EXHIBIT 99.1
NEWS RELEASE
FOR FURTHER INFORMATION:
Media Relations: Investor Relations:
Jim Vitak Bill Henderson
(614) 790-3715 (859) 815-4454
jevitak@ashland.com wehenderson@ashland.com
FOR IMMEDIATE RELEASE
December 20, 2004
ASHLAND INC. PROVIDES UPDATE ON THE
PROPOSED TRANSFER OF ITS INTEREST IN
MARATHON ASHLAND PETROLEUM LLC
COVINGTON, Ky. - Ashland Inc. announced today that the Internal Revenue
Service (IRS) has now indicated that it does not intend to provide all the
rulings requested by Ashland Inc. and Marathon Oil Corporation in the
proposed transaction to transfer Ashland's 38-percent interest in Marathon
Ashland Petroleum LLC (MAP) to Marathon.
As previously announced in March 2004, Ashland entered into an
agreement with Marathon through which Ashland would transfer its 38-percent
interest in MAP to Marathon. The transaction is subject to several
previously disclosed conditions, including receipt of a favorable private
letter ruling from the IRS with respect to the tax treatment of the
transaction. Earlier this year, Ashland submitted a request to the IRS for
a private letter ruling on the tax treatment of the transaction.
Ashland reported in its Form 10-K filing on December 14, 2004, that it
had engaged in discussions with the IRS with respect to the complex tax
issues related to this transaction and had not resolved all issues. At that
time, Ashland reported that it could not predict whether the requested
rulings would be received.
The IRS has now indicated that it does not intend to provide all the
rulings requested by Ashland and Marathon. As previously disclosed, Ashland
might have incurred Section 355(e) gain on the transaction equal to the
difference between the fair market value of Ashland and the tax basis of
Ashland. One of the IRS rulings requested was that the tax basis in Ashland
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not be reduced by the assumption of contingent liabilities associated with
discontinued business operations in a way that would cause additional
Section 355(e) gain to be recognized. The IRS has informed Ashland and
Marathon that it intends to rule adversely on this specific tax basis
issue. Under the IRS' indicated position on this issue, the basis of the
Ashland shares would be reduced by the amount of such contingent
liabilities in a manner that would likely create significant additional
Section 355(e) gain. Ashland believes that the IRS would grant all other
requested rulings that are conditions to closing the transaction.
Ashland and Marathon disagree with the IRS' position on the contingent
liabilities issue and will attempt to further discuss this issue with the
IRS. However, Ashland believes that it is unlikely that the previously
announced transaction will close. Ashland remains pleased with its
ownership interest in MAP and, therefore, does not have any plans to
exercise its option to put its interest in MAP to Marathon. Nonetheless, if
the previously announced transaction does not close, Ashland would consider
other alternatives for the transfer of its interest to Marathon. There is a
substantial risk that no acceptable alternative transaction will be
identified.
Ashland Inc. (NYSE: ASH) is a Fortune 500 transportation construction,
chemical and petroleum company providing products, services and customer
solutions throughout the world. To learn more about Ashland, visit
www.ashland.com.
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FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements, within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements include those that refer
to Ashland's expectations about the MAP transaction. Although Ashland
believes its expectations are based on reasonable assumptions, it cannot
assure the expectations reflected herein will be achieved. The risks,
uncertainties, and assumptions include the possibility that Ashland will be
unable to fully realize the benefits anticipated from the MAP transaction;
the possibility of failing to receive a favorable ruling from the Internal
Revenue Service; the possibility that Ashland fails to obtain the approval
of its shareholders; the possibility that the transaction may not close or
that Ashland may be required to modify some aspect of the transaction to
obtain regulatory approvals; and other risks that are described from time
to time in the Securities and Exchange Commission (SEC) reports of Ashland.
Other factors and risks affecting Ashland are contained in Ashland's Form
10-K for the fiscal year ended Sept. 30, 2004, filed with the SEC and
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 news release to reflect events or
circumstances after the date of this news release.
Additional Information about the MAP Transaction
In connection with the proposed transaction, Ashland filed a preliminary
proxy statement on Schedule 14A with the SEC on June 21, 2004 and an
amended preliminary proxy statement on Schedule 14A on August 31, 2004. ATB
Holdings Inc. and New EXM Inc. filed a registration statement on Form S-4,
which includes a further amended preliminary proxy statement/prospectus,
with the SEC on October 12, 2004. Investors and security holders are urged
to read those documents and any other relevant documents filed or that will
be filed with the SEC, including the definitive proxy statement/prospectus
regarding the proposed transaction as they become available, because they
contain, or will contain, important information. The definitive proxy
statement/prospectus will be filed with the SEC by Ashland, and security
holders may obtain a free copy of the definitive proxy statement/prospectus
when it becomes available, and other documents filed with the SEC by
Ashland, including the preliminary proxy statement at the SEC's website at
www.sec.gov. The definitive proxy statement/prospectus, and other documents
filed with the SEC by Ashland, including the preliminary proxy statement,
may also be obtained for free in the SEC filings section on Ashland's
Investor Relations website at www.ashland.com/investors, or by directing a
request to Ashland at 50 E. RiverCenter Blvd., Covington, KY 41012. The
respective directors and executive officers of Ashland and other persons
may be deemed to be participants in solicitation of proxies in respect of
the proposed transaction. Information regarding Ashland's directors and
executive officers is available in its proxy statement filed with the SEC
by Ashland on December 14, 2004. Investors may obtain information regarding
the interests of participants in the solicitation of proxies in connection
with the transaction referenced in the foregoing information by reading the
definitive proxy statement/prospectus when it becomes available.