance mid-point target is met. At that time, the awards will be recognized ratably over the remaining vesting period. |
REPORTABLE SEGMENT INFORMATION
REPORTABLE SEGMENT INFORMATION | 6 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
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 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. Ashland’s businesses are managed within three reportable segments: Specialty Ingredients, Performance Materials and Valvoline. Reportable segment business descriptions Specialty Ingredients is a global leader in cellulose ethers, vinyl pyrrolidones and biofunctionals. It offers industry-leading products, technologies and resources for solving formulation and product-performance challenges. Specialty Ingredients uses natural, synthetic and semisynthetic polymers derived from cellulose ethers, vinyl pyrrolidones, acrylic polymers, polyester and polyurethane-based adhesives, and plant and seed extract. Specialty Ingredients includes two divisions, Consumer Specialties and Industrial Specialties, that offer comprehensive and innovative solutions for today’s demanding consumer and industrial applications. Key customers include: pharmaceutical companies; makers of personal care products, food and beverages; manufacturers of paint, coatings and construction materials; packaging and converting; and oilfield service companies. Performance Materials is a global leader in unsaturated polyester resins and vinyl ester resins. The business unit has leading positions in gelcoats, maleic anhydride, butanediol, tetrahydrofuran, N-Methylpyrrolidone and other intermediates and solvents. Key customers include: manufacturers of residential and commercial building products; industrial product specifiers and manufacturers; wind blade and pipe manufacturers; automotive and truck OEM suppliers; boatbuilders; engineered plastics and electronic producers; and specialty chemical manufacturers. Valvoline is a leading worldwide producer and distributor of premium-branded automotive, commercial and industrial lubricants, and automotive chemicals. In 2016, it ranked as the # 2 quick-lube chain by number of stores and # 3 passenger car motor oil in the DIY market by volume brand in the United States. The brand operates and franchises 1,108 Valvoline Instant Oil Change SM centers in the United States. It also markets Valvoline TM lubricants and automotive chemicals; MaxLife TM lubricants created for higher-mileage engines; SynPower TM synthetic motor oil; and Zerex TM antifreeze. Key customers include: retail auto parts stores and mass merchandisers who sell to consumers; installers, such as car dealers, repair shops and quick lubes; commercial fleets; and distributors. During January 2017, Valvoline completed the acquisition of Time-It Lube resulting in the addition of 28 quick-lube stores. During February 2016, Ashland completed the acquisition of Oil Can Henry's resulting in the addition of 89 quick-lube stores. See Note B for more information on the acquisitions of Time-It Lube and Oil Can Henry's. During 2015, Ashland announced a plan to separate Valvoline into an independent, publicly traded company. On September 22, 2016, Ashland and Valvoline Inc. announced an IPO of Valvoline Inc.’s common stock and closed the IPO on September 28, 2016. As a result of the IPO, Ashland maintains an approximately 83% ownership interest in Valvoline Inc. as of September 30, 2016. See Note B for additional information. The financial information within this footnote is reflective of the manner in which Ashland manages the Valvoline reportable segment and the Valvoline reportable segment does not include any assets or liabilities transferred to Valvoline Inc. by Ashland in September 2016. Valvoline’s financial position and results of operations as reported as a segment of Ashland may be different than how they are reported on a stand-alone basis. Unallocated and Other generally includes items such as components of pension and other postretirement benefit plan expenses (excluding service costs, which are allocated to the reportable segments), certain significant company-wide restructuring activities, including internal separation costs, and legacy costs or adjustments that relate to divested businesses that are no longer operated by Ashland. Reportable segment results Results of Ashland’s reportable segments are presented based on its management structure and internal accounting practices. The structure and practices are 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, such as the restructuring plans, 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. Revisions to Ashland’s methodologies that are deemed insignificant are applied on a prospective basis. The following table presents various financial information for each reportable segment for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions - unaudited) 2017 2016 2017 2016 SALES Specialty Ingredients $ 544 $ 529 $ 1,026 $ 1,004 Performance Materials 262 239 484 470 Valvoline 514 479 1,003 936 $ 1,320 $ 1,247 $ 2,513 $ 2,410 OPERATING INCOME (LOSS) Specialty Ingredients $ 74 $ 65 $ 114 $ 103 Performance Materials 10 20 18 43 Valvoline 106 105 205 197 Unallocated and other (20 ) (43 ) (30 ) (45 ) $ 170 $ 147 $ 307 $ 298 |
SUPPLEMENTAL GUARANTOR INFORMAT
SUPPLEMENTAL GUARANTOR INFORMATION | 6 Months Ended |
Mar. 31, 2017 | |
Supplemental Guarantor Information [Abstract] | |
SUPPLEMENTAL GUARANTOR INFORMATION | The following tables present condensed consolidating financial information for (a) Ashland Global Holdings Inc. (for purposes of this discussion and table, Parent Guarantor); (b) Ashland LLC (formerly Ashland Inc.), the issuer of the 3.875% notes due 2018, 4.750% notes due 2022 and 6.875% notes due 2043 (collectively referred to as the Senior Notes) (the Issuer); and (c) all other non-guarantor subsidiaries of the Parent Guarantor on a combined basis, none of which guaranteed the Senior Notes (the Other Non-Guarantor Subsidiaries). Ashland Global Holdings Inc. was incorporated on May 6, 2016 as a direct wholly owned subsidiary of Ashland Inc. (now Ashland LLC) to reincorporate in Delaware and to help facilitate the separation of the Valvoline business from the specialty chemical businesses. As a result of the Reorganization, Ashland Global Holdings Inc. replaced Ashland Inc. as the publicly held corporation, and Ashland Inc. was converted to a Kentucky limited liability company and is now an indirect, wholly owned subsidiary of Ashland Global Holdings Inc. Ashland Global Holdings Inc. fully and unconditionally guaranteed the Senior Notes and has no significant independent assets or operations. For periods prior to September 30, 2016, the parent entity was Ashland LLC (formerly Ashland Inc.). Ashland presents all investments in subsidiaries in the supplemental guarantor information using the equity method of accounting. Therefore, the net income (loss) of the subsidiaries accounted for using the equity method is in their parents’ investment accounts. For each financial statement period presented within the following tables, Ashland Global Holdings Inc.’s activity reflects the accounting for investments in subsidiaries under the equity method reflective of the 2016 Reorganization and resulting presentation. The elimination entries within the tables primarily eliminate investments in subsidiaries and inter-company balances and transactions. The total net effect of the settlement of these inter-company transactions is reflected in the Condensed Statements of Cash Flows as a financing activity. The following supplemental condensed consolidating financial statements present information about Ashland Global Holdings Inc., Ashland LLC and other non-guarantor subsidiaries. Condensed Statements of Comprehensive Income Three months ended March 31, 2017 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 157 $ 1,172 $ (9 ) $ 1,320 Cost of sales — 113 783 (9 ) 887 Gross profit — 44 389 — 433 Selling, general and administrative expense 6 38 201 — 245 Research and development expense — 4 20 — 24 Equity and other income (loss) — (15 ) 21 — 6 Operating income (loss) (6 ) (13 ) 189 — 170 Net interest and other financing expense — 30 8 — 38 Income (loss) from continuing operations before income taxes (6 ) (43 ) 181 — 132 Income tax expense — 2 28 — 30 Equity in net income (loss) of subsidiaries 98 76 — (174 ) — Income (loss) from continuing operations 92 31 153 (174 ) 102 Income (loss) from discontinued operations (net of tax) — 4 (1 ) — 3 Net income (loss) 92 35 152 (174 ) 105 Net income attributable to noncontrolling interest — — 13 — 13 Net income (loss) attributable to Ashland $ 92 $ 35 $ 139 $ (174 ) $ 92 Comprehensive income (loss) 169 198 53 (251 ) 169 Comprehensive income attributable to noncontrolling interest 14 — 14 (14 ) 14 Comprehensive income (loss) attributable to Ashland $ 155 $ 198 $ 39 $ (237 ) $ 155 Condensed Statements of Comprehensive Income Three months ended March 31, 2016 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 165 $ 1,088 $ (6 ) $ 1,247 Cost of sales — 117 712 (6 ) 823 Gross profit — 48 376 — 424 Selling, general and administrative expense — 60 198 — 258 Research and development expense — 4 21 — 25 Equity and other income (loss) — (4 ) 10 — 6 Operating income (loss) — (20 ) 167 — 147 Net interest and other financing expense — 40 3 — 43 Net loss on divestitures — (2 ) — — (2 ) Income (loss) from continuing operations before income taxes — (62 ) 164 — 102 Income tax expense (benefit) — (35 ) 50 — 15 Equity in net income (loss) of subsidiaries 87 (32 ) — (55 ) — Income (loss) from continuing operations 87 (59 ) 114 (55 ) 87 Income (loss) from discontinued operations (net of tax) — 1 (1 ) — — Net income (loss) $ 87 $ (58 ) $ 113 $ (55 ) $ 87 Comprehensive income (loss) $ 194 $ (35 ) $ 197 $ (162 ) $ 194 Condensed Statements of Comprehensive Income Six months ended March 31, 2017 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 294 $ 2,237 $ (18 ) $ 2,513 Cost of sales — 209 1,502 (17 ) 1,694 Gross profit — 85 735 (1 ) 819 Selling, general and administrative expense 14 70 399 — 483 Research and development expense — 7 40 — 47 Equity and other income (loss) — (30 ) 48 — 18 Operating income (loss) (14 ) (22 ) 344 (1 ) 307 Net interest and other financing expense — 64 106 — 170 Net loss on divestitures — (1 ) — — (1 ) Income (loss) from continuing operations before income taxes (14 ) (87 ) 238 (1 ) 136 Income tax expense — 7 17 — 24 Equity in net income (loss) of subsidiaries 105 77 — (182 ) — Income (loss) from continuing operations 91 (17 ) 221 (183 ) 112 Income (loss) from discontinued operations (net of tax) — 4 (1 ) — 3 Net income (loss) 91 (13 ) 220 (183 ) 115 Net income attributable to noncontrolling interest — — 24 — 24 Net income (loss) attributable to Ashland $ 91 $ (13 ) $ 196 $ (183 ) $ 91 Comprehensive income (loss) 31 157 (34 ) (123 ) 31 Comprehensive income attributable to noncontrolling interest 24 — 24 (24 ) 24 Comprehensive income (loss) attributable to Ashland $ 7 $ 157 $ (58 ) $ (99 ) $ 7 Condensed Statements of Comprehensive Income Six months ended March 31, 2016 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 321 $ 2,102 $ (13 ) $ 2,410 Cost of sales — 219 1,388 (12 ) 1,595 Gross profit — 102 714 (1 ) 815 Selling, general and administrative expense — 92 391 — 483 Research and development expense — 7 42 — 49 Equity and other income (loss) — (6 ) 21 — 15 Operating income (loss) — (3 ) 302 (1 ) 298 Net interest and other financing expense — 78 7 — 85 Net gain (loss) on divestitures — (1 ) 1 — — Income (loss) from continuing operations before income taxes — (82 ) 296 (1 ) 213 Income tax expense (benefit) — (62 ) 97 — 35 Equity in net income (loss) of subsidiaries 176 63 — (239 ) — Income (loss) from continuing operations 176 43 199 (240 ) 178 Loss from discontinued operations (net of tax) — — (2 ) — (2 ) Net income (loss) $ 176 $ 43 $ 197 $ (240 ) $ 176 Comprehensive income (loss) $ 225 $ 65 $ 224 $ (289 ) $ 225 Condensed Balance Sheets At March 31, 2017 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated ASSETS Current assets Cash and cash equivalents $ — $ 108 $ 497 $ — $ 605 Accounts receivable — 17 955 — 972 Inventories — 47 640 — 687 Other assets — 6 110 (3 ) 113 Total current assets — 178 2,202 (3 ) 2,377 Noncurrent assets Property, plant and equipment, net — 240 1,965 — 2,205 Goodwill — 141 2,272 — 2,413 Intangibles — 34 983 — 1,017 Restricted investments — — 298 — 298 Asbestos insurance receivable — 130 63 — 193 Equity and other unconsolidated investments — 2 59 — 61 Investment in subsidiaries 3,195 7,635 — (10,830 ) — Deferred income taxes 31 96 199 (127 ) 199 Intercompany receivables — 13 2,517 (2,530 ) — Other assets — 256 167 — 423 Total noncurrent assets 3,226 8,547 8,523 (13,487 ) 6,809 Total assets $ 3,226 $ 8,725 $ 10,725 $ (13,490 ) $ 9,186 LIABILITIES AND EQUITY Current liabilities Short-term debt $ — $ — $ 95 $ — $ 95 Current portion of long-term debt — — 16 — 16 Accounts payable and other accrued liabilities 64 214 651 (3 ) 926 Total current liabilities 64 214 762 (3 ) 1,037 Noncurrent liabilities Long-term debt — 2,103 709 — 2,812 Employee benefit obligations — 38 979 — 1,017 Asbestos litigation reserve — 363 300 — 663 Deferred income taxes — — 196 (127 ) 69 Intercompany payables 19 2,498 13 (2,530 ) — Other liabilities — 224 221 — 445 Total noncurrent liabilities 19 5,226 2,418 (2,657 ) 5,006 Equity Total Ashland stockholders’ equity 3,143 3,285 7,702 (10,830 ) 3,300 Noncontrolling interest — — (157 ) — (157 ) Total equity 3,143 3,285 7,545 (10,830 ) 3,143 Total liabilities and equity $ 3,226 $ 8,725 $ 10,725 $ (13,490 ) $ 9,186 Condensed Balance Sheets At September 30, 2016 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated ASSETS Current assets Cash and cash equivalents $ — $ 76 $ 1,112 $ — $ 1,188 Accounts receivable — 18 876 — 894 Inventories — 42 629 — 671 Other assets 7 16 98 (8 ) 113 Total current assets 7 152 2,715 (8 ) 2,866 Noncurrent assets Property, plant and equipment, net — 246 1,978 — 2,224 Goodwill — 141 2,260 — 2,401 Intangibles — 35 1,029 — 1,064 Restricted investments — — 292 — 292 Asbestos insurance receivable — 133 63 — 196 Equity and other unconsolidated investments — 2 55 — 57 Investment in subsidiaries 3,127 7,597 — (10,724 ) — Deferred income taxes 31 97 146 (97 ) 177 Intercompany receivables — 5 2,264 (2,269 ) — Other assets — 253 167 — 420 Total noncurrent assets 3,158 8,509 8,254 (13,090 ) 6,831 Total assets $ 3,165 $ 8,661 $ 10,969 $ (13,098 ) $ 9,697 LIABILITIES AND EQUITY Current liabilities Short-term debt $ — $ — $ 170 $ — $ 170 Current portion of long-term debt — — 19 — 19 Accounts payable and other accrued liabilities — 244 791 (8 ) 1,027 Total current liabilities — 244 980 (8 ) 1,216 Noncurrent liabilities Long-term debt — 2,182 873 — 3,055 Employee benefit obligations — 44 1,036 — 1,080 Asbestos litigation reserve — 381 305 — 686 Deferred income taxes — — 166 (97 ) 69 Intercompany payables — 2,264 5 (2,269 ) — Other liabilities — 220 206 — 426 Total noncurrent liabilities — 5,091 2,591 (2,366 ) 5,316 Equity Total Ashland stockholders’ equity 3,165 3,326 7,580 (10,724 ) 3,347 Noncontrolling interest — — (182 ) — (182 ) Total equity 3,165 3,326 7,398 (10,724 ) 3,165 Total liabilities and equity $ 3,165 $ 8,661 $ 10,969 $ (13,098 ) $ 9,697 Condensed Statements of Cash Flows Six months ended March 31, 2017 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated Total cash flows provided (used) by operating activities from continuing operations $ — $ (109 ) $ 171 $ — $ 62 Cash flows provided (used) by investing activities from continuing operations Additions to property, plant and equipment — (10 ) (94 ) — (104 ) Purchase of operations - net of cash acquired — — (48 ) — (48 ) Intercompany dividends 17 17 — (34 ) — Net purchases of funds restricted for specific transactions — (2 ) — — (2 ) Reimbursements from restricted investments — 12 — — 12 Proceeds from sales of available-for-sale securities — — 19 — 19 Purchases of available-for-sale securities — — (19 ) — (19 ) Other investing activities, net — 1 — — 1 Total cash flows provided (used) by investing activities from continuing operations 17 18 (142 ) (34 ) (141 ) Cash flows provided (used) by financing activities from continuing operations Repayment of long-term debt — (80 ) (257 ) — (337 ) Premium on long-term debt repayment — (1 ) (4 ) — (5 ) Repayment from short-term debt — — (75 ) — (75 ) Cash dividends paid (48 ) — — — (48 ) Distributions to noncontrolling interest — — (4 ) — (4 ) Intercompany dividends (17 ) — (17 ) 34 — Other intercompany activity, net 48 226 (274 ) — — Other financing activities, net — (6 ) — — (6 ) Total cash flows provided (used) by financing activities from continuing operations (17 ) 139 (631 ) 34 (475 ) Cash provided (used) by continuing operations — 48 (602 ) — (554 ) Cash used by discontinued operations Operating cash flows — (16 ) (5 ) — (21 ) Investing cash flows — — — — — Total cash used by discontinued operations — (16 ) (5 ) — (21 ) Effect of currency exchange rate changes on cash and cash equivalents — — (8 ) — (8 ) Increase (decrease) in cash and cash equivalents — 32 (615 ) — (583 ) Cash and cash equivalents - beginning of period — 76 1,112 — 1,188 Cash and cash equivalents - end of period $ — $ 108 $ 497 $ — $ 605 Condensed Statements of Cash Flows Six months ended March 31, 2016 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated Total cash flows provided (used) by operating activities from continuing operations $ — $ (121 ) $ 371 $ — $ 250 Cash flows provided (used) by investing activities from continuing operations Additions to property, plant and equipment — (7 ) (96 ) — (103 ) Purchase of operations - net of cash acquired — — (66 ) — (66 ) Proceeds from sale of operations or equity investments — — 12 — 12 Reimbursements from restricted investments — 23 — — 23 Proceeds from sales of available-for-sale securities — — 4 — 4 Purchases of available-for-sale securities — — (4 ) — (4 ) Other investing activities, net — 5 5 — 10 Total cash flows provided (used) by investing activities from continuing operations — 21 (145 ) — (124 ) Cash flows provided (used) by financing activities from continuing operations Repayment of long-term debt — (27 ) (9 ) — (36 ) Proceeds (repayment) from short-term debt — 439 (71 ) — 368 Repurchase of common stock — (500 ) — — (500 ) Cash dividends paid — (48 ) — — (48 ) Other intercompany activity, net — 238 (238 ) — — Other financing activities, net — (1 ) — — (1 ) Total cash flows provided (used) by financing activities from continuing operations — 101 (318 ) — (217 ) Cash provided (used) by continuing operations — 1 (92 ) — (91 ) Cash used by discontinued operations Operating cash flows — (11 ) (8 ) — (19 ) Investing cash flows — — — — — Total cash used by discontinued operations — (11 ) (8 ) — (19 ) Effect of currency exchange rate changes on cash and cash equivalents — — (11 ) — (11 ) Decrease in cash and cash equivalents — (10 ) (111 ) — (121 ) Cash and cash equivalents - beginning of period — 21 1,236 — 1,257 Cash and cash equivalents - end of period $ — $ 11 $ 1,125 $ — $ 1,136 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | On April 14, 2017, Ashland entered into a definitive agreement to acquire privately owned Pharmachem Laboratories, Inc., a leading provider of quality ingredients to the global health and wellness industries and high-value differentiated products to fragrance and flavor houses. Under terms of the stock purchase agreement, Ashland will pay $660 million in an all-cash transaction that is expected to be completed before the end of the June 2017 quarter. The acquisition, which is subject to customary closing conditions and required regulatory approvals, will be funded with bank financing and available cash. |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 2016 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. The Condensed 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). The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Securities and Exchange Commission (SEC) regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. These statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 . Results of operations for the period ended March 31, 2017 are not necessarily indicative of the expected results for the remaining quarter in the fiscal year. Ashland is composed of three reportable segments: Ashland Specialty Ingredients (Specialty Ingredients), Ashland Performance Materials (Performance Materials) and Valvoline. As of March 31, 2017 , Ashland maintains an approximately 83% controlling interest in Valvoline Inc., which holds the Valvoline reportable segment. See Note B for additional information. The term Valvoline as used herein, depending on context, refers to either Valvoline Inc. or Valvoline as a reportable segment of Ashland. |
Use of Estimates, Risk and Uncertainties | Use of estimates, risks and uncertainties The preparation of Ashland’s Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets (including goodwill and other intangible assets), employee benefit obligations, income taxes and liabilities and receivables associated with asbestos litigation and environmental remediation. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. Ashland’s results are affected by domestic and international economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of certain key raw materials, can have a significant effect on operations. While Ashland maintains reserves for anticipated liabilities and carries various levels of insurance, Ashland could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings relating to asbestos, environmental remediation or other matters. |
New Accounting Standards | New accounting standards A description of new U.S. GAAP accounting standards issued or adopted during the current year is required in interim financial reporting. A detailed listing of new accounting standards relevant to Ashland is included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2016 . The following standards relevant to Ashland were either issued or adopted in the current period, or will become effective in a subsequent period. In March 2017, the FASB issued accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Statement of Consolidated Comprehensive Income. 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 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 and will become effective for Ashland on October 1, 2018, with early adoption being optional. Ashland currently intends to early adopt this guidance on October 1, 2017 and will revise the presentation of the net periodic benefit cost in previous periods to conform to the current period presentation. Ashland expects this guidance to have a significant impact on the presentation of Ashland’s Statements of Consolidated Comprehensive Income as it will result in a reclassification of expenses and income from operating income into a separate caption below operating income, but before income taxes. In January 2017, the FASB issued accounting guidance which simplifies the subsequent measurement of goodwill by eliminating the second step of the two-step impairment test under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. The guidance instead requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value. This guidance must be applied prospectively and will become effective for Ashland on October 1, 2020. Ashland is currently evaluating the impact this guidance may have on Ashland's Condensed Consolidated Financial Statements. In April 2015, the FASB issued accounting guidance to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. Cloud computing arrangements represent the delivery of hosted services over the internet which includes software, platforms, infrastructure and other hosting arrangements. Under the guidance, customers that gain access to software in a cloud computing arrangement account for the software as internal-use software only if the arrangement includes a software license. This guidance became effective prospectively for Ashland on October 1, 2016. |
FAIR VALUE MEASUREMENTS (Polici
FAIR VALUE MEASUREMENTS (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
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. |
Marketable Securities, Available-for-sale Securities, Policy | During 2015, Ashland diversified the restricted investments received from the January 2015 asbestos insurance settlement into primarily equity and corporate bond mutual funds that are designated as available-for-sale securities, classified as Level 1 measurements within the fair value hierarchy. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related deferred income taxes, included in the stockholders' equity section of the Condensed Consolidated Balance Sheets as a component of accumulated other comprehensive income (AOCI). Investment income and realized gains and losses on the available-for-sale securities are reported in the net interest and other financing expense caption in the Statements of Consolidated Comprehensive Income. |
Marketable Securities, Trading Securities, Policy | Gains and losses related to deferred compensation investments are immediately recognized within the Statements of Consolidated Comprehensive Income. |
Derivatives, Methods of Accounting, Derivatives Not Designated or Qualifying as Hedges, Policy | Ashland conducts business in a variety of foreign currencies. Accordingly, Ashland regularly uses foreign currency derivative instruments to manage exposure on certain transactions denominated in foreign currencies to curtail potential earnings volatility effects 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. |
Derivatives, Methods of Accounting, Hedging Derivatives, Policy | Since 2014, Ashland has entered into foreign currency contracts in order to manage the foreign currency exposure of the net investment in certain foreign operations. These foreign currency contracts were primarily the result of certain proceeds from the sale of Water Technologies being received in non-U.S. denominated currencies during 2014 and ongoing management of the volatility in foreign currency exchange rates. Ashland designated the foreign currency contracts as hedges of net investments in its foreign subsidiaries. As a result, Ashland records these hedges at fair value using forward rates, with the effective portion of the gain or loss reported as a component of the cumulative translation adjustment within AOCI and subsequently recognized in the Statements of Consolidated Comprehensive Income when the hedged item affects net income . During 2017 and 2016, these foreign currency contracts were settled and for certain hedges Ashland entered into new foreign currency contracts designated as hedges of net investments in foreign subsidiaries. These settlements resulted in net gains and losses recorded within the cumulative translation adjustment within AOCI, including a net loss of $2 million for the three months ended March 31, 2017 , and net gains of $1 million and $7 million for the six months March 31, 2017 and 2016 , respectively. As of March 31, 2017 and September 30, 2016 , the total notional value of foreign currency contracts equaled $69 million and $94 million , respectively. The fair value of Ashland's net investment hedge assets and liabilities are calculated using forward rates. Accordingly, these instruments are deemed to be Level 2 measurements within the fair value hierarchy. Counterparties to these net investment hedges are highly rated financial institutions which Ashland believes carry only a nominal risk of nonperformance. |
INVENTORIES (Policies)
INVENTORIES (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory Policy | Inventories are carried at the lower of cost or market. Inventories are primarily stated at cost using the weighted-average cost method. In addition, certain chemicals, plastics and lubricants are valued at cost using the last-in, first-out (LIFO) method. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Goodwill, Policy | Ashland reviews goodwill and indefinite-lived intangible assets for impairment annually or when events and circumstances indicate an impairment may have occurred. This annual assessment is performed as of July 1 and consists of Ashland determining each reporting unit’s current fair value compared to its current carrying value. For its July 1, 2016 assessment, Ashland determined that its reporting units for the allocation of goodwill include the Specialty Ingredients reportable segment, the Composites and Intermediates/Solvents reporting units within the Performance Materials reportable segment, and the Core North America, Quick Lubes and International reporting units within the Valvoline reportable segment. Based on the results of its goodwill impairment testing as of July 1, 2016, Ashland recorded a pre-tax goodwill impairment charge of $171 million for Intermediates/Solvents during the fourth quarter of 2016. |
Finite-Lived Intangible Asset Policy | Intangible assets principally consist of trademarks and trade names, intellectual property and customer relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 20 years, and customer relationships over 3 to 24 years. |
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy | Ashland annually reviews indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. |
LITIGATION, CLAIMS AND CONTIN29
LITIGATION, CLAIMS AND CONTINGENCIES (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Policy | Ashland and Hercules have liabilities from claims alleging personal injury caused by exposure to asbestos. To assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions, Ashland retained Hamilton, Rabinovitz & Associates, Inc. (HR&A). The methodology used by HR&A 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, HR&A 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. |
Environmental Cost Policy | The total reserves for environmental remediation reflect Ashland’s estimates of the most likely costs that will be incurred over an extended period to remediate identified conditions for which the costs are reasonably estimable, without regard to any third-party recoveries. Engineering studies, probability techniques, historical experience and other factors are used to identify and evaluate remediation alternatives and their related costs in determining the estimated reserves for environmental remediation. Ashland continues to discount certain environmental sites and regularly adjusts its reserves as environmental remediation continues. Ashland has estimated the value of its probable insurance recoveries associated with its environmental reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. |
EARNINGS PER SHARE (Policies)
EARNINGS PER SHARE (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Policy | The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Stock appreciation rights (SARs), stock options and warrants available to purchase shares outstanding for each reporting period whose grant price was greater than the average market price of Ashland Common Stock for each applicable period were not included in the computation of income from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was approximately 0.1 million and 1.2 million at March 31, 2017 and 2016 , respectively. Earnings per share is reported under the treasury stock method. |
STOCK INCENTIVE PLANS (Policies
STOCK INCENTIVE PLANS (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan Policy | Ashland has stock incentive plans under which key employees or directors are granted stock-settled 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 within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income. |
REPORTABLE SEGMENT INFORMATION
REPORTABLE SEGMENT INFORMATION (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting, Policy [Policy Text Block] | 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 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. Ashland’s businesses are managed within three reportable segments: Specialty Ingredients, Performance Materials and Valvoline. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Amounts in the Statements of Consolidated Income Related To Discontinued Operations | Components of amounts reflected in the Statements of Consolidated Comprehensive Income related to discontinued operations are presented in the following table for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Income (loss) from discontinued operations (net of tax) Water Technologies $ 3 $ (1 ) $ 3 $ (1 ) Gain (loss) on disposal of discontinued operations (net of tax) Water Technologies — 1 — (1 ) Total income (loss) from discontinued operations (net of tax) $ 3 $ — $ 3 $ (2 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The following table summarizes financial instruments subject to recurring fair value measurements as of March 31, 2017 . (In millions) Carrying value Total fair value Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Significant unobservable inputs Level 3 Assets Cash and cash equivalents $ 605 $ 605 $ 605 $ — $ — Restricted investments (a) 328 328 328 — — Deferred compensation investments (b) 186 186 33 153 — Investments of captive insurance company (b) 2 2 2 — — Foreign currency derivatives 6 6 — 6 — Total assets at fair value $ 1,127 $ 1,127 $ 968 $ 159 $ — Liabilities Foreign currency derivatives $ 4 $ 4 $ — $ 4 $ — (a) Included in restricted investments and $30 million within other current assets in the Condensed Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2016 . (In millions) Carrying value Total fair value Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Significant unobservable inputs Level 3 Assets Cash and cash equivalents $ 1,188 $ 1,188 $ 1,188 $ — $ — Restricted investments (a) 322 322 322 — — Deferred compensation investments (b) 185 185 35 150 — Investments of captive insurance company (b) 4 4 4 — — Foreign currency derivatives 3 3 — 3 — Total assets at fair value $ 1,702 $ 1,702 $ 1,549 $ 153 $ — Liabilities Foreign currency derivatives $ 5 $ 5 $ — $ 5 $ — (a) Included in restricted investments and $30 million within other current assets in the Condensed Consolidated Balance Sheets. (b) Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. |
Available-for-sale Securities | The following table provides a summary of the available-for-sale securities portfolio as of March 31, 2017 and September 30, 2016 : March 31 September 30 (In millions) 2017 2016 Original cost $ 335 $ 335 Accumulated investment income, settlement funds and disbursements, net (24 ) (3 ) Adjusted cost (a) 311 332 Investment income (b) 5 8 Unrealized gain 21 11 Unrealized loss (1 ) — Realized gain 2 — Settlement funds 2 4 Disbursements (12 ) (33 ) Fair value $ 328 $ 322 (a) The adjusted cost of the demand deposit includes accumulated investment income, disbursements and settlements recorded in previous periods. (b) Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. The following table presents gross unrealized gains and losses for the available-for-sale securities as of March 31, 2017 and September 30, 2016 : Gross Gross (In millions) Adjusted Cost Unrealized Gain Unrealized Loss Fair Value As of March 31, 2017 Demand Deposit $ 20 $ — $ — $ 20 Equity Mutual Fund 168 21 — 189 Corporate bond Mutual Fund 120 — (1 ) 119 Fair value $ 308 $ 21 $ (1 ) $ 328 As of September 30, 2016 Demand Deposit $ 6 $ — $ — $ 6 Equity Mutual Fund 185 8 — 193 Corporate bond Mutual Fund 120 3 — 123 Fair value $ 311 $ 11 $ — $ 322 |
Investment Income | The following table presents the investment income, realized gains and disbursements related to the investments within the portfolio for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Investment income $ 2 $ 2 $ 5 $ 4 Realized gains 2 — 2 — Disbursements (12 ) (16 ) (12 ) (23 ) |
Summary of gains (losses) on foreign currency derivatives | The following table summarizes the gains recognized during the three and six months ended March 31, 2017 and 2016 within the Statements of Consolidated Comprehensive Income. Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Foreign currency derivative gain $ 7 $ 1 $ 9 $ 4 |
Summary of fair values on foreign currency derivatives | The following table summarizes the fair values of the outstanding foreign currency derivatives as of March 31, 2017 and September 30, 2016 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets. March 31 September 30 (In millions) 2017 2016 Foreign currency derivative assets $ 6 $ 3 Notional contract values 781 333 Foreign currency derivative liabilities $ 3 $ 4 Notional contract values 312 530 |
Fair value of the outstanding net investment hedges | The following table summarizes the fair value of the outstanding net investment hedge instruments as of March 31, 2017 and September 30, 2016 . March 31 September 30 (In millions) Consolidated balance sheet caption 2017 2016 Net investment hedge assets (a) Accounts receivable $ — $ — Net investment hedge liabilities Accrued expenses and other liabilities 1 1 (a) Fair value of $0 denotes a value less than $1 million. |
Summary of unrealized gain (loss) on net investment hedges | The following table summarizes the change in the unrealized gain (loss) on the net investment hedge instruments recognized within the cumulative translation adjustment within AOCI during the three and six months ended March 31, 2017 and 2016 . No portion of the gain or loss was reclassified to income during the three and six months ended March 31, 2017 and 2016 . There was no hedge ineffectiveness with these instruments during the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Change in unrealized loss in AOCI $ (1 ) $ (2 ) $ (1 ) $ (2 ) Tax impact of change in unrealized loss in AOCI (a) 1 1 — 1 (a) $0 denotes a value less than $1 million. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | The following table summarizes Ashland’s inventories as of the reported Condensed Consolidated Balance Sheet dates. March 31 September 30 (In millions) 2017 2016 Finished products $ 514 $ 516 Raw materials, supplies and work in process 200 184 LIFO reserves (27 ) (29 ) $ 687 $ 671 |
GOODWILL AND OTHER INTANGIBLE36
GOODWILL AND OTHER INTANGIBLES (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by Segment | The following is a progression of goodwill by reportable segment for the six months ended March 31, 2017 . Specialty Performance (In millions) Ingredients Materials (a) Valvoline (b) Total Balance as of September 30, 2016 $ 1,991 $ 147 $ 263 $ 2,401 Acquisitions (c) — — 49 49 Currency translation adjustment (36 ) (1 ) — (37 ) Balance as of March 31, 2017 $ 1,955 $ 146 $ 312 $ 2,413 (a) As of March 31, 2017 , goodwill was completely attributable to the Composites reporting unit due to the full impairment of the goodwill for the Intermediates/Solvents reporting unit during the fourth quarter of 2016. (b) As of March 31, 2017 , goodwill consisted of $89 million for the Core North America reporting unit, $183 million for the Quick Lubes reporting unit and $40 million for the International reporting unit. (c) Relates to $44 million for the acquisition of Time-It Lube and $5 million for Valvoline Instant Oil Change SM center acquisitions during the six months ended March 31, 2017 . See Note B for more information on the acquisition of Time-It Lube. |
Intangible Assets | Intangible assets were comprised of the following as of March 31, 2017 and September 30, 2016 . March 31, 2017 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangible assets Trademarks and trade names (a) $ 43 $ (20 ) $ 23 Intellectual property 663 (297 ) 366 Customer relationships (a) 538 (211 ) 327 Total definite-lived intangible assets 1,244 (528 ) 716 Indefinite-lived intangible assets Trademarks and trade names 301 — 301 Total intangible assets $ 1,545 $ (528 ) $ 1,017 (a) Acquired customer relationships and trade names during the six months ended March 31, 2017 had gross carrying amounts of $2 million and $1 million , respectively, for Time-It Lube. See Note B for more information on the acquisition of Time-It Lube. September 30, 2016 Gross Net carrying Accumulated carrying (In millions) amount amortization amount Definite-lived intangible assets Trademarks and trade names $ 42 $ (19 ) $ 23 Intellectual property 667 (273 ) 394 Customer relationships 546 (200 ) 346 Total definite-lived intangible assets 1,255 (492 ) 763 Indefinite-lived intangible assets Trademarks and trade names 301 — 301 Total intangible assets $ 1,556 $ (492 ) $ 1,064 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following table summarizes Ashland’s current and long-term debt as of the dates reported in the Condensed Consolidated Balance Sheets. March 31 September 30 (In millions) 2017 2016 4.750% notes, due 2022 $ 1,082 $ 1,121 3.875% notes, due 2018 659 700 6.875% notes, due 2043 376 376 5.500% notes, due 2024 (a) 375 375 Term Loan, due 2021 (a) 293 375 2017 accounts receivable securitization facility (a) 75 — 6.50% junior subordinated notes, due 2029 50 140 Other international loans, interest at a weighted- average rate of 4.9% at March 31, 2017 (4.8% to 5.0%) 20 20 Medium-term notes, due 2019, interest of 9.4% at March 31, 2017 5 5 Term Loan, due 2017 — 150 Other (b) (12 ) (18 ) Total debt 2,923 3,244 Short-term debt (95 ) (170 ) Current portion of long-term debt (16 ) (19 ) Long-term debt (less current portion and debt issuance cost discounts) $ 2,812 $ 3,055 (a) These debt instruments were issued by Valvoline during 2016 and 2017 in connection with the separation process. (b) Other includes $27 million and $29 million of debt issuance cost discounts as of March 31, 2017 and September 30, 2016 , respectively. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Changes in Unrecognized Tax Benefits | Changes in unrecognized tax benefits are summarized as follows for the six months ended March 31, 2017 . (In millions) Balance at October 1, 2016 $ 168 Increases related to positions taken on items from prior years 5 Decreases related to positions taken on items from prior years (2 ) Increases related to positions taken in the current year 7 Lapse of the statute of limitations (2 ) Settlement of uncertain tax positions with tax authorities (1 ) Balance at March 31, 2017 $ 175 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | The following table details the components of pension and other postretirement benefit costs. Other postretirement Pension benefits benefits (In millions) 2017 2016 2017 2016 Three months ended March 31 Service cost (a) $ 2 $ 6 $ — $ — Interest cost 24 31 1 1 Expected return on plan assets (39 ) (48 ) — — Amortization of prior service credit (a) — — (3 ) (4 ) Curtailment gain — (71 ) — (39 ) Actuarial loss — 126 — 7 $ (13 ) $ 44 $ (2 ) $ (35 ) Six months ended March 31 Service cost (a) $ 5 $ 13 $ — $ — Interest cost 47 62 2 3 Expected return on plan assets (78 ) (96 ) — — Amortization of prior service credit (a) — (1 ) (6 ) (8 ) Curtailment gain — (71 ) — (39 ) Actuarial (gain) loss — 126 (10 ) 7 $ (26 ) $ 33 $ (14 ) $ (37 ) (a) Activity of $0 denote values less than $1 million |
LITIGATION, CLAIMS AND CONTIN40
LITIGATION, CLAIMS AND CONTINGENCIES (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Loss Contingencies [Line Items] | |
Reconciliation of Changes in the Environmental Contingencies and Asset Retirement Obligations Reserve | The following table provides a reconciliation of the changes in the environmental remediation reserves during the six months ended March 31, 2017 and 2016 . Six months ended March 31 (In millions) 2017 2016 Reserve - beginning of period $ 177 $ 186 Disbursements (15 ) (24 ) Revised obligation estimates and accretion 5 14 Reserve - end of period $ 167 $ 176 |
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 are presented in the following table for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Environmental expense $ 1 $ 9 $ 5 $ 13 Accretion (a) — 1 — 1 Legal expense 4 3 5 5 Total expense 5 13 10 19 Insurance receivable (a) — (1 ) — (1 ) Total expense, net of receivable activity (b) $ 5 $ 12 $ 10 $ 18 (a) Activity of $0 denotes value less than $1 million. |
Ashland [Member] | |
Loss Contingencies [Line Items] | |
Summary of Asbestos Claims Activity | A summary of Ashland asbestos claims activity, excluding Hercules claims, follows. Six months ended March 31 Years ended September 30 (In thousands) 2017 2016 2016 2015 2014 Open claims - beginning of period 57 60 60 65 65 New claims filed 1 1 2 2 2 Claims settled — — — — (1 ) Claims dismissed (2 ) (3 ) (5 ) (7 ) (1 ) Open claims - end of period 56 58 57 60 65 |
Progression of Activity in the Asbestos Reserve Accounts | A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Asbestos reserve - beginning of period $ 415 $ 409 $ 409 $ 438 $ 463 Reserve adjustment — — 37 — 4 Amounts paid (18 ) (17 ) (31 ) (29 ) (29 ) Asbestos reserve - end of period $ 397 $ 392 $ 415 $ 409 $ 438 |
Progression of Insurance Receivable | A progression of activity in the Ashland insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Insurance receivable - beginning of period $ 151 $ 150 $ 150 $ 402 $ 408 Receivable adjustment — — 16 (3 ) 22 Insurance settlement (5 ) (4 ) (4 ) (227 ) — Amounts collected (2 ) (7 ) (11 ) (22 ) (28 ) Insurance receivable - end of period $ 144 $ 139 $ 151 $ 150 $ 402 |
Hercules [Member] | |
Loss Contingencies [Line Items] | |
Summary of Asbestos Claims Activity | A summary of Hercules’ asbestos claims activity follows. Six months ended March 31 Years ended September 30 (In thousands) 2017 2016 2016 2015 2014 Open claims - beginning of period 15 20 20 21 21 New claims filed 1 1 1 1 1 Claims dismissed (3 ) (1 ) (6 ) (2 ) (1 ) Open claims - end of period 13 20 15 20 21 |
Progression of Activity in the Asbestos Reserve Accounts | A progression of activity in the asbestos reserve is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Asbestos reserve - beginning of period $ 321 $ 311 $ 311 $ 329 $ 342 Reserve adjustment — — 25 4 10 Amounts paid (5 ) (8 ) (15 ) (22 ) (23 ) Asbestos reserve - end of period $ 316 $ 303 $ 321 $ 311 $ 329 |
Progression of Insurance Receivable | A progression of activity in the Hercules insurance receivable is presented in the following table. Six months ended March 31 Years ended September 30 (In millions) 2017 2016 2016 2015 2014 Insurance receivable - beginning of period $ 63 $ 56 $ 56 $ 77 $ 75 Receivable adjustment — — 7 1 3 Insurance settlement — — — (22 ) — Amounts collected — — — — (1 ) Insurance receivable - end of period $ 63 $ 56 $ 63 $ 56 $ 77 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings per Share | The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Stock appreciation rights (SARs), stock options and warrants available to purchase shares outstanding for each reporting period whose grant price was greater than the average market price of Ashland Common Stock for each applicable period were not included in the computation of income from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was approximately 0.1 million and 1.2 million at March 31, 2017 and 2016 , respectively. Earnings per share is reported under the treasury stock method. Three months ended Six months ended March 31 March 31 (In millions except per share data) 2017 2016 2017 2016 Numerator Numerator for basic and diluted EPS – Income from continuing operations $ 102 $ 87 $ 112 $ 178 Less: Income from continuing operations attributable to noncontrolling interest 13 — 24 — Income from continuing operations attributable to Ashland, net of tax $ 89 $ 87 $ 88 $ 178 Denominator Denominator for basic EPS – Weighted-average common shares outstanding 62 62 62 63 Share-based awards convertible to common shares 1 1 1 1 Denominator for diluted EPS – Adjusted weighted- average shares and assumed conversions 63 63 63 64 EPS from continuing operations attributable to Ashland Basic $ 1.43 $ 1.39 $ 1.42 $ 2.79 Diluted 1.42 1.38 1.41 2.76 |
EQUITY ITEMS (Tables)
EQUITY ITEMS (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of Comprehensive Income (Loss) [Table Text Block] | Components of other comprehensive income (loss) recorded in the Statements of Consolidated Comprehensive Income are presented below, before tax and net of tax effects. 2017 2016 Tax Tax Before (expense) Net of Before (expense) Net of (In millions) tax benefit tax tax benefit tax Three months ended March 31 Other comprehensive income (loss) Unrealized translation gain $ 58 $ 2 $ 60 $ 80 $ — $ 80 Pension and postretirement obligation adjustment: Adjustment of unrecognized prior service credit — — — 86 (31 ) 55 Amortization of unrecognized prior service credits included in net income (a) (3 ) 1 (2 ) (45 ) 14 (31 ) Net change in available-for-sale securities: Unrealized gain during period 9 (2 ) 7 5 (2 ) 3 Reclassification adjustment for gains included in net income (2 ) 1 (1 ) — — — Total other comprehensive income $ 62 $ 2 $ 64 $ 126 $ (19 ) $ 107 Six months ended March 31 Other comprehensive income (loss) Unrealized translation gain (loss) $ (92 ) $ 6 $ (86 ) $ 17 $ 2 $ 19 Pension and postretirement obligation adjustment: Adjustment of unrecognized prior service credit — — — 86 (31 ) 55 Amortization of unrecognized prior service credits included in net income (a) (6 ) 2 (4 ) (49 ) 15 (34 ) Net change in available-for-sale securities: Unrealized gain during period 9 (2 ) 7 14 (5 ) 9 Reclassification adjustment for gains included in net income (2 ) 1 (1 ) — — — Total other comprehensive income (loss) $ (91 ) $ 7 $ (84 ) $ 68 $ (19 ) $ 49 (a) Amortization of unrecognized prior service credits are included in the calculation of net periodic benefit costs (income) for pension and other postretirement plans. For specific financial statement captions impacted by the amortization see the table below. |
Income Statement Location of Prior Service Credits Recognized in Accumulated Other Comprehensive Income [Table Text Block] | The captions on the Statements of Consolidated Comprehensive Income impacted by the amortization of unrecognized prior service credits for pension and other postretirement plans are disclosed within. During the three and six months ended March 31, 2016, the amortization of unrecognized prior service credits included the impact of the pension and other postretirement plan remeasurements of $40 million . See Note J for more information. Three months ended Six months ended March 31 March 31 (In millions) 2017 2016 2017 2016 Cost of sales $ (1 ) $ (18 ) $ (2 ) $ (20 ) Selling, general and administrative expense (2 ) (27 ) (4 ) (29 ) Total amortization of unrecognized prior service credits $ (3 ) $ (45 ) $ (6 ) $ (49 ) |
REPORTABLE SEGMENT INFORMATIO43
REPORTABLE SEGMENT INFORMATION (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | The following table presents various financial information for each reportable segment for the three and six months ended March 31, 2017 and 2016 . Three months ended Six months ended March 31 March 31 (In millions - unaudited) 2017 2016 2017 2016 SALES Specialty Ingredients $ 544 $ 529 $ 1,026 $ 1,004 Performance Materials 262 239 484 470 Valvoline 514 479 1,003 936 $ 1,320 $ 1,247 $ 2,513 $ 2,410 OPERATING INCOME (LOSS) Specialty Ingredients $ 74 $ 65 $ 114 $ 103 Performance Materials 10 20 18 43 Valvoline 106 105 205 197 Unallocated and other (20 ) (43 ) (30 ) (45 ) $ 170 $ 147 $ 307 $ 298 |
SUPPLEMENTAL GUARANTOR INFORM44
SUPPLEMENTAL GUARANTOR INFORMATION (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Supplemental Guarantor Information [Abstract] | |
Condensed Statements of Comprehensive Income | Condensed Statements of Comprehensive Income Three months ended March 31, 2017 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 157 $ 1,172 $ (9 ) $ 1,320 Cost of sales — 113 783 (9 ) 887 Gross profit — 44 389 — 433 Selling, general and administrative expense 6 38 201 — 245 Research and development expense — 4 20 — 24 Equity and other income (loss) — (15 ) 21 — 6 Operating income (loss) (6 ) (13 ) 189 — 170 Net interest and other financing expense — 30 8 — 38 Income (loss) from continuing operations before income taxes (6 ) (43 ) 181 — 132 Income tax expense — 2 28 — 30 Equity in net income (loss) of subsidiaries 98 76 — (174 ) — Income (loss) from continuing operations 92 31 153 (174 ) 102 Income (loss) from discontinued operations (net of tax) — 4 (1 ) — 3 Net income (loss) 92 35 152 (174 ) 105 Net income attributable to noncontrolling interest — — 13 — 13 Net income (loss) attributable to Ashland $ 92 $ 35 $ 139 $ (174 ) $ 92 Comprehensive income (loss) 169 198 53 (251 ) 169 Comprehensive income attributable to noncontrolling interest 14 — 14 (14 ) 14 Comprehensive income (loss) attributable to Ashland $ 155 $ 198 $ 39 $ (237 ) $ 155 Condensed Statements of Comprehensive Income Three months ended March 31, 2016 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 165 $ 1,088 $ (6 ) $ 1,247 Cost of sales — 117 712 (6 ) 823 Gross profit — 48 376 — 424 Selling, general and administrative expense — 60 198 — 258 Research and development expense — 4 21 — 25 Equity and other income (loss) — (4 ) 10 — 6 Operating income (loss) — (20 ) 167 — 147 Net interest and other financing expense — 40 3 — 43 Net loss on divestitures — (2 ) — — (2 ) Income (loss) from continuing operations before income taxes — (62 ) 164 — 102 Income tax expense (benefit) — (35 ) 50 — 15 Equity in net income (loss) of subsidiaries 87 (32 ) — (55 ) — Income (loss) from continuing operations 87 (59 ) 114 (55 ) 87 Income (loss) from discontinued operations (net of tax) — 1 (1 ) — — Net income (loss) $ 87 $ (58 ) $ 113 $ (55 ) $ 87 Comprehensive income (loss) $ 194 $ (35 ) $ 197 $ (162 ) $ 194 Condensed Statements of Comprehensive Income Six months ended March 31, 2017 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 294 $ 2,237 $ (18 ) $ 2,513 Cost of sales — 209 1,502 (17 ) 1,694 Gross profit — 85 735 (1 ) 819 Selling, general and administrative expense 14 70 399 — 483 Research and development expense — 7 40 — 47 Equity and other income (loss) — (30 ) 48 — 18 Operating income (loss) (14 ) (22 ) 344 (1 ) 307 Net interest and other financing expense — 64 106 — 170 Net loss on divestitures — (1 ) — — (1 ) Income (loss) from continuing operations before income taxes (14 ) (87 ) 238 (1 ) 136 Income tax expense — 7 17 — 24 Equity in net income (loss) of subsidiaries 105 77 — (182 ) — Income (loss) from continuing operations 91 (17 ) 221 (183 ) 112 Income (loss) from discontinued operations (net of tax) — 4 (1 ) — 3 Net income (loss) 91 (13 ) 220 (183 ) 115 Net income attributable to noncontrolling interest — — 24 — 24 Net income (loss) attributable to Ashland $ 91 $ (13 ) $ 196 $ (183 ) $ 91 Comprehensive income (loss) 31 157 (34 ) (123 ) 31 Comprehensive income attributable to noncontrolling interest 24 — 24 (24 ) 24 Comprehensive income (loss) attributable to Ashland $ 7 $ 157 $ (58 ) $ (99 ) $ 7 Condensed Statements of Comprehensive Income Six months ended March 31, 2016 (In millions) Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Subsidiaries Eliminations Consolidated Sales $ — $ 321 $ 2,102 $ (13 ) $ 2,410 Cost of sales — 219 1,388 (12 ) 1,595 Gross profit — 102 714 (1 ) 815 Selling, general and administrative expense — 92 391 — 483 Research and development expense — 7 42 — 49 Equity and other income (loss) — (6 ) 21 — 15 Operating income (loss) — (3 ) 302 (1 ) 298 Net interest and other financing expense — 78 7 — 85 Net gain (loss) on divestitures — (1 ) 1 — — Income (loss) from continuing operations before income taxes — (82 ) 296 (1 ) 213 Income tax expense (benefit) — (62 ) 97 — 35 Equity in net income (loss) of subsidiaries 176 63 — (239 ) — Income (loss) from continuing operations 176 43 199 (240 ) 178 Loss from discontinued operations (net of tax) — — (2 ) — (2 ) Net income (loss) $ 176 $ 43 $ 197 $ (240 ) $ 176 Comprehensive income (loss) $ 225 $ 65 $ 224 $ (289 ) $ 225 |
Condensed Balance Sheets | Condensed Balance Sheets At March 31, 2017 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated ASSETS Current assets Cash and cash equivalents $ — $ 108 $ 497 $ — $ 605 Accounts receivable — 17 955 — 972 Inventories — 47 640 — 687 Other assets — 6 110 (3 ) 113 Total current assets — 178 2,202 (3 ) 2,377 Noncurrent assets Property, plant and equipment, net — 240 1,965 — 2,205 Goodwill — 141 2,272 — 2,413 Intangibles — 34 983 — 1,017 Restricted investments — — 298 — 298 Asbestos insurance receivable — 130 63 — 193 Equity and other unconsolidated investments — 2 59 — 61 Investment in subsidiaries 3,195 7,635 — (10,830 ) — Deferred income taxes 31 96 199 (127 ) 199 Intercompany receivables — 13 2,517 (2,530 ) — Other assets — 256 167 — 423 Total noncurrent assets 3,226 8,547 8,523 (13,487 ) 6,809 Total assets $ 3,226 $ 8,725 $ 10,725 $ (13,490 ) $ 9,186 LIABILITIES AND EQUITY Current liabilities Short-term debt $ — $ — $ 95 $ — $ 95 Current portion of long-term debt — — 16 — 16 Accounts payable and other accrued liabilities 64 214 651 (3 ) 926 Total current liabilities 64 214 762 (3 ) 1,037 Noncurrent liabilities Long-term debt — 2,103 709 — 2,812 Employee benefit obligations — 38 979 — 1,017 Asbestos litigation reserve — 363 300 — 663 Deferred income taxes — — 196 (127 ) 69 Intercompany payables 19 2,498 13 (2,530 ) — Other liabilities — 224 221 — 445 Total noncurrent liabilities 19 5,226 2,418 (2,657 ) 5,006 Equity Total Ashland stockholders’ equity 3,143 3,285 7,702 (10,830 ) 3,300 Noncontrolling interest — — (157 ) — (157 ) Total equity 3,143 3,285 7,545 (10,830 ) 3,143 Total liabilities and equity $ 3,226 $ 8,725 $ 10,725 $ (13,490 ) $ 9,186 Condensed Balance Sheets At September 30, 2016 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated ASSETS Current assets Cash and cash equivalents $ — $ 76 $ 1,112 $ — $ 1,188 Accounts receivable — 18 876 — 894 Inventories — 42 629 — 671 Other assets 7 16 98 (8 ) 113 Total current assets 7 152 2,715 (8 ) 2,866 Noncurrent assets Property, plant and equipment, net — 246 1,978 — 2,224 Goodwill — 141 2,260 — 2,401 Intangibles — 35 1,029 — 1,064 Restricted investments — — 292 — 292 Asbestos insurance receivable — 133 63 — 196 Equity and other unconsolidated investments — 2 55 — 57 Investment in subsidiaries 3,127 7,597 — (10,724 ) — Deferred income taxes 31 97 146 (97 ) 177 Intercompany receivables — 5 2,264 (2,269 ) — Other assets — 253 167 — 420 Total noncurrent assets 3,158 8,509 8,254 (13,090 ) 6,831 Total assets $ 3,165 $ 8,661 $ 10,969 $ (13,098 ) $ 9,697 LIABILITIES AND EQUITY Current liabilities Short-term debt $ — $ — $ 170 $ — $ 170 Current portion of long-term debt — — 19 — 19 Accounts payable and other accrued liabilities — 244 791 (8 ) 1,027 Total current liabilities — 244 980 (8 ) 1,216 Noncurrent liabilities Long-term debt — 2,182 873 — 3,055 Employee benefit obligations — 44 1,036 — 1,080 Asbestos litigation reserve — 381 305 — 686 Deferred income taxes — — 166 (97 ) 69 Intercompany payables — 2,264 5 (2,269 ) — Other liabilities — 220 206 — 426 Total noncurrent liabilities — 5,091 2,591 (2,366 ) 5,316 Equity Total Ashland stockholders’ equity 3,165 3,326 7,580 (10,724 ) 3,347 Noncontrolling interest — — (182 ) — (182 ) Total equity 3,165 3,326 7,398 (10,724 ) 3,165 Total liabilities and equity $ 3,165 $ 8,661 $ 10,969 $ (13,098 ) $ 9,697 |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows Six months ended March 31, 2017 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated Total cash flows provided (used) by operating activities from continuing operations $ — $ (109 ) $ 171 $ — $ 62 Cash flows provided (used) by investing activities from continuing operations Additions to property, plant and equipment — (10 ) (94 ) — (104 ) Purchase of operations - net of cash acquired — — (48 ) — (48 ) Intercompany dividends 17 17 — (34 ) — Net purchases of funds restricted for specific transactions — (2 ) — — (2 ) Reimbursements from restricted investments — 12 — — 12 Proceeds from sales of available-for-sale securities — — 19 — 19 Purchases of available-for-sale securities — — (19 ) — (19 ) Other investing activities, net — 1 — — 1 Total cash flows provided (used) by investing activities from continuing operations 17 18 (142 ) (34 ) (141 ) Cash flows provided (used) by financing activities from continuing operations Repayment of long-term debt — (80 ) (257 ) — (337 ) Premium on long-term debt repayment — (1 ) (4 ) — (5 ) Repayment from short-term debt — — (75 ) — (75 ) Cash dividends paid (48 ) — — — (48 ) Distributions to noncontrolling interest — — (4 ) — (4 ) Intercompany dividends (17 ) — (17 ) 34 — Other intercompany activity, net 48 226 (274 ) — — Other financing activities, net — (6 ) — — (6 ) Total cash flows provided (used) by financing activities from continuing operations (17 ) 139 (631 ) 34 (475 ) Cash provided (used) by continuing operations — 48 (602 ) — (554 ) Cash used by discontinued operations Operating cash flows — (16 ) (5 ) — (21 ) Investing cash flows — — — — — Total cash used by discontinued operations — (16 ) (5 ) — (21 ) Effect of currency exchange rate changes on cash and cash equivalents — — (8 ) — (8 ) Increase (decrease) in cash and cash equivalents — 32 (615 ) — (583 ) Cash and cash equivalents - beginning of period — 76 1,112 — 1,188 Cash and cash equivalents - end of period $ — $ 108 $ 497 $ — $ 605 Condensed Statements of Cash Flows Six months ended March 31, 2016 Ashland Global Holdings Inc. (Parent Guarantor) Ashland LLC (Issuer) Other Non-Guarantor Eliminations Consolidated Total cash flows provided (used) by operating activities from continuing operations $ — $ (121 ) $ 371 $ — $ 250 Cash flows provided (used) by investing activities from continuing operations Additions to property, plant and equipment — (7 ) (96 ) — (103 ) Purchase of operations - net of cash acquired — — (66 ) — (66 ) Proceeds from sale of operations or equity investments — — 12 — 12 Reimbursements from restricted investments — 23 — — 23 Proceeds from sales of available-for-sale securities — — 4 — 4 Purchases of available-for-sale securities — — (4 ) — (4 ) Other investing activities, net — 5 5 — 10 Total cash flows provided (used) by investing activities from continuing operations — 21 (145 ) — (124 ) Cash flows provided (used) by financing activities from continuing operations Repayment of long-term debt — (27 ) (9 ) — (36 ) Proceeds (repayment) from short-term debt — 439 (71 ) — 368 Repurchase of common stock — (500 ) — — (500 ) Cash dividends paid — (48 ) — — (48 ) Other intercompany activity, net — 238 (238 ) — — Other financing activities, net — (1 ) — — (1 ) Total cash flows provided (used) by financing activities from continuing operations — 101 (318 ) — (217 ) Cash provided (used) by continuing operations — 1 (92 ) — (91 ) Cash used by discontinued operations Operating cash flows — (11 ) (8 ) — (19 ) Investing cash flows — — — — — Total cash used by discontinued operations — (11 ) (8 ) — (19 ) Effect of currency exchange rate changes on cash and cash equivalents — — (11 ) — (11 ) Decrease in cash and cash equivalents — (10 ) (111 ) — (121 ) Cash and cash equivalents - beginning of period — 21 1,236 — 1,257 Cash and cash equivalents - end of period $ — $ 11 $ 1,125 $ — $ 1,136 |
SIGNIFICANT ACCOUNTING POLICI45
SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Sale of Stock, Percentage of Ownership after Transaction | 83.00% |
VALVOLINE Separation (Details)
VALVOLINE Separation (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Valvoline Shares Owned by Ashland | 170 | ||||
Sale of Stock, Percentage of Ownership after Transaction | 83.00% | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 17.00% | 17.00% | |||
Noncontrolling interest | $ (157) | $ (157) | $ (182) | ||
Net assets (liabilities) transferred to Valvoline Inc. | 15 | ||||
Selling, General and Administrative Expenses [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Separation costs | $ 26 | $ 12 | $ 54 | $ 18 | |
Valvoline [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Defined Benefit Plan, Funded Status of Plan | $ 900 |
VALVOLINE Acquisitions (Details
VALVOLINE Acquisitions (Details) number in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)site | Mar. 31, 2017USD ($)site | Mar. 31, 2016USD ($) | Sep. 30, 2016USD ($)site | ||
Business Acquisition [Line Items] | |||||
Goodwill, Acquired During Period | [1] | $ 49 | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 48 | $ 66 | |||
Time-It Lube [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of Stores | site | 28 | 28 | |||
Purchase of Business, Transaction Value | $ 48 | $ 48 | |||
Goodwill, Acquired During Period | $ 44 | $ 44 | |||
Oil Can Henry's [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of Stores | site | 89 | ||||
Purchase of Business, Transaction Value | $ 72 | ||||
Goodwill, Acquired During Period | $ 83 | ||||
Number of vehicles serviced annually. | 1 | ||||
Number of company-owned stores | site | 47 | ||||
Number of franchise locations | site | 42 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | $ 11 | ||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 62 | ||||
[1] | Relates to $44 million for the acquisition of Time-It Lube and $5 million for Valvoline Instant Oil ChangeSM center acquisitions during the six months ended March 31, 2017. See Note B for more information on the acquisition of Time-It Lube. |
DIVESTITURES (Details)
DIVESTITURES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (Loss) on Disposal | $ 0 | $ (2) | $ (1) | $ 0 | |
Specialty Ingredients [Member] | Specialty Ingredients Joint Venture [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (Loss) on Disposal | $ (12) |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Discontinued Operations [Line Items] | ||||
Income (loss) from discontinued operations (net of tax) | $ 3 | $ 0 | $ 3 | $ (2) |
Water Technologies [Member] | ||||
Discontinued Operations [Line Items] | ||||
Gain (loss) on disposal of discontinued operations (net of tax) | 0 | 1 | 0 | (1) |
Income (loss) from discontinued operations (net of tax) | $ 3 | $ (1) | $ 3 | $ (1) |
FAIR VALUE MEASUREMENTS (Recurr
FAIR VALUE MEASUREMENTS (Recurring Basis) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Sep. 30, 2016 | |
ASSETS | |||
Restricted Investments, Current | $ 30 | $ 30 | |
Fair Value, Measurements, Recurring [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||
ASSETS | |||
Cash and cash equivalents | 605 | 1,188 | |
Restricted investments | [1] | 328 | 322 |
Deferred compensation investments | [2] | 186 | 185 |
Investments of captive insurance company | [2] | 2 | 4 |
Foreign currency derivatives | 6 | 3 | |
Total assets at fair value | 1,127 | 1,702 | |
LIABILITIES | |||
Foreign currency derivatives | 4 | 5 | |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | |||
ASSETS | |||
Cash and cash equivalents | 605 | 1,188 | |
Restricted investments | [1] | 328 | 322 |
Deferred compensation investments | [2] | 186 | 185 |
Investments of captive insurance company | [2] | 2 | 4 |
Foreign currency derivatives | 6 | 3 | |
Total assets at fair value | 1,127 | 1,702 | |
LIABILITIES | |||
Foreign currency derivatives | 4 | 5 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | |||
ASSETS | |||
Cash and cash equivalents | 605 | 1,188 | |
Restricted investments | [1] | 328 | 322 |
Deferred compensation investments | [2] | 33 | 35 |
Investments of captive insurance company | [2] | 2 | 4 |
Foreign currency derivatives | 0 | 0 | |
Total assets at fair value | 968 | 1,549 | |
LIABILITIES | |||
Foreign currency derivatives | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
ASSETS | |||
Cash and cash equivalents | 0 | 0 | |
Restricted investments | [1] | 0 | 0 |
Deferred compensation investments | [2] | 153 | 150 |
Investments of captive insurance company | [2] | 0 | 0 |
Foreign currency derivatives | 6 | 3 | |
Total assets at fair value | 159 | 153 | |
LIABILITIES | |||
Foreign currency derivatives | 4 | 5 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | |||
ASSETS | |||
Cash and cash equivalents | 0 | 0 | |
Restricted investments | [1] | 0 | 0 |
Deferred compensation investments | [2] | 0 | 0 |
Investments of captive insurance company | [2] | 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 $30 million within other current assets in the Condensed Consolidated Balance Sheets. | ||
[2] | Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. |
FAIR VALUE MEASUREMENTS (Availa
FAIR VALUE MEASUREMENTS (Available-for-sale Securities) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | ||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||
Litigation Settlement, Amount | $ 398 | ||||||||
Increase (Decrease) in Restricted Cash | $ 335 | ||||||||
Restricted Investments, Current | $ 30 | $ 30 | $ 30 | ||||||
Original cost | 335 | 335 | 335 | ||||||
Accumulated investment income, settlement funds and disbursements, net | (24) | (24) | (3) | ||||||
Adjusted cost | [1] | 311 | 311 | 332 | |||||
Investment income | 2 | $ 2 | 5 | [2] | $ 4 | 8 | [2] | ||
Unrealized gain | 21 | 21 | 11 | ||||||
Unrealized loss | (1) | (1) | 0 | ||||||
Available-for-sale Securities, Gross Realized Gains | 2 | 0 | 2 | 0 | 0 | ||||
Settlement funds | 2 | 4 | |||||||
Disbursements | (12) | (16) | (12) | (23) | (33) | ||||
Total, fair value | 328 | 328 | 322 | ||||||
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities | 0 | $ 0 | 0 | $ 0 | |||||
Demand Deposits [Member] | |||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||
Demand Deposit Accounts | 20 | 20 | 6 | ||||||
Equity mutual fund [Member] | |||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||
Adjusted cost | 168 | 168 | 185 | ||||||
Equity mutual fund, unrealized gain | 21 | 21 | 8 | ||||||
Equity mutual fund, Fair value | 189 | 189 | 193 | ||||||
Corporate bond mutual fund [Member] | |||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||
Adjusted cost | 120 | 120 | 120 | ||||||
Corporate bond mutual fund, unrealized loss | (1) | (1) | |||||||
Corporate bond mutual fund, unrealized gain | 3 | ||||||||
Corporate bond mutual fund, Fair value | 119 | 119 | 123 | ||||||
Available-for-sale Securities [Member] | |||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||
Adjusted cost | 308 | 308 | 311 | ||||||
Unrealized gain | 21 | 21 | 11 | ||||||
Unrealized loss | (1) | (1) | 0 | ||||||
Total, fair value | $ 328 | $ 328 | $ 322 | ||||||
[1] | The adjusted cost of the demand deposit includes accumulated investment income, disbursements and settlements recorded in previous periods. | ||||||||
[2] | Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds. |
FAIR VALUE MEASUREMENTS (Curren
FAIR VALUE MEASUREMENTS (Currency Hedges) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities | $ 0 | $ 0 | $ 0 | $ 0 | |||
Settlement net gains (losses) | 58 | 80 | (92) | 17 | |||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Foreign currency derivative gain | 7 | 1 | 9 | 4 | |||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Accounts Receivable [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Foreign currency derivative assets | 6 | 6 | $ 3 | ||||
Notional amounts, foreign currency derivatives | 781 | 781 | 333 | ||||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Accrued Expenses and Other Liabilities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Foreign currency derivative liabilities | 3 | 3 | 4 | ||||
Notional amounts, foreign currency derivatives | 312 | 312 | 530 | ||||
Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Notional amounts, foreign currency derivatives | 69 | 69 | 94 | ||||
Settlement net gains (losses) | (2) | 1 | 7 | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 0 | 0 | 0 | 0 | |||
Loss on Fair Value Hedge Ineffectiveness | 0 | 0 | 0 | 0 | |||
Change in unrealized loss in AOCI | (1) | (2) | (1) | (2) | |||
Tax impact of change in unrealized loss in AOCI | 1 | $ 1 | 0 | [1] | $ 1 | ||
Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Accounts Receivable [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Foreign currency derivative assets | [1] | 0 | 0 | 0 | |||
Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Accrued Expenses and Other Liabilities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Foreign currency derivative liabilities | $ 1 | $ 1 | $ 1 | ||||
[1] | Fair value of $0 denotes a value less than $1 million. |
FAIR VALUE MEASUREMENTS (Other
FAIR VALUE MEASUREMENTS (Other Financial Instruments) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Sep. 30, 2016 |
Other financial instruments [Abstract] | ||
Long-term Debt, Carrying Value | $ 2,855 | $ 3,103 |
Long-term Debt, Fair Value | $ 3,002 | $ 3,336 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Sep. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 514 | $ 516 |
Raw materials, supplies and work in process | 200 | 184 |
LIFO reserve | (27) | (29) |
Inventory, Net | $ 687 | $ 671 |
GOODWILL AND OTHER INTANGIBLE55
GOODWILL AND OTHER INTANGIBLES (Goodwill) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | ||||
Goodwill [Line Items] | ||||||
Goodwill impairment | $ 171 | |||||
Goodwill [Roll Forward] | ||||||
Balance at beginning of period | $ 2,401 | |||||
Acquisitions | [1] | 49 | ||||
Currency translation adjustment | (37) | |||||
Balance at end of period | $ 2,413 | 2,413 | 2,401 | |||
Specialty Ingredients [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Balance at beginning of period | 1,991 | |||||
Acquisitions | 0 | |||||
Currency translation adjustment | (36) | |||||
Balance at end of period | 1,955 | 1,955 | 1,991 | |||
Performance Materials [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Balance at beginning of period | 147 | |||||
Acquisitions | 0 | |||||
Currency translation adjustment | (1) | |||||
Balance at end of period | 146 | [2] | 146 | [2] | 147 | |
Valvoline [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Balance at beginning of period | 263 | |||||
Acquisitions | [1] | 49 | ||||
Currency translation adjustment | 0 | |||||
Balance at end of period | 312 | [3] | 312 | [3] | $ 263 | |
Valvoline Core North America Reporting Unit [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Balance at end of period | 89 | 89 | ||||
Valvoline Quick Lubes [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Balance at end of period | 183 | 183 | ||||
Valvoline International Reporting Unit [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Balance at end of period | 40 | 40 | ||||
Time-It Lube [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Acquisitions | $ 44 | 44 | ||||
Valvoline Instant Oil Change [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Acquisitions | $ 5 | |||||
[1] | Relates to $44 million for the acquisition of Time-It Lube and $5 million for Valvoline Instant Oil ChangeSM center acquisitions during the six months ended March 31, 2017. See Note B for more information on the acquisition of Time-It Lube. | |||||
[2] | As of March 31, 2017, goodwill was completely attributable to the Composites reporting unit due to the full impairment of the goodwill for the Intermediates/Solvents reporting unit during the fourth quarter of 2016. | |||||
[3] | As of March 31, 2017, goodwill consisted of $89 million for the Core North America reporting unit, $183 million for the Quick Lubes reporting unit and $40 million for the International reporting unit. |
GOODWILL AND OTHER INTANGIBLE56
GOODWILL AND OTHER INTANGIBLES (Other Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Intangible Assets, Net [Abstract] | |||||
Intangible Assets, Gross (Excluding Goodwill) | $ 1,545 | $ 1,545 | $ 1,556 | ||
Intangibles | 1,017 | 1,017 | 1,064 | ||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 1,244 | 1,244 | 1,255 | ||
Accumulated amortization | (528) | (528) | (492) | ||
Net carrying amount | 716 | 716 | 763 | ||
Amortization expense recognized on intangible assets | 19 | $ 19 | 38 | $ 38 | |
Expected future amortization expense [Abstract] | |||||
2017 (includes six months actual and six months estimated) | 77 | 77 | |||
2,018 | 76 | 76 | |||
2,019 | 71 | 71 | |||
2,020 | 70 | 70 | |||
2,021 | 70 | 70 | |||
Trademarks and Trade Names [Member] | |||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||||
Indefinite-lived intangible assets (excluding goodwill) | 301 | 301 | 301 | ||
Trademarks and Trade Names [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Finite-lived Intangible Assets Acquired | 1 | ||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 43 | 43 | 42 | ||
Accumulated amortization | (20) | (20) | (19) | ||
Net carrying amount | 23 | 23 | 23 | ||
Intellectual Property [Member] | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 663 | 663 | 667 | ||
Accumulated amortization | (297) | (297) | (273) | ||
Net carrying amount | 366 | 366 | 394 | ||
Customer Relationships [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Finite-lived Intangible Assets Acquired | 2 | ||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 538 | 538 | 546 | ||
Accumulated amortization | (211) | (211) | (200) | ||
Net carrying amount | $ 327 | $ 327 | $ 346 | ||
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 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) | 20 years | ||||
Maximum [Member] | Customer Relationships [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Useful life (in years) | 24 years |
DEBT (Schedule of Long-term Deb
DEBT (Schedule of Long-term Debt) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Sep. 30, 2016 | ||
Debt Instrument [Line Items] | |||
Total debt | $ 2,923 | $ 3,244 | |
Short-term debt | (95) | (170) | |
Current portion of long-term debt | (16) | (19) | |
Long-term debt | 2,812 | 3,055 | |
Unamortized Debt Issuance Expense, Long-Term Debt | 27 | 29 | |
Scheduled aggregate debt maturities by fiscal year [Abstract] | |||
2,017 | 8 | ||
2,018 | 674 | ||
2,019 | 35 | ||
2,020 | 30 | ||
2,021 | 210 | ||
Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 1,082 | $ 1,121 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | 4.75% | |
Debt Instrument, Maturity Date | Aug. 15, 2022 | Aug. 15, 2022 | |
Notes due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 659 | $ 700 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.875% | 3.875% | |
Debt Instrument, Maturity Date | Apr. 15, 2018 | Apr. 15, 2018 | |
Notes due 2043 [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 376 | $ 376 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.875% | 6.875% | |
Debt Instrument, Maturity Date | May 15, 2043 | May 15, 2043 | |
Notes due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | [1] | $ 375 | $ 375 |
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | 5.50% | |
Debt Instrument, Maturity Date | Jul. 15, 2024 | Jul. 15, 2024 | |
Term Loan Due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | [1] | $ 293 | $ 375 |
2017 Accounts Receivable Securitization [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | [1] | 75 | 0 |
Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 50 | $ 140 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | 6.50% | |
Debt Instrument, Maturity Date | Dec. 31, 2029 | Dec. 31, 2029 | |
Other International Loans [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 20 | $ 20 | |
Debt, Weighted Average Interest Rate | 4.90% | 4.90% | |
Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 5 | $ 5 | |
Debt Instrument, Interest Rate, Stated Percentage | 9.40% | 9.40% | |
Debt Instrument, Maturity Date | Dec. 31, 2019 | Dec. 31, 2019 | |
Term Loan Due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 0 | $ 150 | |
Other Notes [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | [2] | $ (12) | $ (18) |
Minimum [Member] | Other International Loans [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.80% | 4.80% | |
Maximum [Member] | Other International Loans [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.00% | |
[1] | These debt instruments were issued by Valvoline during 2016 and 2017 in connection with the separation process. | ||
[2] | Other includes $27 million and $29 million of debt issuance cost discounts as of March 31, 2017 and September 30, 2016, respectively. |
DEBT (Financing Activity and Co
DEBT (Financing Activity and Covenants) (Details) $ in Millions | 6 Months Ended | ||
Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | ||
Debt Instrument [Line Items] | |||
Debt instrument, outstanding amount | $ 2,923 | $ 3,244 | |
Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | 6.50% | |
Par value of debt repurchases | $ 182 | ||
Aggregate purchase price of debt | 177 | ||
Reduction in carrying value of debt | 90 | ||
Repayment of debt, accelerated accretion | 92 | ||
Gain (Loss) on Repurchase of Debt Instrument | 5 | ||
Debt instrument, outstanding amount | $ 50 | $ 140 | |
Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | 4.75% | |
Repayments of Debt | $ 39 | ||
Debt instrument, outstanding amount | $ 1,082 | $ 1,121 | |
Notes due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.875% | 3.875% | |
Repayments of Debt | $ 41 | ||
Debt instrument, outstanding amount | 659 | $ 700 | |
Notes due 2018 and 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Gain (Loss) on Repurchase of Debt Instrument | (3) | ||
2017 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, outstanding amount | 150 | ||
2015 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | 748 | ||
Letters of Credit Outstanding, Amount | $ 52 | ||
Covenant restrictions [Abstract] | |||
Maximum consolidated leverage ratio | 3.50 | ||
Calculated leverage ratio | 3.1 | ||
Minimum required consolidated interest coverage ratio | 3 | ||
Calculated consolidated interest coverage ratio | 4.5 | ||
2012 Accounts Receivable Securitization [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 99 | ||
2017 Accounts Receivable Securitization [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, outstanding amount | [1] | 75 | 0 |
Line of Credit Facility, Remaining Borrowing Capacity | 50 | ||
Line of Credit Facility, Maximum Borrowing Capacity | 125 | ||
2016 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | 436 | ||
Letters of Credit Outstanding, Amount | $ 14 | ||
Covenant restrictions [Abstract] | |||
Maximum consolidated leverage ratio | 4.5 | ||
Calculated leverage ratio | 1.4 | ||
Minimum required consolidated interest coverage ratio | 3 | ||
Calculated consolidated interest coverage ratio | 13.5 | ||
Term Loan Due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of Debt | $ 75 | ||
Debt instrument, outstanding amount | [1] | 293 | $ 375 |
Repayment of Debt, Accelerated Amortization | 1 | ||
Ashland [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | 847 | ||
Valvoline [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 486 | ||
[1] | These debt instruments were issued by Valvoline during 2016 and 2017 in connection with the separation process. |
INCOME TAXES (Effective Tax Rat
INCOME TAXES (Effective Tax Rate) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount [Abstract] | ||||
Estimated Annual Effective Interest Rate | 24.00% | 25.00% | ||
Effective tax rate (in hundredths) | 23.00% | 15.00% | 18.00% | 16.00% |
Net discrete tax adjustments | $ 4 | $ 7 | $ 4 | $ 13 |
INCOME TAXES (Unrecognized Tax
INCOME TAXES (Unrecognized Tax Benefits) (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2017USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance | $ 168 |
Increases related to positions taken on items from prior years | 5 |
Decreases related to positions taken on items from prior years | (2) |
Increases related to positions taken in the current year | 7 |
Lapse of the statute of limitations | (2) |
Settlement of uncertain tax positions with tax authorities | (1) |
Balance | 175 |
Continuing Operations [Member] | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 1 |
Discontinued Operations [Member] | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 0 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Defined Benefit Plan, Effect of Plan Amendment on Accumulated Benefit Obligation | $ (86) | $ (86) | ||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Actuarial (gain) loss | 23 | $ 10 | (23) | |||||
United States Pension Plans of US Entity, Defined Benefit [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Actual contributions to benefit plans in period | 7 | |||||||
Estimated future contributions in current fiscal year | 7 | |||||||
Foreign Pension Plans, Defined Benefit [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Actual contributions to benefit plans in period | 7 | |||||||
Estimated future contributions in current fiscal year | 3 | |||||||
Pension Plan [Member] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Service cost | $ 2 | 6 | 5 | 13 | ||||
Interest cost | 24 | 31 | 47 | 62 | ||||
Expected return on plan assets | (39) | (48) | (78) | (96) | ||||
Amortization of prior service credit | 0 | [1] | 0 | [1] | 0 | [1] | (1) | |
Curtailment gain | 0 | (71) | 0 | (71) | ||||
Actuarial (gain) loss | 0 | 126 | 0 | 126 | ||||
Total net periodic benefit cost | (13) | 44 | (26) | 33 | ||||
Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Service cost | [1] | 0 | 0 | 0 | 0 | |||
Interest cost | 1 | 1 | 2 | 3 | ||||
Expected return on plan assets | 0 | 0 | 0 | 0 | ||||
Amortization of prior service credit | (3) | (4) | (6) | (8) | ||||
Curtailment gain | 0 | (39) | 0 | (39) | ||||
Actuarial (gain) loss | 0 | 7 | (10) | 7 | ||||
Total net periodic benefit cost | $ (2) | (35) | (14) | (37) | ||||
Other Postretirement Benefit Plan, Defined Benefit [Member] | Cost of Sales [Member] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Actuarial (gain) loss | (4) | |||||||
Other Postretirement Benefit Plan, Defined Benefit [Member] | Selling, General and Administrative Expenses [Member] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Actuarial (gain) loss | $ (6) | |||||||
Amendments to Plan [Member] | Pension Plan [Member] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Curtailment gain | (65) | (65) | ||||||
Actuarial (gain) loss | 123 | 123 | ||||||
Amendments to Plan [Member] | Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Curtailment gain | (39) | (39) | ||||||
Actuarial (gain) loss | 7 | 7 | ||||||
Reduction in Employees [Member] | Pension Plan [Member] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||
Curtailment gain | (6) | (6) | ||||||
Actuarial (gain) loss | $ 3 | $ 3 | ||||||
[1] | Activity of $0 denote values less than $1 million |
LITIGATION, CLAIMS AND CONTIN62
LITIGATION, CLAIMS AND CONTINGENCIES (Asbestos Litigation) (Details) claim in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2017USD ($)claim | Mar. 31, 2016USD ($)claim | Mar. 31, 2017USD ($)claim | Mar. 31, 2016USD ($)claim | Sep. 30, 2016USD ($)claim | Sep. 30, 2015USD ($)claim | Sep. 30, 2014USD ($)claim | |||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||||
Insurance settlement | $ 0 | [1] | $ 1 | $ 0 | [1] | $ 1 | |||
Asbestos litigation cost projection [Abstract] | |||||||||
Recorded Third-Party Environmental Recoveries, Noncurrent | $ 14 | $ 14 | $ 15 | ||||||
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 | ||||||||
Ashland [Member] | |||||||||
Asbestos claims [Roll Forward] | |||||||||
Open claims - beginning of period | claim | 57 | 60 | 60 | 65 | 65 | ||||
New claims filed | claim | 1 | 1 | 2 | 2 | 2 | ||||
Claims settled | claim | 0 | 0 | 0 | 0 | (1) | ||||
Claims dismissed | claim | (2) | (3) | (5) | (7) | (1) | ||||
Open claims - end of period | claim | 56 | 58 | 56 | 58 | 57 | 60 | 65 | ||
Asbestos reserve [Roll Forward] | |||||||||
Asbestos reserve - beginning of period | $ 415 | $ 409 | $ 409 | $ 438 | $ 463 | ||||
Reserve adjustment | 0 | 0 | 37 | 0 | 4 | ||||
Amounts paid | (18) | (17) | (31) | (29) | (29) | ||||
Asbestos reserve - end of period | $ 397 | $ 392 | 397 | 392 | 415 | 409 | 438 | ||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||||
Insurance receivable - beginning of period | 151 | 150 | 150 | 402 | 408 | ||||
Receivable adjustment | 0 | 0 | 16 | (3) | 22 | ||||
Insurance settlement | (5) | (4) | (4) | (227) | 0 | ||||
Amounts collected | (2) | (7) | (11) | (22) | (28) | ||||
Insurance receivable - end of period | 144 | $ 139 | 144 | $ 139 | $ 151 | $ 150 | $ 402 | ||
Insurance receivables relating to costs previously paid | 4 | 4 | |||||||
Asbestos litigation cost projection [Abstract] | |||||||||
Possible total future litigation defense and claim settlement costs | $ 670 | $ 670 | |||||||
Hercules [Member] | |||||||||
Asbestos claims [Roll Forward] | |||||||||
Open claims - beginning of period | claim | 15 | 20 | 20 | 21 | 21 | ||||
New claims filed | claim | 1 | 1 | 1 | 1 | 1 | ||||
Claims dismissed | claim | (3) | (1) | (6) | (2) | (1) | ||||
Open claims - end of period | claim | 13 | 20 | 13 | 20 | 15 | 20 | 21 | ||
Asbestos reserve [Roll Forward] | |||||||||
Asbestos reserve - beginning of period | $ 321 | $ 311 | $ 311 | $ 329 | $ 342 | ||||
Reserve adjustment | 0 | 0 | 25 | 4 | 10 | ||||
Amounts paid | (5) | (8) | (15) | (22) | (23) | ||||
Asbestos reserve - end of period | $ 316 | $ 303 | 316 | 303 | 321 | 311 | 329 | ||
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | |||||||||
Insurance receivable - beginning of period | 63 | 56 | 56 | 77 | 75 | ||||
Receivable adjustment | 0 | 0 | 7 | 1 | 3 | ||||
Insurance settlement | 0 | 0 | 0 | (22) | 0 | ||||
Amounts collected | 0 | 0 | 0 | 0 | (1) | ||||
Insurance receivable - end of period | 63 | $ 56 | 63 | $ 56 | $ 63 | $ 56 | $ 77 | ||
Asbestos litigation cost projection [Abstract] | |||||||||
Possible total future litigation defense and claim settlement costs | $ 490 | $ 490 | |||||||
[1] | Activity of $0 denotes value less than $1 million. |
LITIGATION, CLAIMS AND CONTIN63
LITIGATION, CLAIMS AND CONTINGENCIES (Environmental Remediation and Asset Retirement Obligations) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017USD ($)disposal_sitewaste_treatment_or_disposal_sitesservice_station_property | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($)disposal_sitewaste_treatment_or_disposal_sitesservice_station_property | Mar. 31, 2016USD ($) | Sep. 30, 2016USD ($) | |||
Environmental contingencies and asset retirement obligation [Roll Forward] | |||||||
Environmental remediation reserve - beginning of period | $ 177 | $ 186 | $ 186 | ||||
Disbursements | (15) | (24) | |||||
Revised obligation estimates and accretion | 5 | 14 | |||||
Environmental remediation reserve - end of period | $ 167 | $ 176 | 167 | 176 | 177 | ||
Accrued Environmental Loss Contingencies, Noncurrent | 124 | 124 | 134 | ||||
Recorded Third-Party Environmental Recoveries Receivables | 22 | 22 | 23 | ||||
Recorded Third-Party Environmental Recoveries, Noncurrent | $ 14 | $ 14 | $ 15 | ||||
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 | waste_treatment_or_disposal_sites | 84 | 84 | |||||
Number of current and former operating facilities subject to various environmental laws. | disposal_site | 130 | 130 | |||||
Total number of service station properties subject to various environmental laws | service_station_property | 1,225 | 1,225 | |||||
Number of service stations being actively remediated | service_station_property | 64 | 64 | |||||
Environmental expense | $ 1 | 9 | $ 5 | 13 | |||
Accretion Expense | 0 | 1 | 0 | 1 | |||
Legal Fees | 4 | 3 | 5 | 5 | |||
Total expense | 5 | 13 | 10 | 19 | |||
Insurance receivable | 0 | [1] | (1) | 0 | [1] | (1) | |
Total environmental remediation expense, net of receivable activity | 5 | [2] | $ 12 | 10 | [2] | $ 18 | |
Site Contingency [Line Items] | |||||||
Net expense related to divested businesses | $ 1 | $ 2 | |||||
Maximum reserve for remediation reserve related to any one site (in hundredths) | 16.00% | 16.00% | |||||
Maximum [Member] | |||||||
Site Contingency [Line Items] | |||||||
Environmental Exit Costs, Reasonably Possible Additional Loss | $ 375 | ||||||
[1] | Activity of $0 denotes value less than $1 million. | ||||||
[2] | Net expense of $1 million and $2 million for the three and six months ended March 31, 2017, respectively, relates to divested businesses which qualified for treatment as discontinued operations and for which certain environmental liabilities were retained by Ashland. These amounts are classified within the income (loss) from discontinued operations caption of the Statements of Consolidated Comprehensive Income. |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from calculation of earnings per share | 0.1 | 1.2 | ||
Numerator [Abstract] | ||||
Income from continuing operations | $ 102 | $ 87 | $ 112 | $ 178 |
Income from continuing operations attributable to noncontrolling interest | 13 | 0 | 24 | 0 |
Numerator for basic and diluted EPS - Income from continuing operations | $ 89 | $ 87 | $ 88 | $ 178 |
Denominator [Abstract] | ||||
Denominator for basic EPS - Weighted-average common shares outstanding | 62 | 62 | 62 | 63 |
Share based awards convertible to common shares | 1 | 1 | 1 | 1 |
Denominator for diluted EPS - Adjusted weighted-average shares and assumed conversions | 63 | 63 | 63 | 64 |
EPS from continuing operations [Abstract] | ||||
Basic (in usd per share) | $ 1.43 | $ 1.39 | $ 1.42 | $ 2.79 |
Diluted (in usd per share) | $ 1.42 | $ 1.38 | $ 1.41 | $ 2.76 |
EQUITY ITEMS Stock Repurchase P
EQUITY ITEMS Stock Repurchase Programs and Stockholder Dividends (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2015 | |
Accelerated Share Repurchases [Line Items] | |||||||||
Stock Repurchase Program, Authorized Amount | $ 1,000 | ||||||||
Payments for Repurchase of Common Stock | $ 0 | $ 500 | |||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 500 | $ 500 | |||||||
Common Stock, Dividends, Per Share, Declared | $ 0.39 | $ 0.39 | $ 0.39 | $ 0.39 | $ 0.39 | $ 0.39 | |||
Sale of Stock, Percentage of Ownership after Transaction | 83.00% | ||||||||
Payments of Ordinary Dividends, Noncontrolling Interest | $ 4 | 0 | |||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 17.00% | 17.00% | |||||||
Valvoline [Member] | |||||||||
Accelerated Share Repurchases [Line Items] | |||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.049 | $ 0.049 | |||||||
2016 Accelerated Share Repurchase Program [Member] | |||||||||
Accelerated Share Repurchases [Line Items] | |||||||||
Payments for Repurchase of Common Stock | $ 500 | ||||||||
Stock Repurchased and Retired During Period, Shares | 1.2 | 3.9 | 5.1 | ||||||
Accelerated Share Repurchases, Final Price Paid Per Share | $ 99.01 |
EQUITY ITEMS Accumulated Other
EQUITY ITEMS Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | ||
Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized translation loss, before tax | $ 58 | $ 80 | $ (92) | $ 17 | |
Unrealized translation loss, tax | 2 | 0 | 6 | 2 | |
Unrealized translation loss, net of tax | 60 | 80 | (86) | 19 | |
Adjustment of unrecognized prior service credit, before tax | 0 | 86 | 0 | 86 | |
Adjustment of unrecognized prior service credit, tax | 0 | (31) | 0 | (31) | |
Adjustment of unrecognized prior service credit, after tax | 0 | 55 | 0 | 55 | |
Amortization of unrecognized prior service credits included in net income, before tax | [1] | (3) | (45) | (6) | (49) |
Amortization of unrecognized prior service credits included in net income, tax | 1 | 14 | 2 | 15 | |
Amortization of unrecognized prior service credits included in net income, net of tax | (2) | (31) | (4) | (34) | |
Unrealized gain on available-for-sale securities, before taxes | 9 | 5 | 9 | 14 | |
Unrealized gain on available-for-sale securities, tax | (2) | (2) | (2) | (5) | |
Unrealized gain on available-for-sale securities, net of tax | 7 | 3 | 7 | 9 | |
Reclassification adjustment for gains on available-for-sale securities included in net income, before tax | (2) | 0 | (2) | 0 | |
Reclassification adjustment for gains on available-for-sale securities included in net income, tax | (1) | 0 | (1) | 0 | |
Reclassification adjustment for gains on available-for-sale securities included in net income, net of tax | (1) | 0 | (1) | 0 | |
Other comprehensive income (loss), before tax | 62 | 126 | (91) | 68 | |
Other comprehensive income (loss), tax | 2 | (19) | 7 | (19) | |
Other comprehensive income (loss) | 64 | 107 | (84) | 49 | |
Cost of Sales [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Amortization of unrecognized prior service credits included in net income, before tax | (1) | (18) | (2) | (20) | |
Selling, General and Administrative Expenses [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Amortization of unrecognized prior service credits included in net income, before tax | $ (2) | (27) | $ (4) | (29) | |
Amendments to Plan [Member] | |||||
Other Comprehensive Income (Loss) [Line Items] | |||||
Amortization of unrecognized prior service credits included in net income, before tax | $ 40 | $ 40 | |||
[1] | Amortization of unrecognized prior service credits are included in the calculation of net periodic benefit costs (income) for pension and other postretirement plans. For specific financial statement captions impacted by the amortization see the table below. |
STOCK INCENTIVE PLANS (Details)
STOCK INCENTIVE PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 8 | $ 8 | $ 17 | $ 18 | |
Cash-settled Nonvested Stock Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 2 | $ 3 | $ 1 | ||
Vesting period of share-based payment award | 3 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 95,000 | 95,000 | |||
Cash-settled Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 1 | $ 2 | |||
Stock Appreciation Rights (SARs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unexercised SARs lapse expiration period | 10 years 1 month | ||||
Grants of share-based payment awards in period | 0 | 0 | 400,000 | 400,000 | |
Total unrecognized compensation costs | $ 12 | $ 12 | |||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 2 years 1 month 6 days | ||||
Model to fair value share-based payment awards | Black-Scholes option-pricing model | ||||
Stock Appreciation Rights (SARs) [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of share-based payment award | 1 year | ||||
Stock Appreciation Rights (SARs) [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of share-based payment award | 3 years | ||||
Nonvested Stock Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants of share-based payment awards in period | 2,890 | 6,100 | 83,690 | 92,950 | |
Total unrecognized compensation costs | $ 12 | $ 12 | |||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 1 year 8 months 12 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 | ||||
Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period of share-based payment award | 3 years | ||||
Grants of share-based payment awards in period | 0 | 0 | 100,000 | 100,000 | |
Total unrecognized compensation costs | $ 12 | $ 12 | |||
Unrecognized cost expected to be recognized over a weighted-average period (in years) | 2 years | ||||
Number of common shares for each converted performance share | 1 | 1 | |||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total unrecognized compensation costs | $ 13 | $ 13 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 260,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 238,000 | 238,000 |
REPORTABLE SEGMENT INFORMATIO68
REPORTABLE SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017USD ($)site | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($)site | Mar. 31, 2016USD ($) | Sep. 30, 2016site | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | 3 | ||||
Sale of Stock, Percentage of Ownership after Transaction | 83.00% | ||||
Sales | $ 1,320 | $ 1,247 | $ 2,513 | $ 2,410 | |
Operating income (loss) | 170 | 147 | 307 | 298 | |
Specialty Ingredients [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 544 | 529 | 1,026 | 1,004 | |
Operating income (loss) | 74 | 65 | 114 | 103 | |
Performance Materials [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 262 | 239 | 484 | 470 | |
Operating income (loss) | $ 10 | 20 | $ 18 | 43 | |
Valvoline [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Number of Stores | site | 1,108 | 1,108 | |||
Sales | $ 514 | 479 | $ 1,003 | 936 | |
Operating income (loss) | 106 | 105 | 205 | 197 | |
Unallocated and other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (loss) | $ (20) | $ (43) | $ (30) | $ (45) | |
Time-It Lube [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Number of Stores | site | 28 | 28 | |||
Oil Can Henry's [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Number of Stores | site | 89 |
SUPPLEMENTAL GUARANTOR INFORM69
SUPPLEMENTAL GUARANTOR INFORMATION SUPPLEMENTAL GUARANTOR INFORMATION (Details) | Mar. 31, 2017 | Sep. 30, 2016 |
Notes due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.875% | 3.875% |
Notes due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | 4.75% |
Notes due 2043 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.875% | 6.875% |
SUPPLEMENTAL GUARANTOR INFORM70
SUPPLEMENTAL GUARANTOR INFORMATION (Condensed Statements of Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Sales | $ 1,320 | $ 1,247 | $ 2,513 | $ 2,410 |
Cost of sales | 887 | 823 | 1,694 | 1,595 |
Gross Profit | 433 | 424 | 819 | 815 |
Selling, general and administrative expense | 245 | 258 | 483 | 483 |
Research and Development Expense | 24 | 25 | 47 | 49 |
Equity and other income (loss) | 6 | 6 | 18 | 15 |
Operating income (loss) | 170 | 147 | 307 | 298 |
Net interest and other financing expense | 38 | 43 | 170 | 85 |
Net loss on divestitures | 0 | (2) | (1) | 0 |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | 132 | 102 | 136 | 213 |
Income tax expense (benefit) | 30 | 15 | 24 | 35 |
Equity in net income (loss) of subsidiaries | 0 | 0 | 0 | 0 |
Income (loss) from continuing operations | 102 | 87 | 112 | 178 |
Income (loss) from discontinued operations (net of tax) | 3 | 0 | 3 | (2) |
Net income (loss) | 105 | 87 | 115 | 176 |
Net income attributable to noncontrolling interest | 13 | 0 | 24 | 0 |
Net income (loss) attributable to Ashland | 92 | 87 | 91 | 176 |
Comprehensive income | 169 | 194 | 31 | 225 |
Comprehensive income attributable to noncontrolling interest | 14 | 0 | 24 | 0 |
Comprehensive income (loss) attributable to Ashland | 155 | 194 | 7 | 225 |
Eliminations | ||||
Sales | (9) | (6) | (18) | (13) |
Cost of sales | (9) | (6) | (17) | (12) |
Gross Profit | 0 | 0 | (1) | (1) |
Selling, general and administrative expense | 0 | 0 | 0 | 0 |
Research and Development Expense | 0 | 0 | 0 | 0 |
Equity and other income (loss) | 0 | 0 | 0 | 0 |
Operating income (loss) | 0 | 0 | (1) | (1) |
Net interest and other financing expense | 0 | 0 | 0 | 0 |
Net loss on divestitures | 0 | 0 | 0 | |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | 0 | 0 | (1) | (1) |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Equity in net income (loss) of subsidiaries | (174) | (55) | (182) | (239) |
Income (loss) from continuing operations | (174) | (55) | (183) | (240) |
Income (loss) from discontinued operations (net of tax) | 0 | 0 | 0 | 0 |
Net income (loss) | (174) | (55) | (183) | (240) |
Net income attributable to noncontrolling interest | 0 | 0 | ||
Net income (loss) attributable to Ashland | (174) | (183) | ||
Comprehensive income | (251) | (162) | (123) | (289) |
Comprehensive income attributable to noncontrolling interest | (14) | (24) | ||
Comprehensive income (loss) attributable to Ashland | (237) | (99) | ||
Ashland Global Holdings Inc. (Parent Guarantor) | ||||
Sales | 0 | 0 | 0 | 0 |
Cost of sales | 0 | 0 | 0 | 0 |
Gross Profit | 0 | 0 | 0 | 0 |
Selling, general and administrative expense | 6 | 0 | 14 | 0 |
Research and Development Expense | 0 | 0 | 0 | 0 |
Equity and other income (loss) | 0 | 0 | 0 | 0 |
Operating income (loss) | (6) | 0 | (14) | 0 |
Net interest and other financing expense | 0 | 0 | 0 | 0 |
Net loss on divestitures | 0 | 0 | 0 | |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | (6) | 0 | (14) | 0 |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Equity in net income (loss) of subsidiaries | 98 | 87 | 105 | 176 |
Income (loss) from continuing operations | 92 | 87 | 91 | 176 |
Income (loss) from discontinued operations (net of tax) | 0 | 0 | 0 | 0 |
Net income (loss) | 92 | 87 | 91 | 176 |
Net income attributable to noncontrolling interest | 0 | 0 | ||
Net income (loss) attributable to Ashland | 92 | 91 | ||
Comprehensive income | 169 | 194 | 31 | 225 |
Comprehensive income attributable to noncontrolling interest | 14 | 24 | ||
Comprehensive income (loss) attributable to Ashland | 155 | 7 | ||
Ashland LLC (Issuer) | ||||
Sales | 157 | 165 | 294 | 321 |
Cost of sales | 113 | 117 | 209 | 219 |
Gross Profit | 44 | 48 | 85 | 102 |
Selling, general and administrative expense | 38 | 60 | 70 | 92 |
Research and Development Expense | 4 | 4 | 7 | 7 |
Equity and other income (loss) | (15) | (4) | (30) | (6) |
Operating income (loss) | (13) | (20) | (22) | (3) |
Net interest and other financing expense | 30 | 40 | 64 | 78 |
Net loss on divestitures | (2) | (1) | (1) | |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | (43) | (62) | (87) | (82) |
Income tax expense (benefit) | 2 | (35) | 7 | (62) |
Equity in net income (loss) of subsidiaries | 76 | (32) | 77 | 63 |
Income (loss) from continuing operations | 31 | (59) | (17) | 43 |
Income (loss) from discontinued operations (net of tax) | 4 | 1 | 4 | 0 |
Net income (loss) | 35 | (58) | (13) | 43 |
Net income attributable to noncontrolling interest | 0 | 0 | ||
Net income (loss) attributable to Ashland | 35 | (13) | ||
Comprehensive income | 198 | (35) | 157 | 65 |
Comprehensive income attributable to noncontrolling interest | 0 | 0 | ||
Comprehensive income (loss) attributable to Ashland | 198 | 157 | ||
Other Non-Guarantor Subsidiaries | ||||
Sales | 1,172 | 1,088 | 2,237 | 2,102 |
Cost of sales | 783 | 712 | 1,502 | 1,388 |
Gross Profit | 389 | 376 | 735 | 714 |
Selling, general and administrative expense | 201 | 198 | 399 | 391 |
Research and Development Expense | 20 | 21 | 40 | 42 |
Equity and other income (loss) | 21 | 10 | 48 | 21 |
Operating income (loss) | 189 | 167 | 344 | 302 |
Net interest and other financing expense | 8 | 3 | 106 | 7 |
Net loss on divestitures | 0 | 0 | 1 | |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | 181 | 164 | 238 | 296 |
Income tax expense (benefit) | 28 | 50 | 17 | 97 |
Equity in net income (loss) of subsidiaries | 0 | 0 | 0 | 0 |
Income (loss) from continuing operations | 153 | 114 | 221 | 199 |
Income (loss) from discontinued operations (net of tax) | (1) | (1) | (1) | (2) |
Net income (loss) | 152 | 113 | 220 | 197 |
Net income attributable to noncontrolling interest | 13 | 24 | ||
Net income (loss) attributable to Ashland | 139 | 196 | ||
Comprehensive income | 53 | $ 197 | (34) | $ 224 |
Comprehensive income attributable to noncontrolling interest | 14 | 24 | ||
Comprehensive income (loss) attributable to Ashland | $ 39 | $ (58) |
SUPPLEMENTAL GUARANTOR INFORM71
SUPPLEMENTAL GUARANTOR INFORMATION (Condensed Balance Sheets) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | |
Current assets | |||||
Cash and cash equivalents | $ 605 | $ 1,188 | $ 1,136 | $ 1,257 | |
Accounts receivable | [1] | 972 | 894 | ||
Inventories | 687 | 671 | |||
Other assets | 113 | 113 | |||
Total current assets | 2,377 | 2,866 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 2,205 | 2,224 | |||
Goodwill | 2,413 | 2,401 | |||
Intangibles | 1,017 | 1,064 | |||
Restricted investments | 298 | 292 | |||
Asbestos insurance receivable | 193 | 196 | |||
Equity and other unconsolidated investments | 61 | 57 | |||
Investment in subsidiaries | 0 | 0 | |||
Deferred income taxes | 199 | 177 | |||
Intercompany receivables | 0 | 0 | |||
Other assets | 423 | 420 | |||
Total noncurrent assets | 6,809 | 6,831 | |||
Total assets | 9,186 | 9,697 | |||
Current liabilities | |||||
Short-term debt | 95 | 170 | |||
Current portion of long-term debt | 16 | 19 | |||
Accounts payable and other accrued liabilities | 926 | 1,027 | |||
Total current liabilities | 1,037 | 1,216 | |||
Noncurrent liabilities | |||||
Long-term debt | 2,812 | 3,055 | |||
Employee benefit obligations | 1,017 | 1,080 | |||
Asbestos litigation reserve | 663 | 686 | |||
Deferred income taxes | 69 | 69 | |||
Intercompany payables | 0 | 0 | |||
Other liabilities | 445 | 426 | |||
Total noncurrent liabilities | 5,006 | 5,316 | |||
Equity | |||||
Total Ashland stockholders’ equity | 3,300 | 3,347 | |||
Noncontrolling interest | (157) | (182) | |||
Total equity | 3,143 | 3,165 | |||
Total liabilities and equity | 9,186 | 9,697 | |||
Eliminations | |||||
Current assets | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Accounts receivable | 0 | 0 | |||
Inventories | 0 | 0 | |||
Other assets | (3) | (8) | |||
Total current assets | (3) | (8) | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Intangibles | 0 | 0 | |||
Restricted investments | 0 | 0 | |||
Asbestos insurance receivable | 0 | 0 | |||
Equity and other unconsolidated investments | 0 | 0 | |||
Investment in subsidiaries | (10,830) | (10,724) | |||
Deferred income taxes | (127) | (97) | |||
Intercompany receivables | (2,530) | (2,269) | |||
Other assets | 0 | 0 | |||
Total noncurrent assets | (13,487) | (13,090) | |||
Total assets | (13,490) | (13,098) | |||
Current liabilities | |||||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 0 | 0 | |||
Accounts payable and other accrued liabilities | (3) | (8) | |||
Total current liabilities | (3) | (8) | |||
Noncurrent liabilities | |||||
Long-term debt | 0 | 0 | |||
Employee benefit obligations | 0 | 0 | |||
Asbestos litigation reserve | 0 | 0 | |||
Deferred income taxes | (127) | (97) | |||
Intercompany payables | (2,530) | (2,269) | |||
Other liabilities | 0 | 0 | |||
Total noncurrent liabilities | (2,657) | (2,366) | |||
Equity | |||||
Total Ashland stockholders’ equity | (10,830) | (10,724) | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | (10,830) | (10,724) | |||
Total liabilities and equity | (13,490) | (13,098) | |||
Ashland Global Holdings Inc. (Parent Guarantor) | |||||
Current assets | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Accounts receivable | 0 | 0 | |||
Inventories | 0 | 0 | |||
Other assets | 0 | 7 | |||
Total current assets | 0 | 7 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Intangibles | 0 | 0 | |||
Restricted investments | 0 | 0 | |||
Asbestos insurance receivable | 0 | 0 | |||
Equity and other unconsolidated investments | 0 | 0 | |||
Investment in subsidiaries | 3,195 | 3,127 | |||
Deferred income taxes | 31 | 31 | |||
Intercompany receivables | 0 | 0 | |||
Other assets | 0 | 0 | |||
Total noncurrent assets | 3,226 | 3,158 | |||
Total assets | 3,226 | 3,165 | |||
Current liabilities | |||||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 0 | 0 | |||
Accounts payable and other accrued liabilities | 64 | 0 | |||
Total current liabilities | 64 | 0 | |||
Noncurrent liabilities | |||||
Long-term debt | 0 | 0 | |||
Employee benefit obligations | 0 | 0 | |||
Asbestos litigation reserve | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Intercompany payables | 19 | 0 | |||
Other liabilities | 0 | 0 | |||
Total noncurrent liabilities | 19 | 0 | |||
Equity | |||||
Total Ashland stockholders’ equity | 3,143 | 3,165 | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | 3,143 | 3,165 | |||
Total liabilities and equity | 3,226 | 3,165 | |||
Ashland LLC (Issuer) | |||||
Current assets | |||||
Cash and cash equivalents | 108 | 76 | 11 | 21 | |
Accounts receivable | 17 | 18 | |||
Inventories | 47 | 42 | |||
Other assets | 6 | 16 | |||
Total current assets | 178 | 152 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 240 | 246 | |||
Goodwill | 141 | 141 | |||
Intangibles | 34 | 35 | |||
Restricted investments | 0 | 0 | |||
Asbestos insurance receivable | 130 | 133 | |||
Equity and other unconsolidated investments | 2 | 2 | |||
Investment in subsidiaries | 7,635 | 7,597 | |||
Deferred income taxes | 96 | 97 | |||
Intercompany receivables | 13 | 5 | |||
Other assets | 256 | 253 | |||
Total noncurrent assets | 8,547 | 8,509 | |||
Total assets | 8,725 | 8,661 | |||
Current liabilities | |||||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 0 | 0 | |||
Accounts payable and other accrued liabilities | 214 | 244 | |||
Total current liabilities | 214 | 244 | |||
Noncurrent liabilities | |||||
Long-term debt | 2,103 | 2,182 | |||
Employee benefit obligations | 38 | 44 | |||
Asbestos litigation reserve | 363 | 381 | |||
Deferred income taxes | 0 | 0 | |||
Intercompany payables | 2,498 | 2,264 | |||
Other liabilities | 224 | 220 | |||
Total noncurrent liabilities | 5,226 | 5,091 | |||
Equity | |||||
Total Ashland stockholders’ equity | 3,285 | 3,326 | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | 3,285 | 3,326 | |||
Total liabilities and equity | 8,725 | 8,661 | |||
Other Non-Guarantor Subsidiaries | |||||
Current assets | |||||
Cash and cash equivalents | 497 | 1,112 | $ 1,125 | $ 1,236 | |
Accounts receivable | 955 | 876 | |||
Inventories | 640 | 629 | |||
Other assets | 110 | 98 | |||
Total current assets | 2,202 | 2,715 | |||
Noncurrent assets | |||||
Property, plant and equipment, net | 1,965 | 1,978 | |||
Goodwill | 2,272 | 2,260 | |||
Intangibles | 983 | 1,029 | |||
Restricted investments | 298 | 292 | |||
Asbestos insurance receivable | 63 | 63 | |||
Equity and other unconsolidated investments | 59 | 55 | |||
Investment in subsidiaries | 0 | 0 | |||
Deferred income taxes | 199 | 146 | |||
Intercompany receivables | 2,517 | 2,264 | |||
Other assets | 167 | 167 | |||
Total noncurrent assets | 8,523 | 8,254 | |||
Total assets | 10,725 | 10,969 | |||
Current liabilities | |||||
Short-term debt | 95 | 170 | |||
Current portion of long-term debt | 16 | 19 | |||
Accounts payable and other accrued liabilities | 651 | 791 | |||
Total current liabilities | 762 | 980 | |||
Noncurrent liabilities | |||||
Long-term debt | 709 | 873 | |||
Employee benefit obligations | 979 | 1,036 | |||
Asbestos litigation reserve | 300 | 305 | |||
Deferred income taxes | 196 | 166 | |||
Intercompany payables | 13 | 5 | |||
Other liabilities | 221 | 206 | |||
Total noncurrent liabilities | 2,418 | 2,591 | |||
Equity | |||||
Total Ashland stockholders’ equity | 7,702 | 7,580 | |||
Noncontrolling interest | (157) | (182) | |||
Total equity | 7,545 | 7,398 | |||
Total liabilities and equity | $ 10,725 | $ 10,969 | |||
[1] | Accounts receivable includes an allowance for doubtful accounts of $14 million at March 31, 2017 and September 30, 2016 |
SUPPLEMENTAL GUARANTOR INFORM72
SUPPLEMENTAL GUARANTOR INFORMATION (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Total cash flows provided (used) by operating activities from continuing operations | $ 62 | $ 250 | |
Cash flows provided (used) by investing activities from continuing operations | |||
Additions to property, plant and equipment | (104) | (103) | |
Purchase of operations - net of cash acquired | (48) | (66) | |
Proceeds (uses) from sale of operations or equity investments | (1) | 12 | |
Intercompany dividends | 0 | ||
Net purchase of funds restricted for specific transactions | (2) | 0 | |
Reimbursements from restricted investments | 12 | 23 | |
Proceeds from sales of available-for-sale securities | 19 | 4 | |
Purchases of available-for-sale securities | (19) | (4) | |
Other investing activities, net | 1 | 10 | |
Total cash flows provided (used) by investing activities from continuing operations | (141) | (124) | |
Cash flows provided (used) by financing activities from continuing operations | |||
Repayment of long-term debt | (337) | (36) | |
Premium on long-term debt repayment | (5) | 0 | |
Proceeds (repayment) from short-term debt | (75) | 368 | |
Repurchase of common stock | 0 | (500) | |
Cash dividends paid | (48) | (48) | |
Distributions to noncontrolling interest | (4) | 0 | |
Intercompany dividends | 0 | ||
Other intercompany activity, net | 0 | 0 | |
Other financing activities, net | (6) | (1) | |
Total cash flows provided (used) by financing activities from continuing operations | (475) | (217) | |
Cash provided (used) by continuing operations | (554) | (91) | |
Cash provided (used) by discontinued operations | |||
Operating cash flows | (21) | (19) | |
Investing cash flows | 0 | 0 | |
Total cash used by discontinued operations | (21) | (19) | |
Effect of currency exchange rate changes on cash and cash equivalents | (8) | (11) | |
Increase (decrease) in cash and cash equivalents | (583) | (121) | |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 1,188 | 1,257 | $ 1,257 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 605 | 1,136 | 1,188 |
Eliminations | |||
Total cash flows provided (used) by operating activities from continuing operations | 0 | 0 | |
Cash flows provided (used) by investing activities from continuing operations | |||
Additions to property, plant and equipment | 0 | 0 | |
Purchase of operations - net of cash acquired | 0 | 0 | |
Proceeds (uses) from sale of operations or equity investments | 0 | ||
Intercompany dividends | (34) | ||
Net purchase of funds restricted for specific transactions | 0 | ||
Reimbursements from restricted investments | 0 | 0 | |
Proceeds from sales of available-for-sale securities | 0 | 0 | |
Purchases of available-for-sale securities | 0 | 0 | |
Other investing activities, net | 0 | 0 | |
Total cash flows provided (used) by investing activities from continuing operations | (34) | 0 | |
Cash flows provided (used) by financing activities from continuing operations | |||
Repayment of long-term debt | 0 | 0 | |
Premium on long-term debt repayment | 0 | ||
Proceeds (repayment) from short-term debt | 0 | 0 | |
Repurchase of common stock | 0 | ||
Cash dividends paid | 0 | 0 | |
Distributions to noncontrolling interest | 0 | ||
Intercompany dividends | 34 | ||
Other intercompany activity, net | 0 | 0 | |
Other financing activities, net | 0 | 0 | |
Total cash flows provided (used) by financing activities from continuing operations | 34 | 0 | |
Cash provided (used) by continuing operations | 0 | 0 | |
Cash provided (used) by discontinued operations | |||
Operating cash flows | 0 | 0 | |
Investing cash flows | 0 | 0 | |
Total cash used by discontinued operations | 0 | 0 | |
Effect of currency exchange rate changes on cash and cash equivalents | 0 | 0 | |
Increase (decrease) in cash and cash equivalents | 0 | 0 | |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 0 | 0 | 0 |
Ashland Global Holdings Inc. (Parent Guarantor) | |||
Total cash flows provided (used) by operating activities from continuing operations | 0 | 0 | |
Cash flows provided (used) by investing activities from continuing operations | |||
Additions to property, plant and equipment | 0 | 0 | |
Purchase of operations - net of cash acquired | 0 | 0 | |
Proceeds (uses) from sale of operations or equity investments | 0 | ||
Intercompany dividends | 17 | ||
Net purchase of funds restricted for specific transactions | 0 | ||
Reimbursements from restricted investments | 0 | 0 | |
Proceeds from sales of available-for-sale securities | 0 | 0 | |
Purchases of available-for-sale securities | 0 | 0 | |
Other investing activities, net | 0 | 0 | |
Total cash flows provided (used) by investing activities from continuing operations | 17 | 0 | |
Cash flows provided (used) by financing activities from continuing operations | |||
Repayment of long-term debt | 0 | 0 | |
Premium on long-term debt repayment | 0 | ||
Proceeds (repayment) from short-term debt | 0 | 0 | |
Repurchase of common stock | 0 | ||
Cash dividends paid | (48) | 0 | |
Distributions to noncontrolling interest | 0 | ||
Intercompany dividends | (17) | ||
Other intercompany activity, net | 48 | 0 | |
Other financing activities, net | 0 | 0 | |
Total cash flows provided (used) by financing activities from continuing operations | (17) | 0 | |
Cash provided (used) by continuing operations | 0 | 0 | |
Cash provided (used) by discontinued operations | |||
Operating cash flows | 0 | 0 | |
Investing cash flows | 0 | 0 | |
Total cash used by discontinued operations | 0 | 0 | |
Effect of currency exchange rate changes on cash and cash equivalents | 0 | 0 | |
Increase (decrease) in cash and cash equivalents | 0 | 0 | |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 0 | 0 | 0 |
Ashland LLC (Issuer) | |||
Total cash flows provided (used) by operating activities from continuing operations | (109) | (121) | |
Cash flows provided (used) by investing activities from continuing operations | |||
Additions to property, plant and equipment | (10) | (7) | |
Purchase of operations - net of cash acquired | 0 | 0 | |
Proceeds (uses) from sale of operations or equity investments | 0 | ||
Intercompany dividends | 17 | ||
Net purchase of funds restricted for specific transactions | (2) | ||
Reimbursements from restricted investments | 12 | 23 | |
Proceeds from sales of available-for-sale securities | 0 | 0 | |
Purchases of available-for-sale securities | 0 | 0 | |
Other investing activities, net | 1 | 5 | |
Total cash flows provided (used) by investing activities from continuing operations | 18 | 21 | |
Cash flows provided (used) by financing activities from continuing operations | |||
Repayment of long-term debt | (80) | (27) | |
Premium on long-term debt repayment | (1) | ||
Proceeds (repayment) from short-term debt | 0 | 439 | |
Repurchase of common stock | (500) | ||
Cash dividends paid | 0 | (48) | |
Distributions to noncontrolling interest | 0 | ||
Intercompany dividends | 0 | ||
Other intercompany activity, net | 226 | 238 | |
Other financing activities, net | (6) | (1) | |
Total cash flows provided (used) by financing activities from continuing operations | 139 | 101 | |
Cash provided (used) by continuing operations | 48 | 1 | |
Cash provided (used) by discontinued operations | |||
Operating cash flows | (16) | (11) | |
Investing cash flows | 0 | 0 | |
Total cash used by discontinued operations | (16) | (11) | |
Effect of currency exchange rate changes on cash and cash equivalents | 0 | 0 | |
Increase (decrease) in cash and cash equivalents | 32 | (10) | |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 76 | 21 | 21 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 108 | 11 | 76 |
Other Non-Guarantor Subsidiaries | |||
Total cash flows provided (used) by operating activities from continuing operations | 171 | 371 | |
Cash flows provided (used) by investing activities from continuing operations | |||
Additions to property, plant and equipment | (94) | (96) | |
Purchase of operations - net of cash acquired | (48) | (66) | |
Proceeds (uses) from sale of operations or equity investments | 12 | ||
Intercompany dividends | 0 | ||
Net purchase of funds restricted for specific transactions | 0 | ||
Reimbursements from restricted investments | 0 | 0 | |
Proceeds from sales of available-for-sale securities | 19 | 4 | |
Purchases of available-for-sale securities | (19) | (4) | |
Other investing activities, net | 0 | 5 | |
Total cash flows provided (used) by investing activities from continuing operations | (142) | (145) | |
Cash flows provided (used) by financing activities from continuing operations | |||
Repayment of long-term debt | (257) | (9) | |
Premium on long-term debt repayment | (4) | ||
Proceeds (repayment) from short-term debt | (75) | (71) | |
Repurchase of common stock | 0 | ||
Cash dividends paid | 0 | 0 | |
Distributions to noncontrolling interest | (4) | ||
Intercompany dividends | (17) | ||
Other intercompany activity, net | (274) | (238) | |
Other financing activities, net | 0 | 0 | |
Total cash flows provided (used) by financing activities from continuing operations | (631) | (318) | |
Cash provided (used) by continuing operations | (602) | (92) | |
Cash provided (used) by discontinued operations | |||
Operating cash flows | (5) | (8) | |
Investing cash flows | 0 | 0 | |
Total cash used by discontinued operations | (5) | (8) | |
Effect of currency exchange rate changes on cash and cash equivalents | (8) | (11) | |
Increase (decrease) in cash and cash equivalents | (615) | (111) | |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 1,112 | 1,236 | 1,236 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 497 | $ 1,125 | $ 1,112 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Pharmachem Laboratories [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Purchase of Business, Transaction Value | $ 660 |