Hercules (HPC) 425 Business combination disclosure

Filed by Ashland Inc.

Pursuant to Rule 425

Under the Securities Act of 1933

Subject Company

Hercules Incorporated

Commission File Number 333-152911

Fourth-Quarter Fiscal 2008 Earnings
October 28, 2008

Fourth-Quarter Fiscal 2008 Earnings
October 28, 2008

James J. O'Brien
Chairman and Chief Executive Officer

James J. O'Brien
Chairman and Chief Executive Officer

Lamar M. Chambers
Sr. Vice President and Chief Financial Officer

Lamar M. Chambers
Sr. Vice President and Chief Financial Officer

Eric N. Boni
Director, Investor Relations

Eric N. Boni
Director, Investor Relations

2

Forward-Looking Statements

This presentation contains forward-looking statements, within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements
include those made with respect to Ashland’s operating performance and Ashland’s acquisition of
Hercules Inc. These expectations are based upon a number of assumptions, including those mentioned
within this presentation. Performance estimates are also based upon internal forecasts and analyses of
current and future market conditions and trends, management plans and strategies, weather, operating
efficiencies and economic conditions, such as prices, supply and demand, cost of raw materials, and
legal proceedings and claims (including environmental and asbestos matters). These risks and
uncertainties may cause actual operating results to differ materially from those stated, projected or
implied. Such risks and uncertainties with respect to Ashland’s acquisition of Hercules include the
possibility that the benefits anticipated from the Hercules transaction will not be fully realized; the
possibility the transaction may not close, including as a result of failure to obtain the approval of
Hercules stockholders; the possibility that financing may not be available on the terms committed; and
other risks that are described in filings made by Ashland with the Securities and Exchange Commission
(SEC) in connection with the proposed transaction. Although Ashland believes its expectations are
based on reasonable assumptions, it cannot assure the expectations reflected herein will be achieved.
This forward-looking information may prove to be inaccurate and actual results may differ significantly
from those anticipated if one or more of the underlying assumptions or expectations proves to be
inaccurate or is unrealized or if other unexpected conditions or events occur. Other factors,
uncertainties and risks affecting Ashland are contained in Ashland's periodic filings made with the SEC,
including its Form 10-K for the fiscal year ended Sept. 30, 2007, and Forms 10-Q for the quarters ended
Dec. 31, 2007, and March 31 and June 30, 2008, which are available on Ashland’s Investor Relations

website at www.ashland.com/investors or the SEC’s website at www.sec.gov. Ashland undertakes no

obligation to subsequently update or revise the forward-looking statements made in this presentation to

reflect events or circumstances after the date of this presentation.

3

Additional Information

In connection with the proposed transaction, Ashland filed a registration statement
on Form S-4 (File No. 333-152911) with the SEC containing a proxy
statement/prospectus. On Oct. 6, 2008, Ashland and Hercules mailed a definitive
proxy statement/prospectus to Hercules’ shareholders containing information about
the merger. Investors and security holders are urged to read the registration
statement on Form S-4 and the proxy statement/prospectus because they contain
important information about the proposed transaction. Investors and security holders
may obtain free copies of these documents and other documents filed with the SEC
by contacting Ashland Investor Relations at (859) 815-4454 or Hercules Investor
Relations at (302) 594-7151. Free copies may also be obtained from Ashland's
Investor Relations website at www.ashland.com/investors, Hercules' website at
www.herc.com or the SEC's website at www.sec.gov.

4

Agenda

·Fiscal fourth-quarter preliminary results
and business outlook

·Ashland full-year highlights

·Hercules update

·Questions

Appendices

-Appendix A: Full-year fiscal 2008 preliminary results

-Appendix B: Business profiles

-Appendix C: Regulation G reconciliation

5

Fiscal Fourth Quarter 2008
Highlights

·Continued volatile raw materials cost environment and
declining demand

·Operating income versus September 2007

-Increased 6 percent to $27.8 million, as reported

-Declined 41 percent to $23.8 million, excluding key items1

§Declines in Ashland Performance Materials, Ashland Water
Technologies and Valvoline

§Significant improvement of $10.6 million at Ashland Distribution

·EBITDA2 decreased 11 percent to $68 million

·Tax provision adjustments unfavorably impacted
EPS by approximately 30 cents per share

·Continued reductions in operating-segment trade
working capital as a percent of sales to 12.3 percent

1 When adjusted for key items in both periods as noted on Slide 7 of this presentation.

2 Operating income, plus depreciation and amortization.

6

Fiscal Fourth Quarter 2008
Preliminary Financial Results

(in millions, except change)	Three months ended Sept. 30,
	2008		2007		Fav./(Unfav.)
Sales and operating revenue		2,216)		2,085)		6 %
Cost of sales		1,898)		1,740)		(9)%
Gross profit		318)		345)		(8)%
Gross profit percentage		14.4%		16.5%		(210) bp
Selling, general & administrative expenses		310)		338)		8)%
SG&A percentage		14.0%		16.2%		220) bp
Equity and other income		20)		19)		5 %
Operating income		28)		26)		8)%
Operating income percentage		1.3%		1.2%		10) bp
Earnings before interest, taxes, depreciation and amortization (EBITDA)	$	68)	$	76)		(11)%
EBITDA as a percent of sales		3.1%		3.6%		(50) bp

$

$

7

Key Items Affecting Operating Income
Comparisons

(in millions)	Three months ended Sept. 30,
Ashland Inc.	2008	2007
Self-insurance reserve adjustment	$11.3)	$8.0)
Severance costs	(7.3)	—)
Non-North American entities reporting lag elimination	—)	5.2)
Litigation reserve adjustment	—)	(5.5)
Asset impairment - PathGuard® equipment	—)	(10.6)
Postretirement benefit obligation adjustment	—)	(11.3)
All other income	23.8)	40.4)
Total operating income	$27.8)	$26.2)

8

Q4 FY 2007 vs. Q4 FY 2008
Factors Impacting Operating Income

($ millions)

(8.2)

(14.0)

Q4 2007

Volume/
Mix

Q4 2008

Currency
Translation

Margin

3.0

26.2

27.8

SG&A
Expenses

2.2

0.4

Other

18.2

Key
Items

9

Fiscal Fourth Quarter 2008
Preliminary Diluted Earnings Per Share

(in millions)	Three months ended Sept. 30,
	2008	2007
Operating income	$28)	$26)
Loss on MAP Transaction	(3)	-)
Net interest and other financing income	2)	12)
Income from continuing operations before income taxes	27)	38)
Income tax expense	(28)	(6)
Income (loss) from continuing operations	(1)	32)
Loss from discontinued operations,net of income taxes	(9)	-)
Net income (loss)	(10)	32)
Diluted EPS from continuing operations	(.01)	.51)
Diluted EPS on net income	(.15)	.51)
Q4 effective tax rate	102.4%	16.2%
Full-year effective tax rate	32.9%	22.3%

10

Fiscal Fourth Quarter 2008
Components of Preliminary EPS

	Three months ended Sept. 30,
Ashland Inc.	2008	2007
Self-insurance reserve adjustment	$.11)	$.08)
Severance costs	(.07)	—)
Tax provision adjustment1	(.30)	.04)
Non-North American entities reporting-lag elimination	—)	.05)
Litigation reserve adjustment	—)	(.05)
Asset impairments	—)	(.10)
Postretirement benefit obligation adjustment	—)	(.11)
All other diluted EPS from continuing operations	.25)	.60)
Diluted EPS from continuing operations	$ (.01)	$.51)

1Difference between quarterly and full-year effective tax rates.

11

Fiscal Fourth Quarter 2008
Operating Cash Flows

(in millions)	Three months ended Sept. 30,
	2008	2007
Net income (loss)	$(10)	$32)
Loss from discontinued operations	9)	-)
Adjustments for cash flows from operations:
Depreciation and amortization	40)	50)
Deferred income taxes	24)	7)
Change in operating assets and liabilities1	68)	81)
Other	13)	11)
Cash flows from operating activities from cont. operations	144)	181)
Additions to property, plant and equipment	(87)	(52)
	$57)	$129)

1Excludes changes resulting from operations acquired or sold.

12

Operating Segments - Accounts Receivable, Inventories Excluding LIFO Reserve,

and Trade and Other Payables, Net, as a % of Trailing Three Months' Sales, Annualized*

* Excludes acquisitions made in June 2008 quarter.

Oct '06

Dec '06

Mar '07

Jun '07

Sep '07

Dec '07

Mar '08

Jun '08

Operating Segment
Trade Working Capital

Sep '08

·Reduced trade working capital by 430 basis points
during last nine months of fiscal 2008

18
17

16

15

14

13

12

11

10

%

13

Progress on cost-structure efficiency

14

Fiscal Fourth Quarter 2008
Performance Summary

·Operating income down 41 percent, excluding key items

·Generated $144 million of cash flows from operating
activities from continuing operations

·Made substantial progress in reducing working capital

·Exceeding forecast for cost-structure efficiencies

15

Key Items Affecting Operating Income
Comparisons

(in millions)	Fiscal fourth quarter ended Sept. 30,
Ashland Performance Materials	2008	2007
Severance costs	$ (4.7)	$—)
Non-North American entities reporting-lag elimination	—)	2.1)
Litigation reserve adjustment	—)	(5.5)
Postretirement benefit obligation adjustment	—)	(3.3)
All other income	6.3)	13.9)
Total operating income	$1.6)	$7.2)

16

Performance Materials
Fiscal Fourth Quarter Summary

(in millions, except percentages) Preliminary	Three months ended Sept. 30,
	2008	2007	Favor./ (Unfav.)
Pounds/day1	5.2)	4.8)	8)%
Operating revenue2	$427)	$438)	(3)%
Gross profit as a % of sales1	14.6%	18.4%	(380) bp
Selling, general & admin. costs	$65)	$75)	13)%
Operating income	$1.6)	$7.2)	(78)%
Operating income as a % of sales	0.4%	1.6%	(120) bp
EBITDA	$15)	$18)	(17)%
EBITDA as a % of sales	3.5%	4.1%	(60) bp

1 Excludes effect of non-North American financial-reporting-lag elimination in 2007.

2 Includes $56 million of revenue from non-North American financial-reporting-lag elimination in 2007.

17

($ millions)

2.6

(12.4)

Q4 2007

Volume/
Mix

Q4 2008

Currency
Translation

Margin

(0.8)

7.2

1.6

SG&A
Expenses

1.4

Other

2.0

Q4 FY 2007 versus Q4 FY 2008

Performance Materials
Factors Impacting Operating Income

·Continued significant weakness in North American
residential construction and transportation markets

1.6

Key Items

18

Performance Materials
Outlook

·Getting our costs right

-Should achieve approximately $8 million
in quarterly savings in Q1 '09 vs. Q1 '08

·Mothballing certain North American manufacturing
capacity and reducing hours of operation in Europe

·Strong potential for raw material cost reductions,
although little received to date

19

Key Items Affecting Operating Income
Comparisons

(in millions)	Fiscal fourth quarter ended Sept. 30,
Ashland Distribution	2008	2007
Non-North American entities reporting-lag elimination	$—)	$(0.9)
Postretirement benefit obligation adjustment	—)	(5.6)
All other income	12.6)	2.0)
Total operating income	$12.6)	$(4.5)

20

Distribution
Fiscal Fourth Quarter Summary

(in millions, except percentages) Preliminary	Three months ended Sept. 30,
	2008	2007	Favor./ (Unfav.)
Pounds/day1	18.2)	19.6)	(7)%
Operating revenue2	$ 1,151)	$ 1,050)	10 %
Gross profit as a % of sales1	8.1%	7.0%	110 bp
Selling, general & admin. costs	$82)	$79)	(4)%
Operating income (loss)	$12.6)	$(4.5)	N.D.
Operating income (loss) as a % of sales	1.1%	(0.4)%	150)bp
EBITDA	$19)	$3)	533)%
EBITDA as a % of sales	1.7%	0.3%	130)bp

1 Excludes effect of non-North American financial-reporting-lag elimination in 2007.

2 Includes $46 million of revenue from non-North American financial-reporting-lag elimination in 2007.

21

·Volume declined 7 percent, including 12-percent reduction in Europe

·Unit gross profit increased 17 percent due to continued focus on pricing
process improvement

($ millions)

29.2

Q4 2007

Currency
Translation

Margin

Q4 2008

Volume/
Mix

SG&A
Expenses

(6.2)

(4.5)

6.5

Other

(0.1)

(12.0)

12.6

Q4 FY 2007 versus Q4 FY 2008

Distribution
Factors Impacting Operating Income

Key
Items

(0.3)

22

Distribution
Selling Price, Cost and Gross Profit Trends

Gross
Profit

Price

& Cost

(cents/lb.)

23

Distribution
Outlook

·Difficult market conditions likely to continue

-Severe product cost volatility, with select commodities
starting to decline

-Building and construction, automotive, and marine
markets remain challenging

·Demand will continue to soften
in our primary markets

-Volume will be driven by overall U.S. industrial production

-European demand also starting to fall

-Credit crisis impacting small manufacturers

·Margins will be pressured by extreme cost volatility
and softening demand

-Improved pricing practices have enabled margin
expansion over last three quarters

24

Key Items Affecting Operating Income
Comparisons

(in millions)	Fiscal fourth quarter ended Sept. 30,
Valvoline	2008	2007
Postretirement benefit obligation adjustment	$—)	$(0.9)
All other income	13.1)	18.8)
Total operating income	$13.1)	$ 17.9)

25

Valvoline
Fiscal Fourth Quarter Summary

(in millions, except percentages) Preliminary	Three months ended Sept. 30,
	2008	2007	Favor./ (Unfav.)
Lubricant gallons1	43.5)	43.3)	-)%
Operating revenue1	$454)	$384)	18 %
Gross profit as a % of sales1	19.2%	24.6%	(540) bp
Selling, general & admin. costs	$77)	$79)	3)%
Operating income	$13.1)	$17.9)	(27)%
Operating income as a % of sales	2.9%	4.7%	(180) bp
EBITDA	$21))	$26)	(19)%
EBITDA as a % of sales	4.6%	6.8%	(220) bp

1 Non-North American financial-reporting-lag elimination had no significant impact in fourth-quarter 2007.

26

Valvoline
Operating Income Performance Factors

($ millions)

·Margin decrease driven by higher raw materials costs

·SG&A improvement due primarily to lower advertising
expenses

Q4 2007

Volume/
Mix

Q4 2008

Currency
Translation

Margin

SG&A
Expenses

Q4 FY 2007 versus Q4 FY 2008

17.9

1.8

(10.6)

0.4

0.3

13.1

0.9

Other

2.4

Key Items

27

Valvoline
Outlook

·Price increases through September should
enable gross profit to improve on a per-unit basis
to levels approximating Q1 - Q3 2008

·Base oil market expected to remain tight
into the second quarter with potential cost relief
later in 2009

·Soft market demand experienced in 2008 is likely
to persist in 2009 despite lower gasoline prices

28

Key Items Affecting Operating Income
Comparisons

(in millions)	Fiscal fourth quarter ended Sept. 30,
Ashland Water Technologies	2008	2007
Severance costs	$(2.6)	$—)
Non-North American entities reporting-lag elimination	—)	4.0)
Asset impairments	—)	(10.6)
Postretirement benefit obligation adjustment	—)	(1.5)
All other income (loss)	(3.3)	6.6)
Total operating loss	$(5.9)	$(1.5)

29

Water Technologies
Fiscal Fourth Quarter Summary

(in millions, except percentages) Preliminary	Three months ended Sept. 30,
	2008	2007	Favor./ (Unfav.)
Operating revenue1	$226)	$249)	(9) %
Gross profit as a % of sales2	32.9%	39.7%	(680) bp
Selling, general & admin. costs	$81)	$100)	19)%
Operating loss	$(5.9)	$(1.5)	N.D.
Operating loss as a % of sales	(2.6)%	(0.6)%	(200) bp
EBITDA	$1)	$17)	(94)%
EBITDA as a % of sales	0.4%	6.8%	(640) bp

1 Includes $42 million of revenue from non-North American financial-reporting-lag elimination in 2007.

2 Excludes effect of non-North American financial-reporting-lag elimination in 2007.

30

($ millions)

Q4 2007

Sales/Mix

Q4 2008

Currency
Translation

Margin

SG&A
Expenses

Other

Q4 FY 2007 versus Q4 FY 2008

·Experiencing significant margin erosion
due to raw material increases

·Beginning to realize benefits of cost structure changes and
discipline in SG&A reductions

Water Technologies
Factors Impacting Operating Income

(1.5)

2.8

(14.8)

1.2

0.4

0.5

5.5

(5.9)

Key Items

31

Water Technologies
Outlook

·Getting our costs right

-Reduced sales, marketing, technical, administrative and
plant headcount

·Opportunity to renegotiate contract pricing in Q1 '09

-High percentage of contracts up for renewal

·Integration into Hercules Paper Technologies

-Reporting in Q1 will be on a combined basis

32

Fiscal 2008 Summary

(in millions, except percentages) Preliminary	12 months ended Sept. 30,
	2008	2007	Favor./ (Unfav.)
Operating revenue	$8,381)	$7,785)	8 %
Gross profit as a % of sales	15.8%	17.2%	(140) bp
Operating income	$213)	$216)	(1)%
Operating income as a % of sales	2.5%	2.8%	(30) bp
EBITDA	$358)	$349)	3)%
EBITDA as a % of sales	4.3%	4.5%	(20) bp
Return on investment	6.1%	8.0%	(190) bp

33

Ashland Inc.
Fiscal 2008 EBITDA Summary

·EBITDA increased 3 percent over FY2007

-Performance Materials down 25 percent

-Distribution up 19 percent

-Valvoline just 2 percent below 2007 record

§Record annual operating income for Valvoline Instant Oil
Change and Valvoline International

-Water Technologies down 16 percent

34

Ashland Inc.
Fiscal 2008 Highlights

·Initiated cost-structure efficiency program

·Generated cash flows from operating activities
from continuing operations in fiscal 2008 of $478
million versus $189 million in fiscal 2007

·Operating-segment trade working capital
decrease of 300 basis points to 12.3 percent
of sales

·Hercules Inc. transaction announced

35

Hercules Update

·All regulatory approvals received

-Hercules shareholder vote Nov. 5

-Anticipated close Nov. 13

·Continue to work with banks on structure and terms
of the committed financing

·Synergies expected at high end of original estimates

-$120 million annually

-$80 million run-rate by 1-year anniversary

-Integration expenses still being determined

·Creates a major, global specialty chemicals company
with ~75 percent of EBITDA derived
from specialty chemicals

–Reduces earnings volatility, improves profitability and
strengthens cash flow generation

Appendix A
Fiscal 2008 Preliminary Results

Appendix A
Fiscal 2008 Preliminary Results

37

Fiscal 2008
Preliminary Financial Results

(in millions, except change)	Three months ended Sept. 30,
	2008		2007		Fav./(Unfav.)
Sales and operating revenue		8,381)		7,785)		8 %
Cost of sales		7,056)		6,447)		(9)%
Gross profit		1,325)		1,338)		(1)%
Gross profit percentage		15.8%		17.2%		(140) bp
Selling, general & administrative expenses		1,166)		1,171)		-)%
SG&A percentage		13.9%		15.0%		110) bp
Equity and other income		54)		49)		10 %
Operating income		213)		216)		(1)%
Operating income percentage		2.5%		2.8%		(30) bp
Earnings before interest, taxes, depreciation and amortization (EBITDA)	$	358)	$	349)		3)%
EBITDA as a percent of sales		4.3%		4.5%		(20) bp

$

$

38

Fiscal 2008
Preliminary Diluted Earnings Per Share

(in millions)	Twelve months ended Sept. 30,
	2008	2007
Operating income	$213)	$216)
Gain (loss) on MAP Transaction	20)	(3)
Net interest and other financing income	28)	46)
Income from continuing operations before income taxes	261)	259)
Income tax expense	(86)	(58)
Income from continuing operations	175)	201)
Income (loss) from discontinued operations, net of income taxes	(8)	29)
Net income	167)	230)
Diluted EPS from continuing operations	2.76)	3.15)
Diluted EPS on net income	2.63)	3.60)
Full-year effective tax rate	32.9%	22.3%

Appendix B
Business Profiles

Appendix B
Business Profiles

40

Ashland Performance Materials
A global leader in specialty chemicals

North
America

North
America

45%

45%

Europe

36%

Latin
America/
Other - -

9%

Trans-
portation

Trans-
portation

24%

24%

Ind.
Constr.

27%

Revenue
by Geography

Revenue
by Market

For the Fiscal Year Ended Sept. 30, 2008

Revenue: $1.6 billion

EBITDA*: $94 million

EBITDA* Margin: 5.8%

Res.
Constr.

14%

Infra-
structure

15%

Marine - - 9%

Asia/
Pacific - - 10%

* See Appendix C for EBITDA reconciliation.

Ashland Distribution
A leading North American chemicals and plastics distributor

Chemicals

Chemicals

47%

47%

Plastics

41%

Environmental
Service/Other - -
2%

Construction

Construction

24%

24%

Other

15%

Revenue
by Product
Line

Revenue
by Market

Trans-
portation

15%

Paint & Coatings - 10%

Medical - - 6%

Marine - - 4%

Com-
posites

10%

Chemical Mfg.
- 11%

Retail
Consumer - - 8%

Personal
Care - - 7%

For the Fiscal Year Ended Sept. 30, 2008

Revenue: $4.4 billion

EBITDA*: $75 million

EBITDA* Margin: 1.7%

* See Appendix C for EBITDA reconciliation.

42

Valvoline:A leading worldwide marketer of premium-branded
automotive lubricants and chemicals

Lubricants

80%

Filters - - 3%

Valvoline
Int'l - - 23%

Valvoline
Int'l - - 23%

Do-It-
Yourself

35%

Business Overview
Customers	·Retail auto parts stores and mass merchandisers who sell to consumers; installers, such as car dealers and quick lubes; distributors
Products/ Services	·Valvoline® lubricants and automotive chemicals ·MaxLife® lubricants for high-mileage vehicles ·SynPower® synthetic motor oil ·Eagle One® and Car Brite® appearance products ·Zerex® antifreeze ·Valvoline Instant Oil Change�� service
Market Channels	·Do-It-Yourself (DIY) ·Do-It-For-Me (DIFM) ·Valvoline International

Revenue
by Product Line

Revenue
by Market Channel

Do-It-
For-Me
37%

DIFM:
Installer channel
23%

Specialty/
Other - - 5%

DIFM:
Valvoline Instant
Oil Change - 14%

Chemicals - - 6%

Appearance
products - - 3%

Antifreeze - - 8%

For the Fiscal Year Ended Sept. 30, 2008

Revenue: $1.7 billion

EBITDA*: $115 million

EBITDA* Margin: 6.9%

* See Appendix C for EBITDA reconciliation.

43

Ashland Water Technologies
A major global supplier to the water treatment industry

North
America

30%

Latin America/
Other - 5%

Marine
15%

Marine
15%

Industrial

42%

Business Overview
Customers/ Markets	·Automotive ·Municipal wastewater treatment ·Pulp and paper processing ·Paint and coatings ·Adhesives ·Printing inks ·Commercial and institutional building management ·Merchant marine
Products/ Services	·Chemicals and consulting services for utility water treatment ·Process water treatments ·Technical products and shipboard services for the merchant marine and cruise ship industry

Revenue
by Geography

Revenue
by Business Unit

E&PS
43%

Asia/
Pacific
17%

Europe
48%

For the Fiscal Year Ended Sept.30, 2008

Revenue: $0.9 billion

EBITDA*: $36 million

EBITDA* Margin: 4.0%

* See Appendix C for EBITDA reconciliation.

Appendix C
Regulation G Reconciliations

Appendix C
Regulation G Reconciliations

47

Regulation G: Reconciliation of Operating
Income to Adjusted EBITDA

The information provided in this presentation regarding
adjusted earnings before interest, taxes, depreciation,
and amortization (EBITDA) does not conform to generally
accepted accounting principles (GAAP) and should not
be construed as an alternative to the reported results
determined in accordance with GAAP. Management has
included this non-GAAP information to assist in
understanding the operating performance of the
Company and its operating segments. The non-GAAP
information provided may not be consistent with the
methodologies used by other companies. All non-GAAP
information is reconciled with reported GAAP results in
the financials that follow in this Appendix.

48

Ashland Inc. Fiscal Fourth Quarter
Regulation G: Reconciliation of Operating Income
to EBITDA

(in millions)

49

Ashland Inc. Fiscal Year Ended Sept. 30
Regulation G: Reconciliation of Operating Income
to EBITDA

(in millions)

50

Hercules Inc. 12 Months Ended Sept. 30, 2008
Regulation G: Reconciliation of Operating
Income to Adjusted EBITDA