EXHIBIT 99.1
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News Release Ashland Logo
Media Relations: Investor Relations:
Jim Vitak Dean Doza
(614) 790-3715 (859) 815-4454
jevitak@ashland.com lddoza@ashland.com
FOR IMMEDIATE RELEASE
July 3, 2007
ASHLAND INC. PROVIDES FISCAL THIRD-QUARTER UPDATE
COVINGTON, Ky. - Ashland Inc. (NYSE:ASH) today provided an update to
its fiscal third-quarter outlook. Results for the quarter, which ended June
30, 2007, will include several favorable developments in certain of
Ashland's reserves and cost estimates.
Operating income for the June 2007 quarter will benefit from
adjustments of approximately $11 million due to lower pension and other
benefit costs. In addition, favorable adjustments to environmental reserves
are expected to total approximately $4 million, reflecting updates of
future costs based on engineering estimates for identified sites and
improvements to the environmental assessment process.
Income from discontinued operations for the June 2007 quarter will
include a favorable net adjustment to asbestos reserves and related
receivables for insurance recoveries of $16 million, resulting from an
updated assessment of future claim costs.
Net income will benefit from an adjustment to Ashland's income tax
rate, as previously disclosed. The tax rate is expected to be roughly 18
percent for the June quarter and 24 percent for the entire fiscal year
ending in September.
In addition, excluding the effects of the above adjustments and
despite weak earnings from Ashland Distribution, operating income for the
June 2007 quarter is expected to substantially exceed the same quarter a
year ago. The current-year quarter will benefit from strong Valvoline
results and lower corporate costs as compared with the prior-year June
quarter. Distribution has experienced both lower margins due to continued
weakness in its key North American markets and a full quarter's impact from
the discontinuance of a significant North American plastics supply
contract. Distribution's operating income, excluding its portion of the
adjustments, is expected to be roughly half of the $20.1 million reported
in the March 2007 quarter. For the year-ago June quarter, Distribution
reported income of $30.1 million.
Ashland's operating income in the prior-year quarter was adversely
affected by a $9.7 million loss from Valvoline and the required inclusion
in operating expenses of $12.1 million of corporate costs previously
allocated to the company's former APAC subsidiary, partially offset
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Ashland Inc.-Covington, Ky.-41012-0391-(859)815-3333-www.ashland.com
ASHLAND INC. PROVIDES FISCAL THIRD-QUARTER UPDATE, PG. 2
by a $7.6 million foreign currency hedge gain related to an Ashland Water
Technologies' acquisition.
Ashland will announce preliminary results* for the third quarter on
July 25, 2007, prior to the opening of the New York Stock Exchange, and
will follow with an 8:30 a.m., EDT, conference call and webcast.
Ashland Inc. (NYSE:ASH), a diversified, global chemical company,
provides quality products, services and solutions to customers in more than
100 countries. A FORTUNE 500 company, it operates through four divisions:
Ashland Performance Materials, Ashland Distribution, Valvoline and Ashland
Water Technologies. To learn more about Ashland, visit www.ashland.com.
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FORTUNE 500 is a registered trademark of Time Inc.
*PRELIMINARY RESULTS
Financial results are preliminary until Ashland's quarterly report on Form
10-Q is filed with the U.S. Securities and Exchange Commission.
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, with respect to Ashland's operating
performance. These estimates are based upon a number of assumptions,
including those mentioned within this news release. Such 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). 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 and risks
affecting Ashland are contained in Ashland's Form 10-K for the fiscal year
ended Sept. 30, 2006. 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 release.